The Attorney-General on Behalf of the Ministry of Health v Idea Services Ltd (in Statutory Management)

• Jurisdiction: New Zealand
• Judge: Mallon J,Ms J Grant Mnzm,Ms S Ineson Qsm
• Judgment Date: 03 December 2012
• Neutral Citation: [2012] NZHC 3229
• Docket Number: CIV 2011-485-1562
• Court: High Court
• Date: 03 December 2012

Under The Human Rights Act 1993

Between

The Attorney-General on Behalf of the Ministry of Health

Appellant

and

Idea Services Limited (In Statutory Management)

Respondent

[2012] NZHC 3229

CIV 2011-485-1562

CIV 2011-485-2052

IN THE HIGH COURT OF NEW ZEALAND

WELLINGTON REGISTRY

Appeal from a decision of the Human Rights Tribunal which found a decision by the Ministry of Health to cut funding for community activities for people with intellectual disabilities over the age of 65 years was discrimination based on age under Part 1A Human Rights Act 1993 (discrimination by government) and was not justified under s5 New Zealand Bill of Rights Act 1990 (test for justification) — appeal against costs order — whether there was a breach of contract with the respondent — whether the Ministry had funding responsibility, and whether this made a difference — whether there had been discrimination — if yes, whether the discrimination was justified.

Counsel:

M Coleman and G J Robins for the Appellant

A S Butler, O C Gascoigne and P Barnett for the Respondent

JUDGMENT OF Mallon J, Ms J Grant Mnzm AND Ms S Ineson Qsm

Contents

Overview	[1]
The facts	[8]
What is a disability?	[8]
An intellectual disability	[9]
Disability Support Services	[10]
Day services	[11]
Funding for disability services	[13]
Appropriations	[19]
Present funding responsibilities as between government bodies	[22]
The MOH funder/provider arrangements	[24]
The contract with IDEA Services	[29]
The contract with NASC	[33]
Back on budget	[34]
The MOH's decision	[36]
Explanation for the SMT decision	[38]
Financial effect of SMT decision	[42]
Preliminary issue no 1: Breach of contract	[44]
The issue	[44]
The Tribunal's decision	[45]
MOH submissions	[50]
IDEA Services submissions	[53]
Our assessment	[55]
Preliminary issue no 2: Who is the claim made against	[58]
The issue	[58]
The Tribunal's decision	[59]
The submissions	[61]
Our assessment	[65]
The pleading	[70]
Preliminary issue no 3: did the MOH have funding responsibility?	[75]
The issue	[75]
The Tribunal's decision	[76]
Submissions	[77]
Consideration given to who should have funding responsibility – pre the NZPHD Act [78] Funding responsibilities post the NZPHD Act [91] Summary	[121]
Discrimination	[124]
The statutory test for discrimination	[124]
The relevant comparison	[126]
A) The Tribunal's decision	[128]
B) The submissions	[129]
Our assessment	[134]
Differential treatment on the basis of age	[141]
A) The Tribunal's decision	[142]
B) Submissions	[143]
C) Our assessment	[146]
Material disadvantage	[160]
A) The legal test	[160]
B) The Tribunal's decision	[162]
C) Submissions	[163]
D) Our assessment	[164]
Justification	[165]
The statutory test [165] Was the SMT decision “prescribed by law”? [167] A) The issue	[167]
B) The Tribunal's decision	[168]
C) The submissions	[171]
D) Our assessment	[174]
Reasonable and justified	[194]
A) Deference	[196]
Did the SMT decision serve a purpose sufficiently important to justify curtailment of the right to be free from discrimination?	[206]
Was the SMT decision rationally connected to its purpose? [218] Did the SMT decision impair the right to be free from age-related discrimination no more than reasonably necessary for its purpose?	[222]
Was the SMT decision in due proportion to the importance of its objective?	[232]
Result on Part 1A claim	[236]
Costs appeal	[237]
Introduction	[237]
Discretion to award costs	[239]
The Tribunal's decision	[242]
Consistency	[256]
Were actual costs reasonable	[261]
High Court scale costs	[266]
Increased costs	[269]
Conclusion	[271]
Costs on this appeal	[273]

Overview

1 Around 31,000 people in New Zealand suffer from an intellectual disability. 1 Their disability means that they require support to do everyday tasks. This includes support to do activities in the community, such as to take a trip to the library or the local swimming pool. This case is concerned with the decision of the Ministry of Health (“the MOH”) not to fund the support needed for community activities (called “day services”) for people with an intellectual disability who are over the age of 65 years. 2

2 The respondent (“IDEA Services”) is a provider of those day services. It says that the MOH's decision discriminated against those affected by the decision on the grounds of age in breach of Part 1A of the Human Rights Act 1993 (“the HRA”). The case is before us by way of appeal from the Human Rights Review Tribunal. The Tribunal found that the decision breached Part 1A. It held that the decision discriminated on the grounds of age, was not prescribed by law and was not justified. The Attorney-General appeals against that decision.

3 The MOH's decision arose in the context of split responsibility for the funding of services to people with an intellectual disability. One of the funders is the Ministry of Social Development (“the MSD”). The MSD is responsible for funding vocational services, which is funding intended to assist people with disabilities to engage in work or work training. As part of that funding, the MSD provides funding to support people with an intellectual disability to engage in community activities. The community activities funding is available from the MSD even if a person's disability means that they have no prospect of ever engaging in work. The MSD funding ceases, however, when a person turns 65 years (at which point, as with the rest of the New Zealand population who turn 65, they are eligible for government superannuation).

4 For some time, once a person with an intellectual disability turned 65, at least some of them would continue to receive funding for community services. Sometimes this funding continued to be provided by the MSD even though under the MSD's criteria they were no longer eligible. However in other cases this funding came from the MOH. An issue in this case is the extent to which the MOH (or its predecessors) ever had responsibility to provide this funding and the extent to which it actually provided this funding. The MOH says that it was not given that responsibility by its Minister or Cabinet and the extent to which it provided that funding was ad hoc and inconsistent. IDEA Services says that the MOH has responsibility and that its consistent practice and policy was to provide the funding.

5 In any case, in March 2005 a decision (the “SMT decision”) was made by a team of senior managers within the MOH (“the SMT”) that no further funding for day services was to be provided to any person with an intellectual disability who was exiting MSD funding because they had turned 65 (the “affected group”). 3 The decision was made in response to MOH disability support services overspending by $15.7 million in the 2003/2004 financial year and a projected budget overspend for disability support services of $30 million for the 2004/2005 financial year. The MOH says it was made because the senior managers believed that the MOH did not have the funding responsibility for these services. Following that decision, the funding for day services for the affected group ceased. 4

6 The principal issues in this case are:

• (a) some preliminary issues: whether the SMT decision breached the contract between the MOH and IDEA Services; whether it is only the actions and responsibilities of the MOH (rather than other government agencies or the executive) that are relevant to the claim that Part 1A of the HRA is breached; and whether the MOH had funding responsibility for day services for the affected group;

• (b) whether the SMT decision was discriminatory: is the appropriate comparator group only other groups which MOH has responsibility to fund or is it those funded by MSD who are under the age of 65; is there discrimination on the basis of age if the MOH made the decision because it understood that it did not have responsibility to fund day services for those who were no longer receiving MSD funding because they had turned 65; and is there material disadvantage to the affected group if the funding is stopped;

• (c) whether the SMT decision was justified: whether the decision was “prescribed by law” because it was made under the New Zealand Public Health and Disability Act 2000 (“the NZPHD Act”); if budget constraints was the reason for the decision should the Court defer to whether the decision was a reasonable and justified limit on the right to be free from discrimination on the ground of age; and is the process by which the decision was made relevant to the level of deference appropriate.

7 The appeal is against the Tribunal's finding of breach, the declaration it made that there was a breach, and its decision to award costs of $165,000 in favour of IDEA Services. Other remedies are sought by IDEA Services. These have been referred to the High Court for determination in the event that the appeal is dismissed.

The facts

What is a disability?

8 Disabilities may be physical, sensory, psychiatric, intellectual or age-related. 5 A person may be considered to have a disability if they have one or more of these disabilities, which is likely to continue for a minimum of six months, 6 and which

results in reduced independent functioning to the extent that ongoing support is required. 7

An intellectual disability

9 Intellectual disability is one kind of disability. 8 There is a spectrum of disability within those who meet...