Chief Executive of the Ministry of Social Development v S
[2017] NZHC 414
•10 March 2017
ORDER PROHIBITING PUBLICATION OF NAME, ADDRESS OR IDENTIFYING PARTICULARS OF RESPONDENT.
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2016-485-712 [2017] NZHC 414
IN THE MATTER OF an appeal by way of case stated from the
determination of the Social Security Appeal Authority at Wellington under s 12Q of the Social Security Act 1964
BETWEEN
THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT
Appellant
AND
S Respondent
Hearing: 17 February 2017 Appearances:
B C L Charmley for appellant
Respondent in person
M S Smith and E M Gattey (Amici Curiae)Judgment:
10 March 2017
RESERVED JUDGMENT OF DOBSON J
[1] This is an appeal by way of case stated from a determination of the Social Security Appeal Authority (the Authority). The case has been stated by the Authority at the request of the appellant (the Chief Executive) to test a relatively confined issue of law going to the scope of the Authority’s powers to make orders under a provision of the Social Security Act 1964 (the Act) other than the provisions relied on by the
Chief Executive in the decision that is under appeal.
CHIEF EXECUTIVE, MINISTRY OF SOCIAL DEVELOPMENT v S [2017] NZHC 414 [10 March 2017]
[2] The terms of the Act that apply in this case are those as at 1 January 2011. The provisions in issue have subsequently been amended in relevant respects, which lessens the precedential impact of the question that is now raised.1
The case at hand
[3] For a period including that from September 2003 to May 2008, the respondent claimed and was paid a domestic purposes benefit, as well as certain accommodation supplements, a disability allowance, special benefits and special needs grants.
[4] In March 2011, the Chief Executive determined that the respondent had been in a relationship in the nature of marriage (a de facto relationship) with a Mr Walton, which disentitled her to benefits she had received.
[5] The Chief Executive determined that the respondent was liable to repay a total of $83,154.19 for overpayment of the domestic purposes benefit and other benefits. This included approximately $10,400 for accommodation supplement payments to which she was found not to be entitled. In doing so, the Chief Executive invoked s 86(1) of the Act, which is in the following terms:
86 Recovery of payments made in excess of authorised rates
(1) The chief executive, in order to recover a debt referred to in section
85A, may–
(a) bring proceedings in the name of the chief executive; or
(b) deduct all or part of that debt from any amount payable to that person by the department as a benefit or a student allowance; or
(c) in the case of a debt referred to in section 85A(d), deduct all or part of that debt from any payment of a grant of special assistance under a welfare programme approved under section 124(1)(d).
1 Appeal rights to both the Benefits Review Committee and the Social Security Appeal Authority have been extended to the spouses of beneficiaries affected by a decision under s 86(3): see the current ss 10A and 12J(8)–(9) of the Social Security Act 1964 as amended by the Social Security (Fraud Measures and Debt Recovery) Act 2014, ss 4(2) and 5.
[6] Also of relevance in this case is the further provision in s 86(3) in the following terms:
(3) If, in the opinion of the chief executive, the spouse or partner of any beneficiary makes any false statement to or otherwise misleads any officer engaged in the administration of this Act, in relation to his or her income or other personal circumstances, as a result of which the benefit or an instalment of benefit is paid in excess of the amount to which the beneficiary is by law entitled, the amount so paid in excess may be recovered from that spouse or partner as a debt due to the Crown at the suit of any member of the chief executive, or the excess payment may be recovered by way of deduction from any instalments of any benefit or student allowance thereafter becoming payable to that spouse or partner.
[7] The Chief Executive declined to make a finding that Mr Walton had any liability, so there was no order that repayment of any of the respondent’s payments be recovered from him under s 86(3).
[8] The respondent sought review of the Chief Executive’s decision by the Benefits Review Committee (BRC). In that forum, she argued that she had not been in a de facto relationship with Mr Walton. If unsuccessful on that point, she argued that Mr Walton should be made liable for part of the repayments sought from her, pursuant to s 86(3) of the Act.
[9] The BRC confirmed the Chief Executive’s decision. On the relevant point, it found that there was not enough evidence to prove that Mr Walton had made any false statements that would justify a debt recovery order enforceable against him under s 86(3).
[10] The respondent pursued an appeal from those decisions to the Authority. In a decision delivered on 13 November 2015, the Authority largely concurred with the Chief Executive’s original decision, modifying slightly the periods to which the obligation to repay applied. However, the Authority differed from the Chief Executive in finding that the debt relating to the accommodation supplement component of benefits that had been paid between December 2003 and May 2008 should also be recovered from Mr Walton, pursuant to s 86(3). The Authority found that Mr Walton had knowingly made a false statement as the partner of the beneficiary, leading to the respondent obtaining a benefit in excess of what she was
entitled to. The Authority directed the Chief Executive to recover the debt from Mr Walton. The direction was in terms that the Chief Executive should limit recoveries from Mr Walton to one half of the wrongly claimed accommodation supplement. That would amount to slightly less than half of the $10,400 the respondent received.
[11] The summary of the Authority’s findings included the following:2
Mr Walton is to be treated as jointly and severally liable with the appellant for the debt in respect of Accommodation Supplement paid in respect of the period 3 December 2003 to 11 May 2008 but the Chief Executive is directed to limit recovery from Mr Walton to half the debt in respect of the period
3 December 2003 to 11 May 2008.
[12] The Chief Executive challenges the Authority’s decision to make an order under s 86(3), a provision that had not been invoked in either the Chief Executive’s own decision or that of the BRC. The Authority responded to the request to state a case by posing questions in the following terms:
In circumstances where:
(a) a Benefits review Committee has made a determination as to the application of s 86(3) of the Social Security Act 1964 as to Mr Walton’s liability;
and/or
(b) where neither the appellant nor the respondent submitted at any material time that the Authority did not have jurisdiction
did the Social Security Appeal Authority err in law in considering
Mr Walton’s liability under s 86(3) of the Act.
[13] At earlier stages of the proceedings, the respondent was represented by a beneficiary advocate who was not qualified to appear on the present appeal. The respondent invited the Court to appoint an amicus and the Chief Executive abided the Court’s decision on that request. It was not able to be considered by the Court until 9 February 2017, but on that day Courtney J directed the appointment of an amicus. I am grateful to Mr Smith for accepting appointment as an amicus at short notice, and to him and Ms Gattey for the careful submissions that they filed on the
day before the hearing.
2 At [127].
Arguments to confine the Authority’s powers
[14] The statutory basis for the powers of the Authority is in s 12I of the Act:
12I Functions of Appeal Authority
(1) The functions of the Appeal Authority shall be to sit as a judicial authority for the determination of appeals in accordance with section
12J of this Act and section 16A of the War Pensions Act 1954.
(2) In hearing and determining any appeal, the Appeal Authority shall have all the powers, duties, functions, and discretions that the chief executive had in respect of the same matter.
[15] The essential point on the Chief Executive’s appeal is that the Authority cannot initiate an order under s 86(3) if that provision was not invoked by the Chief Executive because an order under s 86(1) is not the same matter as an order made under s 86(3).
[16] Ms Charmley submitted that the Chief Executive’s tasks under s 86(1) and (3) are entirely distinct. Once an overpayment has been identified and quantified, under s 85A it becomes a debt due to the Crown from the recipient of the overpayment. Section 86(1) creates a discretion for the Chief Executive to pursue one of three alternative modes of recovery. That contemplates dealings between the Chief Executive and a beneficiary involving, among other things, the individual circumstances of that beneficiary, and the prospect of deducting parts of the debt from on-going benefit entitlements.
[17] On the Chief Executive’s analysis, that process under s 86(1) is a different matter to the additional discretion that may arise under s 86(3), where the spouse or partner of a beneficiary who has received overpayments appears to be implicated in the circumstances of overpayment. That discretion arises if the partner made a false statement or otherwise misled a departmental officer. The Chief Executive treats the consideration of the steps that may be taken to pursue repayment from a beneficiary who has received overpayments on the one hand, and a spouse or partner of such a person if that person is appropriately implicated on the other hand, as not being “the same matter” as that expression is used in s 12I(2).
[18] Ms Charmley argued that numerous procedural difficulties would arise in proceedings before the Authority if consideration of an order against a spouse or partner under s 86(3) is treated as comprising part of the same matter as an order for recovery of debt under s 86(1). As demonstrated by the facts in the present case, if the Chief Executive does not address the point definitively, then the matter goes on review to the BRC just on the beneficiary’s liability under s 86(1). As was the case here, the BRC conducts a reconsideration of the issues as they were before the Chief Executive. A partner in Mr Walton’s position may have only limited or no involvement as a person potentially liable under s 86(3).
[19] On the terms of the Act at the time, no right of appeal to the BRC or the Authority would have arisen if the Chief Executive made a positive finding on Mr Walton’s liability in a combined decision under s 86(1) and (3), and he would not have the right to be provided with all the documents generated in the inquiry.
[20] The Chief Executive accepted that in cases where he has acted under a number of related provisions, then the Authority’s jurisdiction will be correspondingly broad. However, if a decision has been made only under s 86(1), then that defines the extent of the jurisdiction available to the Authority on appeal.
[21] Arguably, Parliament cannot have intended to render persons in Mr Walton’s position vulnerable to an order by the Authority where such liability was not attributed to him or her by the Chief Executive. Such persons’ rights to challenge a finding against them are materially less than the beneficiary receiving the overpayments. The spouse or partner would have no opportunity to seek review by the BRC, and no procedure is provided for them to present argument against the existence of such a liability by challenging a Chief Executive’s decision before the Authority.
[22] The difficulty with the Chief Executive’s argument is that the lack of entitlement for a spouse or partner who was vulnerable to an order under s 86(3) was exactly the same, whether the Chief Executive had made a finding of liability against him or her under s 86(3), or had decided not to do so. The subsequent statutory amendment providing procedural safeguards for spouses and partners in that
situation tends to confirm that Parliament’s omission was an oversight. It certainly is not a deficiency in the rights of such persons that is appropriately cured by a narrower interpretation of the “same matter” when assessing the scope of jurisdiction of the Authority. To do so would deprive beneficiaries in the respondent’s position of any entitlement to challenge a ruling by the Chief Executive that she bore sole responsibility for repaying overpaid benefits, in cases where the beneficiary claimed that liability should be shared by application of s 86(3) of the Act.
[23] On the facts here, Mr Walton was invited to participate in the appeal before the Authority, and did so. Ms Charmley’s point was that he had no assurance of procedural protections, and the adequacy of the opportunity he was given was open to question.
[24] In opposing the Authority’s jurisdiction to make what amounted to a de novo finding of liability, Ms Charmley argued that the appropriate course for the Authority was to exercise its power to refer the matter back to the Chief Executive under s 12M(8) of the Act. That suggestion raises a potential inconsistency in the Chief Executive’s approach to interpreting the relevant provisions. Section 12M(8) relevantly provides:
… the Authority may refer to the chief executive for further consideration, the whole or any part of the matter to which an appeal relates, and where any matter is so referred the Authority shall advise the chief executive of its reasons for so doing and shall give such directions as it thinks just as to the rehearing or reconsideration or otherwise of the whole or any part of the matter that is so referred.
[25] That submission implicitly distinguishes the “matter to which an appeal relates” in s 12M(8) from the reference in s 12I(2) to “the same matter”. Arguably, the former phrase is wider than the latter in that there is a broader power to refer back to the Chief Executive matters arising out of, or incidental to, the issue that is the subject matter of the decision that can be appealed. The distinction is a relatively fine one.
The contrary view
[26] I acknowledge the assistance gained from the submissions presented by the amici. The essence of their submissions was that the Authority’s powers under s 12I(2) were wide enough to consider liability and make a direction under s 86(3). However, they suggested that the lawfulness of the Authority’s decision in this case could be called into question on two other grounds. First, that the Authority failed to accord Mr Walton status as a party to the appeal when it should have done so, and secondly, that its decision failed to address all the points that Mr Walton had raised against his being attributed with a liability under s 86(3).
[27] Mr Smith invited an analogy with earlier decisions that have considered the scope of the Authority’s powers. In McFarlane v Chief Executive of the Department of Work and Income, Harrison J had to consider the Authority’s jurisdiction to make a determination on a section where the parties had not raised or argued that provision.3 The context there was an assessment of assets owned by a claimant for an accommodation supplement and whether their extent disqualified the claimant from the payment. The judgment included the following:
[19] … Once the Authority concluded that the chief executive had erred in determining that Mr McFarlane’s interest in the Opotiki property was a cash asset, it was entitled, if not obliged, to consider the successive question of whether he had realised assets available for his personal use. Whether or not the parties raised or argued its applicability, the Authority clearly had jurisdiction to make a determination pursuant to s 61EC(4).
[20] Effectively Mr McFarlane’s appeal before the Authority was a hearing de novo. It had jurisdiction to undertake a full review of all relevant facts, and to consider all relevant questions or issues afresh. …
[28] Ms Charmley distinguished the circumstances in McFarlane because the different provisions provided for alternative factual analyses going to an individual claimant’s asset position. The additional consideration was, in effect, a review of a further factual aspect affecting the appellant. Arguably, that is different from embarking de novo on a consideration of whether an appellant’s liability should be shared by her partner, which was the new issue considered by the Authority in the present case.
[29] Mr Smith also cited the Supreme Court decision in Arbuthnot v Chief Executive of the Department of Work and Income on the more general nature of the Authority’s jurisdiction.4 That appeal considered the entitlement of the Authority to have regard to new factual matters when considering an appeal from departmental decisions that the appellant was not entitled to an accommodation supplement. The Supreme Court’s consideration of the nature of the appeal to the Authority included the following:
[20] … s 12M provides for it to conduct a rehearing (including, if necessary, rehearing the evidence or any part of it or receiving new evidence on questions of fact) which opens up for further consideration the whole of the decision made by the BRC (or by the chief executive personally). There is nothing in s 12M to prevent the chief executive from then asking the Authority to consider any matter which may support the decision which is under appeal. Indeed, the thrust of the section is quite the other way: that the Authority is to consider all relevant matters.
[21] … the Authority is bound to consider the chief executive’s submissions and to make its decision on all grounds raised before it. …
[26] … That disentitlement decision was the “same matter” in respect of which, in terms of s 12I(2), the Authority was given the powers, duties, functions, and discretions of the chief executive for the purpose of hearing and determining the appeal. Mr Arbuthnot’s argument about the change of address was merely his ground or reason for saying that the BRC should not have decided that he was disentitled to the supplement. The chief executive’s argument that Mr Arbuthnot had been living in a relationship in the nature of marriage was relevant to the ultimate question raised by the appeal, namely whether Mr Arbuthnot was or was not entitled to the benefit.
…
[30] Ms Charmley submitted that the position in Arbuthnot was distinguishable on similar grounds to those she raised on McFarlane. In Arbuthnot, the question was whether the Authority could base its decision on different factual findings to the Chief Executive. It was not whether the Authority could make its decision under a different provision in the Act. The new ground relied on by the Authority was a separate factual consideration that disentitled the appellant from qualifying for the accommodation supplement. It followed that the decision was in respect of the same matter. Arguably, that reasoning would not equally apply to making a finding of a liability attributed to another person under a different statutory provision.
[31] I accept there is a material difference between the Authority identifying new grounds for the same decision, and embarking on a new decision. Nonetheless, the reasoning in the cases cited provides support for a broad approach to the scope of the Authority’s jurisdiction, at least when it is dealing with the same issues as have been addressed in the Chief Executive’s original decision.
[32] From the Chief Executive’s perspective, the matter at issue in his decision about the respondent’s liability was the two-stage inquiry quantifying the extent of overpayment that had been made to the respondent, and secondly whether, and if so in what form, to pursue repayment of it from her. On that approach, the prospect of seeking to attribute liability to her partner for the purposes of also pursuing recovery against him was a different matter.
[33] That conceptual analysis overlooks the practicality that, in the majority of cases, departmental officers are likely to investigate the prospect of recoveries from partners as part of their investigation of the beneficiary involved. That appears to have occurred here.5 Also, it does not readily accommodate the prospect of a negative decision under s 86(3) of the Act. A decision not to attribute liability to Mr Walton can be seen as an exercise of the Chief Executive’s power under that section, as much as a decision to make such an order. In the analogous context of a challenge to a departmental decision not to prosecute in respect of alleged breaches of a statute administered by that department, a decision described as the “positive
exercise of a discretion not to prosecute” is nonetheless treated as the exercise of a
statutory power.6
[34] Another tenable characterisation of the Chief Executive’s task under s 86 is that it authorises him to decide from whom quantified overpayments should be recovered, and the means by which recovery should be pursued. The discretion to make decisions under s 86 is to be exercised in light of its purpose to pursue overpayments which have the status of debts due to the Crown. If the power is characterised in that way, then decisions under s 86 to pursue recovery from the
beneficiary who received the overpayments and any spouse or partner whose
5 See [48]–[51] below.
6 See Hallet v Attorney-General (No 2) [1989] 2 NZLR 96 (HC) at 100–101; Osborne v Worksafe
conduct brings him or her within s 86(3) can reasonably be seen as the same matter. Both alternatives for recovery are provided for in the one section of the Act.
[35] In suggesting that this broader approach to the scope of “the same matter” was preferable, the amici acknowledged that it created procedural difficulties to the disadvantage of a spouse or partner where their liability was not a component of the Chief Executive’s assessment in the original decision. However, they arose whether or not a finding had been made by the Chief Executive under s 86(3).
[36] Mr Smith suggested that these gaps could be filled by recognising the natural justice obligations that can be implied on conventional standards. Specifically, the Authority has the powers of a Commission of Inquiry.7 Accordingly, where the prospect of an order under s 86(3) arises in an appeal before the Authority and such an order has not previously been made, then the Authority ought to make the spouse or partner a party to the appeal. This could cure what would otherwise be prejudicial
inadequacies in that person’s entitlement to know the case against him or her, and their ability to prepare and present their case. That status would require full disclosure of the materials relevant to the appeal, and would give the spouse sufficient opportunity to prepare a response to the claim.
Discussion
[37] It would be somewhat unusual to treat the prospects of procedural or substantive disadvantage to a spouse or partner as justification for reading down what is otherwise the natural and ordinary meaning of “the same matter”, when the exercise of powers under s 86 is in issue before the Authority. As those disadvantages were present whether or not the Chief Executive made an order against a spouse or partner under s 86(3), and the inadequacies in process have been cured by statutory amendment, the lack of procedural protection can be treated as a matter of legislative oversight. I consider that to be a more likely explanation than attributing to Parliament an appreciation that someone in Mr Walton’s position who is vulnerable to an order under s 86(3) would be protected from an order initiated by
the Authority because of a narrower interpretation of “the same matter”.
7 Social Security Act 1964, s 12M(6).
[38] Once that influence on the interpretation of “the same matter” is put to one side, an approach reflecting the natural and ordinary meaning of the expression and consistent with the decisions in McFarlane and Arbuthnot can apply. The matter the Authority was seized of in this case was whether there were grounds for finding that the respondent was ineligible for the benefits the Chief Executive found were overpaid to her, and if so how recovery of the overpayment should be pursued. An aspect of that matter is whether Mr Walton, as a relevant spouse or partner, ought to be jointly and severally liable for overpaid benefits.
[39] I accept Ms Charmley’s basis for distinguishing McFarlane and Arbuthnot. Those cases focused on the scope of additional or different grounds for decisions in respect of the same beneficiary, whereas a decision under s 86(3) triggers a liability by a different person. However, that is not a sufficient distinction to take it outside the scope of “the same matter” as argued on appeal before the Authority.
[40] The terms of s 86(3) do not contemplate attributing individual liabilities for portions of the amount established as overpayment, so that any liability attributed to a spouse or partner would be on a joint and several basis for the whole amount. Operationally, it would appear efficient to research, assess and decide on the prospect of attributing liability to a spouse or partner in the same inquiry as deciding on what action to take. In the operational sense, the decisions made in the name of the Chief Executive under s 86(1) could reflect the same matter as that which gives rise to a finding of liability under s 86(3).
[41] I am accordingly not persuaded that the Authority exceeded its jurisdiction in considering Mr Walton’s position under s 86(3).
Other grounds for concern
[42] In the event that the Authority was correct in assuming it could make a decision under s 86(3) as part of the same matter as a determination under s 86(1), the amici included in their submissions other points on which the Court might be concerned that the Authority had erred. Ms Gattey spoke to this aspect of their submissions. She identified three potential errors by the Authority that might be recognised by the Court:
· the failure to add Mr Walton as a party to the appeal from an early stage;
· the failure to ensure that he was fully informed; and
· the failure to give Mr Walton sufficient opportunity to prepare a defence of his position.
[43] Ms Gattey also drew attention to the document lodged by Mr Walton explaining his position and making arguments against his having any liability under s 86(3) of the Act. Ms Gattey characterised it as a material error for the Authority not to have acknowledged the more significant of these reasons and dealt with them before reaching its conclusion that such liability should be attributed to Mr Walton.
[44] The amici submitted that the answer to the formal question8 posed in the case stated should be “no” (having the effect that the Authority’s decision was not in excess of its jurisdiction), but that the Court ought nonetheless to refer the issue of Mr Walton’s liability back to the Authority, for reconsideration of the matter in accordance with the procedural safeguards the amici submitted should apply. Arguably, the Court could determine the case stated on those terms, given the powers under r 21.14(b) of the High Court Rules.
[45] The Chief Executive sought the answer “yes” to the formal question posed in the case stated, reflecting his arguments that the Authority did not have jurisdiction to make an order under s 86(3). Ms Charmley argued that the most the Authority could have done was to refer back to the Chief Executive its concern at the absence of a decision under s 86(3) attributing joint and several liability to Mr Walton. A footnote to Ms Charmley’s submissions acknowledged that for such concerns to be meaningfully addressed, the Authority could have stayed the effect of the Chief Executive’s decision under s 86(1) until the reconsideration of Mr Walton’s position under s 86(3) had been completed.
[46] To interfere as the amici suggested, when the Authority has been vindicated on its assumption of jurisdiction, is not a step to be taken lightly.
8 The terms of the question are set out in [12] above.
[47] The record of earlier stages of the proceeding that is available on the case stated is not exhaustive. However, I am satisfied that the theoretical prejudice to Mr Walton’s position is more than could be made out in a practical sense on the history of the matter since the Chief Executive’s decision in respect of the respondent.
[48] It is apparent that the investigators interviewed Mr Walton before making a decision on behalf of the Chief Executive as to the respondent’s liability under s 86(1) of the Act. In opposing the making of an order against him under s 86(3) by the Authority, Mr Walton stated:
My alleged role in the matter was investigated by the Chief Executive at the time that charges were laid against the appellant. On conclusion of said investigation I was formally cautioned and no further action was taken against me by the Chief Executive in respect of the overpayments in question.
[49] If that is accurate, it suggests that in the Chief Executive’s assessment of recovery of overpayments from the respondent, a decision was made under s 86(3), but in the negative.
[50] The decision of the BRC also considered the respondent’s claim that Mr Walton should also be liable to contribute to repayment of overpayments. Its decision contained the following:
The Committee has considered the Applicants submission that Mr Walton should be liable, under section 86(3) of the Social Security Act 1964, to have collected from him some monies to repay the overpayment established.
86(3) requires the Ministry to prove that the partner or spouse of any beneficiary made any false statement or otherwise misleads any officer engaged in the administration of this Act that then lead to a payment being made in excess of entitlement. Mr Walton in his statement to the Ministry said that he was not completely aware of what the Applicant was receiving from the Ministry and was never sure of where she was getting her money from. The Committee considers that based on the information and evidence available to them the Ministry is unable to prove that Mr Walton made any false statement or mislead [sic] and therefore would be unable to enforce
86(3).
[51] Therefore in the two decisions on the matter prior to it being considered by the Authority, the prospect of Mr Walton being liable under s 86(3) was considered, but both decisions were made against the imputation of such a liability.
[52] The Authority had to deal with a preliminary issue when first seized of the appeal. The respondent had been found in the criminal proceeding against her in the District Court to have lived in a qualifying de facto relationship with Mr Walton throughout relevant periods. Accordingly, it was argued that it was not open to her to revisit that finding before the Authority. The Authority issued an interim decision on the papers in February 2015 rejecting the notion that the District Court finding was necessarily determinative of the issues before it. That interim decision included an acknowledgement that Mr Walton had an interest in the proceedings. Natural justice dictated he should be heard, not only on the issue of any liability that might be attributed to him under s 86(3), but also on whether the extent of overpayments that were at that stage being claimed from the respondent had been correctly established. The Authority directed the respondent to provide a report containing all the evidence which would support her application to have Mr Walton joined to the proceedings.
[53] By May 2015, Mr Walton had lodged a notice with the Authority of his desire to be heard in relation to the respondent’s claim that 50 per cent of the accommodation supplement debt allegedly owed by her to the Crown should be recovered from him. In a direction on 21 May 2015, the Authority directed that the s 12K report filed by the Ministry with the Authority was to be provided to Mr Walton.
[54] The Authority considered the respondent’s request that recovery of part of the debt be ordered from Mr Walton in some detail. On the basis of the evidence before it, its factual findings included the following:9
[120] A false tenancy agreement was provided to the Ministry in support of an application for Accommodation Supplement in December 2003. The tenancy agreement showed the landlord of 25 Marere Road as QQQQ Investments Ltd and the tenant as [the respondent]. The rental to be paid is shown as $250 per week to be paid fortnightly in advance. Mr Walton filled in the parts of the agreement relating to the landlord and the appellant filled in the parts relating to the tenant. The appellant alleged that it was Mr Walton’s idea. Mr Walton said that the appellant had asked him to fill in the relevant parts of the tenancy agreement. He had trusted her in her judgement in relation to this matter. He had assumed that she knew what she was doing and that she would give it to the Ministry. Mr Walton said he
9 In re S [2015] NZSSAA 84.
knew that the tenancy document was false and he knew the appellant was going to use it to get a benefit. He did not know how long it was going to go on for, or that she would use this form to gain benefits to the extent that she did.
[55] The relevant finding on the basis of that was:
[121] As previously outlined, we think it more likely than not that the appellant was the architect of the false tenancy agreement. However, we accept that in completing and signing the tenancy agreement Mr Walton made a false statement which he knew would be provided to staff at the Ministry of Social Development. The tenancy agreement was a statement which misled the Ministry in relation to his personal circumstances in that it represented that the house of which he was a joint owner (25 Marere Avenue) was owned by QQQQ Investment Ltd and was being rented to the appellant. As a result, the instalments of Accommodation Supplement paid to the appellant between 3 December 2003 (being the date the tenancy agreement was presented to the Ministry) and 11 May 2008, were paid in excess of the amount to which the appellant was entitled.
[56] The Authority’s decision noted that Mr Walton was not represented at the hearing, but that he had consulted a lawyer prior to the hearing. A “Statement of Reasons” prepared by a solicitor on his behalf (an extract from which is quoted at [48] above) addressed reasons why he should not be liable under s 86(3). It ended with the proposition that the respondent alone should be responsible for the overpayments.
[57] Mr Smith advised me in the course of his submissions that he had been in touch with Mr Walton, who remained interested in the outcome but was not in a position to attend at Court on the day this appeal was heard.
[58] In light of this history of Mr Walton’s part in the proceedings, I am not satisfied that the absence of status as a party to the proceeding before the Authority raises the prospect of prejudice to his position in any material respect that would justify referring the matter back to the Authority. He was heard in circumstances where he had prior notice of the grounds on which the respondent was pursuing her claim that he should share some part of her liability for overpayment.
[59] The more relevant consequence of the lack of his party status is that he does not have an independent entitlement to request the Authority to state a case so that he might challenge its determination against his interests in this Court. It may be that
Mr Walton has taken the view that the Chief Executive’s appeal would succeed, and that he therefore was not vulnerable to a liability for part of the overpayments to the respondent. That has not happened. Mr Walton is left with a right to bring judicial review proceedings in relation to the lawfulness of the Authority’s decision adverse to him, on the premise that its decision was made within jurisdiction.
[60] In not addressing specific points that Mr Walton raised, I do not find the Authority’s reasoning demonstrably inadequate. It is clear that its decision to impose a liability on him relies on the factual findings it made, based on evidence it had received from Mr Walton which was inconsistent with his written statement of reasons. It is clear that the Authority preferred the version of events it elicited from Mr Walton during the hearing, to the assertions of the factual position that he set out in his statement of reasons.
[61] I am not persuaded that earlier stages in the proceeding ought to be revisited because of any difference between Mr Walton’s position as a person entitled to pursue his own appeal against the Authority’s determination, and as a person adversely affected by its exercise of a statutory power contrary to his interests.
Outcome
[62] Accordingly, the formal question in the case stated is answered “no”. The Chief Executive’s stance in the appeal suggested that he was uncomfortable attempting to enforce a liability against Mr Walton, contrary to the Chief Executive’s own view that such a liability did not exist. However, the outcome has similar effect to a determination of the Authority to, say, reduce the extent of overpayments that are lawfully recoverable from a beneficiary. There is no legal impediment to the enforcement of the order made against Mr Walton, unless and until it is challenged by him on judicial review.
[63] No issue as to costs arises.
[64] The respondent has requested continuation of the order for name suppression which was made by the Authority. In the circumstances of this appeal, as a
respondent she is entitled to that. Accordingly, there is to be no publication of the
respondent’s name, address or identifying particulars.
Dobson J
Solicitors:
Crown Law, Wellington for appellant
Copy to:
The respondent
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