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Social security - emergency benefit - cancellation of benefit where refugee claimant is a person unlawfully in New Zealand - Social Security Act 1964 ss 74A(1)(c) & 81 - Refugee Convention Article 24

The plaintiff and his family were granted refugee status by the Refugee Status Appeals Authority on 19 February 2004 and from that date the plaintiff was entitled to, and did receive, an emergency benefit. While in those circumstances the proceedings had no practical result in terms of any benefit to the plaintiff, the plaintiff persisted with his proceedings (issued on 13 January 2004) in order to have the High Court determine the scope of the Chief Executive's discretion to review under s 81 of the Act. The central issue argued by the plaintiff was that the Chief Executive could not exercise the discretion under s 81 of the Act to overturn a decision of the Benefits Review Committee which had earlier decided that notwithstanding the plaintiff was not legally in New Zealand, his emergency benefit should be paid to him.

1. Apart from providing a regime for the disbursement of public moneys to assist persons in need, one of the clear objectives of the Act is to ensure that the disbursement of those moneys is effected in a fair and consistent manner. The review and appeal processes are directed to ensuring both of these objectives. To say that a decision of either the Benefits Review Committee or the Social Security Appeal Authority should stand in perpetuity, immune from review under s 81 when there is a change of circumstance would be entirely inimical to the whole process (see para [21](a)(b)).

2. It is well established that a government agency cannot be estopped from exercising its powers, whether given in a statute or by common law, when it is doing so in the proper exercise of its duty to act for the public good even though this may work some injustice or unfairness to a private individual (see para [21](c)).

Laker Airways Ltd v Department of Trade [1977] 2 All ER 182 (CA); Lumber Specialties Ltd v Hodgson [2000] 2 NZLR 347 (Hammond J) referred to.

3. It is imperative in the public good that the Chief Executive should administer benefits consistently, unimpartially. A right of review, subject as it is to both review and appeal, is an essential element towards achieving these objectives. Any decision affecting an entitlement to a benefit can only apply to the circumstances which exist at the time of the decision. The statutory phrase in s 81(1)(a) "whether the beneficiary remains entitled" [to receive a benefit] clearly contemplates the possibility of a change in circumstances after the particular decision, in which case not the decision but the continuing entitlement becomes the subject of review (see para [21](d) & (e)).

4. The submission that the Chief Executive purported by means of the review process to challenge the Benefits Review Committee decision was not correct. The decision of the Social Security Appeal Authority authoritatively defined the plaintiff's legal status in relation to his entitlement to a benefit. From that point on (and not retrospectively) the plaintiff no longer remained entitled to a benefit. The Chief Executive was entitled, pursuant to s 81(1), to review the plaintiff's entitlement to an emergency benefit on 24 November 2003, and then, to determine that the plaintiff did not remain entitled to receive that benefit (see paras [21](f) & [22]).

Dixon-McIver v Attorney-General (HC Wellington, CP214/96, 16 December 1997)
Finnigan v RFU (No.3) [1985] 2 NZLR 190 (CA)
Lockyer v Ferryman (1877) 2 App Cas 519 at 530

Introduction

[1] The plaintiff seeks orders by way of judicial review in relation to a decision by the first defendant pursuant to s81 of the Social Security Act 1964 (“the Act”) to
cancel an emergency benefit previously granted on 28 May 2001 pursuant to s74A(1)(c) of the Act.

[2] Although there are four causes of action pleaded, this proceeding essentially raises one issue, namely, what is the lawful scope of the first defendant’s power to
review under s81 of the Act?

Factual background

[3] The plaintiff, his wife and their 4-year-old daughter arrived in New Zealand on 19 May 2001. They applied for refugee status. The plaintiff and his wife were
issued with certificates of identity and work permits.

[4] On 28 May 2001 the plaintiff was granted an emergency benefit pursuant to s74A(1)(c) of the Act which states than an emergency benefit may be paid to:

[5] The applications for refugee status were declined and the work permits expired on 15 May 2003.

[6] The first defendant then reviewed the emergency benefit pursuant to s81 of the Act, and then cancelled same from 30 May 2003 because:

(a) to the Immigration Removal Review Authority to be allowed to reside in New Zealand with his family; and,

[8] On 4 June 2003 the plaintiff applied to the Social Security Benefits Review Committee (“BRC”) pursuant to s10A of the Act for a review of the first defendant’s
decision to cancel the emergency benefit. The BRC decided in a majority decision that payment of the emergency benefit should be resumed from 30 May 2003, the
date on which further applications for refugee status and work permits had been lodged. The first defendant accepted the decision and resumed payments, and
backdated same to 30 May 2003.

[10] At the time when the BRC application was heard another unrelated appeal was awaiting hearing before the Social Security Appeal Authority (“SSAA”). This
appeal 175-03 was heard on 25 July 2003 and the decision was delivered on 13 November 2003. The SSAA decided:

[11] Counsel agree that the issue raised in appeal 175-03 was exactly the same as the issue raised by the plaintiff before the BRC. The path followed in appeal 175-03
was, however, different in that both the BRC and the SSAA in that case had upheld the first defendant’s original decision not to grant an emergency benefit.

[12] Prior to the hearing of this appeal the first defendant wrote to the plaintiff on 19 August 2003 advising him that depending on the outcome of the impending
appeal, his emergency benefit would be reviewed.

[13] Following receipt of the SSAA decision in appeal 175-03 the first defendant advised the plaintiff on 24 November 2003 of the outcome of this appeal and that his
emergency benefit had been reviewed in the light of it. He was informed:

[14] The plaintiff and his family were granted refugee status by the Refugee Status Appeal Authority on 19 February 2004. From that date, the plaintiff was
entitled to, and did receive, an emergency benefit.

[15] In fact, as a result of representations made on the plaintiff’s behalf, the first defendant exercised his discretion to continue payment of the emergency benefit to
the plaintiff for the whole of the intervening period. The net result is that the outcome of the present proceeding will have no practical result in terms of any
benefit to the plaintiff.

[16] This proceeding was issued on 13 January 2004. Notwithstanding that since that date the plaintiff’s immigration and benefit applications have both been resolved
in his favour, he has persisted with this proceeding in order to have this Court determine the scope of the first defendant’s discretion to review under s81 of the
Act. This decision is concerned only with that point, and, as specifically noted by counsel, it is not concerned with any question raised by the first defendant’s original
decision, nor the reasons found by either of the BRC or SSAA when reaching their respective decisions.

The issue

[17] The central issue as defined by the plaintiff is whether or not the first defendant can exercise the discretion of s81 of the Act to effectively overturn a
decision of a lawfully constituted judicial body, namely, the BRC which had earlier decided, in effect, that not withstanding the plaintiff was not legally in New Zealand,
his emergency benefit should be paid to him.

[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 a
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.]] ]

(a) After the BRC issues its decision, unless the applicant to the BRC exercises his or her right of appeal under s12J of the Act, the
decision of the BRC is res judicata and must be followed by both parties.

(b) The first defendant may only exercise the discretion under s81(1) in the following circumstances:

(i) If the beneficiary’s own particular financial circumstances change such that he or she is no longer eligible for the benefit.

(ii) If the beneficiary’s immigration status changes i.e. in the present case if the plaintiff had not ultimately been granted
refugee status.

(iii) A subsequent decision of a higher judicial authority in relation to an entirely different party, and even though directly
in point could not be relied on as a change of circumstance disentitling the beneficiary to receive the benefit unless
(unlike in the present case) there had been no intervening decision of the BRC.

(c) If the position was otherwise than as stated, if the first defendant exercised the discretion to review under s81 when there was a
prior decision of the BRC, then in turn, the statutory review and appeal process would be frustrated and the integrity of that
process would be undermined.

(d) The reason for this would be because it would be open to the first defendant without any material change to the beneficiary’s
particular circumstances to effectively prevent payment of a benefit which the BRC as an adjudicated body had said must be
paid. The point being that if the first defendant could use s81, as in the present case, it would be able to invoke the administrative
power of review for any reason, and even arbitrarily. It is for this reason that the doctrine of res judicata can, and must be, invoked
to preserve the decisions of the BRC.

(e) In practical terms, if res judicata did not apply then the plaintiff in this case could have applied for a further review by the BRC.
Here, the same arguments would have been proffered with the BRC presumably reaching the decision i.e. that the benefit should
be paid.

(f) Another objection would be that there may be cases where an appeal decision was not so clearly on point as it was in the present
case. If such a decision was subsequently relied on by the first defendant then the whole process would become uncertain.

(g) The purpose of the rule of res judicata as stated in Lockyer v Ferryman (1877) 2 App Cas 519 at 530, namely:

“The object of the rule of res judicata is always put upon two grounds – the one public policy, that is in the interest of the
State that there should be an end of litigation, and the other, the hardship on the individual, that he should be vexed twice
for the same cause.”

is directly relevant to this case and supports the submission that the decision of the BRC remains immune.

(h) Even if the decision by the BRC was wrong, this would be a far lesser evil than allowing the first defendant to use an
administrative power of review to go behind the judicial decision of the BRC.

(a) Contrary to the plaintiff’s submissions, the first defendant’s decision to review and then cancel the benefit did not purport to
override the BRC decision, rather it operated prospectively from the date of the SSAA decision which introduced a circumstance
justifying review under s81(1).

(b) The plaintiff accepted that there were circumstances which could have justified a review:

(i) An improvement in the plaintiff’s financial circumstances.

(ii) A change in his legal status such as an ultimate failure to achieve refugee status.

(c) The decision of the SSAA was simply another example of a change which justified review, namely, a redefinition of the
plaintiff’s legal status in relation to the benefit.

(d) Arguably, it is incorrect to say that the BRC is a judicial body in the sense that its decisions are immune from reversal other than
by a superior judicial body vested with the same lis.

(e) Whether that be correct or not, the SSAA is a statutory judicial authority with the power to “confirm, modify or reverse”
determinations of the first defendant that have been confirmed or varied by the BRC.

(f) The relationship between the BRC and SSAA is no different from that in any other judicial hierarchy. Decisions of a superior body
will bind the decision making power of the inferior body. The parties do not have to be the same but the principle involved as
defined by the principle facts does.

(g) This is precisely what happened in the present case. The factual situation in which the plaintiff found himself was essentially
identical to that of the appellant in the appeal number 175-03. Therefore, the determination of that appellant’s legal position in
relation to the same benefit by the SSAA also served to define the plaintiff’s legal situation.

(h) Providing the first defendant can point to a change of circumstances, a benefit is open to review under s81(1) even when
the entitlement to a review has been settled at a certain point by a decision of the SSAA; (see Dixon-McIver v Attorney-General
(HC Wellington, CP214/96, 16 December 1997, at p15). Therefore, if this is true in relation to a decision of the SSAA then
it must be so in the case of the decision of the BRC, and particularly where, as in this case, the change of circumstance has
in effect been defined by a decision directly in point by the SSAA.

(i) If in the present case the first defendant was inhibited from reviewing the plaintiff’s benefit when, in precisely the same
factual situation, the first defendant’s decision to refuse a benefit to the appellant in the SSAA appeal was ultimately upheld, then
this would produce an entirely unacceptable result. First, because it would effectively undermine the precedent value of SSAA
decisions in comparable cases. Secondly, and perhaps more importantly, it would produce inconsistencies in the conferment of
benefits in comparable cases. Such a situation would be antithetical to the tenants of good administration.

(j) The Act requires both the first defendant and the BRC to act in accordance with the Act. The plaintiff’s submissions, in effect,
invites the conclusion that a BRC may make a binding decision which should stand notwithstanding that it may conflict with a
later decision of the SSRA, which is of general application. To say that such a result cannot be rectified by a review under s81 is
to ignore the fundamental requirement that decisions as to entitlement under the Act must conform to the requirements of the
Act.

(k) No issue of res judicata arises for the simple reason that the BRC did not purport to grant the plaintiff an emergency benefit for all
time. It merely defined an entitlement in the circumstances which applied at the time of its decision. The BRC has no power to make
a decision which can preclude the subsequent exercise of a review under s81. It did not purport to do so.

(l) Apart from any other consideration, it is inappropriate in this case to consider the making of any declaration or other relief because
the subject of this application is moot. There is no outstanding issue to be resolved between the parties. The plaintiff did not in
fact suffer any financial loss because the first defendant exercised the discretion to maintain payments of the benefit until such time
as the plaintiff became entitled to same following the grant of refugee status. Furthermore, the prospect of any outstanding lis
between the parties has been resolved by the first defendant’s acknowledgement that no claim will be made for the repayment of
benefits paid during the period when, as a result of the review, the plaintiff was found not to be entitled to payment of any benefit.

Discussion

[21] In my view, the submissions by counsel for the defendants are correct in every respect. More particularly:

(a) Apart from providing a regime for the disbursement of public monies to assist persons in need, one of the clear objectives of the
Act is to ensure that the disbursement of those monies is effected in a fair and consistent manner.

(b) The review and appeal processes are directed to ensuring both of these objectives. To say that a decision of either the BRC or
SSAA should stand in perpetuity, immune from review under s81, when there is a change of circumstance would be entirely inimical
to the whole process. The plaintiff was, not surprisingly, unable to provide this Court with any authority to the contrary.

(c) On the other hand, it is well established that a government agency cannot be estopped from exercising its powers, whether given in a
statute or by common law, when it is doing so in the proper exercise of its duty to act for the public good even though this
may work some injustice or unfairness to a private individual; (see Laker Airways Ltd v Department of Trade [1977] 2 All ER 182 at
194; and as referred to by Hammond J in Lumber Specialties Ltd v Hodgson [2002] 2 NZLR 347 at para 138. In my view, this
statement is directly applicable to the present case.

(d) For the reasons which I have mentioned it is imperative in the public good that the first defendant should administer benefits
consistently, unimpartially. A right of review, subject as it is to both review and appeal, is an essential element towards achieving
these objectives.

(e) In my view, the real and obvious answer to the plaintiff’s submission is that any decision affecting an entitlement to a
benefit can only apply to the circumstances which exist at the time of the decision. The phrase “whether the beneficiary remains
entitled” (to receive a benefit) clearly contemplates the possibility of a change in circumstance after the particular decision, in which
case not the decision but the continuing entitlement becomes the subject of review.

(f) The essence of the plaintiff’s submission is that the first defendant purported by means of the review process to challenge the BRC
decision. That cannot be correct. The SSAA decision authoritatively defines the plaintiff’s legal status in relation to his
entitlement to a benefit. >From that point on (and not retrospectively) the plaintiff no longer remained entitled to a
benefit. Up to that point, by reason of the BRC, he had been so entitled albeit, in the light of the subsequent SSAA decision,
wrongly so.

(g) The plaintiff argues, as I understand it, that because the first defendant has no right of appeal to the SSAA from a decision of
the BRC, this somehow indicates an intention by the legislature that a BRC decision thereafter operates so as to determine the
plaintiff’s entitlement indefinitely in cases where the BRC decision was favourable to the beneficiary.

(h) The absence of a right of appeal to the SSAA by the first defendant is, as I see it, a recognition that in many cases the
circumstances giving rise to applications of benefits demand that these be determined as speedily as possible. Thus if a BRC
determines that an applicant is entitled to a benefit, then that entitlement should be vested as soon as possible. If the BRC finds
in favour of the first defendant then the Legislature permits a further appeal by the applicant. This concession is as a matter of
fairness and social policy. To say, however, that in one case, the BRC decision is to remain in being indefinitely and not in the
other, is to completely misunderstand the rationale behind the appeal process. It also goes without saying that it is completely
contrary to all accepted concepts relating to the hierarchical authority of superior decision making authorities.

[22] For the above reasons I find that the first defendant was entitled, pursuant to s81(1), to review the plaintiff’s entitlement to an emergency benefit on 24 November
2003, and then, to determine that the plaintiff did not remain entitled to receive that benefit. It is implicit in this finding that the allegations that the first defendant’s
conduct amounted to an abuse of process, was illegal, was in breach of natural justice and was unfair or unreasonable are rejected.

Mootness

[23] There remains one issue, namely, whether there was any live issue between the parties given the continued payment of the benefit and the first defendant’s
acknowledgement, prior to trial, that no claim would be made for payments made to the plaintiff after it was correctly determined he no longer remained entitled to same.
To the extent that this proceeding related solely to the plaintiff’s position, I am satisfied it was moot. The plaintiff has, however, sought a declaration that the first
defendant cannot lawfully review under s81 of the Act a decision of a BRC on an individual case. A declaration in those terms would have far wider implication and
goes beyond merely determining the plaintiff’s position. This being the case, I consider that the proceeding cannot be regarded as having been moot from the
outset.

[24] This conclusion is, I believe, consistent with the decision in Finnigan v RFU (No.3) [1985] 2 NZLR 190. In that case, Richardson J considered this issue at p200,
where leave was refused to appeal to the Privy Council on the question of the standing of the appellants to sue. Leave was refused inter alia because the principle
issue, namely, whether the 1985 All Black tour to South Africa in that year had been effectively resolved by way of an order for interlocutory injunction. The appellants
had not sought a declaration effecting any future tours. In other words, in Finnigan the Court of Appeal had not been asked to make a declaration determining a wider
issue.

[25] In the present case the decision in relation to the plaintiff also resolves the same issue raised by the application for the declaration on the wider issue.

Result

[26] The plaintiff has failed in all respects. Judgment will accordingly be entered in favour of the defendants.

[27] In the normal course the defendants are entitled to costs and disbursements. I note, however, that this proceeding was brought on advice from the Combined
Beneficiary Union (see, statement of claim). Whether this is an indication that the parties regarded the proceeding as being in the nature of a test case, I do not know.
In order to enable this question to be resolved I reserve the question of costs and grant leave to the defendants to apply by memorandum to be filed and served within
fourteen days from the date of this judgment. If applications are made for costs and disbursements, then the plaintiff is to file and serve a memorandum in reply within a
further fourteen days.

Solicitor for the plaintiff: Otene & Ellis (Auckland)
Solicitor for the defendants: Crown Law Office (Wellington)