A man convicted of benefit fraud has received $8000 in compensation after his privacy was breached during an investigation into his wife for similar offending.

Peter Thomas’ wife Lee-Anne Hawe-Thomas was being investigated by the Ministry of Social Development in 2012 for applying for multiple benefits while claiming she was single, when in fact she was married.

As part of that investigation, MSD sent letters to Thomas’ bank, insurer, business partners and utility companies providing him services asking them to provide information confidentially about the state of his affairs.

It’s a move Thomas says breached his privacy and nearly caused his insurer to pull its cover of his business, and his bank to cancel his overdraft facility.

Now, more than a decade later, the Human Rights Review Tribunal has agreed saying the way the letters and requests for information were issued was “unfair”.

PRIVACY BREACH

At the time of the privacy breach Thomas was not being actively investigated for benefit fraud.

However, he and his wife did go on to be convicted in 2014 for claiming $107,000 in disability carer benefits from the Ministry of Health.

The pair had claimed a total of $107,000 in disability carer benefits from the Ministry of Health, despite the funding not being available to people who look after their adoptive, step or biological child.

Thomas submitted 80 claims to the ministry over a seven-year period and listed himself as being a non-relative of his biological daughter in order to claim payments.

He was ordered to pay the money back and sentenced to 200 hours of community service in 2014, while his wife received five months’ home detention.

As a result of the separate MSD investigation, his wife went on to be sentenced to a further five months’ home detention after claiming roughly $120,000 between 2006 and 2013.

Then Privacy Commissioner John Edwards found in 2019 that MSD had misused its powers in investigating benefit fraudsters. Photo / John Stone

THE PRIVACY BREACH:

Thomas complained to the Privacy Commissioner in 2017 that the letters had breached the Privacy Act and the matter was then referred up to the Human Rights Review Tribunal, which held a hearing into the matter last year. It can take years for complex claims to be heard by the tribunal.

His claim was made two years before the Privacy Commissioner released a report that found MSD had been systematically misusing its powers in a bid to catch high-level fraudsters.

Some of the letters sent during the investigation referred to both Thomas and Hawe-Thomas as clients of MSD and said; “I am writing to you about the above-named. To make sure we make the right payments when people are receiving a benefit, we need to check some of the details they have provided.”

Each letter required the response to be made to the National Fraud Investigation Unit of MSD and that the recipient was to treat the matter in confidence.

Thomas claimed that the letters were designed to put pressure on the couple and to undermine his reputation.

At the tribunal hearing last year, MSD claimed the letters were sent for a lawful purpose and that the information it had requested from the various parties was to aid its investigation into Hawe-Thomas which eventually led to a successful prosecution against her.

However, in a recently released ruling the tribunal found that while the investigation was into Hawe-Thomas, some of the letters listed her husband as MSD’s sole client, and were not necessary to determine the status of their marriage, which was the cause of the investigation.

It found the way the letters and requests for information were issued was “unfair” and breached MSD’s own Code of Conduct.

“As a direct result of the issue of the notices, Mr Thomas was required to have interactions with his insurance broker and bankers. While Mr Thomas was able to resolve the issues with his insurance broker and bankers, having listened to his evidence we accept the considerable distress Mr Thomas said he felt when he became aware that organisations had received the notices,” the tribunal found.

”In this case, MSD did not comply with the code of conduct and over-reached when asking for certain types of information.”

COMPENSATION

While Thomas had claimed that MSD conducted its investigation in a way that would deliberately damage his reputation, the tribunal said it could find no evidence of malfeasance.

It did however award Thomas $8000 in compensation for the privacy breach.

”In considering the amount of damages which should be awarded, we have taken into account that there has been a long and unhappy interaction between Mr Thomas and MSD, not all of which is related to the issue of the notices,” the tribunal said.

”We are not awarding damages to Mr Thomas for anything other than his humiliation, loss of dignity and injury to feelings suffered in relation to the issue of the notices.”

Group general manager of MSD’s client service support, George van Ooyen said it accepted the tribunal’s decision, had not appealed it and was working with it to facilitate payment of the compensation.

”We are engaging with the tribunal in order to facilitate payment.”

Thomas could not be reached for comment.

Jeremy Wilkinson is an Open Justice reporter based in Manawatū covering courts and justice issues with an interest in tribunals. He has been a journalist for nearly a decade and has worked for NZME since 2022.