Crequer v Chief Executive of the Ministry of Social Development
[2016] NZHC 3179
•21 December 2016
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2012-485-1027 [2016] NZHC 3179
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
MARGOT CREQUER Appellant
AND
THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT
Respondent
On papers Judgment:
21 December 2016
JUDGMENT OF DOBSON J
[1] This much protracted appeal by way of case stated raises issues about the scope of s 71A of the Social Security Act 1964 (the Act). That section requires an income-tested benefit paid to a person to be reduced by the extent of any weekly compensation payable to the person under the Accident Compensation Act 2001. The terms of the section are set out in [7] below.
Factual background
[2] From 1997, Ms Crequer was paid amounts by the Accident Compensation Corporation (ACC) as a result of her mother’s death. That entitlement arose under cl 70 of the first schedule to the Accident Compensation Act, which makes the ACC liable to pay weekly compensation to the child of a deceased claimant. Whilst Ms Crequer was under the age of 16, the ACC payments were made to her father but,
from 8 May 2010, they were made directly to her. Thereafter, Ms Crequer applied
CREQUER v CHIEF EXECUTIVE, MINISTRY OF SOCIAL DEVELOPMENT [2016] NZHC 3179 [21 December 2016]
under the Act for an Independent Youth Benefit. Her application was granted, and for a period the on-going ACC payments were treated as income. However, in March 2011, the Ministry of Social Development (the Ministry) discovered that it had made an error in treating the ACC payments as income. Thereafter, it applied s 71A to directly deduct the amount of ACC payments from the amount paid to Ms Crequer as an Independent Youth Benefit. That occurred from 21 March 2011.
[3] Ms Crequer initially sought a review of the decision and the application of s 71A was upheld by an internal review and by a Benefits Review Committee. She then appealed to the Social Security Appeal Authority (the Authority) and on
20 December 2011 the Authority released a decision upholding the Ministry’s decision to deduct payments in the way that it was.1 Thereafter, Ms Crequer sought to appeal the Authority’s decision and submitted a draft case proposing 22 questions of law. The Ministry countered with three proposed questions of law and on 23 May
2012 the Authority settled a case stated with the three questions of law as proposed by the Ministry.
[4] Ms Crequer challenged the Authority’s right to amend her draft case, and pursued separate proceedings in this Court, asserting her right to propose questions of law for further appeal. On 4 October 2012, that application was dismissed.2
[5] Subsequently Ms Crequer applied to vary or rescind the October 2012 judgment, and that further application was dismissed. She then pursued a further appeal to the Court of Appeal, which deemed her appeal abandoned in May 2013 for her failure to file a case on appeal.3 A subsequent application for leave of the Supreme Court to bring a further appeal against the Court of Appeal’s dismissal was also dismissed.4 An application for recall was dismissed on 6 March 2015.5
[6] In June 2016, a direction was made in this Court that the appeal be dealt with on the papers. Full submissions were subsequently filed by Ms Crequer in August
1 Crequer v Chief Executive of the Ministry of Social Development [2011] NZSSAA 116.
2 Crequer v Chief Executive of the Ministry of Social Development [2012] NZHC 2575, [2012] NZAR 951.
3 Ms Crequer filed a notice of application for an extension of time which was also dismissed:
Crequer v Chief Executive of the Ministry of Social Development [2014] NZCA 284.
4 Crequer v Chief Executive of the Ministry of Social Development [2014] NZSC 119.
5 Crequer v Chief Executive of the Ministry of Social Development [2015] NZSC 18.
2016, and on behalf of the Ministry in November 2016. The appeal was then referred to me for consideration and determination.
The section
[7] Section 71A provides as follows:
71A Deduction of weekly compensation from income-tested benefits
(1) Subject to subsection (4), this section applies to a person who is qualified to receive an income-tested benefit (other than New Zealand superannuation or a veteran’s pension unless the veteran’s pension would be subject to abatement under section 171 of the Veterans’ Support Act 2014) where—
(a) the person is entitled to receive or receives weekly compensation in respect of the person or his or her spouse or partner or a dependent child; or
(b) the person’s spouse or partner receives weekly
compensation.
(2) Where this section applies, the rate of the benefit payable to the person must be reduced by the amount of weekly compensation payable to the person.
(3) In this section, weekly compensation means weekly compensation for loss of earnings or loss of potential earning capacity payable to the person under the Accident Compensation Act 2001 (whether payable by or on behalf of the Accident Compensation Corporation or by or on behalf of an accredited employer within the meaning of section 181 of that Act).
(4) Subsection (2) does not apply where the person—
(a) was receiving the income-tested benefit immediately before
1 July 1999 and continues to receive that benefit; and
(b) was receiving compensation for loss of earnings or loss of potential earning capacity under the Accident Rehabilitation Compensation and Insurance Act 1992 immediately before that date; and
(c) section 71A(2) (as it was before it was repealed and substituted by the Accident Insurance Act 1998) required the compensation payments to be brought to charge as income in the assessment of the person’s benefit.
Question One: Did the Authority err in finding that payments under cl 70 of the first schedule to the Accident Compensation Act meet the definition of weekly compensation payments?
[8] The Authority relied on the High Court’s decision in Crequer v Ministry of Social Development,6 in which Ms Crequer’s father was the appellant (the 2007 judgment). That judgment confirmed that payments under cl 70 in the first schedule to the Accident Compensation Act meet the definition of “weekly compensation” in s
71A(3) of the Act.7
[9] Ms Crequer does criticise the 2007 judgment for coming:
… to the completely implausible, ridiculously ‘stretched’ conclusion, that the
‘compensation in respect of the child’ part of the section referred to compensation for children (payable under Sch 1 Part 4 Cl.70) …
However, she does not directly address this question in her submissions.
[10] “Weekly compensation” is defined in s 6 of the Accident Compensation Act as follows:
weekly compensation means compensation for loss of earnings, or loss of potential earning capacity, and compensation for the spouse or partner, child, or other dependant of a deceased claimant, that is payable by the Corporation—
(a) under any of clauses 32, 47, 66, 70, and 71 of Schedule 1; or
(b) under sections 131, 210, 224, Part 10, or Part 11
[11] Compensation payable under cl 70 also meets the definition of weekly compensation in s 71A(3) of the Act, being compensation for loss of earnings.
[12] The ACC payments to which Ms Crequer was entitled clearly amounted to
“weekly compensation” for the purpose of s 71A of the Act. Accordingly, the
Authority did not err in its finding on this point.
6 Crequer v Ministry of Social Development HC Wellington CIV-2007-485-561, 28 June 2007.
7 The Authority’s decision (at [13]) refers to s 70 of the Accident Compensation Act, but it is clear from the context that is a reference to cl 70 of the first schedule to that Act.
Question two: Did the Authority err in interpreting s 71A(1) to mean that “the person” referred to in the phrase “in respect of the person” is the person who is qualified to receive an income-tested benefit and is the person entitled to receive weekly compensation?
[13] The Authority considered the submission, made on behalf of Ms Crequer by her father, that the phrase “in respect of the person” referred not to Ms Crequer but to her deceased mother. The Authority rejected this argument, finding that an ordinary reading of that phrase suggests that the person referred to is the person who is entitled to receive weekly compensation. The entitlement to receive weekly compensation is not the entitlement of Ms Crequer’s deceased mother, but is her entitlement, which she received as a result of being the child of a deceased claimant.
[14] Ms Crequer focused her arguments on this question. She submitted that the ACC payments she received were “in respect of” her mother and not in respect of herself, thereby taking her ACC payments outside of the scope of s 71A deductions. Ms Crequer accepts that she is “the person” referenced in the phrase “in respect of the person”, but disputes that the payments are received in respect of herself. She draws a distinction between her being in receipt of the payments, which she accepts is the case, and the payments being made in respect of her. The section covers payments in respect of a person’s spouse or child, but does not include payments in respect of a person’s parent. Arguably, it would be unnecessary to include references to the person’s spouse or child if the person in receipt of the benefit was automatically also the person in respect of whom the benefit was paid.
[15] On Ms Crequer’s interpretation, the phrase “in respect of” is used to refer to
the person who has lost earnings, triggering the weekly compensation payments.
[16] The respondent says that the phrase, “in respect of the person” refers to the person who is entitled to receive weekly compensation. Ms Crequer is herself entitled to receive weekly compensation, on account of her mother’s death. Section 71A(3) clarifies that the weekly compensation captured by that section is weekly compensation payable to the person.
[17] As the respondent points out, the interpretation of this section has been considered in this Court already. In the 2007 judgment, Ronald Young J explained the purpose of s 71A(1) in the following way:8
As I have observed, subs (1)(a) widens the persons on whose behalf the beneficiary may receive compensation.
[18] In that case, Mr Crequer was receiving weekly compensation on behalf of his children, and the Court interpreted the compensation as being in respect of the children. The same compensation is at issue in the present case, so there is no reason to now interpret the weekly compensation as being in respect of Ms Crequer’s deceased mother.
[19] Accordingly, the Authority did not err in the approach challenged by question two.
Question Three: Did the Authority err in finding weekly compensation paid to the appellant must be deducted from her entitlement to Independent Youth Benefit?
[20] The Authority explained the rationale for the deductions in the following way. The ACC payments reflect the income that Ms Crequer’s mother would have brought into the household if she were alive. Had Ms Crequer’s mother been earning, Ms Crequer may not have qualified for the Independent Youth Benefit, which is payable to a person who is not living with their parents and is not financially supported by them.
[21] Ms Crequer criticises the deduction as being without justification. She characterises the deductions as representing a net gain to the Ministry, being compensation from ACC.
[22] The respondent submits that the decision to deduct ACC payments from
Ms Crequer’s Independent Youth Benefit is consistent with the “one benefit”
principle. The courts have recognised that the purpose of such deductions is to
8 Crequer v Ministry of Social Development, above n 6, at [12].
ensure that the person in receipt of an income-tested benefit does not receive the windfall of ACC payments during the same period.
[23] For example, in Goh v Chief Executive of the Ministry of Social Development, the Court of Appeal held that for the appellant to retain the full amount of her benefit and ACC payments would result in a windfall.9 Similarly in M v Chief Executive of the Department of Work and Income, Goddard J emphasised the policy premise of s 71A, which is to ensure that compensation is not to be paid twice for the same circumstances.10
[24] To the extent that Ms Crequer criticises the law for its unfairness, it is not open to the Court to disregard a clear legislative intention in favour of its own view as to fairness.
[25] No error is made out in the Authority’s approach to deductions required by s 71A of the Act, which is the legislative provision in force at the relevant time.
Conclusion
[26] It follows that the answer to each of the questions in the case stated is, “no”. The Authority did not err in its interpretation of s 71A of the Social Security Act and cl 70 of the first schedule to the Accident Compensation Act. The Ministry was correct in finding that Ms Crequer’s ACC payments were weekly compensation payments which were to be deducted from her entitlement to the Independent Youth Benefit.
[27] The Authority’s decision that is the subject of the case stated is therefore confirmed, in accordance with r 21.14(a) of the High Court Rules.
9 Goh v Chief Executive, Ministry of Social Development [2010] NZCA 110 at [15].
10 M v Chief Executive of the Department of Work and Income HC Wellington AC335/01,
27 August 2002 at [29] and M v Chief Executive of the Department of Work and Income
HC Wellington AC335/01,7 February 2003 at [7]–[8].
Costs
[28] If the respondent wishes to pursue costs, it is to file a memorandum within
21 working days of delivery of this judgment. If that step is taken, Ms Crequer will have a further 21 working days in which to file a memorandum in reply.
Dobson J
Solicitors:
Crown Law, Wellington
Copy to:
The appellant
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