NIXON v CHIEF EXECUTIVE, MINISTRY OF SOCIAL DEVELOPMENT [2018] NZHC 3317

NIXON v CHIEF EXECUTIVE, MINISTRY OF SOCIAL DEVELOPMENT [2018] NZHC 3317 [14 December2018]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2018-485-447[2018] NZHC 3317UNDER the Judicial Review Procedure Act 2016IN THE MATTER OF judicial review of decision of cancelledSupported Living Payment, failure toprocess Emergency Benefit application; andapplication for review of decision not toallow application under s 66A of the SocialSecurity Act 1964BETWEEN CURTIS ANTONY NIXONApplicantAND CHIEF EXECUTIVE, MINISTRY OFSOCIAL DEVELOPMENTRespondentHearing: 3 December 2018Appearances: Applicant in personS J Leslie and L M Smith for respondentJudgment: 14 December 2018RESERVED JUDGMENT OF DOBSON J[1] The applicant in this proceeding for judicial review (Mr Nixon) is a long-termrecipient of social welfare benefits. He has pursued a range of challenges to refusalsby the respondent (the Chief Executive/the Ministry) to grant him various benefits towhich he has claimed entitlement.Benefit history[2] Between 25 November 2014 and 30 November 2016, Mr Nixon received asupported living payment (SLP), eligibility for which was defined in s 40B of theSocial Security Act 1964 (the Act), which relevantly provides:140B Supported living payment: on ground of sickness, injury,disability, or total blindness: eligibility and ineligibility(1) A person is entitled to the supported living payment under this sectionif he or she satisfies the criteria in subsections (1A) and (1B), and—(a) the person is totally blind; or(b) the person is permanently and severely restricted in his or hercapacity for work because of sickness, or because of injury ordisability arising (in either case) from accident or existingfrom birth.(2) A person is permanently restricted in his or her capacity for work ifthe chief executive is satisfied that—(a) the restricting sickness, injury, or disability is expected tocontinue for at least the period set out in regulations madeunder this Act for the purposes of this section; or(b) the person is not expected to live for the period set out in thoseregulations, because the person's sickness, injury, or disabilityis terminal.(3) A person is severely restricted in his or her capacity for work if thechief executive is satisfied that the person is incapable of regularlyworking 15 or more hours a week in open employment.[3] On 6 December 2016, the Ministry notified Mr Nixon that he was no longerentitled to the SLP and that he would thereafter be receiving a job seeker supportbenefit (JSB). Mr Nixon sought judicial review of that decision, but before it wasdetermined, the Ministry reviewed its decision. In a letter dated 14 June 2017,Crown Law confirmed to Mr Nixon that the Ministry would reinstate the SLP,backdated to December 2016. The letter advised that the Ministry would conduct afresh review of Mr Nixon's eligibility for the SLP in October 2018.1 A new act, the Social Security Act 2018, came into force on 26 November 2018 but its provisionsdo not apply to any of the issues raised in this judicial review.[4] The earlier application for judicial review was heard by Dunningham J on17 July 2017. In a judgment delivered on 1 August 2017,2 her Honour declined theapplication for any relief, but did acknowledge some aspects of arguments thatMr Nixon had advanced, including criticisms of the terms of medical assessmentforms issued by the Ministry.[5] On 29 September 2017 and 15 November 2017, Mr Nixon made successiveapplications for an emergency benefit, as provided for in s 61 of the Act:61 Chief executive may grant emergency benefit in cases of hardship(1) The chief executive may, in the chief executive's discretion andsubject to such conditions as the chief executive thinks fit to impose,grant an emergency benefit under this Act on account of hardship toany person who satisfies the following conditions, namely:(a) that by reason of age, or of physical or mental disability, or ofdomestic circumstances, or for any other reason, he is unableto earn a sufficient livelihood for himself and his dependants(if any); and(b) that he is not qualified to be granted a main benefit under thisAct, New Zealand superannuation, or a veteran's pension:provided that the chief executive may at any time, in the chiefexecutive's discretion, grant an emergency benefit instead of or insubstitution for a supported living payment, sole parent support, orjobseeker support:(2) The rate of the emergency benefit shall, in each case, be in thediscretion of the chief executive, but, except in any case where thebeneficiary is receiving medical or other treatment, shall not exceedthe rate to which the beneficiary would be entitled if he were qualifiedto receive such other benefit as in the opinion of the chief executive isanalogous to the emergency benefit.[6] These applications were made on the ground that Mr Nixon shared the custodyof his young daughter and the SLP he was being paid ought to be topped up to meetwhat he would be eligible for under the sole parent support benefit. Both of thoseapplications were rejected. Mr Nixon applied for reviews of both those decisions, on9 November 2017 and 13 December 2017 respectively.2 Nixon v Chief Executive, Ministry of Social Development [2017] NZHC 1807.[7] On 29 January 2018, before the internal stage of reviews of those decisions hadoccurred, Mr Nixon began working as a teacher aid. From that date, the Ministryreduced the SLP by the extent of the wages Mr Nixon reported he was earning. On19 February 2018, the Ministry notified Mr Nixon it had stopped the SLP entirelybecause it was exceeded by the wages Mr Nixon was receiving.[8] On 11 February 2018, Mr Nixon requested the Chief Executive to exercise hisdiscretion under s 66A of the Act to disregard the income he was receiving for thepurpose of computing the extent of benefit otherwise payable to him. That provisionis in the following terms:66A Special exemption for severe disablementFor the purposes of computing any benefit payable, the chief executive mayin the chief executive's discretion, as an incentive to personal effort, disregardall or part of the income of any severely disabled person derived from sucheffort.[9] In his request, Mr Nixon reasoned that his receipt of the SLP under s 40B ofthe Act required that he be permanently and severely restricted in his capacity forwork, which he equated with the requirement under s 66A for a person to be severelydisabled. He argued that the same tests applied under ss 40B and 66A, so that abeneficiary recognised as permanently and severely restricted in his or her capacity towork under the former section must also be recognised as severely disabled for thepurposes of the latter section.[10] On 23 May 2018, the Chief Executive declined Mr Nixon's application forexemption under s 66A. In June 2018, the Chief Executive received an applicationfor review of the decision to decline the s 66A exemption. An internal review wascompleted on 18 June 2018, confirming the rejection of the request for an exemption.[11] Meanwhile, on 19 April 2018 Mr Nixon made a third application for anemergency benefit. On 1 May 2018, the internal review of the first two decisionsdeclining Mr Nixon's application for an emergency benefit was made, upholding theoriginal decisions.3[12] Because Mr Nixon was not paid during the school holidays, the Ministryrecommenced payment of the JSB from 17 April 2018. This payment appears to havestopped at the end of April 2018. The JSB resumed again between 23 May and 4 June2018, and again between 11 June and 23 July 2018.[13] Mr Nixon filed the current application for judicial review on 23 July 2018, inwhich he complains that the Ministry is bound by the terms of the June 2017 CrownLaw letter, which arguably entitles him to be paid the SLP continuously until October2018. In a further letter to Mr Nixon dated 31 August 2018, Crown Lawacknowledged that there was a "lack of clarity" in the 14 June 2017 letter, and that itshould have recorded that the entitlement would be reviewed earlier than October 2018if Mr Nixon's circumstances changed. The letter made the point that the Ministry isbound by the law and is not able to pay a benefit unless there is a statutory entitlement,in the case of an SLP, under s 40B of the Act.[14] On 25 July 2018, the Benefits Review Committee4 heard Mr Nixon'sapplication to review the refusal of his first two applications to be paid emergencybenefits.[15] On 21 November 2018, subsequent to submissions being filed for the presentproceeding, the Ministry advised Mr Nixon that his third application for emergencybenefit had been reviewed. The Ministry accepted that an emergency benefit shouldhave been granted during the school holiday period from 17 to 30 April 2018.However, Mr Nixon had been granted a JSB over that same period which would havebeen paid at the same rate, so no arrears were due to him.3 The terms of the letter advising Mr Nixon of the outcome of the internal review refer to a singledecision to decline the emergency benefit, but the Ministry deponent, Jennifer Mary Allan, statedthat the internal review was of both the earlier applications.4 See [19] and [20] below.Relief sought[16] In his statement of claim in this judicial review, Mr Nixon seeks the following:(a) An order that the Ministry be required to reinstate his SLP at least untilthe review that the 14 June 2017 Crown Law letter stated would occurin October 2018. That would require payment to him of the differencebetween the JSB and the SLP throughout the period where the higherbenefit has not been paid.(b) An order that the Ministry accept his application under s 66A of the Actfor exemption of any income earned whilst he receives the SLP.(c) An order that the Ministry accept his application for an emergencybenefit for the amount of the difference between his benefit and the soleparent single child rate, with that top-up to be backdated to the datewhen he started the shared care of his daughter in September 2007.(d) An order directing the Ministry to change the wording and format ofthe medical certificate form that he had criticised in the earlier judicialreview.(e) An order directing changes to the guidelines provided by the Ministryfor the conduct of medical appeal boards so that appellants before thatbody could make legal arguments and have them considered.(f) A direction that the Ministry repair its "failed and negligentcommunication process" with him, including an apology said to beowed because of the Ministry's negligence.[17] Mr Nixon's statement of claim did not include any allegations of the forms ofunlawfulness alleged against the Ministry that could justify the Court's intervention inits judicial review jurisdiction of the exercise of statutory powers. There was, forexample, no allegation that any of the decisions challenged were not ones that theChief Executive, correctly directed as to the law, could have arrived at. Nor was thereany allegation that the Chief Executive had misdirected himself as to the law. Muchof the factual narrative described dealings between Mr Nixon and the Ministry inwhich he disputed the merits of the decisions it had arrived at. In short, for the mostpart Mr Nixon wanted to run a merits appeal against the reasonableness of decisionsmade in the name of the Chief Executive to decline his various applications.[18] The Ministry has taken the point that the Court cannot or ought not entertainan application for judicial review where a statutory process, with a number of levelsof review and appeal on the merits of decisions made, is available to Mr Nixon andthose rights have not been exhausted.[19] The Act provides for a Benefits Review Committee, which is comprised of twoMinistry staff who have had no involvement in a decision under review, and acommunity representative who is appointed by the Minister of Social Development.5The practice of the Ministry is to conduct an internal review of the request for review,before it is referred to the Benefits Review Committee. Thereafter, a statutory rightof appeal exists from decisions of the Benefits Review Committee to the SocialSecurity Appeals Authority (SSAA).6 Further appeals on questions of law are alsoprovided for to the High Court and, with leave, to the Court of Appeal.7[20] The Benefits Review Committee and the SSAA can both be seen as specialisttribunals with a developed expertise in assessing eligibility concerns.[21] In the present case, the Ministry has attempted to progress Mr Nixon'sunresolved challenges to the Ministry's more recent decisions on entitlement to anemergency benefit, and the exercise of the s 66A discretion. Hearings before theBenefits Review Committee on those topics were set for July and August 2018. Bothhearings were cancelled at Mr Nixon's request because he wanted to defer advancingthose until after determination of this judicial review.5 Social Security Act 1964, s 10A(3).6 Section 12J.7 Sections 12Q and 12R (which provides a cross-reference to the Criminal Procedure Act 2011, Pt 6,subpt 8).[22] Internal reviews have produced a measure of success for Mr Nixon. Any grantof relief in judicial review is always discretionary. I accept the point made byMs Leslie for the Chief Executive that the Court should be reluctant to grant relief ona matter where the Ministry has facilitated a review on the merits of decisions, andthey have not been resolved. This would particularly be the case where the groundsfor judicial review are not raised in conventional terms of unlawfulness, oradministrative law unreasonableness.[23] In Meek v Chief Executive of the Ministry of Social Development, whichinvolved similar circumstances, the Court struck out a claim for judicial review by abeneficiary.8 Ellis J summarised the circumstances as follows:9[29] First, Mr Meek does not identify any error of law or process whichmight vitiate the decisions. That point alone means that no tenable cause ofaction is disclosed.[30] Secondly, he had statutory rights of appeal against those decisions.And while the existence of appeal rights does not preclude a claim for review,they do call into question its utility. And again the more fundamental point isthat Mr Meek does not plead how he has been denied these rights. Indeed, hisassertion appears somewhat contrary to the reality, which is that he has in factsuccessfully appealed the second decision to the Benefits Review Committee,and subject to the operation of statutory time limits it remains open to him toappeal the third one.[24] Ellis J found that none of Mr Meek's claims could give rise to a tenable causeof action and the application was struck out.[25] The nature of Mr Nixon's criticisms of the Ministry render the specialist appealprocedures appropriate, so that judicial review should only be used sparingly, if at all,where those procedures have not been exhausted.10 Where such specialist appealprocedures provide a more appropriate forum for addressing the complaints, judicialreview relief may be refused even if grounds are made out.118 Meek v Chief Executive of the Ministry of Social Development [2016] NZHC 967.9 Citations omitted.10 Reekie v Legal Services Agency [2010] NZCA 538 at [16]; citing Fraser v Robertson [1991]3 NZLR 257 (CA) at 260.11 For example, Tannadyce Investments Ltd v Commissioner of Inland Revenue [2011] NZSC 158,[2012] 2 NZLR 153.[26] No application to strike out the statement of claim was made in this case.Despite inviting an analogy with the outcome in Meek, Crown counsel presentedsubstantive submissions defending the lawfulness of the Ministry's decisions. Iaccordingly address Mr Nixon's concerns in relation to each category of benefit orexemption he has sought from the Ministry.Holding the Ministry to the 14 June 2017 letter[27] Although Mr Nixon did not express it as such, he effectively argued that theterms of the Crown Law letter of 14 June 2017 estopped the Ministry from reviewinghis entitlement to the SLP before October 2018.[28] The June 2017 letter stated the Ministry would take several steps, includingreinstating the SLP and backdating it with payments covering the difference betweenwhat Mr Nixon had received since November 2016 by way of JSB, and the SLP. Italso stated the Ministry: will conduct a fresh review of your eligibility for Supported LivingPayment in October 2018.[29] After Mr Nixon had objected to the termination of the SLP, Crown Lawacknowledged, in its letter of 31 August 2018, that its earlier letter should haverecorded that Mr Nixon's entitlement would be reviewed earlier if his circumstanceschanged but did not, and apologised for the "lack of clarity in the letter".[30] The relevant passage of the June 2017 letter expressed a present intention inrelation to future conduct. In that sense, it was not an unqualified commitment. I didnot hear detailed argument on whether the statement about the duration for which theSLP would be paid is reasonably subject to the implicit qualification that the Ministry'sthen intention was not to undertake a review, unless there was a material change inMr Nixon's circumstances. Assuming (without deciding) that Mr Nixon could makeout a representation in all the circumstances of his dealings with the Ministry that theCrown Law June 2017 letter reasonably assured him that there would be noreconsideration of his entitlement to the SLP before October 2018, irrespective of anychanges in his own circumstances, then the question would be whether such arepresentation of future intentions would be binding on the Ministry.[31] An agency of the Crown cannot bind itself to act other than in accordance withthe law. The Ministry has no authority to make payments unless the recipient isentitled to such payments under the statutory scheme. There could therefore be noenforceable promise for the Ministry to continue paying the SLP to Mr Nixon,notwithstanding the Chief Executive's delegates having reasonably reached a viewthat he was no longer entitled to it.[32] Whatever weight Mr Nixon sees the statement in the June 2017 letter addingto his criticisms of his treatment by the Ministry, the non-compliance with therepresentation of future conduct does not constitute a reviewable error.Emergency benefits[33] Mr Nixon claims an entitlement to an emergency benefit to top up his benefitpayments to the level of a sole parent single child rate.[34] There are three provisions in the Act which stand in the way of Mr Nixon'sclaim for such a top-up during periods in which he was receiving another benefit. Thefirst is s 61, the relevant provisions of which are set out at [5] above.[35] At the time of Mr Nixon's first two applications for an emergency benefit, hewas in receipt of the SLP and accordingly could not satisfy the requirement ins 61(1)(b) that he not be qualified for a main benefit. The first proviso within subs (1)does create a discretion for the Chief Executive to grant an emergency benefit insteadof, or in substitution for, a benefit. When read together with the limit on the extent ofemergency benefits that might be paid in s 61(2), the practical outcome is thatMr Nixon could not make out an entitlement to an emergency benefit for any morethan the amount he was already being paid at the time he made the first two of hisapplications for an emergency benefit.[36] The Act also includes a more general limitation in s 72, which is materially inthese terms:72 Limitation where applicant receiving another benefit or pensionNotwithstanding anything to the contrary in this Act,—(a) no person is entitled to receive more than 1 benefit in his or her ownright, except as provided in sections 39D, 61EA, 61FG, 61G, 61GA,and 69C, and section 23 of the Social Security (Working for Families)Amendment Act 2004:[37] The combined effect of the provisions in ss 61 and 72 precludes anyentitlement to an emergency benefit where an applicant is entitled to receive one ofthe other forms of benefit administered by the Ministry.[38] The ground relied on by Mr Nixon for claiming an emergency benefit in thefirst two instances, namely the extra costs he incurred during periods when he had day-to-day care of his daughter, is also a situation that is addressed in the Act. Section 70Bprovides:70B Entitlement to benefits in cases of shared custody(1) If the parents of a dependent child—(a) are living apart; and(b) are both beneficiaries; and(c) each has the primary responsibility for the care of that childfor at least 40% of the time—only the parent whom the chief executive is satisfied has the greaterresponsibility for the child shall be entitled to have that child takeninto account by the chief executive in assessing that parent'sentitlement to a benefit and the rate of benefit payable at any one time.(3) If the chief executive is unable to ascertain that one parent has thegreater responsibility for the child than the other, only the parentwhom the chief executive ascertains was the principal caregiver inrespect of the child immediately before the parents began living apartshall be entitled to have that child taken into account by the chiefexecutive in assessing that parent's entitlement to a benefit and therate of benefit payable.[39] Throughout the relevant period, Mr Nixon's former partner has been receivinga benefit that takes account of her care responsibilities for their daughter, so theprovisions of s 70B exclude the prospect of Mr Nixon also claiming a sole parentsupport benefit. Mr Nixon has unsuccessfully challenged the provisions of s 70B(3)as being unlawfully discriminatory of him before the Human Rights ReviewTribunal.12 It would clearly subvert the structure of the various benefits provided forin the Act if a payment was made to Mr Nixon on account of child care costs wherethe child's other parent is receiving a benefit that takes into account the care of thesame child.[40] The Ministry initially declined to accept Mr Nixon's third application for anemergency benefit. However, since submissions have been filed in this proceeding,the Ministry has completed an internal review and accepts that an emergency benefitshould have been granted during the school holiday period from 17 to 30 April 2018.Throughout that period he was in fact receiving a JSB at the same rate as theemergency benefit and therefore no arrears were payable to him. Even if theMinistry's conduct on that application raised any prospect of unlawfulness, reliefwould be refused on the basis that the matter is moot.Challenging the s 66A discretion[41] The Ministry has previously recognised Mr Nixon as "permanently andseverely restricted" in his capacity for work for the purposes of his entitlement to anSLP under s 40B of the Act. Mr Nixon treats that acknowledgement as requiring theMinistry to also accept that he is a severely disabled person for the purposes of s 66A.Once that characteristic is established, he argues that he ought to be exempt from therequirement that income earned reduces the amount of a benefit he would otherwisebe paid because he should be incentivised to make personal effort as is contemplatedby the terms of s 66A.[42] The Ministry distinguishes the tests under s 40B and s 66A. It disputes thatMr Nixon is severely disabled for the purposes of s 66A, irrespective of whether he ispermanently and severely restricted in his capacity for work.[43] Section 66A was enacted in 1972 to give effect to recommendations in thereport of the Royal Commission on Social Security. Relevantly, that Commissionrecommended that the then Department be given authority as an aid to rehabilitation12 Nixon v Attorney-General [2018] NZHRRT 9.to disregard some or all of the earnings of a severely disabled person when determiningthe amount of that person's benefit.13[44] Ms Leslie submitted that the exemption could not reasonably be exercised inMr Nixon's favour where his disability is not to an extent that requires additional helpor effort to get into work and, when he was working, the level of his earningssubstantially exceeded the relevant benefit. Extending the exemption in thesecircumstances would constitute a reward for Mr Nixon, rather than an incentive toexpend personal effort in obtaining work.[45] The correct approach to a request for exemption under s 66A was consideredin Charlton v Chief Executive of the Ministry of Social Development.14 That was anappeal to this Court from a decision of the SSAA. This Court upheld the SSAA'srecognition of whether a severely disabled person incurred work-related costs whichcould justify the exercise of the discretion and also whether there were circumstancesjustifying the exercise of the discretion purely as an incentive to the disabled personto make personal effort. Heath J described the approach taken by the SSAA in thefollowing terms:[51] The approach taken by the Authority was to regard as relevant to theexercise of the discretion costs incurred by a particular applicant. The higherthe costs incurred to obtain employment, the more likely the discretion wouldbe exercised. Although not specifically referred to in the Authority's decision,[counsel for the Chief Executive] helpfully provided other examples of thetypes of costs that might be relevant: eg the costs incurred in transportationfrom home to employment where a wheel chair is used as a result of theunavailability or unsuitability of the public transport system.[46] Mr Nixon did not suggest there was a constraint on the discretion under s 66Athat precluded the Chief Executive adopting this approach, nor is there any suggestionthat the approach adopted is inconsistent with any policy on how the discretion isexercised.13 Thaddeus McCarthy (chair) Social Security in New Zealand: Report of the Royal Commission ofInquiry [1972] IV AJHR H53 at 275.14 Charlton v Chief Executive of the Ministry of Social Development HC Auckland CIV-2004-485-969, 21 March 2005.[47] I agree that the concepts of permanently and severely restricted in capacity forwork on the one hand, and severely disabled on the other, are different. They arise indifferent contexts, and have different purposes. Further, Mr Nixon did not identifyany unusual costs incurred by him in order to earn the amounts he had as a teacher aid.Accordingly, there is no basis on which the discretion to decline Mr Nixon theexemption in his various applications under s 66A raises any concern that it could beimpugned in an administrative law sense.Additional orders soughtTerms of work capacity form[48] One of Mr Nixon's additional concerns was the failure of the Ministry tochange the terms of a work capacity form provided to doctors undertaking assessmentsof beneficiaries. Ms Leslie advised that similar relief had been sought beforeDunningham J who recognised certain difficulties with the form but was not preparedto grant any such relief.[49] There is no basis on which I could revisit that aspect of an earlier judicialreview that has been determined, and not appealed.Directing medical appeal boards to hear legal arguments[50] I discussed with Mr Nixon the range of reasons why this was untenable.[51] The right to appeal on medical grounds is provided for in s 10B of the Act. TheBoard that hears such appeals is provided for in s 10B(4) in the following terms:10B Right of appeal on medical grounds(4) The Board is to comprise 3 members to be appointed by the chiefexecutive for the particular purpose, being medical practitioners,rehabilitation professionals (as defined in subsection (5)), or otherpersons having appropriate expertise in the fields of vocationaltraining or vocational support for persons with sickness, injury, ordisability.[52] The Board's function is to enable applicants or beneficiaries who wish todispute findings on medical or medical-related grounds (where they affect benefitentitlements) to have medical opinions relied on by the Ministry reconsidered.Decisions of the Board are binding on the Chief Executive.[53] There is no provision for legal expertise to contribute to the Board'sdeliberations and the subject matter of decisions affecting applicants or beneficiariesthat can be reconsidered by the Board on appeal are clearly intended to be distinctfrom any legal issues arising. This argument of Mr Nixon's was misconceived.Better communication by the Ministry[54] Finally, Mr Nixon sought an order that would compel better communicationprocesses by Ministry staff with him, including an apology. An apology has beentendered in Crown Law's letter of 31 August 2018 and it is beyond the powers of theCourt, even if grounds were made out, to order such an apology.Outcome[55] Accordingly, all aspects of the application for judicial review are dismissed. Ido not understand any issue of costs to arise but reserve leave in the event that theMinistry wishes to pursue costs.Dobson JSolicitors:Crown Law, Wellington for respondentCopy to:The applicant