NZLII Home | Databases | WorldLII | Search | Feedback

Social Security Appeal Authority of New Zealand
You are here:  NZLII >> Databases >> Social Security Appeal Authority of New Zealand >> 2009 >> [2009] NZSSAA 17

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help

An appeal against a decision of the Benefits Review Committee [2009] NZSSAA 17 (20 April 2009)

Last Updated: 16 September 2009

Decision No. 17/09

Reference No. SSA 36/05

IN THE MATTER of the Social Security Act 1964

AND

IN THE MATTER of an appeal by XXXXX XXXXX of Auckland against a decision of a Benefits Review Committee

BEFORE THE SOCIAL SECURITY APPEAL AUTHORITY

Ms M Wallace - Chairperson
Mrs N Te Hira - Member
Mr K Williams - Member

HEARING at AUCKLAND on 3 December 2008

APPEARANCES

X X – for the appellant
Linda Moy – for Chief Executive of the Ministry of Social Development


INTERIM DECISION

Introduction


[1] The appellant appeals against a decision of the Chief Executive confirmed by a Benefits Review Committee to establish and recover overpayments of Domestic Purposes Benefit, Accommodation Supplement, Special Benefit, Training Incentive Allowance and Special Needs grants paid to the appellant in the period 26 January 1994 to 30 November 1999 amounting to $120,355.26.

Background


[2] The appellant is a sole parent with one dependent child.

[3] She was originally granted Domestic Purposes Benefit and associated supplementary benefits in XX XXXXXX 1994. At the time of her application she stated that she had separated from her de facto partner XXXXX XXXXX.

[4] Following an investigation in 1999 the Chief Executive determined that the appellant had continued to live with Mr XXXXX in a relationship in the nature of marriage. She was prosecuted. She faced XX charges related to using a document for pecuniary purposes and XX further charges of wilfully misleading an officer of the Department under s.127 of the Social Security Act 1964. The charges under s.127 read as follows:-

(i) Between on or about XX XXXX 1994 and on or about XX XXXX 1994 she wilfully omitted to advise an officer concerned in the administration of the Social Security Act 1964 that she was in a relationship in the nature of marriage for the purpose of misleading an officer concerned in the administration of the Social Security Act 1964 and for the purpose of receiving a benefit under the Social Security Act 1964 namely Accommodation Supplement.


(ii) Between on or about XX XXXX 1994 and on or about XX XXXX 1999 she omitted to advise an officer concerned in the administration of the Social Security Act 1964 that she was in a relationship in the nature of marriage for the purpose of misleading an officer concerned in the administration of the Social Security Act 1964 for the purpose of receiving a benefit under the Social Security Act 1964 namely Special Benefit.

(iii) Between on or about XX XXXXXXX 1994 and on or about XX XXXX 1999 at XXXXX she wilfully omitted to advise an officer concerned in the administration of the Social Security Act 1964 that she was in a relationship in the nature of marriage for the purpose of misleading an officer concerned in the administration of the Social Security Act 1964 for the purpose of receiving benefit under the Social Security Act 1964 namely Disability Allowance.

(iv) Between on or about XX XXXXXX 1994 and on or about XX XXXX 1999 she wilfully omitted to advise an officer concerned in the administration of the Social Security Act 1964 that she was in a relationship in the nature of marriage for the purpose of misleading an officer concerned in the administration of the Social Security Act 1964 and for the purpose of receiving a benefit under the Social Security Act 1964, namely a Domestic Purposes Benefit.

(v) Between on or about YY YYYY 1994 and on or about XX XXXXX 1999 at XXXXX, XXXXX and XXXXX she wilfully omitted to advise an officer concerned in the administration of the Social Security Act 1964 that she was in a relationship in the nature of marriage for the purpose of misleading an officer concerned in the administration of the Social Security Act 1964 and for the purpose of receiving a benefit under the Social Security Act 1964, namely an Accommodation Supplement.

(vi) Between on or about DD DDDDDD 1999 and on or about XX XXXX 1999 she wilfully omitted to advise an officer concerned in the administration of the Social Security Act 1964 that she was in a relationship in the nature of marriage for the purpose of misleading an officer concerned in the administration of the Social Security Act 1964 and for the purpose of receiving a benefit under the Social Security Act 1964, namely a Training Incentive Allowance.

[5] On X XXXXX 2001 following a defended hearing she was convicted and sentenced in the District Court at XXXXX to imprisonment for six months in relation to these charges. In relation to the XX charges of using a document she was convicted and sentenced to imprisonment for one year and three months. The convictions and sentences were later upheld in the Court of Appeal on XX XXXXX 2001.

[6] The appellant sought a review of the decision to establish and recover the overpayments of the benefits concerned.

[7] The matter was heard by a Benefits Review Committee. The Benefits Review Committee determined that the principle of res judicata applied to the issue of whether or not the appellant was living in a relationship in the nature of marriage and that the circumstances did not meet the requirements of s.86(9A) of the Social Security Act 1964 relating to the write-off of the debt. The appellant was advised of this decision by a letter dated 29 November 2004. The appellant then appealed to this Authority.

[8] Following the lodging of the appeal the Ministry advised that it considered the principle of res judicata applied in this case, on the basis that the issue of whether or not the appellant was living in a relationship in the nature of marriage during the periods in question were determined in the criminal proceedings.

[9] At a directions hearing held in 2007 the appellant’s advocate indicated that new evidence was available. He was given an opportunity to file a statement from a witness who had not given evidence at the original defended hearing in the District Court.

[10] This statement was lodged with the Authority on 1 February 2008. The Ministry were given an opportunity to consider whether the statement constituted an exception to the res judicata principle as outlined in Link Technology 2000 Ltd v The Attorney-General [2006] 1 NZLR 1.

[11] The Ministry subsequently submitted that it did not consider that the exception applied as the evidence contained in the statement could have been adduced at the time of the Criminal hearing.

[12] Further lengthy delays occurred as a result of the failure of the Ministry to provide a Certificate of Convictions. When the Certificate of Convictions was eventually filed it was noted that the certificate did not cover the period 20 July 1999 to 30 November 1999. The Ministry has now indicated that it does not seek to recover any debt in respect of that period.

Case for the Appellant


[13] On behalf of the appellant Mr X submitted:

(iv) In this case the Ministry has initiated action to recover the debt which has arisen from the alleged ‘marriage type’ relationship. The appellant is defending herself from this action by reviewing the Ministry’s decision. As part of her defence she contests the decision that she was in such a relationship. In this case the debt did not arise as a result of the conviction. The debt arose from a civil determination as a result of the exercise of a discretion under s.63B of the Act. In these proceedings the appellant merely challenges the decision of the Chief Executive. The appellant is perfectly entitled to raise the defence that the Chief Executive did not exercise his discretion correctly in coming to this decision.

(v) The parties are not the same. A criminal prosecution is taken by the Police or in more serious offence is prosecuted by Crown Law. The purpose is to bring wrong-doers to justice on behalf of society, and punish the behaviour concerned. By comparison the recovery of the debt in this case is a civil suit taken on behalf of the Chief Executive. Its purpose is quite different to and independent from the Criminal Prosecution.

Case for the Ministry


[14] On behalf of the Chief Executive it was submitted that:-

(i) The issue whether or not the appellant was living in a relationship in the nature of marriage has already been judicially determined and the doctrine of res judicata applies in this case.

(ii) The appellant’s conviction and sentence were considered by the Court of Appeal. The Court of Appeal dismissed the appellant’s appeal against conviction. This indicates that the Court of Appeal was satisfied beyond reasonable doubt that the appellant lived in a marriage type relationship from XXXX 1994 to YYYYY 1999 while in receipt of a single rate of benefit.

(iii) The principle of res judicata precludes the appellant from denying in subsequent litigation with the same parties the correctness of a decision made in the earlier litigation.

(iv) It is submitted that the criminal proceedings in the District Court logically involved consideration of whether the appellant was in a marriage type relationship. The issues in the criminal proceedings and the proceedings before the Socal Security Appeal Authority are therefore identical.


(iii) In the criminal prosecution the burden was on the Ministry to prove the charges beyond reasonable doubt. The burden of proof before the Social Security Appeal Authority is on the balance of probabilities, a lesser standard. Having satisfied the higher standard of proof the Ministry should not now be required to re-prove the case to a lower standard.

(iv) In the criminal prosecution the parties were in substance the same.

(v) All the elements for the doctrine of res judicata to apply were present in this case.

Our Findings

The Benefits Review Committee decision


[15] The Authority has jurisdiction under s.12J of the Social Security Act 1964 to hear appeals in respect of decisions of the Chief Executive which have been confirmed or varied by a Benefits Review Committee.

[16] In this case the Benefits Review Committee decision dated 4 November 2004 sets out a summary of the facts of the case. It records the Ministry’s reasons for alleging that the appellant was living in a relationship in the nature of marriage. It also records the submission by the Ministry that as the issue of whether or not the appellant was living in a relationship in the nature of marriage had already been determined by the District Court and the Court of Appeal, the issue is “res judicata and should not be reconsidered by the Committee.” It was submitted by the Ministry that the BRC “did not have jurisdiction to review the decision.” Submissions from the Ministry on s.86(9A) and 86(1) were also received.

[17] Information provided by Ms XXXXX to the Committee about her relationship is recorded in the decision and two witnesses were heard.

[18] In its findings, after recording that it had concerns about the credibility of the two witnesses called by the appellant the Committee determined that in any event:-

“it would be inappropriate to make a determination on the substantive issue as it considered that it had already been decided by a higher authority to a higher standard of proof than that the Committee would be required to consider. ...

The Committee supports the view that the issues being considered at the hearing are the same issues considered by the Court and the parties are the same. The Committee therefore unanimously finds that the issue of res judicata applies in this case and that as the matter has already been determined by a Court of competent jurisdiction it cannot now be re-litigated.”

The Committee then proceeded to consider whether the provisions of s.86(9A) of the Act should apply in this case.


[19] Mr X submits that the Benefits Review Committee declined jurisdiction to hear the matter. That is not how we read the Benefits Review Committee decision. It is unfortunate that the Ministry’s submissions to the Benefits Review Committee suggested to the Committee that it did not have jurisdiction, but the Committee does not appear to have accepted this submission. The Benefits Review Committee makes no reference to declining jurisdiction in its decision. The Benefits Review Committee clearly considered the submissions put to it and determined that because the issue of whether the appellant was living in a relationship in the nature of marriage had previously been determined by a Court of competent jurisdiction, it would be inappropriate for that particular issue to be re-litigated.

[20] Benefit Review Committees are not comprised of lawyers. They do not always express their reasons for decisions as well as they might but in this particular case the Committee has stated its position quite clearly. That it did not decline jurisdiction to hear the review is borne out by the fact that it proceeded to consider the provisions of s.86(9A).

[21] In effect Mr X’s submissions suggests that an administrative body such as the Benefits Review Committee cannot take account of a determination by a Court. The idea that public time and money should be spent by persons making an administrative decision should ignore a Court ruling on the same point seems surprising. The possibility that a Benefits Review Committee could find that a person was not living in a relationship in the nature of marriage when a Court had found that the person was living in such a relationship certainly has implications for the public confidence in our justice system and confidence that public resources are being used wisely.

[22] We are satisfied that the Benefits Review Committee conducted a proper review of the appellant’s case. The review raised a number of issues. One of the issues was whether the appellant was living in a relationship in the nature of marriage. As part of that review it found that it should not consider that particular issue because the issue had previously been determined.

[23] The Committee did not specifically refer to the provisions of s.86(1) of the Social Security Act 1964 although the possibility of considering the debt under that provision was put to it by the Ministry. We think it reasonable to infer that the Committee did not consider that the Chief Executive should exercise any discretion under s.86(1). We note in this regard that from time to time Benefits Review Committees do omit to make specific reference to either s.86(9A) or s.86(1) in their decisions. Whilst this is unsatisfactory we repeat that the Committees are not lawyers and in such circumstances where the issues have been raised before the Committee it seems to us that it should be inferred that the Committee has confirmed the Chief Executive’s decision to recover a debt although in doing so they may have failed to consider a particular aspect of the Chief Executive’s discretion.

Issue Estoppel


[24] The doctrine of res judicata was summarised by the Court of Appeal in Gregoriadis v Commissioner of Inland Revenue [1986] 1 NZLR 110 as follows:-

“Where a final judicial decision has been pronounced by a Court of competent jurisdication any party to that litigation is estopped in any subsequent litigation as against any other party to the earlier proceedings from disputing or questioning the first decision on the merits (Spencer Bower and Turner, Res Judicata (2nd ed 1969) p9. In a case such as the present in order to found an estoppel per rem judicatem there must be (I) identity of parties, (ii) identity of subject matter and (iii) sufficient co-extensiveness of the standard of proof.”

Are the parties the same?


[25] In this case it is alleged on behalf of the appellant that it is the Police who prosecute criminal matters and that it is the Ministry of Social Development who have established and sought to recover the debt. In fact the informations in the Criminal proceedings in the District Court were sworn by an employee of the then Department of Work and Income. The certified copy of the criminal record notes the prosecuting agency as being the Department of Social Welfare. This was the Department having responsibility for the administration of the Social Security Act 1964 at the relevant time. In carrying out its responsibilities under the Social Security Act 1964 the then Department was acting as a manifestation of the Crown. Any role played by the Crown Law Office in prosecuting the proceedings in the Court of Appeal was also on behalf of the Crown.

[26] Section 85F of the Social Security Act 1964 makes it clear that any overpayments made under the Social Security Act 1964 are debts due to the Crown. Section 124 provides for the funds expended to provide benefits to be paid out of the Crown bank account. The Ministry of Social Development now has responsibility for the administration of the Social Security Act 1964. Any steps now taken by the Ministry of Social Development to recover the overpayment will be taken on behalf of the Crown.

[27] We are in no doubt that in these proceedings before the Social Security Appeal Authority the parties are the same parties who were involved in the criminal proceedings which the appellant faced.

Are the issues the same?


[28] The prosecution in this case arose because it was alleged that the appellant was living in a relationship in the nature of marriage and as a result of failing to advise an officer of the Department of her true situation, she received benefits to which she was not entitled.

[29] As an administrative consequence of his determination that the appellant was living in a relationship in the nature of marriage and the exercise of his discretion to treat the appellant’s entitlement to benefit on that basis, the Chief Executive has determined that overpayments of benefits have occurred in this case. We understand the appellant was advised of the decision to establish an overpayment. The appellant has sought a review of this decision. We do not have a copy of her request for review but accept that it is implicit that she seeks a direction that if the debt is not disestablished the Chief Executive will not take steps to recover the debt.

[30] There can be no dispute that in the District Court for the convictions to be entered against the appellant it was essential that the Court find that the appellant was living in a relationship in the nature of marriage during the periods set out in the informations.

[31] On XX XXXXX 2001 the Court of Appeal considering both the conviction and sentence found that there was more than adequate evidence for the District Court Judge to find the appellant guilty of the charges. There was no basis for reversing his decision. The appeal against conviction was dismissed.

[32] In establishing overpayments of benefit an overpayment will be established in respect of each day that the Chief Executive is satisfied that the appellant was not entitled to the benefit or a particular rate of benefit. It is therefore of some importance in establishing that the issues are the same, that the periods to which the convictions relate and the calculation of the overpayment are the same. In this case the XXXX charges of wilful omission to advise an officer of her situation, brought under s.127 of the Social Security Act 1964 relate to a particular period and a particular type of benefit. They cover the period over which the overpayment has been calculated.

[33] There appears to be no suggestion that the appellant alleged either in the District Court or in the Court of Appeal that the relationship was an intermittent relationship. Rather she denied that the relationship between herself and Mr XXXXX was a relationship in the nature of marriage at all. The Court of Appeal dealt with the matter on the basis that the appellant was, during the whole period, in receipt of Domestic Purposes Benefit to which she was not entitled and noted that the total sum received was $120,355.26.

[34] Whilst the Authority is aware that from time to time the Ministry of Social Development uses a formulation in its informations which is intended to be representative, that does not appear to be the case here. The informations have been laid on the basis that there was a continuing relationship between the periods stated. The amount that the Chief Executive now claims is owing is the same as that referred to in the Court of Appeal judgement.

[35] We are in no doubt therefore that the issues before the District Court and the Court of Appeal are the same as the issues which are fundamental to the establishment of the overpayment, i.e. that the appellant was living in a relationship in the nature of marriage during the periods in respect of which the overpayment has been established.

Co-extensiveness of Proof


[36] The standard of proof applied by the Chief Executive and by this Authority is on the balance of probabilities. As the standard required in the District Court was higher than the standard required by the Chief Executive and this Authority we are satisfied that there is co-extensiveness of proof.

In summary we consider all of the elements of issue estoppel are made out in this case.

New Evidence


[37] In Link Technology 2000 Ltd v Memelink and the Attorney General the Court of Appeal endorsed the propositions contained in Mills v Cooper [1967] 2 QB 459 at 468 and Arnold v National Westminster Bank Plc [1991] 2 AC93 at 109 that an exception to issue estoppel arises where further material becomes available “relevant to the correct determination of the point involved in the earlier proceedings,.... being material which could not by reasonable diligence have been adduced in those proceedings.”

[38] A statement from a XXXXX XXXXX has been lodged on behalf of the appellant. It is alleged that this is new evidence. XX XXXXX is the XXXXX of the appellant’s de facto partner. In her statement XX XXXXX makes some observations about the relationship between XXX XXXXX and the appellant and notes that XXX XXXXX was convicted of sexually abusing XXX in 1988. XX XXXXX notes:-

“Counsel at XXXXX’s trial for benefit fraud was aware of the prior offending but I was not asked to make a statement or give evidence.”


[39] This statement suggests that XX XXXXX’s evidence was available at the time of the trial and with reasonable diligence could have been adduced by the appellant at the trial.

[40] The Ministry point out that the appellant’s potential as a witness was known at the time of the trial as evidenced by reference to XXX by defence Counsel during a cross-examination of a prosecution witness.

[41] We are not satisfied that the evidence from XX XXXXX was evidence which could not by reasonable diligence have been addressed in the criminal proceedings. The exception to issue estoppel does not apply in the circumstances of this case.

Abuse of Process


[42] In the Chief Executive of the Ministry of Social Development v Batt [2004] NZAR 180 Goddard J discussed the Authorities relating to res judicata, estoppel per rem judicatam and issue estoppel and concluded that:-

[17] “The short point is, by whatever name it is called where an issue has been determined between parties in a Court of competent jurisdiction, public policy requires that the same issues not be re-litigated. From this it is clear that certain conditions must exist before parties will be prevented from re-litigating an issue. For convenience these can be raised in the terms of conditions for issue estoppel (as set out in Maxwell, Gregoriadis and Toetoe v the Chief Executive Officer, Department Work and Income New Zealand [2002] NZFLR 385: They are that the issue has been decided previously between the same parties and there is sufficient co-extensiveness of proof.

[38] “The term issue estoppel is a matter of semantics not of substance. The preferred approach of the New Zealand Court is simply to regard the re-litigation of an issue that has been decided previously between the same parties to the highest standard of proof required is an abuse of process by way of collateral attack.”


[43] It is a major plank of Mr X’s submission that it is the initiation of a civil action that collaterally attacks a determination of the criminal Court which may be regarded as an abuse of process. He refers to Hunter v the Chief Constable of West Midlands [1981] UKHL 13; [1982] AC 529, and re a Medical Practitioner [1959] NZLR 784 and Link Technology 2000 Limited v The Attorney General.

[44] In the Link Technology case the Court of Appeal found:-

[76]“We accept that there are differences between this case and Beggs. In particular we accept the argument made on behalf of the respondent that different considerations may apply to a party which initiates proceedings seeking to obtain a ruling inconsistent with an earlier ruling, and a party which is engaged in proceedings as defendant. In the leading English decision on abuse of process in relation to criminal proceedings Hunter v Chief Constable of the West Midlands Police [1981] UKHL 13; [1982] AC 529 at 541, Lord Diplock described an action by a convicted person against the Police which called into question matters determined in a criminal trial as follows:

“The abuse of process which the instant case exemplifies is the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made.” ...

[77] “It is notable that the abuse in that case was the initiation of proceedings. We accept the respondent’s submission that different considerations may arise where a party is responding to allegations made against it in proceedings initiated by another party.”


[45] Mr X argues that in this case the debt arose from a “civil determination” as a result of the exercise of a discretion under s.63B of the Act. The Ministry has initiated action to recover the debt which has arisen from the appellant’s alleged marriage type relationship. The appellant is defending herself from this action by reviewing the Ministry’s decision. As part of her defence she contests the decision that she was in such a relationship.

[46] It is questionable whether the appellant is initiating or defending proceedings before the Social Security Appeal Authority. The debt has been established administratively. We are unclear as to what steps have been taken to recover it. The action of simply establishing the debt administratively is not a proceeding in the usual sense of the word. The establishment of the debt is challenged when the appellant takes steps to review the decision of the Chief Executive and pursues that review on appeal. However at the end of the day we do not think anything significant follows from this point.

[47] The Authorities cited by Mr X suggest that the considerations applicable where a party is defending an action might be different from those of a party initiating an action. It seems to us however that that is not the same as saying that it will not be an abuse of process for a party defending an action to attempt to re-litigate a matter previously decided in a Court of a competent jurisdiction or Judicial Tribunal. A variety of considerations might arise. These might for example include the possibility that some unfairness to the appellant might be evident.

[48] In Arbuthnot v The Chief Executive of the Department of Work and Income [2007] NZSC 55 the Supreme Court noted:

“Care must be taken not to allow the doctrine of issue estoppel, designed to prevent injustice to one litigant (namely the unfairness of allowing relitigation of a matter which has been finally decided) from causing greater injustice to the other. An over rigorous application of the issue estoppel doctrine where there was no right of appeal, or where, as in Lynch, it was not reasonable to expect any such right to be exercised in practice would indeed produce unfairness disproportionate to the object of achieving finality in litigation.”

Further at para 31 the Court referred to Arnold v National Westminster Bank Plc and specifically refers to the dictum of Lord Upjohn in Carl Zeiss Stiftung v Rayner & Keeler Ltd. (No. 2) [1967] 1 AL 853 at p947:

“All estoppels are not odious but must be applied so as to work justice and not injustice and I think the principle of issue estoppel must be applied to the circumstances of the subsequent case with this overriding consideration in mind.”


[49] A beneficiary who has pleading guilty to a charge of failing to advise that he or she was living in a relationship in the nature of marriage without proper legal advice in the period 1996 to 2000 might well be a case where it would be unfair for issue estoppel to be applied. There may be instances where a decision has been made by a jury and it is not therefore easy to determine the reasons for their decision or the period or periods to which their decision relates where it may be unfair to apply issue estoppel to prevent certain issues being relitigated.

[50] However in this particular case the appellant was found guilty by a District Court Judge after hearing all the evidence presented. This evidence was reviewed by the Court of Appeal who were satisfied that the District Court Judge had not erred in his conclusion that the appellant was living in a relationship in the nature of marriage.

[51] There is a public interest in using the public resources of the Courts and Tribunals wisely. Moreover a Tribunal considering the same issue as the Court of Appeal coming up with a different result may bring the administration of justice into disrepute. The existence of a right of appeal and the fact that the appellant has exercised that right must also significantly impact on the issue of whether or not any unfairness arises in a particular case.

[52] It is clear that an issue estoppel arises in this case. There is no basis for finding that there was anything about the Court processes that seriously disadvantaged the appellant or that it would be unfair to apply the doctrine in this case. It would be wasteful of public time and money to allow the appellant to re-litigate the issue. In our view it would be an abuse of process for the appellant to be permitted to challenge the issue of whether she was living in a relationship in the nature of marriage during the periods in question in the proceedings relating to the establishment and recovery of the debt before this Authority.

Conclusion


[53] In summary we consider that it would be an abuse of process for the Authority to reconsider and adjudicate upon the issue of whether or not the appellant was living in a relationship in the nature of marriage during the periods specified and the charges that she faced.

[54] The issues which the Authority will consider in this appeal will be:

[55] These issues will be considered by the Authority in Auckland during the May circuit.

DATED at WELLINGTON this 20th day of April 2009

______________________________
Ms M Wallace
Chairperson

______________________________
Mrs N Te Hira
Member

______________________________
Mr K Williams
Member

SSA36-05.doc(jeh)

NZLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.nzlii.org/nz/cases/NZSSAA/2009/17.html