FRANCIS CHESTER DUNN V CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT CA CA207/2008

FRANCIS CHESTER DUNN V CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT CA CA207/2008 23 October 2008IN THE COURT OF APPEAL OF NEW ZEALAND CA207/2008 [2008] NZCA 436BETWEEN FRANCIS CHESTER DUNN Applicant AND CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT Respondent Hearing: 9 September 2008 Court: Chambers, Arnold and Ellen France JJ Counsel: Applicant in person J C Holden and D L Harris for Respondent Judgment: 23 October 2008 at 10.30 amJUDGMENT OF THE COURT The application for leave to appeal is declined. REASONS OF THE COURT(Given by Arnold J) [1] The applicant receives a pension from the United Kingdom National Insurance Fund. He also receives New Zealand superannuation payments. Exercising his power under s 70 of the Social Security Act 1964 (the Act), the Chief Executive of the Ministry of Social Development included in the calculation ofthe applicant's New Zealand superannuation payments a deduction for his United Kingdom pension. [2] The applicant objected. The Social Security Appeal Authority (the Authority) upheld the Chief Executive's decision: [2006] NZSSAA 37. The applicant appealed to the High Court by way of case stated under s 12Q of the Act. Cooper J upheld the Authority's decision: [2008] NZAR 267. The applicant then applied to the High Court for leave to appeal to this Court. In a decision dated 29 November 2007 Cooper J rejected that application: HC AK CIV 2006-485- 002588. The applicant now seeks leave from this Court. (The application was filed late, but the Chief Executive takes no point about that.) [3] We decline to grant leave, on the ground that the appeal has no prospect of success. [4] The applicant's argument is straightforward. He submits that the Chief Executive wrongly applied s 70(1) of the Act. Section 70(1) provides for a reduction in a person's New Zealand superannuation payments by the amount of any "benefit, pension, or periodical allowance granted elsewhere than in New Zealand" if:(b) [T]he benefit, pension or periodical allowance, or any part of it, is in the nature of a payment which, in the opinion of the chief executive, forms part of a programme providing benefits, pensions, or periodical allowances for any of the contingencies for which benefits, pensions, or allowances may be paid under this Act or under the Social Welfare (Transitional Provisions) Act 1990 or under the New Zealand Superannuation and Retirement Income Act 2001 or under the War Pensions Act 1954 which is administered by or on behalf of the Government of the country from which the benefit, pension or periodical allowance is received.[5] The applicant's fundamental point is that the Chief Executive misapplied this provision because the United Kingdom pension he receives is not a statutory pension made by or on behalf of the United Kingdom government. Rather, the applicant says, it is a private contractual pension funded by the contributions made by himself and his employers. He argues that his pension is not state funded but "totally [his] personal property" because it comes from the National Insurance Fund, and not theConsolidated Revenue account into which general taxation receipts go. Accordingly, his pension was not "granted" for the purposes of s 70(1), but earned. [6] In our view, Mr Dunn has misconceived the United Kingdom scheme. [7] The House of Lords discussed the nature of the National Insurance Fund inR (Carson) v Secretary of State for Work and Pensions [2006] 1 AC 173. In his speech Lord Hoffmann said (at [21]):National insurance contributions have no exclusive link to retirement pensions, comparable with contributions to a private pension scheme. In fact the link is a rather tenuous one. National insurance contributions form a source of part of the revenue which pays for all social security benefits and the National Health Service (the rest comes from ordinary taxation).Later, his Lordship said (at [24]):It is, I suppose, the words "insurance" and "contributions" which suggest an analogy with a private pension scheme. But, from the point of view of the citizens who contribute, national insurance contributions are little different from general taxation which disappears into the communal pot of the consolidated fund. The difference is only a matter of public accounting. And although retirement pensions are presently linked to contributions, there is no particular reason why they should be.[8] In other words, rather than contributing through the mechanism of general taxation, those eligible for pensions in the United Kingdom (and their employers) contribute directly to the National Insurance Fund. The monies in that Fund are earmarked for the payment of retirement benefits. As Lord Hoffmann said, this difference in the contribution mechanism is not a difference of substance, simply a difference of public accounting. Moreover, as Lord Hoffmann noted, not all national insurance contributions go into the National Insurance Fund. Some go towards funding the National Health Service and other social security benefits. The link between contributions and entitlements is, in that sense, tenuous. [9] The applicant accepted in argument before us that his pension was the same as that described by their Lordships in Carson. However, he submitted that their Lordships had "got it wrong". We do not agree. Further, we do not see Mr Dunn's arguments based on various human rights instruments as advancing the matter.[10] Finally, we should note that we do not see the use of the word "granted" in s 70(1) as having the significance which the applicant places upon it. In our view, it simply means "made available". [11] For these reasons, we consider that the applicant cannot possibly succeed on his appeal. The Chief Executive was entitled, by virtue of the wording of s 70, to reach the decision under challenge. [12] Leave to appeal is accordingly declined. We make no order as to costs.Solicitors: Crown Law Office, Wellington