From today’s Sunday Independent comes a story by Maeve Sheehan which has many echoes of an earlier story that Department of Agriculture overpayments of €70m in EU grants to farmers would not be recovered. The earlier story prompted my current series of posts (I, II, III, IV, & V) on the recovery of unauthorised State payments. Today’s story goes right to the heart of the issues I have been discussing in that series. It based on a report to the Garda Commissioner in relation to financial control released to the Sunday Independent under freedom of information legislation last week, which found that Gardaí received overpayments totalling more than €1m in pensions and salaries, and that some of these overpayments will have to be written off at the expense of the taxpayer:

Embarrassing gaffe as gardai were ‘overpaid by more than €1.1m’

… The Garda’s internal audit unit put overpayments of salaries and pensions at €1,139,014 at the end of 2014, €184,000 more than in 2013, according to a report obtained by the Sunday Independent. Less than half of the gardai who were overpaid had plans in place to repay it. The force’s internal audit unit concluded: “It is likely that write-off of some of this debt will be required but every effort is being made to recoup as much of this amount as possible.”

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Last month, officials at the Illinois Department of Revenue said that there had been overpayments since 2014 totalling US$168 million to some 6,500 districts across Illinois. The Department says that it’s sensitive to the impact recovering the funds will have on the districts, and it will therefore allow them to repay the money slowly. But repay it they must, unless legislation forgives the debts. It is a stark example of the issues which I have been discussing on this blog in a series of posts on the principles underlying restitution claims made by the Executive. The series was prompted by media reports that the taxpayer has been hit with a €70m bill for overpaid farmers. In my first post in the series, I established the principle associated with Auckland Harbour Board v R [1924] AC 318; [1923] UKPC 92, [1923] NZPC 3 (18 December 1923) [Auckland] and Attorney General v Great Southern and Western Railway Company of Ireland [1925] AC 754 (HL) [GSWR]. This principle has two limbs: first, State payments must be authorised (this is the authorisation limb of the principle, which I discussed in my second and third posts); and second, unauthorised State payments can be recovered if they can be identified (this is the restitution limb of the principle, which I discussed in my fourth post).…

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This is the fourth post in a series on the principles underlying restitution claims made by the Executive (there will be six posts in total on those principles, plus an addendum on related issues). The series was prompted by media reports that the taxpayer has been hit with a €70m bill for overpaid farmers, which led me to wonder whether the State could recover overpayments made to farmers under EU schemes. To begin to answer that question, in my first post in the series, I established the principle associated with Auckland Harbour Board v R [1924] AC 318; [1923] UKPC 92, [1923] NZPC 3 (18 December 1923) [Auckland] and Attorney General v Great Southern and Western Railway Company of Ireland [1925] AC 754 (HL) [GSWR]. This principle has two limbs: first, State payments must be authorised (this is the authorisation limb of the principle); and second, unauthorised State payments can be recovered if they can be identified (this is the restitution limb of the principle). There is a strong common law line of authority on the authorisation limb, which I discussed in my second post in this series. Moreover, the authorisation limb has been afforded constitutional status in Australia; it is at least on its way to a similar status in Ireland if it hasn’t got there already; and I discussed this constitutionalisation of the authorisation limb in my third post in this series.…

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In two earlier posts, I have considered the question of whether the State could recover overpayments made to farmers under EU schemes. In the first post, I established that the principle in Auckland Harbour Board v R [1924] AC 318; [1923] UKPC 92, [1923] NZPC 3 (18 December 1923) [Auckland] and Attorney General v Great Southern and Western Railway Company of Ireland [1925] AC 754 (HL) [GSWR] has two limbs. First, State payments must be authorised (this is the authorisation limb of the principle). Second, unauthorised State payments can be recovered if they can be identified (this is the restitution limb of the principle, and it is a claim to restitution of unjust enrichment, because the recipient of the unauthorised payment has been unjustly enriched at the expense of the State). In the second post, I discussed the common law authorities on the first – authorisation – limb of the principle. In particular, cases such as Steel, Ford and Newton v CPS (otherwise Holden v CPS (No 2)) [1994] 1 AC 22 (HL), Re McFarland [2004] 1 WLR 1289, [2004] UKHL 17 (29 April 2004), and – especially – R v Criminal Lawyers’ Association of Ontario [2013] 3 SCR 3, 2013 SCC 43 (CanLII) (1 August 2013) establish that, as a matter of common law, no money can be taken out of the Consolidated Fund into which the revenues of the State have been paid, without Parliamentary authorisation.…

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In an earlier post, I raised the question of whether the State could recover overpayments made to farmers under EU schemes. To begin to answer that question, I established the principle associated with Auckland Harbour Board v R [1924] AC 318; [1923] UKPC 92, [1923] NZPC 3 (18 December 1923) [Auckland] and Attorney General v Great Southern and Western Railway Company of Ireland [1925] AC 754 (HL) [GSWR]. In particular, I argued that the Auckland/GSWR principle has two limbs. First, State payments must be authorised (this is the authorisation limb of the principle). Second, unauthorised State payments can be recovered if they can be identified (this is the restitution limb of the principle).

Both Auckland and GSWR quote both limbs of the principle, and each neatly illustrates one limb on its facts. On the one hand, GSWR illustrates the authorisation limb, finding that the liability of the Government of the Irish Free State under a series of contracts entered into by the British Government with Irish railway companies in 1917 and 1918 was authorised by the the Irish Free State (Agreement) Act, 1922 (compare Commonwealth v Colonial Ammunition Co Ltd (1924) 34 CLR 198, [1924] HCA 5 (21 March 1924); New South Wales v Bardolph (1934) 52 CLR 455, [1934] HCA 74 (30 November 1934); and see now Williams v Commonwealth of Australia (No 1) (2012) 248 CLR 156, [2012] HCA 23 (20 June 2012); see, generally, Enid Campbell “Commonwealth Contracts” (1970) 44 Australian Law Journal 14; Enid Campbell “Federal Contract Law” (1970) 44 Australian Law Journal 580; Sue Arrowsmith “Government Contracts and Public Law” (1990) 10 Legal Studies 231; Nick Seddon “The Interaction of Contract and Executive Power” (2003) 31 Federal Law Review 541; Cheryl Saunders and Kevin K F Yam “Government Regulation by Contract: Implications for the Rule of Law” (2004) 15 Public Law Review 51; Cheryl Saunders “Intergovernmental Agreements and the Executive Power” (2005) 16 Public Law Review 294).…

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The Times reported last week that the taxpayer has been hit with a €70m bill for overpaid farmers. Under various schemes, farmers are entitled to claim payments via the exchequer from the EU Commission based on the amount of land they own. From 2012, high-resolution aerial photography provided accurate measurements of farms; and it transpired that, between 2008 and 2014, paper maps had overstated the size of some farms, so that some farmers had been overpaid (see here | here | here). After protracted negotiations, the State repaid €68.9million to the EU Commission (see Department of Agriculture press release (pdf)), of which €4 million has been recovered from overpaid farmers. According to The Times, the Minister for Agriculture, Simon Coveney, “expressed his ‘clear preference’ that the repayments should be funded through the exchequer” rather than recovered from the overpaid farmers. A spokesman for the Department told the Times:

Due to the passage of time and the protracted process of opposition to a flat-rate correction with the commission, this cannot be collected from individual farmers.

There may be some factual difficulties in assessing who was overpaid and by how much, but there are no difficulties whatsoever with the legal principles underpinning the State’s claim to recover the overpayments from the overpaid farmers.…

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