WARNOCK (DECEASED) AND ANOR V CE MIN SOCIAL DEV CA CA10/05

WARNOCK (DECEASED) AND ANOR V CE MIN SOCIAL DEV CA CA10/05 16 March 2006IN THE COURT OF APPEAL OF NEW ZEALAND CA10/05BETWEEN D WARNOCK (DECEASED) First Appellant AND COMBINED BENEFICIARIES UNION INCORPORATED Second Appellant AND CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT Respondent Hearing: 20 February 2006 Court: William Young P, Hammond and O'Regan JJ Counsel: P D McKenzie QC and A J McGurk for Appellants J S McHerron and L M Fong for Respondent Judgment: 16 March 2006JUDGMENT OF THE COURT 1. The appeal is dismissed. 2. No order for costs. REASONS(Given by Hammond J)Table of ContentsPara NoIntroduction [1]Background: an advance is made [5]The determination of the Social Security Appeal Authority [15]The case stated [16]The High Court determination [24]The arguments for the appellant [26]The arguments for the respondent [28]Legislative context [30]Discussion [37]Conclusion [52]Introduction[1] This is an appeal from a judgment of Goddard J delivered on 8 October 2003 in the High Court at Wellington in CIV-1998-485-005. It requires us to determine whether s 125 of the Social Security Act 1964 ("the Act") authorised the Director- General of Social Welfare (as the respondent was then known) to charge interest on advances made to beneficiaries under that section. [2] That judgment was in respect of a case stated by the Social Security Appeal Authority dated 22 July 1998. [3] After the case stated was formulated, but before it was determined, Mrs Warnock died. The Combined Beneficiaries Union ("CBU") had assisted her in bringing her appeal. The CBU applied for joinder as a party to the proceedings. On 9 December 2002 Master Gendall (as he then was) directed the joinder, on the footing that there are more than 1,000 beneficiaries in a similar position to Mrs Warnock. Collectively they are affected by the challenge to the determination of the Social Security Appeal Authority. Unsurprisingly, in those circumstances, on 3 December 2004 Goddard J gave leave for the present appeal, without opposition from the respondent. [4] The case is "historic" in that the primary issue on the appeal is whether the Director-General was entitled to charge interest on advances under the now repealed s 125 of the Act. But for the reason we have already noted, the outcome of the appeal is of on-going interest to a large number of beneficiaries and disadvantaged New Zealanders.Background: an advance is made[5] We will have to return to a consideration of the context and terms of the legislation in greater detail later in this judgment, but for present purposes it suffices to note that, the precursor to s 125 of the Act entered our law in 1958 and was initially part of a 1938 statute which expressly gave as one of its purposes that it was to "provide assistance for the poor and needy who cannot otherwise support themselves". [6] In furtherance of that general concern, s 125 (and its 1958 precursor) enabled an advance to be made by the then Department of Social Security ("the Department") to a person who had no resources or prospects of paying for essential repairs to his or her home. The section relevantly provided as follows:125 Advances to beneficiaries and war pensioners for repair or maintenance of home, etc.(1) For the purposes of this section, "beneficiary" means any person who is in receipt of a benefit (as defined in section 3(1) of this Act) or of a pension or allowance under the War Pensions Act 1954 or the [spouse] of any such person; and, for the purposes of subsection (2) (d) of this section, includes any person whether or not he is in receipt of such a benefit, pension, or allowance. (2) Where a beneficiary occupies premises as a home on land— (a) In respect of which the beneficiary holds an estate or interest which is registered or capable of being registered under the Land Transfer Act 1952; or (b) Which is Maori freehold land (within the meaning of Te Ture Whenua Maori (Maori Land) Act 1993) in respect of which the beneficiary has a legal or equitable estate or interest—the Director-General may, in the Director-General's discretion and subject to such terms and conditions as the Director-General may determine, make advances to the beneficiary not exceeding— [emphasis added] (c) The sum of [$2,652] for the purpose of carrying out essential repairs to and maintenance of the premises or of providing essential services to the premises: (d) The sum of $500 for the purpose of complying with a requirement under the Resource Management Act 1991 to convert or replace domestic heating equipment.(3) Any advance under this section shall be a charge upon the estate or interest of the beneficiary in the land, and may be registered against the land under the provisions of the Statutory Land Charges Registration Act 1928. Where the land is Maori freehold land it shall not be necessary to obtain the consent of any person to the registration of the charge. (4) For the purposes of the Statutory Land Charges Registration Act 1928, notice of any charge under this section and any certificate releasing any such charge may be signed by any member of the Director-General or by any person authorised in that behalf by any member of the Director-General. (5) Except with the consent of the Director-General, no dealing in connection with any estate or interest in the land (other than a transmission on the death of the beneficiary) shall be registered while a charge under this section is registered against the land. (6) For the purposes of this section, a spouse of a beneficiary includes a person with whom the beneficiary has entered into a relationship in the nature of marriage notwithstanding that the parties to the relationship are not legally married to each other.[7] Mrs Warnock made an application for assistance under this section. An advance was approved on 3 November 1993 of a sum of $2,652, on the following terms:The advance will become a charge on the property under Section 125 of the Social Security Act and will be registered under the Statutory Land Charges Act 1928. The advance will bear interest at the rate of 5% per annum but this will be reduced to 3% if you continue to occupy the property as a home and interest is paid half yearly. If interest is not paid within one month of the due date, it will be charged at the rate of 5% and will be added to the amount of the advance. Temporary absence from the home will not be regarded as a cessation of occupancy. Payment in full may be required: (a) If the property is sold, transferred, or let (b) If the property ceases to be occupied permanently by you (c) If you come into possession of sufficient money or assets to enable you to repay the advance (d) If your benefit or pension is cancelled.[8] The Department's offer also contained the following advice:Although repayment will not be required except as indicated above, instalment [sic] will be accepted at any time in reduction of the advance. Please advise this office on the enclosed form whether you accept the loan on the conditions and, if so, whether you intend to pay the interest in cash each half year or wish it to be accumulated and added to the advance. A further option may be to arrange deductions directly from your Income Support which, if at $5.00 per week or above will meet your interest payments and also reduce your principal. Should you decide to accept the loan, the necessary arrangements will be finalised with you.[9] Mrs Warnock accepted the advance on 30 November 1993. Of the three options outlined for the method of payment of interest and/or principal, she elected to pay interest on a half yearly basis. [10] This advance was paid to Mrs Warnock on 30 June 1994 after the completion of repairs to her house. [11] A statutory land charge was duly registered securing the advance, in the conventional form. So far as is relevant for present purposes, it provided:Take notice that the land hereinafter described is subject to a charge of $2,652.00 (Two thousand six hundred and fifty two Dollars.) and any unpaid interest thereon on account of an advance made by Her Majesty the Queen (The Director-General of Social Welfare) by virtue of section 125 of the Social Security Act 1964 and that you are hereby directed and required to register the same pursuant to the Statutory Land Charges Registration Act 1928.The charge then went on to give the legal description of the land affected by the charge, being Mrs Warnock's home at Eketahuna. [12] On 15 November 1994, Mrs Warnock was advised that the Department's new policy was to require repayments of principal through fortnightly deductions from benefits. She signed a form stating that she wished to have $5.00 per week deducted from her benefit to repay the advance. [13] Thereafter, the CBU interested itself in Mrs Warnock's cause and on 3 May 1995 an advocate from the CBU, acting on Mrs Warnock's behalf, sought to have the legality of the condition that she pay interest on her advance reviewed.[14] Matters became rather more murky thereafter. Once the legality, simpliciter, of requiring interest payments had been put in issue, it was realised that there might be issues as to when the interest had to be paid (ie, whether it could be deducted from the benefit or not), and whether (as the Department had apparently adopted) there could be an "across the board" policy of requiring interest in every case. In other words, as so often happens in litigation of this character, the ambit of the inquiry began to widen somewhat.The determination of the Social Security Appeal Authority[15] The Authority determined:It seems to us that the words "subject to such terms and conditions as the Director-General may determine" must be given their ordinary and natural meaning. In any loan transaction, the most common term (apart perhaps from the covenant to repay) is a condition requiring payment of interest at a certain rate and at specified times. It seems to us that the words quoted are clearly apt to confer on the Director-General a discretion to require repayment of interest. That being so, we confirm the Director-General's decision in this regard.The case stated[16] It is in that context that we turn next to the somewhat problematical case stated which was before the High Court. [17] That case stated has been signed off by Mr N C Kelly, the then Deputy Chairperson of the Social Security Appeal Authority. [18] The case stated records at [9] that Mrs Warnock lodged an appeal with the Authority on the grounds:(a) There is no statutory authority for the Director-General to impose a condition requiring the payment of interest on a major repairs advance pursuant to s 125 of the Social Security Act. (b) That the Benefits Review Committee was wrong in law to find that they had no jurisdiction to hear the matter.[19] The case stated then proceeds:Determination The Authority determined:1. That s 125 of the Social Security Act contained a discretionary power that was wide enough to entitle the Director-General to adopt a policy to charge interest on all major repair advances. 2. That the appellant had no obligation to reduce the principal sum owing on the advance. 3. That the appellant has the option of paying interest either fortnightly or six monthly. 4. That there had been a problem arising from lack of adequate communication and that the appellant did not know that she had a right of review. The letter advising approval of the advance did not inform the appellant of her right to seek a review. 5. That the Department has an obligation to inform applicants of their rights.Questions of Law1. Was the Authority correct in law to determine that s 125 permits the Director-General to levy an interest charge as she sees fit? 2. Did the Authority err in law by accepting that the Director-General was entitled to charge interest under a general policy and thereby failed to consider whether they could exercise the discretionary power to not charge interest on a MRA in an individual case?Authority's Memorandum1. Although I have signed this case, I have done so with reservations. I am about to go overseas, and do not wish to contribute to any further delay in bringing the matter before the Court. 2. There has been extensive correspondence between the appellant's representatives and myself. Were time available, I would now settle the case by asking for the following amendments: (a) Paragraph 5 on page 2 should be amended by adding "but the then Chairperson directed that the appeal did not lie". (b) Paragraph (1) under Determination on page 2 - the Authority did not determine that the Director-General was entitled to adopt a policy to charge interest - merely that the section conferred a discretion to require payment of interest. (c) Consequently Question of Law (2) does not arise in the form in which it is asked. The appropriate question, in my respectful opinion, would be:"Did the Authority err in law in accepting that the Director- General exercised the discretion to charge interest correctly in this case?"[20] This is yet another illustration of the difficulties which routinely arise with appeals by way of case stated. Effectively the Authority has stated two questions for determination by the High Court, but has then said if time had been available we would have stated them differently. [21] Subject to r 748G of the High Court rules, there is no authority in the appellate court to whom a case stated is referred to amend the terms of it: if it is sought to amend or re-cast questions the proper course is to refer the matter back to the Authority before it is considered by the appellate court. The case stated is that of the Authority or body which refers it. [22] Further, question 2 of the case stated was itself distinctly defective in that there is no finding of fact by the Appeal Authority that the Department had any such general policy as was complained of, or was sought to be complained about. What was really being sought to be addressed under question 2 was much more in the nature of an issue which would normally arise on judicial review, namely as to whether there was an unlawful fettering of a discretion, which might itself raise questions of fact. Case stateds are not omnibus vehicles for the resolution of disputes. [23] The Authority also noted some other difficulties which had arisen out of the way in which the dispute had advanced:There are however some matters which need to be clarified. First, the Department should set out clearly for the appellant the amount of interest at 5% and also at 3% which will accrue half-yearly under the advance. Secondly, the appellant should be told that she has the option to pay interest in a lump sum half-yearly, or to have a fortnightly deduction made from her benefit of a sum which will meet the half-yearly instalment of interest. She should be told what this deduction would amount to. Third, the appellant should be asked to say whether she wishes to pay interest half-yearly in a lump sum, or by way of deduction from her benefit. At the same time she should be warned that it may well be to her advantage to have fortnightly deductions made because if she chooses to pay in a lump sum, and is late paying, she may well run into interest at 5% rather than 3%. Fourth, the appellant should be told that she has the right - at her option - to make additional repayments - either in lump sums or by way of fortnightlydeductions from her benefit - towards repayment of the principal amount of the loan. At the same time it should be made clear to her that she is under no obligation to reduce the principal sum owing under the loan - but it may well be in her long term interest to do so if she can afford to do it. One other matter remains. We gather that during the period when this matter has been under dispute the appellant has not made any of the half-yearly payments of interest required. The result of that may be that she has consequently incurred a liability for interest at the higher rate of 5% and has lost her right to the concessional rate of 3% in respect of those payments. We would like to think that the Department may find a way of adjusting this matter in a manner suitable to the interests of the appellant, particularly in view of her limited means. We note that at one time the deductions from the appellant's benefit were sufficient to repay some part of the principal sum owing under the charge. We would like to think that the Department might find a way of applying these principal repayments towards interest at 3% for the half-yearly dates on which interest was not in fact paid. This will of course result in the principal sum reverting to a higher figure, but that would not be so serious from the appellant's point of view as having to pay interest for those periods at 5%.The High Court determination[24] Goddard J concluded that the answer to the two questions stated in the case were as follows:Question (i): Was the Authority correct in law to determine that s 125 permits the Director-General to levy an interest charge as she see fit?[46] The short answer to question (i) is "yes". In this regard I find the Authority correct when it determined that s 125 of the Act contained a discretionary power that was wide enough to entitle the Director-General to adopt a policy to charge interest on all advances under the section.Question (ii): Did the Authority err in law by accepting that the Director- General was entitled to charge interest under a general policy and thereby failing to consider whether they could exercise the discretionary power to not charge interest on a [major repairs advance] in an individual case?[47] There is no short answer to this question. The long answer is that once again the Authority's determination is correct. The Director-General was entitled to promulgate a general policy requiring interest to be charged on all advances under s 125. He did not unlawfully fetter his discretionary power under s 125 by determining that the general policy should apply in all cases. The advances were in the nature of a loan and constituted a debt voluntarily assumed by a borrower. The manner in which interest was charged was discretionary and at the election of the borrower.[25] We observe that the third sentence in [47], above, is ambiguous. It could mean that the Director-General did not have a general policy which applied in allcases. Alternatively, it could mean that he did, but that such a policy was not an unlawful fettering.The arguments for the appellant[26] On the first question Mr McKenzie QC argued as follows: (a) The Chief Executive, as a public officer charged by statute with the exercise of statutory powers, may only exercise such powers as are conferred by the statute or can be regarded as fairly incidental or consequential on the exercise of express power. (b) The statute contains no express provision for the charging of interest. Neither is the charging of interest incidental or consequential upon that which has been established, namely the making of an advance for the purpose of essential repairs and maintenance to a beneficiary's home. The fact that interest is not included in the statutory charge also points in this direction. (c) Whether Mrs Warnock agreed to pay interest is irrelevant. The issue is whether there was statutory authority to charge interest, regardless of any suggested complicity on the part of Mrs Warnock. (d) In construing the statute, the Court should have regard to the negative approach of the common law to the charging of interest. (e) To the extent that the respondent had argued that the Property Law Act 1952 and also equity would support an obligation to repay principal and interest, that is unsound and should be rejected. Resort to definitions in other statutes is unhelpful inthis case. The implied covenant in Schedule 4, of the Property Law Act 1952 provides for interest only "in accordance with the provisions of the mortgage". If those provisions are silent there is no implication as to interest. It is only in the case of an equitable mortgage that equity implies the payment of interest, this arising from equitable rights in relation to foreclosure and redemption. The present case concerns a statutory charge, not an equitable mortgage. It is to the provisions of the statute that the Court must look. (f) It is a long-established constitutional principle that the Crown may not levy an impost or tax on the subject in the absence of clear statutory authority, conferred either by way of express words or necessary implication from the statute. There are no such clear words or necessary implication under s 125. Issues of reasonableness are irrelevant. (g) The respondent's argument that there is a direct relationship between the interest charged and the cost to the Government in providing this service, is unsound and should be rejected. No part of the interest charged by the Chief Executive represents the cost of any service provided by the Chief Executive. The costs are reimbursed to the Chief Executive from money appropriated by Parliament for the purpose. (h) Goddard J was wrong to treat applicants under s 125 as having a "choice" as to whether or not to accept the advance offered by the Chief Executive. This is not a normal commercial situation: a beneficiary in a position of need is not open to making market choices in meeting that need. [27] On the second question (whether the Director-General had fettered his discretion under s 125) Mr McKenzie submitted:(a) The proper course for the Court to follow is to determine whether the Judge was correct in her approach to this question. Further the policy adopted by the Director-General to charge interest on all advances fettered the discretion of the Director- General under s 125. It precluded the Director-General from having to consider the individual case. Mr McKenzie further contended that Goddard J was wrong to say that the Director- General's discretion was not fettered because individual applicants could elect whether or not to accept a loan, on which interest is fixed in accordance with the general policy. (b) The approach taken by Goddard J rests on a fallacy. Issuing a general policy which applies to all cases will constitute a fettering of the policy marker's discretion, regardless of the way in which those affected by the exercise of the discretion may respond to it. (c) It is no answer to say that beneficiaries could obtain loans from private sources on less favourable terms than s 125 advances: it is precisely because persons could not afford finance elsewhere that the s 125 advance had been made available. (d) Although there is presently no recorded challenge to the Director-General's policy it is the very fettering of the discretion - the making of a policy that applies to all cases - that is in issue. Whether or not persons have objected to that policy is not relevant.The arguments for the respondent[28] Mr McHerron argued that the Director-General was entitled to charge interest under s 125, because:(a) The advances were "subject to such terms and conditions as the Director-General may determine". (b) Interest is the "most common term" in a loan, apart from repayment. (c) Interest was expressly agreed between the Director-General and Mrs Warnock as part of a loan transaction that was secured on the residential property she owned. (d) Interest is implied where a loan is secured (Property Law Act 1952), and power to charge an estate implies a power to charge with interest. Other terms might be implied, for instance repayment or release of the charge. (e) A requirement to repay the advance and interest was "fairly incidental to and consequential upon that which is expressly authorised" under s 125. (f) The appellant's policy arguments based on "benefits" are not of assistance to them. Section 125 ought to be seen as a Government loan scheme for beneficiaries: it was not a "benefit". (g) The interest component of s 125 advances was not a tax, as there was a direct relationship between the interest charge and the cost to Government of providing the advances. [29] On question two, Mr McHerron argued that the Director-General was entitled to have a general policy that interest was payable: such a policy was consistent with the broad discretion under s 125 and with the Act as a whole. In any event, the whole question was somewhat artificial and abstract on the facts of Mrs Warnock's case, as she had not challenged the particular exercise of the discretion.Legislative context[30] The Social Security Act of 1938 was one of the cornerstones (if not thecornerstone) of the welfare state in New Zealand. The long title provided that it was an Act to provide for the payment of superannuation benefits and of other benefits designed to safeguard the people of New Zealand from disabilities arising from age, sickness, widowhood, orphanhood, unemployment, or other exceptional condition; to provide a system whereby medical and hospital treatment will be made available to persons requiring such treatment; and, further, to provide such other benefits as may be necessary to maintain and promote the health and general welfare of the community. The background to the Act is set out in Bassett and King, Tomorrow Comes the Song: A Life of Peter Fraser (2000) at page 149 et seq. [31] There was produced to us, although Mr McKenzie said it is of no moment, a copy of a Ministerial document from the Minister of Social Security in 1958, the Honourable Mabel Howard, which clearly indicated a Cabinet intention to make available loans "from the Special Assistance Fund for repairs to homes of social security beneficiaries ". These were not to exceed a stated amount with interest at the rate of 5% reducible to 3% if the home continued to be occupied by the beneficiary, and interest was to be paid annually. The law draftsman was authorised to proceed with an amendment to give effect to this scheme and to provide that the amount of the loan and any accrued interest was to be a statutory charge to which the provisions of the statutory Land Charges Registration Act 1928 would apply. [32] This then was the genesis of s 106A of the Social Security Amendment Act of 1958, which was the precursor of the section with which we are concerned, namely s 125 of the Act . [33] There appears to have been only minimal discussion of the amendment in Parliament. On the first reading of the Bill, the Honourable Mabel Howard simply noted that "[cl 29] is a new provision which enables advances of up to £200 to be made to beneficiaries for essential repairs to or maintenance of their homes". On the second reading the Minister said:In Clause 29 we have another completely new proposal: advances to beneficiaries and war pensioners for repairs to and maintenance of their home. For many years Members of Parliament have received requests from people for special assistance, sometimes considerable amounts, for the purposes of repairing spouting, roofs, and other parts of the house, and for painting. It was almost impossible in many cases for the beneficiaries to get the work done because they cannot save the necessary money, so we have taken in this amendment the right to advance to such people a sum not exceeding £200 so that they can get essential repairs to their homes carried out. These advances are to be registered as a charge against the property, and all precautions are taken to safeguard the loan. The people can pay the money back over a long period if they so desire, but they do not need to if they cannot save the money, and the charge remains on the property when the two people have passed on and the property is sold. (Hansard 24 September 1958 at 2039).[34] The Right Honourable K J Holyoake (the then Leader of the Opposition) noted that Clause 29 went beyond what had been foreshadowed at the election leading to the re-election of the then administration, but supported it as a "very proper and worthwhile provision" (supra at 2040). The question of interest appears not to have been raised in Parliament. [35] It is worth making this point. Because of the way in which this amendment came up in the history of the social security legislation in New Zealand, it does not sit entirely easily in the "scheme" of the Act. It was effectively a "clip-on" legislative provision, as we have noted made under amendments more than 20 years after the initial Act was passed. It was slotted into the Finance part of the Act, with the advances to be made to beneficiaries coming out of the Consolidated Fund. [36] We have concluded that we are faced with an orthodox (and quite narrow) issue of statutory construction, which means there is no requirement to resort to this material for guidance in the interpretation exercise; indeed, it is not clear the Cabinet material was ever placed before Parliament. All what can be said is that a construction which led to interest being chargeable would at least be consistent with the relevant Cabinet determination at the time the scheme was implemented. But the issue for us is whether this is a proper construction of the statute itself.Discussion[37] What was authorised was something described as an "advance" to a recipient: defined as any person who is in receipt of a benefit (as set out in s 3(1) of the Act), or a pension or allowance under the War Pensions Act 1954, or the spouse of any such person (see s 125(1)). That beneficiary had to occupy premises as a home on land in which that person held an interest which was capable of being registered under the Land Transport Act 1952, or as Maori freehold land under the Te Ture Whenua Maori (Maori Land) Act 1993. [38] If those pre-conditions were satisfied then the Director-General could (in his or her discretion) "and subject to such terms and conditions as the Director-General may determine" make advances to that beneficiary not exceeding the statutory maximum. [39] If such an advance was made, it was to be secured as a "charge" against that land under the Statutory Land Charges Registration Act 1928. [40] The central issue before the Social Security Appeal Authority and the High Court was always, whether in the absence of express words, "interest" was one of the terms and conditions which the Director-General might "determine". [41] It is trite that a statute must be construed according to its text and in light of its purpose (Interpretation Act 1999 s 5). [42] It is accepted that s 125 does not contain, in terms, a power to charge interest. [43] It is important, we think, to understand the basis on which the respondent puts its case. The argument is not as to whether there is an "implied" power to charge interest. The law relating to "necessary implications" in statutes was recently reviewed by the House of Lords in McCarthy & Stone (Developments) Ltd v Richmond upon Thames London Borough Council [1992] 2 AC 48; and the Privy Council in B v Auckland District Law Society [2004] 1 NZLR 326; and this Court inHarness Racing New Zealand v Kotzikas [2005] NZAR 268. In particular, the PrivyCouncil in the Auckland District Law Society case expressly adopted what was said by Lord Hobhouse of Woodborough in R (Morgan Grenfell and Company Ltd) v Special Commissioner of Income Tax [2002] 2 WLR 1299 at 45), that a necessary implication is not the same as a reasonable implication. A necessary implication is one which necessarily follows from the express provisions of a statute construed in its context: it is a matter of express language and logic, not interpretation. [44] The respondent's argument here is rather that the Director-General is expressly given a very broad power to determine the terms and conditions on which the advance is to be made, and that that power is broad enough to include a requirement for the payment of interest. [45] We accept that a power to exercise a statutory discretion subject to terms and conditions to be determined by the decision maker will not usually warrant the imposition of terms requiring the payment of money, see for instance Mt Cook National Park Board v Mount Cook Motels Ltd [1972] NZLR 481. But we do not see that approach as applicable in the present context of a discretion to make advances on terms and conditions to be fixed by the Director-General. The terms and conditions on which an advance is made might be thought naturally to include requirements as to the payment of interest. [46] The case begins and ends, as the Appeal Authority and the High Court Judge saw it, with the proposition that the power which is reposed in the Director-General was sufficiently wide in this particular instance (and notwithstanding that beneficiaries were the recipients) to empower the charging of interest. [47] We do not find it particularly helpful to look to the position at common law, or under other statutes, in this particular instance. And the interest component of an advance under s 125 was not a tax. It was an advance or a loan secured against property, as it turns out, in view of the course the Director-General actually took, on favourable terms to a beneficiary. [48] In the result we agree with the High Court Judge that the answer to question 1 in the case stated is "yes".[49] As to question 2, there are the difficulties posed by the case stated. As the Appeal Authority itself has noted, the question in the form stated never arose before that Authority, and the most that could have been before the Authority was whether interest was correctly charged in this particular case. [50] The requirements for a case stated must be strictly observed. (See, generally,Laws of New Zealand, Civil Procedure at [553] and following.) We cannot therefore, strictly speaking, formally respond to question 2. What follows therefore are purely observations, for whatever assistance they may provide to the parties. [51] We have difficulty in seeing why the Director-General could not have evolved a base-line policy as to interest. But equally, it is difficult to see why that would not have made provision for applicants to have interest waived, in their particular case, if the circumstances warranted that course being taken. Ideally the waiver possibility would be expressed in the policy document, with delegation to appropriate officials to decide waiver applications. But as long as the Director- General did in fact remain open to the possibility of a waiver when asked, we see no particular grounds for concern. There is nothing in the material before us in this case that indicates that the Director-General did not remain open to such requests.Conclusion[52] The appeal is dismissed. [53] In the circumstances there will be no order for costs.Solicitors: Otene & Ellis, Auckland for Appellants Crown Law Office, Wellington