C v Legal Services Commissioner
[2013] NZHC 1758
•12 July 2013
ORDER SUPPRESSING NAME OF THE APPLICANT AS NOTED IN [69] OF THIS JUDGMENT
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2012-485-2221 [2013] NZHC 1758
IN THE MATTER OF case stated from the Legal Aid Tribunal pursuant to s 61 of the Legal Services Act
2011
BETWEEN
C Applicant
AND
LEGAL SERVICES COMMISSIONER Respondent
Hearing: 17 April 2013 Counsel:
S Cooper and S Benton for the Applicant
F Cooke QC for the RespondentJudgment:
12 July 2013
JUDGMENT OF MALLON J
Table of Contents
Introduction ....................................................................................................................................... [1] The statutory provisions ................................................................................................................... [5] The background facts...................................................................................................................... [18] Appeal from a Tribunal’s determination....................................................................................... [27]
The issue ....................................................................................................................................... [27] Submissions .................................................................................................................................. [29] My assessment .............................................................................................................................. [31]
Is there a discretion to pay above the maximum grant ................................................................ [45]
The Tribunal’s determination........................................................................................................ [45] Submissions .................................................................................................................................. [48] My assessment .............................................................................................................................. [50]
Result ................................................................................................................................................ [64]
C v LEGAL SERVICES COMMISSIONER [2013] NZHC 1758 [12 July 2013]
Introduction
[1] The Legal Services Act 2011 is the legislation under which legal aid is granted to those who need legal representation but cannot afford it. In the first instance grants of legal aid are determined by the Legal Services Commissioner. An applicant for legal aid can seek review of the Commissioner’s decision by the Legal Aid Tribunal on the grounds that the Commissioner’s decision is manifestly unreasonable or wrong in law. The Tribunal can confirm, modify or reverse the Commissioner’s decision or refer it back to the Commissioner for reconsideration.
[2] The principal issue before me is whether the Commissioner can appeal the Tribunal’s decision, when the Tribunal has referred the matter back to the Commissioner for reconsideration but the Commissioner considers that the Tribunal has made an error of law. The other issue concerns whether there is power under the legislation for the Commissioner to pay a legal provider above a maximum grant of legal aid when the request for that payment has been made after the grant of legal aid has been withdrawn.
[3] Both questions are matters of statutory interpretation. The first has ongoing importance beyond the case in which it has arisen particularly because the parties say that the Tribunal is increasingly directing a reconsideration rather than determining the matter itself. The second issue is also of continuing relevance because it will clarify whether there is a discretion under the 2011 Act not to decline a claim even
though it exceeds a maximum grant.1
[4] The matter is before me by way of case stated. The Commissioner is effectively the appellant because he is the party that disagrees with the Tribunal’s decision at issue. C is the person to whom the Tribunal’s decision relates. His legal provider requested that the Tribunal state the case. C’s legal aid matters were dealt
with under the Legal Services Act 2000, which is the predecessor legislation.2
1 Section 99(4) of the 2011 Act sets out the grounds on which the Commissioner can exercise that discretion.
2 The application for a grant, the Agency’s consideration of the payment of the invoice and the
application for review were lodged before the 2011 Act came into force. Pursuant to s 131 of the
2011 Act the application for review was to be determined under the 2000 Act.
However the relevant provisions are the same and this judgment will refer to the
2011 provisions because it is those provisions which will have ongoing application.
The statutory provisions
[5] An application for a grant of legal aid is made under s 14 of the 2011 Act. The application must be made “before the final disposition” of “the matter to which the application relates, by a court, tribunal, or any other means”.3 However there is provision for an application to be made after “final disposition” if the Commissioner is satisfied that the application was delayed because of circumstances beyond the control of the applicant and the provider which could not reasonably have been anticipated and all reasonable steps were taken to apply before final disposition.4 In that case the application must be made within 15 working days from the date of final disposition.5
[6] The Commissioner makes a decision on the application under s 16 of the
2011 Act. The Commissioner may grant or decline the application, grant legal aid on an interim basis until a decision is made to grant or decline it, or request further information.6 When granting an application the decision must specify the conditions that apply to the grant of legal aid.7 It may specify a maximum grant.8 The
maximum grant is “the amount of legal aid that is authorised under the grant”.9
[7] Where the Commissioner grants legal aid on an interim basis, payments cease when the Commissioner makes a decision to grant or decline the application or the Commissioner considers it is appropriate that the payments should cease.10 If payments have ceased, s 31 (concerning the withdrawal of a grant) does not apply to
it and s 32 (concerning the consequences of withdrawing a grant) apply with any
3 Legal Services Act 2011, ss 14(1)(c) and (3).
4 Section 14(2)(b).
5 Section 14(2)(a).
6 Section 16(1).
7 Section 16(2)(a).
8 Section 16(2)(c).
9 Section 23(1).
10 Section 16(3)(a).
necessary modifications, and a reference to withdrawal of legal aid under that section must be read as a reference to the grant ceasing.11
[8] An application can also be made to amend a grant of legal aid.12 Like the application for a grant, an application for an amendment to the grant must be made before “final disposition” (defined as above at [5]).13 And again this is subject to the situation where delay is beyond the control of the applicant or provider, all reasonable steps have been taken to apply for the amendment before the final disposition and the application is made within 15 days of final disposition.14 The Commissioner can confirm the grant or amend it.15
[9] In relation to a civil matter, there are circumstances in which the Commissioner must withdraw or amend a grant of legal aid.16 There are also circumstances in which the Commissioner “may” withdraw or amend the grant.17
The latter circumstances include where the aided person is no longer a person who would be entitled to that grant by virtue of ss 10, 11, 12 or 13 of the 2011 Act.18
They also include where the Commissioner is satisfied that the proceedings in respect of which legal aid was granted have been disposed of.19
[10] If a grant of legal aid is to be withdrawn in such a way that the aided person is likely to be detrimentally affected, then notice must be given and the aided person must be given an opportunity to be heard before the grant is withdrawn.20 If a grant is withdrawn, the Commissioner must notify the aided person and the provider of the date on which the withdrawal takes effect and the reasons for the withdrawal.21 They must also be told of their right to seek a reconsideration (under s 51) and a review
(under s 52).22 The withdrawal of legal aid does not affect “the Commissioner’s
11 Section 16(3)(b).
12 Section 28.
13 Section 28(1)(c) and (6).
14 Section 28(2).
15 Section 28(3).
16 Section 30(1).
17 Section 30(2).
18 Section 30(2)(a). The sections referred to are concerned with who may qualify for the grant of legal aid.
19 Section 30(2)(b).
20 Section 31(2).
21 Section 31(3)(a) and (b).
22 Section 31(3)(c).
obligation to pay for the services provided under the grant before the date of its withdrawal”.23 The Commissioner “is not obliged to pay for any services provided to an aided person after the date on which legal aid is withdrawn.”24
[11] A person who is aggrieved by a decision of the Commissioner can apply for a reconsideration.25 A person may also apply for a review of a decision, but they must first obtain a reconsideration.26 The grounds for a review are that the Commissioner’s reconsideration of the decision is “manifestly unreasonable” or “wrong in law”.27 The decisions that can be reviewed include decisions to grant or decline the application, decisions to withdraw or amend a grant, and a maximum grant decision.28
[12] On receipt of an application for review the chairperson of the Tribunal may require the Commissioner or any other person to provide information.29 The Tribunal may require the Commissioner to provide all information held by the Commissioner relating to the original decision and the reconsideration and/or a written report setting out the considerations to which the Commissioner had regard in making the decision and reconsidering it.30 The Tribunal may also receive and obtain from any person any information that may assist it in dealing with the review.31
[13] Section 56 provides:
56 Determination of review
(1) The Tribunal may determine a review by confirming, modifying, or reversing the decision under review.
(2) Every determination by the Tribunal must be accompanied by a brief summary of the reasons for it.
[14] Section 57 provides:
23 Section 32(1)(c).
24 Section 32(5).
25 Section 51.
26 Section 51(7).
27 Section 52(1).
28 Section 52(2).
29 Section 54(a).
30 Section 55(2).
31 Section 55(3).
57 Tribunal may direct Commissioner to reconsider
(1) The Tribunal may, instead of determining a review, give a direction to the Commissioner to reconsider all or any part of the decision to which the review relates.
(2) If the Tribunal gives a direction under subsection (1),—
(a) the Tribunal must give reasons for the direction and may set out the matters that the Commissioner must take into account when reconsidering the decision; and
(b) the Commissioner must reconsider the decision, taking into account the reasons for the direction and any matters set out by the Tribunal.
[15] Section 59 provides:
59 Appeal on question of law
If the Commissioner or an applicant considers that the Tribunal's determination is wrong in law, the Commissioner or the applicant (as the case may be) may appeal to the High Court on the question of law, and the appeal must be dealt with in accordance with the rules of court.
[16] Section 61 provides that “the chairperson of the Tribunal may state a case for the opinion of the High Court on any point of law that arises on a review ... of a decision of the Commissioner”.
[17] Claims for payment for legal aid must be made by the provider to the Secretary for Justice.32 The time frame for claiming a payment is the time frame set by regulations unless the Secretary, in relation to an individual matter, specifies that a different time frame applies.33 Section 99 provides:
99 Secretary to refer claim to Commissioner for decision
(1) On receiving a claim for payment from a lead provider, the Secretary must refer the claim to the Commissioner.
(2) The Commissioner may—
(a) approve the claim or any part of it; or
(b) defer payment of all or part of the claim in order that the deferred part may be examined; or
(c) decline payment of the claim or any part of it.
(3) A payment may be deferred and a claim, or part of a claim, examined if—
(a) the claim or part of the claim appears to the Commissioner to be excessive in light of the Secretary's standard rates for payment or the Commissioner's experience with comparable claims; or
(b) an aided person has requested an examination of the cost of services under section 90.
(4) The Commissioner may decline some or all of a claim on any 1 or more of the following grounds:
(a) the claim exceeds the maximum grant specified in the grant: (b) the claim or part of a claim is for disbursements of a type not
approved for payment by the Commissioner:
(c) an examination of the claim or part of a claim under subsection (2) has determined that the claim is excessive or inaccurate:
(d) the claim was not made in accordance with the time frame referred to in section 98.
The background facts
[18] C received a grant of legal aid to pursue an historic abuse claim.34 A maximum grant was specified. On 29 March 2010 the Legal Services Agency (now the Commissioner) wrote to C advising that legal aid would be withdrawn with effect from 2 April 2010. That decision was made because the Agency considered that C no longer had reasonable grounds for continuing his claim. C sought a review of that decision by the Legal Aid Review Panel (now the Tribunal).35
[19] The provider (ie. the legal firm acting for C) had many other clients with historic abuse claims in respect of whom legal aid had been withdrawn. They had sought amendments of the grants. The Agency wrote to C’s provider on 26 July
2010 about those clients advising that the Agency took the view that once legal aid
had been withdrawn there was no longer a grant which could be amended. The
34 This was one of hundreds of similar civil claims for damages brought in respect of alleged abuse suffered by someone under the responsibility of, or in the care of, the state or other institutions many years ago.
35 The Panel confirmed the Agency’s decision to withdraw aid in its decision dated 2 November
2010.
Agency acknowledged its obligation to pay for services under the grant before the date of withdrawal, up to the balance of available funding.36
[20] C’s provider submitted an invoice on 15 September 2010 for work done up to
1 April 2010 (being one day before the effective date of withdrawal of his legal aid) which exceeded the maximum grant by $964.36. On the same date C’s provider filed an application to amend the grant seeking an increase in the maximum grant. The increase sought was for an amount close to the amount by which the invoice exceeded the maximum grant. At this time there had been no “final disposition” of C’s historic abuse claim. The Agency wrote to the applicant on 24 September 2010 advising it was paying the invoice up to the amount remaining under the maximum grant. The Agency refused to amend the grant on the basis that it had been made
outside the time limit for such applications.37
[21] On 26 October 2010 C and his provider applied to the Agency to reconsider its decision. Its view was that, as there had been no final disposition, an amendment to the legal aid grant could still be made. In the meantime, on 2 November 2010, the Panel confirmed the Agency’s decision of 29 March 2010 to withdraw aid to C. The Agency made its decision on C’s request to reconsider the application to amend the grant on 27 April 2011. It confirmed its decision to refuse to amend the grant and to pay the invoice submitted in September 2010 only up to the maximum grant. The Agency expressed the view that a grant which had been withdrawn did not exist and therefore could not be amended.
[22] C and his provider sought a review of that decision on 14 June 2011. The Tribunal gave its decision on that review on 9 November 2011. It agreed with the Agency that a grant must be extant for it to be amended. It upheld the Agency’s decision refusing to amend the grant. It considered, however, that the Agency had failed to exercise a statutory discretion to pay above the maximum grant. It considered that this discretion arose under s 75(3)(a) of the 2000 Act (now s 99(4)(a) of the 2011 Act).
[23] The Tribunal concluded that the correct approach to an invoice submitted for work done before legal aid is withdrawn is that the invoice should be assessed on its merits, irrespective of the maximum grant. It considered that the Commissioner cannot refuse payment of an invoice solely because it exceeded the maximum grant. It said that the same factors that would be considered in assessing an application to amend the grant if an application had been made in time, will be relevant to assessing whether payment of the invoice should be made.
[24] The Tribunal concluded that the Agency’s decision of 27 April 2011 was wrong in law as there had been a failure to consider the statutory discretion in s 75(3)(a). The Tribunal directed the Commissioner to reconsider the invoice. In accordance with the transitional provisions of the 2011 Act, that reconsideration was to be under s 99(4)(a) of the 2011 Act. In directing this reconsideration, the Tribunal said:38
This does not necessarily mean that the invoice must be paid in full, but only that the Commissioner will consider whether to pay the balance, having regard to all the relevant factors, including those set out at [58]-[59] [of its decision].39
[25] The Commissioner reconsidered the decision to decline payment of the balance of the September 2011 invoice. In his decision dated 12 April 2012 the Commissioner confirmed the earlier decision that it could not approve payment of an invoice which exceeded the maximum grant. This was because the Commissioner did not agree with the Tribunal’s interpretation of s 99(4)(a) of the 2011 Act (s 75(3)(a) of the 2000 Act). The Commissioner considered that the Tribunal erred in law in finding that the Commissioner has a discretion to authorise payment of an invoice which exceeds the maximum grant when the grant cannot be amended.
[26] C sought a review of the Commissioner’s decision. In the context of that
review C’s provider was successful in asking the Tribunal to state a case to the High
Court.
38 Re AM [2011] NZLAT 36 at [66].
39 Paragraphs [58]-[59] of its decision discuss when it might be appropriate to pay an invoice that exceeds the maximum grant.
Appeal from a Tribunal’s determination
The issue
[27] The right to appeal to the High Court is provided by s 59 of the 2011 Act. That section provides that the right arises if the Commissioner or the applicant considers that “the Tribunal’s determination is wrong in law”.40 That right clearly exists where the Tribunal exercises its power under s 56 to “determine a review by confirming, modifying, or reversing the decision under review”. The issue is whether the Tribunal has made a “determination” (as referred to in s 59) if the Tribunal has directed the Commissioner to reconsider the decision (under s 57). That issue arises because the power to direct a reconsideration is expressed in s 57 as
being “instead of determining a review”.
[28] If the correct interpretation of these provisions is that the Commissioner cannot appeal a Tribunal’s decision where the Tribunal has directed a reconsideration, that may leave the Commissioner bound by an interpretation of the Act it does not agree with. It would mean that the Commissioner could only seek the High Court’s interpretation of the issue where the Tribunal has reversed or modified the Commissioner’s decision rather than directed a reconsideration.
Submissions
[29] The Commissioner considers that this interpretation cannot be correct. He considers that Parliament must have intended that the Commissioner could appeal to the High Court on questions of law ruled upon by the Tribunal. He submits that there are two alternative interpretative routes to this conclusion:
(a) when a Tribunal finds that the Commissioner is wrong in law that amounts to a “determination” under s 59. That means that there is a right of appeal to the High Court on the ground that the Tribunal’s
determination is itself wrong in law;
40 Section 59.
(b)when a Tribunal considers that the Commissioner is wrong in law it is modifying or reversing the decision under s 56 to that extent, and directing a reconsideration under s 57 of an aspect of the decision in light of the modification or partial reversal. That means that there is a right of appeal to the High Court to the extent that the Commissioner’s decision was modified or reversed.
[30] The provider submits that the Commissioner’s interpretation of ss 56, 57 and
58 is contrary to the plain words of those sections. It submits that the Commissioner is not necessarily stuck with what it considers to be an erroneous interpretation by the Tribunal. It submits that the Commissioner can request the Tribunal to state a case (as it had to do in this case), or seek a judicial review, or encourage amendments to the Act or Legal Services Regulations 2011. It points out that in the vast majority of cases the Tribunal rules in favour of the Commissioner. This is understood to be only the second occasion on which the Tribunal (or its predecessor) has stated a case to the High Court. The provider submits that Parliament has deliberately confined appeals to cases where the Tribunal has determined the matter instead of directing a reconsideration.
My assessment
[31] On the plain words of ss 56 and 57 the legislation has provided the Tribunal with a choice. It “may” determine the review or it “may, instead of determining a review, give a direction to the Commissioner to reconsider ...”. The reconsideration direction is therefore expressed as an alternative to determining the review. If the Tribunal decides to determine the review, s 56 sets out how it can do so. That is, the Tribunal determines the review by confirming, modifying, or reversing the decision under review. If the Tribunal finds that the Commissioner is “wrong in law” but directs a reconsideration, on the face of it, it would seem that the Tribunal has chosen not to “determine the review by confirming, modifying or reversing the decision under review” but to “instead ... give a direction to reconsider ...”. The question is
whether that is the meaning of these provisions, which depends on the words used in the light of their purpose.41
[32] I start by identifying “the decision under review”. It is that which may be confirmed, modified or reversed under s 56 and which (in whole or in part) may be the subject of a direction to reconsider under s 57. I do not have any of the correspondence between the provider/C and the Agency/the Commissioner. However both the case on appeal and the description of the events in the Tribunal’s decision indicate that there were two (related) decisions at issue. One decision was the decision to decline the application to increase the maximum grant. The other decision was to decline to pay the full invoice submitted. As the Tribunal dealt with both of these matters I consider that both decisions were “under review” by the Tribunal.
[33] Turning then to what the Tribunal decided, in respect of the application to amend the maximum grant the Tribunal confirmed the Commissioner’s view that the application was made too late. In respect of the decision to decline to pay the full invoice, the error identified by the Tribunal was in failing to consider whether to pay the invoice submitted notwithstanding that it was above the maximum grant and that the maximum could not now be amended. It could therefore be said that the Tribunal’s decision was in two parts. The first part was determined by confirming the Tribunal’s decision. That determination could have been the subject of an appeal by C. The second part (whether to pay the balance of the invoice) was to be reconsidered. It does not sit easily with the words, as they are ordinarily used, to say that the Tribunal modified or reversed the Commissioner’s decision on the second part, where the Tribunal has made it clear that it has not concluded whether the invoice should be paid, but rather has directed the Commissioner to reconsider it.
[34] Moving from ss 56 and 57 to the words of s 59, the appeal right under that section is conferred where the Commissioner or an applicant considers that the Tribunal’s “determination” is wrong in law. On a plain meaning of “determination”
the Tribunal has determined that the Commissioner was wrong in law in failing to
41 Interpretation Act 1999, s 5; Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR 767 at [22].
consider a statutory discretion to pay above the maximum grant. In accordance with the usual way decisions in a hierarchy operate,42 it must have been intended that the Commissioner would be bound by that determination (subject to any right conferred by the legislation to appeal that determination or request that the Tribunal state a case on a question of law). If the Commissioner is still free to take a different view than the Tribunal on a question of law, it leaves the applicant in the position of
having to seek a further review and in that context to request that the Tribunal state a case (as occurred here), even though the legally aided person was the successful party before the Tribunal. That seems unlikely to have been the intention yet, on the words of s 57, the Commissioner is required only to reconsider the decision “taking into account” the reasons for the direction.
[35] If it is intended that the Commissioner is to be bound, on a reconsideration, by a finding that it was wrong in law, this suggests that there has been a determination of that issue.43 That suggests that “determination” in s 59 is not confined to the situation where the Tribunal elects to determine a review by confirming, modifying or reversing the decision under s 56. A “determination” that the Commissioner was “wrong in law” may be made, but the decision under review
may not be confirmed, modified or reversed. Rather, the decision is to be reconsidered in accordance with the determination that has been made (here that there remains a discretion to pay an invoice above a maximum grant), and taking into account the reasons the Tribunal has given for the direction and any matters set out by the Tribunal (here the matters relevant to the discretion set out in [58]-[59] of its decision).
[36] On this interpretation s 57(1) is read as meaning that the Tribunal “may, instead of determining a review [in the manner set out in s 56], give a direction to reconsider ...”. This interpretation is consistent with the words of ss 56 and 57, if
those sections are about the orders the Tribunal may make having considered the
42 Legal Services Agency v Walker (2006) 18 PRNZ 280 (HC) at [11].
43 This is consistent with Legal Services Agency v Rossiter (2005) 17 PRNZ 815 (CA) at [9] and Clasen v Legal Services Agency HC Auckland CIV-2010-404-1853, 30 July 2010 at [26]. These decisions related to the interpretation of the 2000 Act. They were the subject of a submission to the Justice and Electoral Select Committee that the view expressed in them was wrong but the
2011 Act remained in the same terms as the 2000 Act.
review, not whether the Tribunal makes a determination on the review at all. In my view those sections are about the orders available to a Tribunal.
[37] This interpretation also makes sense given that a direction to reconsider under s 57 will presumably often involve a decision that the Commissioner was wrong about something.44 That is because a review will only be sought where a Commissioner has made a decision that is contrary to the application made by the legally aided person. The Tribunal may decide that the Commissioner’s decision was manifestly unreasonable or that it was wrong in law. In the former case (where the Commissioner’s decision is found to be manifestly unreasonable) there may be no appeal right under s 59 (unless the decision that it is manifestly unreasonable is “wrong in law”)45 and so the Tribunal’s choice to determine the decision or direct a reconsideration will not ordinarily impact upon appeal rights. In the latter case (a decision that the Commissioner is “wrong in law”), there is nothing in the wording of the legislation nor anything in principle which suggests that the Tribunal should have to choose between determining a review itself or directing a reconsideration in light of the impact upon appeal rights. That is a decision which should be made in light of whether it is in a position to confirm, modify or reverse the decision (on the information before it or by using its power to request further information) or whether
the issue is better determined by the Commissioner taking into account the
Tribunal’s decision.
[38] If a choice between confirming, modifying or reversing a decision and directing a reconsideration were to impact upon appeal rights, that is most likely to affect the Commissioner. That is because, if the applicant for legal aid has been unsuccessful before the Commissioner and unsuccessful in persuading the Tribunal that the Commissioner’s interpretation is wrong in law, the Tribunal is likely to confirm the Commissioner’s decision. The applicant will be able to appeal that determination confirming the decision. A reconsideration is only likely to be
directed where the Tribunal considers that the Commissioner was wrong in law and
44 If the Tribunal considers that the grounds of review are not made out, the Commissioner’s decision will be “confirmed”.
45 It has been held that “manifestly unreasonable” must have been intended to mean something different from “wrong in law”: see the discussion of the cases on the meaning of these words in JMM v Legal Services Agency [2012] NZCA 573, [2013] 1 NZLR 517 at [97]-[112]. The extent to which these terms may overlap is not of relevance to this case stated.
that it is more appropriate that the Commissioner decides the matter in light of the correct legal position, or that the Commissioner is in a better position to do so.46
[39] However this will not always be the case. A situation might arise where the applicant wishes to appeal the Tribunal’s interpretation even though the Tribunal has directed a reconsideration. For example, this might arise if the Tribunal considers that the Commissioner’s reasons for rejecting the applicant’s application was wrong for reasons different from those advanced by the applicant, and the applicant sees some benefit in having its interpretation ruled upon by the High Court despite the direction to the Commissioner to reconsider the matter. That may be an unlikely, but
nevertheless possible, scenario.47
[40] In any case, that it would always or mainly be the Commissioner’s appeal rights affected by whether a Tribunal determines the review under s 56 or directs a reconsideration under s 57, is not a persuasive reason for adopting an interpretation that prevents an appeal where the Tribunal directs a reconsideration. The appeal right conferred under s 59 is conferred upon the Commissioner or an applicant. Parliament therefore intended that each were to have a right of appeal where they considered the Tribunal was “wrong in law”.
[41] I also consider that the possibility of requesting that the Tribunal state a case or seeking judicial review does not favour an interpretation that prevents the Commissioner from appealing a decision that he or she considers to be wrong in law. The legislation has provided both for a right of appeal by the parties and for a Tribunal to state a case. The possibility of judicial review is not a reason to read down the right of appeal that is conferred when either party considers that the Tribunal’s decision is wrong in law. Likewise the case stated procedure, which requires the Tribunal’s involvement, may be more suited to the situation where the
Tribunal considers that the High Court’s assistance is desirable in respect of a legal
46 See Legal Services Agency v Rossiter, above n 43, at [6]-[10] as to the Tribunal’s exercise of its
powers in the context of a discretion that is primarily the Commissioner’s.
47 Gibson v Legal Services Agency (2006) 18 PRNZ 284 (HC) appears to be an example of an applicant for legal aid under the 2000 Act, successful before the Panel in obtaining a direction that the Agency reconsider its decision, seeking to appeal the Panel’s decision.
wrong in law.
[42] The provider says that case law supports the interpretation that there is no right of appeal where a Tribunal has directed a reconsideration rather than confirming, modifying or reversing the Commissioner’s decision. I agree that Gibson v Legal Services Agency supports this view.48 However that was an oral judgment in respect of an appeal brought by a self-represented litigant and the discussion on the topic is brief. In Legal Services Agency v Haslam the issue was raised but not determined.49 Legal Services Agency v Rossiter is not concerned with
this issue.50
[43] The provider also referred to other legislation. The provider referred to s 165 of the Plumbers, Gasfitters, and Drainlayers Act 2006, s 143 of the Financial Advisers Act 2000 and s 68 of the Electricity Industry Act 2000. However the provider did not include the wording of these sections in the materials for my consideration nor refer me to any case law interpreting them. In the absence of any analysis of these provisions and why that analysis supports how ss 56, 57 and 59 should be interpreted here, there is no reason to take a different view than that which I have reached on the meaning of those sections in the light of their purpose.
[44] For these reasons I conclude that, where the Tribunal has found that the Commissioner was “wrong in law” there is a determination that may be appealed to the High Court, even though the Tribunal does not confirm, modify or reverse the
decision under review but directs a reconsideration.
48 Gibson v Legal Services Agency, above n 47.
49 Legal Services Agency v Haslam (2007) 18 PRNZ 469 (HC). The Judge said that it was “difficult” to interpret ss 56 and 57 as giving rise to any right to appeal from a direction, but that this seemed to be an anomaly and that it was not necessary to determine this “important and
difficult issue”.
50 Legal Services Agency v Rossiter, above n 43. Because this was not the issue before the Court of Appeal, I consider that it is wrong to place any reliance on “or” in the sentence of the judgment at [9] which reads “[i]t is only once that threshold is met that [the Panel] may confirm the decision, modify the decision, reverse the decision or direct the agency to remake the decision.”
Is there a discretion to pay above the maximum grant
The Tribunal’s determination
[45] The provider submitted its application for amendment of the maximum grant to the Commissioner believing it was not out of time because there had been no “final disposition.” The Tribunal’s view was that there must be an existing grant of legal aid in order for it to be amended. It considered that there was no existing grant where the application to amend was made after the withdrawal of the grant.
[46] The Tribunal considered, however, that even if no application to amend a maximum grant can be made, the Commissioner may still decide to pay an invoice that exceeds the maximum grant. It reached this view because:
(a) Under s 99(4)(a) of the 2011 Act (formerly s 75(3)(a) of the 2000 Act) the Commissioner “may”, not “must”, decline to pay an invoice exceeding the maximum grant and there is no statutory prohibition against payment of an invoice exceeding the maximum grant.
(b)A maximum grant is the “amount ... authorised”. It can be seen as a pre-approval (for work to be done). It is not an upper limit for payment of an invoice because of the discretion in s 99(4) (formerly s 75(3)). When the discretion is exercised to pay an invoice above the maximum grant this can be seen as post-approval (or retrospective approval) for work already done.
(c) If a provider wishes to ensure work done will be paid even though it exceeds the maximum grant, it must make a timely application for an amendment. If it does not do so it takes a risk that the work above the maximum grant will not be paid (if the discretion is not exercised in its favour).
(d)Section 32(1)(c) of the 2011 Act (formerly s 28(1)(c) of the 2000 Act), which provides an obligation on the Commissioner to pay for services
purport to restrict the discretion under s 99(4)(a) (formerly s 75(3)(a)).
(e) Contrary to the submission of the Commissioner, a provider cannot be expected to cease work when it is on notice that withdrawal of aid is being considered (a notice does not give rise to a suspension of legal aid) and here all work at issue was done prior to the effective date of withdrawal.
(f) Once legal aid is withdrawn there is no grant in existence. Once there is no grant, the focus will be on assessing the appropriateness of payment for work done.
[47] In exercising the discretion to pay over the maximum grant the Tribunal considered the following matters were relevant:
(a) whether the work done was covered by the approved steps in the proceeding;
(b) whether the amount of time spent by the provider was reasonable;
(c) if the work was not within an approved step, whether approval would have been refused if a timely amendment was made;
(d) the reasons why a timely application for amendment was not made.
Submissions
[48] The Commissioner submits that there is no jurisdiction to increase the amount paid after a specified period following the withdrawal of legal aid. The Commissioner submits that an application for an amendment to a grant of legal aid can only be made in respect of an existing grant of legal aid. He submits that “may” in s 99 is simply descriptive of the circumstances when the Commissioner has the power to decline payments. He submits that it would be contrary to the Act for the Commissioner to authorise a payment in excess of a maximum grant in
the maximum grant.
[49] The provider submits that the Commissioner and the Tribunal were wrong in finding that a grant could not be amended after a decision has been made to withdraw the grant. It submits that there is jurisdiction to amend a grant after the grant of legal aid has been withdrawn provided there has been no final disposition of the claim to which the application for aid relates. It submits that work that has been carried out up until the time that legal aid is withdrawn is work done pursuant to a grant. In the alternative, if there is no power to amend a grant where a decision has been made to withdraw the grant, the provider submits that there is a discretion to pay above a maximum grant under s 99 as the Tribunal found.
My assessment
[50] I start with the Commissioner’s contention (accepted by the Tribunal) that a maximum grant cannot be amended after a decision has been made to withdraw the grant. Section 28 of the 2011 Act provides that an application “for an amendment to a grant of legal aid” must be made either by the aided person or the provider, in the prescribed manner and in the required timeframe. The Commissioner’s contention is that when a decision has been made to withdraw a grant of legal aid there is no “grant of legal aid” to amend.
[51] I do not agree with this. As set out above in the discussion of the statutory provisions, when a grant of legal aid is withdrawn it takes effect on a date on or after which the aided person will have received notice.51 It does not affect the Commissioner’s “obligation to pay for the services provided under the grant before the date of its withdrawal”.52 It is therefore prospective and not retrospective in its effect. Work performed up until the date a grant is withdrawn is work done pursuant to a grant. When the provider submits an invoice for payment for that work it is seeking payment pursuant to the grant that was made. An application for an amendment of that grant is still an “application for an amendment to a grant of legal
aid” even though the grant has been withdrawn with effect from a particular date.
51 Section 31(3)(a).
52 Section 32(1)(c).
[52] There is nothing in the words of s 28 or elsewhere in the Act which defines “a grant of legal aid” for the purposes of s 28 as meaning a grant which has not been withdrawn.53 Section 28 is not expressly qualified by the power to withdraw a grant. It does not require an aided person or a provider to seek an amendment to a grant before the effective date of a withdrawal. The time limit for seeking an amendment is tied only to the date of final disposition of the matter to which the legal aid relates.
[53] Where a grant is withdrawn the Commissioner’s obligation is to pay “for the services provided under the grant before the date that the grant was withdrawn”. Where work is performed pursuant to a grant and before the grant is withdrawn, it is the work (ie. services performed) in respect of which there is an obligation. The grant is extant in respect of that work. There is no reason why the Commissioner should not be able to consider whether to amend that grant for the services already performed.
[54] The Commissioner submits that it is difficult to see why a grant should be increased when it has been determined that there should not be a grant. I do not agree. The work performed prior to the withdrawal of a grant was carried out pursuant to a grant. If there are good reasons to show why the grant was insufficient for the work that was carried out prior to the withdrawal of the grant, the grant should be capable of amendment.
[55] The Commissioner submits that it is odd if the only time limit for amendments relates to the disposition of the underlying claim. I do not agree. Parliament has decided on a cut off for legal aid applications and amendments to them.54 That cut off is the final disposition of the claim, not a decision to withdraw a grant of aid. That means that sometimes withdrawn grants can be revisited.55 In the
present case a subsequent grant was made in respect of alternative dispute resolution
steps.
53 Section 4(1) simply defines a “grant of legal aid” as “a grant of legal aid ... and ... any amendments to that grant.”
54 Legal Services Agency v Rossiter, above n 43, is an example where this cut off operated unfairly on the aided person/provider.
55 In JMM v Legal Services Agency, above n 45, at [34] it was said that, in practical terms, where this occurs the grants in those cases are suspended.
[56] In my view, therefore, the Commissioner and the Tribunal were wrong to find that there was no jurisdiction to amend the maximum grant in respect of work done prior to the withdrawal of the application. That view means that it is unnecessary to determine the alternative that s 99 provides the Commissioner with a discretion to pay an invoice even though it is above a maximum grant. However it is part of the case stated and therefore it should be answered.
[57] There is support for the Commissioner’s view in the words of s 99(2). Under that subsection, where the Commissioner has received a claim for payment, he “may” approve, defer or decline the claim (or any part of it). Approval, deferral and declinature are the only conceivable options in deciding upon a claim. The “may” in this subsection is therefore descriptive of all the options available to the Commissioner. The “may” in this subsection therefore means the Commissioner “must” choose between one of these things. Section 99(3) then sets out the circumstances in which a payment “may” be deferred. Section 99(4) in turn sets out the circumstances in which a claim “may” be declined.
[58] I also agree with the Commissioner that the specific provisions in the Act requiring that applications for amendments to grants be made, and stipulating the timeframes for doing so, point against the “may” in s 99(4) conferring a discretion on the Commissioner to pay above the maximum grant. It would cut across Parliament’s intention to have strict timeframes for amending a grant if the Commissioner could override that at his discretion. If such a discretion were intended, it would more likely have been provided for in s 28 (or elsewhere in Part 2 of the Act which deals with the grant of legal aid) rather than s 99 (which is found in Part 3 of the Act and which is concerned with administration of the legal services system). Moreover, if it was intended that s 99 conferred a discretion, it would more likely have been conferred in positive terms (that is, “the Commissioner may pay a claim that is above the maximum grant if it considers it appropriate to do so in the circumstances”) rather than in the negative terms that are stated (that is, “the Commissioner may decline [a] claim ... [that] exceeds the maximum grant specified in the grant”).
[59] The provider relies on papers concerning a complaint about the Legal Services Regulations 2011 which was considered by the Regulations Review Committee. That complaint concerned the timeframe for submitting a claim for payment. The Committee was of the view that s 99 conferred a discretion on the Commissioner to accept late claims for payment. I agree with the provider that, if the Committee’s view about this is correct, that supports the contention that s 99 also confers a discretion on the Commissioner to pay a claim that exceeds the maximum grant.
[60] The provider also refers to the commentary of the Justice and Electoral Committee on the Legal Assistance (Sustainability) Amendment Bill.56 The Committee commented as follows:57
We recommend clarifying the grounds on which the Commissioner must decline payment to a legal aid provider for legal aid.
Clause 17 of the bill as introduced would amend the grounds on which the Commissioner may approve, defer, or decline a claim, prescribed by section 99(4) of the principal Act. We consider that it is unclear whether section 99(4) would give the Commissioner discretion to approve or decline a claim, or whether it would simply set out the options of grounds for declining a claim. We do not think that discretion is warranted for claims to the extent that they exceed the maximum grant, excessive or inaccurate claims, or unapproved disbursements. Our proposed amendments would clarify these points.
[61] It proposed an amendment to s 99(4) so that it would read as follows:58
(4) The Commissioner must decline –
(a) any claim to the extent that it exceeds the maximum grant specified in the grant; and
(b) any claim to the extent to which it is for a disbursement of a type not approved for payment by the Commissioner; and
(c) any claim or any part of a claim that has been determined to be excessive or inaccurate by an examination under subsection (2); and
(d) if the user charge has not been paid by the aided person, an amount of the claim that is the equivalent of that charge.
56 Legal Assistance (Sustainability) Amendment Bill 2011 (316-2) (select committee report).
57 At 6.
58 At 23-24.
(5) The Commissioner may decline any claim that was not made in accordance with the time frame referred to in section 98.
[62] This commentary is about the lack of clarity in s 99(4) as enacted. It does not assist with interpreting Parliament’s intent when it enacted s 99(4). However the reasoning of the Justice and Electoral Committee does provide support for the view that “may” in s 99(4) does not confer a discretion in respect of each of the matters listed. That is, it would seem odd if Parliament intended to confer a discretion on the Commissioner to pay a claim that is “excessive or inaccurate” (being one of the grounds set out in s 99(4) on which a claim may be declined).
[63] Therefore, despite the view of the Committee which considered the complaint in respect of late payments, I agree with the Commissioner that the Tribunal erred in its interpretation of s 99(4)(a). The section does not confer a discretion to pay a claim that exceeds the maximum grant.
Result
[64] The questions of law as stated were:
(1)Whether s 59 of the Legal Services Act 2011 allows the Commissioner to appeal a direction of the Legal Aid Tribunal made under s 57 that the Commissioner reconsider an earlier decision;
(2)Whether s 57(2)(b) of the Legal Services Act 2011 requires the Commissioner to follow any directions of the Tribunal, and any findings of fact or law of the Tribunal, in the event that the Commissioner:
(a) is not able to appeal a direction of the Tribunal under s 57 that the
Commissioner reconsider an earlier decision; or
(b) the Commissioner chooses not to appeal a Tribunal decision under s 59; and
(3)Whether s 99(4)(a) of the Legal Services Act 2011 confers a discretion on the Commissioner to make payment of an invoice exceeding a maximum grant and, if so, the proper basis on which that discretion should be exercised.
[65] The answer to question 1 is “yes” where the direction to reconsider an earlier decision is made because the Tribunal has determined that the Commissioner was “wrong in law”.
[66] The answer to question 2 is that s 57 requires the Commissioner to reconsider the decision “taking into account the reasons for the direction and any matters set out by the Tribunal”. Where, however, the Tribunal has determined that the Commissioner was “wrong in law”, the Commissioner is bound by that finding unless he or she appeals that finding. As was said in Legal Services Agency v Walker “[t]here is a hierarchy and the normal rule is that the decision of the highest body in
the chain governs until overturned”.59
[67] The answer to question 3 is “no” but an application may be made to amend a maximum grant even though the grant has been withdrawn, in respect of work done prior to the withdrawal of the grant and providing that there has been no final disposition.
[68] I am uncertain whether there is any issue as to the costs of this appeal. If there is an issue, memoranda (limited to no more than three pages and confined to the particular issue in dispute) can be submitted within one month of this judgment.
[69] As in the proceedings before the Tribunal, the applicant’s name is suppressed on the basis that I understand him to be a complainant in respect of an historic abuse claim.
Mallon J
59 Legal Services Agency v Walker, above n 42, at [11]
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