22 September 2015

Counterfactual: Ministry of Social Welfare v. Morgan

Lawyers in anti-trust cases are fond of using hypothetical counterfactuals to cloud the issue: If the monopoly supplier were not in fact dominant in the market would the commercial behaviour in dispute still be questionable?  The Court of Appeal dismissed use of counterfactual arguments to support a claim for a social welfare housing benefit.
At issue was a temporary accommodation assistance benefit available to Christchurch residents displaced by earthquake damage.  The Morgan family were forced to move while their damaged home was repaired.  They moved into a house owned by their family trust.  It was previously tenanted.  The Morgans signed a tenancy agreement to cover their occupation of the family trust-owned home.  Initially their earthquake insurer met the rental costs.  They applied for an accommodation benefit when these payments stopped.  Social Welfare refused, saying they were occupying their “own” property.  The High Court decided they were entitled to a benefit, a decision reversed by the Court of Appeal.
The Court of Appeal was critical of the High Court’s acceptance of a counterfactual argument: If the Morgans had rented a property from a stranger, then would a benefit be payable?  Hypothetical scenarios should not be used to determine eligibility for benefits, it said.
Ministry of Social Development v. Morgan – Court of Appeal (22.09.15)

15.107