I was slapped down for this before but I will again say and having re-read both cases I am now convinced of this – it will depend on the timing of the bankruptcy and the creation of the overpayment. I may happy to be slapped down again about this but I do think the view yess they are recoverable are wrong.
I would say in those two cases you have – the answer is no, unless the cases were fraud overpayments in which case the answer is they are definately recoverable.
In the original High Court decision referred to by Kevin the following categories were suggested
Category (1): benefits which were awarded and paid to a claimant prior to the date of bankruptcy and the bankruptcy order, and in respect of which a decision that they were recoverable was issued also prior to that date.
Category (2): benefits which were awarded and paid to the claimant prior to the date of the bankruptcy order, but in respect of which a decision that they were recoverable was issued after that date.
Category (3): benefits which were awarded prior to the date of the bankruptcy order, but which were paid, and in respect of which a decision that they were recoverable was issued after that event.
Category (4): benefits which were awarded, paid and in respect of which a decision that they were recoverable was issued, all after the date of the bankruptcy order.
The High Court did not reject those categories and looked at a case which clearly fell in to category 2. Category 4 is always recoverable. This is in much the same way as a new utitlity bill would be recoverable after a bankruptcy.
The COA ruled that Category 2 was recoverable in much the same way as another contingent liability. (Gas bil analogy)
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