CHIEF EXECUTIVE MINISTRY OF SOCIAL DEVELOPMENT V T L MARSDEN HC CHCH CIV 2006-485-000655

CHIEF EXECUTIVE MINISTRY OF SOCIAL DEVELOPMENT V T L MARSDEN HC CHCH CIV 2006- 485-000655 8 May 2006IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY CIV 2006-485-000655UNDER Section 12Q of the Social Security Act 1964 IN THE MATTER OF an appeal by way of case stated from the determination of the Social Security Appeal Authority BETWEEN THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT Appellant AND TESSA LEIGH MARSDEN Respondent Hearing: 8 May 2006 Counsel: J McHerron for Appellant T D Holton for Respondent Judgment: 8 May 2006ORAL JUDGMENT OF PANCKHURST J[1] At issue in this case stated appeal is the interpretation of s39A(3) of the Social Security Act 1964. That subsection relevantly provides:(3) Subject to the provisions of this section and of sections 39B to 39E of this Act, the chief executive may grant a child disability allowance in respect of a child with a serious disability being cared for – (a) In a private home that is the residence of the person caring for that child; or (b) In a home or hostel operated by an approved voluntary organisation if the child's parent or guardian is required to contribute to the cost of maintaining him in that home or hostel and the child is cared for by his parent or guardian during school holidays or weekends. (emphasis added)[2] In this case the Social Security Appeal Authority (the Appeal Authority) decided that the respondent's son, Hayden, was entitled to a child disability allowance during a period when he was resident at the McKenzie Residential School at Yaldhurst on the outskirts of Christchurch. This meant, in particular, that the Appeal Authority accepted that Hayden was being cared for in a home or hostel "operated by an approved voluntary organisation". [3] The Chief Executive of the Ministry of Social Development (the Chief Executive) disagrees with this viewpoint, namely that McKenzie Residential School is a voluntary organisation. It is on this basis that the present appeal is brought. In short the Chief Executive considers that although Hayden had a serious disability, which would have entitled Mrs Marsden to receive a child disability allowance had he lived at home with her, because Hayden was not being cared for in a home or hostel operated by an approved voluntary organisation, eligibility for payment of the allowance does not exist.The facts and the Appeal Authority decision[4] It is common ground that the child suffers from ADHD. In the period to May 2001 Mrs Marsen was paid a child disability allowance in relation to her son. However, for the balance of that year he attended the McKenzie Residential School on the recommendation of the Special Education Service. For the period from May to December 2001 payment of the allowance stopped, at least during the school terms when the boy was resident at the school. [5] Whether the decision to stop payment of the allowance was correct was the subject of an appeal to the Appeal Authority. It released a written decision dated 13 June 2002. [6] The decision referred to s39A(1) and (2) which provide:39A. Child disability allowance – (1) For the purposes of this section and of sections 39B to 39F of this Act a child with a serious disability means a dependent child who - (a) Has a physical or mental disability; (b) Because of that disability needs constant care and attention; and(c) Is likely to need such care and attention permanently or for a period exceeding 12 months. (2) In determining for the purposes of subsection (1)(b) of this section whether a child with a serious disability needs constant care and attention the chief executive shall consider whether the child requires - (a) From another person, frequent attention in connection with his bodily functions; or (b) Attention and supervision substantially in excess of that normally required by a child of the same age and sex; or (c) Regular supervision from another person in order to avoid substantial danger to himself or others.As can be seen these subsections define the concept of "a child with a serious disability" and the concept of "constant care and attention". Neither concept poses difficulty in the circumstances of this case. [7] Rather the focus of the case is with s39A(3) by which eligibility for the child disability allowance is defined with reference to the child's place of residence and who is responsible for the cost of day to day care. On account of the Chief Executive's view that Hayden was in a home or hostel at the school, but not one which was "operated by an approved voluntary organisation", the allowance was cut. It followed, despite the fact that Mrs Marsden did continue to contribute something to the cost of maintaining her son and did continue to provide care during weekends and school holidays, that a prior statutory criteria for eligibility was not met. This was viewed as determinative. [8] By contrast the Appeal Authority in its decision closely analysed certain payments which were made by Mrs Marsden to the school during the time of her son's residence there. Then, the nub of the decision was set out in two paragraphs of the decision:[23] It is clear from the evidence available to us that the appellant remained responsible for paying for Hayden's clothing and the toiletry items listed in the letter from the school. Payments for these items on their own constituted contributions to his maintenance in the McKenzie Residential School. Moreover, she was also expected to reimburse the school for stationery, to pay for manual training fees, an activity fee to cover school trips and uniform hire. Whilst the principal of the school now suggests that the term fees of $77.50 per pupil (this figure does not include the "manual training fee") were voluntary, we agree with the appellant that the letter from the school dated 6 December 2000 which outlines the fees and the invoices make no reference to the notion that these costs are voluntary. Anyonereading those documents would assume that the payments were required to be made. [24] We are satisfied that the appellant was required to contribute to the cost of maintaining Hayden in the McKenzie Residential School. We are of the view that the criteria for paying Child Disability Allowance provided for in s39A has been made out.On this basis the appeal was allowed and the Chief Executive was directed to pay arrears of child disability allowance to Mrs Marsden. [9] As a reading of the decision of the Appeal Authority as a whole shows, no express consideration was given to the prior question whether the McKenzie Residential School is an approved voluntary organisation. This issue, it seems, was not seen by the Appeal Authority as contentious in this case. [10] The effect of the decision was that Mrs Marsden became eligible for an allowance payment of $34.18 per week. In the event because Hayden was only at the school for the period from May to December 2001, the amount at stake is not large. Prior to then the allowance was paid and likewise subsequent to December 2001, when Hayden returned to the full-time care of his mother, the allowance was reinstated.Basis of the appeal[11] Mr McHerron in support of the appeal did not focus upon the issue whether Mrs Marsden was required to contribute to her son's care while he remained resident at the McKenzie Residential School. Rather, in keeping with the view of the Chief Executive, the sole focus of the appeal was upon whether the school is "operated by an approved voluntary organisation". The assumption which the Appeal Authority seemed to have made in this regard was certainly not accepted. [12] In a careful submission Mr McHerron analysed this prior question. He submitted that the McKenzie Residential School is not an approved voluntary organisation. Counsel contended that this phrase contemplates that the body in question must be privately funded. Reference was made to the definition of the word"voluntary", contained in the Oxford English Dictionary wherein, with reference to institutions, the following definition appears:Of institutions: Maintained or supported solely or largely by freewill offerings or contributions of members or subscribers, and free from State interference or control; spec. in Educ. with reference to schools, etc., maintained by voluntary bodies.This definition was cited by counsel as apposite to the present circumstances. [13] With reference to the word "approved" Mr McHerron asked rhetorically, approved by whom? This is not expressly covered in s39A(3), but the only implication to be taken from the section is that it is the decision-maker who must accept or approve of the fact that the organisation is voluntary in nature. The decision-maker, here the Chief Executive, is the person who can determine eligibility for the allowance and therefore, Mr McHerron argued, it is for him to satisfy himself that an institution is an approved voluntary organisation. In practice, the Ministry does recognise a number of institutions as being voluntary organisations, but recognition does not extend to residential schools or hospitals which also fulfil an educational function with state funding. [14] With that in mind counsel turned to the relevant legislative history of s39A. Its genesis is a recommendation of the Royal Commission on Social Security which reported in 1972. Such recommendation was taken up in the Social Security Amendment Bill (No. 2) which was introducted into the House in 1978 by the then Minister of Social Welfare, the Hon H J Walker. Upon a second reading he said (NZPD, Volume 420) at p 2844:To qualify for this allowance the parents or guardians must be caring for the seriously handicapped child at home. However, provision is also made to pay the allowance to the parents or guardians of a child who is in a home or hostel run by an approved voluntary organisation, such as the Society for the Intellectually Handicapped, provided the parents or guardians are required to meet a board charge and care for the child during school holidays or weekends.[15] On this basis, confirmed by the terms of the section itself, Mr McHeroon submitted that the policy of the section was clear. Its intent is to recognise and compensate parents for the additional costs incurred in caring for a disabled child athome. However, s39A(3)(b) effects an extension, provided the child is resident in a home or hostel of an approved voluntary organisation and provided the parents continue to contribute to their child's care and, at the same time, provide actual care either at weekends or during school holidays. Conversely, and this is the important point for present purposes, where the child is in a state funded institution, then the extension in relation to eligibility to the allowance does not apply. [16] The next question addressed by Mr McHerron was whether the McKenzie Residential School is state funded and controlled. He noted at the outset that it is one of a number of schools which are listed as "specified institutions" in Schedule 5 to the Education Act 1989. The concept of a specified institution relates back to s92 of the Act. That section refers to the various entities listed in Schedule 5, to the correspondence school and also to other institutions which incorporate a school facility. These include health camps, certain hospitals involved in the care of children with special needs and also centres administered by the Children and Young Persons Service, being in the nature of remand institutions which also provide schooling. Thereby, it is plain from the terms of s92, these various institutions are made subject to the Education Act. [17] I note that s3 of the Act defines the right to free primary and secondary education for children in New Zealand. Section 93 of the Act provides that the control of schools, including the McKenzie Residential School, is vested in a Board of Trustees. In the case of the McKenzie Residential School the composition of the Board is controlled by a Gazette Notice which designates the members of the Board. Section 91C of the Act ensures that the salaries of teachers employed at the McKenzie Residential School, and others are paid by the state. [18] Counsel continued on and referred to a raft of other sections within the Act, all of which demonstrated the control which is exerted in relation to schools, generally, under the Education Act. Thereby, it was said, that the specified institutions listed in Schedule 5 were created as a species of primary school in terms of the Act.Discussion[19] In my view Mr McHerron's submissions in support of the appeal are unanswerable. [20] Indeed Mr Holton who appeared as counsel for the respondent, Mrs Marsden, did not seriously contend otherwise. Mrs Marsden's main concern in opposing the appeal was to ensure that she was not required to refund the sum of $722.67 which was paid by way of allowance during the subject period. In fact the Chief Executive does not seek to obtain a refund of that amount. Rather his concern is with the underlying matter of principle and, in particular, to obtain a ruling as to the correct interpretation of "operated by an approved voluntary organisation". [21] As to that I am in no doubt that Mr McHerron's argument is correct. The McKenzie Residentuial School is a specified institution and thereby a primary school in terms of the Education Act. The various provisions of that Act indicate that it is the antithesis of a voluntary organisation. Indeed, it is very much a state funded school and subject to a real measure of control by the state in a number of respects, albeit that the day to day running of the school is vested in a Board of Trustees, in common with virtually all other state schools in New Zealand. [22] The case stated poses as the sole question of law raised by the appeal:Did the Authority err in law in directing the Chief Executive to pay Child Disability Allowance for Hayden while he was attending the McKenzie Residential School from Monday to Friday of each week?In my view the answer to that question is "yes", because the McKenzie Residential School is a specified institution in terms of the Education Act 1989 and therefore is a residential primary school of the state, rather than an institution operated by a voluntary organisation. For that reason the statutory criteria contained in s39A(3)(b), that the child must be in a home or hostel operated by an approved voluntary organisation, was not met, and the Appeal Authority was wrong to overturn the decision of the Chief Executive.Result[23] The appeal by way of case stated is therefore allowed. [24] No question of costs arises in this case because Mrs Marsden was granted legal aid for the purposes of the appeal and, as I have already noted, the concern of the Chief Executive was as to the underlying question of principle or law, not with recovery of monies from this particular respondent. ____________________________________________________________________Solicitors: Crown Law, Wellington for Appellant Cameron & Co, Christchurch for Respondent