PRIOR v THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT [2013] NZHC 2928

PRIOR v THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT [2013] NZHC 2928 [6 November 2013]IN THE HIGH COURT OF NEW ZEALANDNELSON REGISTRYCIV-2012-485-002182[2013] NZHC 2928IN THE MATTER OF an appeal by way of case stated from thedetermination of the Social SecurityAppeal Authority at Wellington undersection 12Q of the Social Security Act1964BETWEEN CHARLOTTE PRIORAppellantAND THE CHIEF EXECUTIVE OF THEMINISTRY OF SOCIALDEVELOPMENTRespondentHearing: 6 November 2013Counsel: S J Zindel for AppellantT Bromwich for RespondentJudgment: 6 November 2013JUDGMENT OF COLLINS JIntroduction[1] The Social Security Appeal Authority (the Authority) has posed four questions for me to consider.[2] The questions arise in the context of the Chief Executive of the Ministry of Social Development (the Ministry) deciding that Ms Prior is not entitled to adomestic purposes benefit (DPB). That decision was based on the Ministry's assessment that Mr Tunnicliffe, Ms Prior's former partner, had greater responsibilityfor the care of F, who was born to Ms Prior and Mr Tunnicliffe before they separated.[3] The Ministry decided under s 70B of the Social Security Act 1964 (the Act) that Mr Tunnicliffe was able to have his care of F taken into account when assessing his entitlement to a benefit and the rate of that benefit, but that Ms Prior was not entitled to have her care of F taken into account when assessing her entitlement to a benefit.[4] The four questions posed by the Authority are:(1) Did the Authority err in law in its interpretation and application of s 70B of the [Act]?(2) As a matter of law was there any evidence on which the Authority could conclude that for the purposes of s 70B [of the Act] Mr Tunnicliffe had greater responsibility for [F] and that he was therefore entitled to have [F] taken into account in assessing his entitlement to a benefit and the rate of benefit payable?(3) Did the Authority have jurisdiction to issue [a] minute of 30 January 2012?(4) Did the Authority have jurisdiction to issue [an] interim decision of 27 February 2012?Background[5] Ms Prior and Mr Tunnicliffe separated on 4 January 2009. At that time their child, F, was almost three years old.[6] After Ms Prior and Mr Tunnicliffe separated, Ms Prior had the primary care of F. This arrangement lasted from 4 January 2009 until 23 August 2010. During most of this period Ms Prior received the DPB.[7] On 6 September 2010 Mr Tunnicliffe informed the Ministry that he was nowF's primary caregiver. As a consequence Ms Prior's DPB was cancelled from17 October 2010 and Mr Tunnicliffe was granted the DPB from 1 November 2010.[8] On 30 March 2011 the Family Court made parenting orders under which Ms Prior and Mr Tunnicliffe share the parenting of F. The parenting order specified:[Ms Prior] shall have the care of [F] in the following ways:(a) From Wednesday after [school] until 9.30 on Saturday on the first week.(b) The following week, after [school] on Tuesday until 4pm on Thursday and from 9.30am on Saturday until [school] on Monday morning, (but if that Monday falls on a public holiday, the contact will continue until 4.00 pm on that Monday evening), or if [F] is not at [school] then drop off will be at the Motueka Library at 9.30am.(c) Otherwise [Mr Tunnicliffe] shall have the care of [F].[9] The Authority held that the sharing of responsibility for the care of F under the parenting order resulted in F spending 173.5 hours per fortnight in the care of Mr Tunnicliffe and 162.5 hours per fortnight in the care of Ms Prior.[10] On 4 April 2011 Ms Prior applied for the DPB. Her application was declined by the Ministry because it reasoned Mr Tunnicliffe had the greater responsibility forthe care of F. The Ministry's decision was upheld by the Benefits ReviewCommittee and the Authority.Statutory framework[11] Section 70B(1) of the Act explains that where two beneficiaries are living apart and each has primary responsibility for the care of a child for at least 40 percent of the time, only the parent who has "the greater responsibility for the child" shall have that child taken into account in assessing the parent's entitlement to a benefit and the rate of that benefit.[12] Section 70B(2) of the Act provides that when deciding which parent has thegreater responsibility for the care of a child the Ministry "shall have regard primarilyto the periods the child is in the care of each parent and then to ..." five factors.[13] The five factors specified in s 70B(2) of the Act are:(1) "How the responsibility for decisions about the daily activities of the child is shared"; and(2) "Who is responsible for taking the child to and from schooland supervising that child's leisure activities"; and(3) "How decisions about the education or health care of the child are made"; and(4) "The financial arrangements for the child's material support"; and(5) "Which parent pays for which expenses of the child".[14] Section 70B(3) of the Act applies when the Ministry is unable to ascertain which parent has the greater responsibility for the care of the child. In those circumstances only the parent who was principal caregiver of the child immediately before the parents separated shall be entitled to have that child taken into account inassessing the parent's entitlement to a benefit and the rate of that benefit.[15] Section 70B(4) of the Act provides that if the Ministry is unable to ascertain which parent was the principal caregiver for the child before the parents separated then the parents shall agree between themselves which of them shall be entitled tohave the child taken into account when assessing the parent's entitlement to a benefitand the rate of that benefit. However, until the parents reach agreement neither is entitled to have the child taken into account in assessing their entitlement to a benefit or the rate of that benefit.[16] Section 70B of the Act therefore provides a tiered system for determining which parent is entitled to have a child taken into account when assessing theparent's entitlement to a benefit, and the rate of that benefit. It is only when theMinistry cannot determine entitlements under s 70B(1) that s 70B(3) applies, and it is only where the Ministry is unable to determine the issue under s 70B(3) that s 70B(4) is engaged.The Authority's decision[17] In dismissing Ms Prior's appeal the Authority:(1) Determined F was in Mr Tunnicliffe's care 11 hours more eachfortnight than he was in the care of Mr Prior.(2) Reasoned that both parents had an equal role in relation to the factors listed in s 70B(2) of the Act.(3) Recognised that the issue as to who had the greater responsibility for F was finely balanced but concluded because F spends greater time inMr Tunnicliffe's care he made decisions on matters contained ins 70B(2) more often than Ms Prior and therefore, only Mr Tunnicliffe was entitled to have F taken into account when assessing his benefit and the rate of his benefit.Statutory basis for an appeal[18] Section 12Q(1) of the Act provides that Ms Prior's right to appeal to the HighCourt is confined to questions of law. To facilitate Ms Prior's appeal the Authorityhas posed the four questions set out in paragraph [4] of this judgment. The Authorityhas done this under s 12Q(6) and (7) of the Act. Ms Prior's appeal can only beallowed by me if I am satisfied that the Authority either:(1) made an error of law when it interpreted and applied s 70B of the Act; or(2) reached a finding of fact that was not reasonably open to it.1[19] The Supreme Court has explained that an error of fact may constitute an error of law when the fact finder's decision is:2(1) not based on evidence; or(2) based on evidence that is inconsistent with and contradictory of, their findings of fact; or(3) contradicts the only true and reasonable conclusion of fact that was available on the evidence.1 Edwards v Bairstow [1956] AC 14 (HL) at 14.2 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 at [24]-[26].Question 1: Did the Authority err in law in its interpretation and application of s 70B of the Act?[20] There are three limbs to this part of Ms Prior's appeal. Mr Zindel, counselfor Ms Prior:(1) Submits the Authority erroneously equated the time F spent with his parents pursuant to the parenting order with their respective parental responsibilities; (2) He submits the Authority did not have sufficient regard to the factors set out in s 70B(2) of the Act;(3) He also submits the Authority was really unable to determine which parent had greater responsibility for F and so s 70B(3) of the Act should have been applied.Did the Authority erroneously equate time spent with the child with parental responsibility?[21] This aspect of Ms Prior's appeal is based on the reasoning of Heath J inSamuels v Chief Executive of the Ministry of Social Development,3 where his Honour held that having the day-to-day care of a child does not equate to having responsibility for the care of a child for the purposes of assessing a parent's benefit entitlement. Therefore, while the time spent by a child in each parent's care is ofprimary importance, it is not determinative.4[22] In Samuels the Authority had to decide if an applicant for a DPB had"dependent" children. One criteria was whether the applicant had the primary responsibility for the care of her children. Heath J found that the Authority had erred in law in equating day-to-day care of a child with primary responsibility for the care of a child. In that case the relevant custody orders were in favour of the mother but it appears the children were in the care of their father on a day-to-day basis. The Authority had assumed that, because the mother did not have care of the children on a day-to-day basis she could not as a matter of law have primary responsibility for them, despite the fact that the relevant custody orders were in her favour. Heath J3 Samuels v Chief Executive of the Ministry of Social Development (2005) 24 FRNZ 810 at [46].4 D v Chief Executive of the Ministry of Social Development [2013] NZHC 1520.found that the Authority's approach was incorrect as a matter of law. He held thats 70B provides guidance in determining the issue of whether a child is "primarily the responsibility" of a person and that the factors in s 70B(2) are applicable. Heath Jremitted the case back to the Authority for it to reconsider because of the errors of law which it had made.[23] In my assessment, the Authority did not make an error of law in this case. The Authority gave primary weight to the fact that F spent 11 more hours per fortnight being cared for by Mr Tunnicliffe than with Ms Prior pursuant to the parenting order made by the Family Court..[24] However, the Authority also considered and evaluated the factors in s 70B(2) of the Act. In particular the Authority concluded:(i) Both parents made decisions about F's daily life when he was in that parent's care5;(ii) Each parent delivered and collected F from school and wasinvolved in supervising F's activities when he was in theircare;6(iii) Ms Prior enrolled F at the pre-school F attended but Mr Tunncliffe was primarily responsible for F being enrolled in the primary school he attended.7 Both parents were involved in educational programmes involving F, his speech therapy programme and his daily activities;8(iv) Both parents were involved in taking F to his doctor when required;95 An appeal by Charlotte Prior: Social Security Appeal Authority decision [2012] NZSAA [14].6 [16].7 [17].8 [17] and [18].9 [19].(v) The parents each paid half of F's pre-school fees and paid forF's food and clothing when he was in their care;10[25] The Authority concluded that the factors in s 70B(2) of the Act were finely balanced. Nevertheless, the Authority reasoned that because F spent more time inMr Tunnicliffe's care, Mr Tunnicliffe was likely to spend more time exercising the responsibilities identified in s 70B(2) of the Act.[26] The Authority's determination on this point was consistent with Ms Prior and Mr Tuncliffe's evidence that they respectively made s 70B(2) decisions when F wasliving with them. In my assessment, the Authority's decision on this point was bothlogical and consistent with the evidence.[27] I would have been concerned if I believed the Authority had simply equated the time F spent with each parent with a measure of their parental responsibilities. Such an approach would have constituted an error of law because it would have wrongly suggested that a parent surrenders their responsibilities for their child when that child is living with the other parent. As Heath J said in Samuels:11The concept of responsibility for care of children is quite distinct from the concept of day to day care of a child. The latter focuses on the person with physical custody of a child, while the former focuses on the person who has the responsibility, as parent or guardian, to ensure that the child is properly cared for at any given time. ...[28] However, rather than equate time spent with a child with parental responsibility the Authority canvassed the factors set out in s 70B(2) of the Act and reached the logical conclusion that because F spent more time with Mr Tunnicliffe than with Ms Prior, Mr Tunnicliffe was likely to spend more time making s 70B(2) decisions and therefore he had the greater responsibility for F.10 [21].11 Samuels v Chief Executive of the Ministry of Social Development, above n 3, at [34].[29] Did the Authority fail to have sufficient regard to the s 70B(2) factors?[30] I have explained in paragraph [24] of this judgment the Authority's analysisof s 70B(2) factors. I am satisfied the Authority carefully considered the factors set out in s 70B(2) of the Act when making its decision under s 70B(1) of the Act.Was the Authority "unable" to ascertain which parent had the greater responsibilityfor F?[31] Ms Prior also submits that there was not sufficient evidence to enable the Authority to determine which parent had the greater responsibility for F and that the Authority made an error of law by not applying s 70B(3) of the Act.[32] However, in my assessment, the Authority clearly considered there was sufficient evidence to enable it to determine Mr Tunnicliffe had the greater responsibility for F.[33] It was for the Authority to decide if it was able to make a decision under s 70B(1) of the Act. Because the Authority decided it was able to make a decision under that subsection, it did not need to consider the evidence which related to s 70B(3) of the Act. This course was open to the Authority. The evidence available to the Authority enabled it to reach the logical conclusion that Mr Tunnicliffe "had the greater responsibility" for F.Question 2: Was the Authority's finding that Mr Tunnicliffe had greaterresponsibility for [F] supported by any evidence?[34] Ms Prior submits that the Authority erred when it calculated the time F spent with each parent on the basis of the parenting order. Ms Prior says the Authority should have made its calculation on the basis of "contact time" F had with eachparent. Using this formula Ms Prior says that the time F spent at his school and when sleeping should have been deducted from the equation. If this is done MsPrior says F spends 60.5 hours in Mr Tunnicliffe's care and 61.5 hours in Ms Prior'scare.[35] In my assessment Ms Prior's submissions on this point is misconceived. Itwould not have been appropriate to deduct non-contact hours from the calculation which the Authority made in assessing which parent had the greater care for F. A parent continues to have care for their child when they are sleeping or at school. The approach advocated by Ms Prior would have resulted in a conflation of the time a parent spends in contact with their child with the concept of having responsibility for the care of their child.[36] I accordingly conclude the Authority was entitled to reach its decision on the basis of the hours each parent had to care for F based on the effect of the FamilyCourt's parenting order. There is nothing in the Authority's approach or findings thatconstituted a factual error of such significance that it resulted in an error of law.Question 3: Did the Authority have jurisdiction to issue the minute of 30 January 2012?[37] On 30 January 2012, the Authority issued a minute in which it noted that Mr Tunnicliffe would be affected by the pending hearing and that he should be informed of the matters which might affect his entitlement to a benefit. In issuing the minute the Authority directed that a copy of a report prepared pursuant to s 12K of the Act be provided to Ms Prior and to Mr Tunnicliffe.[38] At the commencement of the hearing, Ms Prior's counsel raised concernsabout the possibility of the information in the s 12K report being used in Family Court proceedings. The Authority took account of this concern and required Mr Tunnicliffe to surrender the s 12K report at the end of the hearing.[39] Ms Prior submits that the Authority ought to have obtained a revised s 12K report to include information about Mr Tunnicliffe. However, Ms Prior has not pointed to any information in relation to Mr Tunnicliffe that was not before the Authority and which might have been contained in any further report. Accordingly, I am driven to the conclusion that the Authority did not err in failing to seek a further report from the Ministry that specifically related to Mr Tunnicliffe.[40] Ms Prior also submits that certain private matters pertaining to her should have been redacted from the report prior to it being given to Mr Tunnicliffe.[41] Mr Zindel submits the s 12K report should not have disclosed Ms Prior's medical information and her benefit history. I can understand Mr Zindel's concern,given the litigation that has occurred in the Family Court between Ms Prior and Mr Tuncliffe. However, as a matter of law, the Authority had jurisdiction to provide the complete report to Mr Tunnicliffe.12[42] Because the Authority had the power to determine its own procedure13 the Authority had the flexibility to adapt its procedure to take account of any privacy issues which might have been raised.[43] In the present case, the Authority acted in a commendable manner when it determined Mr Tunnicliffe had an interest in being heard and that he should be effectively treated as a party to the proceeding. The Authority also took account of any privacy concerns raised by Ms Prior by requiring Mr Tunnicliffe to surrender his copy of the s 12K report at the end of the hearing.[44] In my assessment, the approach taken by the Authority adequately addressed any privacy concerns which Ms Prior may have had. The Authority's approach also ensured Mr Tuncliffe's rights to natural justice where given effect to.Question 4: Did the Authority have jurisdiction to issue the interim decision of 27 February 2012?[45] On 27 February 2012, after the hearing of Ms Prior's appeal, the Authorityissued an interim decision. The effect of that interim decision was to direct the Ministry to arrange mediation between Ms Prior and Mr Tunnicliffe to see if agreement could be reached between the parties as to which of them should have F taken into account in assessing their entitlement to a benefit and the rate of that benefit.12 Social Security Act 1964, s 12M(6); Commissions of Inquiry Act 1908, s 4C.13 Social Security Act 1964, s 12K.[46] It transpired that Ms Prior and Mr Tunnicliffe were not able to reach agreement and as a consequence, the Authority proceeded to deliver its decision.[47] Ms Bromwich, counsel for the Ministry properly acknowledges that there does not appear to have been any jurisdiction for the Authority to have issued its interim decision In the way it did in this case.[48] The Authority's interim decision appears to have involved the Authority in seeking to facilitate Ms Prior and Mr Tunnicliffe reaching an agreement on who should have F taken into account in assessing their entitlement to a benefit before the Authority grappled with the factual determinations it was required to make under s70B(1) and (2). Furthermore, even if agreement had been able to be reached between Ms Prior and Mr Tunnicliffe, any agreement they reached could not have usurped the role of the Ministry under s 70B(3). Any decision under s 70B(3) is to be made by the Chief Executive of the Ministry, or on appeal by the Authority, not achild's parents.[49] However, as Ms Bromwich also properly submits, the Authority's interimdecision did not in any way impugn its substantive decision. The Authority'ssubstantive decision involved the Authority correctly interpreting and applying s 70B of the Act.Conclusion[50] The questions posed by the Authority are answered in the following way:(1) Question 1 is answered "No".(2) Question 2 is answered "Yes".(3) Question 3 is answered "Yes".(4) Question 4 is answered "No". However, the answer does not impugn the Authority's substantive decision.Costs[51] The Ministry does not seek costs. This is appropriate because Ms Prior is in receipt of legal aid. No issues as to costs arise.____________________D B Collins JSolicitors:Zindels, Nelson for AppellantCrown Law Office, Wellington for Respondent