Flippard v Chief Executive of the Ministry of Social Development
[2017] NZHC 3295
•22 December 2017
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2016-485-840 [2017] NZHC 3295
IN THE MATTER of an appeal by way of case stated from
the determination of the Social Security Appeal Authority at Wellington under section 12Q of the Social Security Act
1964
BETWEEN
CLAYTON FIPPARD Appellant
AND
THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT
Respondent
Hearing: On Papers Counsel:
Appellant in Person
S Leslie and T Burgess for RespondentJudgment:
22 December 2017
JUDGMENT OF ELLIS J
[1] Mr Fippard, is a beneficiary who failed to attend two mandatory interviews with the respondent Ministry of Social Development (Ministry). Attending interviews is one of the obligations Parliament requires of work-tested beneficiaries in s 102A of the Social Security Act 1964 (Act). As a consequence of these failures Mr Fippard’s benefit was suspended, purportedly in accordance with ss 116B and 117 of the Act. He unsuccessfully applied for a review of the suspension decision and then appealed
to the Social Security Appeal Authority (the Authority).
FIPPARD v THE MINISTRY OF SOCIAL DEVELOPMENT [2017] NZHC 3295 [22 December 2017]
[2] The Authority denied his appeal but subsequently stated a case for this Court, posing two questions of law which I set out later, below.1
[3] On 7 July 2017, Williams J directed that the appeal be determined on the papers. Mr Fippard was directed to file his written submissions in support of the appeal by 4 August 2017. He did not do so. Counsel for the Ministry of Social Development (MSD) filed written submissions on 18 August, in which one of the grounds of appeal was conceded. On 28 August, counsel filed a memorandum consenting to an extension of time to Mr Fippard to 8 September. On 1 September, Mr Fippard filed submissions.
[4] Then, on 5 September 2017, Mr Fippard filed a memorandum in which he sought a four month adjournment, on the grounds that he was awaiting further documents from MSD that he had requested under the Official Information Act 1982 and the Privacy Act 1993. He said that the purpose of his information requests was so that he can “go after MSD staff” for what he says are their lies and flouting of procedure. He nonetheless acknowledged, that he didn’t mind “leaving things as they stand” and would wait for the decision.
[5] In light of the outcome of the case stated appeal I do not consider Mr Fippard will be prejudiced by proceeding to judgment. Nor do I consider that his reasons for wishing to wait for the information he has sought could have any bearing on the appeal.
Legislative background
[6] The Act imposes sanctions on beneficiaries who fail to comply with certain specified “obligations”. The sanctions regime can be found in ss 113 to 121. More particularly, s 116B requires the sanctions set out in s 117 to be imposed on beneficiaries who fail to meet certain obligations and s 116B(1) sets out the types of failures that attract sanction. These includes, at (e), where:
the person is a work-tested beneficiary and the Chief Executive considers that the person has, without “a good sufficient reason”, failure to comply with any of the work test obligations as set out in s 102A.”
1 [2016] NZSSAA 053; Case Stated on Appeal (27 October 2016).
[7] And s 102A(1)(d) provides that one such obligation is:
when required by the chief executive, to attend and participate in any interview with an officer of the department or other person on behalf of the chief executive.
[8] Section 116C provides examples of a “good and sufficient reason” for failing to comply with such obligations and s 117(1) sets out the sanctions that must be imposed when a failure has occurred, and their prerequisite circumstances:
(1) The sanctions that the chief executive must apply in respect of failures under section 116B are,—
(a) for a first failure,—
(i) the person’s benefit (unless it is not a main benefit under this Act) must be reduced by 50% until the person recomplies; and
(ii) if the person has not recomplied within 4 weeks after the date on which the reduction took effect, the person’s benefit (unless it is not a main benefit under this Act) must be reduced by a further 50% (so that the total reduction is 100%) until the person recomplies:
(b) for a second failure (being a failure that occurs after the person has recomplied following a first failure), suspension of the person’s benefit (unless it is not a main benefit under this Act) until the person recomplies:
(c) for a third failure (being a failure that occurs after the person has recomplied following a second failure), cancellation of the person’s benefit (unless it is not a main benefit under this Act).
[9] Accordingly, there are two preconditions for applying any sanction under s 117(1):
(a) an obligation failure as described in s 116B must have occurred; and
(b)the failure must have occurred the number of times specified in relation to the particular sanction being imposed.
[10] Section 113 provides that before any sanction is imposed, written notice must be provided, specifying certain matters including the fact of the obligation failure, the consequent sanction, the date on which the sanction is to take effect and its duration, the ability of the beneficiary to dispute the sanction within five working days, an invitation for the beneficiary to contact MSD to discuss or dispute the sanction, and the beneficiary’s right to review the sanction and relevant procedure.
Mr Fippard’s case
[11] On 27 August 2014 Mr Fippard failed to attend an interview with the Ministry to discuss his work search activities and related matters. This followed several other missed appointments.
[12] On 28 August 2014 the Ministry wrote to Mr Fippard advising him that, consequently, his benefit would be reduced by 50 per cent. This is the relevant sanction for a first obligation failure.
[13] Mr Fippard then contacted the Ministry. He said he had not received the letter advising him of the interview. The Ministry accepted this explanation and did not impose the sanction. The Ministry then sent Mr Fippard another letter scheduling an interview for 20 October 2014.
[14] On 20 October 2014 Mr Fippard again failed to attend the scheduled interview. The same day the Ministry sent Mr Fippard a letter advising him of a further appointment scheduled for 24 November 2014.14 The letter stated that failure to attend the interview or to contact the Ministry may result in Mr Fippard's benefit being reduced or stopped.
[15] The following day, 21 October 2014, the Ministry wrote again to Mr Fippard
in respect of his failure to attend the scheduled appointment. This letter advised Mr Fippard his benefit would “stop” on 30 October 2014 because he had failed to attend the appointment. This is the relevant sanction for a second obligation failure. The letter advised Mr Fippard he had a period of five working days to dispute the decision.
[16] Mr Fippard did not dispute the decision and, on 31 October 2014, Mr Fippard’s benefit payments were suspended.
[17] On 12 November 2014, Mr Fippard contacted the Ministry to complain about the suspension - he said he understood the letter of 20 October 2014 (advising him of the further appointment) to mean his benefit would not be suspended. Mr Fippard was unwilling to attend an interview with the Ministry to have his benefit reinstated: he wanted to apply for the suspension to be reviewed.
[18] On 24 November 2014 Mr Fippard attended the interview scheduled in the
20 October 2014 letter. However, for reasons that are not entirely clear his benefit was not reinstated at this time.2
[19] On 22 December 2014 Mr Fippard had applied to the Benefits Review Committee to review the decision to suspend his benefit. His principal focus was on the making of the new appointment in the letter dated 20 October which, he contended, created a legitimate expectation that no suspension action would be taken as a result of his failure to attend the meeting that day (ie on 20 October).
[20] On 19 February 2015 the Committee issued a decision finding the Ministry's decision to suspend Mr Fippard’s benefit payments was correct. Mr Fippard then appealed the Committee’s decision to the Authority.
The Authority’s decision
[21] By the time the matter came before the Authority, the Ministry had realised that it had overlooked its earlier decision that Mr Fippard’s failure to attend the 27 August
2014 appointment was not an obligation failure when it decided to suspend Mr Fippard’s benefit. It conceded this error before the Authority. But Mr Fippard’s focus remained on the 20 October letter and the asserted legitimate expectation.
[22] On 16 June 2016 the Authority issued a decision dismissing Mr Fippard’s appeal.
2 Mr Fippard’s benefit was cancelled on 23 January 2015. He reapplied for a benefit on 5 March
2015, which was granted to him from 26 February 2015.
[23] As regards the legitimate expectation claim the Authority found:
(a) no “express representation” to the effect contended for had been suggested;
(b)such an expectation could not be reasonably inferred because advising Mr Fippard of a further appointment would not preclude the Ministry from considering whether a sanction notice should be issued and proceeding to issue such a notice the following day.
[24] The Authority then considered the second issue raised by the appeal, which it articulated as being “that the letter of 21 October 2014 does not correctly state the sanction that could be applied”.
[25] The Authority’s view was that the purpose of the notice requirement in the Act is to advise the beneficiary that a sanction is to be imposed and to give the beneficiary time to remedy the failure and so avoid the sanction. The Authority had previously held “strict compliance with s 113 is required”.
[26] In Mr Fippard's case, however, the Authority found the written notice of
21 October 2014 set out all of the required matters, including the sanction to be imposed. The only error was that it incorrectly stated the sanction would be complete suspension of the benefit payment, rather than reduction by 50 per cent.
[27] The Authority found that the notice met the “key requirements” of s 113, noting that: “The appellant was given notice that a sanction involving the suspension of his benefit was about to occur”.3 The “overstatement of the Sanction” did not invalidate the notice as it did not “adversely affect” Mr Fippard.4 The Authority said:5
It is difficult to conclude that the misstatement of the sanction by advising of a greater sanction than the one to be imposed would have any impact on the appellant or his actions following receipt of the notice. This would not be so if the notice understated the sanction (presumably because in such a situation the beneficiary would be less likely to dispute it).
3 At [28].
4 At [28].
5 At [27].
[28] The Authority accordingly found that the Ministry was entitled to reduce Mr Fippard’s benefit by 50 per cent on 30 October 2014 (although in fact it had reduced it by 100 per cent). The Authority noted the Ministry’s offer to pay Mr Fippard 50 per cent of the benefit he ought to have received during the period of suspension. It commented that such a payment had not been made as Mr Fippard had mentioned having had employment during the period but had not provided confirmation of earnings. The remedy for that was said to be in Mr Fippard’s hands.
The case stated questions
[29] The two questions subsequently stated by the Authority for answer by this
Court are:
Did the Authority err in law in concluding that the letter sent to the appellant dated 20 October 2014 did not give rise to a legitimate expectation that no action resulting from his failure to attend the meeting on 20 October would be taken against him and he would be entitled to retain his full benefit until the appointment made for 24 November?
and
Did the Authority err in law in finding that the sanction imposed on the appellant was valid despite the fact that the written notice of the sanction incorrectly stated the extent of the sanction?
Approach to case stated appeals
[30] In a case stated appeal, this Court's jurisdiction is limited to answering the questions of law posed by the Authority. A case stated appeal is a “form of consultation” with the Court, to obtain an answer to a specific point of law. It is not an appeal by way of rehearing; the Court does not review the case “from scratch”. Nor may the Court review the merits of the decision.
The first question
[31] I agree with counsel for the Ministry that this question should be answered “no”. At best, the Ministry's letter of 20 October 2014 was ambiguous as to whether action resulting from Mr Fippard’s failure to attend the interview would be taken against him. In any event, any expectation held by Mr Flippard would have ended as a result of the letter dated 21 October 2014, which clearly advised that a sanction would be imposed. It is not reasonable to suggest that a letter with a later date would not displace the earlier. As well, s 116B of the Act requires the Ministry impose a sanction when a failure stipulated in that section has occurred. Given that, in the absence of a “good and sufficient reason" for the failure, an obligation failure had, in fact, occurred, the Ministry had no power to simply ignore his non-attendance. The Act required a sanction be imposed.
[32] In these circumstances, it was unreasonable for Mr Fippard to have relied on
the expectation he purports to have held.
The second question
[33] Again, I agree with the Ministry submits the answer to the second question should be “yes”. The Authority misdirected itself by focusing on the notice requirements in s 113 of the Act rather than the validity of the substantive sanction imposed on Mr Fippard.
[34] Put briefly, the Ministry is only empowered to impose a sanction in accordance with the terms of ss 116B and 117. In Mr Fippard’s case, the prerequisite condition for the sanction of complete suspension (a first failure) did not, as a matter of fact, exist. The Ministry was not authorised to impose that sanction, irrespective of whether the written notice for it met the “key Requirements” of s 113. The sanction imposed was invalid and the Authority was wrong to hold that it was not.
Conclusion
[35] The case stated questions are therefore to be answered as follows:
(a) No, the Authority did not err in finding the Ministry's letter dated
20 October 2014 did not give rise to a legitimate expectation that no action resulting from Mr Fippard's failure to attend the meeting on
20 October 2014 would be taken against him; and
(b)Yes, the Authority did err in finding the sanction imposed on Mr Fippard was valid. The Ministry imposed the sanction for a second failure when, under s 117 of the Act, it only had authority to impose the sanction for a first failure.
[36] I record that the Ministry has already taken the necessary remedial action. It has agreed to provide Mr Fippard a formal apology and to pay Mr Fippard the full amount of Jobseeker Support benefit that he would have received for the period of 31
October 2014 to 26 February 2015. As I understand it, this payment will, by now,
have been processed.
Rebecca Ellis J
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