Davis v The Chief Executive of the Ministry of Social Development
| Jurisdiction | New Zealand |
| Judge | Gendall J |
| Judgment Date | 05 July 2011 |
| Neutral Citation | [2011] NZHC 910 |
| Docket Number | CIV-2011-485-000118 |
| Court | High Court |
| Date | 05 July 2011 |
In the Matter of an appeal by way of case stated from a decision of the Social Security Appeal Authority
[2011] NZHC 910
CIV-2011-485-000118
IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY
Appeal against determination of the Social Security Appeal Authority that appellant had been overpaid Domestic Purposes Benefit amounts — alleged appellant had received sums while her son was not actually in her care — appellant had been found not guilty on criminal charges of dishonestly obtaining the benefit — whether doctrines of issue estoppel and res judicata prevented the respondent from asserting the appellant was not entitled to receive the DPB during the relevant period and seeking recovery of overpayment.
N C King for Appellant
A L Russell and N E Gray for Respondent
RESERVED JUDGMENT OF Gendall J
This is an appeal by way of case stated from a determination of the Social Security Appeal Authority (the Authority) made on 16 November 2009. A party to proceedings before the Authority, if dissatisfied with any determination of it as being wrong in law may appeal to the High Court but only by way of case stated on a question of law, under s 12Q of the Social Security Act 1964.
The appellant received a Domestic Purposes Benefit between 2002 and 2004 which the Chief Executive initially contended was obtained through fraud. She obtained $16,481.77. The appellant faced charges under the Crimes Act 1961 and the Social Security Act 1964 alleging that she dishonestly obtained the benefit. She was acquitted after a jury trial. The Chief Executive determined that there had been overpayment because the appellant was not entitled to have received the benefit. She appealed to the Authority, which as a preliminary matter said that no issue estoppel arose and that it was not an abuse of process for the Chief Executive to require refund of overpayment.
This Court is bound by the facts contained in the case stated:
[5] On 16 August 2002 the appellant applied for Domestic Purposes Benefit. In her application the appellant indicated that she was caring for a dependent child, her son Edwards who at that time was aged nearly 16 years. The appellant was interviewed in connection with her application. The case manager noted in relation to that interview that the reason for the application was “ child back in care”. As a result of her application the appellant was granted Domestic Purposes Benefit and Accommodation and Supplement on the basis of her caring for her son.
[6] This grant of Domestic Purposes Benefit was cancelled from 30 July 2002 when the appellant returned to work.
[7] The appellant re-applied for Domestic Purposes Benefit and Accommodation Supplement on 29 August 2003. In her application the appellant indicated that her son was in her care and living with her. Domestic Purposes Benefit was re-granted from 9 August 2003.
[8] In December 2003 the Ministry received an allegation that the appellant was working and that her son had not been in her care for the previous 2 1/2 years.
[9] Ministry records indicate that in any event the appellant's Domestic Purposes Benefit was suspended on 5 January 2004 because the appellant had not returned the “ end of school year” forms for her son who was by then aged 17 years.
[10] The appellant's Domestic Purposes Benefit was cancelled on 28 February 2004.
[11] Further information was obtained in relation to the whereabouts of the appellant's son during the relevant period.
[12] As a result it was determined that the appellant's son had not been in her care when she applied for Domestic Purposes Benefit on either occasion and an overpayment of $16,481.77 was established.
[13] In December 2004 the Ministry laid a number of charges against the appellant. The Authority understood that the appellant faced three charges under s 229A(b) of the Crimes Act 1961, three charges under s 127 of the Social Security Act 1964 and one charge under s 228 of the Crimes Act 1961.
[14] The appellant entered pleas of not guilty. The matter proceeded to a District Court jury trial on 29 May 2006. The appellant was found not guilty of the charges in the indictment.
[15] Subsequently the appellant questioned the Ministry's pursuit of the overpayment against her. This was treated as a request for a review of decision in relation to the debt. The decision was reviewed both internally and by a Benefits Review Committee. The Benefits Review Committee upheld the decision of the Chief Executive. The appellant then appealed to this Authority.
The Authority made certain findings in its decision, which was made on the papers. The Authority concluded that the doctrines of res judicata and issue estoppel did not prevent the Chief Executive from determining that the appellant was not entitled to receive the Domestic Purposes Benefit. Amongst its reasons were:
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• the parties were the same as those involved in the appellant's criminal proceedings;
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• it said it was prepared to accept it would have been fundamental for the jury to find the appellant's son was in her care during the relevant period so it was “prepared to accept therefore that the issues in the proceedings before the Authority will be the same as those before the jury in the criminal trial”. (That is not necessarily correct and I return to deal with that point later at [10]);
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• the standard of proof to be applied by the Chief Executive and the Authority was on the balance of probabilities whereas in the District
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Court criminal proceedings it was beyond reasonable doubt, so there was not sufficient co-extensiveness of proof so that the issue estoppel or res judicata arises;
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• it was not an abuse of process for the Chief Executive to seek repayment on the basis that the appellant's son was not in her care.
The Authority then set out the issues that were required to be determined by it in considering the appeal. I am advised from the bar that in fact the appellant has withdrawn her appeal.
The question of law contained in the case stated is as follows:
Did the Authority err in law in holding that issue estoppel or the principle of res judicata did not prevent the Chief Executive from asserting that the appellant was not entitled to receive the Domestic Purposes Benefit during the relevant period and seek to recover an overpayment?
The offences with which the appellant was charged were offences against ss 228 and 229A(b) of the Crimes Act 1961 and s 127 of the Social Security Act 1964. Section 229A(b) was repealed as from 1 October 2003 but was in force during the offending alleged against the appellant. Both it and s 228 relate to crimes of dishonestly and without colour of right using or attempting to use documents for the purpose of and with the intention of obtaining a benefit or pecuniary advantage. Section 127 of the Social Security Act makes it an offence to make a statement knowing it to be false or wilfully doing anything for the purpose of misleading or attempting to mislead a departmental officer for the purpose of receiving a benefit.
The principles of res judicata and issue estoppel are well known. They are set out in Maxwell v Commissioner of Inland Revenue 1 and Gregoriadis v Commissioner of Inland Revenue: 2
Where a final judicial decision has been pronounced by a Court of competent jurisdiction 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 … In a case such as the present in order to found an estoppel per rem judicatam there must be (i) identity of parties; (ii) identity of subject-matter; and (iii) sufficient co-extensiveness of the standard of proof.
It was accepted that the parties were the same, with the Chief Executive being the complainant in the criminal proceedings and acting in the exercise of his discretionary powers in requiring repayment under the Social Security Act.
Although the Authority said it was prepared to...
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