CDLA/1859/2004

DECISION OF THE SOCIAL SECURITY COMMISSIONER
  
1.	I allow the claimant’s appeal.  I set aside the decision of the Harrow appeal tribunal dated 23 January 2004 and I refer the case to a differently constituted appeal tribunal for determination.

REASONS

2.	On 14 January 2003, the Secretary of State decided that the claimant was not entitled to disability living allowance from 15 October 1999 because she was not present in Great Britain and that an overpayment of benefit amounting to £4,811.20 in respect of the period from 20 October 1999 to 23 January 2001 was recoverable from her.  The claimant appealed, protesting that the Secretary of State had got the dates wrong, that in any event the Overseas Branch had been informed of her absence in connection with her retirement pension and, finally, that if her order book had been cashed it was without her authority as she had instructed that her book was to be returned.  The Secretary of State was unmoved but the tribunal, having seen pages from the claimant’s passport, accepted that she had been out of the country only from 9 April 2000.  However, it did not accept that the Department had been informed of her absence and it took the view that any request by the claimant that her daughter deal with her order book and disclose her absence made her daughter her agent and if the daughter cashed the orders the claimant remained liable for the overpayment as her principal.  Accordingly, it allowed the claimant’s appeal only in part and found that £3,001.20 had been overpaid and that that sum was recoverable from the claimant.  The claimant now appeals with my leave, given in the light of the Court of Appeal’s decision in Hinchy v. Secretary of State for Work and Pensions.

3.	The Secretary of State’s appeal to the House of Lords in Hinchy was allowed ([2005] UKHL 16; [2005] 1 W.L.R. 967 (also to be reported as R(IS) 7/05) and that decision does not assist the claimant because it is accepted that the Disability Benefits Unit administering disability living allowance was not informed of the claimant’s absence.  The implication of the decision is that disclosure had to be made to that particular office to be effective.

4.	However, Mr Cahill, on behalf of the Secretary of State, submits that the tribunal’s decision is, in any event, flawed.  He refers to CIS/395/1992 and submits that, if the claimant asked her daughter to return her order book to the Department and the daughter then cashed the orders without her authority, the overpayment is not recoverable from the claimant.  Therefore, he submits, the tribunal’s decision is erroneous in point of law because it did not make any finding as to whether the claimant’s daughter did in fact not have the claimant’s authority to continue to cash the orders after she left Great Britain.  On the tribunal’s view of the law of agency, such a finding was not necessary.

5.	In CIS/395/1992, I said –

“10.	…  If the claimant intended to stop claiming and her order book was then stolen by her husband who cashed the orders without her knowledge, it cannot be said that payments made when the stolen orders were cashed were in consequence of the claimant’s failure to disclose a material fact.  It might possibly be argued that there would have been no overpayment if there had been disclosure of the material facts because it could be suggested that a ‘stop notice’ would then have been issued.  However, the failure to disclose would still not have been an effective cause of the overpayment; it would have been causa sine qua non but not causa causans.”

6.	The present case is not materially distinguishable from that case, save only that here, since the daughter had at one time had authority to cash the orders, it will be necessary for the claimant to show that that authority was withdrawn when she went abroad.  That, of course, is implicit in what she has said.  It is also implicit in what she has said that the money obtained by her daughter was not paid to, or applied on behalf of, the claimant herself.  That is important because, even if an agent wrongly obtains benefit without the authority of her principal, the principal may still be liable to repay the money if it was paid to, or applied on behalf of, the principal (see the discussion of the law of agency in paragraph 56 of R(IS) 5/03).  However, the Secretary of State is not entitled to recover from a claimant benefit that has been wrongly obtained by an agent, where the agent was acting outside her authority and the claimant has not derived any advantage from the wrong-doing.  The tribunal’s approach to the law of agency was therefore not sufficiently sophisticated and findings of fact had to be made before the claimant’s case was dismissed.

7.	I therefore accept Mr Cahill’s submission and refer the case to another tribunal.  It should be noted that I asked the Secretary of State to explain why the period of overpayment ended in 2001 when the claimant had remained abroad until after the decision under appeal was made and to explain how and the overpayment was discovered.  The necessary documents have not yet been found.  I asked the questions because the information might have thrown some light on the circumstances in which the orders were being cashed while the claimant was abroad.  I also observe that it has been open to the Secretary of State to cause the daughter to be interviewed ever since the claimant first suggested that she had been acting contrary to her instructions.

	(signed on the original)	MARK ROWLAND
		Commissioner
		1 July 2005