Chief Executive of the Ministry of Social Development v Genet
[2016] NZHC 2541
•25 October 2016
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2016-485-396 [2016] NZHC 2541
BETWEEN CHIEF EXECUTIVE OF THE
MINISTRY OF SOCIAL DEVELOPMENT Appellant
AND
MARTINE GENET Respondent
Hearing: 19 October 2016 Counsel:
N Bailey and O Upperton for Appellant
R L Roff as AmicusJudgment:
25 October 2016
JUDGMENT OF WILLIAMS J
[1] The nominal respondent is a beneficiary. She is categorised within the Ministry of Social Development (the Ministry) as a “complex case”. She has had difficulties in the past in achieving productive interaction with WINZ staff. She no longer has face-to-face dealings with staff. Instead, her case is managed by the Ministry’s Remote Client Unit.
[2] In 2015, the Chief Executive suspended the respondent’s benefit for reasons that are not relevant to this appeal. The respondent then sought a review of the decision before the Ministry’s internal Benefits Review Committee. The committee upheld the Chief Executive’s decision. The respondent then appealed to the Social Security Appeal Authority (the Authority).
[3] The respondent was represented at the Authority by a lay advocate, Ms Brereton. The appeal was successful and the respondent was awarded
retrospective reinstatement of her benefit.
CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT v MARTINE GENET [2016] NZHC
2541 [25 October 2016]
[4] The Authority awarded $500 costs directly to the lay advocate, bypassing the respondent. This aspect of the decision was dealt with briefly and may be set out in full:1
In this case the appellant was represented primarily by Ms Brereton, an experienced beneficiary advocate. At least in the first instance, she offers her services as a volunteer. As the appellant is a person on an income-tested benefit it is reasonable to infer she does not have the ability to pay Ms Brereton for her work.
That Ms Brereton has offered her service for free in the first instance does not mean that she does not have costs in providing her services or should not be remunerated for her work if she is successful.
She has advised that she usually invoices the Ministry of Social Development $35 per hour. In addition to the hearing time she would have had preparation time, including all work related to this appeal from the time of the Benefits Review Committee hearing onwards.
Because Ms Brereton was unable to attend this hearing in person, another experienced advocate, Mr Howell, attended the hearing primarily as a support person for the appellant. He also made submissions, particularly in relation to the Benefits Review Committee matter.
We direct that an amount of $500 is to be paid in costs in this matter. The amount is to be paid to Ms Brereton in the first instance.
[5] The Chief Executive brings this appeal by way of case stated, the procedure prescribed under the Social Security Act 1964.2 He does not challenge the substantive result in the Authority. He challenges only the costs award. While the award is minor, the Chief Executive says the principle has potentially significant implications in future appeals.
[6] The Chief Executive says there is no jurisdiction to award costs to any party other than the appellant him or herself. Further, the relevant statutory provisions do not contemplate the payment of costs that are not proven to be actually incurred. It is not open to the Authority, the Chief Executive says, to make a kind of ex-gratia payment to the lay advocate falsely clothed as a costs award.
[7] The respondent took no active part in this appeal as she is unaffected by it. The lay advocate, Ms Brereton, filed a document she described as “Background for High Court” but took no further part in the matter either.
[8] In the absence of an opposing party, Ellis J appointed amicus to act as contradictor. In fulfilment of that brief, Ms Roff appeared in order to challenge the Chief Executive’s argument. The essential point made was that the Authority should have the broadest possible discretion on matters of costs in the context of a jurisdiction that deals as a matter of course with impecunious and vulnerable litigants. Ms Roff submitted that a purposive approach to the legislation suggests that a direct award of costs on the basis of the Authority’s own estimate of the lay advocate’s time and effort involved is well within the contemplation of the statute and that is what was done here.
The Social Security Act 1964
[9] Section 12O(1) of the Social Security Act 1964 provides as follows:
Where an appeal is allowed in whole or in part, or the whole or any part of the matter is referred back to the chief Executive, the Authority may allow the appellant the costs of bringing the appeal or any part thereof.
[10] I am advised by counsel that such awards on successful appeal are relatively rare but not unheard of.
[11] By contrast, subs (2) bars any award of costs against the appellant if the appeal fails:
Where any appeal is not allowed, no award of costs shall be made against the appellant unless in the opinion of the Authority, the appeal was frivolous or vexatious or one that ought not to have been brought.
[12] Section 12OA allows the Authority to claim its own costs against the
Ministry:
Where an appeal is allowed in whole or in part the Authority, if it considers it appropriate, may require the Department to pay a sum fixed by the Authority to cover all or part of the costs incurred by the Authority in hearing and determining the appeal.
[13] As is perhaps implicit in the thrust of these provisions, the focus of the Social Security Act is the needs of poor and/or vulnerable people who, for one reason or another, are unable to provide for themselves. This is made explicit in the opening paragraphs of s 1A of the Act. These provide:
The purpose of this Act is—
(a) to enable the provision of financial and other support as appropriate—
(i) to help people to support themselves and their dependents while not in paid employment; and
(ii) to help people find or retain paid employment; and
(iii) to help people for whom work may not currently be appropriate because of sickness, injury, disability, or caring responsibilities, to support themselves and their dependents:
(b) to enable in certain circumstances the provision of financial support to people to help alleviate hardship:
[14] This explains for example the terms of s 12L in which the Chief Executive, who is the formal respondent in any appeal before the Authority, must in some circumstances cover certain costs of the appellant in that person’s own appeal:
If the Appeal Authority requests an appellant to appear before it and the appellant does so, the chief executive shall, out of money appropriated by Parliament for the purpose, pay the actual and reasonable travelling and accommodation expenses (if any) incurred by the appellant.
[15] Another of the Act’s design elements is that the Ministry must facilitate the prosecution of the appeal. For example, s 12K requires the appellant to lodge a written notice of appeal with the Authority and to send or leave with the Chief Executive a copy of that notice of appeal. At that point it is the job of the Chief Executive to provide any necessary background information to the Authority to assist its assessment of the appeal including “a report setting out the considerations to
which regard was had in making the decision or determination.”3
[16] While a hearing is the default setting, one is not required where the Authority
“considers that the appeal can be properly determined without a hearing.”4
[17] Lawyers have a right of audience for either side before the Authority, but so
does any “duly authorised representative”.5
[18] These provisions demonstrate that, for the reasons articulated in the Act’s express purpose, proceedings before the Authority are very different from those in the ordinary courts. As Mallon J said in respect of proceedings of a different kind before the Human Rights Review Tribunal:6
Statutory tribunals exist “in order to provide simpler, speedier, cheaper and more accessible justice than do the ordinary courts.”
[19] If that is true generally of statutory tribunals, then the Authority is undeniably the paradigm case.
Analysis
[20] On the face of it then, Ms Brereton had a right of audience on behalf of the respondent and the Authority had jurisdiction to make an award of costs in respect of the work she did on behalf of the respondent.
[21] As a matter of general principle, costs award are made at the discretion of the decision-maker, and there is no reason to depart from that principle in this case. To succeed therefore, the Chief Executive must demonstrate that the Authority erred in law or principle, took into account irrelevant considerations, failed to take into
account relevant considerations or was plainly wrong.7
[22] Further, the process of weighing these relevant considerations, both individually and inter se, is a matter for the Authority, not me, on appeal.
[23] The Chief Executive does not say the costs award of $500 was too high. Rather, his case is that the terms of s 12O must be strictly complied with: any costs
award must be to the appellant, not her advocate; and the amount awarded must
5 Section 12K(8).
6 Commissioner of Police v Andrews [2015] NZHC 745, [2015] 3 NZLR 515 at [61] (footnote omitted).
7 May v May (1982) 1 NZFLR 165 (CA) at [170] approved in Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32] per Tipping J.
reflect actual costs incurred or a contribution to them, based on actual evidence of those costs.
[24] The Chief Executive says the Authority bypassed the appellant and made the award directly to the advocate in contravention of the plain terms of the section. Further, Ms Brereton did not charge the respondent for her work, and did not provide the Authority any details of the time she spent on the file or the hourly rate she would have charged. On the contrary, her advice was that her work was carried out for free.
[25] This lack of transparency placed the Chief Executive in an invidious position, it was argued. He says he has no basis upon which to assess the reasonableness of the award and therefore no basis upon which to decide whether it ought to be challenged. The Chief Executive is concerned that this approach may become the norm and submitted it was important that proper principles for costs awards be confirmed now.
[26] In my view, s 12O should be liberally construed in light of the Act’s purpose of providing financial assistance to vulnerable people, and the Authority’s function of providing simple, fast, cheap, and therefore accessible justice for those people. The role of lay advocates within that framework is, I sense, of considerable importance. They are not lawyers, but they are experienced in, and knowledgeable about the operation of the Act and its associated bureaucracy. Their services are inexpensive, indeed often free, as was the case here. They help to make the Act’s systems work, particularly where the beneficiary has difficulties, for whatever reason, in interacting with Ministry officials. In those circumstances, I apprehend that the lay advocate becomes indispensible both for the beneficiary and the bureaucracy. That seems to have been the position in the case of this respondent.
[27] As to the first of the Chief Executive’s two points, in my view, to award costs directly to Ms Brereton is consistent with allowing the appellant the costs of bringing the appeal in accordance with the terms of the provision. “Allowing” an appellant his or her costs can sensibly be construed simply as covering or contributing to those costs. There is no need to read into the provision the idea that the cheque must
actually be made out to the appellant. The costs in question are still the appellant’s costs even if the representative is paid directly. And given that appellants are often impecunious in this jurisdiction, there are good practical reasons to interpret the provision as allowing direct payment rather than requiring payment through the beneficiary.
[28] I reject the Chief Executive’s first ground accordingly.
[29] The Chief Executive’s second argument has more merit. Mr Upperton accepted that the Chief Executive can have no problem in principle with costs retrospectively charged – that is with lay advocates who act pro bono with the proviso that if the Authority indicates an award of costs is appropriate a fee will be charged. This was done in the Environment Court in Tandem Maritime
Enhancement v Waikato Regional Council,8 in which the advocate for a successful
party (a lawyer) acted pro bono but recorded his time and disbursements against the possibility of a costs award in his client’s favour. The Court accepted that an award was appropriate in that case.
[30] In any event, it seems to me there is no difficulty in principle with charging a client costs on a contingency basis especially in the context of this appeal process where, as I have said, the assistance of lay advocates who are prepared to act on that basis is of real value to the Authority.
[31] Here however, Ms Brereton provided no bill to the appellant nor any time record, even retrospectively. Rather, she advised the Authority that she had charged the Ministry $35 per hour for other non-advocacy work. The Authority then took the matter from there, effectively estimating Ms Brereton’s preparation and hearing time before both the earlier Benefits Review Committee, and the Authority itself. In addition, the Authority mentioned the fact that another advocate attended the Authority hearing in person, as a support person for the appellant. Ms Brereton had to phone in because she was unable to attend personally.
[32] There can be no doubt that the award was modest. Inferring, as I do, that the hourly rate quoted Ms Brereton of $35 was what the Authority applied in its calculation, the costs covered a little less than 15 hours work for the whole process including, presumably, the time of two advocates at the Authority hearing.
[33] Nonetheless, the plain words of s 12O strongly suggest that the calculation of costs claimed should come either from the appellant or the lay advocate. The phrase “… the costs of bringing the appeal …,” refers, in my view, to an identifiable figure able to be calculated in the orthodox way even if the calculation is made retrospectively. This quantum should thus be provided by one of them to the Authority rather than simply estimated by the Authority, even where it is only proposed to order that the Chief Executive make a contribution to the total amount
claimed.9
[34] I do not for a moment consider the award of costs in this case to be extravagant or irrational in that sense, and it may well be that when the Authority reconsiders the issue armed with an actual claim for time and effort, the $500 will increase, but that is not a matter for me to consider at this point.
[35] The answer to the question, did the Authority err in directing costs to be paid, is yes. Pursuant to r 21.14, the matter is remitted back to the Authority with a direction that it reconsider the question of costs armed with appropriate information from the lay advocate in accordance with this judgment.
[36] There will be no award of costs in this Court.
Williams J
Solicitors:
Crown Law, Wellington
R L Roff, Thorndon Chambers
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