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Minister for Social, Community and Family Affairs v. Scanlon [1999] IEHC 156 (11th May, 1999)
THE
HIGH COURT
1997
No. 277 S
BETWEEN
MINISTER
FOR SOCIAL, COMMUNITY AND FAMILY AFFAIRS
PLAINTIFF
AND
MICHAEL
J. SCANLON
DEFENDANT
Judgment
of Ms. Justice Laffoy delivered on the 11th day of May 1999
THE
CLAIM
1. In
these proceedings the Plaintiff seeks to recover from the Defendant the sum of
£43,088.25 which is alleged to be due and owing by the Defendant to the
Plaintiff in respect of disability benefit overpaid to the Defendant between
24th September, 1985 and 25th May, 1994.
THE
FACTS
2. The
essential material facts, which are not in dispute, are as follows:-
(a) On
1st October, 1985 the Defendant applied to the Minister's department for
disability benefit, stating that he had last worked on 27th July, 1985. His
claim was processed and he was awarded disability benefit with effect from 24th
September, 1985.
(b) Between
24th September, 1985 and 25th May, 1994 the Defendant received disability
benefit payments at the rates applicable to him which aggregated the sum
claimed, namely, £43,088.25.
(c) In
1994, the Defendant's entitlement to disability benefit was reviewed and the
review resulted in a revised decision of a deciding officer dated 15th June,
1994 which:-
(i) revised
the original decision of a deciding officer to allow disability benefit for the
period from 24th September, 1985 to 25th May, 1994, as the Defendant had worked
between those dates;
(ii) decided
that the disability benefit and pay related benefit paid in respect of those
periods, amounting to £41,566.15 and £1,522.10 respectively, be
disallowed; and
(iii) decided
that benefit in respect of all those days was paid on the basis of statements
or representations which were false or misleading in a material respect or by
wilful concealment of material facts and, as a consequence, that the benefit
paid was repayable.
(d) The
Defendant appealed that decision of the deciding officer to an appeals officer
and, following an oral appeal, the appeals officer issued her decision on the
appeal in April 1995, which was that in the period from 24th September, 1985 to
25th May, 1994, the Defendant was not entitled to disability or pay related
benefit as new evidence available showed that he was working during this
period. As to the reasons for the decision on appeal, the appeals officer
stated as follows:-
"On
examination of the evidence, I am satisfied that the appellant's involvement in
the business as Manager and occasional operator, constituted work and he
derived benefit from this work. I am not fully satisfied that the appellant
knowingly made false or misleading statements in claiming disability benefit,
but based on the new evidence that he was working, I am satisfied that benefit
was not payable and should be refunded."
(e) The
only evidence before the Court of a demand for repayment of the sum of
£43,088.25, on which these proceedings is based, is of a demand made on
17th June, 1994, in the interim period between the revised decision of the
deciding officer and the decision of the appeals officer.
THE
RELEVANT STATUTORY PROVISIONS
3. In
order to ascertain the legal position of a recipient of disability benefit
during the years from 1985 to 1994 in respect of whom a deciding officer or an
appeals officer has made a revised decision it is necessary to consider the
following statutes:-
(1) The
Social Welfare (Consolidation) Act, 1981, (the Consolidation Act of 1981);
(2) The
Social Welfare Act, 1991 (the Act of 1991);
(3) The
Social Welfare Act, 1992 (the Act of 1992);
(4) The
Social Welfare Act, 1993 (the Act of 1993); and
(5) The
Consolidation Act of 1993.
4. Section
300 of the Consolidation Act of 1981 dealt with revision of a decision of a
deciding officer by a deciding officer or an appeals officer. Subsection (5)
of Section 300 as originally enacted provided as follows:-
"A
revised decision given by a deciding officer or an appeals officer shall take
effect as follows:-
(a) where
any benefit...will, by virtue of the revised decision, be disallowed...and the
revised decision is given owing to the original decision having been given, or
having continued in effect, by reason of any statement or representation
(whether written or verbal) which was to the knowledge of the person making it
false or misleading in a material respect or by reason of the wilful
concealment of any material fact, it shall take effect as and from the date on
which the original decision took effect but the original decision may, in the
discretion of the deciding officer or appeals officer (as the case may be),
continue to apply to any period covered by the original decision to which such
false or misleading statement or representation or such wilful concealment of
any material fact does not relate; and
(b) in
any other case, it shall take effect as from the date considered appropriate by
the deciding officer or appeals officer (as the case maybe), but-
(i) any
payment of benefit...already made at the date of the revision shall (without
prejudice to its being treated, in accordance with regulations for the purposes
of Section 113(2)(b), as paid on account of another benefit) not be affected..."
5. Section
113 of the Consolidation Act of 1981 empowered the Minister to make regulations
in relation to matters arising out of any appeal or revision of any decision
under Part VIII of that Act, in which Section 300 was contained, and, by virtue
of subsection (2)(b) thereof, he was specifically empowered to make regulations:-
"...in
a case referred to in section 300(5)(a) for the repayment of any such benefit
and the recovery thereof by deduction from any benefit...as maybe specified, or
otherwise."
6. Section
117 of the Consolidation Act of 1981 provided that all sums due to the Social
Insurance Fund should be recoverable as debts due to the State and might be
recovered by the Plaintiff as a debt under statute in any court of competent
jurisdiction.
7. Section
35 of the Act of 1991 amended Section 300 of the Consolidation Act of 1981 by
the insertion after paragraph (a) of subsection (5) of the following paragraph:-
"(aa) Where
any benefit...will, by virtue of the revised decision, be disallowed...and the
revised decision is given in the light of new evidence or new facts which have
been brought to the notice of the deciding officer or appeals officer (as the
case maybe) since the original decision was given, it shall take effect from
such date as that officer shall determine having regard to the new facts or new
evidence."
8. Section
117 of the Consolidation Act of 1981 was amended by Section 38 of the Act of
1991 but the amendment is not material for present purposes.
9. Section
40 of the Act of 1992 clarified paragraph (aa) of subsection (5) of Section 300
and provided as follows:-
"For
the avoidance of doubt, the provisions of paragraph (aa) (inserted by Section
35 of the Act of 1991) of Section 300(5) of the Principal Act shall apply to
new facts or new evidence relating to periods prior to and subsequent to the
commencement of that paragraph."
10. Section
31(1) of the Act of 1993 amended the Consolidation Act of 1981 by substituting
for Section 300 the sections therein set out, which were numbered 300 and 300A
to 300H inclusive. Section 300B dealt with the effect of revised decisions and
determinations. By virtue of Section 32 of the Act of 1993, Section 117 of the
Consolidation Act of 1981, as inserted by Section 38 of the Act of 1991, was
repealed. The repealed provision was replaced by Section 300F, but, again, the
amendments introduced in this provision are not material for present purposes.
11. Finally,
the Act of 1993 was repealed by the Consolidation Act of 1993. Section 249 of
the latter provides as follows:-
"A
revised decision given by a deciding officer shall take effect as follows:-
(a) where
any benefit...will, by virtue of the revised decision be disallowed...and the
revised decision is given owing to the original decision having been given, or
having continued in effect, by reason of any statement or representation
(whether written or verbal) which was to the knowledge of the person making it
false or misleading in a material respect or by reason of the wilful
concealment of any material fact, it shall take effect as from the date on
which the original decision took effect, but the original decision may, in the
discretion of the deciding officer, continue to apply to any period covered by
the original decision to which such false or misleading statement or
representation or such wilful concealment of any material fact does not relate;
(b) where
any benefit...will, by virtue of the revised decision be disallowed...and the
revised decision is given in the light of new evidence or new facts (relating
to periods prior to and subsequent to the commencement of this Act) which have
been brought to the notice of the deciding officer since the original decision
was given, it shall take effect from such date as the deciding officer shall
determine having regard to the new facts or new evidence; and
(c) in
any other case, it shall take effect as from the date considered appropriate by
the deciding officer having regard to the circumstances of the case."
12. Section
264 of the Consolidation Act of 1993 deals with the effect of a revised
decision by an appeals officer and is in similar terms to the provisions of
Section 249. Sections 249 and 264 re-enacted the provisions of Section 300B,
inserted by Section 31(1) of the Act of 1993, as regards revised decisions of
deciding officers and appeals officers substantially verbatim. Section 278 of
the Consolidation Act of 1993 provides as follows:-
"Where,
in accordance with the provisions of sections 249, 264..., a decision...is
varied...by a deciding officer, an appeals officer ...so as to disallow...any
benefit...paid or payable to a person:-
(a) any
benefit paid in pursuance of the original decision shall be repayable to the
Social Insurance Fund to the extent to which it would not have been payable if
the decision on the appeal or revision had been given in the first instance and
such person and any other person to whom the benefit was paid on behalf of such
person, or the personal representative of such person, shall be liable to pay
to the said Fund, on demand made in that behalf by an officer of the Minister,
the sum so repayable..."
13. The
substance of the foregoing provision had been contained in subsection (4) of
Section 300D, inserted by Section 31(1) of the Act of 1993.
14. Section
281 of the Consolidation Act of 1993 re-enacted Section 300F, inserted by
Section 31(1) of the Act of 1993, and provided that all sums due to the Social
Insurance Fund should be recoverable as debts due to the State and might be
recovered by the Plaintiff as a debt under statute or a simple contract debt in
any court of competent jurisdiction.
15. All
of the provisions of the earlier acts which I have referred to above then
extant were repealed by Section 300 of the Consolidation Act of 1993. However,
the repeal was expressed to be subject to the following proviso:-
"Provided
that without prejudice to the
Interpretation Act, 1937, the provisions of the
repealed enactments shall continue to apply to benefit...prior to the
commencement of
this Act to the same extent as if
this Act had not been passed."
16. Section
301 of the Consolidation Act of 1993 provided that the continuity of the
operation of the law relating to the matters provided for in the repealed
enactments should not be affected by the substitution of the Consolidation Act
for those enactments.
APPLICATION
OF THE STATUTORY PROVISIONS: QUESTIONS
17. Having
regard to the foregoing provisions, the position of a recipient of disability
benefit in respect of whom a deciding officer or an appeals officer has made a
revised decision over the years in question here would have been as follows:-
(1) In
the period from 1985 until the coming into operation of
the Act of 1991, his
position would have been governed by Section 300(5) of the Consolidation Act of
1981 as originally enacted and, unless he came within the provisions of
paragraph (a), in other words, that a finding of fraud was made against him,
benefit already paid to him prior to the revised decision could not be affected
and was irrecoverable. This construction is consistent with the decision of
this Court, (Barron J.) in
The
State (Hoolahan) -v- Minister for Social Welfare and the Attorney General
,
in which judgment was delivered on 23rd July, 1986.
(2) In
the period from the coming into operation of
the Act of 1991 until the coming
into operation of
the Act of 1993, his position would have been governed by
Section 300(5) of the Consolidation Act of 1981, as amended by Section 35 of
the Act of 1991, as clarified by Section 40 of
the Act of 1992. This means
that, if the revised decision did not relate to a finding of fraud but did come
within paragraph (aa) of subsection (5), in other words, was based on new
evidence, he would be outside the ambit of paragraph (b) of subsection (5) and
the revised decision would take effect from the date determined by the deciding
officer or the appeals officer, as the case might be. Two questions, which are
relevant to the issue before the Court arise in relation to this period.
First, if a revised decision made during this period was based on new evidence,
as a matter of construction of the relevant statutory provision, was the
deciding officer or the appeals officer, as the case might be, entitled to make
a decision taking effect as and from a date prior to the commencement of the
Act of 1991, which would have had the effect of disallowing and rendering
recoverable benefit paid prior to such commencement? In other words, did the
relevant statutory provision, Section 300(5)(aa), as clarified, have
retrospective effect? Secondly, was there a liability to repay and a statutory
mechanism for recovering benefit disallowed on account of new evidence in this
period?
(3) In
the period since the coming into operation of
the Act of 1993 his position has
been governed until it was repealed by
the Act of 1993 and subsequently by the
Consolidation Act of 1993. It is undoubtedly the case that under both Acts,
where benefit is disallowed because of fraud or an account of new evidence it
is recoverable from such date as the deciding officer or the appeals officer
determines, assuming that date post-dates the coming into operation of the
relevant Act. However, a question arises, which is relevant to the issue
before the Court, whether, as a matter of the construction of the provisions of
Section 300, as amended by
the Act of 1993, and, in particular, Sections 300B
and 300D(4), and, as a matter of the construction of the provisions of Sections
249, 264 and 278 of the Consolidation Act of 1993, a determination of a
deciding officer or an appeals officer is capable of having effect so as to
render recoverable benefit paid before the respective dates of commencement of
those Acts. In other words, the question is did those provisions have
retrospective effect?
RETROSPECTIVITY
18. The
subject of retrospectivity of legislation was dealt with by the Supreme Court in
Hamilton
-v- Hamilton
(1982) I.R. 467. In his judgment, at page 473, O'Higgins C.J. stated as
follows:-
"For
the purpose of stating what I mean by retrospectivity in a statute, I adopt a
definition taken from Craies on Statute Law (7th ed., p.387) which is, I am
satisfied, based on sound authority. It is to the effect that a statute is
deemed to be retrospective in effect when it 'takes away or impairs any vested
right acquired under existing laws, or creates a new obligation, or imposes a
new duty, or attaches a new disability in respect to transactions or
considerations already past'."
19. Having
stated that retrospective legislation, since it necessarily affects vested
rights, has always been regarded as prima facie unjust, O'Higgins C.J. then
went on to consider the approach at common law to the examination of a statute
to determine whether the legislature intended it to have retrospective effect
and stated as follows at page 474:-
"The
result is a rule of construction which leans against such retrospectivity and
which, according to Maxwell, is based upon the presumption 'that the
legislature does not intend what is unjust' - see Maxwell on The Interpretation
of Statutes (12th ed., p. 215)'."
20. O'Higgins
C.J. then went on to quote with approval from three English cases, including
the following passage from the judgment of Wright J. (at page 551-552 in the
report) in
Re:
Athlumney, ex. p. Wilson
(1898) 2 QB 547:-
"Perhaps
no rule of construction is more firmly established than this - that a
retrospective operation is not to be given to a statute so as to impair an
existing right or obligation, otherwise than as regards matters of procedure,
unless the effect cannot be avoided without doing violence to the language of
the enactment. If the enactment is expressed in language which is fairly
capable of either interpretation, it ought to be construed as prospective only."
21. Finally,
O'Higgins C.J. considered the proper approach to the consideration of an Act of
the Oireachtas for restrospectivity and stated as follows at page 475:-
"In
considering and interpreting Acts of the Oireachtas we must assume, in the
first instance, that what the legislature has done was not intended to
contravene the Constitution. The presumption of validity prevails until the
contrary is clearly established. It follows that in interpreting or construing
an Act of the Oireachtas where two possible meanings or intentions are open,
one which conforms with an Act's validity having regard to the provisions of
the Constitution while the other does not, the meaning or intention which so
conforms must be preferred. This is so because it must be assumed that the
Oireachtas has intended to act within its powers and with due regard to the
Constitution. This approach to the interpretation and construction of Acts of
the Oireachtas is required by the Constitution. While it may not replace the
common-law rule, it certainly supersedes it once the question of possible
infringement of the Constitution arises."
22. Applying
the foregoing principles to the statutory provisions at issue in the instant
case leads to the following conclusions. First, the introduction of a
requirement that the recipient of State benefit refund benefit paid to him in
circumstances in which no such requirement existed when the benefit was
received, in my view, undoubtedly creates a new obligation in respect to a
transaction already past. The introduction of such requirement brings about a
substantive change in the recipient's position, not merely a change of
procedure or form. It is not merely a matter of taking past events into
account; it is a case of applying new law to past events. When such
requirement is introduced by statute, the statute is retrospective in effect
within the definition of retrospectivity adopted by O'Higgins C.J. in
Hamilton
-v- Hamilton
.
Secondly, the fundamental question on the restrospectivity issue in the
instant case is whether the words "it [the revised decision] shall take effect
from such date as the deciding officer shall determine having regard to the new
facts and the new evidence" in paragraph (aa) of Section 300(5), when read in
the broader context of a provision which refers to the revised decision being
given in the light of new evidence or new facts relating to periods prior to
and subsequent to the enactment of the provision, are only open to one
interpretation, namely, that the clear and unequivocal intention of the
legislature was that the provision would have retrospective effect, or whether
they are equally open to two interpretations, namely, one allowing for
retrospective effect and the other providing for prospective effect only. In
my view, the words in question in the context in question are equally open to
the interpretation that legislature intended the relevant provision to have
retrospective effect and the interpretation that it was intended to operate
prospectively only. That being the case, according to the principles of
construction applied by the Supreme Court in
Hamilton
-v- Hamilton
,
the relevant provision is to be construed as having prospective effect only.
Thirdly, although the constitutionality of the relevant provisions is not in
issue since Mr. Meehan, for the Defendant, contends for prospective operation
only of those provisions, construing the provisions as operating prospectively
only conforms with the validity of the provisions having regard to the
provisions of the Constitution.
23. On
that basis, Section 35 of the Act of 1991 which introduced paragraph (aa) did
not have retrospective effect and, accordingly, benefit paid to the Defendant
prior to the commencement of that Act is not recoverable. As regards benefit
paid to the Defendant after the commencement of the 1991 Act, it was paid to
and received by the Defendant on the basis that it could be affected by a
revised decision in accordance with paragraph (aa) of Section 300(5) of the
Consolidation Act of 1981, as inserted by the Act of 1991, which was outside
the ambit of paragraph (b) of that sub-section and, in particular, the
protection afforded by subparagraph (i) of that paragraph. Therefore, such
benefit would have been recoverable on the making of a revised decision after
the commencement of the 1991 Act disallowing it on the ground of new evidence,
provided there was statutory liability for repayment and a mechanism for its
recovery.
STATUTORY
LIABILITY FOR REPAYMENT/ MECHANISM FOR RECOVERING BENEFIT
24. There
was no such express liability or mechanism until the coming into operation on
2nd April, 1993 of Section 31(1) of the Act of 1993, which brought in Section
300D(4) of the Consolidation Act of 1981. In particular, the Regulation which
provided for repayment to the Social Insurance Fund of benefit disallowed in
consequence of a finding of fraud, Regulation 10 of Social Welfare (General
Benefit) Regulations, 1953 (S.I. No.16 of 1953), was never extended to benefit
disallowed on account of new evidence before the coming into force of Section
300D(4).
25. This
raises the question whether Section 31(1) of the Act of 1993 and the
introduction of Section 300D(4) had retrospective effect in relation to a
revised decision founded on new evidence effective after the enactment of
Section 35 of the Act of 1991. Applying the same principles of law and the
same reasoning as I have applied earlier in relation to the issue of the
retrospectivity or prospectivity of Section 35 of the Act of 1991, in my view,
Section 300D(4) did not have retrospective effect and took effect prospectively
only from 2nd April, 1993.
26. It
was urged by Mr. Marry, on behalf of the Plaintiff, that Section 35 of the Act
of 1991 was self-executing and that the absence of a Regulation on the lines of
Regulation 10 or a statutory provision on the lines of Section 300D(4) did not
prevent the Plaintiff recovering benefit disallowed thereunder on account of
new evidence for the Social Insurance Fund. I do not accept this argument.
Following the enactment of Section 300(5)(aa) in 1991, there was a patent
cassus omissus in the Social Welfare code. While, in broad terms, a deciding
officer or an appeals officer had a discretion as to the date on which a
revised decision should take effect, whether the revision was founded on fraud
or on new evidence, it was only in the case of a revised decision founded on
fraud that an obligation to repay disallowed benefit to the Social Insurance
Fund was imposed and that a mechanism, a demand by an officer of the Plaintiff,
for triggering the entitlement of the State to recover was provided for.
CONCLUSION
27. Accordingly,
the position in April 1995 when the appeals officer reversed the deciding
officer's revised decision based on fraud and substituted for it a revised
decision based on new evidence was that, as a matter of law, benefit paid to
the Defendant prior to the commencement of the Act of 1993 was not repayable to
the Social Insurance Fund on demand under Section 278 of the Consolidation Act
of 1993 because:-
(1) The
revised decision of the appeals officer, being based on new evidence, could
have taken effect only from the commencement of the Act of 1991; and
(2) The
revised decision could only have taken effect so as to render disallowed
benefit to be repayable to the Social Insurance Fund and recoverable on demand
made by and officer of the Plaintiff from the coming into operation of the Act
of 1993.
28. While,
in consequence of the revised decision of the appeals officer, a demand for
repayment of the benefit paid to the Defendant between 2nd April, 1993 and the
25th May, 1994 could have been made, in the absence of evidence of such a
demand after the decision of the appeals officer, the liability of the
Defendant under Section 278 of the Consolidation Act of 1993 has not been
established. I do not accept Mr. Marry's argument that the issuing of the
Summary Summons in this case within the relevant limitation period was a
sufficient demand within the meaning of Section 278, because the scheme of the
Social Welfare code is that it is a demand which creates liability to re-pay
and it is the existence of liability which empowers the Minister to sue and
this is reflected in Sections 278 and 281 of the Consolidation Act of 1993.
29. The
Plaintiff's claim is dismissed.
© 1999 Irish High Court
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