Nixon v Chief Executive, Ministry of Social Development
[2018] NZHC 3317
•14 December 2018
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2018-485-447
[2018] NZHC 3317
UNDER the Judicial Review Procedure Act 2016 IN THE MATTER OF
judicial review of decision of cancelled Supported Living Payment, failure to
process Emergency Benefit application; and application for review of decision not to
allow application under s 66A of the Social Security Act 1964BETWEEN
CURTIS ANTONY NIXON
Applicant
AND
CHIEF EXECUTIVE, MINISTRY OF SOCIAL DEVELOPMENT
Respondent
Hearing: 3 December 2018 Appearances:
Applicant in person
S J Leslie and L M Smith for respondent
Judgment:
14 December 2018
RESERVED JUDGMENT OF DOBSON J
[1] The applicant in this proceeding for judicial review (Mr Nixon) is a long-term recipient of social welfare benefits. He has pursued a range of challenges to refusals by the respondent (the Chief Executive/the Ministry) to grant him various benefits to which he has claimed entitlement.
NIXON v CHIEF EXECUTIVE, MINISTRY OF SOCIAL DEVELOPMENT [2018] NZHC 3317 [14 December 2018]
Benefit history
[2] Between 25 November 2014 and 30 November 2016, Mr Nixon received a supported living payment (SLP), eligibility for which was defined in s 40B of the Social Security Act 1964 (the Act), which relevantly provides:1
40BSupported living payment: on ground of sickness, injury, disability, or total blindness: eligibility and ineligibility
(1)A person is entitled to the supported living payment under this section if he or she satisfies the criteria in subsections (1A) and (1B), and—
(a)the person is totally blind; or
(b)the person is permanently and severely restricted in his or her capacity for work because of sickness, or because of injury or disability arising (in either case) from accident or existing from birth.
…
(2)A person is permanently restricted in his or her capacity for work if the chief executive is satisfied that—
(a)the restricting sickness, injury, or disability is expected to continue for at least the period set out in regulations made under this Act for the purposes of this section; or
(b)the person is not expected to live for the period set out in those regulations, because the person’s sickness, injury, or disability is terminal.
(3)A person is severely restricted in his or her capacity for work if the chief executive is satisfied that the person is incapable of regularly working 15 or more hours a week in open employment.
…
[3] On 6 December 2016, the Ministry notified Mr Nixon that he was no longer entitled to the SLP and that he would thereafter be receiving a job seeker support benefit (JSB). Mr Nixon sought judicial review of that decision, but before it was determined, the Ministry reviewed its decision. In a letter dated 14 June 2017, Crown Law confirmed to Mr Nixon that the Ministry would reinstate the SLP, backdated to December 2016. The letter advised that the Ministry would conduct a fresh review of Mr Nixon’s eligibility for the SLP in October 2018.
1 A new act, the Social Security Act 2018, came into force on 26 November 2018 but its provisions do not apply to any of the issues raised in this judicial review.
[4] The earlier application for judicial review was heard by Dunningham J on 17 July 2017. In a judgment delivered on 1 August 2017,2 her Honour declined the application for any relief, but did acknowledge some aspects of arguments that Mr Nixon had advanced, including criticisms of the terms of medical assessment forms issued by the Ministry.
[5] On 29 September 2017 and 15 November 2017, Mr Nixon made successive applications for an emergency benefit, as provided for in s 61 of the Act:
61 Chief executive may grant emergency benefit in cases of hardship
(1)The chief executive may, in the chief executive’s discretion and subject to such conditions as the chief executive thinks fit to impose, grant an emergency benefit under this Act on account of hardship to any person who satisfies the following conditions, namely:
(a)that by reason of age, or of physical or mental disability, or of domestic circumstances, or for any other reason, he is unable to earn a sufficient livelihood for himself and his dependants (if any); and
(b)that he is not qualified to be granted a main benefit under this Act, New Zealand superannuation, or a veteran’s pension:
provided that the chief executive may at any time, in the chief executive’s discretion, grant an emergency benefit instead of or in substitution for a supported living payment, sole parent support, or jobseeker support:
…
(2)The rate of the emergency benefit shall, in each case, be in the discretion of the chief executive, but, except in any case where the beneficiary is receiving medical or other treatment, shall not exceed the rate to which the beneficiary would be entitled if he were qualified to receive such other benefit as in the opinion of the chief executive is analogous to the emergency benefit.
…
[6] These applications were made on the ground that Mr Nixon shared the custody of his young daughter and the SLP he was being paid ought to be topped up to meet what he would be eligible for under the sole parent support benefit. Both of those applications were rejected. Mr Nixon applied for reviews of both those decisions, on 9 November 2017 and 13 December 2017 respectively.
2 Nixon v Chief Executive, Ministry of Social Development [2017] NZHC 1807.
[7] On 29 January 2018, before the internal stage of reviews of those decisions had occurred, Mr Nixon began working as a teacher aid. From that date, the Ministry reduced the SLP by the extent of the wages Mr Nixon reported he was earning. On 19 February 2018, the Ministry notified Mr Nixon it had stopped the SLP entirely because it was exceeded by the wages Mr Nixon was receiving.
[8] On 11 February 2018, Mr Nixon requested the Chief Executive to exercise his discretion under s 66A of the Act to disregard the income he was receiving for the purpose of computing the extent of benefit otherwise payable to him. That provision is in the following terms:
66A Special exemption for severe disablement
For the purposes of computing any benefit payable, the chief executive may in the chief executive’s discretion, as an incentive to personal effort, disregard all or part of the income of any severely disabled person derived from such effort.
[9] In his request, Mr Nixon reasoned that his receipt of the SLP under s 40B of the Act required that he be permanently and severely restricted in his capacity for work, which he equated with the requirement under s 66A for a person to be severely disabled. He argued that the same tests applied under ss 40B and 66A, so that a beneficiary recognised as permanently and severely restricted in his or her capacity to work under the former section must also be recognised as severely disabled for the purposes of the latter section.
[10] On 23 May 2018, the Chief Executive declined Mr Nixon’s application for exemption under s 66A. In June 2018, the Chief Executive received an application for review of the decision to decline the s 66A exemption. An internal review was completed on 18 June 2018, confirming the rejection of the request for an exemption.
[11] Meanwhile, on 19 April 2018 Mr Nixon made a third application for an emergency benefit. On 1 May 2018, the internal review of the first two decisions
declining Mr Nixon’s application for an emergency benefit was made, upholding the original decisions.3
[12] Because Mr Nixon was not paid during the school holidays, the Ministry recommenced payment of the JSB from 17 April 2018. This payment appears to have stopped at the end of April 2018. The JSB resumed again between 23 May and 4 June 2018, and again between 11 June and 23 July 2018.
[13] Mr Nixon filed the current application for judicial review on 23 July 2018, in which he complains that the Ministry is bound by the terms of the June 2017 Crown Law letter, which arguably entitles him to be paid the SLP continuously until October 2018. In a further letter to Mr Nixon dated 31 August 2018, Crown Law acknowledged that there was a “lack of clarity” in the 14 June 2017 letter, and that it should have recorded that the entitlement would be reviewed earlier than October 2018 if Mr Nixon’s circumstances changed. The letter made the point that the Ministry is bound by the law and is not able to pay a benefit unless there is a statutory entitlement, in the case of an SLP, under s 40B of the Act.
[14] On 25 July 2018, the Benefits Review Committee4 heard Mr Nixon’s application to review the refusal of his first two applications to be paid emergency benefits.
[15] On 21 November 2018, subsequent to submissions being filed for the present proceeding, the Ministry advised Mr Nixon that his third application for emergency benefit had been reviewed. The Ministry accepted that an emergency benefit should have been granted during the school holiday period from 17 to 30 April 2018. However, Mr Nixon had been granted a JSB over that same period which would have been paid at the same rate, so no arrears were due to him.
3 The terms of the letter advising Mr Nixon of the outcome of the internal review refer to a single decision to decline the emergency benefit, but the Ministry deponent, Jennifer Mary Allan, stated that the internal review was of both the earlier applications.
4 See [19] and [20] below.
Relief sought
[16]In his statement of claim in this judicial review, Mr Nixon seeks the following:
(a)An order that the Ministry be required to reinstate his SLP at least until the review that the 14 June 2017 Crown Law letter stated would occur in October 2018. That would require payment to him of the difference between the JSB and the SLP throughout the period where the higher benefit has not been paid.
(b)An order that the Ministry accept his application under s 66A of the Act for exemption of any income earned whilst he receives the SLP.
(c)An order that the Ministry accept his application for an emergency benefit for the amount of the difference between his benefit and the sole parent single child rate, with that top-up to be backdated to the date when he started the shared care of his daughter in September 2007.
(d)An order directing the Ministry to change the wording and format of the medical certificate form that he had criticised in the earlier judicial review.
(e)An order directing changes to the guidelines provided by the Ministry for the conduct of medical appeal boards so that appellants before that body could make legal arguments and have them considered.
(f)A direction that the Ministry repair its “failed and negligent communication process” with him, including an apology said to be owed because of the Ministry’s negligence.
[17] Mr Nixon’s statement of claim did not include any allegations of the forms of unlawfulness alleged against the Ministry that could justify the Court’s intervention in its judicial review jurisdiction of the exercise of statutory powers. There was, for example, no allegation that any of the decisions challenged were not ones that the Chief Executive, correctly directed as to the law, could have arrived at. Nor was there
any allegation that the Chief Executive had misdirected himself as to the law. Much of the factual narrative described dealings between Mr Nixon and the Ministry in which he disputed the merits of the decisions it had arrived at. In short, for the most part Mr Nixon wanted to run a merits appeal against the reasonableness of decisions made in the name of the Chief Executive to decline his various applications.
[18] The Ministry has taken the point that the Court cannot or ought not entertain an application for judicial review where a statutory process, with a number of levels of review and appeal on the merits of decisions made, is available to Mr Nixon and those rights have not been exhausted.
[19] The Act provides for a Benefits Review Committee, which is comprised of two Ministry staff who have had no involvement in a decision under review, and a community representative who is appointed by the Minister of Social Development.5 The practice of the Ministry is to conduct an internal review of the request for review, before it is referred to the Benefits Review Committee. Thereafter, a statutory right of appeal exists from decisions of the Benefits Review Committee to the Social Security Appeals Authority (SSAA).6 Further appeals on questions of law are also provided for to the High Court and, with leave, to the Court of Appeal.7
[20] The Benefits Review Committee and the SSAA can both be seen as specialist tribunals with a developed expertise in assessing eligibility concerns.
[21] In the present case, the Ministry has attempted to progress Mr Nixon’s unresolved challenges to the Ministry’s more recent decisions on entitlement to an emergency benefit, and the exercise of the s 66A discretion. Hearings before the Benefits Review Committee on those topics were set for July and August 2018. Both hearings were cancelled at Mr Nixon’s request because he wanted to defer advancing those until after determination of this judicial review.
5 Social Security Act 1964, s 10A(3).
6 Section 12J.
7 Sections 12Q and 12R (which provides a cross-reference to the Criminal Procedure Act 2011, Pt 6, subpt 8).
[22] Internal reviews have produced a measure of success for Mr Nixon. Any grant of relief in judicial review is always discretionary. I accept the point made by Ms Leslie for the Chief Executive that the Court should be reluctant to grant relief on a matter where the Ministry has facilitated a review on the merits of decisions, and they have not been resolved. This would particularly be the case where the grounds for judicial review are not raised in conventional terms of unlawfulness, or administrative law unreasonableness.
[23] In Meek v Chief Executive of the Ministry of Social Development, which involved similar circumstances, the Court struck out a claim for judicial review by a beneficiary.8 Ellis J summarised the circumstances as follows:9
[29] First, Mr Meek does not identify any error of law or process which might vitiate the decisions. That point alone means that no tenable cause of action is disclosed.
[30] Secondly, he had statutory rights of appeal against those decisions. And while the existence of appeal rights does not preclude a claim for review, they do call into question its utility. And again the more fundamental point is that Mr Meek does not plead how he has been denied these rights. Indeed, his assertion appears somewhat contrary to the reality, which is that he has in fact successfully appealed the second decision to the Benefits Review Committee, and subject to the operation of statutory time limits it remains open to him to appeal the third one.
[24] Ellis J found that none of Mr Meek’s claims could give rise to a tenable cause of action and the application was struck out.
[25] The nature of Mr Nixon’s criticisms of the Ministry render the specialist appeal procedures appropriate, so that judicial review should only be used sparingly, if at all, where those procedures have not been exhausted.10 Where such specialist appeal procedures provide a more appropriate forum for addressing the complaints, judicial review relief may be refused even if grounds are made out.11
8 Meek v Chief Executive of the Ministry of Social Development [2016] NZHC 967.
9 Citations omitted.
10 Reekie v Legal Services Agency [2010] NZCA 538 at [16]; citing Fraser v Robertson [1991] 3 NZLR 257 (CA) at 260.
11 For example, Tannadyce Investments Ltd v Commissioner of Inland Revenue [2011] NZSC 158, [2012] 2 NZLR 153.
[26] No application to strike out the statement of claim was made in this case. Despite inviting an analogy with the outcome in Meek, Crown counsel presented substantive submissions defending the lawfulness of the Ministry’s decisions. I accordingly address Mr Nixon’s concerns in relation to each category of benefit or exemption he has sought from the Ministry.
Holding the Ministry to the 14 June 2017 letter
[27] Although Mr Nixon did not express it as such, he effectively argued that the terms of the Crown Law letter of 14 June 2017 estopped the Ministry from reviewing his entitlement to the SLP before October 2018.
[28] The June 2017 letter stated the Ministry would take several steps, including reinstating the SLP and backdating it with payments covering the difference between what Mr Nixon had received since November 2016 by way of JSB, and the SLP. It also stated the Ministry:
… will conduct a fresh review of your eligibility for Supported Living Payment in October 2018.
[29] After Mr Nixon had objected to the termination of the SLP, Crown Law acknowledged, in its letter of 31 August 2018, that its earlier letter should have recorded that Mr Nixon’s entitlement would be reviewed earlier if his circumstances changed but did not, and apologised for the “lack of clarity in the letter”.
[30] The relevant passage of the June 2017 letter expressed a present intention in relation to future conduct. In that sense, it was not an unqualified commitment. I did not hear detailed argument on whether the statement about the duration for which the SLP would be paid is reasonably subject to the implicit qualification that the Ministry’s then intention was not to undertake a review, unless there was a material change in Mr Nixon’s circumstances. Assuming (without deciding) that Mr Nixon could make out a representation in all the circumstances of his dealings with the Ministry that the Crown Law June 2017 letter reasonably assured him that there would be no reconsideration of his entitlement to the SLP before October 2018, irrespective of any changes in his own circumstances, then the question would be whether such a representation of future intentions would be binding on the Ministry.
[31] An agency of the Crown cannot bind itself to act other than in accordance with the law. The Ministry has no authority to make payments unless the recipient is entitled to such payments under the statutory scheme. There could therefore be no enforceable promise for the Ministry to continue paying the SLP to Mr Nixon, notwithstanding the Chief Executive’s delegates having reasonably reached a view that he was no longer entitled to it.
[32] Whatever weight Mr Nixon sees the statement in the June 2017 letter adding to his criticisms of his treatment by the Ministry, the non-compliance with the representation of future conduct does not constitute a reviewable error.
Emergency benefits
[33] Mr Nixon claims an entitlement to an emergency benefit to top up his benefit payments to the level of a sole parent single child rate.
[34] There are three provisions in the Act which stand in the way of Mr Nixon’s claim for such a top-up during periods in which he was receiving another benefit. The first is s 61, the relevant provisions of which are set out at [5] above.
[35] At the time of Mr Nixon’s first two applications for an emergency benefit, he was in receipt of the SLP and accordingly could not satisfy the requirement in s 61(1)(b) that he not be qualified for a main benefit. The first proviso within subs (1) does create a discretion for the Chief Executive to grant an emergency benefit instead of, or in substitution for, a benefit. When read together with the limit on the extent of emergency benefits that might be paid in s 61(2), the practical outcome is that Mr Nixon could not make out an entitlement to an emergency benefit for any more than the amount he was already being paid at the time he made the first two of his applications for an emergency benefit.
[36] The Act also includes a more general limitation in s 72, which is materially in these terms:
72 Limitation where applicant receiving another benefit or pension
Notwithstanding anything to the contrary in this Act,—
(a) no person is entitled to receive more than 1 benefit in his or her own right, except as provided in sections 39D, 61EA, 61FG, 61G, 61GA, and 69C, and section 23 of the Social Security (Working for Families) Amendment Act 2004:
[37] The combined effect of the provisions in ss 61 and 72 precludes any entitlement to an emergency benefit where an applicant is entitled to receive one of the other forms of benefit administered by the Ministry.
[38] The ground relied on by Mr Nixon for claiming an emergency benefit in the first two instances, namely the extra costs he incurred during periods when he had day- to-day care of his daughter, is also a situation that is addressed in the Act. Section 70B provides:
70B Entitlement to benefits in cases of shared custody
(1)If the parents of a dependent child—
(a)are living apart; and
(b)are both beneficiaries; and
(c)each has the primary responsibility for the care of that child for at least 40% of the time—
only the parent whom the chief executive is satisfied has the greater responsibility for the child shall be entitled to have that child taken into account by the chief executive in assessing that parent’s entitlement to a benefit and the rate of benefit payable at any one time.
…
(3)If the chief executive is unable to ascertain that one parent has the greater responsibility for the child than the other, only the parent whom the chief executive ascertains was the principal caregiver in respect of the child immediately before the parents began living apart shall be entitled to have that child taken into account by the chief executive in assessing that parent’s entitlement to a benefit and the rate of benefit payable.
…
[39] Throughout the relevant period, Mr Nixon’s former partner has been receiving a benefit that takes account of her care responsibilities for their daughter, so the provisions of s 70B exclude the prospect of Mr Nixon also claiming a sole parent support benefit. Mr Nixon has unsuccessfully challenged the provisions of s 70B(3) as being unlawfully discriminatory of him before the Human Rights Review
Tribunal.12 It would clearly subvert the structure of the various benefits provided for in the Act if a payment was made to Mr Nixon on account of child care costs where the child’s other parent is receiving a benefit that takes into account the care of the same child.
[40] The Ministry initially declined to accept Mr Nixon’s third application for an emergency benefit. However, since submissions have been filed in this proceeding, the Ministry has completed an internal review and accepts that an emergency benefit should have been granted during the school holiday period from 17 to 30 April 2018. Throughout that period he was in fact receiving a JSB at the same rate as the emergency benefit and therefore no arrears were payable to him. Even if the Ministry’s conduct on that application raised any prospect of unlawfulness, relief would be refused on the basis that the matter is moot.
Challenging the s 66A discretion
[41] The Ministry has previously recognised Mr Nixon as “permanently and severely restricted” in his capacity for work for the purposes of his entitlement to an SLP under s 40B of the Act. Mr Nixon treats that acknowledgement as requiring the Ministry to also accept that he is a severely disabled person for the purposes of s 66A. Once that characteristic is established, he argues that he ought to be exempt from the requirement that income earned reduces the amount of a benefit he would otherwise be paid because he should be incentivised to make personal effort as is contemplated by the terms of s 66A.
[42] The Ministry distinguishes the tests under s 40B and s 66A. It disputes that Mr Nixon is severely disabled for the purposes of s 66A, irrespective of whether he is permanently and severely restricted in his capacity for work.
[43] Section 66A was enacted in 1972 to give effect to recommendations in the report of the Royal Commission on Social Security. Relevantly, that Commission recommended that the then Department be given authority as an aid to rehabilitation
12 Nixon v Attorney-General [2018] NZHRRT 9.
to disregard some or all of the earnings of a severely disabled person when determining the amount of that person’s benefit.13
[44] Ms Leslie submitted that the exemption could not reasonably be exercised in Mr Nixon’s favour where his disability is not to an extent that requires additional help or effort to get into work and, when he was working, the level of his earnings substantially exceeded the relevant benefit. Extending the exemption in these circumstances would constitute a reward for Mr Nixon, rather than an incentive to expend personal effort in obtaining work.
[45] The correct approach to a request for exemption under s 66A was considered in Charlton v Chief Executive of the Ministry of Social Development.14 That was an appeal to this Court from a decision of the SSAA. This Court upheld the SSAA’s recognition of whether a severely disabled person incurred work-related costs which could justify the exercise of the discretion and also whether there were circumstances justifying the exercise of the discretion purely as an incentive to the disabled person to make personal effort. Heath J described the approach taken by the SSAA in the following terms:
[51] The approach taken by the Authority was to regard as relevant to the exercise of the discretion costs incurred by a particular applicant. The higher the costs incurred to obtain employment, the more likely the discretion would be exercised. Although not specifically referred to in the Authority’s decision, [counsel for the Chief Executive] helpfully provided other examples of the types of costs that might be relevant: eg the costs incurred in transportation from home to employment where a wheel chair is used as a result of the unavailability or unsuitability of the public transport system.
[46] Mr Nixon did not suggest there was a constraint on the discretion under s 66A that precluded the Chief Executive adopting this approach, nor is there any suggestion that the approach adopted is inconsistent with any policy on how the discretion is exercised.
13 Thaddeus McCarthy (chair) Social Security in New Zealand: Report of the Royal Commission of Inquiry [1972] IV AJHR H53 at 275.
14 Charlton v Chief Executive of the Ministry of Social Development HC Auckland CIV-2004-485- 969, 21 March 2005.
[47] I agree that the concepts of permanently and severely restricted in capacity for work on the one hand, and severely disabled on the other, are different. They arise in different contexts, and have different purposes. Further, Mr Nixon did not identify any unusual costs incurred by him in order to earn the amounts he had as a teacher aid. Accordingly, there is no basis on which the discretion to decline Mr Nixon the exemption in his various applications under s 66A raises any concern that it could be impugned in an administrative law sense.
Additional orders sought
Terms of work capacity form
[48] One of Mr Nixon’s additional concerns was the failure of the Ministry to change the terms of a work capacity form provided to doctors undertaking assessments of beneficiaries. Ms Leslie advised that similar relief had been sought before Dunningham J who recognised certain difficulties with the form but was not prepared to grant any such relief.
[49] There is no basis on which I could revisit that aspect of an earlier judicial review that has been determined, and not appealed.
Directing medical appeal boards to hear legal arguments
[50]I discussed with Mr Nixon the range of reasons why this was untenable.
[51] The right to appeal on medical grounds is provided for in s 10B of the Act. The Board that hears such appeals is provided for in s 10B(4) in the following terms:
10B Right of appeal on medical grounds
…
(4)The Board is to comprise 3 members to be appointed by the chief executive for the particular purpose, being medical practitioners, rehabilitation professionals (as defined in subsection (5)), or other persons having appropriate expertise in the fields of vocational training or vocational support for persons with sickness, injury, or disability.
[52] The Board’s function is to enable applicants or beneficiaries who wish to dispute findings on medical or medical-related grounds (where they affect benefit entitlements) to have medical opinions relied on by the Ministry reconsidered. Decisions of the Board are binding on the Chief Executive.
[53] There is no provision for legal expertise to contribute to the Board’s deliberations and the subject matter of decisions affecting applicants or beneficiaries that can be reconsidered by the Board on appeal are clearly intended to be distinct from any legal issues arising. This argument of Mr Nixon’s was misconceived.
Better communication by the Ministry
[54] Finally, Mr Nixon sought an order that would compel better communication processes by Ministry staff with him, including an apology. An apology has been tendered in Crown Law’s letter of 31 August 2018 and it is beyond the powers of the Court, even if grounds were made out, to order such an apology.
Outcome
[55] Accordingly, all aspects of the application for judicial review are dismissed. I do not understand any issue of costs to arise but reserve leave in the event that the Ministry wishes to pursue costs.
Dobson J
Solicitors:
Crown Law, Wellington for respondent
Copy to:
The applicant
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