MEDERO v MINISTRY OF SOCIAL DEVELOPMENT [2019] NZHC 2204

MEDERO v MINISTRY OF SOCIAL DEVELOPMENT [2019] NZHC 2204 [4 September 2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2019-485-214[2019] NZHC 2204BETWEEN RAZIO MEDEROAppellantAND MINISTRY OF SOCIAL DEVELOPMENTRespondentHearing: 26 August 2019Counsel: P J McKenzie QC and P A McKenzie-Bridle for AppellantJ K Gorman and S P R Conway for RespondentJudgment: 4 September 2019JUDGMENT OF CHURCHMAN JIntroduction[1] This appeal by way of case stated from a determination of the Social SecurityAppeal Authority (the Authority) raises a number of questions relating to the eligibilityof a New Zealand citizen who is permanently residing in Australia to payment of eithera Supported Living Payment – Overseas (SLPO), or an emergency benefit.Facts[2] Razia Medero arrived in New Zealand on 29 October 2004 when she was 65years of age having attained that age on 3 July 2004.1 Shortly after her arrival, shewas granted an emergency benefit, remaining on this until she was moved onto anunemployment benefit on 21 March 2007. On 22 October 2007, she was granted a1 In his opening submissions, Mr McKenzie QC, senior counsel for the appellant, reserved hisposition on whether the appellant was 64 years of age when she arrived but the clear evidence,including her birth certificate, indicates she was, in fact, 65.sickness benefit which then became an invalid's benefit (now the supported livingpayment (SLP)).[3] Ms Medero was granted New Zealand citizenship on 27 June 2008.[4] Six days later, on 3 August 2008, when she was 69 years of age, Ms Mederomoved to Australia to be with family. She was advised by the Ministry for SocialDevelopment (the Ministry) that her invalid's benefit would be suspended from15 September 2008 if she had not returned to New Zealand by that date. When shedid not return, her invalid's benefit was suspended and subsequently cancelled.[5] On 29 April 2013, Ms Medero applied for an Australian age pension, but herapplication was rejected as she did not meet the residency rules.[6] On 6 August 2015, the Ministry received Ms Medero's application for a SLPOunder the Social Security (Reciprocity with Australia) Order 2002 (the Order), herapplication having been completed by her daughter. Her disability was recorded as"stroke – no or limited mobility". This application was declined as she had no"working age residence" in New Zealand, as that term is defined in the Agreement onSocial Security between the Government of New Zealand and the Government ofAustralia (the Agreement).[7] The Ministry's decision was upheld by the Benefits Review Committee.Ms Medero's appeal to the Authority was dismissed in a decision dated 20 July 2017.2[8] On a date unknown but prior to 17 January 2018, the appellant travelled to herhomeland of Ethiopia against medical advice.[9] Ms Medero passed away before this appeal was filed, and this case is broughtby her personal representative, her daughter, Kimiya Abdulla.2 Re Medero [2017] NZSSAA 39.Statutory framework[10] Section 77 of the Social Security Act 1964 (the Act) deals with the effect of abeneficiary's absence from New Zealand and relevantly provides:(1) A benefit is not payable while a beneficiary is absent fromNew Zealand unless the benefit is so payable under—(a) the other provisions of this section; or(b) any agreement or convention adopted under section 19 of theSocial Welfare (Reciprocity Agreements, and New ZealandArtificial Limb Service) Act 1990; or[11] "Benefit" is defined in the Act as:3 a monetary benefit payable under any of Parts 1A to 1P or Part 2 (including,without limitation, any such benefit payable under this Act by virtue of anagreement or convention given effect in relation to New Zealand by an orderunder section 19 of the Social Welfare (Reciprocity Agreements, andNew Zealand Artificial Limb Service) Act 1990) [12] "Main benefit" includes, inter alia, a supported living payment (SLP) and anemergency benefit.4Reciprocity agreement with Australia[13] Section 19(1) of the Social Welfare (Reciprocity Agreements, andNew Zealand Artificial Limb Service) Act 1990 (the Reciprocity Act) relevantlyprovides:19 Adoption of reciprocity agreement with other countries(1) For the purpose of giving effect to any agreement or Convention withthe government of another country providing for reciprocity in respectof matters relating to social security monetary benefits, or to anyalteration thereto, the Governor-General may, by Order in Council,—(a) declare that the provisions contained in any agreement orConvention or alteration thereto set out in a schedule of theOrder in Council shall have force and effect so far as theyrelate to New Zealand:3 Social Security Act 1964, s 3. This Act has since been replaced by the Social Security Act 2018but was the Act in force at the times material to this appeal.4 Section 3.(b) declare that the provisions of this Act and of the SocialSecurity Act 1964 and Part 6 of the Veterans' Support Act2014 and of Part 1 of the New Zealand Superannuation andRetirement Income Act 2001 and of the regulations and ordersin force under those Acts shall have effect subject to suchmodifications as may be required for the purpose of givingeffect to the agreement or Convention or alteration thereto:[14] The Governor-General made the Order in 2002, bringing the Agreement intoforce.[15] The preamble to the Agreement records that it was entered into to "strengthenthe existing friendly relations" between New Zealand and Australia and to:5 coordinate the operation of their respective social security systems and toenhance the equitable access by people covered by this Agreement to specifiedsocial security benefits provided for under the laws of both countries[16] The Agreement applies to the following benefits:6(a) New Zealand superannuation;(b) veteran's pension; and(c) invalid's benefit.[17] Article 2(2) provides:For the purposes of this Agreement a New Zealand invalid's benefit shallbe limited to cases where:(a) the person is severely disabled;(b) the person was a resident of one of the Parties at the date of severedisablement; and(c) the person, prior to the date of severe disablement, was residing in theterritory of the other Party for a period of not less than one year at anytime.5 Social Welfare (Reciprocity with Australia) Order 2002, sch 1.6 Schedule 1, art 2(1)(b).[18] The term "severely disabled" is defined as a person who:7(i) has a physical impairment, a psychiatric impairment, an intellectualimpairment, or two or all of such impairments, which makes theperson, without taking into account any other factor, totally unable:(aa) to work for at least the next 2 years; and(bb) unable to benefit within the next 2 years from participation ina program of assistance or a rehabilitation program; or(ii) is permanently blind[19] Article 4 provides for equality of treatment:Except as provided for in this Agreement, the persons to whom this Agreementapplies shall be treated equally by each of the Parties in regards to rights andobligations that arise under the social security law of that Party or as a resultof this Agreement.[20] Article 6 relevantly provides that where a person who would be entitled toreceive a New Zealand benefit is not ordinarily resident in New Zealand on the dateof application, he or she will be deemed to be ordinarily resident and present inNew Zealand on that date if he or she:(a) is in Australia;(b) is an Australian resident; and(c) has been a New Zealand resident at any time for a continuous period ofat least one year since attaining the age of 20 years.[21] Article 8, which deals with totalisation for New Zealand, relevantly provides:8In determining whether a person meets the residential qualifications for aninvalid's benefit, the competent institution of New Zealand shall deem a periodas an Australian resident to be a period during which that person was both aNew Zealand resident and present in New Zealand.7 Schedule 1, art 1(l).8 Article 8(2).[22] The amount of New Zealand invalid's benefit a person resident in Australia isentitled to receive is calculated in accordance with "the number of whole months ofworking age residence in New Zealand".9 "Working age residence" is defined as:10 a period of residence between the ages of 20 and 64 years inclusive (beinga maximum of 45 years) but does not include any period deemed pursuant toArticle 8 ... to be a period in which that person was an Australian resident ora New Zealand resident.[23] The concept of working age residence is critical to the appeal as it is clear thatthe appellant had no working age residence in either Australia or New Zealand andunless that criteria is held to be ultra vires or invalid, the quantum of any benefitpayment is nil.Relevant case law[24] Bredmeyer v Chief Executive of the Ministry of Social Development is theleading decision on the Reciprocity Act and the Agreement.11 Ms Bredmeyer was bornin New Zealand but had lived outside of New Zealand since 1968. She moved toAustralia in 1990. When Ms Bredmeyer turned 65, she applied for New Zealandsuperannuation. However, under the Agreement, the amount she was entitled toreceive could not exceed the amount of Australian age pension that would have beenpayable to her if she was entitled to receive that pension. Ms Bredmeyer's assets andthose of her husband were such that she was not entitled to the Australian age pensionas it is means tested. The Authority determined that the decision to decline herapplication for New Zealand superannuation was correct and her appeals against thisdecision to the High Court and Court of Appeal were both dismissed.[25] In its decision, the Court of Appeal observed that:12 there has been a gradual winding back of the arrangements, for example, areduction in the range of benefits covered with benefits like the widowsbenefit no longer part of the reciprocal arrangement.9 Article 10(1).10 Article 5(5).11 Bredmeyer v Chief Executive of the Ministry of Social Development [2008] NZCA 557.12 At [53].[26] It was noted that Australia had become dissatisfied with the arrangementwhereby New Zealanders would get immediate access to all Australian benefits andAustralians enjoying similar privileges in New Zealand, with migration flows fromNew Zealand to Australia having increased markedly in the 1980s.13 The Agreementarose in this context, and "has its 'genesis' in a political compact with the inevitablecompromises involved in such an exercise".14[27] The Court of Appeal further noted that, if a person was entitled to a pension inan overseas country with which New Zealand has no applicable reciprocal agreement,the rate of benefit that would otherwise be payable in New Zealand would be reducedby the amount of the overseas benefit.15 It said:16The effect of the Agreement as we have construed it may mean that a personlike the appellant is worse off having moved to Australia than she may havebeen if she moved to a country with which New Zealand does not have areciprocal arrangement. That is, however, the arrangement that has beenreached with Australia Approach on appeal[28] An appeal from the Authority to the High Court is by way of case stated andlimited to questions of law only.17 It is not an appeal by way of rehearing but, rather,a "form of consultation" to obtain an answer to a specific point of law.18 It is not tobe taken as an opportunity to review the merits of the decision.19Questions of law[29] The questions for determination by this Court are as follows:20(1) Whether the Social Security (Reciprocity with Australia) Order 2002("the Order") is properly interpreted as extending the EmergencyBenefit to Australian residents, in particular, where the EmergencyBenefit is granted instead of or in substitution for the SupportedLiving Payment (SLP) in the Chief Executive's discretion?13 At [54].14 At [55].15 At [58]; Social Security Act, s 70.16 At [59].17 Social Security Act, s 12Q(1).18 Koroua v Chief Executive of the Ministry of Social Development [2013] NZHC 3418 at [8].19 IAM v Chief Executive of the Ministry of Social Development [2013] NZHC 762 at [11].20 Case Stated on Appeal CIV-2019-485-214, 16 April 2019.(2) Did the Authority err in law by finding that the medical evidencebefore the Ministry did not verify that the appellant was severelydisabled? This finding is not open to the Authority on the evidencethat was before the Authority and contradicts the Ministry's statementto the Benefits Review Committee dated 1 December 2015.(3) Did the Authority err in law by reading the Order and the ReciprocityAct in a way that wrongly fettered the discretion of the ChiefExecutive under s 61, so that the granting of SLP or EmergencyBenefit pursuant to the Order is fettered out of existence by providingthat the rate of the Benefit is Nil?(4) Did the Authority err in law by holding that the disadvantages sufferedby the applicant in this case, in comparison to other persons ofworking age, non-disabled persons, and NZ residents applying forSLP, did not amount to prohibited discrimination under [theNew Zealand Bill of Rights Act 1990 (NZBORA)]?(5) Did the Authority err in law by failing to give a "Bill of Rightsconstruction" to the interpretation of the relevant statutory provisions,so that the meaning that is most consistent with the rights of theApplicant is preferred?(6) Did the Authority err in law in holding that there were no grounds ofprohibited discrimination under NZBORA in this case?(7) Did the Authority err in law in holding that the Order is not ultra viresthe Reciprocity Act or the Social Security Act?[30] Some of these questions overlap, some relate to questions of fact and otherscontain legal submissions. I will address them sequentially.Does the Agreement extend the emergency benefit to Australian residents?[31] Section 61(1) of the Act empowers the chief executive, at his or her discretion,to grant an emergency benefit "instead of or in substitution for a supported livingpayment, sole parent support, or jobseeker support".[32] Mr McKenzie QC, submitted that, in the event that the Authority was correctto conclude that no assistance in the form of SLPO was available to the Ms Medero,then she is entitled to an emergency benefit. He notes that the emergency benefit hasoften been described as a "third tier benefit". "First tier benefits" are those benefits ofentitlement where, upon satisfying the statutory criteria, an applicant is entitled to thegrant of a benefit such as New Zealand superannuation. "Second tier benefits" arethose where the grant is subject to a means test, such as the supplementary livingbenefit. "Third tier benefits", though, are discretionary benefits where a generaldiscretion is conferred on the chief executive to alleviate need in certain statutorycircumstances.[33] Mr McKenzie submitted that the Court's role is to ensure that the statutorydiscretion is exercised in the fullest way that Parliament has intended, the Courtapplying to the chief executive's discretion the principle that the person on whom astatutory discretion is conferred must not fetter its exercise by self-made rules.21 Hecontends that any conditions which the chief executive "may think fit to impose" unders 61(3) must not fetter the broad discretion to alleviate hardship under the section andsuggests that the emergency benefit is treated as a discretionary benefit which issupplemental to the other forms of relief available under the Act. As subsection (1)expressly confers on the chief executive a discretion "to grant an emergency benefitinstead of or in substitution for a supported living payment", he submitted thatreferences in the Agreement to the invalid's benefit (SLPO) must be read as includingthe emergency benefit where, in the exercise of the chief executive's discretion, thisbenefit is granted instead of or in substitution for the SLP.[34] Mr McKenzie submitted that, while the emergency benefit is called a "benefit"and provided with its own separate section in the Act, it is not properly described as adiscrete benefit, but rather is supplementary in nature. It sits alongside other benefitsand is designed to fill gaps not covered in the benefit structure. He argued that it isnot necessary for the Agreement to expressly name the emergency benefit because theinclusion of the SLPO carries with it this supplementary discretion.[35] If, however, the Authority was correct in holding that the emergency benefit isnot covered by the Agreement and so is excluded, then Mr McKenzie submitted thatthe Order creating it went well beyond the power of the Executive to depriveNew Zealand residents of this important discretion on the part of the chief executive.He submits that only Parliament could make such a major change in the position ofNew Zealand applicants given that Australian applicants have the correspondingAustralian special benefit, as one of the objectives of the Agreement was to achieve21 Ankers v Attorney-General [1995] 2 NZLR 595 at 599-600.equality of treatment between Australian and New Zealand applicants for benefitassistance, thereby providing reciprocity. The Authority is said to have failed to givea NZBORA interpretation to the Agreement by interpreting it in a narrow way so as toexclude the chief executive's discretion under s 61. It is therefore submitted that theAuthority was wrong in excluding from being covered by the Agreement the chiefexecutive's discretion available under s 61 to substitute an emergency benefit for theSLPO.[36] However, the Agreement only applies to New Zealand superannuation, theveteran's pension and the invalid's benefit.22 While the emergency benefit could bedescribed as a "third tier" benefit, being one that is granted at the chief executive'sdiscretion, it is nevertheless classified under the Act as a main benefit.23 If theintention had been that the emergency benefit would be available to those not entitledto New Zealand superannuation, the veteran's pension and the invalid's benefit, itwould have been explicitly included in the Agreement. Its exclusion from theAgreement, along with other main benefits such as the jobseeker support and soleparent support benefits, can only have been deliberate. The absence of these mainbenefits from the Agreement is consistent with the observations made by the Court ofAppeal in Bredmeyer that there has been a gradual winding back of the arrangementsprovided for under the Agreement, and:24 the scope of the cost-sharing agreement should be confined to a few keybenefits and that policy on access to the broader range of benefits remained apolicy matter for each Government.[37] Although there is a "special benefit" available for Australian citizens residentin New Zealand and art 4 provides for equality of treatment, this article is stated to beexpressly subject to other provisions in the Agreement. As the Court of Appealobserved in Bredmeyer, the purpose of the Reciprocity Act is not "harmonisation" ofthe New Zealand and Australian social welfare systems.25 It is not the purpose of theAct to provide benefits to a New Zealand resident in Australia co-extensive with thebenefits they might receive in New Zealand.22 Social Welfare (Reciprocity with Australia) Order 2002, sch 1, art 2(1).23 Social Security Act, s 3.24 Bredmeyer v Chief Executive of the Ministry of Social Development, above n 10, at [54].25 At [34].[38] While Mr McKenzie argued that the Agreement fetters the chief executive'sdiscretion to grant an emergency benefit, noting that the Order was made by theExecutive and was not enacted by Parliament, this fails to take into account the factthat, under s 77 of the Act, the norm is that a benefit is not payable to a beneficiarywho is absent from New Zealand. It is only the Agreement and the Order that allowsfor a New Zealander resident in Australia, once certain conditions are met, to beeligible for those benefits made available under the Agreement. Rather than limitingor restricting the rights of New Zealand beneficiaries who choose to reside inAustralia, the Agreement and Order create additional rights that would not otherwiseexist. The Agreement does not extend the emergency benefit entitlement to Australianresidents.Did the Authority err in finding that the medical evidence did not verify that theappellant was severely disabled?[39] The Authority, in its decision, stated:26[36] The description of the appellant's health condition would seem tosupport the conclusion that she is severely disabled and totally unable to workhowever it does not appear from the evidence that this has been verified forthe Ministry by medical evidence.[40] Mr McKenzie challenged this statement, submitting that this finding was notopen to the Authority on the evidence that was before it and contradicts the Ministry'sstatement in December 2015 which assured the Benefits Review Committee that "theApplicant's date of severe disablement or her eligibility under the severely disabledcriteria is not in dispute here". Furthermore, a medical report from a doctor atWerribee Group Healthcare in Melbourne dated 2 September 2015 was attached to thestatement of Frances Kinraid, a community worker who assisted Ms Medero and herfamily, and there was a further report confirming the nature of Ms Medero's severedisability in the agreed bundle of documents.[41] Counsel for the respondent submitted that this question is one of fact and, evenif it is capable of constituting a question of law, does not affect the outcome of theappeal. To the extent that the passage could be said to constitute a factual finding, it26 Re Medero, above n 2. This point is reiterated at [66].is submitted that the Authority placed no weigh upon it, merely seeking to illustratethat the requirements for a New Zealand citizen living in Australia to qualify for SLPOunder the Agreement are more restrictive than those for New Zealand residents seekingSLP under the Act. It was submitted that whether the appellant is "severely disabled"has no bearing on the result as the reason she was not entitled to receive any moneyunder art 10 was that she had no working age residence in New Zealand. It was notbecause she did not meet the "severely disabled" test.[42] It does appear that the Authority, in stating that the question of the appellantbeing severely disabled and totally unable to work had not been verified by medicalevidence, overlooked some of the evidence before it. In particular, there was a letterfrom Werribee Group Healthcare detailing Ms Medero's condition since suffering astroke in 2015 and the further letter from Dr Abdalla of 17 January 2018 updating herhealth status. There can be no question but that the appellant was severely disabledfrom at least September 2015 onwards. However, this comment did not play a role inthe Authority's determination that she was not entitled to receive any money under theSLPO, this being a result of her not meeting the working age residence requirement.In any event, it was a finding of fact, rather than one of law, and as such does not fallto be considered in an appeal by way of case stated.Does the Authority's interpretation of the Agreement and the Reciprocity Actwrongly fetter the discretion of the chief executive?[43] Junior counsel for the appellant, Mr McKenzie-Bridle, argued that theAuthority was wrong to decide the chief executive's discretion in s 61 of the Act wasousted by the Order. While it had been noted in Bredmeyer that there had been a"gradual winding back" of benefit entitlements, this was said to be a matter forParliament, not the Executive. It was submitted that, in any event, Bredmeyerconcerned superannuation entitlements and the effect of art 9, which had undergone alevel of scrutiny and oversight from Parliament that was lacking in art 10, which hadbeen agreed by the Executive acting independently of Parliament.[44] Although the Authority considered that the Order ousted the s 61 discretion,Mr McKenzie-Bridle contended that that overlooks the purpose behind the chiefexecutive's discretion. That discretion is an essential element of New Zealand's socialsecurity scheme to ensure New Zealand citizens in need do not experience unnecessaryhardship. If the discretion to grant the emergency benefit in substitution is not readinto the Order, there is nothing standing between New Zealand citizens resident inAustralia and indigence.[45] Counsel for the respondent noted that, under s 77 of the Act, benefits are notgenerally granted to a person absent from New Zealand and the chief executive'sstatutory discretion under s 61 does not extend to overseas persons. It was accordinglysubmitted that there is no discretion to grant the emergency benefit instead of or insubstitution for the SLPO to a New Zealand citizen resident in Australia (anddeliberately so).[46] It is clear that the chief executive's discretion to grant the emergency benefit islimited to those persons who meet the criteria and who are resident in New Zealand.As the law currently stands, a New Zealand citizen who is resident in, say, China,would also not be eligible for the SLPO or an emergency benefit. Neither theAgreement nor the Reciprocity Act fetter the discretion given by s 61 of the SocialSecurity Act.Is the Agreement consistent with the New Zealand Bill of Rights Act 1990?[47] Questions 4-7 largely deal with the same issue of whether or not the Agreementis consistent with NZBORA.[48] Mr McKenzie argued that the appellant was affected by the provisions ofNZBORA in four respects:(a) By reason of being a person suffering from a disability in terms ofs 21(1)(h) of the Human Rights Act 1993 (HRA).27(b) By reason of her employment status which, under s 21(1)(k) of theHRA, means being unemployed or a recipient of a benefit.27 Section 19 of the New Zealand Bill of Rights Act 1990 incorporates into that Act the grounds ofdiscrimination in the Human Rights Act 1993.(c) By reason of her age, being outside the period of "working age"referred to in the Agreement.28(d) By reason of her national origins because, although she is a permanentresident and citizen of New Zealand, she is receiving less favourabletreatment by being resident in Australia, under a provision intended tobenefit New Zealanders resident in Australia, as compared with herentitlement if still resident in New Zealand.29[49] Section 6 of NZBORA provides:Wherever an enactment can be given a meaning that is consistent with therights and freedoms contained in this Bill of Rights, that meaning shall bepreferred to any other meaning.[50] The Courts have applied a two-stage test in determining whether thediscrimination provisions of s 19 of NZBORA apply: first, there must be differentialtreatment between groups in comparable situations and, second, that differentialtreatment had to have resulted in a material disadvantage to the group differentiatedagainst.30[51] Mr McKenzie submitted that the appellant was materially disadvantaged underart 10 in comparison with New Zealand citizens or residents living in Australia ofworking age who are normal, healthy and able-bodied people. She is also materiallydisadvantaged in comparison with qualifying citizens and residents applying for SLPin New Zealand to whom "working age residence" does not apply. In Ministry ofHealth v Atkinson, the Court of Appeal stated that it is sufficient at the s 19(1) stage toshow that the differential treatment resulted in some discriminatory impact, namely"disadvantage".31 While the Authority had placed weight on Bredmeyer, in which theCourt of Appeal held that there was no "disadvantage" arising from matters such asresidence and location, Mr McKenzie submitted that it is unnecessary to look to28 Human Rights Act, s 21(1)(i).29 Section 21(1)(g).30 Ministry of Health v Atkinson [2012] NZCA 184, [2012] 3 NZLR 456 (CA) at [55] and [109];Child Poverty Action Group Inc v Attorney-General [2013] NZCA 402, [2013] 3 NZLR 729 at[43].31 Ministry of Health v Atkinson, above n 30, at [45].NZBORA for specific grounds showing disadvantage, saying that would beunrealistic. Mr McKenzie accepted that any social security system needs to providetargeted benefits and must have criteria for assessing need. However, he submittedthat the introduction by executive action of a criterion such as working age residencewhich is otherwise foreign to the New Zealand benefit system, has served to seriouslydisadvantage the applicant under the reciprocity scheme as, if not for this criterion,she would have been entitled to welfare assistance from New Zealand. Thediscriminatory effect of introducing this criterion to applicants, who would otherwisequalify, gives rise to the disadvantage.[52] The Authority held that this was a case where s 5 of NZBORA applied and thedisadvantage based on disability was a justified limit to the right to freedom fromdiscrimination.32 Mr McKenzie submitted that it was important to note that the onusis on the Crown to demonstrably justify the limit, and that onus had not beendischarged. He argued that the disadvantage to the applicant and the class ofvulnerable persons to whom she belongs is stark and is difficult to justify havingregard to the overall purpose of the Agreement. To excuse this on the basis of theCrown's involvement in international negotiations is, it is submitted, to trivialise thedisadvantage.[53] There is no doubt that, as a consequence of her decision to move to Australiaand then suffering a stroke, Ms Medero's situation became dire. She did not qualifyfor any Australian benefit and was unable to meet the cost of her necessary medicaltreatment. However, this case does not turn on the desperate nature of Ms Medero'splight. It turns on whether the relevant provisions of the Agreement breach NZBORA,and, if so, whether they are a justified limit on the right to freedom fromdiscrimination.[54] Counsel for the respondent submitted that it was not correct to say that theAuthority held there were no grounds of prohibited discrimination under NZBORA.The Authority considered three possible grounds of discrimination. The first is thatthe Agreement discriminates against those receiving SLPO in Australia as compared32 Re Medero, above n 2, at [66].with SLP in New Zealand. That claim was answered by the Authority with referenceto Bredmeyer in which it was held that neither residence nor location is a ground ofdiscrimination in terms of NZBORA.33[55] The second was that the requirement for working age residence under art 10 inorder to qualify for SPLO discriminates on the basis of age. The Authority consideredthat this was prima facie discrimination, but that it was a justified limitation in termsof NZBORA.[56] The third was that the requirement that an applicant for SPLO be severelydisabled is more restrictive than the requirements for SPL under the Act, and thereforediscriminates on grounds of disability. Again, the Authority considered this to beprima facie discrimination but held that it was a justified limitation.[57] The approach to be taken when determining whether a provision is inconsistentwith NZBORA was considered in Hansen v R.34 In that case, the Supreme Court notedthat, in deciding what constitutes a justified limitation under s 5 NZBORA, theNew Zealand courts have commonly adopted the test used by the Supreme Court ofCanada in R v Oakes.35[58] In R v Chaulk, the Supreme Court of Canada summarised the Oakes test asbeing:361 The objective of the impugned provision must be of sufficientimportance to warrant overriding a constitutionally protected right orfreedom; it must relate to concerns which are pressing and substantialin a free and democratic society before it can be characterized assufficiently important.2 Assuming that a sufficiently important objective has been established,the means chosen to achieve the objective must pass a proportionalitytest; that is to say they must:(a) be "rationally connected" to the objective and not be arbitrary,unfair or based on irrational considerations;33 Re Medero, above n 2, at [64], referring to Bredmeyer v Chief Executive of the Ministry of SocialDevelopment, above n 10, at [63].34 Hansen v R [2007] NZSC 7; [2007] 3 NZLR 1 at [64].35 R v Oakes [1986] 1 SCR 103.36 R v Chaulk [1990] 3 SCR 10303 at pp 1335-1336.(b) impair the right or freedom in question as "little as possible";and(c) be such that their effects on the limitation of rights andfreedoms are proportional to the objective.[59] Where the Court is considering s 5 in the context of Social Welfare legislation,the Court is entitled to have regard to the policy factors behind such legislation. InChild Poverty Action Group Incorporated v Attorney-General, Ellen France J givingthe decision of the Court said, in relation to those provisions of the Income Tax Actwhich provided for the Working for Families package:37[91] The effect of these authorities is therefore, that in approaching the s 5analysis, some latitude or leeway is given to the legislature or the decisionmaker particularly in a case like the present which involves the complexinteraction of a range of social, economic, and fiscal policies as well astaxation measures. In addition, those policy factors relate to the overall socialassistance measures with various tiers of benefits for the relief of poverty, aswell as incentives to encourage beneficiaries to move into employment. Thatlatitude or leeway to the legislature does not however alter the fact that theonus is on the Crown to justify the limit on the right. The justification has tobe "demonstrable".[60] The purpose of the Agreement was considered in Bredmeyer v The ChiefExecutive of the Ministry of Social Development:38[34] Consideration of the "immediate" legislative context requires anexamination of the purpose of the Agreement itself. We agree with therespondent that the purpose of the Agreement is to coordinate some of thesocial security laws of New Zealand and Australia. The primary objective isto ensure that for New Zealand superannuation and the Australian age pensiontime spent in either country can be credited in the calculation of residence.Associated with that, the Agreement aims to ensure that payment of therelevant benefit is made in either country at an equivalent rate to that in theother country. The purpose is not a harmonisation of the two countries' laws.Rather, the intention is to ensure that a person is not disqualified in terms ofthe residency requirements by shifting from one country to the other and tothen ensure that there is an equivalence in terms of the rates of payment. [61] I do not accept the appellant's argument that the "primary and authorisingstatute" of the Agreement is the Act. Just as in Bredmeyer, the authorising statute isthe Reciprocity Act.37 Child Poverty Action Group Incorporated v Attorney-General, above n 30 (citation omitted).38 Bredmeyer v The Chief Executive of the Ministry of Social Development, above n 11.[62] The test is, therefore, whether the provisions of the Reciprocity Act authorisean Order in Council which is inconsistent with NZBORA and therefore ultra vires s 19of the Reciprocity Act.Was the order ultra vires the Reciprocity Act or the Social Security Act?[63] Mr McKenzie-Bridle argued that, when making art 10 of the Agreement, whichimposes additional restrictive eligibility criteria to benefits provided by the Act, theExecutive went further than the Reciprocity Act empowered it to go. This exercise ofpower is said to be ultra vires both the Act and the Reciprocity Act and, consequently,art 10 is unlawful.[64] Mr McKenzie-Bridle noted that the purpose of the Act is to help people forwhom work is not currently appropriate, providing financial support to alleviatehardship. The primary regulation making power contained in the Act is as follows:132 RegulationsThe Governor-General may from time to time, by Order in Council, makeregulations providing for such matters as are contemplated by or necessary forgiving full effect to the provisions of this Act and for the due administrationthereof.[65] The section dealing with regulations relating to overseas pension is subject tos 132:132C Regulations relating to overseas pensions(1) Without limiting the general power to make regulations conferred bysection 132, the Governor-General may from time to time, by Orderin Council, make regulations for all or any of the following purposes[66] Mr McKenzie-Bridle submitted that s 132 indicated that Parliament intendedthe Minister to only make regulations which furthered the purpose and intention of theAct. Parliament is said to have carefully and intentionally limited the power of theMinister to impose restrictions that take away social security entitlements. If theMinister wants to impose restrictions on entitlements, he or she is required to followthe scheme and practice of the Act and pass those restrictions through Parliament.Parliament, it is submitted, did not empower the Minister to chip away atNew Zealand's social security protections through regulation, policies or orders.When contrasted with the careful scheme of the Act, the Reciprocity Act did notempower the Executive to do anything more than the minimum required to give effectto reciprocity agreements with Australia.[67] Mr McKenzie-Bridle submitted that, when analysing art 10 in light of the scopeand purposes of these Acts, it becomes apparent that it goes much further than thoseActs permit. It attempts to import eligibility criteria from Australia's social securitylegislative framework without any context. The working age residence requirement isan eligibility requirement indigenous to Australia's social security scheme and is notfound in the Act in relation to SLP.[68] The purpose of the Act is to provide protections for those who, for variousreasons, are unable to earn an income whilst resident in New Zealand. It is not toprovide a security blanket for all New Zealand citizens, regardless of where they maychoose to live. However, the Reciprocity Act has extended the Act's provisions so asto allow for agreements to be entered into with other countries that will provide certaincategories of persons with benefits whilst resident outside of New Zealand. Section19(1)(b) recognises that modifications to the Act's provisions may be necessary inorder to give effect to any agreement reached. The eligibility criteria in art 10 of theAgreement was one such modification. It was not ultra vires the Act.[69] The respondent submitted that the objectives of art 10 were two-fold: firstly,to restrict the number of people who were eligible for the SLPO in Australia and,secondly, to fulfil one of the aims of the Agreement which was to co-ordinate theSocial Security systems of New Zealand and Australia and ensure equivalence in termsof rates of payment between New Zealanders living in Australia and their Australiancounterparts also resident in that country.[70] I accept the respondent's submissions that these objectives are sufficientlyimportant to limit the right to not be discriminated against on the basis of age.[71] As the Court held in Bredmeyer, the Agreement had its genesis in a politicalcompact between the Governments of Australia and New Zealand with the inevitablecompromises involved in such an exercise.39 Such agreements inevitably involve ahigh social and economic policy component. The Agreement is primarily focused onthe attaining of political objectives. The merits of individual cases are subservient tothose objectives.[72] When assessing political objectives with a high social policy content, theCourts have accorded the policy objectives some weight. In the case of A (on theapplication of Hooper) v Secretary of State for Work and Pensions, the High Court ofEngland and Wales said:40[115] In determining how to target resources to those in need, the legislatureis entitled to impose "bright line" rules which are easy to apply and which maynot focus with precision on the merits of individual cases. No logic canindicate where the balance should be struck; evaluative judgments arerequired, based on experience. But such bright line rules in the context ofsocial and economic policy do not lead to incompatibility even if individualhardship is occasioned. The Government was entitled to avoid complexand expensive assessments of need.[73] In terms of the analysis set out above, the working age residence requirementis rationally connected with, and proportionate to, the objectives of the Agreement.[74] Mr McKenzie mounted an attack on the Agreement on the basis of what hesaid the word "modifications" in s 19(1)(b) of the Reciprocity Act means.41[75] Mr McKenzie relied on one of the definitions of "modify" in the OxfordEnglish dictionary to argue that the changes can only be of a minor nature. Theparticular definition he relied on said:To make partial or minor changes to; to alter (an object) in respect of some ofits qualities, now typically so as to improve it; to cause to vary without radicaltransformation.[76] Another definition of modify in the same dictionary says: "to limit or qualifythe sense of (a word, phrase, or sentence); to stand as a modifier in relation to (anoun)". I am satisfied that this latter definition is to be preferred.39 Above n 11, at [55].40 A (on the application of Hooper) v Secretary of State for Work and Pensions [2002] EWHC 191(Admin).41 The relevant parts of s 19 of the Reciprocity Act are set out at [13].[77] There is nothing in the text or purpose of the Reciprocity Act that wouldindicate that it was the intention of Parliament to only authorise minor modifications.[78] As the Court of Appeal in Bredmeyer noted, a result of the Agreement may bethat a New Zealand beneficiary may even be worse off pursuant to the Agreement byvirtue of the fact that they had moved to Australia than they would be if they hadmoved to a country with which New Zealand did not have a reciprocal agreement.42The Court in that case indicated that such a result was justified because of issues ofnational interest in policy underlying the international agreement.Conclusion on NZBORA arguments[79] I agree with the Authority's finding that there was prima facie discriminationon the grounds of age and disability. However, the objective of the Agreement ofstrengthening the existing friendly relations between Australia and New Zealand andco-ordinating the two countries' social security systems is of sufficient importance tooverride NZBORA rights.[80] Section 77 of the Act makes it clear that the starting point in relation toentitlement to receipt of a benefit is residence in New Zealand. That entitlement canbe extended by international convention or inter-country agreement. Suchconventions or agreements are political compacts and their terms are a policy matterfor each government to decide.[81] The exclusion from coverage of the Agreement of certain New Zealandbenefits is not arbitrary, unfair or based on irrational considerations but is rationallyconnected to the purpose of the Reciprocity Act and the Agreement.Answers to questionsQ1: Whether the Social Security (Reciprocity with Australia) Order 2002 isproperly interpreted as extending the emergency benefit to Australianresidents, in particular, where the emergency benefit is granted instead of, orin substitution for the SLPO in the Chief Executive's discretion?42 Above n 11 at [59].A: No.Q2: Did the Authority err in law by finding that the medical evidence before theMinistry did not verify that the appellant was severely disabled?(The second part of this question is not a question of law but a submission).A: Yes, but this did not affect the decision.Q3: Did the Authority err in law by reading the Order and the Reciprocity Act in away that wrongly fettered the discretion of the Chief Executive under s 61, sothat the granting of SLPO or emergency benefit pursuant to the Order isfettered out of existence by providing that the rate of Benefit is Nil?A: No.Q4: Did the Authority err in law by holding that the disadvantages suffered by theapplicant in this case, in comparison to other persons of working age, non-disabled persons, and New Zealand residence applying for SLPO, did notamount to prohibited discrimination under NZBORA?A: No.Q5: Did the Authority err in law by failing to give a "Bill of Rights construction"to the interpretation of the relevant statutory provisions, so that the meaningthat is most consistent with the rights of the appellant is preferred?A: No.Q6: Did the Authority err in law in holding that there were no grounds of prohibiteddiscrimination under NZBORA in this case?A: No.Q7: Did the Authority err in law in holding that the Order is not ultra vires theReciprocity Act or the Social Security Act?A: No.Result[82] For the reasons set out above, this appeal is dismissed.Churchman JSolicitors:Bell and Co, Wellington for AppellantCrown Law, Wellington for Respondent