Robb v Chief Executive of the Ministry of Social Development

[2014] NZHC 3347

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2013-485-010884 [2014] NZHC 3347

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

HUGH ROBB Appellant

AND

THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT

Respondent

Hearing:	On the papers
Counsel:	Appellant in Person T Bromwich for Respondent
Judgment:	19 December 2014

JUDGMENT OF MACKENZIE J

I direct that the delivery time of this judgment is

2 pm on the 19th day of December 2014.

Solicitors:           Crown Law Office, for Respondent

Copy to:            The appellant

ROBB v THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT [2014] NZHC 3347 [19 December 2014]

[1]       This is an appeal under s 12Q of the Social Security Act 1964 (the Act) against a decision of the Social Security Appeal Authority (the Authority) delivered on 13 September 2012.1   The decision dismissed an appeal by the appellant against a decision of the respondent, upheld by a Benefits Review Committee, to establish and recover over-payments of unemployment benefit, sickness benefit, accommodation supplement and temporary additional support totalling $8,467.56 in the period from

19 February 2008 to 31 March 2009.

[2]       Under s 12Q, an appeal is available only on a question of law.  A case was stated by the Authority on 20 December 2013, on the following questions of law:

(i)        Was  there  any  evidence  on  which  the  Authority  could  base  its conclusion that the appellant was not self-employed during the relevant time?

(ii)      Did the Authority err in law in finding that there was no basis for the

Ministry to deduct expenses from the appellant’s income?

(iii)      Was  there  any  evidence  on  which  the Authority  could  base  its conclusion that the debt arose because of the appellant’s failure to advise the Ministry of his income?

[3]      The appeal in this Court has a lengthy procedural history, which it is not necessary to describe.  In accordance with directions given at various stages, I am to determine the appeal on the papers, having regard to the respondent’s submissions and chronology dated 10 September 2014, the appellant’s submissions which were received  by  the  Registry  by  email  on  1 October 2014,  and  the  supplementary submissions of the respondent dated 22 October 2014.

[4]      The facts are set out in the case stated.  The appellant was granted an unemployment   benefit   at   the   single   rate   from   11 January 2008,   and   an accommodation     supplement     plus     temporary     additional     support     from

19 February 2008.  He was transferred from the unemployment benefit to a sickness benefit from 28 July 2008.  He continued on that benefit until March 2009, when he completed a personal  details  form  declaring  gross  income of  $210  a  week  and requested to be transferred to non-beneficiary assistance.  In May 2009 as a result of

a data match with Inland Revenue (the Department), the Ministry established that the

1      An appeal by Hugh Robb of Tauranga against a decision of a Benefits Review Committee [2012] NZSSAA 68.

appellant   had   been   employed   by   Television   New   Zealand   (TVNZ)   since

15 February 2008.      Following   confirmation   of  his   income   from  TVNZ,   an overpayment   was   established   in   respect   of   the   period   25 February 2008   to

31 March 2009 amounting to $8,467.56.

[5]      In  its  decision,  the Authority  concluded  that  the  overpayment  had  been correctly calculated.   It rejected a submission that the rate of accommodation supplement and temporary additional support should have been assessed on the basis of the appellant’s net income rather than his gross income.   It also rejected a submission that the Ministry had  failed to deduct expenses from his income in calculating the income to be charged against his benefit entitlement.  The Authority accordingly confirmed the calculation of the debt.

[6]      Under s 86 of the Act, the Chief Executive is bound to take all reasonably practicable steps to recover that debt, except in certain specified circumstances.  One of those is in s 86(9A), where the debt was caused wholly or partly by an error by an officer of the Department to which the debtor did not intentionally contribute.  The Authority considered whether or not it could direct that the debt not be recovered pursuant to s 86(9A) of the Act.  It held that the debt did not arise because of an error by an officer of the Ministry.   It further held that the appellant could not have received the benefit payments believing that he was entitled to them.   It therefore held  that  it  could  not  direct  that  the  debt  should  not  be  recovered  pursuant  to s 86(9A) of the Act.

[7]      The Authority went on to consider whether it could direct the respondent not to recover the debt, pursuant to the directions in ss 86(1) and 86A of the Act.   It noted that this can be done only in unusual circumstances, and held that there was nothing unusual about this case.  The appellant had simply failed to act honestly in his dealings with WINZ in failing to declare his income from employment over a lengthy period.

[8]      The first question posed in the case stated is whether there was any evidence on which the Authority could base its conclusion that the appellant was not self- employed during the relevant period.  The question whether the contract between the

appellant and TVNZ was a contract of employment, or a contract for services to be provided by the appellant as self-employed, was seen as relevant because the Authority took the view that the discretion in s 64(3) of the Act to deduct items relates to deductions by self-employed persons for expenses incurred in earning assessable income.   Its finding that the appellant’s income was from employment resulted in the Authority finding that there was no deduction to be made in assessing the appellant’s estimated income.

[9]      Question 1 essentially turns on the Authority’s finding that the appellant was an employee of TVNZ.  In his submissions, the appellant contests the finding.  He submits that his contract with TVNZ was a contract for services.

[10]     The Authority had  information  from TVNZ  which  specifically states  the appellant is a casual employee who commenced work on 15 February 2008.  Holiday pay was included in his hourly rate of pay and PAYE was deducted.   The TVNZ report which was included in the evidence confirmed that the appellant had been employed by the business, as a casual employee working less than 30 hours per week, and that his pay rate included holiday pay.  The report also confirmed that the appellant did not have to meet his own work related expenses. That was evidence on which  the Authority  could  base  its  conclusion  that  the  appellant  was  not  self- employed at the relevant time.

[11]     The appellant submits that the Tribunal cannot have sighted an employment contract because none exists.   It was not necessary for the Authority to have a contract to make the finding that it did.  It was entitled to rely upon the information provided by TVNZ, and its characterisation of the nature of the relationship.  That was evidence on which the Authority could base its conclusion that the appellant was not self-employed.  This Court, in deciding this appeal on a question of law, is not required to consider that conclusion for itself.

[12]     For these reasons, I answer question 1 “yes”.

[13]     Question 2 is whether the Authority erred in law in finding there was no basis for the Ministry to deduct expenses from the appellant’s income.  In answering this

question, the Authority’s view that s 64(3) was concerned with deductions by self- employed persons for expenses incurred in earning assessable income is relevant.

[14]     Ms Bromwich  for  the  respondent  submits  that  the Authority  erred  in  its interpretation of s 64(3).  She submits that s 64(3) does not relate to the assessment of the person’s actual income, but rather it concerns the prospective estimation of income,  and  enables  the  respondent  to  estimate  a  beneficiary’s  income  for  the purpose of determining their weekly payment to reflect the actual entitlement as closely as possible.  On that interpretation, the issue of whether the contract was a contract  of  employment  or  a  contract  for  services  would  not  necessarily  be significant in applying s 64(3).   Ms Bromwich further submits that s 64(3) is not applicable when retrospectively determining the appellant’s actual income over the relevant period in the present case and could not have been used as a basis for the Ministry to deduct expenses from the appellant’s income.

[15]     On this appeal, which is being dealt with on the papers, it is appropriate to address only those points which it is necessary for me to decide on the appellant’s appeal.  Ms Bromwich’s submissions seem at first sight to have considerable merit. Those submissions potentially raise a question of law about whether the Authority has applied s 64(3) correctly.  However, it is not necessary or appropriate for me to address that question, because the Authority’s factual findings mean that it does not arise.  The Authority found as a matter of fact that the appellant had not established that there were any expenses to deduct.  It said:

[19]     The  appellant  has  not  provided  details  of  any  amounts  of  the expenses which he alleges should be deducted from his income to the Authority.   He has simply made vague assertions that they relate to wet weather gear, footwear, travel costs, food and child care costs.   Clothing, travel and child care costs are living expenses normally paid from income and it is difficult to see why they should be deducted from the appellant’s income before entitlement to benefit is assessed.

[16]     In the light of that factual finding, there was no evidence of any expenses which could have been deducted. The question of law does not arise.

[17]     I answer the second question “no”.

[18]     The third question is whether there was any evidence on which the Authority could base its conclusion that the debt arose because of the appellant’s failure to advise the Ministry of his income.  The appellant submits on this appeal, that he had made a declaration of his income on a number of occasions by telephone, but that those  had  not  been  noted  on  his  file.    He  asserts  that  he  has  made  a  further declaration after the original hearing that had  not been noted on the  file.   The Authority’s conclusion on this issue was as follows:

[27]      In any event the appellant says that after February 2008 he contacted Work and Income New Zealand on a regular basis to advise of changes to his income.  In his original letter of appeal to the Authority dated 9 January 2012 he claimed that he contacted the Ministry approximately once a month to declare his income.  In his submissions of 31 (sic) April 2012 in response to the  s 12K  report  he  advised  that  he  contacted  Work  and  Income  New Zealand approximately twice a month to declare his income.  He has been asked by Work and Income New Zealand to provide the telephone number he called from to make his declarations to enable a check to be carried out but has stated that most of the calls were made from a phone box.  He has not provided any telephone numbers.  Nor has he provided any other details about the calls made or the locations they were made from.   Work and Income have no record of the appellant contacting them to advise of his income until 30 March 2009 when he claimed to be earning $210 per week as a self employed person.   This was not an accurate description of his employment circumstances either.

[28]     It is possible that from time to time the Ministry may fail to record income.  We do not accept however that the appellant could have contacted the Ministry on at least 25 occasions as his submission suggests, and that on

25 occasions Ministry staff failed to record information about income.  The

appellant’s claim is simply unbelievable and his failure to provide any evidence of a probative value supporting his claim such as the telephone number from which the calls were made supports our finding in this regard.

[19]     That  is  a factual  finding which  the Authority was  able to  make,  on  the evidence before it.  This appeal is on a question of law only.  It is not possible to challenge that factual finding.  The appellant takes issue with the Authority’s finding that he had  failed to  act correctly in  his dealings  with Work and  Income New Zealand (WINZ).   Because it is not the function of this Court, on this appeal, to examine the factual basis for that finding, it is not appropriate to comment on it.

[20]     The appellant also asserts that records of phone conversations he had with the Department have been destroyed in accordance with a policy which has not previously been disclosed to him, and that he has been misled over the availability of the evidence.   That assertion is denied by the respondent.   It is not necessary or

appropriate to examine the Department’s policy, or what the appellant was told.  The only issue for this Court is whether the evidence to which the Authority referred was evidence on which it could base its conclusions.  I find that it was.

[21]     The questions to question 3 is “yes”

[22]     I have answered the questions as follows: (a)   Question 1 – yes.

(b)      Question 2 – no. (c)      Question 3 – yes.

[23]     It follows that the appeal must be dismissed.

A D MacKenzie J