Owens v Chief Executive of the Ministry of Social Development

[2005] NZCA 212

IN THE COURT OF APPEAL OF NEW ZEALAND

CA131/05

BETWEENPATRICIA LINDA OWENS

Applicant

ANDTHE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT

Respondent

Hearing:15 August 2005

Court:Glazebrook, O'Regan and Robertson JJ

Counsel:T J McGurk for Applicant

U R Jagose and L M Fong for Respondent

Judgment:18 August 2005 

JUDGMENT OF THE COURT

A        The application for special leave to appeal is granted.

B        We make no order as to costs.

REASONS

(Given by O’Regan J)

Introduction   

[1]       This is an application for special leave to appeal on a question of law from a judgment of Miller J in relation to a case stated for the opinion of the High Court under s 12Q of the Social Security Act 1964: HC WN CIV 2003-485-2763 4 April 2005.  In that decision Miller J answered four questions stated for the High Court’s opinion by the Social Security Appeal Authority in the affirmative.  The effect of that decision was to uphold a decision by the Authority that the applicant had been overpaid an accommodation supplement by the Department and that it would not be inequitable to require her to repay the amount overpaid.

[2]       The applicant applied to the High Court for leave to appeal under s 144(2) of the Summary of Proceedings Act 1957.  In a judgment dated 13 June 2005, Miller J granted leave to appeal in relation to one question, namely:

Whether relative fault forms part of the balancing exercise when applying provisions such as s 86(9A) [of the Social Security Act 1964] that contain an all or nothing defence. 

He declined leave to appeal in relation to two other questions.

[3]       The applicant now seeks special leave from this Court in relation to one of those two questions, namely:

Whether the Court was wrong to conclude that the test of whether repayment is inequitable does not require a determination of whether or not there is a connection between the alteration of position in reliance on the overpayment and the factors relied on to show that is not inequitable to require repayment.

Miller J refused leave on this question, saying it “is based on a plain mis-reading of my judgment”.

[4]       In this Court, counsel for the applicant, Mr McGurk presented a detailed argument in which he argued that there had been an error in the High Court judgment at [61] which says:

I accept, as Mr McGurk pointed out, that the evidence does not show whether Mrs Owens increased her equity in the property [a rental property she owned] as a result of receiving the Accommodation Supplement.  It appears that rent from the property paid the mortgage.  He contended that there is no causal connection between the overpayment and the increase in equity, since she spent the overpayment on routine living expenses and there was no evidence that she would have been forced to realise assets without the Accommodation Supplement.  However, the Department was not required to establish such a connection.  The question was whether she had so altered her position in reliance on the overpayment that it would be inequitable, in all the circumstances (including her financial circumstances) to require repayment.  Accordingly, it sufficed that Mrs Owens had been able to increase her equity in the property while maintaining an admittedly modest standard of living commensurate with receiving the Accommodation Supplement.  She was left with an increase in asset value of some $55,000 that might be deployed to repay the Department.

[5]       Mr McGurk highlighted the sentence “However, the Department was not required to establish such a connection”.  That statement appears to be qualified by what follows in that paragraph, which may be why Miller J characterised the ground of appeal as being based on a mis-reading of his judgment.

[6]       Counsel for the respondent filed a memorandum indicating that the respondent abided the decision of the Court.  The respondent has adopted a practice of not opposing leave applications such as the present one, “to ensure that the respondent does not impede beneficiaries’ access to justice”.  However we were told that the respondent will oppose the appeal on the basis that the applicant must have misunderstood the High Court decision.

[7]       We are faced with a situation where the Judge and the respondent have indicated that the ground of appeal is based on a mis-reading of the decision, but we do not have before us any argument which provides us with a detailed response to the applicant’s contentions.  In circumstances where leave to appeal has already been granted on one question, we have determined that it is appropriate to grant special leave in relation to the question of law outlined in [3] above, so that the matter can be properly argued in a contested hearing situation.  If the position outlined by counsel for the applicant is correct, then the question of law which is the subject of the present application would appear to meet the requirement of s 144(3), in that it is a matter of general or public importance because it affects a large number of similar cases, even though the relevant section has now been repealed.  If he has misread the High Court judgment, that will no doubt be highlighted by the respondent at the substantive hearing.

[8]       We therefore grant special leave for the question of law outlined in [3] above.

[9]       We make no order as to costs.

Solicitors:
Otene & Ellis for Applicant
Crown Law Office, Wellington