NIXON v CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT [2017] NZHC 1807 [1 August 2017]

NIXON v CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT [2017] NZHC 1807 [1 August 2017]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV-2017-485-000046[2017] NZHC 1807UNDER the Judicature Amendment Act 1972IN THE MATTER of an application for reviewBETWEEN CURTIS ANTONY NIXONPlaintiffAND CHIEF EXECUTIVE OF THEMINISTRY OF SOCIALDEVELOPMENTDefendantHearing: 17 July 2017Appearances: Applicant in personO Upperton and K Hutchinson for RespondentJudgment: 1 August 2017JUDGMENT OF DUNNINGHAM J[1] On 30 November 2016, Mr Nixon was transferred from receiving the supported living payment (SLP)1 to job seeker support (JSS) by Work and Income.2This step was taken after Work and Income received a Work Capacity medical formcompleted by the plaintiff's doctor, Dr Anthony Dowell. The form contained a question "Can the person undertake suitable and open employment ifaccommodations, support and services are provided? Dr Dowell answered "yes" tothat statement, and confirmed that Mr Nixon could regularly work more than 15 hours and less than 30 hours per week.1 The benefit which replaced the benefit known as an invalid's benefit.2 Work and Income is a service delivery arm of the respondent.[2] Mr Nixon now challenges the decision to place him on a JSS benefit. He alleges that the question on the standard form does not accurately reflect the test in the Social Security Act 1964 (the Act) and, as a result, the decision was made on an erroneous basis.[3] The Ministry of Social Development (the Ministry) has since reversed the decision and back-paid Mr Nixon the difference between the two benefits. It did this because it could not find any records of the decision-making process and could not identify the decision-maker. As a consequence, it considered it could not defend the particular decision under review and so reversed it.[4] In any event, though, the Ministry says the Work Capacity form is simply a tool the Ministry uses to ascertain what support a person might need to work. It does not determine eligibility for a benefit or whether a person can work in open employment. That decision is made based on the medical information together with other relevant information, in accordance with the Ministry's guidelines, to determine whether the statutory test for eligibility for SLP is met. Thus, theMinistry's decision-making process is robust and accurately reflects the statutory test.[5] Furthermore, it says Mr Nixon had not availed himself of the review and appeals process provided for under the Act which allows for such decisions of the respondent to be challenged.[6] For these reasons, the Ministry considers that the Court should exercise its discretion to decline the relief sought.[7] The issues for determination are, therefore:(a) What effect does the reversal of the Ministry's decision have on Mr Nixon's application for judicial review?(b) Is the current wording of the Work Capacity form flawed in any of the ways suggested by Mr Nixon?(c) If yes, does this mean there is an error in the decision-making process?(d) If it does, what relief, if any, should be granted?Background[8] Mr Nixon has a history of benefit dependence, interspersed with periods of full and part-time employment. After periods of being on an unemployment benefit or a sickness benefit, he was placed on an invalid's benefit in 1996. That changed in 2009 when he obtained employment with Land Information New Zealand, with his hours of work gradually increasing from 20 hours per week to 40 hours. However,he explains that he "started to suffer from increasing stress from overwork which led to physical and mental symptoms leading to burn out". He went back on a benefit in 2011, receiving the SLP.[9] On 25 November 2014 Mr Nixon was transferred from SLP to JSS. He appealed the decision to transfer him to JSS to the Medical Appeals Board. On 3 July 2015, the Board agreed to overturn that decision, transferring Mr Nixon back to SLP from that date, but recommended his eligibility for SLP be reviewed in 24 months.[10] In October 2016, the Ministry requested up to date medical information for Mr Nixon as part of a review of his eligibility for SLP.3 Mr Nixon's medicalpractitioner, Dr Dowell, provided that information to the Ministry on 27 October 2016, on the standard Work Capacity form provided to him by the Ministry. That form stated that, in the doctor's opinion, Mr Nixon was able to work regularly more than 15 hours and less than 30 hours per week, in suitable and open employment, if "accommodations, support and services were provided". However, the doctor did not respond to the question "what accommodations, supports orservices could be put in place to assist the person into suitable and openemployment".3 Undertaken pursuant to s 81 of the Act.[11] On 3 November 2016 the Regional Disability Adviser, Brenda Keating, recommended that Mr Nixon did not meet the criteria for SLP on the basis that he was not severely restricted in his capacity for work, because he was capable of regularly working 15 or more hours in open employment. She recommended that Mr Nixon met the criteria for JSS with part-time work obligations. When making her recommendation, Ms Keating recorded that she had taken into account the medical certificate provided by Dr Dowell, along with the Medical Appeals Board report, and she had also telephoned Dr Dowell to discuss and clarify his opinion regarding Mr Nixon's ability to work.[12] On 6 December 2016, an unknown case manager made the decision to transfer Mr Nixon from SLP to JSS. That decision was reviewed by the Ministry as a consequence of these proceedings. It reinstated Mr Nixon's SLP from the date itwas cancelled. It advised Mr Nixon that this was because "the decision-making and record keeping in your case has fallen short of the standard [the Ministry] wouldexpect".[13] Mr Nixon does not consider that this resolves the issue. He still considers the wording of the Work Capacity form is flawed because the question the medical practitioner is invited to answer addresses the ability to work in sheltered employment, and not in open employment, as those terms are defined by the Act. As a result, the Ministry is not applying the correct statutory test when making its decisions to transfer beneficiaries from SLP to JSS. That remains a live issue despite the reversal of the decision made in relation to Mr Nixon's benefit entitlement in late 2016.[14] As a consequence, Mr Nixon still seeks:(a) declaratory relief regarding whether the wording of the Work Capacity form conforms with the Act; and(b) if the wording does not, a direction from the Court that the Ministry review all cases where decisions have been made to end SLP payments where this form has been used.[15] For completeness, Mr Nixon's submissions also raised allegations ofmalfeasance by the Ministry. As these were not pleaded claims, and did not relate to the decision under review, I advised Mr Nixon I would not consider them in this hearing.The legal framework[16] The purpose of an SLP is to provide income support to people who have, and are likely to have in the future, a severely restricted capacity to support themselves through open employment because of sickness, injury, or disability.4[17] A person is entitled to the SLP if he or she is aged at least 16 years, meets the residential requirements, and:(a) is totally blind; or(b) is permanently and severely restricted in his or her capacity or work because of sickness, or because of injury or disability arising (in either case) from accident or existing from birth.5[18] Determining a person's eligibility for SLP involves a two-part test:(a) a person is permanently restricted in his or her capacity for work if the Chief Executive is satisfied that the restricting sickness, injury, or disability is expected to continue for at least two years;6(b) a person is severely restricted in his or her capacity for work if the Chief Executive is satisfied that the person is incapable of regularly working 15 or more hours a week in open employment.7[19] Both tests must be satisfied for the person to be eligible to receive SLP.4 Section 40A(1)(a).5 Section 40B.6 Section 40B(2)(a).7 Section 40B(3).[20] To assist the Chief Executive in making this determination, the Chief Executive may ask the beneficiary to provide an up to date medical certificate from his or her medical practitioner. The medical practitioner must certify whether, in their opinion, the beneficiary is or is not permanently and severely restricted in their capacity for work.[21] Both ss 40A and 40B of the Act (which set out the purpose of and eligibility for SLP) refer to the capacity to engage in "open employment". Where an individual is able to engage in open employment for 15 hours or more a week, they will not be eligible for SLP.[22] "Open employment" is defined in the Act as "employment other than sheltered employment".8 "Sheltered employment" is defined as including "employment in a sheltered workshop within the meaning of the Disabled Persons Employment Promotion Act 1960".9 Section 2 of the Disabled Persons EmploymentPromotion Act 1960 provided that "sheltered workshop" means "any place owned orcontrolled by an organisation and approved by the Minister under section 3 in which disabled persons are employed; and includes any hospital care institution within the meaning of section 58(4) of the Health and Disability Services (Safety) Act 2001".While the Disabled Persons Employment Promotion Act 1960 has been repealed,10the term "sheltered workshop" continues to have the same meaning for the purposeof the Act.11 As it is critical to the issues raised in this case, I return to the distinctionbetween "open employment" and "sheltered employment" in the discussion below.What effect does the reversal of the Ministry's decision have on Mr Nixon'sapplication for review?[23] The application for review centres on the Ministry's decision to transferMr Nixon from SLP to JSS, but that decision has now been reversed. Given the discretionary nature of relief on an application for review, the Ministry suggests that relief should be denied as the dispute has effectively been resolved by other means.128 Section 3(1).9 Section 3(1).10 Disabled Persons Employment Promotion Repeal Act 2007, s 6.11 Disabled Persons Employment Promotion Repeal Act 2007, s 10.12 Turner v Pickering [1976] 1 NZLR 129.[24] However, I do not consider the reversal of the decision has resolved the issues of concern to Mr Nixon. The issue he raises relates to a standard form used by the Ministry in which, he suggests, the wording is erroneous, so that the subsequent decision is not made on information which reflects the statutory test. Mr Nixon, and others like him, will have their eligibility to receive SLP reviewed again in the future, and information obtained using that form will be relied on to make that decision. For that reason, I consider that the application for review still serves a useful purpose and it is appropriate to consider and rule on the issue raised by Mr Nixon.[25] I also do not consider that Mr Nixon should have to avail himself of the rightof appeal to the Medical Appeals Board first. As the Chief Executive's submissionsexplain, Mr Nixon also said that he had tried to raise this question before in front of the Medical Appeals Board in July 2015. However, he said he was stopped from doing so by the chairperson and told that the Board was not a legal tribunal and that they were not going to allow him to argue legal definitions there. He therefore sees no utility in raising this issue with the Board through the statutory appeal process. I accept that his position in that regard is reasonable.Is the Work Capacity form flawed in the ways suggested by Mr Nixon?Mr Nixon's submissions[26] Mr Nixon says the question in the Work Capacity form which asks "Can theperson undertake suitable and open employment?" is flawed because the addition of the qualifying clause "if accommodations, support and services are provided?"means that what is being asked about is the opposite of the concept of "open employment". Either the person is capable of working more than 15 hours in open employment per week, or they need accommodations, support and services in order to work those hours. He submits that the latter case would be sheltered employment not open employment.[27] Mr Nixon also pointed out there was other duplication and confusing wording on the form. For example, the form also includes an earlier question which reads:Is the person's capacity expected to:Improve and allow them to regularly undertake FULL-TIME work with appropriate accommodations and supportImprove and allow them to regularly undertake PART-TIME work with appropriate accommodations and support.Following on from that question is a question which read "what accommodations, supports or services could be put in place to assist the person into suitable and open employment?" In his view these questions were repetitive and they also repeated the error of the impugned question by conflating "open employment" with "sheltered employment".[28] In response to the Court's questions, Mr Nixon accepted that there was a graduation between open employment, which an able bodied person could undertake without any assistance, and fully sheltered employment, such as that offered in workshops for the intellectually handicapped, and that not all support or assistance to an afforded employee would make the employment "sheltered employment". However, in his view, employment such as he had at Land Information New Zealand was a form of sheltered employment. This was because he was being mentored, he was accommodated as to his start and finish times, he did not have the same expectations for what he could achieve, and he was paid less than other employees. Thus, in general, if accommodations, supports and services were required by an individual before they could work, they were likely to be in sheltered employment.[29] While he acknowledged that the decision as to whether the statutory test for receiving SLP was met was made by someone within the Ministry, and not by the doctor in question, he nevertheless considered that if the answer provided by the medical practitioner was inaccurate, because it was directed to sheltered employment, then the resulting decision would also be wrong.Discussion[30] The starting point for answering this question depends on whether Mr Nixon is correct when he says that the question is an "oxymoron", because if"accommodations, support and services" are provided, then what is being asked about is sheltered employment not open employment.[31] The definitions in the Act have already been set out above.13 They do not satisfactorily address the boundary between what is sheltered employment and what is open employment. Open employment is anything which is not sheltered employment. However, sheltered employment is not defined comprehensively but only by reference to one example of what comprises sheltered employment.14[32] The only previous case to have considered this appears to be Charlton v Chief Executive of the Ministry of Social Development, where the High Court consideredthe meaning of "open employment".15 Given the nature of the statutory definition, Heath J first addressed the meaning of "sheltered employment".16In my judgment, the term "sheltered employment" is intended to refer to a form of employment designed to cater for the needs of a severely disabled person. In effect, it provides an environment in which the disabled person can work, despite their physical or mental infirmities. Flexibility of time within which work should be carried out and the availability of accommodation to enable a person to rest when required are factors that ought to properly to be taken into account in determining whether, on thefacts of a particular case, employment is "open" or "sheltered".[33] Heath J went on to consider the meaning of "open employment".17It is clear from the definition of "open employment" that that type ofemployment is the opposite of "sheltered employment". Accordingly, "open employment" must be regarded as work ordinarily undertaken by able body persons who are unrestricted by mental, intellectual or physical infirmity.[34] The Court said that when determining whether a person is capable of "open employment", it was not enough that a job had been publicly advertised and paid more than the minimum wage.18 For example, the decision-maker must consider:(a) whether the person requires flexible work, and to what extent; and13 At [22].14 Being a sheltered workshop as defined in the Disabled Persons Promotion Act 1960.15 Charlton v Chief Executive of the Ministry of Social Development HC Auckland CIV-2004-485- 969, 21 March 2005.16 At [37].17 At [37].18 At [32].(b) whether a person requires accommodation for the person to rest at work.[35] In Charlton, Heath J considered the Authority ought to have undertaken further enquiries as to whether the terms on which Mr Charlton was employed, including the flexibility of his employment, were provided in order to enable him to carry out the task because of his infirmities, and therefore might have been a form of"sheltered employment". However, in the end, the decision did not turn on that as Mr Charlton was ineligible for an invalid's benefit for other reasons.[36] I accept that Charlton indicates that sheltered employment covers a wider range of situations than employment in a workshop which is especially set up to address the disabilities of the people working there. It includes other forms of employment where the work requirements and environment are substantially modified to cater for the individual's disability. However, not all "accommodations,supports or services" provided necessarily detract from employment being open employment. For example, it might be that someone needs assistance with transport to and from work because there is no public transport and they are not able to bike or walk to work because of their disability, but they are able to function at the job for at least 15 hours per week. Providing assistance with transport would not, in my view, convert that employment to sheltered employment. Similarly, someone might need assistance with appropriately designed office furniture because he or she suffers from an injury, but with that assistance is able to undertake the same office work as an able bodied person would. Again, in my view, that assistance does not render theemployment "sheltered employment".[37] The complexity of the decision as to whether work is sheltered employmentis reflected in the Ministry's own Guidelines on this issue. These note that shelteredemployment, for SLP eligibility purposes, is "employment that has been designed to cater for the needs of a person who is severely disabled". To determine that, a number of questions are recommended to be asked of both the client and the employer. For example, the Ministry's Guidelines suggest that the followingquestions may need to be asked to get all the relevant information: Does your client need flexibility in working hours because of their impairment or illness? Is this flexibility over and above what the employer would provide for staff without disabilities? Has the employer allowed the client flexibility in the time taken to complete task because of their impairment or illness? Is this flexibility different compared to time taken for staff without disabilities to complete task? Has your client's job been customised to be within their capability (for example does the client complete a narrower range of tasks than their co-workers, or has their job been created from selected tasks usually done by co-workers)? Does your client need changes to their work conditions (for example, a place to rest when required)? Does your client need additional support on an ongoing basis (for example, support from an employment support group over and above what is provided to staff without disabilities, such as regular supervision, job mentoring or coaching)? Has your client been granted a minimal wage exemption by a labour inspector?The Guidelines go on to say that if the client answers "yes" to one or more of thequestions then the client may be in sheltered employment, although a "one off environmental change" is not sheltered employment.[38] All this demonstrates that deciding whether someone is in open or sheltered employment involves a significant degree of judgment. The fact that"accommodations, support and services" are required may indicate that what theclient is capable of is really a form of sheltered employment, but is not determinative of it.[39] I accept, therefore, that the questions in the Work Capacity form are not ideal, particularly as they use the term "open employment" without making it clear whatthat means for the purposes of the medical assessment. There is also no evidence to suggest that medical practitioners filling out the Work Capacity form are briefed on what is meant by the term "open employment". By inviting the medical practitioner to respond to a question which includes this term, I accept there is a risk that he or she may respond affirmatively, when in reality the person could only work in a form of sheltered employment.[40] In my view, it would be preferable for the questions to focus on the individual's current or likely future capacity to work, without reference to defined terms, and for the decision maker within the Ministry to then assess that and other information against the statutory test in s 40B to determine whether LSP remains the appropriate benefit.[41] Furthermore, a more logical order and format for the questions about theperson's capacity to work would be to ask:(a) Is the person currently able to undertake suitable employment, without assistance, for 15 or more hours per week?(b) If not, then would they be able to undertake suitable employment for 15 or more hours per week if accommodations, support and services are provided?(c) If yes, then what accommodations, support or services could be put in place to assist the person into suitable employment?(d) If no, is the person's capacity expected to improve and allow them toregularly undertake employment of 15 hours or more a week with appropriate accommodations and support?[42] A tiered list of questions such as this would test what stage the person is at (if any) in terms of being able to engage in open employment, without requiring the doctor to make this judgment.[43] I therefore accept that the Work Capacity form has deficiencies, primarily because it risks soliciting an affirmative response to the question about theindividual's capacity to engage in open employment, when it may be that the level of services, support and accommodation that are required means the person is only capable of sheltered employment.Does the identified flaw in the Work Capacity form mean there is an error in the Ministry's decision-making process?[44] Although I consider there are difficulties with the way the Work Capacity form is drafted, that does not address the nub of Mr Nixon's complaint. He asserts that because the form invites his doctor to give a "medico–legal opinion", as far as his disability relates to the Act, this has led to an incorrect finding about his eligibility for SLP.[45] However, as the Chief Executive was at pains to point out, it is not the doctor who makes the assessment as to whether an individual remains eligible for SLP in terms of the Act. That enquiry is undertaken by staff within the Ministry.[46] To substantiate its submission that the decision-makers within the Ministry do not rely on the Work Capacity form in isolation to make their decision, the Chief Executive filed evidence from a senior adviser which described the decision-making process for determining eligibility for SLP. That evidence included copies of the documents and guidelines which are used to guide Work and Income staff through the decision-making process. It explained that case managers use both:(a) an overview of the decision-making process which is contained in adocument called "Reviewing benefit eligibility and work ability at medical reassessment"; and(b) Work and Income's Manuals and Process Guidelines, which set out:(i) operational guidelines for determining a person's eligibility forSLP;(ii) guidance on the medical qualifications required for entitlement to SLP;(iii) the meaning of sheltered employment;(iv) how to assess "sheltered employment" for the purpose of eligibility; and(v) guidance on the information that can be considered in addition to medical certificates for the purpose of that assessment.[47] As the Chief Executive submitted, the Guidelines help decision-makers make their decisions in accordance with the statutory definitions. It is clear from the Guidelines that the information a doctor gives in a medical certificate does notdetermine a person's eligibility for a benefit. Importantly, the Ministry's internalguidelines state:The Work Capacity Medical Certificate is one source of information for determining a client's ability to work but does not determine this on its own.You must consider all other information provided by the client. It is important to note that the decision about work capacity rests with Work and Income, not with the health practitioner.[48] The Guidelines deal specifically with the distinction between sheltered employment and open employment. They note that:Sheltered employment, for supported living payment eligibility purposes is employment that has been designed to cater for the needs of a person who is severely disabled... You must decide whether the client has employment conditions that have been substantially changed to accommodate their disability. Examples of employment conditions may include: their job content performance expectations or requirements environmental changes[49] It is clear from this evidence that the Ministry appreciates (as Charltonindicated) that sheltered employment encompasses a wide range of employment situations, and that the Work Capacity form is just one source of information for the decision. The decision-maker must consider the degree to which employmentconditions are altered to accommodate the client's disability. Alterations that go beyond those that may be offered to staff without disabilities could mean that what is really being offered is sheltered employment, not open employment, and SLP would be available, subject to other criteria being met.[50] I am satisfied that the decision-maker within the Ministry is required to reach an independent view on whether the client is capable of working in open employment based on an assessment of the level of support, services and accommodation the individual requires to engage in work. Regardless of the opinionof the client's doctor as to the client's ability to engage in open employment, the decision-maker must enquire into the individual's level of disability and the degreeof support they would need to participate in employment. That means they do notrely on the doctor's conclusion on the person's ability to engage in open employment, but take into account, without necessarily accepting, the doctor's opinion on that person's level of disability and on his or her likely need for support in the workplace, to reach their decision on whether the person continues to be eligible for SLP. In substance, therefore, they use the information which supportsthe doctor's conclusion and not the conclusion itself, to assist them with theirdecision-making.[51] I am therefore satisfied that decisions made in accordance with the Ministry'sGuidelines correctly apply the statutory test, and assess the information provided by the doctor in light of their obligation to be satisfied the statutory test is met. That is why the doctor is required to provide information about:(a) the person's current level of disability;(b) the likelihood of improvement; and(c) what accommodations, supports or services they might require to assist them into employment.For example, in Mr Nixon's case, Ms Keating, who made the recommendation (but not the decision) to transfer him to JSS, recorded she sought "clarification" from thedoctor as to the information provided by him.[52] Thus the Work Capacity form does not determine whether the statutory test is met. That is done independently and having regard to all relevant information. I therefore do not consider the difficulties that have been identified with the impugnedquestion would, in the usual course, lead to any error in the decision as to eligibility for SLP.[53] For these reasons, the application for relief is declined.Costs[54] I reserve the issue of costs. However, given some of the criticisms of the Work Capacity form are justified, even though they have not warranted relief being granted, this may be a case where costs should be modest, if any.[55] If costs are not sought by way of a memorandum within 20 working days of the date of this decision, then I order that there be no award of costs.Solicitors:Crown Law, WellingtonCopy To:Mr Nixon