British American Tobacco (New Zealand) Limited v Legal Services Agency HC Wellington CIV-2003-485-2118
[2005] NZHC 1281
•22 February 2005
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2003-485-2118
UNDER the Judicature Amendment Act 1972 and the Declaratory Judgments Act 1908 IN THE MATTER OF
an application for review and declaratory orders in relation to decisions under Legal Services Act 2000
BETWEEN
BRITISH AMERICAN TOBACCO (NEW ZEALAND) LIMITED AND W D & H O WILLS (NEW ZEALAND) LIMITED
Plaintiff
AND
LEGAL SERVICES AGENCY
First Defendant
AND
BRANDON HAMIORA PARAIKI POU AND KASEY HERENA APORO WAIRAU POU
Second Defendant
Hearing:
16 February 2005
Appearances: M R Camp QC and I Thain for Plaintiffs
G D S Taylor and R M Taylor for First Defendant
D B Collins QC and J Herschell for Second Defendants Judgment: 22 February 2005
In accordance with r 540(4) I direct the Registrar to endorse this judgment with the delivery time of 2.30pm on the 22nd day of February 2005.
RESERVED JUDGMENT OF GENDALL J
[1] The plaintiffs are tobacco companies who were sued by Janice Pou, the mother of the second defendants, for damages said to arise out of her illness of lung cancer alleged to be caused through their negligence. She had been granted legal aid
BRITISH AMERICAN TOBACCO (NEW ZEALAND) LIMITED AND Anor V LEGAL SERVICES AGENCY And Anor HC WN CIV-2003-485-2118 [22 February 2005]
to pursue those proceedings. She died from her lung cancer illness on 24 September 2002 and her two children have taken over the conduct of the proceeding.
[2] The plaintiffs apply by way of judicial review seeking to quash a decision of the Legal Services Agency (“the Agency”) which effectively granted legal aid to the children of the deceased, so as to enable them to continue the proceedings. Orders are sought setting aside the decision of the Agency and seeking declarations as to the correct construction of relevant sections of the Legal Services Act 2000.
Factual background
[3]The deceased commenced her proceedings in June 2002. General damage of
$300,000 for loss of expectation of and enjoyment of life and special damages were sought. Legal aid to pursue those proceedings was granted. When she died of her illness in September 2002 solicitors for the tobacco companies wrote to the Agency stating that it was their understanding that as a consequence her legal aid had ended, and that executors of the deceased’s estate would be required to apply for legal aid. In the event they wished to pursue the claim as aided persons, the solicitors wished to make submissions on any application made.
[4] The Agency advised solicitors for the deceased that it was the intention to withdraw aid but afforded them an opportunity to make submissions on that issue. Those submissions were provided on 21 November 2002 which contained detailed argument made by counsel instructed by those solicitors.
[5] On 6 December 2002 the Agency expressed its views on submissions made by counsel for the Pou family. It concluded that aid must be withdrawn. Reconsideration of that decision was sought and further submissions made on 28 January 2003 by counsel. Counsel contended that the Agency’s decision to withdraw aid should be reconsidered because it was not mandatory for aid to be withdrawn, there being a discretion vested in the Agency, and that the grant made to the deceased could be amended to extend to the executors, Mrs Pou’s two children, who had given instructions to continue the proceeding.
[6] Detailed submissions were made on 18 February 2003 by solicitors on behalf of the tobacco companies. On 12 March the Agency advised solicitors for both the Pou family and the tobacco companies of a process that it would follow in determining the application or reconsideration of the withdrawal of aid. It afforded final opportunities to be heard. On 31 March 2003 solicitors for the tobacco companies submitted detailed and thorough submissions as to why aid had to be withdrawn and why, in their contention the executors could only be granted aid if they complied with s10(3) of the Act. Essentially they argued that the executors were wrongly seeking to obtain the grant of aid, without having their eligibility properly tested under s10(3), and a variation or extension of the grant previously made to the deceased for the benefit of the executors would be a breach of the Act.
[7] The decision, which is the subject of the application for review was effectively made on 24 April 2003. The Agency determined that the original grant of aid was unexceptional and that when Mrs Pou died her rights in the proceeding survived pursuant to s3 of the Law Reform Act 1936. It then said:
“Section 26(2)(a) LSA 2000 permits the Agency to ‘amend a grant of legal aid’ to aid a person where ‘the aided person is no longer a person who would be entitled to that grant of legal aid’.
[4] The executors of Mrs Pou’s estate are accordingly now able to apply for an amendment of grant to them in accordance with s26(2)(a) LSA 2000 in order to enable them to continue the proceedings, if they so wish.
[5] Clause 6, Schedule 1 LSA 2000 provides that where an applicant for legal aid is concerned in the matter only in a ‘representative…or official capacity’, then that person’s personal resources are not taken into account but ‘the Agency may have regard to the value of the…estate…out of which the applicant is entitled to be indemnified and to the resources of the person’s…who are beneficially interested’. It would follow that upon receipt of such an application for amendment, then the usual assessment of financial criteria would then be made.”
[8] The Pou children through solicitors completed declarations as to their financial circumstance (in a sense notionally applying for legal aid) and on 20 August 2003 the Agency advised that although Brandon Pou had no disposable income or capital Kasey Pou had nominal disposal capital and
“We are prepared to fix the initial contribution at $5,500 based on Ms Pou’s disposal income. Legal aid is accordingly continued on this basis.
….
Her application for amendment to the grant has been approved….and maximum grant increased.”
Solicitors were advised that they would now need to complete an application for amendment of aid providing an estimate of costs over the following three months.
[9] Thereafter an order was made on 20 September 2003 in the High Court at Auckland substituting the Pou children as plaintiffs in their late mother’s proceedings. Subsequently the Pou children amended the proceedings against the tobacco companies by adding a claim, based upon them being alleged dependants, under s6 of the Deaths by Accidents Compensation Act 1952. The tobacco companies applied to strike out that claim and in a judgment of 27 August 2004 Harrison J, in the High Court at Auckland, struck out that claim for damages being illegally unsustainable. That judgment is subject of an appeal to the Court of Appeal but I am told that such is unlikely to be heard before September of this year.
[10]In the introduction to that judgment Harrison J said this:
“BAT and Wills have applied to strike out the [Deaths by Accidents claim] but not the [claim pursued under s3 of the Law Reform Act 1936]. A disinterested bystander may enquire of the logic in this division when the Pous’ claim under the Law Reform Act remains extant and will apparently proceed to trial. The reason is unashamedly tactical. In their dependent capacities, Brandon and Kasey enjoy a grant of legal aid to fund this proceeding which is not available to them as executors. They may lose the means to continue with the case if their claim under the Deaths by Accidents Compensation Act is struck out.”
[11] At the heart of the application of the tobacco companies is the following argument. They contend that when Mrs Pou died she could not pursue her cause of action. She was unable to have access to legal aid which had to be withdrawn. The right to pursue the cause of action was transferred to her executors for the benefit of her estate. Because the legal aid given to her was personal it was incapable of transfer to the executors. They themselves had to apply for legal aid and themselves be eligible under the Act. Because they “represented” the deceased’s estate the Agency was required, in considering any grant to them, to apply s10(3) of the Act.
Statutory provisions
[12] Aid may be granted in civil matters, where an applicant qualifies financially, if the applicant is a natural person or a trustee corporation; (s9). There are certain prohibitions in s9 which are not relevant in this case.
[13] Sections 10 and 11 restrict the grant of, or limit of civil legal aid but the only relevant provision for present purposes said to be s10(3). It provides:
“(3) The Agency must refuse to grant legal aid to an applicant who applies for legal aid in connection with a civil proceeding in which he or she is concerned in a representative, fiduciary, or official capacity, unless it appears to the Agency that, -
(a)if proceedings were brought, the court would be likely to order that the cost of the proceedings be paid out of any property, estate, or fund; and
(b)if that happened, the property, estate, or fund would be diminished or extinguished by the order and any person beneficially interested would suffer hardship as a result.”
[14] After legal aid is granted the aided person has to advise the Agency of relevant changes in circumstances and may, or the lead provider (solicitor or counsel) may, apply for an amendment to the grant. Section 24 provides:
“24 Application for amendment to grant of legal aid
(1)An application for amendment to a grant of legal aid –
(a)must be made by either the aided person or the lead provider; and
(b)must be made in the prescribed manner to the Agency; and
(c)may be made at any time before the matter to which the application or grant relates is finally disposed of by the relevant body.
(2)Following an application for amendment to a grant of legal aid, the Agency may, subject to section 27, confirm the grant, or may amend it in any manner consistent with this Act and any regulations made under it.”
[15]Section 26 provides:
“26 Withdrawal of, or amendment to, grant of legal aid: civil matters
(1)The Agency must withdraw legal aid granted in respect of a civil matter in any of the following circumstances:
(a)the grant of legal aid includes a condition that the person pay a contribution, and payment of that contribution is [in arrears or unpaid].
(b)the grant of legal aid is subject to a condition that the aided person authorises a charge to be registered over specified property, and the aided person has not so authorised the charge….
(c)….
(2)In relation to a civil matter, the Agency may withdraw legal aid from, or amend a grant of legal aid to, an aided person in any of the following circumstances:
(a)the aided person is no longer a person who would be entitled to that grant of legal aid, by virtue of any of the provisions of sections 9, 10, or 11:
(b)the Agency is satisfied that the proceedings in respect of which legal aid was granted have been disposed of:
(c)the Agency is satisfied that the aided person has required the proceedings to be conducted unreasonably so as to incur an unjustifiable expense to the Agency, or has required unreasonably that the proceedings be continued:
(d)the Agency considers that the aided person no longer has reasonable grounds for taking, defending, or being a party to the proceedings, or that it is unreasonable or undesirable in the particular circumstances for the person to continue to receive legal aid:
(e)the Agency is satisfied that the aided person has, in relation to any application by that person relating to legal aid, -
(i)intentionally or negligently made an untrue statement about that person’s resources, or has failed to disclose any material fact concerning them, whether the statement was made or the failure occurred before or after the aid was granted; or
(ii)intentionally contravened or failed to comply in any respect with this Act or with regulations made under this Act:
(f)the aided person requests that the grant of legal aid be withdrawn.”
[16] Clause 6 of the First Schedule to the Act, provides for taking into account resources of a “representative, fiduciary etc” as follows:
“If an applicant for legal aid is concerned in the matter only in a representative, fiduciary, or official capacity, -
(a)the applicant’s personal resources must not be taken into account when assessing disposal income or disposable capital;
but
(b)the Agency may have regard to the value of the property or estate, or the amount of the fund, out of which the applicant is entitled to be indemnified, and that the resources of the person’s (if any) who are beneficially interested.”
Submissions on behalf of the tobacco companies
[17] Counsel submitted that the Agency’s original view that aid should be withdrawn was correct, because Mrs Pou was no longer a “natural person” and therefore not entitled to aid. The aid, being purely a personal benefit, died with her and the Agency was wrong in accepting the contention that s26(2) allowed it to amend a grant of legal aid to some person other than the person to whom aid was originally granted. It was contended there is no power to change the identity of the aided person through a simple substitution. As the two children as executors would not themselves have been eligible for aid if they had applied for it the Agency could not, under the guise of an “amendment” grant aid to them in that case. Counsel contends the Agency recognised the need of the Pou children as executors to make their own application as this was done.
[18] Considerable emphasis was placed by counsel in submissions on s10(3), arguing that the Pou children as executors were concerned in the proceedings in a representative, fiduciary or official capacity and s10(3) applied which required aid to be refused. He submitted that the subsection applies whenever an applicant for aid does not have a personal claim and that is the position of the executors in the present case. Accordingly their application for legal aid was subject to s10(3) which it could
not have been satisfied. Indeed counsel contended the Agency did not consider s10(3) at all.
Submissions on behalf of the Agency
[19] Mr Taylor told me that this was the first time judicial review had been sought by an opponent of a legally aided person challenging a grant of legal aid to the opposing party, and that this was also the first time the question of amending a grant of civil legal aid, following the death of a legally aided person, had come before the New Zealand Courts. There was impliedly at least, the suggestion that the tobacco companies were to be criticised for adopting the stance, it being said they acted “proactively”. But Mr Taylor accepted, as did counsel for the Pou children, that there is no challenge to the standing of the tobacco companies to bring this judicial review application. Although the cynical might believe their aim is to scuttle the proceedings, the interest that gives them standing is their entitlement to costs against a non-legally aided plaintiff if that person failed in an action against them and such interest is affected by a grant of aid to an opponent. There is Australian authority to support the view that an opponent of a person granted legal aid has appropriate standing to commence proceedings to challenge a decision granting that entitlement to another person – see for example Tectran Corporation Pty Ltd v Legal Aid Commission of New South Wales [1986] 17 SWLR 340 (CA) and Kevin R Whelpton & Associates (Aust) Pty Ltd v Attorney-General [1987] 72 ALR 679 (FCA).
[20] I mean no disservice to Mr Taylor if I do not record in complete detail the breadth of his submissions which encompassed 88 paragraphs. Essentially they can be summarised as follows. He submitted there is a discretion available to the Agency under s26(2)(a) to amend a grant of aid rather than withdraw it upon an originally aided person ceasing to be eligible. He submitted that in terms of s4 of the Act a grant of legal aid includes “any amendments to that grant” and that the Agency powers relating to original applications and amendments are the same. He observed that what he called was a “proactive stance” of the tobacco companies being involved in the decision-making process was rare. As I have said they cannot be criticised for taking steps available in law. He submitted the purpose of the Act is to
provide a legal aid scheme that assists people who have insufficient means to pay for legal services but to ensure nonetheless that they have access to them. He undertook careful analysis of the factors which were relevant in determining those who are eligible for aid, for what purposes, and when a grant should be made. He referred to the decision of Legal Services Agency v H (HC AK CIV-2004-404-758 21 July 2004 Goddard J) is authority for the view that a dead person can continue in receipt of legal aid until, at least in criminal proceedings, the matter is disposed of by the Court, there being a contrast as between “natural person” and “juristic person”. He submitted that there was no basis to treat civil legal aid differently.
[21] Mr Taylor highlighted that the Agency has a wide discretion in granting, amending, withdrawing aid, depending on views it takes as to reasonable grounds for taking or defending of proceedings, the effect of any contribution likely to be made, prospects of success, and multiple other features.
[22] He submitted that three principles had to be applied when the Court approaches judicial review of a decision in respect of legal aid relating to a party who is an opponent to the application for judicial review. That is, he submits, the scope for review in such a situation is limited by those principles. He submitted the legislative history of legal aid schemes highlights the risks to the Courts in involving themselves in such decision-making. He emphasises, of course, that the merits of a legal aid decision are not to be inspected by the Court, as it is limited to error of law whether in its appellate jurisdiction or by way of judicial review. Thirdly, he argued that the words in the introduction to s26(2) – “the Agency may withdraw legal aid from, or amend a grant of legal aid to, an aided person in the following circumstances” confer a discretion on the Agency. This is to be contrasted with s26(1) where – “the Agency must withdraw legal aid granted in respect of a civil matter in any of the following circumstances….”. He submitted Parliament has specifically provided for situations where withdrawal of aid was mandatory.
[23] Mr Taylor argued that as a consequence, even if a dead person is not a natural person and so not “eligible” to receive aid, Parliament has allowed aid to continue, in the Agency’s discretion – presumably if a satisfactory amendment is available. He said that legal aid may properly continue without change on the basis of the decision
of Goddard J in Legal Services Agency v H (supra) and by analogous reasoning in a civil case legal aid can properly continue without change at the very least until the executors are substituted or any other consequential changes are made. In this case there was a later change through the adding of a new cause of action which did not exist until Mrs Pou died. He said there is a difference between an original grant and an amendment grant, highlighting by way of example the mandatory requirement to refuse aid if the applicant has no reasonable grounds for being involved (s9(3) whereas if aid is granted and circumstances change so that what was reasonable becomes unreasonable there is explicitly a discretion to continue aid or to withdraw or amend it (s26(2)(d)).
[24] Generally Mr Taylor submitted that the policy and purpose of the legal system enact is that legal aid once granted is not automatically to be withdrawn simply because the change of circumstances and the practicalities of access to justice, aid for which has already been granted, mean that withdrawal or adverse amendment must in all cases be discretionary and that is why s26(2) uses the word “may”.
[25] Concerning the possible application or relevance of s10(3); Mr Taylor submitted that although the Agency’s written advice of its decision did not directly or specifically refer to the fact that s10(3) was considered, it clearly was dealt with in detail in submissions made to the Agency, and it was implicit that the statutory provision had been considered. The tobacco companies had contended that “costs of the proceedings” in s10(3)(a) did not relate to an order for costs against an unsuccessful aided party but rather envisaged the situation where the costs of all parties in the proceedings was the subject of such an order. To the contrary, Mr Taylor submitted that s10(3) when read in the wider context of the Act, resulted in the correct meaning of “costs of the proceedings” being the costs of the fiduciary/representative/official. He contended that the Agency on its reconsideration in fact considered that question when applying cl 6 of the First Schedule.
[26] Although the word “only” in cl 6 does not appear in s10(3) nevertheless counsel argued that the decision-maker’s consideration of the cl 6 as it related to the
Pou children made it clear that the Agency was turning its mind to the required matters in s10(3). Counsel submitted that a Court order that the Pou children’s costs be paid out of the estate was so obviously likely that it did not have to be separately identified. As the estate was minimal and neither the Pous were affluent, it was open to the Agency to reach the decision that it was likely that if that happened the estate would be diminished or extinguished to the extent that the Pou children would suffer hardship. Mr Taylor said the Court cannot, on judicial review, enter into an inquiry as to the sufficiency or reasonableness of such a conclusion.
Submissions for the Pou children
[27] Mr Collins QC submitted that the Agency had a discretion to continue the original grant of aid after Mrs Pou’s death. It properly exercised this by amending the original grant to substitute the children for their mother, given that the Agency was satisfied that the children were eligible for aid. He contended that in any event the children were entitled to aid in their capacity as claimants under the Deaths by Accidents Compensation Act 1952, each receiving one grant of aid to continue the proceeding as a whole. He said that no error of law arose or, alternatively, if there was error it was not of such a nature to justify the Court exercising its discretion to grant the review sought by the tobacco companies. Mr Collins did not agree that an amendment to aid was necessarily always to be regarded or treated in the same way as an application for aid, but contended there was a correct amendment of the original grant of aid, granting effectively a new application for aid to the Pou children as claimants under the Deaths by Accidents Compensation Act. He argued the approach taken by the Agency was consistent with the purpose of the Act to promote access to justice.
[28] Mr Collins did not share the view the Agency was actually required to consider the provisions of s10(3) in this case, but said that it was obviously alert to those provisions given that the tobacco companies’ solicitors referred to, and placed strong reliance upon, them in their submissions to the Agency. The Agency in seeking and obtaining information about the financial position of the deceased’s estate and her children, acted consistently with it having regard to s10(3) and cl 6(b) of the First Schedule. Mr Collins submitted that the Agency knew that the Pou
children were not applying for aid solely as “representatives” and submitted that their compensation claims overlapped the original claim. He argued that the Pou children would still have received aid in the “proceedings”, as aid is not linked to individual causes of action.
[29] Finally, Mr Collins submitted that even if there were some error on the part of the Agency it would not justify the granting of relief by way of judicial review as sought by the tobacco companies. He submitted that the setting aside of the grant of aid would be an inordinately harsh outcome, disproportionate to the gravity of any legal error in the context and circumstances of the case. Mr Collins emphasised that the Pou children each receive one grant of aid for two purposes and it was highly likely, indeed he says inevitable, that aid was going to be granted to them in their capacities as Deaths by Accidents Compensation Act claimants if not as substituted claimants for their deceased mother. He says the outcome, of aid being extended, was inevitable and even if there was a failure to consider s10(3) of the Act, such was immaterial and it did not affect the ultimate outcome. He said the remedy sought by the tobacco companies should be denied.
Discussion
[30] In this unusual area it is necessary to commence by stating that which is clear:
(1)Janice Pou was a natural person properly entitled to and granted legal aid to bring her proceedings against the tobacco companies. Obviously on her death she ceased to be a person natural or otherwise, but she had until then been a legally aided person.
(2)The question is, what happens to her grant of aid thereafter? The tobacco companies say it had to be withdrawn. The Agency and the Pou children say it “could” be amended or varied, as was done. Whether or not I share the view of Goddard J that a grant of aid can be made on an application filed by a person who is then dead, the present position is different. The application of Mrs Pou and the
granting of aid in the performance of legal services all occurred when she was alive.
(3)Her cause of action based on alleged negligence on the part of the tobacco companies in breach of a duty of care said to be owed to her. It is her cause of action, which survives her death. It remains a cause of action concerning or relating to alleged wrongs done to, and damage suffered by, her. So it remains in that sense, her claim based upon her loss and no one else’s. What happens under s3 of the Law Reform Act 1936 is that cause of action vested in her survives for the benefit of her estate.
(4)The tobacco companies say that the persons substituted as plaintiffs are personal representatives or executors, so they act in a “representative capacity” and, therefore, s10(3) comes into operation and aid must be refused unless the cumulative qualifying provisions apply. Two issues arise from this. First, if s10(3) applies in what circumstances can the Agency’s view be challenged?; and, secondly, in any event does s10(3) come into play?
Is there a discretion?
[31] It may be pertinent to envisage the situation where there is an action brought against a person as a defendant, who later dies. Under s3 of the Law Reform Act 1936 that cause of action survives against his estate. If that person had been a legally aided defendant and the estate is meagre, or nil, would the executors or personal representatives be prevented from continuing to defend the proceedings with the benefit of legal aid? If the concept of access of justice is predominant, then the answer ought to be the same, whether a legally aided person who dies is plaintiff or defendant. The question remains what happens upon death – automatic withdrawal or discretionary amendment?
[32] To give another example. A legally aided plaintiff dies midway through trial. Must aid therefore be immediately withdrawn because the aided person is dead? Or
does the Agency have a discretion to amend the grant by, for example, substitution of some other person or in some other fashion to meet purposes of the Act? Some sense has to be made of the word “may” in s26(2) contrasted with the word “must” in s26(1). The circumstances of an already aided person dying or ceasing to be eligible will vary widely and the legislature has deliberately, it seems, left to the Agency a discretion to withdraw or amend the grant of aid in such circumstances. Otherwise, a strict application of the entitlement to aid under s9 being to a natural person or trustee corporation could, in some circumstances, result in injustice and denial to a person or his personal representatives of access to the Courts, either as plaintiff or defendant.
[33] For example, and viewed as a mirror image, if for some reason Mrs Pou had herself been sued by the tobacco companies, for example, in contract or tort, and was legally aided to defend those proceedings, would it inevitably follow that upon her death that the benefit of that aid could not devolve for those who would be substituted as defendants by the plaintiffs under s3? Or would the plaintiffs have a “free rein” at the impoverished estate?
[34] The Act has to be applied, and its provisions interpreted in a way that is consistent with and promotes its purpose, which, as set out in s3 could not be clearer.
It is
“to promote access to justice by –
(a) providing a legal aid scheme that assists people who have insufficient means to pay for legal services who nonetheless have access to them;
(b) ….”
[35] A very recent illustration of the imporance of that principle is apparent in the judgment of the European Court of Human Rights in Steel and Morris v The United Kingdom delivered the day before this case was argued before me; (Application 68416/01 15 February 2005). That judgment in its relevant respects concerned the inability of defendants in defamation proceedings to obtain legal aid in proceedings brought against them by McDonald’s Corporation and McDonald’s Restaurants Ltd because legal aid is not available for defamation proceedings in the
United Kingdom. The European Court expressed the opinion there had been a breach of the appellant's rights under Art 6§1 of the Convention for the Protection of Human Rights and Fundamental Freedoms:
“In the determination of its civil rights and obligations..., everyone is entitled to a fair...hearing...by [a] ...tribunal. ”
[36] Because those defendants were unable to obtain legal aid, the Court said this at paras [59] – [62]:
“[59] The Court recalls that the Convention is intended to guarantee practical and effective rights. This is particularly so of the right of access to court in view of the prominent place held in a democratic society by the right to a fair trial….It is central to the concept of a fair trial, in civil as in criminal proceedings, that a litigant is not denied the opportunity to present his or her case effectively before the court…and that he or she is able to enjoy equality of arms with the opposing side….
[60]….legal aid scheme is one of those means.
[61] The question whether the provision of legal aid is necessary for a fair hearing must be determined on the basis of the particular facts and circumstances of each case and will depend inter alia upon the importance of what is at stake for the applicant in the proceedings, the complexity of the relevant law and procedure and the applicant’s capacity to represent him or herself effectively….
[62] The right of access to a court is not, however, absolute and may be subject to restrictions, provided that these pursue a legitimate aim and are proportionate….It may therefore be acceptable to impose conditions on the grant of legal aid based, inter alia, on the financial situation of the litigant or his or her prospects of success in the proceedings….Moreover, it is not incumbent on the State to seek through the use of public funds to ensure total equality of arms between the assisted person and the opposing party, as long as each side is afforded a reasonable opportunity to present his or her case under conditions that do not place him or her at a substantial disadvantage vis-à-vis the adversary….”
[37] Those general remarks endorse the proper approach to be adopted in the interpretation and application of the Legal Services Act 2000 and in particular s26 regarding withdrawal or amendment, as well as the application of s10 and cl 6 in the First Schedule.
As to s10(3) and Clause 6 of the First Schedule
[38] Counsel for the tobacco companies contended that s10(3) prevents aid being granted, and subs (a) only applies where it is likely that the costs of the entire proceedings would be ordered to be paid out of the estate. That is sometimes the case in Family Protection, Testamentary Promises and Trustee Act proceedings. But I do not think the interpretation need necessarily be so restricted. In most other situations it would only be when an estate is a defendant that the Court might, or would be likely to, order costs against, and to be paid out of, it. If the estate is meagre, then a beneficiary might suffer hardship. It might be the case that, where executors are plaintiffs who fail, a Court would be likely to award costs against them as executors and it would then be a matter for them to obtain reimbursement and be indemnified from the property (“the estate”) they hold. The Court may not be making an order that costs be paid out of the estate, so strictly s10(3)(a) may not apply, but the practical effect is that such would follow. But the test is what “appears to the Agency” might be the case.
[39] Clearly executors can obtain legal aid. Clause 6 of the First Schedule makes that clear. The executor’s personal resources are not taken into account, but the size of the estate may be regarded because the executor may be indemnified from it. If the estate is meagre a grant of aid is more likely, otherwise beneficiaries may suffer hardship. But if a person is also concerned with the proceedings in a personal capacity then obviously personal resources may be taken into account. That is what occurred in this case.
[40] So, there is no absolute prohibition from the granting of aid to an executor of an estate. Section 10(3) prohibits aid unless the circumstances in (a) and (b) (as the Agency views it to “appear”), are likely to arise in the future. In the present case the Agency may have considered that such future events were likely. There is merit in the submission of Mr Taylor that the Court ought not interfere in a discretionary judgment such as that if it occurred. I would not be disposed to question, as a matter of law, the discretion of the Agency in reaching a view that subs (3)(a) and (b) may apply.
[41] But in any event I do not consider that the s10(3) prohibition applies in any event in a case such as this where the aid has already been granted, and the Agency is considering an Amendment to allow those who represent no one but themselves to continue a claim, the subject of a proper grant of aid.
[42] First, the Death by Accidents claim, or cause of action, arose upon Mrs Pou’s death, and it had to be brought for the benefit of a husband and children. The deceased has no husband and the only children are the two claimants. It is brought for their benefit and for their loss which is separate to the loss or damage alleged to be suffered by their mother under her cause of action. Of course, the Death by Accidents cause of action has been struck out and is subject to an appeal, but the relevant point remains, namely that the Pou children are entitled to legal aid for the purpose of the proceedings.
[43] Secondly, and crucially, the Pou children are exercising a right vested in their mother, which survived her death and could be pursued for the benefit of her estate. They, of course, are not acting in an official capacity. Nor, are they fiduciaries of themselves. Although they are, in one sense, concerned in a “representative” capacity because they are executors or trustees, they are representative only of the property of the deceased. That is what “estate” means. But they are not representing any other person. I consider it is implicit in the legal aid scheme, that “represent” means to represent some other person or group.
[44] Section 10(3) does not use the word “only”. But it is apparent from cl 6 of the First Schedule that resources of a “representative, fiduciary, etc” must not be taken into account, but the value of an estate may, as may the resources of a beneficiary, where “an application for legal aid is concerned in the matter only as a representative”. So if an applicant is a beneficiary, as well as a representative, his/her personal resources have to be taken into account. That accords with common sense as the proceedings are designed to benefit him/her, not simply others.
[45] I am of the opinion that the proper interpretation of s10(3), viewed in the context of the Act as a whole and its purposes, is that executors or other “representatives” have to be solely, or only concerned in such a capacity, before the
s10(3) denial of aid, or restriction, applies. That approach accords with the view of the Court of Appeal expressed by Blanchard J in Glancy v Legal Services Agency (2003) 17 PRNZ 168 (CA) at para [32]:
“Section 10(3) requires refusal of legal aid to a trustee corporation or another applicant in a representative, fiduciary or official capacity unless the case falls within the exceptions cumulatively stated in (a) and (b). But, to the extent that an applicant has a personal claim, as we have held the appellants do, and is otherwise qualified in terms of s9, legal aid is not denied by s10(3), which is directed only to representative claims or to the portion of a claim which is representative.” (emphasis added)
[46] In the present case the Pou children have aid first as claimants under the Deaths by Accidents Compensation Act, and secondly in Mrs Pou’s proceedings because they are “concerned” in a dual capacity. They are executors representing the legal entity known as “the estate” (i.e. its property) and also in the capacity of representing the only beneficiaries, who are in fact themselves. So they have a personal claim. They are concerned as to their eventual entitlement as the sole beneficiaries. I consider that “representative” means representation of some other person, body or agency, who would take the benefit of, or detrimental consequences, of the outcome of the proceedings. Where the person seeking legal aid is involved in a dual capacity, one of which is personal to them (which I am satisfied is the case here), then s10(3) does not apply. Otherwise a person who, in their own right may be entitled to legal aid so as to be represented in Court, would be deprived because, in another legal capacity, he/she should happen to “represent” his/her own beneficial interests. That, frankly, would make a nonsense of the legal aid scheme and purposes of the Act.
[47] The clear purpose of the Act is to ensure that those who financially cannot afford access to the Courts, so as to obtain a remedy, alternatively or defence, available to them are not unjustly deprived of that access. There is nothing inherently unlawful about the Agency amending a grant of aid under s26 in such a situation as the present. So, for example, one of the Pou children should die, they both being currently legally aided, there would be no bar to the Agency considering further amendment by deletion of that person and/or substitution of another, subject of course to financial qualifications. That person would simply fill the shoes of the aided person.
Summary
[48](1) The Agency was entitled to act under s26(2) and in its discretion amended the grant of aid as it did.
(2)Section 10(3) when read alongside cl 6 of the First Schedule, only comes into play where a person is concerned only in representative, fiduciary or official capacity. Further, if the claim is not representative of another person or body, a disqualifying “representative capacity” does not exist.
(3)The tobacco companies cannot call in aid s10(3) so as to prevent the Agency amending the original grant of aid to Mrs Pou.
(4)Aid if granted to a person (plaintiff or defendant) who later dies, does not automatically cease in the sense that it must be withdrawn. The Agency has discretion, that it is required to exercise judicially. The Court will be slow to interfere with the exercise of that discretion, especially in cases where the challenge is made by an opponent to the applicant in the legal proceedings the subject of an aid application.
(5)There being no error of law on the part of the Agency the application for judicial review is dismissed.
[49] The Agency and the Pou children are entitled to costs which are fixed on a Category 2B basis. I certify for second counsel for both parties. Leave is reserved to all parties to apply further on questions of costs.
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J W Gendall J
Solicitors:
Phillips Fox, Solicitors, DX CP24027, Auckland for Plaintiffs
(Counsel acting: Mr M R Camp QC, Barrister, DX SP26514, Wellington for Plaintiffs)
Bartlett Partners, Solicitors, P O Box 10852, Wellington for First Defendant (Counsel acting: Mr G D S Taylor, Barrister, Wellington for First Defendant)
French Burt Partners, Solicitors, DX YA90005, Invercargill for Second Defendants (Counsel acting: D B Collins QC, P O Box 5300, Wellington for Second Defendants)
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