Beneficiary’s $25k claim to Human Rights Review Tribunal over MSD debt bungle rejected

A man who kept getting "pay now" letters from the Ministry of Social Development is appealing a decision that he failed to prove ongoing efforts to fix the problem caused him harm. Photo / 123RF

A man whose privacy was breached by the Ministry of Social Development hounding him over erroneous welfare debts has failed to prove that the constant effort to fix the problem harmed him emotionally.

The Human Rights Review Tribunal has dismissed a claim brought by Graham William D’Arcy-Smith, who sought $25,000 in compensation for what he said was “significant emotional harm” caused by being sent two debt recovery letters in error.

The tribunal found MSD breached a section of the Privacy Act when it used D’Arcy-Smith’s personal information to generate debt recovery letters in March and April 2021.

However, he failed to establish that the breach caused him to suffer either significant humiliation, significant loss of dignity or significant injury to feelings.

The tribunal said in a decision this month that his claim was therefore unsuccessful and no remedy could be ordered.

D’Arcy-Smith told NZME he had lodged an appeal against that part of the decision, after his repeated attempts to get confirmation that the debts had been wiped.

Despite assurances from the ministry that they had been wiped, plus apologies and small payments for the trouble caused, D’Arcy-Smith kept receiving warning letters telling him to pay up.

In his response to NZME, he alleged the ministry had tried to minimise its behaviour and the stress caused had given him a lifetime illness. He claimed the privacy breaches were made possible by the actions and inactions of two senior ministry staff.

“MSD’s behaviour caused me severe physical and mental anguish and harm, so they need to be held accountable.

“It’s time for them to stop this behaviour towards people.”

D’Arcy-Smith had at times received jobseeker support over five years.

At the same time, he had occasionally earned income from part-time employment, which meant his jobseeker benefit had to be adjusted to reflect his earnings.

Due to inconsistencies in those adjustments, he was overpaid and was left owing money to MSD.

In 2018, after he received correspondence about the debt, an MSD case manager twice told him the debt would be written off. This never happened and the ministry continued to chase the debt.

In October 2020, he wrote to the ministry’s deputy chief executive seeking $10,000 for the stress, humiliation, loss of dignity and injury to feelings he had suffered from the ministry’s failings over the debt and its repeated failure to sort the matter out.

A month later, he was told the matter was being sorted and that he’d be sent a confirmation letter.

In December 2020, he received an apology, a $1000 payment acknowledging he should have received better service, and notice that debts totalling $4261 had been written off.

However, the write-off procedure was not logged in the ministry’s system and, in March 2021, it sent him a request seeking repayment of a $4360 debt, followed by a final reminder in April 2021.

He complained to the Privacy Commissioner that the ministry had breached a principle of the Privacy Act by not checking the accuracy of his personal information before sending the two debt recovery letters.

In June 2021, he received another apology and a notice that the debt was written off in the system.

The letter explained that, despite the paperwork being completed and signed off, actions to remove the debt from the system were not manually completed.

When the ministry’s automatic systems completed a search for any outstanding debts, D’Arcy-Smith’s prior debts were still showing as current, so the system generated and sent the two letters.

In December 2021, he lodged the claim with the tribunal seeking $25,000 in damages, alleging the ministry had interfered with his privacy by sending the two letters in error, and that it had caused him “significant emotional harm”.

The ministry denied the allegations during the tribunal’s investigation.

It concluded that D’Arcy-Smith did not prove a causal connection between the breach and the emotional harm he alleged he suffered as a result.

MSD group general manager Jayne Russell told NZME the ministry was sorry that D’Arcy-Smith received inconsistent service and it had formally apologised to him.

“As this matter is under appeal, we have no further comment.”

Tracy Neal is a Nelson-based Open Justice reporter at NZME. She was previously RNZ’s regional reporter in Nelson-Marlborough and has covered general news, including court and local government for the Nelson Mail.