Busby v Chief Executive of the Ministry of Social Development [2014] NZHC 294 (3 March 2014)

Last Updated: 12 March 2014

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2013-485-732 [2014] NZHC 294

BETWEEN SIMON JAMES BUSBY Appellant

AND THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT

Respondent

Hearing: On Papers

Counsel: Appellant in Person

C Fleming and M Clark for Respondent

Judgment: 3 March 2014

_{JUDGMENT OF SIMON FRANCE J}

[1] This is a case stated appeal from a decision of the Social Security Appeal Authority (the Authority). The Authority has dismissed an appeal by Mr Busby against a decision of the Chief Executive of the Ministry of Social Development holding that Mr Busby had incorrectly received the unemployment benefit.

[2] The Chief Executive’s decision related to two periods (12 November 1998 to

28 November 1999, and 2 January 2002 to 1 December 2002) during which it has been held Mr Busby was in full-time employment and therefore ineligible to receive the unemployment benefit. The total amount of consequent overpayment is

$15,346.87.

[3] Mr Busby was notified of the Chief Executive’s decisions in relation to each period on 9 June 2003 and 27 January 2004 respectively. He took no steps at the

_{time, but in 2010 he sought a review of the decisions by the Benefits Review}

BUSBY v MINISTRY OF SOCIAL DEVELOPMENT [2014] NZHC 294 [3 March 2014]

Committee. The Committee agreed to review the matter, but confirmed the Chief

Executive’s decision.

[4] Mr Busby then appealed to the Authority. He requested that the matter be dealt with on the papers. The Authority indicated that it would be preferable for there to be oral evidence from the key people involved and this occurred. The Ministry called its investigating officer and two people involved with the business said to have provided employment to Mr Busby over the relevant period. Mr Busby appeared for himself and gave evidence.

[5] The primary factual issue was whether Mr Busby had been employed full-time by the business over the relevant periods. Mr Busby said he had only ever worked for the company on a casual basis and was paid cash in hand. He pointed to the lack of proper records kept by the company and the lack of an employment contract and suggested that the company’s principal had dirty hands. This seems to be a suggestion that the written records such as a wages book were made up to support a tax dodge of some sort, and that IRD records showing PAYE having been paid by the company for Mr Busby as being improper use by the employer of his tax number.

[6] Relying on evidence which will be identified later, the Authority found that it had been established that Mr Busby worked for the company on a full-time basis in the relevant periods. It follows from this conclusion that his contrary evidence was not accepted.

[7] The next step for the Authority was to determine whether, in accordance with s 86(9A) of the Social Security Act 1964, the overpayments should be recovered. Section 86(9A) sets out a series of criteria which must be established before non-recovery can be directed. The first step is that it must be shown the debt (i.e. incorrect benefit payment), or part of it, came about as the result of an error by a Ministry officer.

[8] Error is itself defined to include the provision of incorrect information by the

Ministry, an erroneous act or omission by the Ministry when investigating benefit

entitlement, or any other Ministry error.¹ The Authority concluded there was no error by the Ministry because it was not accepted that Mr Busby told anyone about his full-time work. There being no error, further inquiry under s 86(9A) was not required.

Case stated

[9] The Authority stated three questions for this Court:

(a) Was there any evidence on which the Authority could conclude that the appellant was in full time employment for the purposes of s 89 of the Social Security Act 1964 in respect of the periods:

(i) 12 November 1998 to 28 November 1999; and

(ii) 2 January 2001 to 1 December 2002?

(b) As a matter of law is the Chief Executive entitled to establish overpayments in respect of these periods?

(c) Did the Authority err in law in the application of s 86(9A) of the

Social Security Act 1964?

[10] The appellant requested the appeal be determined on the papers. Each side has filed written submissions.

First question – evidence supporting the decision

[11] This question of law does not require the appeal court to form its own view of the evidence. Rather, the Court is required to assess if there was evidence before the Authority that made the Authority’s decision an available and permissible one.

[12] In the present case there was ample evidence to support the Authority’s

_{conclusion. One need only point to the fact that the employer who paid Mr Busby}

¹ Section 86(9B).

testified that he had known Mr Busby for a long time and he worked full-time for him over these periods. To that could be added the wages book produced by the employer which records Mr Busby being paid, and also Mr Busby’s acknowledgement he did some work there. If these items are accepted it would be open to a decision maker to consider the case made out.

[13] There is much more evidence that could be referred to, just as there was contrary evidence from Mr Busby. There was no item of evidence conclusive in itself, so the Authority’s decision had to be a product of inference and of balancing the various points. But the evidence was there, if accepted, to establish that conclusion.

[14] The first question is answered “yes”.

Second question

[15] It is unclear to me why the Chief Executive might not as a matter of law be entitled to establish overpayments. The Act says it can be done, the required process was followed, and Mr Busby notified of the outcome. Once a conclusion was reached that Mr Busby was employed full-time during these periods, it follows he was not entitled to an unemployment benefit and the payments became “overpayments”.

[16] The second question is answered “yes”.

Third question

[17] Section 86(9A) provides that notwithstanding payments having been incorrectly made, if there has been a Ministry contribution to the mistake, that part of the overpayment that is attributable to Ministry error cannot be recovered. It is convenient to set out the text:

(9A) The chief executive may not recover any sum comprising that part of a debt that was caused wholly or partly by an error to which the debtor did not intentionally contribute if–

(a) the debtor–

(i) received that sum in good faith; and

(ii) changed his or her position in the belief that he or she was entitled to that sum and would not have to pay or repay that sum to the chief executive; and

(b) it would be inequitable in all the circumstances, including

the debtor’s financial circumstances, to permit recovery.

(9B) In subsection (9A), error–

(a) means–

(i) the provision of incorrect information by an officer of the department:

(ii) any erroneous act or omission of an officer of the department that occurs during an investigation under section 12:

(iii) any other erroneous act or omission of an officer of the department; but

(b) does not include the simple act of making a payment to which the recipient is not entitled if that act is not caused, wholly or partly, by any erroneous act or omission of an officer of the department.

[18] The Authority considered whether the payment of the benefit to Mr Busby was contributed to by an error by the Ministry. This inquiry seems to have been undertaken in response to Mr Busby’s claim that he told the Ministry about working part-time for the company. As the Authority found it was plain that he did not tell the Ministry he was working full-time during these periods. Mr Busby would not have done that because he continues to deny that he did work full-time.

[19] The Authority’s consideration involved only a question of fact as to whether a

Ministry error had been made. No question of law is involved.

[20] In terms of what error might have been made by the Ministry, Mr Busby’s

submissions on this appeal focus on what he says was an inadequate investigation in

2003/2004 when the overpayments were first established. However, this is not the type of error at which s 86(9A) is directed. Any error in the investigation would have occurred after the payments were made, and was not therefore causative of the overpayment happening. The Authority correctly focussed on the only suggestion of

an error made at the relevant time. Its conclusion no error was made was open to it on the facts.

[21] The third question is answered “no”.

Other matters

[22] Whilst outside the scope of the case stated procedure, Mr Busby has raised other points concerning which I consider it preferable to provide a response, albeit brief.

[23] Mr Busby placed weight on the provisions of the Employment Relations Act 2000 that require there to be a written employment contract for full-time work. He submits the absence of such a contract in his case means it could not be established that he was in full-time employment. It can be noted that this proposition would only apply to the second of the two employment periods in question as the Employment Relations Act was not in force at the time of the first period.

[24] The Employment Relations Act does not have the effect for which Mr Busby contends. Mr Busby is presumably referring to s 65(1)(a) of the Act which states an employment contract must be in writing. It has been held, however, that oral agreements remain enforceable and are not illegal.² The provision does not assist Mr Busby in resisting the contention that he was not entitled to receive the unemployment benefit in these periods. The other provisions in the Act on which

Mr Busby relies could be relevant to whether his employer had complied with the Act, but again do not affect the present inquiry into whether Mr Busby was correctly receiving an unemployment benefit.

[25] Mr Busby also complains of breaches of the New Zealand Bill of Rights Act 1990. The first is a claim that that Act means the debt can only be established in civil proceedings, and that has not happened. A short but sufficient answer to that contention is that the Social Security Act provides for the procedure that has been

_{used and so the Chief Executive is entitled to use it.}

² Warwick Henderson Gallery v Weston [2006] 2 NZLR 145 (CA).

[26] The second allegation is that during the initial investigation the case against Mr Busby was either not adequately put to him or not adequately established. The latter point is a challenge to the sufficiency of the evidence and has already been addressed. The former is answered by reference to the hearings before the Benefits Review Committee and the Appeals Authority. These have provided Mr Busby with an opportunity to hear and confront the case against him.

Conclusion

[27] The questions are answered:

(a) Yes. (b) Yes. (c) No.

[28] In its submission the respondent has not dealt with costs. However, there is no indication that costs are not sought so I order the respondent is entitled to scale costs in accordance with Counsel’s memorandum of 13 June 2013, together with

_{reasonable disbursements to be determined by the Registrar if necessary.}

_{Simon France J}

Solicitors:

Crown Law, Wellington