Medero v Ministry of Social Development
[2019] NZHC 2204
•4 September 2019
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-485-214
[2019] NZHC 2204
BETWEEN RAZIO MEDERO
Appellant
AND
MINISTRY OF SOCIAL DEVELOPMENT
Respondent
Hearing: 26 August 2019 Counsel:
P J McKenzie QC and P A McKenzie-Bridle for Appellant J K Gorman and S P R Conway for Respondent
Judgment:
4 September 2019
JUDGMENT OF CHURCHMAN J
Introduction
[1] This appeal by way of case stated from a determination of the Social Security Appeal Authority (the Authority) raises a number of questions relating to the eligibility of a New Zealand citizen who is permanently residing in Australia to payment of either a Supported Living Payment – Overseas (SLPO), or an emergency benefit.
Facts
[2] Razia Medero arrived in New Zealand on 29 October 2004 when she was 65 years of age having attained that age on 3 July 2004.1 Shortly after her arrival, she was granted an emergency benefit, remaining on this until she was moved onto an unemployment benefit on 21 March 2007. On 22 October 2007, she was granted a
1 In his opening submissions, Mr McKenzie QC, senior counsel for the appellant, reserved his position on whether the appellant was 64 years of age when she arrived but the clear evidence, including her birth certificate, indicates she was, in fact, 65.
MEDERO v MINISTRY OF SOCIAL DEVELOPMENT [2019] NZHC 2204 [4 September 2019]
sickness benefit which then became an invalid’s benefit (now the supported living payment (SLP)).
[3]Ms Medero was granted New Zealand citizenship on 27 June 2008.
[4] Six days later, on 3 August 2008, when she was 69 years of age, Ms Medero moved to Australia to be with family. She was advised by the Ministry for Social Development (the Ministry) that her invalid’s benefit would be suspended from 15 September 2008 if she had not returned to New Zealand by that date. When she did not return, her invalid’s benefit was suspended and subsequently cancelled.
[5] On 29 April 2013, Ms Medero applied for an Australian age pension, but her application was rejected as she did not meet the residency rules.
[6] On 6 August 2015, the Ministry received Ms Medero’s application for a SLPO under the Social Security (Reciprocity with Australia) Order 2002 (the Order), her application having been completed by her daughter. Her disability was recorded as “stroke – no or limited mobility”. This application was declined as she had no “working age residence” in New Zealand, as that term is defined in the Agreement on Social Security between the Government of New Zealand and the Government of Australia (the Agreement).
[7] The Ministry’s decision was upheld by the Benefits Review Committee. Ms Medero’s appeal to the Authority was dismissed in a decision dated 20 July 2017.2
[8] On a date unknown but prior to 17 January 2018, the appellant travelled to her homeland of Ethiopia against medical advice.
[9] Ms Medero passed away before this appeal was filed, and this case is brought by her personal representative, her daughter, Kimiya Abdulla.
2 Re Medero [2017] NZSSAA 39.
Statutory framework
[10] Section 77 of the Social Security Act 1964 (the Act) deals with the effect of a beneficiary’s absence from New Zealand and relevantly provides:
(1)A benefit is not payable while a beneficiary is absent from New Zealand unless the benefit is so payable under—
(a)the other provisions of this section; or
(b)any agreement or convention adopted under section 19 of the Social Welfare (Reciprocity Agreements, and New Zealand Artificial Limb Service) Act 1990; or
…
[11]“Benefit” is defined in the Act as:3
… a monetary benefit payable under any of Parts 1A to 1P or Part 2 (including, without limitation, any such benefit payable under this Act by virtue of an agreement or convention given effect in relation to New Zealand by an order under section 19 of the Social Welfare (Reciprocity Agreements, and New Zealand Artificial Limb Service) Act 1990) …
[12] “Main benefit” includes, inter alia, a supported living payment (SLP) and an emergency benefit.4
Reciprocity agreement with Australia
[13] Section 19(1) of the Social Welfare (Reciprocity Agreements, and New Zealand Artificial Limb Service) Act 1990 (the Reciprocity Act) relevantly provides:
19 Adoption of reciprocity agreement with other countries
(1)For the purpose of giving effect to any agreement or Convention with the government of another country providing for reciprocity in respect of matters relating to social security monetary benefits, or to any alteration thereto, the Governor-General may, by Order in Council,—
(a)declare that the provisions contained in any agreement or Convention or alteration thereto set out in a schedule of the Order in Council shall have force and effect so far as they relate to New Zealand:
3 Social Security Act 1964, s 3. This Act has since been replaced by the Social Security Act 2018 but was the Act in force at the times material to this appeal.
4 Section 3.
(b)declare that the provisions of this Act and of the Social Security Act 1964 and Part 6 of the Veterans’ Support Act 2014 and of Part 1 of the New Zealand Superannuation and Retirement Income Act 2001 and of the regulations and orders in force under those Acts shall have effect subject to such modifications as may be required for the purpose of giving effect to the agreement or Convention or alteration thereto:
…
[14] The Governor-General made the Order in 2002, bringing the Agreement into force.
[15] The preamble to the Agreement records that it was entered into to “strengthen the existing friendly relations” between New Zealand and Australia and to:5
… coordinate the operation of their respective social security systems and to enhance the equitable access by people covered by this Agreement to specified social security benefits provided for under the laws of both countries…
[16]The Agreement applies to the following benefits:6
(a)New Zealand superannuation;
(b)veteran’s pension; and
(c)invalid’s benefit.
[17]Article 2(2) provides:
For the purposes of this Agreement … a New Zealand invalid's benefit shall be limited to cases where:
(a)the person is severely disabled;
(b)the person was a resident of one of the Parties at the date of severe disablement; and
(c)the person, prior to the date of severe disablement, was residing in the territory of the other Party for a period of not less than one year at any time.
5 Social Welfare (Reciprocity with Australia) Order 2002, sch 1.
6 Schedule 1, art 2(1)(b).
[18]The term “severely disabled” is defined as a person who:7
(i)has a physical impairment, a psychiatric impairment, an intellectual impairment, or two or all of such impairments, which makes the person, without taking into account any other factor, totally unable:
(aa) to work for at least the next 2 years; and
(bb)unable to benefit within the next 2 years from participation in a program of assistance or a rehabilitation program; or
(ii)is permanently blind…
[19]Article 4 provides for equality of treatment:
Except as provided for in this Agreement, the persons to whom this Agreement applies shall be treated equally by each of the Parties in regards to rights and obligations that arise under the social security law of that Party or as a result of this Agreement.
[20] Article 6 relevantly provides that where a person who would be entitled to receive a New Zealand benefit is not ordinarily resident in New Zealand on the date of application, he or she will be deemed to be ordinarily resident and present in New Zealand on that date if he or she:
(a)is in Australia;
(b)is an Australian resident; and
(c)has been a New Zealand resident at any time for a continuous period of at least one year since attaining the age of 20 years.
[21]Article 8, which deals with totalisation for New Zealand, relevantly provides:8
In determining whether a person meets the residential qualifications for an invalid's benefit, the competent institution of New Zealand shall deem a period as an Australian resident to be a period during which that person was both a New Zealand resident and present in New Zealand.
7 Schedule 1, art 1(l).
8 Article 8(2).
[22] The amount of New Zealand invalid’s benefit a person resident in Australia is entitled to receive is calculated in accordance with “the number of whole months of working age residence in New Zealand”.9 “Working age residence” is defined as:10
… a period of residence between the ages of 20 and 64 years inclusive (being a maximum of 45 years) but does not include any period deemed pursuant to Article 8 ... to be a period in which that person was an Australian resident or a New Zealand resident.
[23] The concept of working age residence is critical to the appeal as it is clear that the appellant had no working age residence in either Australia or New Zealand and unless that criteria is held to be ultra vires or invalid, the quantum of any benefit payment is nil.
Relevant case law
[24] Bredmeyer v Chief Executive of the Ministry of Social Development is the leading decision on the Reciprocity Act and the Agreement.11 Ms Bredmeyer was born in New Zealand but had lived outside of New Zealand since 1968. She moved to Australia in 1990. When Ms Bredmeyer turned 65, she applied for New Zealand superannuation. However, under the Agreement, the amount she was entitled to receive could not exceed the amount of Australian age pension that would have been payable to her if she was entitled to receive that pension. Ms Bredmeyer’s assets and those of her husband were such that she was not entitled to the Australian age pension as it is means tested. The Authority determined that the decision to decline her application for New Zealand superannuation was correct and her appeals against this decision to the High Court and Court of Appeal were both dismissed.
[25]In its decision, the Court of Appeal observed that:12
… there has been a gradual winding back of the arrangements, for example, a reduction in the range of benefits covered with benefits like the widows benefit no longer part of the reciprocal arrangement.
9 Article 10(1).
10 Article 5(5).
11 Bredmeyer v Chief Executive of the Ministry of Social Development [2008] NZCA 557.
12 At [53].
[26] It was noted that Australia had become dissatisfied with the arrangement whereby New Zealanders would get immediate access to all Australian benefits and Australians enjoying similar privileges in New Zealand, with migration flows from New Zealand to Australia having increased markedly in the 1980s.13 The Agreement arose in this context, and “has its ‘genesis’ in a political compact with the inevitable compromises involved in such an exercise”.14
[27] The Court of Appeal further noted that, if a person was entitled to a pension in an overseas country with which New Zealand has no applicable reciprocal agreement, the rate of benefit that would otherwise be payable in New Zealand would be reduced by the amount of the overseas benefit.15 It said:16
The effect of the Agreement as we have construed it may mean that a person like the appellant is worse off having moved to Australia than she may have been if she moved to a country with which New Zealand does not have a reciprocal arrangement. That is, however, the arrangement that has been reached with Australia …
Approach on appeal
[28] An appeal from the Authority to the High Court is by way of case stated and limited to questions of law only.17 It is not an appeal by way of rehearing but, rather, a “form of consultation” to obtain an answer to a specific point of law.18 It is not to be taken as an opportunity to review the merits of the decision.19
Questions of law
[29]The questions for determination by this Court are as follows:20
(1)Whether the Social Security (Reciprocity with Australia) Order 2002 (“the Order”) is properly interpreted as extending the Emergency Benefit to Australian residents, in particular, where the Emergency Benefit is granted instead of or in substitution for the Supported Living Payment (SLP) in the Chief Executive’s discretion?
13 At [54].
14 At [55].
15 At [58]; Social Security Act, s 70.
16 At [59].
17 Social Security Act, s 12Q(1).
18 Koroua v Chief Executive of the Ministry of Social Development [2013] NZHC 3418 at [8].
19 IAM v Chief Executive of the Ministry of Social Development [2013] NZHC 762 at [11].
20 Case Stated on Appeal CIV-2019-485-214, 16 April 2019.
(2)Did the Authority err in law by finding that the medical evidence before the Ministry did not verify that the appellant was severely disabled? This finding is not open to the Authority on the evidence that was before the Authority and contradicts the Ministry’s statement to the Benefits Review Committee dated 1 December 2015.
(3)Did the Authority err in law by reading the Order and the Reciprocity Act in a way that wrongly fettered the discretion of the Chief Executive under s 61, so that the granting of SLP or Emergency Benefit pursuant to the Order is fettered out of existence by providing that the rate of the Benefit is Nil?
(4)Did the Authority err in law by holding that the disadvantages suffered by the applicant in this case, in comparison to other persons of working age, non-disabled persons, and NZ residents applying for SLP, did not amount to prohibited discrimination under [the New Zealand Bill of Rights Act 1990 (NZBORA)]?
(5)Did the Authority err in law by failing to give a “Bill of Rights construction” to the interpretation of the relevant statutory provisions, so that the meaning that is most consistent with the rights of the Applicant is preferred?
(6)Did the Authority err in law in holding that there were no grounds of prohibited discrimination under NZBORA in this case?
Did the Authority err in law in holding that the Order is not ultra vires
the Reciprocity Act or the Social Security Act?
[30] Some of these questions overlap, some relate to questions of fact and others contain legal submissions. I will address them sequentially.
Does the Agreement extend the emergency benefit to Australian residents?
[31] Section 61(1) of the Act empowers the chief executive, at his or her discretion, to grant an emergency benefit “instead of or in substitution for a supported living payment, sole parent support, or jobseeker support”.
[32] Mr McKenzie QC, submitted that, in the event that the Authority was correct to conclude that no assistance in the form of SLPO was available to the Ms Medero, then she is entitled to an emergency benefit. He notes that the emergency benefit has often been described as a “third tier benefit”. “First tier benefits” are those benefits of entitlement where, upon satisfying the statutory criteria, an applicant is entitled to the grant of a benefit such as New Zealand superannuation. “Second tier benefits” are those where the grant is subject to a means test, such as the supplementary living
benefit. “Third tier benefits”, though, are discretionary benefits where a general discretion is conferred on the chief executive to alleviate need in certain statutory circumstances.
[33] Mr McKenzie submitted that the Court’s role is to ensure that the statutory discretion is exercised in the fullest way that Parliament has intended, the Court applying to the chief executive’s discretion the principle that the person on whom a statutory discretion is conferred must not fetter its exercise by self-made rules.21 He contends that any conditions which the chief executive “may think fit to impose” under s 61(3) must not fetter the broad discretion to alleviate hardship under the section and suggests that the emergency benefit is treated as a discretionary benefit which is supplemental to the other forms of relief available under the Act. As subsection (1) expressly confers on the chief executive a discretion “to grant an emergency benefit instead of or in substitution for a supported living payment”, he submitted that references in the Agreement to the invalid’s benefit (SLPO) must be read as including the emergency benefit where, in the exercise of the chief executive’s discretion, this benefit is granted instead of or in substitution for the SLP.
[34] Mr McKenzie submitted that, while the emergency benefit is called a “benefit” and provided with its own separate section in the Act, it is not properly described as a discrete benefit, but rather is supplementary in nature. It sits alongside other benefits and is designed to fill gaps not covered in the benefit structure. He argued that it is not necessary for the Agreement to expressly name the emergency benefit because the inclusion of the SLPO carries with it this supplementary discretion.
[35] If, however, the Authority was correct in holding that the emergency benefit is not covered by the Agreement and so is excluded, then Mr McKenzie submitted that the Order creating it went well beyond the power of the Executive to deprive New Zealand residents of this important discretion on the part of the chief executive. He submits that only Parliament could make such a major change in the position of New Zealand applicants given that Australian applicants have the corresponding Australian special benefit, as one of the objectives of the Agreement was to achieve
21 Ankers v Attorney-General [1995] 2 NZLR 595 at 599-600.
equality of treatment between Australian and New Zealand applicants for benefit assistance, thereby providing reciprocity. The Authority is said to have failed to give a NZBORA interpretation to the Agreement by interpreting it in a narrow way so as to exclude the chief executive’s discretion under s 61. It is therefore submitted that the Authority was wrong in excluding from being covered by the Agreement the chief executive’s discretion available under s 61 to substitute an emergency benefit for the SLPO.
[36] However, the Agreement only applies to New Zealand superannuation, the veteran’s pension and the invalid’s benefit.22 While the emergency benefit could be described as a “third tier” benefit, being one that is granted at the chief executive’s discretion, it is nevertheless classified under the Act as a main benefit.23 If the intention had been that the emergency benefit would be available to those not entitled to New Zealand superannuation, the veteran’s pension and the invalid’s benefit, it would have been explicitly included in the Agreement. Its exclusion from the Agreement, along with other main benefits such as the jobseeker support and sole parent support benefits, can only have been deliberate. The absence of these main benefits from the Agreement is consistent with the observations made by the Court of Appeal in Bredmeyer that there has been a gradual winding back of the arrangements provided for under the Agreement, and:24
… the scope of the cost-sharing agreement should be confined to a few key benefits and that policy on access to the broader range of benefits remained a policy matter for each Government.
[37] Although there is a “special benefit” available for Australian citizens resident in New Zealand and art 4 provides for equality of treatment, this article is stated to be expressly subject to other provisions in the Agreement. As the Court of Appeal observed in Bredmeyer, the purpose of the Reciprocity Act is not “harmonisation” of the New Zealand and Australian social welfare systems.25 It is not the purpose of the Act to provide benefits to a New Zealand resident in Australia co-extensive with the benefits they might receive in New Zealand.
22 Social Welfare (Reciprocity with Australia) Order 2002, sch 1, art 2(1).
23 Social Security Act, s 3.
24 Bredmeyer v Chief Executive of the Ministry of Social Development, above n 10, at [54].
25 At [34].
[38] While Mr McKenzie argued that the Agreement fetters the chief executive’s discretion to grant an emergency benefit, noting that the Order was made by the Executive and was not enacted by Parliament, this fails to take into account the fact that, under s 77 of the Act, the norm is that a benefit is not payable to a beneficiary who is absent from New Zealand. It is only the Agreement and the Order that allows for a New Zealander resident in Australia, once certain conditions are met, to be eligible for those benefits made available under the Agreement. Rather than limiting or restricting the rights of New Zealand beneficiaries who choose to reside in Australia, the Agreement and Order create additional rights that would not otherwise exist. The Agreement does not extend the emergency benefit entitlement to Australian residents.
Did the Authority err in finding that the medical evidence did not verify that the appellant was severely disabled?
[39]The Authority, in its decision, stated:26
[36] The description of the appellant’s health condition would seem to support the conclusion that she is severely disabled and totally unable to work however it does not appear from the evidence that this has been verified for the Ministry by medical evidence.
[40] Mr McKenzie challenged this statement, submitting that this finding was not open to the Authority on the evidence that was before it and contradicts the Ministry’s statement in December 2015 which assured the Benefits Review Committee that “the Applicant’s date of severe disablement or her eligibility under the severely disabled criteria is not in dispute here”. Furthermore, a medical report from a doctor at Werribee Group Healthcare in Melbourne dated 2 September 2015 was attached to the statement of Frances Kinraid, a community worker who assisted Ms Medero and her family, and there was a further report confirming the nature of Ms Medero’s severe disability in the agreed bundle of documents.
[41] Counsel for the respondent submitted that this question is one of fact and, even if it is capable of constituting a question of law, does not affect the outcome of the appeal. To the extent that the passage could be said to constitute a factual finding, it
26 Re Medero, above n 2. This point is reiterated at [66].
is submitted that the Authority placed no weigh upon it, merely seeking to illustrate that the requirements for a New Zealand citizen living in Australia to qualify for SLPO under the Agreement are more restrictive than those for New Zealand residents seeking SLP under the Act. It was submitted that whether the appellant is “severely disabled” has no bearing on the result as the reason she was not entitled to receive any money under art 10 was that she had no working age residence in New Zealand. It was not because she did not meet the “severely disabled” test.
[42] It does appear that the Authority, in stating that the question of the appellant being severely disabled and totally unable to work had not been verified by medical evidence, overlooked some of the evidence before it. In particular, there was a letter from Werribee Group Healthcare detailing Ms Medero’s condition since suffering a stroke in 2015 and the further letter from Dr Abdalla of 17 January 2018 updating her health status. There can be no question but that the appellant was severely disabled from at least September 2015 onwards. However, this comment did not play a role in the Authority’s determination that she was not entitled to receive any money under the SLPO, this being a result of her not meeting the working age residence requirement. In any event, it was a finding of fact, rather than one of law, and as such does not fall to be considered in an appeal by way of case stated.
Does the Authority’s interpretation of the Agreement and the Reciprocity Act wrongly fetter the discretion of the chief executive?
[43] Junior counsel for the appellant, Mr McKenzie-Bridle, argued that the Authority was wrong to decide the chief executive’s discretion in s 61 of the Act was ousted by the Order. While it had been noted in Bredmeyer that there had been a “gradual winding back” of benefit entitlements, this was said to be a matter for Parliament, not the Executive. It was submitted that, in any event, Bredmeyer concerned superannuation entitlements and the effect of art 9, which had undergone a level of scrutiny and oversight from Parliament that was lacking in art 10, which had been agreed by the Executive acting independently of Parliament.
[44] Although the Authority considered that the Order ousted the s 61 discretion, Mr McKenzie-Bridle contended that that overlooks the purpose behind the chief executive’s discretion. That discretion is an essential element of New Zealand’s social
security scheme to ensure New Zealand citizens in need do not experience unnecessary hardship. If the discretion to grant the emergency benefit in substitution is not read into the Order, there is nothing standing between New Zealand citizens resident in Australia and indigence.
[45] Counsel for the respondent noted that, under s 77 of the Act, benefits are not generally granted to a person absent from New Zealand and the chief executive’s statutory discretion under s 61 does not extend to overseas persons. It was accordingly submitted that there is no discretion to grant the emergency benefit instead of or in substitution for the SLPO to a New Zealand citizen resident in Australia (and deliberately so).
[46] It is clear that the chief executive’s discretion to grant the emergency benefit is limited to those persons who meet the criteria and who are resident in New Zealand. As the law currently stands, a New Zealand citizen who is resident in, say, China, would also not be eligible for the SLPO or an emergency benefit. Neither the Agreement nor the Reciprocity Act fetter the discretion given by s 61 of the Social Security Act.
Is the Agreement consistent with the New Zealand Bill of Rights Act 1990?
[47] Questions 4-7 largely deal with the same issue of whether or not the Agreement is consistent with NZBORA.
[48] Mr McKenzie argued that the appellant was affected by the provisions of NZBORA in four respects:
(a)By reason of being a person suffering from a disability in terms of s 21(1)(h) of the Human Rights Act 1993 (HRA).27
(b)By reason of her employment status which, under s 21(1)(k) of the HRA, means being unemployed or a recipient of a benefit.
27 Section 19 of the New Zealand Bill of Rights Act 1990 incorporates into that Act the grounds of discrimination in the Human Rights Act 1993.
(c)By reason of her age, being outside the period of “working age” referred to in the Agreement.28
(d)By reason of her national origins because, although she is a permanent resident and citizen of New Zealand, she is receiving less favourable treatment by being resident in Australia, under a provision intended to benefit New Zealanders resident in Australia, as compared with her entitlement if still resident in New Zealand.29
[49]Section 6 of NZBORA provides:
Wherever an enactment can be given a meaning that is consistent with the rights and freedoms contained in this Bill of Rights, that meaning shall be preferred to any other meaning.
[50] The Courts have applied a two-stage test in determining whether the discrimination provisions of s 19 of NZBORA apply: first, there must be differential treatment between groups in comparable situations and, second, that differential treatment had to have resulted in a material disadvantage to the group differentiated against.30
[51] Mr McKenzie submitted that the appellant was materially disadvantaged under art 10 in comparison with New Zealand citizens or residents living in Australia of working age who are normal, healthy and able-bodied people. She is also materially disadvantaged in comparison with qualifying citizens and residents applying for SLP in New Zealand to whom “working age residence” does not apply. In Ministry of Health v Atkinson, the Court of Appeal stated that it is sufficient at the s 19(1) stage to show that the differential treatment resulted in some discriminatory impact, namely “disadvantage”.31 While the Authority had placed weight on Bredmeyer, in which the Court of Appeal held that there was no “disadvantage” arising from matters such as residence and location, Mr McKenzie submitted that it is unnecessary to look to
28 Human Rights Act, s 21(1)(i).
29 Section 21(1)(g).
30 Ministry of Health v Atkinson [2012] NZCA 184, [2012] 3 NZLR 456 (CA) at [55] and [109]; Child Poverty Action Group Inc v Attorney-General [2013] NZCA 402, [2013] 3 NZLR 729 at [43].
31 Ministry of Health v Atkinson, above n 30, at [45].
NZBORA for specific grounds showing disadvantage, saying that would be unrealistic. Mr McKenzie accepted that any social security system needs to provide targeted benefits and must have criteria for assessing need. However, he submitted that the introduction by executive action of a criterion such as working age residence which is otherwise foreign to the New Zealand benefit system, has served to seriously disadvantage the applicant under the reciprocity scheme as, if not for this criterion, she would have been entitled to welfare assistance from New Zealand. The discriminatory effect of introducing this criterion to applicants, who would otherwise qualify, gives rise to the disadvantage.
[52] The Authority held that this was a case where s 5 of NZBORA applied and the disadvantage based on disability was a justified limit to the right to freedom from discrimination.32 Mr McKenzie submitted that it was important to note that the onus is on the Crown to demonstrably justify the limit, and that onus had not been discharged. He argued that the disadvantage to the applicant and the class of vulnerable persons to whom she belongs is stark and is difficult to justify having regard to the overall purpose of the Agreement. To excuse this on the basis of the Crown’s involvement in international negotiations is, it is submitted, to trivialise the disadvantage.
[53] There is no doubt that, as a consequence of her decision to move to Australia and then suffering a stroke, Ms Medero’s situation became dire. She did not qualify for any Australian benefit and was unable to meet the cost of her necessary medical treatment. However, this case does not turn on the desperate nature of Ms Medero’s plight. It turns on whether the relevant provisions of the Agreement breach NZBORA, and, if so, whether they are a justified limit on the right to freedom from discrimination.
[54] Counsel for the respondent submitted that it was not correct to say that the Authority held there were no grounds of prohibited discrimination under NZBORA. The Authority considered three possible grounds of discrimination. The first is that the Agreement discriminates against those receiving SLPO in Australia as compared
32 Re Medero, above n 2, at [66].
with SLP in New Zealand. That claim was answered by the Authority with reference to Bredmeyer in which it was held that neither residence nor location is a ground of discrimination in terms of NZBORA.33
[55] The second was that the requirement for working age residence under art 10 in order to qualify for SPLO discriminates on the basis of age. The Authority considered that this was prima facie discrimination, but that it was a justified limitation in terms of NZBORA.
[56] The third was that the requirement that an applicant for SPLO be severely disabled is more restrictive than the requirements for SPL under the Act, and therefore discriminates on grounds of disability. Again, the Authority considered this to be prima facie discrimination but held that it was a justified limitation.
[57] The approach to be taken when determining whether a provision is inconsistent with NZBORA was considered in Hansen v R.34 In that case, the Supreme Court noted that, in deciding what constitutes a justified limitation under s 5 NZBORA, the New Zealand courts have commonly adopted the test used by the Supreme Court of Canada in R v Oakes.35
[58] In R v Chaulk, the Supreme Court of Canada summarised the Oakes test as being:36
1The objective of the impugned provision must be of sufficient importance to warrant overriding a constitutionally protected right or freedom; it must relate to concerns which are pressing and substantial in a free and democratic society before it can be characterized as sufficiently important.
2Assuming that a sufficiently important objective has been established, the means chosen to achieve the objective must pass a proportionality test; that is to say they must:
(a)be “rationally connected” to the objective and not be arbitrary, unfair or based on irrational considerations;
33 Re Medero, above n 2, at [64], referring to Bredmeyer v Chief Executive of the Ministry of Social Development, above n 10, at [63].
34 Hansen v R [2007] NZSC 7; [2007] 3 NZLR 1 at [64].
35 R v Oakes [1986] 1 SCR 103.
36 R v Chaulk [1990] 3 SCR 10303 at pp 1335-1336.
(b)impair the right or freedom in question as “little as possible”; and
(c)be such that their effects on the limitation of rights and freedoms are proportional to the objective.
[59] Where the Court is considering s 5 in the context of Social Welfare legislation, the Court is entitled to have regard to the policy factors behind such legislation. In Child Poverty Action Group Incorporated v Attorney-General, Ellen France J giving the decision of the Court said, in relation to those provisions of the Income Tax Act which provided for the Working for Families package:37
[91] The effect of these authorities is therefore, that in approaching the s 5 analysis, some latitude or leeway is given to the legislature or the decision maker particularly in a case like the present which involves the complex interaction of a range of social, economic, and fiscal policies as well as taxation measures. In addition, those policy factors relate to the overall social assistance measures with various tiers of benefits for the relief of poverty, as well as incentives to encourage beneficiaries to move into employment. That latitude or leeway to the legislature does not however alter the fact that the onus is on the Crown to justify the limit on the right. The justification has to be “demonstrable”.
[60] The purpose of the Agreement was considered in Bredmeyer v The Chief Executive of the Ministry of Social Development:38
[34] Consideration of the “immediate” legislative context requires an examination of the purpose of the Agreement itself. We agree with the respondent that the purpose of the Agreement is to coordinate some of the social security laws of New Zealand and Australia. The primary objective is to ensure that for New Zealand superannuation and the Australian age pension time spent in either country can be credited in the calculation of residence. Associated with that, the Agreement aims to ensure that payment of the relevant benefit is made in either country at an equivalent rate to that in the other country. The purpose is not a harmonisation of the two countries’ laws. Rather, the intention is to ensure that a person is not disqualified in terms of the residency requirements by shifting from one country to the other and to then ensure that there is an equivalence in terms of the rates of payment. …
[61] I do not accept the appellant’s argument that the “primary and authorising statute” of the Agreement is the Act. Just as in Bredmeyer, the authorising statute is the Reciprocity Act.
37 Child Poverty Action Group Incorporated v Attorney-General, above n 30 (citation omitted).
38 Bredmeyer v The Chief Executive of the Ministry of Social Development, above n 11.
[62] The test is, therefore, whether the provisions of the Reciprocity Act authorise an Order in Council which is inconsistent with NZBORA and therefore ultra vires s 19 of the Reciprocity Act.
Was the order ultra vires the Reciprocity Act or the Social Security Act?
[63] Mr McKenzie-Bridle argued that, when making art 10 of the Agreement, which imposes additional restrictive eligibility criteria to benefits provided by the Act, the Executive went further than the Reciprocity Act empowered it to go. This exercise of power is said to be ultra vires both the Act and the Reciprocity Act and, consequently, art 10 is unlawful.
[64] Mr McKenzie-Bridle noted that the purpose of the Act is to help people for whom work is not currently appropriate, providing financial support to alleviate hardship. The primary regulation making power contained in the Act is as follows:
132 Regulations
The Governor-General may from time to time, by Order in Council, make regulations providing for such matters as are contemplated by or necessary for giving full effect to the provisions of this Act and for the due administration thereof.
[65] The section dealing with regulations relating to overseas pension is subject to s 132:
132C Regulations relating to overseas pensions
(1)Without limiting the general power to make regulations conferred by section 132, the Governor-General may from time to time, by Order in Council, make regulations for all or any of the following purposes
…
[66] Mr McKenzie-Bridle submitted that s 132 indicated that Parliament intended the Minister to only make regulations which furthered the purpose and intention of the Act. Parliament is said to have carefully and intentionally limited the power of the Minister to impose restrictions that take away social security entitlements. If the Minister wants to impose restrictions on entitlements, he or she is required to follow the scheme and practice of the Act and pass those restrictions through Parliament. Parliament, it is submitted, did not empower the Minister to chip away at
New Zealand’s social security protections through regulation, policies or orders. When contrasted with the careful scheme of the Act, the Reciprocity Act did not empower the Executive to do anything more than the minimum required to give effect to reciprocity agreements with Australia.
[67] Mr McKenzie-Bridle submitted that, when analysing art 10 in light of the scope and purposes of these Acts, it becomes apparent that it goes much further than those Acts permit. It attempts to import eligibility criteria from Australia’s social security legislative framework without any context. The working age residence requirement is an eligibility requirement indigenous to Australia’s social security scheme and is not found in the Act in relation to SLP.
[68] The purpose of the Act is to provide protections for those who, for various reasons, are unable to earn an income whilst resident in New Zealand. It is not to provide a security blanket for all New Zealand citizens, regardless of where they may choose to live. However, the Reciprocity Act has extended the Act’s provisions so as to allow for agreements to be entered into with other countries that will provide certain categories of persons with benefits whilst resident outside of New Zealand. Section 19(1)(b) recognises that modifications to the Act’s provisions may be necessary in order to give effect to any agreement reached. The eligibility criteria in art 10 of the Agreement was one such modification. It was not ultra vires the Act.
[69] The respondent submitted that the objectives of art 10 were two-fold: firstly, to restrict the number of people who were eligible for the SLPO in Australia and, secondly, to fulfil one of the aims of the Agreement which was to co-ordinate the Social Security systems of New Zealand and Australia and ensure equivalence in terms of rates of payment between New Zealanders living in Australia and their Australian counterparts also resident in that country.
[70] I accept the respondent’s submissions that these objectives are sufficiently important to limit the right to not be discriminated against on the basis of age.
[71] As the Court held in Bredmeyer, the Agreement had its genesis in a political compact between the Governments of Australia and New Zealand with the inevitable
compromises involved in such an exercise.39 Such agreements inevitably involve a high social and economic policy component. The Agreement is primarily focused on the attaining of political objectives. The merits of individual cases are subservient to those objectives.
[72] When assessing political objectives with a high social policy content, the Courts have accorded the policy objectives some weight. In the case of A (on the application of Hooper) v Secretary of State for Work and Pensions, the High Court of England and Wales said:40
[115] In determining how to target resources to those in need, the legislature is entitled to impose “bright line” rules which are easy to apply and which may not focus with precision on the merits of individual cases. No logic can indicate where the balance should be struck; evaluative judgments are required, based on experience. … But such bright line rules in the context of social and economic policy do not lead to incompatibility even if individual hardship is occasioned. … The Government was entitled to avoid complex and expensive assessments of need.
[73] In terms of the analysis set out above, the working age residence requirement is rationally connected with, and proportionate to, the objectives of the Agreement.
[74] Mr McKenzie mounted an attack on the Agreement on the basis of what he said the word “modifications” in s 19(1)(b) of the Reciprocity Act means.41
[75] Mr McKenzie relied on one of the definitions of “modify” in the Oxford English dictionary to argue that the changes can only be of a minor nature. The particular definition he relied on said:
To make partial or minor changes to; to alter (an object) in respect of some of its qualities, now typically so as to improve it; to cause to vary without radical transformation.
[76] Another definition of modify in the same dictionary says: “to limit or qualify the sense of (a word, phrase, or sentence); to stand as a modifier in relation to (a noun)”. I am satisfied that this latter definition is to be preferred.
39 Above n 11, at [55].
40 A (on the application of Hooper) v Secretary of State for Work and Pensions [2002] EWHC 191 (Admin).
41 The relevant parts of s 19 of the Reciprocity Act are set out at [13].
[77] There is nothing in the text or purpose of the Reciprocity Act that would indicate that it was the intention of Parliament to only authorise minor modifications.
[78] As the Court of Appeal in Bredmeyer noted, a result of the Agreement may be that a New Zealand beneficiary may even be worse off pursuant to the Agreement by virtue of the fact that they had moved to Australia than they would be if they had moved to a country with which New Zealand did not have a reciprocal agreement.42 The Court in that case indicated that such a result was justified because of issues of national interest in policy underlying the international agreement.
Conclusion on NZBORA arguments
[79] I agree with the Authority’s finding that there was prima facie discrimination on the grounds of age and disability. However, the objective of the Agreement of strengthening the existing friendly relations between Australia and New Zealand and co-ordinating the two countries’ social security systems is of sufficient importance to override NZBORA rights.
[80] Section 77 of the Act makes it clear that the starting point in relation to entitlement to receipt of a benefit is residence in New Zealand. That entitlement can be extended by international convention or inter-country agreement. Such conventions or agreements are political compacts and their terms are a policy matter for each government to decide.
[81] The exclusion from coverage of the Agreement of certain New Zealand benefits is not arbitrary, unfair or based on irrational considerations but is rationally connected to the purpose of the Reciprocity Act and the Agreement.
Answers to questions
Q1: Whether the Social Security (Reciprocity with Australia) Order 2002 is properly interpreted as extending the emergency benefit to Australian residents, in particular, where the emergency benefit is granted instead of, or in substitution for the SLPO in the Chief Executive’s discretion?
42 Above n 11 at [59].
A: No.
Q2: Did the Authority err in law by finding that the medical evidence before the Ministry did not verify that the appellant was severely disabled? (The second part of this question is not a question of law but a submission).
A: Yes, but this did not affect the decision.
Q3: Did the Authority err in law by reading the Order and the Reciprocity Act in a way that wrongly fettered the discretion of the Chief Executive under s 61, so that the granting of SLPO or emergency benefit pursuant to the Order is fettered out of existence by providing that the rate of Benefit is Nil?
A: No.
Q4: Did the Authority err in law by holding that the disadvantages suffered by the applicant in this case, in comparison to other persons of working age, non- disabled persons, and New Zealand residence applying for SLPO, did not amount to prohibited discrimination under NZBORA?
A: No.
Q5:Did the Authority err in law by failing to give a “Bill of Rights construction” to the interpretation of the relevant statutory provisions, so that the meaning that is most consistent with the rights of the appellant is preferred?
A: No.
Q6: Did the Authority err in law in holding that there were no grounds of prohibited discrimination under NZBORA in this case?
A: No.
Q7: Did the Authority err in law in holding that the Order is not ultra vires the Reciprocity Act or the Social Security Act?
A: No.
Result
[82]For the reasons set out above, this appeal is dismissed.
Churchman J
Solicitors:
Bell and Co, Wellington for Appellant Crown Law, Wellington for Respondent
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