CHARLTON V THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT HC AK CIV 2004-485-969

CHARLTON V THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT HC AK CIV 2004-485-969 29 November 2005IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2004-485-969BETWEEN PHILLIP CHARLTON Applicant AND THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT Respondent Hearing: 29 November 2005 Counsel: A Crabb for Applicant G Stanish for Respondent Judgment: 29 November 2005(ORAL) JUDGMENT (NO. 2) OF HEATH JSolicitors: Crown Law Office, PO Box 2858, Wellington Counsel: A Crabb, PO Box 20 706, Glen Eden, AucklandIntroduction[1] Mr Charlton seeks leave to appeal to the Court of Appeal from a judgment I delivered on 21 March 2005. In that judgment, I answered five questions of law posed by way of Case Stated from a determination of the Social Security Appeal Authority. The questions related to Mr Charlton's eligibility for an Invalids' benefit.The issues[2] Two essential questions are raised on the application for leave. A third, which is consequential on the second, was also raised but it is agreed that that will fall away should leave on the second issue not be granted and that it would not stand alone. In those circumstances I confine my discussion to the two main issues. [3] The first concerns the question whether the Chief Executive was entitled to go behind a medical certificate obtained from a designated doctor under s44 of the Social Security Act 1964 (the Act). [4] The second is whether the Chief Executive correctly approached the exercise of his discretion under s66A of the Act, a provision which enables the Chief Executive to disregard all or part of the income of a severely disabled person to bring that person within the eligibility criteria for a benefit for the purpose of providing an incentive to personal effort.Leave to appeal – legal principles[5] Appeals to the Court of Appeal from determinations of this Court under the Act are dealt with by s12R of the Act. That section states:12R Appeals to Court of Appeal The provisions of section 144 of the Summary Proceedings Act 1957 shall apply in respect of any determination of the High Court under section 12Q ofthis Act as if the determination were made under section 107 of the Summary Proceedings Act 1957.[6] Section 144 of the Summary Proceedings Act 1957 is incorporated by reference into the appeal process by s12R. Section 144 provides:144 Appeal to Court of Appeal(1) Either party may, with the leave of the High Court, appeal to the Court of Appeal against any determination of the High Court on any case stated for the opinion of the High Court under section 107 of this Act or against any determination of the High Court on a question of law arising in any general appeal: Provided that, if the High Court refuses to grant leave to appeal to the Court of Appeal, the Court of Appeal may grant special leave to appeal. (2) A party desiring to appeal to the Court of Appeal under this section shall, within 21 days after the determination of the High Court, or within such further time as that Court may allow, give notice of his application for leave to appeal in such manner as may be directed by the rules of that Court, and the High Court may grant leave accordingly if in the opinion of that Court the question of law involved in the appeal is one which, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for decision. (3) Where the High Court refuses leave to any party to appeal to the Court of Appeal under this section, that party may, within 21 days after the refusal of the High Court or within such further time as the Court of Appeal may allow, apply to the Court of Appeal, in such manner as may be directed by the rules of that Court, for special leave to appeal to that Court, and the Court of Appeal may grant leave accordingly if in the opinion of that Court the question of law involved in the appeal is one which, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for decision.[7] In order to justify a second appeal, a question of law as distinct from a question of fact must arise. That question of law must be one which, by reason of its general or public importance or for any other reason ought to be submitted to the Court of Appeal for decision. [8] The purpose of s144 was described by Thomas J, delivering the judgment of the Court of Appeal in R v Slater [1997] 1 NZLR 211 (CA), at 215, where His Honour said:Section 144 was not intended to provide a second tier of appeal from decisions of the District Court in proceedings under the Summary Proceedings Act. Parliament intended such proceedings to be brought tofinality with the defendant having an appeal to the High Court other than when the conditions it has specified in subss (2) and (3) are met and leave to appeal is granted. Neither the determination of what comprises a question of law, nor the question whether that point of law raises a question of general or public importance, are to be diluted.Those comments apply equally to s12R appeals, with references to the District Court being replaced by references to the Social Security Appeal Authority. [9] I turn to consider the issues raised against the background of that test.The s44 issue[10] The first question is whether a medical certificate given under s44 of the Act is binding on a Chief Executive when he or she determines whether an applicant for an Invalids' Benefit is permanently and severely restricted in his or her capacity for work. [11] Section 44 enables the Chief Executive to seek a certificate from a designated medical practitioner or a psychologist who 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 or severely restricted in his or her capacity for work. [12] In this case such a certificate was given in favour of Mr Charlton but, because Mr Charlton had been in work, the Chief Executive declined to act on the certificate and decided not to grant the benefit on those grounds. [13] The only issue of law is whether the Chief Executive is bound by the certificate and cannot go behind it. If it were accepted that the Chief Executive had power to go behind the certificate in appropriate cases then the issue is one of fact or degree. In each case it would be necessary for the Chief Executive to make a decision on a fact-specific basis. [14] The proposition that the Chief Executive cannot take into account other factors known to him or her is, with respect, unsustainable. Out of fairness toMr Crabb, he did not seek to put it so widely. In my view, the issue raised is really one of fact and degree and does not fall within the ambit of s144.The s66A issue[15] The second question relates to s66A of the Act. That section 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.[16] The Social Security Appeal Authority expressed its view on this issue as follows:[30] The appellant has requested that the Authority consider whether or not the Chief Executive was correct in declining to exercise the discretion contained in s66A of the Act to exempt part of the appellant's earnings, on the basis that the appellant meet the eligibility criteria for Invalid's Benefit contained in s40. [31] We note that the department's policy manual accepts that a person receiving an Invalid's Benefit is severely disabled and therefore automatically qualifies for consideration pursuant to this s66A. [32] Matters which we consider to be relevant to the exercise of the discretion contained in s66A include whether or not an appellant has additional costs related to participating in employment that an able bodied person might not have, the hours worked and the level of remuneration received. [33] In the appellant's case he was unable to point to any additional costs that he might have relating to his employment arising out of his disability. The appellant works significantly more than 15 hours a week. His remuneration includes the provision of accommodation and the rate paid appears to reflect a rate greater than the minimum hourly adult wage. There was nothing before us in the evidence to suggest that the appellant has difficulty making ends meet. He owns a rental property at Bucklands Beach Road and has savings in the bank.[17] The passage in my judgment which Mr Crabb submitted was in error is in para [51]. In that paragraph I said:[51] The approach taken by the Authority was to regard as relevant to the exercise of the discretion costs incurred by a particular applicant. The higherthe costs incurred to obtain employment, the more likely the discretion would be exercised. Although not specifically referred to in the Authority's decision, Mr Stanish helpfully provided other examples of the types of costs that might be relevant: eg the costs incurred in transportation from home to employment where a wheel chair is used as a result of the unavailability or unsuitability of the public transport system.[18] Mr Crabb's submission is that the section does not restrict the Chief Executive to financial considerations. In essence Mr Crabb suggests a two stage approach: first, to consider whether there are any work related costs which would justify exercise of the discretion to disregard all or any part of the income of the severely disabled person; if the answer to that question were "no", then a further question would need to be asked: namely, are there any other circumstances justifying exercise of the discretion purely as an incentive to personal effort? [19] The wording of s66A plainly permits an interpretation of the type that Mr Crabb contends for, but that was not the issue before me on appeal. [20] The questions I was asked to consider under s66A were whether the Authority erred in finding that a "relevant consideration" in the exercise of the discretion was whether the applicant had additional costs relating to employment that an able bodied person may have; whether the Authority erred in law by "taking into account" financial criteria in exercising the discretion and whether, as a matter of law, the Authority was correct in determining that it was "not appropriate" that all or part of the appellant's income should be disregarded in computing the amount of any benefit payable. Those questions go to whether the discretion was properly exercised, not whether the correct questions were asked. [21] In those circumstances, I cannot regard the s66A issue as raising a question of law. Rather it raises an issue of fact and degree. That does not meet the test for leave to appeal to be granted under s144.Observation[22] That does not leave Mr Charlton without a remedy. I have been told that his circumstances may have changed for the worse. A fresh application could plainly bemade. The Chief Executive holds information for him. I am sure efforts can be made to expedite any renewed application that is based on changed medical circumstances or the need to use, in the interim, accrued capital.Result[23] For the reasons I have given, the application for leave to appeal is dismissed. There will be no order as to costs. ____________________________ P R Heath J