B V THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT HC WN CIV-2012-485-000688

B V THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT HC WN CIV-2012-485- 000688 [28 November 2012]ORDER MADE PROHIBITING PUBLICATION OF THE APPELLANT'SNAMES.IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV-2012-485-000688[2012] NZHC 3165IN THE MATTER OF an appeal by way of case stated from thedetermination of the Social Security AppealAuthority at Wellington under s 12Q of theSocial Security Act 1964BETWEEN BAppellantAND THE CHIEF EXECUTIVE OF THEMINISTRY OF SOCIALDEVELOPMENTRespondentHearing: 14 November 2012Counsel: J K Scragg and M I Razak with P H Higbee for AppellantD L Harris and R N Moran for RespondentJudgment: 28 November 2012In accordance with r 11.5 I direct the Registrar to endorse this judgment with the delivery time of 9.30am on the 28th day of November 2012.RESERVED JUDGMENT OF COLLINS J[1] This judgment answers three questions of law posed by the Social Security Appeal Authority (the Authority). The questions that the Authority has posed concern the correct interpretation of s 147A and Schedule 27 of the Social Security Act 1964 (the Act) as well as reg 9B of the Social Security (Long-Term Residential Care) Regulations 2005 (the Regulations). The issues in this case require me todecide if a financial means assessment of an applicant for a residential care subsidy can take into account the total value of annual gifts made by the applicant and their spouse or partner when the aggregated value of those assets exceeds $27,000. The questions I answer are set out in [25], [34] and [58].[2] This judgment also addresses two preliminary issues concerning:(1) the unfortunate death of Mrs B just six days before the hearing of this case;(2) the use I can make of Cabinet papers and a letter from the Ministry of Social Development (the Ministry) to the Regulations Review Committee when I interpret the Regulations.[3] Before I address the preliminary issues and answer the questions posed by the Authority I will summarise the background to this case so that the preliminary issues and questions can be understood in context.Background[4] Mr and Mrs B established the B Family Trust (the Trust) in 1987. They were named as primary beneficiaries of the Trust. Their children and grandchildren are also beneficiaries. The Trust purchased properties in Auckland, Kumeu and Sydney. In doing so the Trust became indebted to Mr and Mrs B. The debt exceeded $900,000. That debt was addressed by Mr and Mrs B each gifting $27,000 to the Trust each year from 1987 to 2004. That is to say, Mr and Mrs B forgave the Trust an aggregated total of $54,000 per annum from 1987 to 2004.[5] In March 2009 Mrs B moved into a rest home. She then applied for a residential care subsidy under the Act and Regulations.[6] To determine if Mrs B was eligible for a residential care subsidy the Ministry conducted a financial means assessment pursuant to the Act and Regulations. The purpose of the financial means assessment was to ascertain if Mrs B's assetsexceeded $180,000 in 2009. At that time, those whose assets exceeded $180,000 were not eligible for a residential care subsidy.1 That threshold has since been increased to $213,297.[7] In calculating Mrs B's assets the Ministry inquired into what assets Mrs B and her husband had disposed of during two periods:(1) The first period was the five years preceding Mrs B's application for aresidential care subsidy.2 In 1999 dispositions in excess of $5,000 per annum for the five years preceding the application were taken into account in calculating an applicant's financial means.3 This threshold has since been increased to $6,000. The five year period precedingthe application is referred to as the "gifting period".4(2) The second period were all the years prior to the commencement of the gifting period. At issue in this case is what threshold existed for the disposition of assets prior to the gifting period. The Ministry believes that the Act and Regulations impose a $27,000 threshold per annum, per couple. On the other hand, the appellant argues the $27,000 per annum threshold relates only to an applicant.[8] The Ministry determined that Mrs B was not eligible for a residential care subsidy because of the size of her assets, which it determined were $253,183.57. The largest portion of this figure was derived from calculating the value of the gifts that Mrs B and her husband had given to the Trust during the 1987 to 2004 period.1 Social Security Act 1964, Schedule 7, Part 1, cl 1(2)(a).2 Social Security (Long-Term Residential Care) Regulations 2005, reg 8.3 Regulation 9.4 Under reg 9(3) gifts in excess of $5,000 in any one of the gifting period years can be applied byway of setoff to other years in the gifting period. The total gifting during the gifting period mustnot exceed $25,000.[9] The figure of $253,183.57 was calculated in the following way:(A) – Value of assets gifted within the five year gifting period(1) The Ministry determined that Mr and Mrs B gifted the Trust $54,000 on 25 June 2004.(2) The Ministry deducted $5,000 per annum for each of the five years from 2005 to 2009.(3) The excess gifting for the five year gifting period was calculated to be $29,000.Sum (A) = $29,000.(B) – Value of assets gifted from 1987 to 2004 inclusive(1) The total amount gifted by Mr and Mrs B prior to the five year"gifting period" was $918,000.(2) The Ministry interpreted the Act and Regulations to mean that the maximum annual aggregated dispositions by Mr and Mrs B could not exceed $27,000.(3) On this basis the Ministry determined that the excess gifting prior to the five year gifting period was $459,000.Sum (B) = $459,000.(C) – Cash assetsThe Ministry determined that Mrs B had cash assets of $9,183.57 and Mr B had cash assets of $925.47.[10] In calculating the value of Mrs B's assets the Ministry added Sums A and B together ($488,000) and then divided that sum in two ($244,925.47) to which the Ministry added Mrs B's cash assets (in total $253,183.37).[11] Mrs B challenged the Ministry's assessment. No issue was taken with the way the Ministry calculated Sums A5 and C. The challenge concerned the way Sum B was calculated. Mrs B's challenge was rejected by the Benefit Review Committee on 30 November 2010. Mrs B then appealed to the Authority. The Authority dismissed Mrs B's appeal on 14 November 2011.[12] The Authority then stated a case for this Court to determine pursuant to s 12Q of the Act.Preliminary issuesMrs B's death[13] Regrettably, Mrs B passed away on 8 November 2012.[14] Notwithstanding the passing of Mrs B counsel for both parties were keen to have the questions posed by the Authority answered by me.[15] To do this Mr B applied to be substituted as the appellant on the basis that to the best of everyone's knowledge he is Mrs B's sole executor and beneficiary. Acopy of what is believed to be Mrs B's last will dated 24 April 2009 recording that Mr B is the sole executor of Mrs B's estate was annexed to an affidavit which Mr B swore on 12 November in support of his application to be substituted as the appellant.[16] Clearly there has not been sufficient time for probate to be granted. However, I have, with the consent of both parties proceeded on the assumption that5 The appellant would no doubt say that the Ministry's decision to aggregate Mr and Mrs B'sgifting during the gifting period was also wrong.the will of 24 April 2009 was Mrs B's last will and that in due course Mr B will be confirmed as executor of Mrs B's estate.[17] The approach I have taken is not without risk. It is, however, a risk that counsel were happy for me to take. Substituting Mr B as appellant appeared to me tobe compatible with the definition of "applicant" in s 3 of the Act and "eligibleperson" in s 136 of the Act.[18] Accordingly, at the commencement of the hearing on 14 November 2012 Mr B was substituted for Mrs B as the appellant in this proceeding.Cabinet and related documents[19] Mr Scragg, counsel for Mr B has provided me with three documents:(1) A Cabinet paper dated 12 August 2005 proposing that Cabinet authorise the creation of relevant amendments to the Regulations;(2) A Cabinet minute of 12 September 2005 approving the creation of the amendments to the Regulations;(3) A letter of 15 December 2005 from the Ministry to the Regulations Review Committee explaining the background to the amendments to the Regulations and the reasons for the total values of gifts referred to in the amended Regulations.[20] Mrs Harris, counsel for the Ministry did not object to me receiving these documents. Mrs Harris agreed with Mr Scragg that the Cabinet papers immediately preceded the relevant amendments to the Regulations which were made on 12 September 2005 and came into force on 19 September 2005. Mrs Harris'principal submission in relation to all three documents was that they did not mean what Mr Scragg submitted they mean.[21] I am willing to accept the three documents as extrinsic aids to interpreting the meaning of the Regulations. In doing so, I am mindful that in Skycity Auckland Ltd v Gambling Commission6 the Court of Appeal reluctantly allowed reference to be made to Cabinet papers when interpreting a statute. In allowing reference to be made to Cabinet papers the Court said that "... we doubt that reference to Cabinet papers and reports to Cabinet will ever be of much assistance to courts involved in interpreting specific statutory provisions".7 One of the Court's primary concernswas that:8... while Cabinet papers may reveal the intention of the Executive at the timeof the relevant Cabinet meeting, that may differ from Parliament's intentionwhen a Bill is passed.[22] While the Court of Appeal was undoubtedly correct when expressing misgivings about the reliability of Cabinet papers as an aid to interpretingParliament's intention when passing a Bill, those concerns are far less relevant wheninterpreting regulations. The process of passing regulations is much more precise and controlled than the process of passing Bills, particularly in an MMP environment where political compromises during the passage of a Bill may result in a Bill being passed by Parliament that contains many changes from the time that Cabinet considered the proposed legislation. Regulations, however, are the prerogative of the Executive. Cabinet papers that recommend the adoption of regulations are considered by Cabinet which in turn authorises the drafting of regulations to reflect the policy contained in the Cabinet papers. Regulations are usually passed expeditiously and are rarely subject to political compromise or significant change after Cabinet has authorised their drafting. Thus, in the present case, on 12 August 2005 Cabinet considered a recommendation that the relevant amendment regulations be drafted. Those regulations were then drafted. On 12 September 2005 Cabinet authorised the submission of the drafted amended regulations to the Executive Council. The amended regulations were adopted later on 12 September 2005 by the Executive Council and came into force on 19 September 2005.6 Skycity Auckland Ltd v Gambling Commission [2007] NZCA 407, [2008] 2 NZLR 182 (CA).7 At [40].8 At [41].[23] In these circumstances I believe I can have confidence in the reliability of the Cabinet paper as an aid to interpreting the amendments to the regulations which are the focus of this judgment. I accordingly find myself in a different situation from Williams J who, in Marlborough Lines Ltd v Cassels said, in response to a submission that Cabinet documents should be used as an aid to the interpretation of regulations:9The parties also referred to statements (or the absence of them) in Cabinet (or Cabinet-related) preparatory material in support of their arguments. I do not need to rely on those statements, as the answer can properly be found in the words and structure of the regulations. In any event I am concerned about the way this material was admitted: there was insufficient explanation of what these documents were, when they were prepared and by whom, how they fit into the decision-making process, and whether the record was complete. The material was simply admitted as part of the common bundle, with only handwritten citations identifying some of the documents. It is difficult to have confidence in that material in those circumstances. In my view such material should only be admitted as evidence through an appropriately senior official who is able to explain what it is, how it fitted into the drafting process, what is missing and why.[24] I am much more hesitant about admitting the letter written by the Ministry to the Regulations Review Committee in December 2005. However, as neither party has objected to me referring to that letter I shall make reference to it during the course of my judgment. I need to stress that in doing so, I recognise, that as a matter of general principle letters written by Ministry officials after a regulation has been adopted may not always help in understanding the law maker's purposes at the timethe regulations in question were adopted.Question 1[25] The first question I am required to answer is:Did the Authority err in law in interpreting s 147A of [the Act] to mean that the deprivation of assets by both the assessed person and his or her spouse are to be considered in carrying out a financial means assessment under Part 4 of [the Act]?9 Marlborough Lines Ltd v Cassels [2012] NZHC 9 at [63].[26] Section 147A of the Act reads:147A Deprivation of assets and income(1) If the chief executive is satisfied that a person who has applied for a means assessment, or the spouse or partner of that person, has directly or indirectly deprived himself or herself of any income or property (other than an exempt asset), the chief executive may in his or her discretion conduct the means assessment as if the deprivation had not occurred.(2) If the chief executive is satisfied that a person who has been means assessed, or the spouse or partner of that person, has directly or indirectly deprived himself or herself of any income or property (other than an exempt asset), the chief executive may in his or her discretion include that income or property in a review of the person's means assessment under section 150 as at the date of means assessment as if the deprivation had not occurred.[27] Mr Scragg appropriately accepts that the Authority did not err when it interpreted s 147A of the Act to mean that the disposition of assets by both Mr and Mrs B could be considered when carrying out a financial means assessment of Mrs B under Part 4 of the Act.[28] Although there is no issue that Question 1 must be answered in favour of the approach taken by the Authority, I will nevertheless explain why the Authority was correct because understanding the answer to the first question assists in understanding the answers to the other questions posed by the Authority.[29] Part 4 of the Act sets out the process by which a person in Mrs B's positionapplies for a residential care subsidy.[30] The first step in the process involves the Ministry undertaking an assessment of the applicant's assets under s 146 and Part 2 of Schedule 27 of the Act.[31] The second step in the process involves the Ministry undertaking an assessment of the applicant's income under s 147 and Part 3 of Schedule 27 of the Act. In this case the Ministry was only concerned with assessing Mrs B's assets.[32] Section 147A of the Act confers upon the Ministry a discretion to include any"income or property" in the applicant's means assessment if the Ministry is satisfied that the applicant or the spouse or partner of the applicant has directly or indirectly deprived himself or herself of any income or property.10 If there has been a deprivation of income or assets then s 147A empowers the Ministry to conduct the financial means assessment as if the deprivation had not occurred.[33] Section 147A clearly enabled the Ministry to consider any deprivation of assets by Mrs B and Mr B when conducting the financial means assessment of Mrs B. Accordingly the Authority did not err in its interpretation of s 147A.Question 1 must therefore be answered "No".Question 2[34] The second question asks:Did the Authority err in law in interpreting regulation 9B of [the Regulations] to require the total assets of the appellant and her husband to be assessed, including the assets they have deprived themselves of less $27,000 per annum of allowable gifting in the period outside the "gifting period"?[35] This question raises the principal issues in dispute in this case. Mr Scragg submits that the Authority erred in law. He says that the proper interpretation of reg 9B(a) of the Regulations would have led the Authority to conclude that Mrs B and Mr B could each gift $27,000 to the Trust outside the gifting period. On this basis, Mr Scragg submits that the Ministry should not have determined that there had been excessive gifting amounting to $459,000 outside of the gifting period. Instead,Mr Scragg says that if Mrs B's assets had been properly calculated the Ministrywould have concluded her assets were under the $180,000 threshold.1110 This provision does not apply to exempt assets. However, the assets in question in this case arenot exempt assets.11 By my calculations, Mr Scragg's approach to the calculation of Mrs B's assets would haveresulted in her assets being valued at $23,683.57.[36] Regulation 9B(a) reads:9B(a) Deprivation of property and incomeFor the purposes of section 147A of the Act, instances of deprivation of property or income include, but are not limited to, the following:(a) gifts that are gifted in the 12-month period prior to the commencement of the gifting period, or in any 12-month period preceding that period, to the extent that the total value of the gifts in each such period exceeds $27,000:ExampleIn the year before the commencement of the gifting period the person being means assessed and that person's spouse jointly make gifts having a total value of $100,000.The person being means assessed and his or her spouse may be treated as having deprived themselves of $73,000 in respect of the gifts.[37] Regulation 3A of the Regulations recognises the status of examples provided in the Regulations. Regulation 3A acknowledges that:(1) An example is only illustrative of the provision to which it relates. It does not limit the provision to which it relates.(2) If an example and a provision to which it relates are inconsistent, the provision prevails.12[38] The Authority interpreted the words "total value of the gifts" in reg 9B(a) as meaning the total aggregated value of the gifts of the person being means assessed and his or her spouse or partner.13 In reaching this conclusion the Authority drew upon the example to reg 9B(a) which the Authority referred to as being a "primary aid to interpretation" of the words "total value of the gifts".14 The Authority reasoned that the example to reg 9B(a) supported the conclusion that the words "total12 Cf Interpretation Act 1999, s 5(3) which provides that examples may be considered whenascertaining the purpose of an enactment.13 An appeal against a decision of the Benefits Review Committee [2011] NZSSA 91 at [28]-[35].14 At [29].value of gifts" means the aggregated total gifts by the applicant and their spouse or partner.[39] Mr Scragg submits:(1) The example is inconsistent with the proper interpretation of reg 9B(a); and(2) The Authority's interpretation is wrong and that the proper meaningof reg 9B(a) is that the applicant and their spouse or partner are each allowed to gift up to $27,000 per annum. Mr Scragg's submissions on this point were based upon:(a) the extrinsic aids to interpretation referred to in [19]; and(b) the gifting provisions in the Estate and Gift Duties Act 1968 in force at the time the assessment of Mrs B was made.15Does the example assist in interpreting reg 9B(a) in the circumstances of this case?[40] Mr Scragg correctly points out that the example which relates to reg 9B(a) describes the scenario where "a person being means assessed and that person'sspouse jointly makes gifts having a total value of $100,000" (emphasis added). Mr Scragg then reasons that the word "jointly" in the example should not beinterpreted as being synonymous with "combined". He says that the Authority erredwhen it reasoned that "jointly" in the example meant the same as "combined" in reg 9B(a).1615 Gift duty was repealed in 2011.16 At [32].[41] In support of this aspect of his case Mr Scragg points to the fact that the word"jointly" in regs 9(1)(a)(iii)17, 9A(2)(a)(iii)18 and 9(4)19 is used in a way that cannotmean "combined". Those regulations are all concerned with the treatment of gifts for the purposes of means assessments. The reasons why I am attracted to this aspect of Mr Scragg's submissions are:(1) The phrase "the person being means assessed and the person's spouse or partner jointly" in regs 9(1)(a)(iii) and 9A(2) is superfluous if"jointly" simply means "combined" in those regulations. Both regulations already provide for the combining of separate gifts made by the person being means assessed and their spouse or partner.(2) The word "jointly" in reg 9(4) cannot mean "combined" because:(a) the purpose of reg 9(4) is to allow both spouses or partners who are in long-term residential care to gain the benefit of the offset allowed by reg 9A(2) by allowing for the apportionment of joint gifts;(b) the offset allows gifts over the allowable gift threshold made by the person being means assessed to be carried over into subsequent years within the five year gifting period;17 9 Allowable gifts(1) For the purpose of paragraph (b) of the definition of assets in clause 4 of Part 2 of Schedule 27 of the Act, allowable gifts are gifts of real or personal property (for example, money) gifted during the gifting period that—(a) are gifted by any of the following persons:...(iii) the person being means assessed and that person's spouse or partner jointly ...18 9A Gift in recognition of care...(2) The criteria for a gift in recognition of care are that the gift—(a) is a gift of real or personal property (for example, money) gifted by any of the following persons:...(iii) the person being means assessed and the person's spouse or partner jointly ...19 9 Allowable gifts...(4) If the person being means assessed and that person's spouse or partner are both in long-termresidential care, then the value of any gift made jointly by that person and that person'sspouse or partner is to be apportioned equally between that person and that person's spouseor partner.(c) if "jointly" means "combined" there would be no need to provide for the apportionment of the "gift made jointly" in order to allow both spouses or partners to benefit from the offset.[42] Thus, if "jointly" in the example to reg 9B(a) has the same meaning as "jointly" in regs 9(1)(a)(iii), 9A(2)(a)(iii) and 9(4) then the Authority probably erredwhen it relied on the example to conclude that the total value of gifts in reg 9B(a) means the aggregated gifts made by an applicant and their spouse or partner.[43] However, I also find the word "jointly" in the example in reg 9B(a) is unhelpful in ascertaining the true meaning of that regulation. In my view theexample to reg 9B(a) is of little assistance in determining the law maker's trueintentions when passing this regulation.Can reg 9B(a) be sensibly interpreted without reference to the example?[44] In my judgement, reg 9B must be interpreted in conjunction with s 147A ofthe Act. The reason for this is that reg 9B is expressly "for the purposes of s 147A of the Act". As already noted, s 147A(a) of the Act permits the Ministry to take intoaccount deprivation of assets by an applicant or his or her spouse or partner for thepurposes of assessing the applicant's assets. Thus, if reg 9B(a) is interpretedconsistently with the purposes of s 147A one is inevitably drawn to the conclusion that reg 9B allows the Ministry to take into account the aggregated values of gifts made by the applicant and his or her spouse or partner.[45] The approach I have favoured is reinforced by the following points:(1) The reference to "gifts that are gifted" in reg 9B(a) is inextricablylinked to the "income or property" that the applicant and or their spouse or partner deprived themselves of and which the Ministry may take into account pursuant to s 147A of the Act. The use of the plural"gifts" in reg 9B(a) refers to the disposition of assets by both the applicant and their spouse or partner.(2) The reference to "total value of the gifts" in reg 9B(a) should be interpreted to mean the combined gifts or assets of an applicant and his or her spouse or partner in any given period.(3) The definition of "assets" in Schedule 27, Part 2, cl 4(b) of the Act isalso entirely consistent with the approach which I favour. The term"assets" in that clause is defined to mean:the value of assets that have been gifted by the person, theperson's spouse or partner, or both during the prescribed gifting period immediately before the date of the means assessment; ... (emphasis added)[46] When reg 9B(a) is interpreted correctly, the argument that the use of the word"jointly" in the example must be interpreted consistently with the use of that word in regs 9(1)(a)(iii), 9A(2)(a)(iii) and 9(4) ceases to have the force contended by Mr Scragg. In my assessment, the true meaning of reg 9B(a) can be determined without referring to the example at all.Do the extrinsic aids to interpretation assist Mr B's case?[47] Having determined that Cabinet papers may on this occasion be able to be relied upon to ascertain the meaning of the Regulations, I now turn to decide if the extrinsic documents really assist Mr Scragg's argument.[48] Mr Scragg places weight on paragraphs [9] and [10] of the Cabinet paper of 12 August 2005 which state:[9] ... The proposed Amended Regulations are intended to provide clarity within the legislative framework and reflect current administrative policy.[10] Gifts made outside the five-year gifting period are generally not included in the assessment unless the gifting is considered extraordinary. The Amendment Regulations prescribe that, subject to the exercise of theChief Executive's discretion, gifts made more than five years ago, which are more than $27,000, may be treated as deprivation of property or income. The $27,000 amount is a guideline based on the gifting provisions used in the calculation of tax for gift duty purposes.[49] The contents of paragraphs [9] and [10] of the Cabinet paper were repeated inthe Ministry's letter to the Regulations Review Committee with an additionalexplanation. In its letter the Ministry said that only "gifting of a nature beyond what would be considered ordinary or normal" would be considered extraordinary. The Ministry's letter was written to explain, amongst other matters, the reason for thetotal value of gifts referred to in the regulation.[50] Mr Scragg suggests that the Cabinet papers and Ministry's letter support hisclient's case in two ways:(1) First, he says that only gifts prior to the five year gifting period thatare "considered extraordinary" are relevant to a means assessment. The argument for Mr B is that as gifts by individuals of up to $27,000 were a common feature of the administration of trusts and estate planning in New Zealand for many years, there has to have been gifts by an individual that exceeded $27,000 per annum before passing the threshold for disposition of assets for the purposes of an individual'smeans assessment.(2) Second, the Cabinet papers and Minister's letter dispel the Authority'sreasoning when it said:[26] ... We accept the Ministry's submission that thechoice of the figure of $27,000 in regulation 9B(a) could equally have been $25,000 or $30,000. While the figure of $27,000 for each person was the amount of gifting permitted under the Estate and Gift Duties Act 1968 there is nothing in either the Social Security Act 1964 or regulation 9B(a) which would suggest there is any relationship between the two statutory provisions.Is there an "extraordinary" threshold in the Act and Regulations?[51] Mr Scragg's first argument concerning the assistance that can be derived from the Cabinet papers and Ministry's letter is that there must be "extraordinary"gifting before there is a deprivation of assets for the purposes of a means assessment. He suggests that gifting of up to $27,000 per person, or up to $54,000 per couple wasan ordinary and normal occurrence prior to the repeal of gift duty on 1 October 2011. Accordingly, Mr Scragg says the Act and Regulations should be interpreted to mean that couples could gift up to $54,000 in the years prior to the gifting period.[52] The difficulty I have with Mr Scragg's argument on this point is that while it is possible the Ministry, as a matter of practice, may have followed a course that reflected his argument, there is in fact nothing in the relevant sections of the Act or in the Regulations that support this interpretation. Nowhere does the Act or theRegulations refer to dispositions having to be "extraordinary" before they can betaken into account when a means assessment is conducted. The argument that Mr Scragg advances would require a complete rewrite of the relevant sections of the Act and Regulations if I were to interpret the threshold of dispositions for the pre-gifting period as requiring "extraordinary" gifting.Is there a link between the $27,000 threshold and the gift duty threshold?[53] I have a little more sympathy for Mr Scragg's second argument about the value that can be derived from the Cabinet papers and Ministry's letter. I do believethe Authority slightly overstated the position when it said the gifting threshold of $27,000 under the Estate and Gift Duties Act 1968 was not relevant to the Social Security Act 1964. In my view the $27,000 threshold found in reg 9B(a) was chosen because it was the same figure that was allowed before gift duty was incurred under the Estate and Gift Duties Act 1968. It would be an extraordinary coincidence if there was no connection between the thresholds found in the two different legislative regimes. However, the fact that the lawmakers had the same thresholds in mind does not mean that those thresholds apply in the same way. In my view the lawmakers used the same threshold in two different ways:(1) Under the Estate and Gift Duties Act 1968 an individual could gift up to $27,000 per annum before incurring gift duty.(2) Under the Act and Regulations that this judgment is concerned with, couples could gift up to $27,000 per annum before the gifting periodwithout having gifts in excess of that figure taken into account whenconducting an individual's means assessment.Can any other assistance be derived from the Cabinet papers?[54] Although it was not referred to by counsel, there is material in the Cabinet papers that provide assistance in understanding the true meaning of the Act and Regulations. The Cabinet paper clearly recognised the term "spouse" or "partner" inthe Regulations applied to persons who were married or in a civil union or opposite sex couples who were living together in the nature of marriage, but not to persons living in a same sex de facto relationship. Partners in same sex de facto relationships were to be treated as being single.[55] The promoters of the Regulations recognised that persons in the position of Mr and Mrs B would be disadvantaged compared to persons who were in a same sex relationship. Paragraph [15] of the Cabinet paper recorded:[15] The Amendment Regulations may therefore financially advantage persons living in same-sex de facto relationships. Income or property disposed of by same-sex de facto partners will not be counted as the income or asset of the resident for the purpose of the means assessment, whereas for a couple who are married or in a civil union, or in an opposite-sex relationship in the nature of marriage, it would be.[56] Thus, the lawmakers appreciated at the time the regulations were passed that persons in Mr and Mrs B's position were to be treated differently from persons living in a same sex de facto relationship. The lawmakers appreciated and intended that persons in Mr and Mrs B's position would be disadvantaged because there could be an aggregation of the disposition of their assets whereas persons living in a single sex de facto relationship were to be treated as being single persons.[57] This acknowledgement in the Cabinet paper is entirely consistent with the interpretation favoured by the Authority. It is also entirely consistent with the interpretation I favour, and provides a further reason why I answer Question 2 "No".Question 3[58] The third question was described by the parties as being a "wash-upquestion" and asks:Did the Authority err in law in deciding to accept that gifts by the appellant and her husband could be aggregated in the relevant period?[59] In submitting that the answer to Question 3 is "Yes", Mr Scragg raised an additional argument that was not raised in relation to Question 2. That argument was that the interpretation favoured by the Authority was not consistent with the rights and freedoms contained in the New Zealand Bill of Rights Act 1990 (NZBORA), and was therefore in breach of the requirement that where an enactment may be interpreted in different ways, it should be given the meaning that is most consistent with the NZBORA in preference to any other interpretation.20[60] Mrs Harris objected to me considering Mr Scragg's argument based on theNZBORA. Mrs Harris argued that Mr Scragg was in effect raising a new issue that was not considered by the Authority and which was not part of the questions posed by the Authority for me to answer.[61] I believe Mrs Harris' concerns were overstated. Mr Scragg was not raising a new issue in the sense of asking me to address a question that has not been posed by the Authority. Mr Scragg is simply relying on the NZBORA and anti-discrimination law to support his understanding of the correct interpretation of the Act and Regulations.[62] Mr Scragg's argument can be distilled to the following three propositions:(1) Interpreting the Act and Regulations to mean that the Ministry can legitimately aggregate gifts made by an applicant and his or her spouse or partner is inconsistent with s 19 of the NZBORA, which protects against discrimination on the grounds set out in the Human Rights Act 1993 (HRA). In particular, the interpretation20 New Zealand Bill of Rights Act 1990, s 6.favoured by the Authority discriminates on the grounds of marital status which is a prohibited ground of discrimination in s 21(1)(b) of the HRA.(2) The limitation on the right in s 19 of the NZBORA that flows fromthe Authority's interpretation cannot be salvaged by s 5 of the NZBORA. This part of Mr Scragg's argument is that theinterpretation favoured by the Authority cannot be demonstrably justified in a free and democratic society.(3) Accordingly, the interpretation which Mr Scragg argues for must prevail by reason of s 6 of the NZBORA.[63] There are two alternative reasons why I disagree with Mr Scragg'ssubmission based upon the NZBORA:(1) I do not believe that the interpretation favoured by the Authority is inconsistent with s 19 of the NZBORA.(2) Alternatively, even if the Authority's approach was inconsistent withs 19 of the NZBORA, and not a justifiable limitation under s 5 of the NZBORA, the effect of s 4 of the NZBORA is that I must still give effect to the only available interpretation of the Act and Regulations. In my view that proper interpretation involves endorsing the approach taken by the Authority.[64] I will now explain my reasons for concluding that either approach summarised in [63] inevitably leads to the conclusion that Question 3 posed by theAuthority must be answered "No".No inconsistency with s 19 of the NZBORA[65] The key issue is whether the aggregation of gifts by those who are married, or in a partnership is inconsistent with the right not to be discriminated against on the grounds of marital status, as defined in s 21(1)(b) HRA. That section provides:21 Prohibited grounds of discrimination(1) For the purposes of this Act, the prohibited grounds of discrimination are—...(b) marital status, which means being—(i) single; or(ii) married, in a civil union, or in a de facto relationship; or(iii) the surviving spouse of a marriage or the surviving partner of a civil union or de facto relationship; or(iv) separated from a spouse or civil union partner; or(v) a party to a marriage or civil union that is now dissolved, or to a de facto relationship that is now ended....[66] In Ministry of Health v Atkinson, Ellen France J for the Court of Appeal explained that in applying s 19 of the NZBORA the correct approach is:21... to [first] ask whether there is differential treatment or effects as between persons or groups in analogous or comparable situations on the basis of a prohibited ground of discrimination. The second step is directed to whether that treatment has a discriminatory impact.[67] Applying comparative methodology when assessing claims of discriminationis not without difficulty. Clayton and Tomlinson, the authors of "The Law ofHuman Rights" observe that:2221 Ministry of Health v Atkinson [2012] NZCA 184, [2012] 3 NZLR 456 at [55].22 Clayton and Tomlinson, "The Law of Human Rights" (2nd ed, Oxford Press, 2008) at 17.138.The concept of an "analogous situation" is a notoriously slippery one: thereis no limit to either the analogies or disanalogies that might be drawn between two groups or individuals.23[68] In this case, it is helpful to examine the evolution of the Regulations to see how comparator methodology can on occasions illuminate unjustifiable discrimination:(1) When the Amendment Regulations were adopted by the Executive on 12 September 2005, with effect from 19 September 2005 the term"spouse" or "partner" was defined to mean persons who were married or in a civil union or who were opposite sex couples living together in a relationship in the nature of marriage (essentially a de facto relationship). Thus, persons who were in a same sex de facto relationship enjoyed an advantage not bestowed upon those who were in opposite sex relationships. Persons in a same sex relationship were treated as separate entities for the purposes of s 147A of the Act and reg 9B(a) of the Regulations.(2) On 1 April 2007 the term "partner" in the Act and Regulations was amended to include same sex de facto relationships. Thus, from 1 April 2007 the Act and Regulations ceased to differentiate between couples in a same sex de facto relationship and those in other forms of long term relationship.[69] The comparator methodology could usefully expose the discrimination that existed in the Act and Regulations from 19 September 2005 to 1 April 2007. This is demonstrated in the following way:(1) Couple A are in a same sex de facto relationship;(2) Couple B are married, in a civil union or opposite sex de facto relationship;23 See also Lord Walker "Treating Like Cases Alike and Unlike Cases Differently: SomeProblems of Anti-Discrimination Law (2010) 16 Canterbury Law Rev 201; Aileen McColgan"Cracking the Comparator Problem: Discrimination, Equal Treatment and the Role ofComparators" [2006] EHRLR 650.(3) Couple A and B's circumstances are in all material respects identical. However, Couple A were treated more favourably than Couple B solely because they were in a same sex de facto relationship.24Mr Scragg did not attempt to rely on the state of the Act and Regulations between 19 September 2005 and 1 April 2007 because the assessment of Mrs B took place after the change in the law. Instead Mr Scragg suggested that the current law discriminated against couples compared to single people.[70] However, when an attempt is made to apply the comparator methodology to the Act and legislation post-1 April 2007 real difficulties emerge.[71] A comparator group or person must be materially similar to the person or group who is alleged to be the victim of discrimination. The comparator group must also be consistent with the statutory scheme and purpose of the law in order to have any value as a means of analysis. This point was made by Elias CJ in Air New Zealand v McAlister:25The task of a Court is to select the comparator which best fits the statutory scheme in relation to the particular ground of discrimination which is in issue, taking full account of all facets of the scheme, including particularly any defences made available to the person against whom discrimination is alleged.[72] It is also important when defining the comparator not to focus on differences between two groups that are inextricably linked with the possible ground of discrimination.26 For instance, by saying that men and women are not in comparable circumstances because men cannot conceive.[73] When these cautions are taken into account it becomes extremely difficult to find a meaningful comparator with couples who dispose of assets and who, since 1 April 2007 are all treated in the same way by the Act and legislation.24 This conclusion is consistent with the reasoning of Baroness Hale (dissenting) but not themajority in M v Secretary of State for Work and Pensions [2006] 2 AC 91 (HL).25 Air New Zealand v McAlister [2009] NZSC 78, [2010] 1 NZLR 153 at [34].26 AL (Serbia) v Secretary of State for the Home Department [2008] UKHL 42, [2008] 1 WLR1436 at [27].[74] The suggestion that single or divorced individuals should be compared to persons in the position of Mr and Mrs B is totally artificial. That approach ignores the statutory scheme and purpose of the Act and Regulations which are reflected by the lawmaker's view that couples (regardless of their sex) co-mingle their assets and ought to be treated as a combined unit rather than two individuals when assessing the value of disposed assets. It would be artificial in these circumstances to try to compare a single person with couples.[75] Thus, I am drawn to the conclusion that there is no useful comparator to couples who, since 1 April 2007 are treated in the same way regardless of their sexes. On this basis there is no discrimination because the lawmakers have not failed to treat like cases alike.27 It is accordingly not necessary to consider s 5 of the NZBORA. The issue of whether the interpretation favoured by the Authority is a justified limitation does not arise from the approach I have taken to s 19 of the NZBORA.[76] However, I would add, that it would have been difficult for me to have properly considered s 5 of the NZBORA absent submissions and possibly evidence from the Crown as to why, if the interpretation favoured by the Authority breached s 19 of the NZBORA it was nevertheless a demonstrable limitation in terms of s 5 of the NZBORA.Effect of s 4 of the NZBORA[77] By way of alternative analysis, even if the Authority's interpretation breachess 19 of the NZBORA, and is not a justifiable limitation under s 5 of the NZBORA, Iwould conclude that s 4 of the NZBORA would result in the Authority's approachbeing upheld. This is because, in my view, the language of s 147A and reg 9B(a) is so clear that it is not possible to interpret reg 9B(a) as applying to gifts by applicants alone when they and their spouse or partner have disposed of assets prior to the gifting period.27 R (Carson) v Secretary of State for Work and Pensions [2006] 1 AC 173 (HL) at [14] per LordHoffmann.[78] In my view, the answers given to Questions 1 and 2 posed by the Authority are unequivocal and mean that the alternative interpretation argued for by Mr Scraggis not "reasonably possible".28Conclusion[79] For the reasons set out above Questions 1, 2 and 3 are answered "No".Name suppression[80] At the conclusion of the hearing counsel for both parties invited me to continue to suppress the names of Mr and Mrs B. It appears that the Authority has prohibited publication of Mrs B's name. No statutory basis for this was brought tomy attention. However, as both parties have asked that I suppress the names of Mr and Mrs B I will continue to do so.Costs[81] This was a test case and is therefore a case in which there would be considerable merit in me ordering that the parties meet their own costs. If the parties cannot reach agreement on costs they should file memoranda within ten working days of this judgment._____________________D B Collins JSolicitors:Duncan Cotterill, Wellington for AppellantCrown Law Office, Wellington for Respondent28 R v Hansen [2007] NZSC 7, [2007] 3 NZLR 1 at [90] per Tipping J.