B e f o
r
e :
LORD JUSTICE SCOTT BAKER
MR JUSTICE KING
and
HIS HONOUR JUDGE MOSS Q.C
____________________
Between:
____________________
(Transcript of the Handed Down Judgment of
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Allister Walker (instructed by Department for Work and Pensions) for the Appellant
Angus Bunyan for the
Respondent
Hearing date: 16 June
2009
____________________
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VERSION
OF JUDGMENT
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Lord Justice Scott Baker :
- The prosecution apply for leave to appeal against a terminating
ruling
under Section 58 of the
Criminal
Justice Act 2003. We grant that leave.
- The appeal arises in this way. Christopher
Tilley
(to whom we shall
refer
as the defendant) and Nicola
Tilley
face trial in the Crown Court at Cambridge. The indictment contains seven counts
relating
to fraudulent claims for social security benefits. Five of the counts are against Nicola
Tilley
and allege false
representations
to obtain benefit or failing to notify a change of circumstances that she knew would affect her entitlement to benefit. These are not the subject of this appeal. Counts two and four, which are the subject of this appeal, are against the defendant and allege offences under S.111A(1B) of the Social Security Administration Act 1992, as amended.
- The statement of offence in each case is "causing or allowing another to fail to give a prompt notification of a change of circumstances." The particulars of offence in count two
read:
"Christopher
Tilley,
between 1st January 2002 and 2nd March 2007, dishonestly caused or allowed Nicola
Tilley
to fail to give a prompt notification to the Department for Work and Pensions in the prescribed manner of a change of circumstances that he knew would affect Nicola
Tilley's
entitlement to Income Support, namely that he and Nicola
Tilley
were maintaining a common household."
The particulars in count four are similar, but the end date is 11 May 2007
rather
than 2 March 2007, the person to be notified is the Bedford Borough Council
rather
than the Department for Work and Pensions and the benefit is housing benefit and council tax benefit
rather
than income support.
- It was agreed by both sides in the Crown Court that
rather
then empanel a jury and call what was effectively agreed evidence, Mr
Recorder
Holborn should hear argument on the basis of agreed facts and give his
ruling
on the point of law which is now the subject of this appeal. In short the issue was and is the meaning of the word "allows" in s.111A(1B) and whether it
requires
in this case any positive act on the part of the defendant for the offence to be committed.
- The
Recorder
said in his
ruling
that the substantive issue was the construction of the word "allows"; first what the Crown has to show and secondly whether on the agreed facts there was sufficient evidence to go to the jury. He accepted the
reality
was that the defendant did nothing in terms of any positive act towards the commission of the offence with which he was charged. He said, "perhaps turning a blind eye, he did nothing".
- He concluded that the word "allows," in the absence of any further assistance in the statute by way of a duty imposed by Parliament,
requires
the Crown to prove that the defendant did something
rather
than just stood back and did nothing. There was, he said no evidence that the defendant did anything and that the Crown was in effect, asking him to
read
words into the statute that were not there. He said that in the absence of a clear expressed intention Parliament cannot have, in these circumstances, intended to impose
criminal
liability on an individual for a failure to act.
- It is common ground that the
Recorder's
decision is a terminating
ruling
with the meaning of s.58 of the
Criminal
Justice Act 2003.
- The undisputed facts are these. The defendant and Nicola
Tilley
maintain a common household. They are living together as man and wife and at least some of the defendant's wages are paid into a bank account in which some of Nicola
Tilley's
benefit is paid. The account is in her name. The defendant was said to be living
rent
free although there are no details about the ownership of the property in which they are living.
- S.111A(1B) provides:
"A person shall be guilty of an offence if –
(a) there has been a change of circumstances effecting any entitlement of another person to any benefit or other payment or advantage under any provision of the
relevant
social security legislation;
(b) the change is not a change that is excluded by
regulations
from the changes that are
required
to be notified;
(c) he knows that the change effects an entitlement of that other person to such a benefit or other payment or advantage; and
(d) he dishonestly causes or allows that other person to fail to give a prompt notification of that change in the prescribed manner to the prescribed person."
- As the
Recorder
observed, four things have to be proved:
i) A change of circumstances effecting any entitlement of another person to any benefit. That is accepted in the present case.
ii) That the change is not a change that is excluded by
regulations
from the changes that are
required
to be notified. It is not suggested that the changes in this case are excluded by the
regulations.
iii) That the defendant knows that the change affects an entitlement of that other person to such benefit or other payment or advantage. It is accepted that this too is met.
iv) That the defendant dishonestly causes or allows that other person to fail to give a prompt notification of that change in the prescribed manner to the prescribed person. There is no evidence that the defendant caused the failure on the part of Nicola
Tilley
and during the course of the hearing below it was agreed that the words "caused or" should be deleted from the particulars of Counts two and four. The focus was therefore on the meaning of dishonestly allowing Nicola
Tilley
to fail to give the necessary prompt notification.
- It is necessary to say a word about the structure of the social security fraud legislation. Section 16 of the Social Security Fraud Act 2001 ("the 2001 Act"), which is headed: "Offence of failing to notify a change of circumstances," brought new provisions into the Social Security Administration Act 1992 ("the 1992 Act"). Until the Social Security Administration (Fraud) Act 1997 ("the 1997 Act") the only specific offence
relating
to social security fraud was the summary offence of obtaining benefit by making a false statement or producing a false document (section 112 of the 1992 Act). The 1997 Act created a new offence, triable either way, of dishonestly making a false statement or producing a false document with a
view
to obtaining benefit (section 13 inserting section 111A of the 1992 Act). The new legislation also included offences of omission as well as commission e.g. dishonestly failing to
report
a change of circumstances (section 111A(1)(c). This, according to the note in Current Law Statutes [2001] chapters 1 – 19, 11 – 31, was designed primarily to deal with claimants paid benefit by direct credit to their bank or building society account. In such cases there would be no signature of the claimant on which to base a prosecution for a false claim. The 1997 Act also inserted a parallel summary offence into the 1992 Act, (section 14 of the 1997 Act amending section 112 of the 1992 Act). That, however, was not end of the matter. It did not prove workable to define offences in terms of failing to comply with
requirements
under
regulations.
The 2001 Act introduced a new approach in defining offences as failing to
report
changes in circumstances affecting entitlement to benefit
rather
than failing to comply with
requirements
under
regulations.
That is the underlying concept that we are dealing with the present case. Section 16(2) of the 2001 Act inserted seven new subsections into section 111 of the 1992 Act as previously amended.
- Section 111A(1A) is the
reformulation
of the offence of dishonestly failing to notify a
relevant
change of circumstances. The offence is committed when the claimant knows that a change affects benefit entitlement and dishonestly fails to give prompt notification of that change.
- Section 111A(1B), with which the present case is directly concerned, is the
reformulation
of the offence of dishonestly causing or allowing another person to fail to notify a
relevant
change in circumstances. An example of the kind of situation this subsection is obviously designed to catch is where a claimant is in
receipt
of unemployed job seekers' allowance and has a partner in part time work and the latter's earnings increase but he does not tell the claimant. The change of circumstances in the present case is not however something that is unknown to the claimant; it is that she and the defendant are living in a common household, a fact of which both will be equally aware.
- It is, we think, worth looking at the predecessor to s.111A(1B) to see how it was framed as this suggests that Parliament was not intending to extend the ambit of the liability of persons other than the
recipient
of the benefit,
rather
it was
reformulating
the offence in terms that were easier to establish in a
criminal
court. S.111A of the Social Security Administration Act as amended
read:
i) If a person dishonestly –
a) Makes a false statement or
representation;
b) Produces or furnishes, or causes or allows to be produced or furnished, any document or information which is false in a material particular;
c) fails to notify a change of circumstance which
regulations
require
him to notify; or
d) causes or allows another person to fail to notify a change of circumstances which such
regulations
require
the other person to notify with a
view
to obtaining any benefit or other payment or advantage under the social security legislation (whether for himself or for some other person),
he shall be guilty of an offence.
- It will thus be apparent that the concept of dishonestly causing or allowing appeared in the previous legislation, not only in
relation
to the type of situation with which the present case is concerned but also in
relation
to producing a false document or information.
- Section 111A(1C) and (1D) extend the ambit of the offence of dishonestly failing to notify a change in circumstances to third parties who have a
right
to
receive
payment of benefit on behalf of a claimant (e.g. appointees). Section 111A(1E) extends the third party offence of dishonestly causing or allowing a failure on the part of the claimant whose
responsibility
it is to notify the change of circumstances (see subjection (1B)) to the types of situation envisaged in subsection (1C) i.e. where somebody other than the claimant has the
right
to
receive
payments of benefit. It is unnecessary for present purposes to
recite
the
remaining
new subsections.
- It is to be noted that the concept of "dishonestly causing or allowing," apart from appearing in the section under consideration and its predecessor, also appears in s.111A itself and s.111A(1E)(c) as does a dishonest failure in s.111(1D)(c).
- The primary obligation to give prompt notification of a change of circumstances is on the person whose entitlement to benefit is liable to be
reduced,
in this case Nicola
Tilley.
Subsection 111A(1B) places on a third party, in this case the defendant, a secondary obligation which he owes not to the authority, but to the
recipient
of the benefit, in this case Nicola
Tilley.
It is an offence if he dishonestly causes or allows her to fail to give the appropriate notification.
- But what is the extent of the obligation on him? Her obligation is to
report
a change of circumstances. His obligation is, in a sense, a negative one i.e. not to cause or allow her to fail in her obligation. Subsection 111A(1B) says nothing about the
relationship
between the person entitled to the benefit and the third party. Ordinarily, we imagine there would be likely to be some
relationship
between the two as, for example in the present case, living in the same household. But the subsection on its face does not
require
this.
- To what kind of change of circumstances is s.111A(1B) directed? The answer is in subsections (b) and (c); it is any change that is not excluded from those
required
to be notified, and one which the third party knows affects the other person's entitlement. It is not limited to a change in the circumstance just of the third party on the one hand or just of the claimant on the other.
- The position seems to us to be
relatively
straightforward where it is the third party's circumstances that have changed and this change affects the claimant's benefit. If the third party leaves the claimant unaware of the change so that the third party does not
report
it he is plainly allowing the third party not to give notification of the change and if he does so dishonestly he is guilty of an offence under s.111A(1B). He has the means to ensure she does not
report
the change by not giving her the
relevant
information e.g. that his wages have increased.
- The position is more difficult where the change of circumstances is something of which the claimant is aware, without the need for the third party to tell her. Here the claimant's obligation to
report
already exists without the necessity for the third party to tell her anything. In the present case Nicola
Tilley's
own circumstances were changed and changed, so it is alleged, to her knowledge because she was maintaining a common household with the
respondent.
- It is easy to envisage circumstances in which someone in the shoes of the defendant would be guilty of aiding and abetting Nicola
Tilley's
dishonest failure to give a prompt notification of a change of circumstances to the authorities. Why, therefore, is the s.111A(1B) offence necessary where the
relevant
information is already in the hands of the claimant? Nicola
Tilley
was, so far as we are aware, perfectly well able to tell the authorities she was living in a common household with the defendant.
- One possibility is that Parliament intended to
criminalise
the conduct of someone who is well aware that a change has occurred that ought to be notified to the authorities and yet stands by and does nothing perhaps, as here, benefiting indirectly from the non-disclosure. If this is the correct interpretation, how can the section be construed so as not to
criminalise
the conduct of say a neighbour who has no
relationship
with the claimant and yet knows that a change in circumstances has occurred that ought to be
reported?
What the legislation does not do is to
require
anyone other than the
recipient
of the benefit to notify the authorities. The answer may be that you cannot be said to allow something that you have no means of preventing. That poses the question what could the defendant have done to get Nicola
Tilley
to
report
the change?
- Another possibility is that s.111A(1B) is only directed towards a change of circumstances of which the third party, but not the claimant herself, is aware. However that is not the way in which the subsection is phrased and to construe it in this way would in our
view
do
violence
to the language used.
- Ordinarily a person is not guilty of a
criminal
offence if he merely stands by with the knowledge that a third party is committing an offence. The question that seems to us to arise in the present case is whether, in the context of a
criminal
non notification by the
recipient
of the benefit, Parliament intended to make someone in the shoes of the defendant
criminally
liable in circumstances where his conduct falls short of aiding and abetting an offence by the person primarily obliged to notify a change of circumstances. It can of course be said that the position is
rather
different where two people are living in a common household. They,
rather
than the authority paying the benefit, are likely to be the people who know about a material change of circumstances and it is hardly surprising that Parliament should impose
criminal
liability on those who deliberately fail to see that the authority obtains the
relevant
information. Especially, it can be said, where no offence is committed by the third party under the section unless he acts dishonestly. A case can therefore be made out that if he dishonestly does nothing and the other criteria in the subsection are met he should be
criminally
liable for 'allowing' the claimant to fail to give notification of the change.
- In focussing on the meaning of "allows" it is necessary to consider whether the defendant should have done something, and if so what. The judge concluded that turning a blind eye and doing nothing was not enough to establish
criminal
liability.
- Mr Walker, for the appellant, submits that 'allows' necessitates the pre-
requisite
knowledge and an ability to prevent, falling short of actively preventing. He argues that there is an obligation on the defendant to seek to prevent a failure to notify and that in this
regard
the
relationship
between the defendant and the
recipient
of the benefit is crucial. Whereas many people have the
requisite
knowledge, only a limited number will be in a position to prevent a failure to
report
a change of circumstances. Whether in any case the defendant is in such a position is a question of fact. If a third party in the shoes of the defendant is in a position to prevent the failure and does nothing about it there is a prima facie case of "allowing". The question therefore is: what should the defendant have done?
- The judge put this question to counsel for the Crown asking what steps the defendant should have taken to avoid
criminal
liability. Counsel gave the following examples, emphasising that they were only examples:
i)
Report
his wife to the authorities;
ii) Instruct her to stop or withdraw from the household;
iii) Set up his own bank account.
- The first suggestion of
reporting
Nicola
Tilley
to the authorities is not what the subsection is
requires,
and it would have been
very
simple for Parliament to have said so if this was what was intended. Indeed it is precisely what the
recipient
of the benefit (Nicola
Tilley)
is
required
to do when she knows of a change of circumstances effecting her entitlement. Parliament has deliberately under s.111A(1B)(d) focussed the third party's obligation not on
requiring
the third party to
report
a change to the authorities but on getting the
recipient
to do so.
- Instructing Nicola
Tilley
to stop
receiving
an amount to which she is not entitled implies that the
respondent
has in some way control over her. The
respondent
might persuade but could not compel. We do not think it would be appropriate for the law to expect him to withdraw from the household in circumstances where, if he stayed, he would not be aiding and abetting any offence by her. Finally, we cannot see that setting up his own bank account would be of any
relevance
or make any difference. Accordingly, no appropriate step that the defendant should take was advanced to the judge or to us other than trying to persuade Nicola
Tilley
to comply with her legal duty.
- We turn back to the words in the subsection "dishonestly causes or allows." The emphasis in the present case is, of course, on the word "allows" but it seems to us that the four words must be considered together. "Allows" plainly means something less than "causes". The judge said it
required
some positive act on the part of the
respondent,
but it is difficult to envisage a category of positive acts that would not fall within the description "causes." He noted the appellant's submission that "allows" should be construed as a failure to act or at least so as to include a failure to act, but he pointed out the Crown would normally be expected to prove an actus
reus
and mens
rea.
It is not a
criminal
offence, for example, to stand by and do nothing to prevent an assault or the continuation of an assault. That, however, is not a
very
helpful analogy because the defendant in the present case must have been dishonest.
- The
Recorder
considered s.5 of the Domestic
Violence,
Crime
and
Victims
Act 2004 which creates the offence of causing or allowing the death of a child. The Crown
relied
on this as an example of Parliament imposing
criminal
liability on someone who has failed to act. That legislation was, however, enacted in order to deal with a
very
specific problem namely where a child has died in a household in which one of two adults caused the death but it was impossible on the evidence to say which. As the judge pointed out, s.5(1)(d) set out with some precision the circumstances in which a defendant would be liable if it was not his act that caused the death. No assistance is therefore to be obtained from the meaning of "allows" in this Act.
- We were also
referred
to
Vehicle
Inspectorate
v
Nuttall [1999] 1 WLR 629. That case was concerned with the owner of a coach business permitting drivers to exceed the maximum number of driving hours or distance. The court was concerned with s.96(11A) of the Transport Act 1968 as amended, and the words "caused or permitted the contravention". It was held that permitting in the section meant failing to take
reasonable
steps to prevent contravention by drivers. Lord Steyn said at 635C:
"It is sufficient to consider the matter generally in
regard
to what constitutes the prohibited conduct actus
reus
and what is
required
to be proved in
respect
of the mental element mens
rea.
I deal first with the prohibited conduct. Section 96(11A) prohibits the employer of a driver from "causing" or "permitting" a driver to contravene the
requirements
of the applicable Community
rules.
Depending on the context the word "permit" is capable of bearing, on the one hand, a narrow meaning of assenting to or agreeing to or, on the other hand, a wider meaning of not taking
reasonable
steps to prevent something in one's power. But I am persuaded that the second or wider meaning best matches the context."
Lord Hobhouse of Woodborough said at 639G:
"This offence of permitting is a
crime
of omission which arises from the duty to act and involves the failure to perform that duty. What actual conduct will amount to the offence of permitting will be a question of fact depending on the circumstances of the particular case."
- There are important differences between Nuttall and the present case. Nuttall was concerned with an employer's duty
vis
a
vis
the actions of his employees. Secondly, the mens
rea
in the present case
requires
that the defendant acts dishonestly. The material word in, the present case is 'allows'
rather
than 'permits'. Like 'permits' 'allows' is a word capable of a
range
of meanings and it has to take its meaning from its context, we do not find Nuttall of any assistance in the present case.
- Crabtree
v
Fern Spinning Co. Limited (1901) 85 LT 549 was a case involving safety at work under the Factory and Workshop Act 1985. Darling J said at p552 it seemed to him that a man could not be said to allow something of which he is unaware or that which he cannot prevent. A little later he said that the defendants did not sanction or permit what had occurred. These observations seem to us to be a helpful starting point. Knowledge of a change that affects entitlement is a specific element of the offence in the present case (see s.111A(1B)(c)) and it is not in issue that the defendant had such knowledge. But was there anything the defendant could have done to make Nicola
Tilley
discharge her duty under s.111(1A), or to put it the other way
round
to prevent her from failing to give a prompt notification to the authorities of the change? The evidence does not suggest that there was. The position would be otherwise if the defendant had the means to ensure that Nicola
Tilley
did not
report
the change, for example by failing to tell her about a change in his circumstances that affected her benefit. But that is not this case.
- The word 'causes' as we have said has been
removed
in the present case, and so we are looking at 'dishonestly allows'. The word 'allows' must have some meaning that is less than 'causes': so, is doing nothing sufficient, or is something more
required
that nevertheless falls short of "causing"?
- It may be said that the word 'allows' in the present section imports the approval or sanction of the defendant. The appellant submits the mere fact that they are living together in the same household is sufficient, because the offence
requires
the mental element of dishonesty and dishonesty can be implied from the circumstances.
- We think the critical question is whether there was evidence of anything the defendant could have done that would have prevented Nicola
Tilley's
failure to give notice, bearing in mind that the obligation to give prompt notification was hers not his. No such evidence was before the court on the agreed facts.
- It was apparently agreed before the
Recorder
that it was not appropriate to look at Hansard and no
reference
to Hansard was made in argument in the appeal before us. However, after the conclusion of the hearing we invited written submissions from the parties on the appropriateness of obtaining assistance from Hansard as to the true construction of the section. In Thet
v
Director of Public Prosecutions [2007] 1 WLR 2022 Lord Phillips of Worth Matravers C.J said at p. 227 para 15:
"I would, however, question the use of Pepper
v
Hart [1993] AC 593 in the context of a
criminal
prosecution. Mr Chalk was not able to
refer
the court to any case in which Pepper
v
Hart has been used in that context. If a
criminal
statute is ambiguous, I would question whether it is appropriate by the use of Pepper
v
Hart to extend the ambit of the statute so as to impose
criminal
liability upon a defendant where, in the absence of the Parliamentary material, the court would not do so. It seems to me at least arguable that if a
criminal
statute is ambiguous, the defendant should have the benefit of the ambiguity."
More
recently
in
R
v
JTB [
2009]
UK HL 20 the House of Lords put weight on Parliamentary materials in concluding that Section 34 of the
Crime
and Disorder Act 1998 abolished not merely the presumption but the defence of doli incapax. Both Lord Phillips and Lord Brown of Eaton-Under-Heywood
referred
to the comparative
rarity
of utilising the Pepper
v
Hart principle.
- We are quite satisfied that the word "allows" in s.111A(1B)(d) is not immediately clear in its meaning and while we agree that it would be inappropriate to use Ministerial statements in Hansard to conclude a wide meaning and thereby expose the defendant to
criminal
liability when on a narrower
view
he would not be liable, we think that in this case that is not the position. Observations by Baroness Hollis during the passage of the Bill through the House of Lords lend some support to the defendant's submissions. On 6 February 2001 see Hansard HL
Vol
621 Col 1116 she said that:
"The liability occurs when the third party knows that the change affects benefit and causes or allows the beneficiary not to
report
the change. Third parties are not
responsible
if they do nothing and the claimant fails to
report
it."
This answer was made in
response
to a question whether professionals could be liable if they did not pass on information and we have some doubt therefore whether the Baroness had in mind circumstances such as those in the present case. She came back however to the point on 27 February 2001 (Hansard
Vol
622 Col 1152) when she said:
"Finally, let me point out once more for the
record
that the offence in Clause 15
relating
to "causing or allowing" a claimant to fail to notify a change of circumstances does not include third parties who merely learn of a change. To become guilty of an offence, a third party would have to be active in some way in the failure."
This seems to us to support our
view
that the
respondent
is not
criminally
liable in the present case on the basis that he simply did nothing and Nicola
Tilley
failed to
report
the change. He would, as the Baroness said, have to have been active in some way in the failure and there is no evidence that he was.
- The actus
reus
of the offences alleged against the
respondent
in each of the two offences is causing or (as the charge now stands) allowing Nicola
Tilley
to fail to give a prompt notification to the authorities of a change of circumstances that he knew that would effect her entitlement. The mens
rea
is doing so dishonestly. The actus
reus
is therefore allowing an act of omission by a third party. Such an actus
reus
is not
readily
to be found in the
criminal
law. In deciding what must be proved to establish "allowing" on the part of the
respondent
the wording of the subsection is important. Dishonestly causing or allowing indicates that there are two ways of committing the offence, but that in either case the
respondent
must have acted dishonestly. On any
view
"allowing" must mean something less than "causing". As was pointed out by Cussen J in Gilbert
v
Gulliver [1918]
VLR
185, 189 – 190 the meaning of the word "allow" may
vary
according to the circumstances and the class of enactment in which it is found.
Conclusion
- The change of circumstances
relied
on in the present case is that the defendant and Nicola
Tilley
were maintaining a common household. The primary obligation to
report
this was on Nicola
Tilley
as the
recipient
of the benefit (see s.111A(1A)). It is not suggested that the
respondent
did anything that "caused" her not to
report
this and if he had done any such thing he would probably be guilty of aiding and abetting an offence by her. In a case, as here, where Nicola
Tilley
was as aware as the defendant of the circumstances that needed to be
reported
in our
view
for the defendant to be liable under s.111A(1B) there had to be some action that he could have taken that would have
resulted
in Nicola
Tilley
discharging her obligation to
report.
As the agreed facts do not disclose anything that he could appropriately have done we think the judge was correct in the conclusions that he
reached.
This is not one of those cases in which the defendant unbeknown to the
recipient
of benefit is aware of circumstances that he knows affects the
recipient's
entitlement. Accordingly the appeal is dismissed and the terminating
ruling
stands. We direct the defendant's acquittal under s.61(3) of the
Criminal Justice Act 2003.