PHILIP CHARLTON V CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT CA CA9/06

PHILIP CHARLTON V CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT CA CA9/06 13 December 2006IN THE COURT OF APPEAL OF NEW ZEALAND CA9/06BETWEEN PHILIP CHARLTON Applicant AND CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT Respondent Hearing: 4 December 2006 Court: O'Regan, Robertson and Ellen France JJ Counsel: P D McKenzie QC and A J McGurk for Applicant G A J Stanish for Respondent Judgment: 13 December 2006 at 9 amJUDGMENT OF THE COURT The application for leave to appeal is refused.____________________________________________________________________REASONS OF THE COURT(Given by Robertson J)Introduction[1] In 2003, Philip Charlton appealed to the Social Security Appeal Authority (the Authority) against a decision of the respondent refusing him an invalid's benefit. His appeal was unsuccessful. [2] The Authority stated a case to the High Court on five questions of law. It was heard before Heath J. In a reserved decision of 21 March 2005, the Judgeanswered the questions contrary to the interests of Mr Charlton and confirmed the Authority's decision. [3] On 29 November 2005, Heath J heard an application for leave to appeal to this Court on two issues: (a) whether the Chief Executive was entitled to go behind a medical certificate obtained from the designated doctor under s 44 of the Social Security Act 1964 (the Act)? (b) whether the Chief Executive correctly approached the exercise of his discretion under s 66A of the Act? [4] The Judge held that both issues were matters of fact and degree and did not meet the test for leave to appeal under s 144 of the Summary Proceedings Act 1957.The issues[5] Mr Charlton now seeks special leave from this Court. The application has two aspects. [6] First, leave to appeal out of time is required as due to an oversight in calculating the time, the application was not filed by 20 December 2005. It was filed a few days late. [7] The respondent accepted that he was not prejudiced by the delay, but submitted that special leave should not be granted as the proposed appeal lacked legal merit. Further he noted that in the interim there may well have been a change in Mr Charlton's condition which would justify a new application being made for an invalid's benefit and that was the sensible way to deal with his complaint. In and of itself, the time factor is not a determining issue. [8] Secondly and critically, do the matters advanced warrant leave? The issues are now identified as:(a) In determining whether the medical criteria for an invalid's benefit have been met, and where the Chief Executive has obtained a medical opinion for that purpose, is the Chief Executive entitled to override the opinion without further medical evidence? (b) Did the High Court err by failing to give effect to the words in s 66A "as an incentive to personal effort"? (c) Did the High Court err by holding that consideration of financial circumstances alone could disqualify a person from receiving a s 66A exemption? (d) Given the words in s 66A "as an incentive to personal effort", can a person's financial situation be a relevant factor in the exercise of the discretion. There are really just two issues and all but the first point are variations on a core theme. [9] The jurisdiction of this Court is limited by s 144(3) of the Summary Proceedings Act to a question of law which by reason of general or public importance, or for some other reason, ought to be submitted to this Court for decision.The medical certificate[10] The applicant is a single man aged 54 years who works 20-25 hours a week as a caretaker in an apartment building earning $340 per week before tax. Of that, $100 is attributed to rental on a flat which he occupies on the premises. Mr Charlton also receives income from renting a property he owns. His total income puts him above the threshold for an invalid's benefit.[11] In 2002 he applied for an invalid's benefit under s 40 of the Act because he contended that, as a consequence of the cumulative effect of a number of medical conditions, he fell within the necessary classification. The section provides:40. Invalid's benefit –(1) A person who is aged 16 years or more is eligible for an invalid's benefit if the chief executive is satisfied that - (a) the person is totally blind, or (b) the person is permanently and severely restricted in his or her capacity for work because of sickness, or because of injury or disability from accident or congenital defect.[12] "Severely restricted" is defined in s 40(3) of the Act as:(3) 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.[13] Section 44 of the Act provides:44. Medical examination of invalids(1) The chief executive may require an applicant for an invalid's benefit, or a person in receipt of an invalid's benefit, to submit himself or herself for examination by a medical practitioner or psychologist. The medical practitioner or psychologist must be agreed for the purpose between the applicant or beneficiary and the chief executive, or, failing agreement, must be nominated by the chief executive. (2) The medical practitioner or psychologist must certify whether, in his or her opinion, the applicant or beneficiary is, or is not, or whether there is doubt about whether he or she is or is not, permanently and severely restricted in his or her capacity for work, or totally blind. (3) A certificate given under this section must state the grounds upon which the opinion is founded. (4) A certificate given under this section must, in the case of doubt referred to in subsection (2), and may, in any other case, indicate a date for review of the permanency, severity, or both, of the applicant's or beneficiary's sickness, injury, or disability.[14] The assessing doctor certified that the applicant was severely restricted in his capacity for work.[15] The Chief Executive did not accept that Mr Charlton was severely restricted and incapable of regularly working 15 or more hours a week having regard to the manner and circumstances in which he was in fact working. [16] In dealing with the case stated, Heath J held that the Chief Executive and the Authority were entitled to go behind the medical certificate and to have regard to the fact that Mr Charlton had been regularly working more than 15 hours per week. The High Court Judge suggested that there should have been more inquiry into whether Mr Charlton's employment was in fact "open", but accepted that the appeal did not turn on the point. [17] In challenging the respondent's ability to go beyond the medical certificate, the applicant placed particular reliance on the decision in Ramsay v Accident Compensation Corporation [2004] NZAR 1 where John Hansen J considered that a medical assessment provided under the Accident Compensation regime could not be departed from unless there was evidence to show it was clearly wrong, or there was cogent evidence to the contrary. [18] Mr McKenzie QC accepted that there were differences between rights under accident compensation legislation and benefit entitlements, but nonetheless submitted that the same approach should apply. [19] Even if the reasoning in Ramsay is applicable, the evidence as to the hours Mr Charlton had been working over a substantial period of time is clearly capable of being treated as cogent evidence to the contrary. [20] As it appears that there may well have been a change in Mr Charlton's present circumstances, a new application for an invalid's benefit will clarify the position for him and a proper analysis can be undertaken as to whether the employment he has is "open". [21] The applicant in reality is just challenging the application of clear legal principles to the facts of his case. That is not a question of law which requires the attention of this Court.The Section 66A discretion[22] The other three questions all arise out of s 66A of the Act which provides:66A Special exemption for severe disablementFor the purposes of computing any benefit payable, the chief executive may in the chief executive's discretion, as an incentive to personal effort, disregard all or part of the income of any severely disabled person derived from such effort.[23] The issue here is the meaning to be given to the words "an incentive to personal effort". Mr McKenzie's argument, stripped of its adornments, was that the Chief Executive should consider exempting part of Mr Charlton's income because he was a severely disabled person who derived it from his own effort and deserved an incentive for his "personal effort". [24] The first classification required under the section is whether a person is "severely disabled". There is no indication that such an assessment was made. Mr McKenzie relied on the fact that the Ministry of Social Development Policy Manual provides that a person who is receiving an invalid's benefit is "severely disabled". That, however, is circular because, in Mr Charlton's case, the fact that he has not been found to be "severely disabled" or "severely restricted" has led to the decision not to grant him an invalid's benefit. [25] Of more substance was the argument that it was within the discretion of the Chief Executive to disregard part or all of Mr Charlton's earnings to mark the "personal effort" which he had made. The point was acknowledged in the closing comments of the Authority in the decision of 16 July 2003 when it said at [34]:We have considerable admiration for the appellant. It would appear that he has worked for most of his adult life and in doing so has had to overcome significant disability. That he continues to work is very much to his credit. However his combined earnings from employment and investment are significant and are substantially more than the maximum that could be earned by a person in receipt of Invalid's Benefit. If in fact the appellant is eligible for Invalid's Benefit we do not consider it appropriate that all or part of his income should be disregarded in computing the amount of benefit payable. This is not a case where it could be said that there is little financial incentive for the appellant to work.[26] The full thrust of the applicant's argument was that the Chief Executive erred in treating the discretion granted by the statutory provision as essentially financially based. We do not agree that the discretion has been treated as limited to financial considerations. Financial considerations are always relevant but in some circumstances will not be exhaustive. [27] As Mr Stanish reminded us, the starting point for the grant of an invalid's benefit is s 39F:Section 39F(1) The purpose of the invalid's benefit is to provide income support to people who - (a) 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; or (b) Are totally blind. (2) The purpose in subsection (1) is to be considered in the context of the expectation that people of working age support themselves directly or indirectly through employment, and that other measures are available for people who are temporarily unable to support themselves.[28] There are no particular issues raised with regard to the manner or circumstances in which Mr Charlton is able to earn income which lead to increased costs or demands being made upon him. [29] We are not satisfied that there is any question of law which arises in respect of the three issues posed about s 66A. Again, this has been a conventional application of settled legal principles to the particular facts of this case and there is no basis for a third appeal.ConclusionThe application for leave to appeal is refused. There is no order as to costs.Solicitors: Otene & Willis, Auckland, for Applicant Crown Law Office, Wellington