McCartney v Chief Executive of the Ministry of Social Development

[2017] NZHC 423

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-485-000538 [2017] NZHC 423

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

SHAUN MCCARTNEY Appellant

AND

THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT

Respondent

Hearing:	9 March 2017
Appearances:	Appellant in person L M Jackson for Respondent
Judgment:	14 March 2017

JUDGMENT OF GILBERT J

This judgment is delivered by me on 14 March 2017 at 2 pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Solicitors:           Crown Law, Wellington

And to:              The Appellant

MCCARTNEY v THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT [2017] NZHC 423 [14 March 2017]

Introduction

[1]    This appeal, by way of case stated, arises out of Mr McCartney’s contention

that the sickness benefit paid to him from 8 December 2009 should be backdated to

7 April 2009.  This turns on whether his delay in applying for a benefit was caused by some erroneous action or inaction on the part of the Ministry of Social Development.

[2]    Mr McCartney was dismissed from his employment on 7 April 2009.  Because he was dismissed for misconduct, he was not entitled to a benefit for a period of

13 weeks.1  Although the Chief Executive of the Ministry of Social Development has

a discretion  not  to  apply  this  stand-down  period,  payment  of  a  benefit  cannot commence until an application is made or the applicant becomes entitled to receive the benefit, whichever is later.2   According to his doctor, Mr McCartney would have been eligible for a sickness benefit from 7 April 2009 because he was not in a fit state  to  work.     His  doctor  urged  him  to  apply  for  a  sickness  benefit  but Mr McCartney did not do so until December 2009 and benefit payments did not commence until 8 December 2009.

[3]    Mr McCartney’s request that the Ministry backdate his payments was declined. On 29 November 2011, Mr McCartney applied to the Benefits Review Committee for  a  review  of  the  Ministry’s  decision.    This  application  was  dismissed  on

25 September 2012.

[4]    Mr McCartney appealed to the Social Security Appeal Authority.  On 8 April

2013, the Authority issued a decision adjourning the appeal and directing that the matter be referred to the Chief Executive to consider whether the discretion provided for in s 80AA of the Act should be exercised.3     This section enables backdated payments to be made with the consent of the Minister.  However, the Minister can only give consent in the case of a particular applicant if satisfied that one of the

preconditions in s 80AA(2)(a) is met, namely, that the applicant:

1      Social Security Act 1964, s 60H(4).

2      Social Security Act 1964, ss 60H(6) and 80(1).

3      Re McCartney [2013] NZSSAA 30.

(i)        could not reasonably have been expected to apply at the earlier time because of some erroneous action or inaction on the part of the department; or

(ii)       at or before the earlier time, tried to apply or applied incompletely, and did not proceed because of some erroneous action or inaction on the part of the department.

[5]    It took nearly two years, until 26 February 2015, for the Ministry to report back  to  the Authority that  the Chief  Executive  was  satisfied  that  there was  no erroneous action or inaction on the part of the Ministry and accordingly there was no discretion to backdate the benefit.

[6]    The Authority reconvened the hearing of the appeal on 12 May 2015  and issued a written decision on 28 May 2015 finding that there was no basis for a sickness benefit or unemployment benefit to be backdated.4     The Authority summarised the reasons for its decision as follows:

[10]     There appear to have been three primary reasons why the appellant did not apply for Sickness or any other benefit before December 2009.  The first reason is that he was in a very distressed and depressed frame of mind. The second is that throughout this period the appellant was convinced that he would get his job back when a claim against his employer went through the Employment Tribunal.  The third reason is that the appellant’s partner was working and was able to pay the basic household expenses.   There was therefore perhaps less pressure on the appellant to seek support from the Ministry.  In our view, the appellant’s failure to apply for a benefit was for these three reasons and not as a result of any failure on the part of the Ministry.

[7]    Mr McCartney appeals against this decision.   The appeal is by way of case stated and is limited to questions of law only.5  The questions of law are as follows:

(a)      Was the appellant prejudiced by the delay of the Chief Executive in considering his application pursuant to the provisions of s 80AA of the Social Security Act 1964?

(b)If the answer to question (1) is yes, did the Authority err in law in failing to take the alleged prejudice into account in concluding that

there was no basis on which a backdated Sickness Benefit could be paid to the appellant in respect of the relevant period?

Question 1 – was the appellant prejudiced by the delay?

[8]    The relevant delay was on the part of the Ministry and involved the period from 8 April 2013 until 26 February 2015.

[9]    Ms  Jackson  responsibly  referred  to  the  Court  of  Appeal’s  decision  in Idea Services Ltd v Clark in which the Court held that excessive delay between a hearing and a decision could give rise to a question of law, namely, whether in all of the circumstances it should be presumed that the decision-maker was no longer able to  do  justice  between  the  parties.6      The  Court  adopted  the  test  applied  by the

Privy Council in Cobham v Frett:7

… a fair case must be shown for believing that the judgment contains errors that are probably, or even possibly, attributable to the delay.  The appellate court must be satisfied that the judgment is not safe and that to allow it to stand would be unfair to the complainant.

[10]     While  delay  in  decision-making  can  give  rise  to  an  appealable  error, Mr McCartney confirmed at the hearing in this Court that he has not suffered any prejudice as a result of the Ministry’s inordinately long delay in providing its confirmation  that  neither  of  the  preconditions  for  the  exercise  of  ministerial discretion under s 80AA was satisfied.  Mr McCartney acknowledged that he would be no better off today if he had received confirmation earlier that there was no basis to backdate his benefit and agrees that the answer to question 1 must be “no”.

[11]     This was an appropriate concession.  The Authority independently found as a fact that Mr McCartney’s failure to apply for a benefit prior to December 2009 was explained by the three reasons summarised in [10] of its decision, quoted above, and not  as  a  result  of  any error  or  inaction  on  the  part  of  the  Ministry.    In  these circumstances, the Chief Executive was not entitled to backdate the benefit and the Authority’s decision declining the appeal was inevitable.

Question 2 – if the appellant was prejudiced, did the Authority err in law by failing to take this into account?

[12]  This question does not apply because the answer to question 1 is “no”.

Result

[13]  The answer to question 1 is “no”.

[14]  The answer to question 2 is “not applicable”.

[15]  The appeal is dismissed.

[16]  There is no issue as to costs.

M A Gilbert J