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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Hinchy v Secretary of State for Work and Pensions  EWCA Civ 138 (20 February 2003)
Cite as:  1 WLR 2018,  EWCA Civ 138
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM SOCIAL SECURITY COMMISSIONER
London, WC2A 2LL
B e f o r e :
LORD JUSTICE CARNWATH
SIR DENIS HENRY
| MAUREEN HINCHY
|- and -
|SECRETARY OF STATE FOR WORK AND PENSIONS
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Richard Drabble QC (instructed by Office of the Solicitor, Department of Work and Pensions, Department of Health) for the Respondent
AS APPROVED BY THE COURT
CROWN COPYRIGHT ©
Crown Copyright ©
Lord Justice Aldous:
"71. (1) 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. (3) An amount recoverable under subsection (1) above is in all cases recoverable from the person who misrepresented the fact or failed to disclose it."
"You were being paid an income support severe disability premium on the basis that you were receiving the middle rate care component of disability living allowance but you failed to tell the income support section that your disability living allowance had ceased as instructed to do in the instruction pages of your order book and you used an order in your order book date 3.7.00 declaring that you were entitled to the amount show on the order whereas you had already been notified that you were entitled to a lesser amount."
Thus the Agency maintained its decision that repayment was necessary.
"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 the receipt of the above sum."
"5. . The question of law that arises in such circumstances is whether there can properly be said to have been any failure of disclosure and to what extent any continued miscalculation of the claimant's benefit can be properly attributed to wrongful failure on the part of the claimant, rather than the Department's own failure to marry up the information it already has. This is a question of which differing views have been expressed by Commissioners, and it is of course one of general importance.
6. The Tribunal's decision holding the claimant liable to repay is expressed with admirable clarity, and there is no question of it being open to challenge on the way the facts are found and recorded or the way the reasons for the decision are explained in the statement issued to the parties on 24th August 2001. The only issue was whether the Tribunal was right in law to follow as it did the recent decision of a Tribunal of Commissioners on the 'failure to disclose' issue in case CG 4494/99, it being conceded as recorded in paragraph 7 of the statement of reasons that this was indistinguishable, and binding so far as the Tribunal was concerned.
8. It is the practice of the Commissioners in the interests of comity and certainty of the law to follow the decision of a Tribunal of Commissioners on a question of legal principle unless there are compelling reasons not to do so: case R(I) 12/75 paragraph 21. It is not suggested though there are such reasons for me to depart from the normal practice here, even though I understand it has been decided not to select case CG 4494/99 for reporting in the official series
9. In those circumstances the claimant, now represented by the Child Poverty Action Group, in view of the point of principle involved, concedes that the appropriate order for me to make is to dismiss her appeal. ."
The Commissioner gave leave to appeal.
(1) a person has misrepresented or failed to disclose a material fact, and
(2) as a consequence of such a misrepresentation or failure to disclose, a payment has been made which should not have been made.
"In Federal Commissioner of Taxation v. Westgarth it was held that disclosure of "all the material facts necessary for making an assessment" under s. 20 (1) of the Estate Duty Assessment Act 1914-1942 meant disclosure of relevant facts known to the taxpayer or of relevant beliefs held by him, and that it did not involve making the commissioner aware of facts unknown to the taxpayer. In the present case it is urged for the commissioner that the taxpayer did not disclose to the commissioner the facts that the appeal was pending, and the company succeeded upon the appeal. But the commissioner, as the taxpayer must have known, was already aware of those facts and he was aware of them as facts having a direct relation to the assessment of the company in which the taxpayer was a shareholder. In my opinion it is not possible, according to the ordinary use of language, to "disclose" to a person a fact of which he is, to the knowledge of the person making a statement as to the fact, already aware. There is a difference between "disclosing" a fact and stating a fact. Disclosure consists in the statement of a fact by way of disclosure so as to reveal or make apparent that which (so far as the "discloser" knows ) was previously unknown to the person to whom the statement was made. Thus the taxpayer could not add anything to the commissioner's knowledge with respect to the appeal. In my opinion in these circumstances it should be held that the failure of the taxpayer to repeat to the commissioner what he already knew did not constitute a failure to disclose material facts."
"The limitation upon the commissioner's power of amendment arise under s. 170 (3) where a taxpayer has made to the commissioner a full and true disclosure of all the material facts necessary for the assessment and an assessment is made after the disclosure. This condition was, in my opinion, fulfilled. The taxpayer did not, it is true, tell the deputy commissioner that the company had appealed, but he knew that the commissioner was aware of this fact. The commissioner was, in fact, a party to the appeal. It may be doubted whether this was a fact "necessary for the assessment". It bore only on the wisdom of withholding an assessment till the appeal was determined, not on the contents of the assessment, if made. But a taxpayer can hardly be said to fail to disclose to the commissioner a fact which is not only within the commissioner's knowledge in connection with the exercise of his functions in the very matter, but which the taxpayer knows so to be within his knowledge."
"24. Foster v Federal Commissioner of Taxation (1951) 82 CLR 606 at 615 confirms that there is a difference between "disclosing" a fact and stating a fact. Disclosure consists in the statement of a fact by way of disclosure so as to reveal or make apparent something which was previously unknown to the person to whom the statement is made."
"What is fair procedure is to be judged not in the light of constitutional fictions as to the relationship between the minister and the other servants of the Crown who serve in the government department of which he is the head, but in the light of the practical realities as to the way in which administrative decisions involving forming judgments based on technical considerations are reached. To treat the minister in his decision-making capacity as someone separate and distinct from the department of government of which he is the political head and for whose actions he alone in constitutional theory is accountable to Parliament is to ignore not only practical realities but also Parliament's intention. Ministers come and go; departments, though their names may change from time to time, remain. Discretion in making administrative decisions is conferred upon a minister not as an individual but as the holder of an office in which he will have available to him in arriving at his decision the collective knowledge, experience and expertise of all those who serve the Crown in the department of which, for the time being, he is the political head. The collective knowledge, technical as well as factual, of the civil servants in the department and their collective expertise is to be treated as the minister's own knowledge, his own expertise."
"The duties imposed upon ministers and the powers given to ministers are normally exercised under the authority of the ministers by responsible officials of the department. Public business could not be carried on if that were not the case. Constitutionally, the decision of such an official is, of course, the decision of the minister. The minister is responsible. The whole system of departmental organisation and administration is based on the view that ministers, being responsible to Parliament, will see that important duties are committed to experienced officials. If they do not do that, Parliament is the place where complaint must be made against them."
"26. To what members of the staff of the Department should disclosure then be made? The section uses the phrase "fails to disclose" and not "does not disclose" and one Commissioner said . that a failure imported the breach of some obligation such that the relevant non-disclosure occurred in circumstances in which, at the lowest, disclosure by the person in question was reasonably to be expected. To whom is there this obligation to disclose? We are concerned here with breaches of the obligation which have the consequence that expenditure is incurred by the Secretary of State; and, in our view, the obligation is to disclose to a member or members of the staff of an office of the Department handling the transaction giving rise to the expenditure. We consider hereafter the way in which this obligation can be fulfilled. Miss Kearns conceded, rightly in our view, that once disclosure has been made to a particular person there can be no question of his being under any obligation to repeat that disclosure to the same person
28. We accept that a claimant cannot be expected to identify the precise person or persons who have the handling of his claim. His duty is best fulfilled by disclosure to the local office where his claim is being handled either in the claim form or otherwise in terms that make sufficient reference to his claim to enable the matter disclosed to be referred to the proper person. If he does this it is difficult, having regard to our acceptance of Miss Kearn's concession, to visualise any circumstances in which a further duty to disclose the same matter can arise. But, as was pointed out in R(SB) 54/83, there can be other occasions when the duty can be fulfilled by disclosure elsewhere. This can happen, for instance, if an officer in another office of the Department of Health and Social Security or local employment benefit office accepts information in circumstances which make it reasonable for the claimant to think the matters disclosed will be passed on to the local office in question. It was in reference to this sort of case that the Commissioner included in paragraph 18 of the Decision R(SB) 54/83 his statement about a continuing duty. A claimant who has made such disclosure has not in fact made disclosure to the right person or in the right place, but he has done something which has the effect that, for the time being at least, further disclosure is not reasonably to be expected. We consider that paragraph 18 of R(SB) 54/83 is concerned with the case of a claimant who subsequently becomes aware, or should have become aware, that the information has not been transmitted to the proper person or place and who is then under a duty to make disclosure to that person or place. We desire to reserve for consideration when it arises the question whether the means of knowledge that the information has not been transmitted has the same effect as actual knowledge."
Lord Justice Carnwath:
"(The Department) administers some 24 different benefits, the cost of which in 2002 was £110 billion, one third of all government spending. The spend on DLA in 2002 was £6.5 billion, with 2,329,000 beneficiaries. The numbers for IS were £9.6 billion and 2,227,000 beneficiaries.
Organisationally, the Department is not monolithic. In 2002 (following merger with the Employment Service of the old Department for Education and Employment) it employed 122,687 people. These civil servants are organised in discrete structures, although those structures may change from time to time. For example currently there are four agencies Jobcentre Plus, the Pensions Service, the Child Support Agency and the Tribunals Appeals Service
. DLA and IS are separate benefits (with separate legislation and indeed different rules eg as to duration of the award). Further DLA has always since its introduction in the early 1990s been a centrally administered benefit whereas IS is locally administered, through several hundred local offices. The civil servants administering DLA and IS have always been geographically separate, with separate "files". There has never been a computer link between these two systems "
(I understand that, although administered by separate offices, both Disability Living Allowance and Income Support are the responsibility of "Jobcentre Plus".)
"any change of circumstances which he might reasonably be expected to know might affect the right to benefit".
This regulation, he said, was made under section 5(1)(i) of the Social Security Administration Act 1992, which allows regulations to provide
"for the person to whom, time when and manner in which a benefit to which this section applies is to be paid and for the information and evidence to be furnished in connection with the payment of such a benefit".
Sir Denis Henry: