Robb v Chief Executive of the Ministry of Social Development

[2013] NZHC 1918

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2012-485-2734 [2013] NZHC 1918

BETWEEN  MERVIN ROBB AND PAULA ROBB Appellants

ANDTHE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT

Respondent

Hearing:                   29 July 2013

Counsel                   P T Birks for Appellants

T Bromwich for Respondent

Judgment:                29 July 2013

ORAL JUDGMENT OF KATZ J

Solicitors:

T Bromwich, Crown Law, Wellington
Aurere Law, Rotorua

Counsel:

P T Birks, Rotorua

ROBB & ROBB v THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT [2013] NZHC 1918 [29 July 2013]

Introduction

[1]      This is an appeal by way of case stated[1] in respect of a determination of the

Social Security Appeal Authority (“Authority”).

[1] Pursuant to 12A of the Social Security Act 1964.

[2]      The first appellant,  Mr Robb, suffered a heart attack and  related  serious medical complications (including a hypoxic brain injury) while working in Australia in 2006.  Mr Robb and his wife subsequently returned to New Zealand to live.  They received the invalid’s benefit and several supplementary benefits while awaiting determination of Mr Robb’s workers compensation claim in Australia.  The Ministry were fully aware of the outstanding Australian compensation claim.

[3]      In  2011  Mr  Robb  received  an  out  of  Court  settlement  in  respect  of  his worker’s compensation claim, in the sum of $950,000.  This included an element of compensation  for  loss  of  earning  capacity,  although  the  award  was  made  on  a “global” basis”.  As a consequence, the Ministry concluded that Mr and Mrs Robb had received benefits during the relevant period that were in excess of those they were entitled to.   Those “overpayments” were recovered from Mr Robb’s compensation award.

The case stated on appeal

[4]      The Authority found, in effect, that the Ministry was entitled to recover the relevant sum.   The Authority has, however, stated a case for this Court on appeal which identifies five questions of law:

(i)Did   the  Authority  err   in   law  in   determining  that   part   of  the compensation payment received by the appellant constituted “income” as defined in s 3 of the Social Security Act 1964?

(ii)Did the Authority err in law in concluding that the appellant received income related compensation in respect of the period 9 June 2008 to 31

August 2010 which compensated him at a level which exceeded the cut-out point for benefits he had received in that period?

(iii)Did  the Authority  err  in  law  in  finding  that  the  Chief  Executive's decision not to subject the receipt of benefit granted to the appellant to

any condition under s 71(1)(b) did not constitute an “error” on the part of an officer of the Ministry for the purposes of s 86(9A) of the Act which related to the recovery of benefit?

(iv)As a matter of law did the failure of the Chief Executive to make the grants of benefit to the appellant conditional on repayment prevent the Chief Executive from establishing an overpayment and recovering a debt?

(v)Did the Authority err in law in determining that it should not direct that the  Chief  Executive  take  no  steps  to  recover  the  debt  pursuant  to s 86(1) or s 86A of the Social Security Act 1964?

Agreement between the parties

[5]      Pending the hearing of the appeal in this Court the parties have had a constructive dialogue.  Essentially the parties have reached agreement on all issues arising out of the case stated,  save for issues as to Mrs Robb’s entitlement to any of the supplementary benefits that she received during the period 9 June 2008 to 31

August 2010.  I have been requested to remit that particular issue to the Authority for determination.

[6]      The parties outlined to me their views as to how the questions raised by the case stated should be answered, given the agreement that has been reached between them.   I am satisfied that the “agreed” answers are appropriate in the particular context of this case.  I therefore set out my answers to the questions raised by the case stated as follows.

Question  1:    Did  the Authority  err in  law  in  determining  that part of  the compensation  payment  received  by  the  appellant  constituted  “income”  as defined in s 3 of the Social Security Act 1964?

[7]      The answer to this question is “yes”, although that is not determinative of the appeal.    In particular, the respondent noted that even if part of the compensation payment did not constitute income, the Chief Executive was nevertheless entitled to “treat” that part of the compensation relating to loss of earning capacity as income, pursuant to s 71(1)(a) of the Act.

Question 2:  Did the Authority err in law in concluding that Mr Robb received income related compensation in respect of the period 9 June 2008 to 31 August

2010 which compensated him at a level which exceeded the cut-out point for benefits he had received in that period?

[8]      The answer is “no” in respect of all benefits received by Mr Robb and also in respect of the invalid’s benefit received by Mrs Robb.

[9]      Mrs Robb, however, received a number of supplementary benefits, namely disability allowance, accommodation supplement and temporary additional support. There is an extant dispute as to whether Mrs Robb was entitled to these supplementary benefits.  It is arguable that Mrs Robb was entitled to apply for these benefits in her own right.  Evidence will likely be necessary in relation to this issue. Further, it is clearly appropriate that the Authority, as a specialist tribunal, determine this issue.

[10]     I therefore remit to the Authority determination of the issue of whether Mrs Robb is entitled to any of the supplementary benefits that she received during the period 9 June 2008 to 31 August 2010.

Question 3:  Did the Authority err in law in finding that the Chief Executive's decision not to subject the receipt of benefit granted to the appellant to any condition under s 71(1)(b) did not constitute an “error” on the part of an officer of the Ministry for the purposes of s 86(9A) of the Act which related to the recovery of benefit?

[11]     The answer is “no”.

Question 4:  As a matter of law did the failure of the Chief Executive to make the grants of benefit to the appellant conditional on repayment prevent the Chief Executive from establishing an overpayment and recovering a debt?

[12]     The answer is “no”.

Question 5:   Did the Authority err in law in determining that it should not direct that the Chief Executive take no steps to recover the debt pursuant to s 86(1) or s 86A of the Social Security Act 1964?

[13]     The answer is “no”.

Result

[14]     The five questions set out in the Authority’s case stated are answered as set

out above.

[15]     The issue of whether Mrs  Robb  is  entitled  to any of the supplementary benefits that she received during the  period 9 June 2008 to 31 August 2008 is remitted to the Authority for determination.

[16]     The parties have reached agreement that costs should lie where they fall and I

order accordingly.

Katz J