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The Chief Executive of the Department of Work and Income v Vicary HC Wellington AP158/00 [2001] NZHC 276 (11 April 2001)

Last Updated: 13 November 2013

IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY AP158/00

UNDER the Social Security Act 1964

IN THE MATTER of an appeal from the decision of the Social Security Appeal Authority under s 12Q of the Social Security Act 1964

BETWEEN THE CHIEF EXECUTIVE OF THE DEPARTMENT OF WORK AND INCOME
Appellant

AND JILLIAN VICARY
Respondent

Hearing: 4 April 2001

Counsel: C Geiringer for Appellant
P D McKenzie QC, Amicus Curiae
M W Vicary (also heard) father of Respondent

Judgment: 11 April 2001

RESERVED JUDGMENT OF GENDALL J

[1] This appeal is by way of case stated pursuant to s 12Q of the Social Security Act 1964 in which, in essence, the appellant (“WINZ”) appeals against the decision of the Social Security Appeal Authority (“the Authority”). That decision was one allowing an appeal by Ms Vicary which had the effect of ordering that she was entitled to payment of an Invalid’s Benefit, backdated to the date she became so entitled, namely her 16th birthday. Such benefit was to be paid in substitution for a Handicapped Child’s Allowance that had been paid in respect of her.

[2] The essential background is that Ms Vicary was an infant in respect of whom a Handicapped Child Allowance was being paid to her mother. She remained entitled to that during her infancy but upon attaining the age of 16, she became entitled to an Invalid’s Benefit. An application was not made on her behalf for such benefit although WINZ had written to her parents to the effect that she might be entitled to it. It was not until some time later that Ms Vicary’s father applied and the benefit was granted at the Invalid’s Benefit rate but that such would commence at the date of application, (26 May 1998) and not at the date of her 16th birthday being the date upon which she became entitled (22 January 1998).

[3] On an appeal brought on her behalf, the Authority held that the payment of the Invalid’s Benefit could commence on the date at which she became entitled and accordingly it was backdated.

[4] Appeals by way of case stated can only be on points of law. They must be determined on the facts stated in the case. The case stated has been amended pursuant to Rule 724G(2) of the High Court Rules, with the consent of both the Authority and the respondent. Mr P D McKenzie QC was appointed as amicus curiae to assist the Court in presenting arguments on behalf of the respondent. Separately the respondent’s father, Mr M W Vicary, attended and brought to the attention of the court three matters which were of concern to him regarding the procedures adopted by and responsibilities of WINZ in circumstances such as related to his daughter.

The facts as determined by the Authority

[5] The facts set out in the amended case stated are recorded as follows:

“4.1. Ms Vicary was in receipt of a Handicapped Child’s Allowance until 19 May 1998 when it was replaced with an invalid’s benefit.

4.2 Ms Vicary had become entitled to an invalid’s benefit on 22 January 1998 upon her 16th birthday.

4.3 In January 1998, the Department wrote to Ms Vicary’s mother and advised that once Ms Vicary turned 16, she may be entitled to an invalid’s benefit.

4.4 Ms Vicary’s father did not apply for an invalid’s benefit for Ms Vicary at the time of her birthday because he had formed the view, based on his reading of a booklet from the Department . . ., that Ms Vicary would not qualify for an invalid’s benefit as she was still at school.

4.5 Ms Vicary’s father applied for the invalid’s benefit on 26 May 1998, after he had been talking to parents in a similar situation and had realised that the payment of invalid’s benefit could be made to applicants still at school.

4.6 The Department granted an invalid’s benefit from the date of application, being the later of the date of application and the date on which Ms Vicary became entitled to the benefit.

Statutory Provisions

[6] The Social Security Act 1964, as it provided at the relevant time contained a number of provisions relating to the dates upon which benefits would commence. The relevant statutory provisions are as follows:

“s 80 “Commencement Of Benefits”:

(1) Except as otherwise provided in this section . . . a benefit shall commence on the later of-

(a) The date the applicant became entitled to receive it; or

(b) The date the application for it was received.

. . . .

(13) A benefit shall commence on the day on which it was granted if-

(a) The person has become eligible for the benefit while receiving another benefit;

and

(c) The benefit is granted instead of that other benefit.”

Section 81 Review of Benefits

“(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 -

and for that purpose may require the beneficiary or his or her spouse to provide any information or to answer any relevant question orally or in writing, and in the manner specified by the chief executive. If the beneficiary or his or her spouse fails to comply with such requirement within such reasonable period as the chief executive specifies, the chief executive may suspend, terminate, or vary the rate of benefit from such date as the chief executive determines.

(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.

(3) If, after reviewing a benefit under subsection (1) of this section, the chief executive considers the beneficiary is more appropriately entitled to receive some other benefit, the chief executive may, in his or her discretion, cancel the benefit the beneficiary was receiving and grant that other benefit commencing from the date of cancellation.”

[7] The amended case stated provides in paragraph 6 that the grounds for the Authority’s decision to allow the appeal were as follows:

“6.1 The chief executive had a discretion under s 81(3) of the Social Security Act to cancel Ms Vicary’s handicapped child’s allowance from 22 January and to grant her an invalid’s benefit from that date;

6.2 It is unclear whether the Authority found:

6.2.1 That the Department should have initiated a review of the appellant’s benefit under s 81 at the time she turned 16; or

6.2.2 That the Department should have conducted a review of the appellant’s benefit under s 81 when the application was received from the appellant on 19 May 1998.

6.3 The chief executive ought to have exercised her discretion in Ms Vicary’s favour;

6.4 In accordance with s 12M(7) the Authority substituted its decision for that of the chief executive.”

[8] Section 12M(7) relates to hearings and determinations of appeal by way of rehearing, and authorises the Authority to confirm, modify, or reverse the decision or determination appealed against.

Questions of law for the opinion of the Court

[9] The questions stated in the amended case for this Court’s opinion are as follows:

“1 If, on January 1998 [sic] a person on whose account a handicapped child’s benefit was being paid turned 16, was the Director-General of Social Welfare, in the absence of an application, empowered to conduct an automatic review of that person’s benefit entitlement under s 81 of the Social Security Act 1964?

2 Did s 81(3) confer a discretion on the chief executive to cancel a benefit (in this case a handicapped child’s allowance) with retrospective effect and to grant another benefit in substitution for it (in this case an invalid’s benefit) from the effective date of cancellation?”

Appellant’s Argument

[10] In summary counsel submitted that the basic rule set out in s 80(1) is that benefits under the Act commence on the date of eligibility or the date of application whichever is the later and that rule governed in this case. Counsel submitted that the “no retrospectivity rule” was enacted in order to protect the public purse and whilst there are some exceptions to the rule (for example in relation to emergency benefits, accommodation supplements and rent rebate entitlements) they arise out of specific statutory authorisation, are not “first tier” benefits, and without statutory sanction there can be no retrospectivity.

[11] Counsel argued that s 8l, providing for review of benefits and which the Authority used in coming to its decision, could not apply retrospectively, other than within the terms of s 81(1) and (2). But, counsel argued, the proper application of s 81(3) - which the Authority used - had the key words, “commencing from the date of cancellation”, and could only refer to the date upon which the Chief Executive made a decision to cancel the benefit and substitute it with a more “appropriately entitled” benefit. Counsel submitted that in any event the Authority was wrong to categorise its actions as being a s 81 review at all. She argues that, for example, s 81(1) is not directed to a situation where an applicant is and remains eligible for a benefit but wishes to be assessed for some other benefit on more advantageous terms, but rather it relates to review of a benefit to which a beneficiary may not be entitled. Counsel submitted, however, that the power to substitute benefits in s 81(3) can only be exercised prospectively, as is evident from its wording.

[12] Counsel argued by an attempted use of s 81 to facilitate a retrospective substitution of a benefit, in circumstances such as Ms Vicary’s, led to an undermining of the provisions of s 80(13) which prohibits retrospective substitution (see para [6] above).

[13] As to the question of whether the Authority (or Chief Executive), in the absence of an application, is empowered to conduct a review of a person’s benefit entitlement, counsel for WINZ submitted that s 81 does not empower such action. She submitted that the section certainly does not impose any duty upon WINZ to advise applicants of their rights so as to enable the Authority to put an applicant into a financial position that he or she would have been but for any default by WINZ in advising them of their rights. Counsel submitted that s 81(1) provides for a review of existing and past benefits where the Department wants to satisfy itself that a beneficiary is not receiving or has not received more than to which he or she is entitled, but the section does not provide a vehicle for the Department to initiate a review, in the absence of any application, of a person’s wider benefit entitlement. It is argued that, there being no power for the Department to grant a benefit in the absence of an application, it must follow that there is no power for the Authority to even consider an appeal from an alleged failure to investigate whether the Department should have instituted such review. Counsel argues that to import such a duty to the Department to proactively put a person into such a position so as to receive an increased benefit, backdated, is to seek to evade the clear “no retrospectivity rule” contained in s 80. Counsel submits that the Authority has sought to re-create a discretionary position that previously existed in the proviso to s 80(1) [inserted by s 4 of the Social Security Amendment Act (No 3) 1990], which proviso said that where the Director-General was satisfied that an applicant for a Widow’s, Sickness or Invalid’s Benefit

“Could not reasonably have made an application for that benefit on the date he or she became entitled to it, the Director General may, in his or her discretion, treat an application for that benefit lodged within 28 days after the date of entitlement as if it had been made on that date of entitlement.”

[14] But that section has now been repealed, in line with the no retrospectivity rule. Counsel submits that the Authority erred in law in endeavouring to act in a way that had earlier been permitted by reason of that discretion, now removed.

Submissions on behalf of Respondent

[15] Mr McKenzie QC as amicus, made careful and detailed submissions as to the scheme and purpose of the Act. He correctly observed that it was to provide financial help for people who could not adequately support themselves. He argued that the retrospectivity provisions in s 80 should apply only for the purposes of that section and do not govern, he submitted, the application of s 81. He contended that the statutory scheme, as revised by s 81, empowered the Chief Executive to exercise her discretion as to the commencement date of a substituted benefit without limitation, and that there was nothing in the provisions of s 81 which restricted the exercise of her discretion in the way contended by the appellant. In essence, counsel submitted just as any benefit may be reviewed under s 81(1), which covers a Handicapped Child’s Allowance as much as any other benefit, so too the exercise by the Chief Executive of her discretion pursuant to s 81(3) cannot be limited so as to restrict the date of cancellation of that benefit so as to be always prospective or contemporaneous with a decision to cancel. Likewise it is argued that any decision to substitute another benefit can be retrospective.

[16] Counsel submits there is no difficulty in reconciling the provisions of s 80(13) and s 80(1) because the reference to the benefit “shall commence on the day it was granted”, where there is a substituted benefit under s 81(3), may equate with the date of cancellation, which may well be backdated. That is, counsel submits, the date of grant of the new benefit is the date of cancellation of the previous benefit and as, he submitted, the Chief Executive had a discretion to cancel the previous benefit retrospectively, then the date of grant could also be retrospective.

[17] Concerning the question of automatic review by the Chief Executive: amicus submitted that WINZ is required to be pro-active in the administration of benefits and to initiate steps to ensure that an appropriate benefit is provided to a beneficiary. Counsel submitted that as a matter of fact the Authority had provided information to Ms Vicary’s father which was unclear as to whether the child was entitled to an Invalid’s Benefit. He argued that WINZ erred in its duty to pro-actively inform the beneficiary. Counsel argued that the Authority, as it could exercise the duties, functions and discretions of the Chief Executive (pursuant to s 12(2)), could itself exercise that power, which the Chief Executive was herself entitled to adopt if it wished to do so, and was correct in so acting.

[18] In summary amicus submitted that the Court should take a broader approach to the objectives of the legislation than that advocated by counsel for WINZ, and construe the relevant statutory provisions so as to ensure that the primary objective and purpose of the legislation being “to provide financial help for people who for one reason or another could not adequately support themselves” was met.

Discussion

[19] Counsel invited me to consider the second question of law stated in the amended case first. I think that that is logical. The starting point is s 81(3) and the question is quite simple, namely whether that subsection confers a discretion on the Chief Executive to cancel a benefit retrospectively and to grant another benefit in substitution from it from such retrospective date.

[20] It is clear that there is a general theme running through the statute that there should be no retrospective commencement of benefits that are granted. There are specific exceptions. For example, emergency benefits which are granted in cases of hardship and for which the Chief Executive may determine an earlier commencement date (s 61(3)); an Accommodation Supplement (being a supplement second tier benefit, s 61EA(l)) and Rent Rebate Entitlement (s 61FA). All of those provisions specifically vest in the Chief Executive a wide discretion. Section 80(1) makes it clear that except as otherwise provided in the Act a benefit commences on the later of the dates upon which the applicant was entitled to receive it or the date of application. Subsection (13), which applies where a person becomes eligible for a benefit whilst receiving another benefit, and there is to be a substitution, then the substituted benefit commences on the date on which it was granted.

[21] The crux of the issue is whether it can become payable on the date of eligibility, rather than the date of grant, or date of application.

[22] On the face of it the words or s 80(1) are clear and do not, for example, contain the words “from such date as the Chief Executive determines” as are to be found in the other sections.

[23] Whilst counsel debated the supposed different purposes or objective of the legislation, in the end I do not think that matters in this case. In Ruka v Department of Social Welfare [1997] 1 NZLR 154, 161, the Court of Appeal summarised the principal objectives of the Act as being:

“The concern of the legislation was with the provision of financial help for people who for one reason or another could not adequately support themselves.”

[24] The appellant relied on later dicta of the Court of Appeal in Nicholson v Department of Social Welfare [1999] 3 NZLR 50, 58 where it was said that:

“. . . the relevant statutory objectives [provide] for the efficient administration of social welfare benefits in protecting the public purse.”

[25] In truth the latter follows upon the former. The concern and purpose of the Act is to aid those who truly are in need of financial assistance in a way that is administratively efficient and not wasteful of public funds. Those considerations have to be balanced. Counsel referred me to the Hansard Debates prior to the introduction of the legislation which was designed to remove retrospectivity of benefit payments. The Minister of Social Welfare is recorded as saying:

“The other important change to the Social Welfare provisions in the Bill is to remove the provision for retrospective payments. Under existing provisions, payments of benefits, the guaranteed retirement income, and the veteran’s pension can be backdated for up to 6 months for people who do not apply for the benefit or pension as soon as they become eligible. The removal of those provisions is a logical step by a Government committed to tighter targeting of the welfare dollar. The backdating of payments for up to 6 months is not an effective way of targeting people in need. A person who is genuinely in need does not allow weeks or months to elapse before he or she applies for a benefit or a pension.” (1990) 511 NZPD at 519.

[26] Thereafter a 28 day rule was instituted to give the Director General a discretion and the Minister is recorded in Hansard (1990) 511 NZPD at 561:

“The second measure that the legislation deals with is the provisions that terminate the ability for people to have retrospective entitlement to claim benefits that they could have been entitled to up until six months before the date of application. There has been some debate during the second reading and the Committee stage of the legislation, and while the House appears to accept the point that the ability to have retrospective access to that money should be concluded, there has been dispute about the conditions under which people should have access to entitlement when that entitlement is established.

In the Committee stage I moved an amendment that had been brought to my attention . . . . This provision will now allow the Director-General of Social Welfare to have some discretion over whether people should have a period longer than the two weeks, or two weeks beyond the time that the application has been filed. The amendment provides that if the application is lodged within 28 days of the entitlement the director-general can have discretion and in some instances can allow it to be made as though the entitlement has been established on the day of application.”

[27] That provision survived however for only one year and by the Social Security Amendment Act 1996 the 28 day rule was abolished altogether. It is obvious that the no retrospectivity rule, or provisions relating to it, are designed to protect or preserve public funds and the strict back-dating rule that is embodied in s 80(1) arose out of a direct social policy decision of Government.

[28] The question still remains however whether s 81(3) is framed in such terms as to preserve to the Chief Executive a discretion to backdate.

[29] Section 81(1) and (2) relate to the review of existing benefits. Cancellation can be backdated. Subsection (1) is concerned with whether a beneficiary remains entitled to receive a benefit. If a review by the Chief Executive determines that such entitlement no longer existed or exists, then there may be a suspension, termination or variation of that benefit under subsection (2). The Chief Executive may, if satisfied entitlement to that benefit no longer exists, backdate the payment of either a variation or suspension or termination. That would seem to make obvious sense given that the issue is whether there was entitlement to that benefit and its continuation from a certain date. Both subsections (1) and (2) refer to entitlement to receive that benefit or the rate of that benefit. If there is established to be no entitlement then the Chief Executive has a discretion to terminate it from the date upon which entitlement ceased.

[30] But s 81(3) is concerned with a different situation. It is not necessarily concerned with the position where a beneficiary who is in receipt of a benefit becomes not entitled to continuation of that benefit. It may not be a question of the beneficiary having received something to which he/she is not entitled. Rather subsection (3) is concerned with the Chief Executive reaching a decision that a beneficiary, although he/she may still be entitled to one benefit (as for example in this case the Handicapped Child’s Allowance), or they may no longer be entitled to that benefit, but nevertheless he or she is more appropriately entitled to receive some other benefit. It is that other benefit that then commences in lieu of the benefit that it replaces. Of course it may also be that an existing benefit should be cancelled because of non-entitlement but nevertheless a “more appropriate” benefit can be substituted. But it is the grant of the new benefit that is the crucial factor and its commencement can only occur upon the cancellation of the other. What if, as here, the other benefit is one to which a person remained entitled? Could cancellation and substitution be retrospective?

[31] Whilst one would expect, (as was the position in the present case) that the benefit to which a beneficiary is more appropriately entitled, and which is substituted for another, might be at a higher or more advantageous rate, subsection (3) does not have such a restriction as a matter of law. Thus if the Chief Executive considered a beneficiary (already entitled to receive one benefit) was more appropriately entitled to receive some other benefit, but which happened to be less advantageous to the beneficiary for personal or unique circumstances relating to him or her, they could be substituted. Would it be open to challenge if, in those circumstances the Chief Executive chose to backdate the commencement of the new lower benefit so as to financially “disadvantage” the beneficiary? I think so given that the “entitlement” to the former benefit had existed. What then if the Chief Executive is able to backdate a replacement benefit under s 81(3) so as to “advantage” the beneficiary?

[32] The legislative policy in s 80(1), s 80(13) and s 81(l) and (2) is clear. Has it been abrogated by an interpretation of s 81(3) so as to enable such an “advantage” to the beneficiary to nevertheless occur?

[33] I agree with counsel for WINZ that s 81(1) applies only where the Department was reviewing whether or not a beneficiary was entitled to that type of benefit, or at a particular level, that was being received. It is clear that s 81 review relates to any benefit that the beneficiary already is or has been receiving. It does not provide for reviews of eligibility for benefits that he or she is not currently receiving. Counsel submitted that therefore s 81(3) does not apply at all because it relates only to one of the (negative) consequences that may arise out of a s 81(1) review. Counsel argued that in the situation of Ms Vicary where she was, and remained, entitled to a Handicapped Child’s Allowance but there was a desire to be assessed for some other benefit on more advantageous terms, then such could only be dealt with under s 80(13). She said that, on the other hand, s 81(3) only governed the transition from one benefit to another where the Department had conducted a review of a person’s existing benefit for the purpose of ascertaining whether overpayment had been made and has concluded that the person is “more appropriately entitled to some other benefit”.

[34] I do not think it is necessary to go as far as counsel suggests. The sections can be reconciled in the following way. Section 81(1) arises only where the Chief Executive reviews any existing benefit. He or she may, after such a review, if satisfied the beneficiary is not entitled to it, or entitled to that benefit at a different rate, suspend, terminate or vary. Subsection (3), on its clear wording, can apply where there is review of an existing benefit undertaken by the Chief Executive (who “may from time to time review any benefit”) and in so doing if the Chief Executive concludes that some other benefit is the more appropriate entitlement (whether or not there is overpayment, underpayment or otherwise), the benefit may be cancelled and a substituted benefit granted and commenced from the date of cancellation. I have already discussed, in paragraph [31], the possibilities of more or less attractive benefits being substituted under s 81(3).

[35] But s 80(13) simply emphasises that in such a situation where substitution occurs, because a person has become eligible for one benefit whilst receiving another, and that benefit is granted instead of the other (as could arise under s 81(3)) then the benefit commences on the day in which it was granted.

[36] I am satisfied that “date of cancellation” referred to in s 81(3) on a plain reading of that subsection, means the date upon which the Chief Executive having first reviewed the earlier benefit cancels that benefit. The absence of the words which appear in subsection (1) and (2) of s 81 “from such date as the Chief Executive determines” and “from such date as the Chief Executive reasonably determines” in subsection (3), reinforces this interpretation. If Parliament required it to be otherwise it would or should have said so. The legislative history of s 81 shows that since its introduction in 1990, s 81(2) has allowed for a certain degree of retrospective suspension, termination or variation of benefits but when subsection (3) was introduced in 1991 Parliament chose to adopt contrasting language and not to follow or allow retrospective application. Later in 1993 subsection (2) was amended to allow further flexibility in the starting date of suspension, termination or variation of benefits by adopting the words “from such date as the Director General reasonably determines” but no similar amendments were made to s 81(3). The only conclusion one can properly draw is that Parliament has consciously chosen, in line with the Minister’s comments as recorded in Hansard in 1990 to provide for retrospective application for subsection (2) but only prospective application of subsection (3). The use of s 83 [sic] to facilitate a retrospective substitution further undermines s 80(13) prohibiting such retrospective substitution.

[37] The issue was discussed in Moody v Chief Executive of the Department of Work and Income (High Court, Christchurch Registry, AP38/00, 12 March 2001, Young J) where His Honour accepted that the words “date of cancellation” in subsection (3) referred to the date upon which the Chief Executive makes the relevant decision. Of course in that case Young J was dealing with a different factual situation than that before the Court at present. He was not dealing with the question of retrospective cancellation of a benefit under s 81(3) but rather the Department’s entitlement to recover an overpayment of a benefit. It was not strictly necessary, therefore, for the Court to deal with the argument that retrospective cancellation of a benefit and awarding the beneficiary a substituted benefit would have meant a lesser amount would be payable to the Department than the overpayment claimed.

[38] Amicus curiae submits that Moody v Chief Executive (supra) is not applicable to the present case and relies upon the dicta of Robertson J in Ioane v Department of Social Welfare (1994) 11 CRNZ 489 (HC). But that was a case concerned with the degree of criminal culpability, and assessing, for the purposes of sentencing, of an appropriate loss figure to the Department, rather than cost of payments, arising out of the criminal activity of welfare fraud on the Department. That is, what would have been lost but for the criminal activity. Robertson J held that for the purposes of determining an appropriate sentence there had to be brought into account the amount of any benefit to which the offender would have been legally entitled, and not to the gross amount of a benefit which had been wrongly received. On that basis there was an acceptance of a legal entitlement on a retrospective basis, but that case relates solely to a notional accounting for the purpose of assessing loss and criminal culpability in assessing the total circumstances of the offending, including an appropriate loss figure. It is a case which is quite different to and has no application to the present, or to cases where a person applies for and is granted a benefit in substitution of an existing benefit, when its date of actual commencement arises on the date of grant, and cancellation of the existing benefit.

[39] I am satisfied that clear purpose of the statutory provisions, when read as a whole in their context, viewed against the legislative history, requires that the answer to the second question is “no”. The Chief Executive, or the Authority acting on behalf of the Chief Executive, cannot call in aid any discretion under s 81(3) to give retrospective effect to the cancellation of a benefit to which someone is entitled, and to the commencement of another benefit to which a person has become concurrently entitled, and is granted substitution for the former benefit. Retrospectivity in such circumstances, cannot apply to the cancellation and the contemporaneous granting of the new benefit. If Parliament thinks otherwise, it should say so.

The first question of law

[40] The first question therefore becomes redundant to the extent that, there being no power to order retrospective commencement of the new benefit, even if the Chief Executive may conduct an automatic review of a person’s benefit entitlement retrospectivity does not arise where a substituted benefit is granted. However, because of the way the case is framed, I deal with the question shortly. It is unclear whether the Authority found that WINZ should have initiated a review when Ms Vicary turned 16, and because it was empowered or had a duty to do so, but did not, therefore backdating to that date could occur on the basis that there is a notional “intended application” then.

[41] Section 81 does not impose a duty upon the Chief Executive to conduct a review. It is clearly expressed in a discretionary way. It vests in the Chief Executive a discretion that she “may from time to time review any benefit”. It empowers her to undertake if she wishes an automatic assessment of the benefit eligibility of anyone on a benefit. They may turn out to be not entitled to it. They may turn out to be entitled to it. Or they may turn out to be more appropriately entitled to some other benefit. Counsel is correct that s 81 is not about empowering in the sense of an automatic assessment for eligibility for new benefits. Yet if, in the exercise of the discretion to review an existing benefit, the Chief Executive decides to do so and comes to a conclusion as recorded in s 81(3) then he or she may act accordingly. But there is no statutory obligation or common law obligation on the Chief Executive to review the situation of beneficiaries when their circumstances change, in the absence of an application. Of course as McGechan J observed in Hall v Director General of Social Welfare [1997] NZFLR 902 (HC) the Director General should be proactive in seeking to promote the welfare of persons and not be defensive or bureaucratic about the task. But His Honour was referring to applications that had been made but incorrectly so. His Honour expressed the proper view, with which I agree, that the Director General should not refuse to assist simply because of the technicality of an incorrect application. Amicus referred to approaches taken by the Appeal Authority in other cases (decisions 146/95, 107/2000, 119/2000) said to follow the approach suggested by McGechan J’s observations; that is, that the Department has an obligation to be proactive in inviting applications. The Authority has stated on a number of occasions that in certain circumstances the date of application may be deemed to be earlier than the date when a formal written application is lodged, where “an applicant sought assistance from the Department for a particular purpose but a written application on the prescribed form has not been lodged”. However the Authority accepts, as it must, that the Act does not place a duty on the Department to invite applications where no inquiry for assistance has been made. That is abundantly clear. That was the position here.

[42] I hold that the Chief Executive is empowered to review but is not so bound. The Chief Executive whilst having a general obligation to act in a manner consistent with promoting the alleviation of hardship and the provision of financial assistance to those in need, nevertheless has no duty in the absence of any application to conduct automatic review. If the Authority, in the shoes of the Chief Executive, conducts such review then it is empowered to do so and does not err. But, in accordance with the answer to the second question, it has no discretion to grant a benefit in substitution for an existing benefit which it has cancelled, so as to provide retrospective effect to the commencement date of the new benefit.

[43] The answers to the questions of law in this case do not affect the respondent in any practical way because WINZ has agreed that it will not, in the event of it succeeding, seek refund of overpayments arising out of the retrospective commencement of the Invalid’s Benefit. Although there is no longer any lis to be decided directly affecting the rights and obligations of the two parties as between themselves, there remained an issue of public law involving a public Department which entitled this Court to answer the questions posed; R v Secretary of State for Home Department ex parte Salem [1999] 2 All ER 42 (HL). So, in my discretion, and hopefully to assist WINZ, the Authority and beneficiaries, I have proceeded to answer the questions.

[44] Accordingly the answer to the questions are:

[a] The first question:

Yes, provided that the review is of an existing benefit (and not generally as to entitlement) but such power to review does not carry with it a duty to undertake such review.

[b] The second question:

No.

[45] The appeal is allowed. The fees and disbursements of amicus shall be paid, pursuant to s 99A Judicature Act 1908, by the Department for Courts from public funds. I express my gratitude to both counsel for their assistance and argument.