29th January 2015

How blind is a blind eye?

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29th January 2015

How blind is a blind eye?


A defence that is sometimes used when a person is being asked to repay something which he/she has been mistakenly paid, or overpaid is that the person in question has changed their position/circumstance by (i) relying on the payment and (ii) then spending it!

Is this defence available to a person when the person in question knows that he/she shouldn’t have received the payment in the first place i.e.: can a person rely on the defence when they have turned a “blind eye” to their own knowledge?

The High Court in Webber v Department for Education [2014] EWHC 4240 (Ch) has gone some way to answering this question by partially allowing an appeal against a determination of the Deputy Pensions Ombudsman that had rejected a complaint by a member of the Teachers’ Pension Scheme about the recovery of overpaid pension instalments. The facts are that a teacher had taken early retirement but had then been re-employed a few years later. He had then informed the scheme administrator when he was re-employed, but maintained he was not aware he was obliged to tell the administrator about a subsequent salary increase that triggered statutory abatement provisions. He argued he had changed his position to his detriment in reliance on the overpayment through one-off and repeated expenditure.

The court held that if a person appreciated that a payment he was receiving may be an overpayment and could make a simple enquiry to check whether this was the case but chose not to do so, it would be inequitable to allow him to rely on a change of position defence. The case therefore implies that if a person turns “a blind eye”, this will usually be enough to stop a person arguing they have changed their position to their detriment.