PRASAD v THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT [2014] NZHC 3156

PRASAD v THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT [2014] NZHC 3156 [10 December 2014]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2014-485-009341[2014] NZHC 3156IN THE MATTER of an appeal by way of case stated fromthe determination of the Social SecurityAppeal Authority at Wellington under s12Q of the Social Security Act 1965BETWEEN FIONA PRASADAppellantAND THE CHIEF EXECUTIVE OF THEMINISTRY OF SOCIALDEVELOPMENTRespondentHearing: (On the papers)Judgment: 10 December 2014JUDGMENT OF VENNING JThis judgment was delivered by me on 10 December 2014 at 4.45 pm, pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors: Crown Law, WellingtonCopy to: Appellant[1] This is an appeal by way of case stated against a decision of the Social Security Appeal Authority (the Authority) under s 12Q of the Social Security Act 1964 (the Act).[2] The following question of law has been stated for the opinion of this Court:Did the Authority err in law in finding that the Chief Executive was correct to exclude the $50 claimed by the appellant in respect of treeplanting costs from the appellant's disability costs, for the purpose ofassessing the appellant's Special Benefit?[3] I take the background from the case stated as follows:[1] The appellant appealed to the Authority in respect of a decision of the Chief Executive upheld by a Benefits Review Committee declining to include certain gardening costs in the assessment of her disability costs.[2] The appellant's disability costs are assessed each year for thepurpose of paying her Disability Allowance and for inclusion as allowable costs in the assessment of Special Benefit. The appellant receives the maximum Disability Allowance payable. The full amount of her disability costs are then included in the calculation of her entitlement to Special Benefit.[3] The issue considered by the Authority in this decision was whether or not certain gardening costs could be regarded as allowable disability costs in the assessment of Special Benefit.[4] The Authority issued a decision on 13 November 2012 dismissingthe appellant's appeal as it related to the inclusion of tree planting costs as allowable costs in the assessment of Special Benefit.The Facts of the Case Determined by the AuthorityThe Authority found:[5] The appellant is paid the maximum Disability Allowance. Her total disability costs are included in the assessment of Special Benefit.[6] On 13 August 2012 a further review of the appellant's disability costs was carried out. This resulted in the appellant's disability costs for theperiod prior to 11 July 2010 being increased to $109.73 per week. The assessment included $2,216.25 per annum in respect of gardening costs.[7] The gardening costs included:Lawnmowing $300.00 per annumTree trimming $310.00 per annumGardening $1,706.25 per annumTotal $2,216.25 per annum ($42.62 per week)11 These figures are taken from the Case Stated but if the figures are correct, the total is $2,316.25 per annum ($44.54 per week).[8] The only amount claimed by the appellant in respect of gardening costs which was excluded was the sum of $50 in respect of tree planting costs. This cost was excluded on the basis that it could not be seen as essential and not reasonably avoidable.[9] The Ministerial Directive relating to the payment of Special Benefit requires that all costs included in the assessment of Special Benefit be essential and not reasonably avoidable.[10] The costs which have not been included in the assessment of gardening costs relate to the cost of planting fruit trees. While it may be desirable for the appellant to have her own fruit trees the Authority did not consider that any costs relating to the planting of fruit trees could be regarded as essential and not reasonably avoidable. The Authority concluded that the Chief Executive was correct to exclude these costs fromthe assessment of the appellant's disability costs.[4] The appeal was set down for hearing on 10 December 2014. Counsel for the respondent prepared a joint memorandum which the appellant has signed confirming that the respondent concedes the Authority (and the respondent before it) erred in excluding the $50 claimed by the appellant in respect of fruit tree planting costs fromthe appellant's disability costs, for the purposes of assessing the appellant's specialbenefit.[5] Despite that agreement it is still necessary for the Court to consider the matter on the merits.[6] The Special Benefit is a discretionary benefit that was formerly provided for in s 61G of the Act. From 1 April 2006 the Special Benefit was replaced by temporary additional support. However the transitional provisions provide that the Special Benefit continues to be payable to people such as the appellant who are receiving it or have applied for it before 1 April 2006.[7] A Ministerial Direction in relation to Special Benefit was issued on 10 February 1999 (pursuant to s 5 of the Act). It was amended on various occasions prior to 10 August 2009 (the Direction).[8] The Direction specifies the process to be followed when the Chief Executive is exercising his discretion as to whether to grant a Special Benefit. It envisages a two-stage process:(a) the first, a formula assessment;(b) the second, a mandatory discretionary assessment.[9] In the context of the first stage, part of the formula assessment directs theChief Executive to ascertain the applicant's disposable income. That is calculated by deducting allowable costs from the applicant's weekly chargeable income.[10] The concept of allowable costs is significant for the purposes of this appeal. It is defined in cl 2.1 as follows by reference to allowable costs:"Allowable costs", in relation to an applicant and subject to section 68A ofthe Act, means any regular essential expenses reckoned on a weekly basis arising out of the special circumstances of the applicant and his or her spouse or partner (if any) which cannot readily be avoided or varied, and include–(c) Disability related expenses, being expenses of a kind for which a disability allowance would be payable under section 69C of the Act, but not including any counselling costs in excess of the amount paid for that purpose by way of a disability allowance; and[11] As the Court of Appeal observed in Smith v Chief Executive of Work and Income New Zealand by reference to allowable costs:2[25] No doubt the Minister considered that such costs should be takeninto account at the first stage of the special benefit assessment process, so they were specifically included as allowable costs even though they would not have met the general part of the definition. That is a drafting technique which is used on occasion.[12] The respondent now concedes that the Authority erred by failing to determine whether the $50 claimed in the present case constituted allowable costs by failing to consider whether the costs claimed constituted any of the expenses specified to be included within the definition of allowable costs (in paras (a) to (h) of cl 2.1), or any of the expenses specified not to be included (in paras (i) to (l)).2 Smith v Chief Executive of Work and Income New Zealand CA181/05, 23 October 2006, at [25].[13] As the Court of Appeal confirmed, the costs specified to be included constitute allowable costs even if they would not meet the general definition at the beginning of the cl 2.1.[14] The respondent concedes the Authority did not turn its mind to these matters. In short, the Authority determined the fruit tree planting costs claimed were not allowable costs without regard to the relevant legislative provisions that govern that decision and in doing so the Authority erred. The Authority effectively moved directly to the second stage of the consideration, namely whether the costs were essential and not reasonably avoidable.[15] For those reasons the respondent concedes that the Court should answer thequestion of law "yes". On a strictly legal analysis the Court accepts the concession by the respondent is appropriate.[16] The issue then is the appropriate order. High Court Rule 21.14 provides that after hearing and determining the question of law the Court must do one or more of the following:(a) in the case of an appeal, reverse, confirm, or amend the decision in respect of which the case was stated:(b) in the case of an appeal, remit the matter to the tribunal for reconsideration and decision in accordance with the opinion of the court on the question of law or fact (or both):(c) in every other case, remit the matter to the tribunal with the opinion of the court:(d) in any case, make any other order that is just.[17] The respondent does not seek to have the matter referred back to the Authority. I understand from the joint memorandum that it is now conceded the $50 may be paid so that it is unnecessary to refer the matter back.[18] Normally the Court would remit the matter back to the Authority for determination. However, given the very limited amount of money involved in this case and the lack of its precedential effect, as I apprehend it, I accept there is no need in this case to refer the matter back to the Authority. In coming to that conclusion Imake it clear that I do not necessarily accept that ultimately the decision to approve the $50 is correct. That however is not a matter that this Court needs to rule on to deal with this appeal.Result[19] (a) The question in the case stated is answered "yes".(b) No order is made for a rehearing.(c) No order for costs.__________________________ Venning J