Goh v Chief Executive of the Ministry of Social Development [2010] NZCA 110 (31 March 2010)

Last Updated: 7 April 2010

IN THE COURT OF APPEAL OF NEW ZEALAND

CA679/2009 [2010] NZCA 110

BETWEEN IRENE YEH LENG GOH
Applicant

AND CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT
Respondent

Hearing: 16 March 2010

Court: Hammond, Chambers and Baragwanath JJ

Counsel: Applicant in Person
E J Child for Respondent

Judgment: 31 March 2010 at 10am

JUDGMENT OF THE COURT

A The application for special leave to appeal is dismissed.

2. The applicant must pay the respondent costs for a standard application on a Band A basis and usual disbursements.

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REASONS OF THE COURT

(Given by Baragwanath J)

[1] The applicant, Irene Goh, applies under s 12R of the Social Security Act 1964 (SSA) for special leave to appeal against a decision of the High Court.[1]

Background

[2] The applicant had received a weekly benefit from the respondent under the SSA for a number of years. She was later found to be entitled to weekly compensation from the Accident Compensation Corporation (ACC) under the Injury Prevention, Rehabilitation, and Compensation Act 2001 (IPRCA)[2] in respect of that period and so was due a large back-dated payment from ACC in respect of weekly compensation.
[3] The dispute concerned whether and how such compensation payment should affect the applicant’s entitlement to Social Security benefit payments she had already received from the respondent.
[4] Section 252 of the IPRCA provides that if a person receives a payment of an income-tested benefit under the SSA in respect of a period and establishes a claim to an entitlement from ACC in respect of the same period, an excess benefit payment is regarded as having been paid in respect of that entitlement, that being defined as the part of the benefit payment in excess of the amount of benefit properly payable having regard to the entitlement under the IPRCA. The Corporation is required to refund the excess benefit payment to the Chief Executive.
[5] The applicant’s ACC entitlement was for $95,891.90. The respondent calculated an overpayment of benefit, in the light of the ACC entitlement, paid to the appellant of $48,408.56. The respondent secured reimbursement of that amount under s 252(4)(b) of the IPRCA.
[6] The respondent’s power to review benefits is conferred by s 81 of the SSA which provides that:

• (1) The chief executive may from time to time review any benefit in order to ascertain—
  • (a) Whether the beneficiary remains entitled to receive it; or
• (b) Whether the beneficiary may not be, or may not have been, entitled to receive that benefit or the rate of benefit that is or was payable to the beneficiary—

...

(2) If, after reviewing a benefit under subsection (1) of this section, the chief executive is satisfied that the beneficiary is no longer or was not entitled to receive the benefit or is or was entitled to receive the benefit at a different rate, the chief executive may suspend, terminate, or vary the rate of the benefit from such date as the chief executive reasonably determines.

In Arbuthnot v Chief Executive of the Department of Work and Income[3] the Supreme Court held that the respondent’s power may be exercised retrospectively.

[7] By s 85A(f) of the SSA an overpayment paid to a person is a debt due to the Crown and by s 71A ACC payments are to be brought to charge as income in the assessment of a person’s benefit.
[8] The respondent’s decision was reviewed and upheld by the Benefits Review Committee. Following a further appeal to the Social Security Appeal Authority, the debt due to the respondent was reduced to $35,591.00.
[9] On appeal, the High Court answered no to the question:

Did the Social Security Appeal Authority err in law in finding that s 81 empowered the Chief Executive to retrospectively review the appellant’s benefit and treat the appellant’s ACC compensation as income for the period 15 March 1998 to 11 September 2005, in circumstances where the compensation payments were paid as a lump sum to cover an earlier period in which compensation payments had been incorrectly denied?

The challenge to the judgment

[10] Section 64 of the SSA states that where in relation to the rate of any benefit reference is made to the annual income of the beneficiary, that reference shall be deemed to be a reference to the estimated income of the person concerned for the period of 52 weeks commencing on the day on which the benefit will commence. By subs (2A), where in relation to the rate of any benefit reference is made to the weekly income of a person such income shall be determined by dividing the person’s total income over a specified number of weeks. Subsection (2B) then states:

For the purposes of determining a person's weekly income under subsection (2A), the chief executive may determine the period or periods to which any income relates, having regard to—

(a) the extent to which it was earned in that period or those periods; or
(b) the extent to which any other entitlement to it arose in, or in respect of, that period or those periods; or
(c) the period or periods for which it was otherwise received, acquired, paid, provided, or supplied.
[11] The High Court judgment reproduced subs (2B) and stated:

[25] The wording of this section requires the Chief Executive to focus on the “period” when the income was “earned” or “arose in”, rather than the time when the income was paid. In other words, the section indicates that in determining what is income it is correct for the Chief Executive to treat entitlements paid for certain periods as income for the periods, even if the payments are actually made at a much later date. The period to which payments are attributable will usually be identified by reference to the period when the right to payment was acquired.

[12] The applicant submitted that the Judge had incorrectly applied subs (2B). She contended that it does no more than authorise the Chief Executive to determine the income of a beneficiary over an annual or shorter period. She submitted that subs (2B) has no direct application to her backdated weekly compensation for which her entitlement was $95,891.90.
[13] She asked how she could have incurred an overpaid benefit of $48,404.56. She asserted that the High Court provided no explanation of how the benefit entitlement was affected and how the rate of the benefit should be affected in that period in respect of the lump sum compensation payment. She further submitted that s 71A(4)(c) provided no authority to allocate the compensation payment into discrete individual payments relating to the period when the entitlement for weekly compensation arose.
[14] Like the respondent’s counsel, we found it difficult to discern the applicant’s grounds of appeal even with the help of Mr Murphy, her McKenzie friend, whose assistance we appreciated. We agree with the respondent’s assessment that the arguments appear to be:

• (a) the Benefits Review Committee did not review the relevant decision;
• (b) the decision-makers did not properly explain the calculations;
• (c) the backdated compensation should not be treated as income earned in the period in which it related but instead as income earned only in the week when it was in fact paid.

[15] We reject the first and second arguments as untenable even if they raise questions of law as is required for an appeal to this Court under s 12R of the SSA, which may be doubted. The major contention was (c). As to that we accept the respondent’s submission that the only sensible way to analyse the legislation is to construe it as treating the compensation as applicable to the equivalent period during which benefit was paid. The legislation is designed to place the person largely in the position she would have been in had she received compensation from ACC throughout the period. The applicant’s argument is that she should retain both the full amount of her benefit and some of the accident compensation calculated on a weekly basis in respect of exactly the same period. Such duplication resulting in an unjustified windfall would entail a preposterous result.
[16] A similar argument was rejected by this Court in Tapp v Chief Executive Officer of the Department of Work and Income.[4]
[17] The application is dismissed. The applicant must pay the respondent costs for a standard application on a Band A basis and usual disbursements.

Solicitors:
Crown Law Office, Wellington for Respondent

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[1] Goh v Chief Executive of the Ministry of Social Development HC Auckland CIV 2008-485-2391, 30 June 2009. Leave to appeal was declined on 30 September 2009.
[2] Now the Accident Compensation Act 2001.

[3] Arbuthnot v Chief Executive of the Department of Work and Income [2007] NZSC 55, [2008] 1 NZLR 13 at [34].
[4] Tapp v Chief Executive Officer of the Department of Work and Income [2003] NZFLR 761.