The ROE Case and High Court Decisions

Dr William Roe and his wife, originally from the United States and living in Nelson, had their NZ Super payments stopped when the Department of Social Welfare (DSW, now WINZ) discovered that Dr and Mrs Roe were receiving Social Security pensions from the US.  In 1987 William Roe appealed the action taken by DSW in the High Court, Wellington. 

Without legal counsel, Dr Roe inadequately framed the issues and was ill-equipped to confront the combined legal forces of the Social Security Commission and the Office of Crown Law.  His appeal was dismissed.  It became a landmark case and the decision by Chief Justice Davison is still used today to dismiss appeals against the direct deduction policy.

Dr and Mrs Roe (both now deceased) had neither the financial resources nor the stamina to appeal the decision.  Davison dismissed the appeal on two points of law.  Accepting evidence submitted by civil servants, the first point of law was based on the misrepresentation of US Social Security as “income maintenance assistance” granted to retired persons by the US Government (refer Discretionary Powers).

The second point of law was based on an alleged principle of international social security: “Governments of countries do not consider it their obligation to pay retirement benefits to a person when another government is already doing so.”  Davison’s assessment was completely wrong.  There is no such principle.

The International Labor Convention, Number 157, protects the rights of the individual to government-sponsored pensions that he/she has legitimately earned.  With the exception of New Zealand, countries around the world honor the principle.  European Convention 1408/71 Article 12 states that countries may apply domestic anti accumulative measures for widows, the disabled or any benefits deemed of like kind.  Article 46 however, states that Article 12 must be set aside when it comes to old age pensions, and that national domestic legislation to prevent overlapping retirement benefits cannot be applied.

Qualified American opinion on US Social Security was never requested or presented to the High Court.  Given the prohibitive cost for any pensioner to challenge a High Court decision, two decades on it is not surprising that the Roe Case has never been appealed or questioned.  The decision in the Roe Case remains one of the great travesties of justice in New Zealand’s legal history - but it provided the government with the legitimacy it sorely needed.

It is highly unlikely that Chief Justice Davison would have been personally familiar with the complexities of international social security and in dealing with such matters Davison and the Courts would have been reliant on information supplied by MSD/WINZ and/or Crown Law.  Beginning with the Roe Case, under the authority of the Chief Executive, distorted and incorrect information has been given to the High Court that has resulted in decisions establishing the following:

(i) Foreign pensions no longer have to be analogous to, or have like contingencies with, NZ Super in order to be direct deductible.

(ii) “Age related” is no longer criteria.

(iii) A widow’s pension from overseas can now be deducted from NZ Super.

(iv) The Tetley-Jones Case, 2004 established that the Chief Executive no longer needs to be specific in his determination of foreign pensions subject to the direct deduction policy.

The Chief Executive of MSD has been asked to specify in complete and exact detail how the Crown determines that the US Social Security pension has like contingencies with NZ Super.  In reply, the CEO admitted he was unable to specify in complete and precise detail the similarities between the US and the NZ retirement programs.  Some generalities were provided, the CEO’s strongest justification appearing to be that his authority to deduct US pensions had been upheld by the High Court - with its decision in the Roe Case.

The Courts are bound to abide by legislation enacted by Parliament but the decision process involving the deduction of overseas pensions is a “gray area” where important policies have been established and enforced not by the Courts or Parliament - but by a bureaucrat.  One of the highest paid and most powerful men in government, the Chief Executive has, over a period of time, been able to extend and reinforce his powers - with no questions ever being asked.  The nation should be deeply concerned.

Questionable methods have been used to establish that superannuation schemes within New Zealand (such as the GSF) cannot be likened to pensions from abroad.  For instance, Teachers Super is defined as an “occupational” pension - therefore, according to the Chief Executive, it is quite different to any overseas pension.  The term “occupational” is not to be found in any social security legislation, but after being used by the Chief Executive, the definition becomes accepted as law.

It should be noted: a number of overseas pensions subject to Section 70 could also be defined as “occupational”.

A major setback for the Chief Executive in 2004 reveals a great deal.  For the first time in an appeal involving pensions, the High Court ruled in favor of the appellant rather than in favor of the Crown.

WINZ had attempted to deduct the government pension of Mr Sant Raj Rai, an immigrant from Fiji.  The Court ruled in favor of the appellant on the basis that his pension was a civil servant’s pension and not government funded.  For the very first time, in a Court of Law, the Chief Executive was found to be wrong in his determination of overseas pensions subject to direct deduction.

When the decision went against the CEO, the Ministry of Social Development marshaled all its forces to appeal the decision.  It needs to be asked: what business did the Ministry have in going to the High Court to appeal a case involving a single, minor pension?  Was the decision favoring the appellant a slap in the face for the Chief Executive; did it undermine and threaten his hitherto unquestioned authority?

The court records for this case, and subsequent appeal, make fascinating reading.  In the appeal, the Chief Executive takes particular exception to the wording in the ruling that the Fijian pension was “not government funded”.  From the same records, it appears the CEO was not asking, but telling the judge to change the wording.

The Court dismissed the Chief Executive’s appeal.

Why were the Ministry and the Chief Executive so concerned over the wording that the Fijian pension was “not government funded”, and why were they so anxious for the judge to change that wording?  The answer is simple.

Under the direction and authority of the Chief Executive, for decades MSD/WINZ has been appropriating billions of dollars in overseas pensions belonging to elderly people.  The majority of those overseas pensions have not been government funded.

Last modified: February 21, 2007