Charlton v Chief Executive of the Ministry of Social Development no.2 HC Auckland CIV 2004-485-969

[2005] NZHC 299

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2004-485-969

BETWEEN  PHILLIP CHARLTON Applicant

ANDTHE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT

Respondent

Hearing:         29 November 2005

Counsel:         A Crabb for Applicant

G Stanish for Respondent

Judgment:      29 November 2005

(ORAL) JUDGMENT (NO. 2) OF HEATH J

Solicitors:

Crown Law Office, PO Box 2858, Wellington
Counsel:

A Crabb, PO Box 20 706, Glen Eden, Auckland

CHARLTON V THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT HC AK CIV

2004-485-969  29 November 2005

Introduction

[1]      Mr Charlton seeks leave to appeal to the Court of Appeal from a judgment I delivered on 21 March 2005.   In that judgment, I answered five questions of law posed by way of Case Stated from a determination of the Social Security Appeal Authority.  The questions related to Mr Charlton’s eligibility for an Invalids’ benefit.

The issues

[2]      Two essential questions are raised on the application for leave.   A third, which is consequential on the second, was also raised but it is agreed that that will fall away should leave on the second issue not be granted and that it would not stand alone.  In those circumstances I confine my discussion to the two main issues.

[3]      The first concerns the question whether the Chief Executive was entitled to go behind a medical certificate obtained from a designated doctor under s44 of the Social Security Act 1964 (the Act).

[4]      The second is whether the Chief Executive correctly approached the exercise of his discretion under s66A of the Act, a provision which enables the Chief Executive to disregard all or part of the income of a severely disabled person to bring that person within the eligibility criteria for a benefit for the purpose of providing an incentive to personal effort.

Leave to appeal – legal principles

[5]      Appeals to the Court of Appeal from determinations of this Court under the

Act are dealt with by s12R of the Act.  That section states:

12R    Appeals to Court of Appeal

The provisions of section 144 of the Summary Proceedings Act 1957 shall apply in respect of any determination of the High Court under section 12Q of

this  Act  as  if  the  determination  were  made  under  section  107  of  the

Summary Proceedings Act 1957.

[6]      Section  144  of  the  Summary  Proceedings  Act  1957  is  incorporated  by reference into the appeal process by s12R.  Section 144 provides:

144     Appeal to Court of Appeal

(1)     Either party may, with the leave of the High Court, appeal to the Court of Appeal against any determination of the High Court on any case stated for the opinion of the High Court under section 107 of this Act or against any determination of the High Court on a question of law arising in any general appeal:

Provided that, if the High Court refuses to grant leave to appeal to the Court of Appeal, the Court of Appeal may grant special leave to appeal.

(2)      A party desiring to appeal to the Court of Appeal under this section shall, within 21 days after the determination of the High Court, or within such further time as that Court may allow, give notice of his application for leave to appeal in such manner as may be directed by the rules of that Court, and the High Court may grant leave accordingly if in the opinion of that Court the question of law involved in the appeal is one which, by reason of its  general  or  public  importance  or  for  any  other  reason,  ought  to  be submitted to the Court of Appeal for decision.

(3)     Where the High Court refuses leave to any party to appeal to the Court of Appeal under this section, that party may, within 21 days after the refusal of the High Court or within such further time as the Court of Appeal may allow, apply to the Court of Appeal, in such manner as may be directed by the rules of that Court, for special leave to appeal to that Court, and the Court of Appeal may grant leave accordingly if in the opinion of that Court the question of law involved in the appeal is one which, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for decision.

[7]      In order to justify a second appeal, a question of law as distinct from a question of fact must arise.  That question of law must be one which, by reason of its general or public importance or for any other reason ought to be submitted to the Court of Appeal for decision.

[8]      The purpose of s144 was described by Thomas J, delivering the judgment of the Court of Appeal in R v Slater [1997] 1 NZLR 211 (CA), at 215, where His Honour said:

Section 144 was not intended to provide a second tier of appeal from decisions   of   the   District   Court   in   proceedings   under   the   Summary Proceedings Act. Parliament intended such proceedings to be brought to

finality with the defendant having an appeal to the High Court other than when the conditions it has specified in subss (2) and (3) are met and leave to appeal is granted. Neither the determination of what comprises a question of law, nor the question whether that point of law raises a question of general or public importance, are to be diluted.

Those comments apply equally to s12R appeals, with references to the District Court being replaced by references to the Social Security Appeal Authority.

[9]      I turn to consider the issues raised against the background of that test.

The s44 issue

[10]     The first question is whether a medical certificate given under s44 of the Act is binding on a Chief Executive when he or she determines whether an applicant for an Invalids’ Benefit is permanently and severely restricted in his or her capacity for work.

[11]     Section 44 enables the Chief Executive to seek a certificate from a designated medical  practitioner  or  a  psychologist  who  must  certify  whether,  in  his  or  her opinion, the applicant or beneficiary is, or is not (or whether there is doubt about whether he or she is or is not) permanently or severely restricted in his or her capacity for work.

[12]     In this case such a certificate was given in favour of Mr Charlton but, because Mr Charlton had been in work, the Chief Executive declined to act on the certificate and decided not to grant the benefit on those grounds.

[13]     The  only  issue  of  law  is  whether  the  Chief  Executive  is  bound  by  the certificate and cannot go behind it.  If it were accepted that the Chief Executive had power to go behind the certificate in appropriate cases then the issue is one of fact or degree.   In each case it would be necessary for the Chief Executive to make a decision on a fact-specific basis.

[14]     The  proposition  that  the  Chief  Executive  cannot  take  into  account  other factors known to him or her is, with respect, unsustainable.   Out of fairness to

Mr Crabb, he did not seek to put it so widely.  In my view, the issue raised is really one of fact and degree and does not fall within the ambit of s144.

The s66A issue

[15]     The second question relates to s66A of the Act.  That section provides:

66A     Special exemption for severe disablement

For the purposes of computing any benefit payable, the chief executive may in  the  chief  executive’s  discretion,  as  an  incentive  to  personal  effort, disregard all or part of the income of any severely disabled person derived from such effort.

[16]     The Social Security Appeal Authority expressed its view on this issue as follows:

[30]  The appellant has requested that the Authority consider whether or not the Chief Executive was correct in declining to exercise the discretion contained in s66A of the Act to exempt part of the appellant’s earnings, on the basis that the appellant meet the eligibility criteria for Invalid’s Benefit contained in s40.

[31]   We note that the department’s policy manual accepts that a person receiving   an   Invalid’s   Benefit   is   severely   disabled   and   therefore automatically qualifies for consideration pursuant to this s66A.

[32]   Matters which we consider to be relevant to the exercise of the discretion contained in s66A include whether or not an appellant has additional costs related to participating in employment that an able bodied person might not have, the hours worked and the level of remuneration received.

[33]  In the appellant’s case he was unable to point to any additional costs that he might have relating to his employment arising out of his disability. The appellant works significantly more than 15 hours a week.   His remuneration includes the provision of accommodation and the rate paid appears to reflect a rate greater than the minimum hourly adult wage.  There was nothing before us in the evidence to suggest that the appellant has difficulty making ends meet.  He owns a rental property at Bucklands Beach Road and has savings in the bank.

[17] The passage in my judgment which Mr Crabb submitted was in error is in para [51]. In that paragraph I said:

[51] The approach taken by the Authority was to regard as relevant to the exercise of the discretion costs incurred by a particular applicant. The higher

the  costs  incurred  to  obtain  employment,  the  more  likely  the  discretion would be exercised.  Although not specifically referred to in the Authority’s decision, Mr Stanish helpfully provided other examples of the types of costs that might be relevant: eg the costs incurred in transportation from home to employment where a wheel chair is used as a result of the unavailability or unsuitability of the public transport system.

[18]     Mr  Crabb’s  submission  is  that  the  section  does  not  restrict  the  Chief Executive to financial considerations.   In essence Mr Crabb suggests a two stage approach: first, to consider whether there are any work related costs which would justify exercise of the discretion to disregard all or any part of the income of the severely disabled person; if the answer to that question were “no”, then a further question  would  need  to  be  asked:  namely,  are  there  any  other  circumstances justifying exercise of the discretion purely as an incentive to personal effort?

[19]     The wording of s66A plainly permits an interpretation of the type that Mr

Crabb contends for, but that was not the issue before me on appeal.

[20]     The  questions  I  was  asked  to  consider  under  s66A  were  whether  the Authority erred in finding that a “relevant consideration” in the exercise of the discretion was whether the applicant had additional costs relating to employment that an able bodied person may have; whether the Authority erred in law by “taking into account” financial criteria in exercising the discretion and whether, as a matter of law, the Authority was correct in determining that it was “not appropriate” that all or part of the appellant’s income should be disregarded in computing the amount of any benefit  payable.    Those  questions  go  to  whether  the  discretion  was  properly exercised, not whether the correct questions were asked.

[21]     In those circumstances, I cannot regard the s66A issue as raising a question of law.  Rather it raises an issue of fact and degree.  That does not meet the test for leave to appeal to be granted under s144.

Observation

[22]     That does not leave Mr Charlton without a remedy.  I have been told that his circumstances may have changed for the worse.  A fresh application could plainly be

made.   The Chief Executive holds information for him.   I am sure efforts can be made to expedite any renewed application that is based on changed medical circumstances or the need to use, in the interim, accrued capital.

Result

[23]     For the reasons I have given, the application for leave to appeal is dismissed. There will be no order as to costs.

P R Heath J