Harlen v Chief Executive of the Ministry of Social Devlopment
[2016] NZCA 648
•22 December 2016 at 12.30 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA463/2016 [2016] NZCA 648 |
| BETWEEN | KATHRYN ANNE HARLEN |
| AND | THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT |
| Hearing: | 28 November 2016 |
Court: | Harrison, French and Cooper JJ |
Counsel: | F M Joychild QC for Applicant |
Judgment: | 22 December 2016 at 12.30 pm |
JUDGMENT OF THE COURT
AThe application for special leave to appeal is declined.
BThere is no order for costs.
____________________________________________________________________
REASONS OF THE COURT
(Given by Cooper J)
The applicant, Ms Harlen, has sought special leave to appeal to this Court against a judgment of the High Court on appeal under s 12Q of the Social Security Act 1964 (the Act).[1] The application to this Court for special leave is necessary because the High Court previously declined leave.[2]
[1]Harlen v Chief Executive of the Ministry of Social Development [2015] NZHC 2663.
[2]Harlen v Chief Executive of the Ministry of Social Development [2016] NZHC 1954.
In order to obtain special leave to appeal, Ms Harlen must persuade this Court that the proposed appeal involves a question of law that, “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]
Background
[3]Summary Proceedings Act 1957, s 144(3). The present proceeding was commenced before the commencement date of the Criminal Procedure Act 2011 and so must be continued and disposed of in accordance with s 12R of the Social Security Act 1964 as if the Criminal Procedure Act had not been enacted: Harlen v The Chief Executive of the Ministry of Social Development [2016] NZCA 118.
The relevant background was succinctly set out in the substantive judgment of Faire J in the High Court. We can adopt it for present purposes:[4]
[4] The appellant applied for, and received, the [Domestic Purposes Benefit] and associated benefits, allowances and grants in January 1994. She continued to receive them until June 1999.
[5] In 1999 the appellant reported a Mr Egen to the police after certain of her children disclosed to her he had been sexually abusing them. Mr Egen was the father of the appellant’s youngest child. I need not go precisely into the background facts because as a result of a criminal prosecution they are no longer matters at issue.
[6] Mr Egen was arrested and charged. He reported the appellant to the Department as a person who had been living in a relationship in the nature of a marriage with him while claiming the Domestic Purposes Benefit. The Ministry carried out an investigation and concluded that the appellant had, in fact, been living in a de facto relationship with Mr Egen throughout the period. On 9 February 2000, a letter was sent to the appellant which set out the results of the investigation. It found that she had an overpayment to the Department of $120,355.26, which represented a period of five years and five months of benefits received to which she was not entitled.
[7] The appellant was prosecuted and convicted on four charges under s 127 of the Social Security Act 1964 and s 229A of the Crimes Act 1961 in respect of her receipt of the benefits between 26 January 1994 and 30 June 1999, on 14 February 2001. On 9 March 2001, she was sentenced to 15 months’ imprisonment. Her appeal to the Court of Appeal against conviction and sentence was unsuccessful.[5]
[8] The Ministry advised that repayments or deductions would be suspended on 27 March 2001 whilst appeals were being considered. This suspension is still in place. At a later date, on 9 June 2009, the Ministry advised that the amount of the debt had been reduced to $117,598.84 as a result of the Ministry’s decision not to recover the amount of an accommodation supplement and a special benefit for the period 20 July 1999 to 30 November 1999. Counsel confirmed to me that the debt currently stands at $115,800, due to some payments that were made and have been credited.
[4]Harlen, above n 1.
[5]R v Harlen (2001) 18 CRNZ 582 (CA).
The High Court judgment was delivered on an appeal by way of case stated by the Social Security Appeal Authority (the Authority).[6] The Authority had in fact made a previous decision in relation to the same matters in February 2010.[7] That decision had also prompted an appeal to the High Court dealt with by Courtney J in a judgment delivered on 4 April 2012.[8] Courtney J held that the Authority had erred in a number of respects and that, as a consequence, its decision should be quashed. She remitted the matter to the Authority for its reconsideration in accordance with answers that she had given to the questions of law posed.[9]
[6]Re Harlen [2013] NZSSAA 108.
[7]Re X [2010] NZSSAA 2.
[8]Harlen v Ministry of Social Development [2012] NZHC 669, [2012] NZAR 491.
[9]At [80].
The decision of the Authority that gave rise to the appeal dealt with by Faire J followed the Authority’s reconsideration of the matter in accordance with the directions of Courtney J.
The appeal process
There are some unsatisfactory aspects of the procedures that have been adopted in this case. Section 12Q of the Act, which is the only provision for appeals from determinations of the Social Security Appeal Authority, only provides for appeals to the High Court by way of case stated. Subsection (1) provides:
12Q Appeals to High Court on questions of law only
(1) Where any party to any proceedings before the Authority is dissatisfied with any determination of the Authority as being erroneous in point of law, he [or she] may appeal to the High Court by way of case stated for the opinion of the court on a question of law only.
The process involves lodging a notice of appeal with the Secretary of the Authority, which is then followed by a written statement setting out the facts and the grounds of the determination and “specifying the question of law on which the appeal is made”.[10] That document is submitted to the Chairperson who must, after hearing the parties if that is considered necessary, as soon as practicable settle the case, sign it and send it to the Registrar of the High Court.[11]
[10]Social Security Act, s 12Q(4).
[11]Section 12(2)–(6).
The process by which the case is settled by the body whose decision is the subject of the appeal can be cumbersome and, perhaps for this reason, statutory provisions for appeals by way of case stated are fewer in number than they used to be. If it is desired to limit appeals to questions of law the more common approach these days is simply to provide for straightforward rights of appeal limited to questions of law. Even then, however, the task of defining a relevant question of law may be problematic.
The present case is an example where the task of drafting appropriate questions of law has proved elusive. In our view many of the questions posed by the Authority for the High Court did not amount to questions of law but were, rather, questions of fact stated as if they were questions of law. The format of the questions was evidently considered to be inappropriate by Faire J and counsel advised that at the hearing the questions were recast. Even so, many of them were left in a form that does not in our view correspond to the requirements of the statute. As a result the appeal proceeded in the High Court on an uninformative basis.
The language of s 12Q(1) clearly shows a legislative intent that appeals to the High Court from decisions of the Authority should be limited to questions of law. Strict adherence to what is Parliament’s plain intent is necessary to give the High Court jurisdiction. The importance of ensuring that questions raised are properly questions of law is underlined when applications such as the present fall to be considered. The question that now has to be answered is whether 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”.[12]
[12]Summary Proceedings Act, s 144(3).
The application for special leave to appeal set out no fewer than ten “grounds of appeal” alleging errors of law. However, actual questions of law that might meet the statutory test were not identified. The same was true of the written submissions of counsel for the applicant filed in support of the appeal. That led to a process at the hearing in which four questions emerged as candidates for a possible grant of leave.
We will address these in turn.
The questions
First question
Counsel for Ms Harlen, Ms Joychild QC, submitted that the High Court erred by misinterpreting and misdirecting itself as to what its task was when responding to the six questions in the case stated before the Court. She submitted that the High Court had been required to consider whether or not the debt claimed as owing by Ms Harlen to the Ministry should be recovered. She referred to the statement near the end of the Authority decision that:[13]
[57] Taking into account all of the circumstances in this case we are not satisfied that no steps should not be taken to recover the debt. The debt is to be recovered.
[13]Re Harlen, above n 6.
We assume that this wording is in error and the Authority meant to say that it was not satisfied that steps should not be taken to recover the debt. Assuming that is so, Ms Joychild complains that Faire J, in the High Court judgment, wrote:[14]
[37] It is important to keep in mind that this appeal relates only to the question of whether the respondent may recover the debt. This appeal does not relate to the rate of recovery or to the question of whether recovery should actually be effected. Those matters are subject to the Chief Executive’s offer of negotiation in the 2006 report to negotiate.
[14]Harlen, above n 1. Once again there is something awry in the wording here: we assume that the last sentence should have ended after the reference to the 2006 report. The 2006 report was a report for the Authority prepared by the Chief Executive of the Department under s 12K(4)(e) of the Act setting out the considerations to which regard was had in making the decision.
The Judge then relied on that understanding in dealing with the questions of law posed. For example, question one in the High Court asked whether the Authority erred in law in concluding that the integrity of the system for social support in New Zealand would be undermined if hardship to the beneficiary and her dependent child was a reason for foregoing recovery of the debt she had incurred.
Faire J concluded that the answer to this question should be no. He said in relation to it:[15]
The Authority’s decision related only to whether the Chief Executive may recover the debt. It did not relate to whether this will in fact occur, nor did it relate to the amount and frequency of recovery if it does occur.
[15]Harlen, above n 1, at [60].
Another question before the High Court was whether the Authority had erred in law in its consideration of the application of the International Covenant on Economic, Social and Cultural Rights (ICESCR) and the United Nations Convention on the Rights of the Child (UNROC). In responding to that question, the Judge again reasoned on the basis that the Authority’s decision related only to the question of whether the debt might be recovered “per se”.[16] On the other hand:[17]
The Authority’s decision did not concern when or if recovery should commence, and at what rate. These, as the appellant correctly submits, are questions of fact that depend upon the level of the benefit and the appellant’s financial and other needs. Decisions to enforce recovery are best left to the specialist bodies.
[16]At [106].
[17]At [106].
Ms Joychild referred to two other instances of this kind of approach. First, there was a question as to whether the Authority had erred in law in “not adopting and not applying the evidence of Dr Easton about what constitutes an adequate standard of living in New Zealand”.[18] Dr Easton, who is an economist, gave evidence on behalf of Ms Harlen about that issue. In discussing his evidence, Faire J identified as an issue the fact that it was not directed to the question of whether discretion should be exercised so that the debt would be remitted. He thought the evidence was more relevant to a determination of the rate of recovery, or whether the recovery should in fact occur. However, those questions were not before the Authority and there was still a possibility that Ms Harlen could convince the Ministry not to recover the debt in a way that would put her in “especially difficult circumstances”.[19]
[18]At [13].
[19]At [114].
Second, the sixth question of law considered by Faire J asked whether, as a matter of law, it was open to the Authority to conclude in the exercise of its discretion that it was not satisfied that no steps should be taken to recover the debt. In dealing with that question, Faire J said (amongst other things):
[130] I sympathise with the appellant’s request for the Court to make all necessary final determinations in this case. However, this judgment concerns only whether the Chief Executive may, not will, recover the amount of benefits paid to the appellant in excess of the amount to which she was entitled.
Ms Joychild submitted that, since the exercise of the discretion to recover the debt had been the consistent issue in the litigation, these statements by the High Court showed that it had seriously misdirected itself on the task it had to fulfil. The wrong approach meant that the Court further erred by not answering the questions in the case stated by reference to the actual decision to recover the debt.
When the matter first came before the Authority in December 2009, the Authority recorded that one of the issues it needed to consider on Ms Harlen’s appeal was whether the Chief Executive should be directed not to take any steps to recover the debt under s 86 of the Act.[20] In its decision, the Authority recorded it was not satisfied that the circumstances in the case were such that the Chief Executive should exercise his discretion under s 86 to take no steps to recover the debt.[21] Consequently, it dismissed the appeal.
[20]Re X, above n 7, at [2(iii)].
[21]At [34].
That decision was subject to the appeal heard by Courtney J who, as we have seen, referred the matter back to the Authority for reconsideration after concluding there had been errors of law. Following that reconsideration, the Authority was not satisfied that no steps should be taken to recover the debt, adding “The debt is to be recovered”.[22] As Ms McKechnie noted for the respondent, the Authority did not set a rate of recovery. She submitted that Faire J was correct to draw a distinction between the decision to recover on the one hand, and the time when recovery should commence and at what rate. On the latter two matters, no decision has yet been taken.
[22]Re Harlen, above n 6, at [57].
We are satisfied that Ms McKechnie’s submission is correct in that respect. However, Faire J also found that there had been no decision made to recover the debt. That is hard to reconcile with the language used by the Authority when it specifically said: “The debt is to be recovered.” We consider that, at least in broad terms, a decision has been made to collect the debt, but key elements of the way in which the Chief Executive goes about that task are yet to be determined. A decision could, at least theoretically, be made to recover on the basis of monthly payments of a very small amount. And the date on which such recovery is to commence could be set at some time in the future. The fact those matters have not been decided makes it very difficult for Ms Harlen to contend that Faire J has made an error of law of any significance in the way he has approached the matter. This is especially so because the statutory scheme in force at all relevant times has empowered the Chief Executive to take action to recover payments made in excess of authorised rates. Faire J’s error does not constitute an error of law sufficient to satisfy the high statutory threshold for leave to appeal to this Court.
For example, looking at question one posed in the High Court, the question of whether the integrity of the system for social support in New Zealand might be undermined if the debt were not recovered because of hardship would depend at least to some degree on the rate at which the debt was proposed to be recovered, and also on a comparison between Ms Harlen’s financial position and that of other beneficiaries. And in relation to the question raised about erroneous consideration of the application of ICESCR and UNROC, unless those instruments are to be construed as having the necessary and inescapable result that the debt must not be recovered, it is difficult to see how there can be a question of law on the basis of a simple decision to recover without any particulars as to the rate and timing of such recovery. In any event, no such question has been posed.
However, even if that conclusion were incorrect, that would not necessarily mean that there was a question of law that “by reason of its general public importance or for any other reason” ought to be submitted to this Court for decision. The most that could be said is that the High Court had misconstrued the legal effect of the Authority’s decision and that it should have dealt with other questions that were raised on the case stated appeal by recognising simply that the debt was to be recovered. The only concrete facts to go on in those circumstances would be those pertaining to Ms Harlen’s financial position, which would then be examined to see if it was such that, as a matter of law, there could be no lawful basis for the recovery of the debt on whatever basis was decided on.
Again, no question has been stated in those terms in the High Court or in this Court. Further, we do not consider a question focused on Ms Harlen’s personal circumstance in that way would fall within the restricted basis on which this Court is able to receive and consider second appeals.
Second question
The second question focuses on statements made by the High Court in dealing with what was question 5(A) of the questions before it. That question asked whether the Authority erred in law in determining that:[23]
There appeared to be nothing that distinguished the appellant’s circumstances from those of any other beneficiary who had defrauded the benefit system or a beneficiary who owes debt innocently incurred?
We see this as an example of what is really a question of fact, dressed up to look like a question of law.
[23]Harlen, above n 1, at [13].
This question arose because the Authority had scrutinised Ms Harlen’s expenditure on food, power, transport and medical bills concluding that there was nothing in the case that distinguished her circumstances (including her financial circumstances) from those of any other beneficiary who had defrauded the benefit system or who owed a debt innocently incurred.[24]
[24]Re Harlen, above n 6, at [56].
The Judge noted that the Authority had to determine whether the Chief Executive’s discretion should be exercised in favour of recovery of the debt owed by Ms Harlen. He acknowledged that that question was to be addressed taking into account relevant considerations.[25] He said:
[120] In my view, ascertaining whether there were rare or unusual circumstances that would cause the appellant hardship that would be unlike the kind typically experienced by other beneficiaries in her position was a relevant factor in deciding how the discretion should be exercised. The appellant did not argue that such circumstances existed, only that deductions from an already low (or to use the appellant’s term, inadequate) level of income would result in increased hardship. For reasons explained above, such an argument is directed at the rate of recovery.
[25]Harlen, above n 1, at [119].
In this part of her argument, Ms Joychild submitted that the position of other beneficiaries was irrelevant and it had been necessary for the Authority to look at Ms Harlen’s position as an individual. However, the answer to that submission is that the Authority considered Ms Harlen’s financial circumstances, discussed an affidavit that she filed in considerable detail, and acknowledged that as a beneficiary her financial circumstances were “very limited”.[26]
[26]Re Harlen, above n 6, at [51].
The question raised in this part of the case was in essence a question about a factual conclusion reached by the Authority. A question of law might have been asked along the lines of whether it was lawful for the Authority, in deciding whether or not to exercise the discretion to recover Ms Harlen’s debt, to consider whether there were appropriate means of distinguishing her circumstances from those of other beneficiaries who were debtors to the Ministry. However, that was not the question asked. Further, the answer to such a question would be obvious given that the financial circumstances of all beneficiaries are “very limited”, as the Authority recognised. A process that allowed for the recovery of debt from some beneficiaries and not others without regard to their financial circumstances would be capricious. We do not consider that there is a question here that requires the attention of this Court.
Third question
The third potential question focused on a question asked of the High Court as to whether the Authority erred in law in its consideration of the application of ICESCR and UNROC. Both were held by Courtney J to be relevant considerations in the exercise of the statutory discretion about debt recovery. The Authority discussed both in its decision. Ms Joychild complained that the Judge accepted as correct the Authority’s view that the rights afforded by the ICESCR required a balance to be struck between government spending and the individual needs of persons such as the appellant. Further, she was critical of the Judge’s observation that a “balancing exercise requiring an assessment of whether the discretion to recover debt should be put into practice is a matter best left to specialist government bodies”.[27]
[27]Harlen, above n 1, at [110].
Ms Joychild was also critical of an observation made by Faire J that Ms Harlen’s argument that her benefit was already inadequate and that further deductions from it would be contrary to the ICESCR had been “misdirected”.[28] This was a particular instance of the difficulty faced by virtue of the fact that, although there had been a decision to recover the debt, the rate at which recovery would be sought had not been established.
[28]At [107].
We are not sure what Faire J intended by his reference to “specialist government bodies”. However, once again, there was no attempt with respect to this issue to pose a question of law suitable for this Court’s attention in terms of the statutory test. If, as appeared to be the thrust of Ms Joychild’s argument, it were to be suggested that as a matter of law ICESCR requires the Chief Executive not to recover debts, we would not regard that as a seriously arguable proposition given the statutory scheme. No other possible question of law has been identified.
Fourth question
The fourth issue arises from the fact that for some time Ms Harlen had been living with a Mr Egen, the father of Ms Harlen’s dependent child. Courtney J had been satisfied that Ms Harlen’s benefit had been paid into a bank account used to meet repayments on a loan secured by mortgage over a property held in Mr Egen’s name.[29] There was evidence that the property was held in Mr Egen’s name so as to prevent Ms Harlen from being located by a violent previous partner. However, the property was eventually sold and both Ms Harlen and Mr Egen received lump sums from the proceeds of over $36,500. Courtney J considered that the possibility of recovery of at least part of the debt from Mr Egen was a relevant consideration that the Authority should have taken into account, and that an action in money had and received was a possible means of recovering some of the appellant’s debt.[30]
[29]Harlen, above n 8, at [53].
[30]At [54]–[55].
The potential pursuit of Mr Egen to recover at least part of the debt was considered by the Authority in accordance with Courtney J’s judgment. The issues were also thoroughly canvassed by Faire J.[31] He reached conclusions that in some respects differed from the Authority, including disagreement with the Authority’s view that there was no suggestion that Mr Egen was a party to the appellant’s offending or knowingly benefited from the money to which he was not entitled. On that issue he found that the “reasonable inference” to be drawn from the available evidence was that Mr Egen was likely aware of the appellant’s offending and knowingly benefited from it.[32] That, however, was a conclusion of fact and it is not clear why the Judge thought he was able to deal with this on a case stated appeal.
[31]Harlen, above n 1, at [62]–[98].
[32]At [80].
Other issues canvassed in the High Court included the question of whether the Authority had been correct in deciding that it was likely the benefit money had been mixed with other money, and ceased to be traceable and therefore outside the powers to recover debt contained in the Act. This was an issue that essentially related to what had become of the money received by Ms Harlen and the prospects of the Chief Executive succeeding in an action for money had and received against Mr Egen. None of this comes anywhere near establishing that there is a question of law involved in the appeal of sufficient importance to warrant the attention of this Court on a second appeal on questions of law.
Result
It will be obvious from what we have said that in approaching these issues the Court is bound to apply a statutory scheme that has set, quite deliberately, narrow limits on the kinds of appeal that may be brought to this Court. These are limitations that would not apply in another setting.
However, for the reasons given we do not consider that Ms Harlen has identified questions of law that, by reason of general or public importance, are appropriate for this Court to decide.
The application for special leave to appeal is accordingly declined.
The Crown did not seek costs and we make no order accordingly.
Solicitors:
Davenports City Law, Auckland for Applicant
Crown Law Office, Wellington for Respondent
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