Secretary of State for Work and Pensions v Payne & Anor

This is an application by the Secretary of State for Work and Pensions for a variation in the terms of an order made by this court on 17 December 2010. That order was made when this court dismissed an appeal by the Secretary of State from an order made by Cranston J

A stay was granted by the court pending the determination of an appeal by the Secretary of State to the Supreme Court. The Secretary of State has made an application to the Supreme Court for a permission that was refused by this court. The application was made on 12 January 2011. Enquiries which have been made both by the court and by the parties have revealed that a decision on the permission application is likely to be made before the end of the current term.

The stay, pending determination of any appeal by the Secretary of State, was limited to that part of order requiring the Secretary of State to repay deductions from social security benefits since the DROs. The limited terms of the stay affect not only the respondents but also others from whom deductions have been made, but it only permits the Secretary of State not to repay sums recovered during the moratorium period. The order made by this court did not permit the Secretary of State to continue making deductions during what is left of that period, nor during the moratorium period of new DROs.

We were told by the Secretary of State's counsel that it had not been possible to ensure that deductions from benefits ceased with immediate effect and so deductions have been made following 14 December and claims are now being made for the repayment of those sums.

What the Secretary of State now requests this court to do is to extend the scope of the stay so that the Secretary of State can continue to make deductions during the moratorium period of existing and new DROs and so that he does not have to repay sums deducted after 14 December 2010. What is suggested is that this court should now grant, in place of the order that it made, a new stay which is in similar terms to that made by Stanley Burnton J pending the appeal from Cranston J to this court. That was a stay in general terms, simply saying. “Stay on judgment pending determination of an appeal.”

An alternative form of words is also suggested. The Secretary of State relies on potential prejudice to public funds, saying that, if he were required to repay overpaid benefits to people who are not entitled to receive them in the first place, the sums might not be recoverable. In relation to the Social Fund it was necessary to recover loans in order to replenish the fund. In all cases it would be difficult or impossible to recover the repaid funds, if the appeal was successful.

We are told that statutory powers of recovery affecting overpaid benefits in other areas that are the concern of the Secretary of State are also affected: Housing Benefit; Council Tax Benefit; Tax Credits and Child Benefit are mentioned as instances where the same problem occurs, if the Secretary of State was not allowed to continue to make the deductions.

The respondents, through Mr Drabble QC, oppose the application. They say the court has no power to make the order varying what was a final order, and that, even if the court had the power, it should not exercise it in its discretion in this case. The argument before us has concentrated on two main points. The first is what has been during the course of submissions called “a constitutional point” which was raised by Toulson LJ with counsel for the Secretary of State on the opening of his application. What is said is this that we are being asked, contrary to the decision of the court as to what the law was, to authorise the Secretary of State to do something that is not in accordance with the law. The Secretary of State wishes to continue making deductions. Cranston J and this court by a majority held that there was no power in the circumstances affecting DROs to make these deductions, and so what the Secretary of State is in fact asking the court to do is to either suspend the law, as it is declared to be, or to dispense with it, or to ask this court by express order to authorise something which it is held to be contrary to law.

In my judgment, Mr Drabble is right in saying that constitutionally this court has no power to do this. No powers of case management under the Civil Procedure Rules could authorise the court to do something that constitutionally it has no power to do. This court has no power to authorise general acts which are contrary to the law, unless there is some law authorising them to do it, and there is nothing in the relevant legislation that allows the court to do this.

The alternative submission was that the court could do what it is being asked to do by the Secretary of State under the Civil Procedure Rules. We were referred to the rules concerning powers of case management in CPR 3. Under the court’s general powers of management 3.1(2)(f) states that the court has power to “stay the whole or part of any proceedings or judgment either generally or until a specified date or event”. Would the court exercise the power of stay in the terms of the order which the Secretary of State now wishes to have varied.? Reference is then made to 3.1(7) containing a power of the court under these rules to make an order include a power to vary or revoke the order. That is relied on in support of the submission that what is being asked here is a variation of the order that we have made. The difficulty with that submission is that it is clear from the authorities that that discretion would not normally be exercised in what would in substance have been an appeal against the order that has originally been made.

The decision by this court in Edwards v Golding [2007] EWCA Civ 416 deals with the Civil Procedure Rule on which reliance is placed. It is clear that in normal circumstances the court would not vary a previous order, unless there has been some material change of circumstances, or the judge (or judges) who made the earlier order, were misled in some way, whether innocently or otherwise, as to the correct factual position before them. There is a discussion in the judgment of Buxton LJ about the exercise of the jurisdiction. What he says in paragraph 24, having referred to earlier judgment by Mr Justice Patten in the case of Lloyds Investment (Scandinavia) Ltd v Ager-Hansen and to the judgment of Dyson LJ in that matter, is this:

As was pointed out in the course of argument, it would be striking, taking the words of Patten J literally, if new facts could lead to rule 3.1(7) being applied, but that did not apply in a case, such as the present, where there are no new facts but a completely new understanding of the nature of the matter that was before the judge.

However, in this case Mr Drabble submitted that what was being asked of the court was simply to change its mind. There was no new material put before the court. What was said on behalf of the Secretary of State was that new material was being put before the court in the form of submissions about what the impact of the limited stay that was granted originally and what the impact would be if the more extended stay as requested was not granted. It was also suggested, in my view without any foundation, that the court had in some way been misled about the impact of the order that was being sought by way of a stay at the original handing down of the judgment.

In my judgment, there is no basis before the court for exercising its discretion to make a different order than it originally made on the matter of stay. There is no question of the court having been misled. There are no new circumstances either in the form of new facts, or in the form of new arguments, or in the form of a fresh understanding of the position which would justify the court exercising its discretion.

So on both points of objection to this application which have been raised by Mr Drabble, I agree with him. Constitutionally there is no basis on which this court could authorise something that would be contrary to the law laid down, and there is no basis for the exercise in such discretion as the court may have under the Civil Procedure Rules.

I would say finally, speaking for myself, that I can understand that there is a degree of urgency for a decision on the application for the permission to appeal which has been made by the Secretary of State, and if it is granted permission, in having an appeal heard promptly. We are told that no application has been made to the Supreme Court for an expedited hearing. That is in contrast to this court where an expedition was ordered. The matter was heard within a few months of the decision of Cranston J which was appealed. I would say again, speaking for myself, that in recent conversations I have had with the Registrar of the Supreme Court, there are slots for hearings. I do not know the details. That would be a matter for enquiry by the parties and one which the Supreme Court would be asked to deal with.

In this court the system is quite flexible. It will in urgent cases actually simply direct that the application for permission will be heard by the full court with a direction that the appeal will follow immediately if permission is granted, so the time that would be wasted by having separate hearings is saved by having the whole matter rolled up into one hearing. This case has given rise to a division of opinion, but it is on quite a short point. The three judgments given in this court lay out all the arguments that were put before the court. The matter could be dealt with in one day. If any support is needed by from this court about the possible expedition of any hearing that is going to take place in the Supreme Court, I would support it.

For the reasons which I have given, I would not grant this application.

I agree.

I also agree.