Prasad v Chief Executive of the Ministry of Social Development CA119/04

This appeal concerns the interpretation of the Social Security Act 1964, specifically provisions relating to accommodation supplements. The appellant, Fiona Prasad, is a domestic purposes beneficiary with two dependent children who lives in one part of a house she owns, while renting out the other part. The Chief Executive of the Ministry of Social Development determined that the rental income should be deducted from the total cost of the property in calculating the appellant's entitlement to an accommodation supplement. The appellant challenged this decision, leading to a case stated by the Social Security Appeal Authority to the High Court. The High Court answered three questions posed in the case statement, and the appellant appealed against the High Court's decision to the Court of Appeal of New Zealand.

The main legal issue before the Court of Appeal was whether all payments made by the appellant in relation to the composite premises (the entire property) should be considered as accommodation costs or only the payments referable to the flat occupied by the appellant as a home. The Court of Appeal concluded that only the payments referable to the flat occupied by the appellant as a home should be considered as accommodation costs. The Court agreed with the High Court's interpretation of the relevant statutory provisions, holding that the reference to total payments in the definition of accommodation costs is qualified by the requirement that the costs are "in relation to premises". Since the mortgage payments which relate to the amount required to fund the purchase of the rental flat are not accommodation costs, only the part of the payments which are referable to the flat occupied as a home should be considered.

The Court of Appeal dismissed the appeal and made no order for costs. The Court found that the High Court's interpretation of the relevant statutory provisions was correct, and that apportionment of costs on an equitable basis between the home and the rental flat was an appropriate method to determine the accommodation costs. The Court also rejected the appellant's argument that the Residential Tenancies Act applied to her situation, as well as the contention that the cap on the accommodation supplement allowed for costs which were not properly referable to the place in which a person lives to be brought into account.