Social Welfare Act demand requirement upheld where original demand remains valid pending appeal outcome.

THE SUPREME COURT

136/99

Keane C.J.

Denham J.

Murray J.

McGuinness J.

Fennelly J.

BETWEEN

THE MINISTER FOR SOCIAL COMMUNITY & FAMILY AFFAIRS (FORMERLY MINISTER FOR SOCIAL WELFARE)

APPELLANT

AND

MICHAEL J SCANLON

RESPONDENT

JUDGMENT delivered the 16th day of January, 2001 by Fennelly J.

The cycle of continual amendment and periodic consolidation of the Social Welfare Acts inevitably throws up problems concerning the

effect of legislative change on past events. The present appeal concerns principally whether retrospection is to be given to a change

designed to add to the armoury of means of recovery of social welfare over-payments by the Minister for Social Community and

Family Affairs (whom, for brevity, I will describe as the Minister).

The respondent, Michael J Scanlon, worked as a Signalman for Córas Iompair Eireann until 27th July, 1985 when he was released as

unfit for work due to failing eyesight. He applied for disability benefit, which he was awarded as from 24th September, 1985. This

depended on his being incapable of work. Between that date and 25th May, 1994 ("the relevant period") he was paid disability benefit

at the rates prevailing from time to time amounting in total to £43,088.25.

In 1994, as a result of further information, the respondent’s right to disability benefit was reviewed. It is important for an

understanding of the issues to distinguish between the two stages of that review, namely the decision of the Deciding Officer and the

decision of the Appeals Officer.

The Deciding Officer on 15th June, 1994 decided “under the authority of section 248 of the Social Welfare (Consolidation) Act, 1993"

to revise the original decision. She decided that for the entire of the relevant period for which disability benefit had been paid the

respondent had “worked” and that the benefit was “disallowed”.

She further explained that “benefit in respect of all the above days was paid on the basis of statements or representations which

were false or misleading in a material respect or by the wilful concealment of material facts and as a consequence that the benefit

paid is repayable.”

The effect of this decision was conveyed to the respondent by a letter of 17th June, 1994 which, the Minister says, constitutes a

demand for the repayment of the sum in question, £43,088.25. That letter also informed the respondent of his right to appeal against

the decision, which he duly did.

The decision of the Appeals Officer dated 3rd April, 1995 was made following an oral hearing. It includes a summary of findings of

activity by the respondent in the provision of a school bus service, a hackney car service and in the ownership and running of a public

house. The Appeals Officer rejected as “simply not credible” the respondent’s contention that, although owner of these businesses,

he was not involved in running them. She expressed herself as “quite satisfied that this businessman was working while claiming and

in receipt of Disability and Pay Related Benefit.” However, it is crucial to the argument in the appeal before this court that the

Appeals Officer continued as follows:

“On the question of whether he claimed with fraudulent intent, I am not quite so sure. All businesses had been in

operation while he was employed by CIE, and he claims that this caused confusion. In the light of this explanation, I feel

that it would be difficult to sustain an accusation of fraud. I am satisfied however that in the light of the new evidence

of his involvement in business enterprises, he was not entitled to benefit in respect of absence from work due to illness,

and that any benefit paid should be disallowed under Section 249(b) of the Social Welfare (Consolidation) Act, 1993. My

decision to this effect is attached.”

The “attached” decision is merely a summary of the conclusion of the Appeals Officer. It states:

“Decision of Appeals

I decide that in the period from 24 September 1985 to 25 May 1994, Mr Michael Scanlon RSI No. 01115536 was not

entitled to Disability or Pay-Related Benefits as new evidence available shows that he was working during this period.”

“Note on reasons for Decision

On examination of the evidence I am satisfied that the Appellant’s involvement in his businesses as Manager and

Occasional operator, constituted work and that 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 the Benefit was not payable and should be refunded.”

I draw attention to two critical features of this decision. Firstly, it alters the statutory reason for the decision given by the Deciding

Officer. In depends not on “false or misleading” statements or “wilful concealment” of material facts but simply on “new evidence

that [the respondent] was working". Secondly, though not using words descriptive of the exercise of a discretion, the Appeals Officer

was, in fact, doing just that when she said that she was “satisfied that Benefit was not payable and should be refunded.”

For the purposes of the legal issues in this appeal, the decision of the Appeals Officer has to be taken as finally deciding that the

respondent had not been entitled to the benefit he received, because he was not, at any time during the relevant period, disabled

from work. The respondent did not seek judicial review of the decision.

The Minister issued a Summary Summons on 28th May, 1997 claiming the sum of £43,088.25 on the basis that it represented benefit

“overpaid” to the respondent and that it had been formally demanded from him on 17th June, 1994. The Special Indorsement of Claim

says that the proceedings are maintained “in accordance with the provisions of the Social Welfare Act, 1993.”

The proceedings came on for hearing before Miss Justice Laffoy in the High Court on the basis of the affidavits. In a judgment of 11th

May, 1999, she dismissed the Minister’s claim on grounds which can only be understood when the legislation is discussed, but briefly

were to the effect that:-

1. Insofar as the claim related to sums paid to the respondent prior to 1st April, 1991 they depended on a legislative change

made in that year which should not be interpreted as having retrospective effect.

2. Insofar as they related to sums paid in respect of the period 1st April, 1991 to 2nd April, 1993, they depended on a

legislative mechanism for recovery which came into effect only on the latter date and for similar reasons that retrospective

effect should not be allowed.

3. That, even in respect of sums paid in the period after 2nd April, 1993, when no question of the retrospective effect of

legislation arose, the claim could not succeed in the absence of a new demand for payment following upon the decision of the

Appeals Officer.

The Minister has appealed against the judgment of the High Court on all points. The decision at issue and the Minister’s demands were

all made on foot of the provisions of the Social Welfare (Consolidation) Act, 1993.

However, the argument concerning retrospective effect requires an account of the relevant prior legislation. This issue revolves round

a change made in 1991. Before then the Minister could recover Social Welfare payments wrongly made only, in effect, if fraud was

established. From 1991, new evidence sufficed without proof of fraud. The respondent has at all times maintained that a revision of a

decision based only on new evidence cannot, without injustice, permit the Minister to recover benefit paid for periods prior to the

legislative change which permitted it.

Section 15 of the Social Welfare Act, 1952 (the Act of 1952) established an entitlement, “subject to the provisions of this Act” to

“disability benefit in respect of any day of incapacity for work ......” The entitlement to benefit was and remains subject, inter alia, to

a condition that a claim for it be made in a manner to be prescribed (Section 29) and to a favourable decision by a Deciding Officer.

(Section 42)

It is the machinery for revision of decisions that is central to this case. Section 46(1) of the Act of 1952 provided:

“A deciding officer may, at any time and from time to time, revise any decision of a deciding officer, if it appears to him that

the decision was erroneous in the light of new evidence or of new facts which have been brought to his notice since the date

on which it was given or by reason of some mistake having been made with respect to the law or the facts, or if it appears to

him in a case where benefit has been payable that there has been any relevant change of circumstances since the decision

was given, and the provisions of this Act as to appeals shall apply to such revised decision in the same manner as they apply

to an original decision.”

This provision has been repeated almost verbatim in all subsequent amending and consolidating Acts, notably Section 300(1) of the

Social Welfare (Consolidation) Act, 1981 (the Act of 1981), Section 31(1) of the Social Welfare Act, 1993 (the Act of 1993) and

Section 248(1)(a) of Social Welfare (Consolidation) Act, 1993 (the Consolidation Act of 1993).

The effect of such a revised decision was dealt with in Section 46(5) of the Act of 1952. It is the extent to which these provisions

were subsequently altered that is the core of the issue on this appeal. Section 46(5) read:-

“(5) A revised decision given by a deciding officer or an appeals officer shall take effect as follows:-

(a) where benefit will, by virtue of the revised decision, be disallowed or reduced 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 oral) 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, in a case in which the benefit is by way of periodical payment, 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

such original decision to which such false or misleading statement or representation or such wilful concealment of any

material fact does not relate.

(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 may be), but 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 paragraph (b) of subsection (2) of

section 48 of this Act, as paid on account of another benefit) not be affected.”

Paragraph (a) of this provision has also remained virtually unchanged, with inconsequential changes in wording, through section

300(5)(a) of the Act of 1981, section 31(1) (introducing a new section 300B(a)) of the Act of 1993 and section 249(1) of the

Consolidation Act of 1993.

In short, decisions to grant benefit were, at all times since 1952, subject to the possibility of revision and, in the event of fraud or

wilful concealment, to consequential recovery of payments already made.

Section 46(5) of the Act of 1952 also remained in effect with minimal change of no consequence for the present appeal up to its re-

enactment in section 300(5)(b)(i) of the Act of 1981.

In effect, when fraud was not established and recorded in the revised decision, the benefit recipient could not be asked to repay

wrongly-paid benefit. It should, at the same time, be noted that the Acts of 1952 and 1991 permitted the Minister, by regulations, to

treat benefit so found to have been wrongly paid as paid on account of another benefit.

The first encroachment on this simple distinction between revision on the ground of fraud with full reimbursement and all other cases,

where the Minister was barred from seeking reimbursement, occurred in 1991. Section 35 of the Social Welfare Act, 1991 amended

Section 300(5) of the Act of 1981 by inserting a new and crucial paragraph (aa) (for brevity "paragraph (aa)") between paragraphs

(a) and (b) (all other cases). The new provision reads:-

“(aa) Where any benefit, assistance, supplement or child benefit will, by virtue of the revised decision, be disallowed or

reduced or a qualification certificate under Chapter 2 of Part III is revoked 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 may be)

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.”

The ground of “new evidence or of new facts” had always since 1952 been the first of the grounds available for the revision of a

decision. It had not, however, merited separate treatment in the sub-section dealing with the consequences of a revision. The

discovery of new evidence or new facts might or might not involve the discovery of fraud or wilful concealment and, thus, might or

might not enable the Minister to seek reimbursement. Therefore, this new paragraph covers part of the ground previously covered

both by paragraph (a) and by paragraph (b).

Section 40 of the Social Welfare Act, 1992, in addition, provided:-

“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 (the Act of 1981) shall apply to new facts or new evidence relating to periods prior to and subsequent to the

commencement of that paragraph.”

The legislative provisions here summarised were re-enacted with no material alteration by section 248 (regarding revision of decisions)

and section 249 (regarding their effects) of the Consolidation Act of 1993.

The controversy surrounds the question as to whether the introduction of paragraph (aa) in 1991 should be interpreted so as to have

retrospective effect. The Appeals Officer, having reviewed the Deciding Officer's findings of false or misleading statements and wilful

concealment, the Minister's right to recover is based only on "new evidence".

The learned High Court judge cited certain passages from the judgment of O’Higgins CJ in Hamilton -v- Hamilton [1982] I.R. 467 and

from that of Wright J. in Re: Athlumney, ex parte Wilson [1898] 2 Q.B. 547. Referring to the amending provisions of the Act of 1991

introducing paragraph (aa) she said:-

“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 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.”

She continued:-

“Secondly, the fundamental question on the retrospective 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 only. In my view, the words in question in the context in question are equally

open to the interpretation that the 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.”

At the hearing of the appeal, Mr O’Donnell, Senior Counsel, for the Minister agreed that the trial judge correctly identified the

fundamental issue. He also accepted that, upon the construction advanced by the Minister, paragraph (aa) would, quoting her words,

“create a new obligation in respect of a transaction already past” and would be retrospective. Indeed, he could hardly do otherwise.

If the provision does not have retrospective effect, the Minister cannot recover payments of benefit made before the enactment of

that provision.

He went on to point out that, in the passage in question, the learned trial judge dealt both with the correct statutory interpretation

and the construction of the statute in the light of the Constitution and traces this “confusion” to certain passages quoted by her

from the judgment of O’Higgins C.J.

The learned trial judge quoted the passage at page 473 of his judgment in which O'Higgins C.J. adopted a well-known definition of

retrospective legislation:-

"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'."

Noting the reference by O'Higgins C.J. to the traditional view that retrospective legislation is regarded as prima facie unjust for its

effect on vested rights she quoted the following passage from 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)'."

Finally, she quoted from p. 475 regarding the "proper approach to the considerations of an Act of the Oireachtas", where O'Higgins

C.J. had said:

"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."

It is necessary, as Mr O'Donnell submitted, to segregate the two issues, namely the correct approach to the interpretation of

statutes with potential retrospective effect in accordance with common-law principles and the interpretation of provisions with such

effect in the light of the Constitution.

I propose to deal firstly with the constitutional issue. It is important to record at the outset that there is no question before the court

regarding the constitutionality of any of the provisions at issue. Although some of the arguments of Dr Forde, Senior Counsel for the

respondent seemed to go so far as to challenge the compatibility of the provisions of paragraph (aa) with the Constitution (assuming,

of course, that it has retrospective effect), the learned High Court judge expressly noted that it was not in issue; the Attorney

General has not been given notice of the proceedings; it is not the subject of any Notice to Vary, nor has it been raised in the

respondent’s submissions.

The legislation must, of course, be interpreted in the light of the Constitution. The court must not interpret it so as to bring in into

conflict with the Constitution if that is reasonably possible as a matter of interpretation.

The only constitutional provision expressly touching on retrospective legislation is Article 15.5:-

“The Oireachtas shall not declare Acts to be infringements of the law which were not so at the date of their commission.”

Dr Forde argued that paragraph (aa) imposes a retrospective penalty if it permits the Minister to recover benefits already received

and that it is fundamentally unfair to alter a rule which previously permitted a person to retain benefits already but wrongly paid (in

the absence of fraud). He relies on the following passage from Murphy J. in Dublin Heating Co Ltd -v- Hefferon Kearns Ltd [1992]

ILRM 51 at p. 59 in commenting on Article 15.5 of the Constitution:-

“What was submitted on behalf of the applicants and what has been contended by textbook writers is that this article in

prohibiting retroactive effect is not confined to criminal offences. On its face this would appear to be correct. On its face

there seems to be no reason why a tort would not be described as ‘an infringement of the law’. Furthermore in practical

terms a citizen might have much more reason to be aggrieved if his actions which at the time of their performance where

wholly innocent were to attract substantial civil liability than he would be if the same actions were to be transmuted into a

criminal activity punishable by a nominal fine.

In my view reckless trading is now an infringement of the law and to declare retrospectively innocent actions as constituting

that wrong would necessarily amount to a breach of Article 15.”

It must be recalled that the section at issue in that case, section 33 of the Companies (Amendment) Act, 1990, potentially exposed

officers of a company to significant personal liability for the act of participating in the reckless trading of a company - personal liability

for the debts of the company. A retrospective interpretation of that provision would have attached serious legal consequences to

past acts which they did not have at the time they were committed. In any event and in spite of some remarks by Dr Forde to the

contrary, paragraph (aa) does nothing to declare acts to be “infringements of the law”. It permits, subject to its own provisions, the

recovery of sums wrongly paid on earlier dates. In the Dublin Heating Co case Murphy J. observed that the “wrongdoing of reckless

trading did not exist prior to the enactment of the 1990 Act”.

Dr Forde also argued that the respondent enjoyed a property right in the benefits he had received. If that were so, then a

retrospective reading of the legislation would deprive him of it and should not be adopted.

How then should the benefit already received be characterised? It is an entitlement created by statute. It is subject, from the

outset, to the condition that a Deciding Officer award it. That decision, in turn was at all times subject to the infirmity that a

Deciding Officer might revise that decision on one of the grounds set out in what was originally section 46 of the Act of 1952.

Furthermore, the recipient was at all times at risk of a decision by a Deciding Officer given on the grounds of false or misleading

statements or wilful concealment, leading to an obligation to repay all benefit received. In other cases, it was at least possible that

he would have to submit the application of the amount of wrongly paid benefit in payment of other benefits to which he was entitled.

In these circumstances, the sole bar to the imposition of an obligation to repay was that contained at that time in section 300(5)(b)

of the Act of 1981 i.e. that benefit already paid was not affected. Dr Forde was driven to identify this as the constitutional right

which would be infringed by a retrospective reading of paragraph (aa). The bar on recovery contains at most a statutory concession

that money already paid should not be recoverable at the suit of the Minister even though it has been established through the

applicable statutory machinery that it had been wrongly paid in the first place. I cannot identify any constitutional right to retain the

benefit of a concession of that sort. The right to receive benefit in the first place or retain benefit wrongly paid derive from the

statute and do not partake of the nature of a property right.

Dr Forde also argued that the provision infringed the constitutional scheme of separation of powers by assigning a judicial function to

Deciding Officers. Implicit in this submission is the consequence that all Deciding and Appeals Officers are exercising judicial functions.

I am quite satisfied that this argument is devoid of merit. Such decisions are inherently administrative. They deal with the

administration of the statutory social welfare code. The fact that such officers are bound to act judicially does not alter the

character of their functions.

In the light of the conclusions I have reached about the constitutional issue of interpretation, I do not think that there is any

imperative that paragraph (aa) be construed only prospectively. Consequently, I do not agree with the remarks of the learned High

Court Judge at the end of the passage quoted above. A retrospective reading would not infringe any constitutional right.

It is necessary then to return to the correct statutory interpretation of the provisions in the light of the common-law rule.

It is common ground that the Minister’s interpretation involves giving retrospective effect to paragraph (aa) as introduced by section

35 of the Act of 1991 and clarified by section 40 of the Act of 1992. A recipient may have to repay money paid to him before that

provision came into effect.

Mr O’Donnell also accepts that such an interpretation should not be adopted unless the words lead clearly and unambiguously or by

necessary implication to that result.

I do not think it necessary or fruitful to pronounce on Mr O’Donnell’s detailed analysis and critique of the judgments of this court in

Hamilton -v- Hamilton. He was at particular pains to distinguish the common-law and constitutional principles of interpretation

which he considered not to be adequately distinguished in the judgment of O’Higgins C.J. He cited the judgment of Henchy J. to

establish that retrospective effect should be given not only when the words expressly say so but also when they do so by necessary

implication. Henchy J. said at p 485:-

“If the legislature intended the Act of 1976 to affect retrospectively the rights created by such agreements - upon the

expected operation of which the parties may have further committed themselves - one would expect the enacted words to

state that effect clearly and unambiguously. Since they fail to state such an intention expressly, one must endeavour to see if

an inference to that effect follows necessarily from the statutory provisions.”

I do not think there is any antithesis between the requirement of “clear and unambiguous” words and concluding that they are so by

“necessary implication.”

O’Higgins C.J. approved of the following passage, also cited in the judgment under appeal, from the judgment of Wright J. in Re:

Athlumney:-

“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 matter of procedure, unless that 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.”

O'Higgins C.J. himself identified the rationale of the rule at p. 474 as follows:

"Retrospective legislation since it necessarily affects vested rights has always been regarded as being prima facie unjust".

He also remarked, as cited by the learned trial judge that the "result [of the doctrine of the sovereignty parliament] is a rule which

leans against .... retrospectivity .... "

The two essential elements of the rule, as it emerges from these, passages are: Firstly, it is designed to guard against injustice, in

the sense that new burdens should not be unfairly imposed in respect of past actions; secondly, the rule is one of construction, not

of law. It amounts to a presumption against retrospective effect which may be displaced by the clear words of the statute.

In this explanation of the rule, there is not, as Mr O'Donnell pointed out, any inconsistency between the views of O'Higgins C.J. and

those expressed in the dissenting judgment of Costello J. The latter stated at p. 481:

"..... the general rule is not an inflexible one and ...., if necessary, the courts will give effect to the words of the statute and

apply it retrospectively when by express words or necessary intendment it appears that this was the legislative intent."

Barron J. succinctly explained the rule in the High Court in O'H v. O'H [1990] IR 558 at 562. Having considered Hamilton v.

Hamilton and other cases he said:

"From these cases, I am satisfied that whether or not a statute should be regarded as having retrospective effect is a matter

of construction of the provision concerned. There is a presumption against retrospective construction. This however is only

another way of saying that unless there is a clear intention that is should be, it will not be so construed."

Mr O'Donnell went further, however, and argued for a balance to be struck between the degree of injustice flowing from a

retrospective reading on the one hand and the required clarity of language to rebut the presumption on the other. He cited, in

particular, the following passage from Lord Mustill's speech in the House of Lords in L'Office Cherifien v. Yamashita - Shinnihon

Steamship Co Ltd [1994] 1 A.C. 486 at 525:-

"Precisely how the single question of fairness will be answered in respect of a particular statute will depend on the interaction

of several factors, each of them capable of varying from case to case. Thus, the degree to which the statute has

retrospective effect is not a constant. Nor is the value of the rights which the statute affects, or the extent to which that

value is diminished or extinguished by the retrospective effect of the statute. Again, the unfairness of adversely affecting the

rights, and hence the degree of unlikelihood that this is what Parliament intended, will vary from case to case. So also will the

clarity of the language used by Parliament, and the light shed on it by consideration of the circumstances in which the

legislation was enacted. All these factors must be weighed together to provide a direct answer to the question whether the

consequences of reading the statute with the suggested degree of retrospectivity are so unfair that the words used by

Parliament cannot have been intended to mean what they might appear to say."

In the circumstances of this case, I do not find it necessary to express a concluded view on this approach to the presumption. Mr

O'Donnell argued for consideration of the matter "in the round". It is true, of course, that a presumption is not a mechanical rule

leading to the exclusion of retrospective effect. It is, in any case, necessary to consider the nature of the vested or pre-existing

rights that would be affected by reference to the words of the statute. More entrenched rights will require more clear language to

affect them. Partial or marginal effects on such rights may more easily follow from the scheme of a legislative provision.

I will now turn to paragraph (aa). These words provide that a revised decision based on new evidence or new facts "shall take effect

from such date as that officer shall determine having regard to the new facts or new evidence." By virtue of Section 40 of the Act

of 1992 this provision "shall apply to new facts or new evidence relating to periods prior to and subsequent to the commencement

of that paragraph."

As already stated, the effect of a retrospective reading of this provision is that a determination by a Deciding Officer or Appeals

Officer that benefit was wrongly paid under an earlier decision significantly changes the position of the recipient. Formerly, paragraphs

(a) and (b) of Section 300(5) of the Act of 1981 (replacing effectively identical provisions of the Act of 1952) comprised two rules

about recovery of wrongly paid benefit. Firstly, in the case of false or misleading statements or wilful concealment, the revised

decision took effect prima facie from the date of the original decision (paragraph (a)). Secondly, in all the cases of revised decisions

based on new facts or evidence (i.e. without quasi-fraudulent findings) benefit payments already made were not affected.

Paragraph (aa), therefore, exposed disability-benefit recipients to the risk of being asked to repay it in whole or in part even for

periods before the commencement of the Act of 1991. Such a reading would clearly be retrospective. It does not go so far as to

penalise past behaviour. It does, however, remove the privilege of retaining the wrongly paid benefit (if incorrectly or non-fraudulently

received).

In the context of the social welfare code this was a significant and, clearly, deliberate legislative choice. Social welfare recipients can

reasonably, in the nature of things, be assumed not to be in a position easily to repay benefit received in the past, even if wrongly.

The removal of the bar on recovery was a significant legislative change even insofar as it had prospective effect. Put simply, the

Minister no longer had to establish dishonesty in order to recover such payments. In these circumstances, I believe that the provision

must be interpreted in accordance with the rule which presumes against retrospective effect.

Before considering whether the words are clear enough to rebut the presumption, I would recall that, as already stated, not only was

a benefit recipient at risk of recovery on the ground of dishonesty , but even in other cases the payments might be applied in

satisfaction of other social welfare benefits to which he would otherwise have been entitled.

The effect of paragraph (aa) should, in my view, be considered in two stages. Firstly, after its introduction by Section 35 of the Act

of 1991, it formed part of the scheme laying down the effect of revised decisions contained in Section 300(5) of the Act of 1981 (and

going back to 1952). It permitted a Deciding Officer, in the event of a revised decision, to determine the date from which the decision

was to have effect "having regard to the new facts or new evidence". Certainly there is nothing to limit that date to a period after

the commencement of the Act of 1991. On the other hand a revised decision made after that date is capable of having effect by

limiting it to "new facts or evidence" also occurring after that date. Given the significant legislative change involved and the common

law presumption against retrospective effect, the latter is the meaning that should be attributed to it. Two interpretations are

possible and, pending further legislative clarification, the one which excludes retrospectivity is to be preferred.

However, section 40 of the Act of 1992 removes any doubt. It is now clear that paragraph (aa) is to apply to "new facts or evidence

relating to periods prior to and subsequent to the commencement of that paragraph". This provision is clear and unambiguous. It

was the version of paragraph (aa) in force at the making of both the Deciding Officer and Appeals Officers' decisions. They are thus

capable of retrospective effect.

I would accordingly, disagree with the learned trial judge on the first aspect of the case, but only because I do not think she gave

enough weight to the very clear wording of the Act of 1992.

The learned trial judge also held that, even in respect of sums received in the period after the commencement of paragraph (aa) i.e.

1st April, 1991, the respondent could not be made liable to repay. There was not, she held, any sufficient machinery of statutory

recovery of the debt as would have entitled the Minister to do so.

There are two aspects of this argument. The learned trial judge pointed out that Regulation 10 of the Social Welfare (General Benefit)

Regulations 1953 (S.I. No 16 of 1953) (which had made benefit paid under an original decision "repayable to the Social Insurance

Fund") was never extended to benefit disallowed on account of new evidence (without an element of fraud) before the coming into

effect of section 31(1) of the Act of 1993 which introduced Section 300D(4) of the Act of 1981. Firstly, this conclusion implies that

there was,

prior to 1993, no other available statutory mechanism for recovery. Secondly, it means - and she so held - that section 31(1) of the

Act of 1993 could not be used to recover amounts paid before its own coming into force on 2nd April, 1993.

On the first of these points, I am satisfied that the learned trial judge was correct. Section 117 of the Act of 1981 (replacing Section

54 of the Act of 1951) provided:

"All sums due to the Social Insurance Fund or the Occupational Injuries Fund shall be recoverable as debts due to the State

and, without prejudice to any other remedy, may be recovered by the Minister as a debt under statute in any court of

competent jurisdiction."

However, Section 300(5) of the Act of 1981, providing for the revised decision, does not establish the required link by making any

sums whose recovery might be sought repayable to the fund. This is a missing link so far as the Minister is concerned, in the absence

of some such mechanism as an extension of the 1953 Regulation.

His claim turns then necessarily on Section 300(4) of the Act of 1981, introduced by Section 31(1) of the Social Welfare Act, 1993.

This provision was, in turn, re-enacted by Section 278(a) of the Consolidation Act of 1993, which reads:

"Where, in accordance with the provisions of sections 249, 264 or 269, a decision or determination is varied or reversed by a

deciding officer, an appeals officer or an officer of the health board (as the case may be) so as to disallow or reduce any

benefit, assistance, child benefit or family income supplement 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."

The learned trial judge applied the same reasoning to this provision as to paragraph (aa). She considered that to allow the Minister to

recover benefit payable between 1st April, 1991 and 2nd April, 1993 would involve giving it impermissible retrospective effect.

However, once it is established that, as I have concluded, paragraph (aa), as clarified by the Act of 1992 did, in fact, have

retrospective effect there is no significant additional element of retrospectivity involved in permitting a statutory recovery mechanism

to operate in respect of further revised decisions, even if some of them are made pursuant to paragraph (aa), by then, of course,

incorporated in Section 249 and 264 of the Consolidation Act of 1993. From the enactment of Section 300D(4) of the Act of 1993,

that provision, read in combination with paragraph (aa), unambiguously permitted full retrospectivity of decisions covered by the

latter.

I would accordingly, disagree with the learned trial judge on the second issue.

The third point concerns the need for a new "demand" following the decision of the Appeals Officer. Even in respect of disability

benefit disallowed to the respondent in respect of the period after the passing of the Act of 1993 - a period in respect of which no

argument based on retrospectivity remained open to the respondent - the learned trial judge dismissed the Minister's claim because,

although a demand for payment of the entire sum in issue was made after the decision of the Deciding Officer (17th June, 1994), no

new demand for the purposes of Section 279 of the Consolidation Act of 1993 was made after the decision of the Appeals Officer,

even though the grounds of the decision had been changed.

A formal demand is required by the terms of Section 278. It constitutes an essential step in the statutory machinery and a vital

component in the Minister's cause of action. There can be no doubt that the letter of 17th June, 1994 constituted a demand. It

stated that the sum was repayable to the Minister and that consideration was being given to the taking of legal proceedings. It then

invited the respondent to indicate whether he proposed to pay in a single lump sum or by instalments and invited him to fill in a slip

indicating his choice. The absence of the formal word "demand" does not affect the unequivocal character of the letter.

It is suggested, however, that a new demand had to be made after the appeal decision, though the amount in question was identical.

I think that the answer is to be found in the provision of section 300H of the Act of 1981 introduced by section 31(1) of the Act of

1993 and re-enacted by section 283(b) of the Consolidation Act of 1993, which provides:

"In any proceedings for an offence under this Act, or in any proceedings involving any issue related to the payment of

contributions, or for the recovery of any sums due to the Minister or the Social Insurance Fund, a decision on any question

relevant to the proceedings given in accordance with this Act shall, unless an appeal or reference in respect of the decision is

pending or the prescribed time for appealing against the decision has not expired, be conclusive for the purpose of those

proceedings and

(a) if any such decision which might be so given has not been obtained and the decision is necessary for the determination of

the proceedings, the question shall be submitted for decision in accordance with this Act, and

(b) where any such appeal or reference is pending or the time for so appealing has not expired or any question has been

submitted under paragraph (a), the court dealing with the case shall adjourn the proceedings until such time as a final decision

on the question has been obtained."

Thus, when an appeal is pending, a court seised of a claim for recovery by the Minister must simply adjourn the matter to await the

outcome of the appeal. This implies necessarily that, upon confirmation of the decision of the Deciding Officer, the court may then

proceed with the adjourned hearing. It also follows that the claim can proceed on foot of the claim based on the original decision,

including the demand made on foot thereof. Consequently, I do not think the Act envisages that any new demand be made.

In the result, I disagree also with the learned trial judge on the third ground upon which she dismissed the Minister's claim.

I would, therefore, allow the appeal and grant a decree to the Minister for the sum claimed, namely £43,088.25.