Chatha v Legal Services Agency HC Palmerston North CIV 2004 454 888

[2005] NZHC 1674

IN THE HIGH COURT OF NEW ZEALAND                CIV 2004 454 888 PALMERSTON NORTH REGISTRY

UNDER  The Legal Services Act 2000

AND

IN THE MATTER   of an appeal against the decision of the

Legal Aid Review Panel, Auckland and dated 30^th September 2004

BETWEEN              ARSHAD MAHMOOD CHATHA

Appellant

AND  THE LEGAL SERVICES AGENCY

Respondent

Hearing:        6 April 2005

Counsel:        Appellant in person

G Taylor for Respondent

Judgment: In accordance with r 540(4) I direct the Registrar to endorse this judgment with the delivery time of 10.00 a.m. on Thursday the 14^th day of April 2005.

RESERVED JUDGMENT OF RONALD YOUNG J

[1]    This is an appeal against a decision of the Legal Aid Review Panel. The Panel upheld the decision of the Legal Services Agency to decline the appellant’s application for Legal Aid. Legal Aid was to pursue proceedings for assault seeking exemplary damages. The Legal Services Agency and Review Panel refused aid because in their view there was no realistic prospect of exemplary damages being awarded (s9(4)(d)(i) Legal Services Act 2000).

[2]    A right of appeal from the Legal Aid Review Panel to the High Court is contained in s59 of the Act. It restricts appeals on a point of law only. Section 59 provides as follows:

59       Appeal on question of law

If the Agency or an applicant considers that the Review Panel’s determination is wrong in law, the Agency 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.

[3]    In turn s54 of the Legal Services Act provides for the right of appeal from the Agency to the Panel as follows:

54       Grounds for review

(1)An aided person or an applicant for legal aid may apply to the Review Panel for a review of a decision of the Agency referred to in subsection (2) on the grounds that the decision is—

(a)manifestly unreasonable; or

(b)wrong in law.

(2)The decisions that may be reviewed are decisions that affect the applicant for review and that relate to any 1 or more of the following:

(a)an application for legal aid:

(b)any conditions imposed under section 15 or section 42 on a grant of legal aid:

(c)any amount payable by an aided person, whether as contribution or repayment, under a grant of legal aid:

(d)the identity of any listed provider in a grant of legal aid:

(e)the maximum grant under a grant of legal aid:

(f)the withdrawal of, or amendment to, a grant of legal aid:

(g)the enforcement of any condition imposed under section 15 or section 42 on a grant of legal aid:

(h)any changes to, or dealings with, a charge on property arising out of a grant of legal aid:

(i)an application under section 41.

(3)A listed provider or former listed provider may apply to the Review Panel for a review of a decision relating to the amount payable by the Agency to that provider, on the grounds that the decision is—

(a)manifestly unreasonable; or

(b)wrong in law.

(4)In this section, decision includes a failure or refusal to make a decision.

Background facts

[4]    Mr Chatha claims that on 19 January 2002 an article was published in the Manawatu Evening Standard quoting him and his views regarding immigration. Days later on 25 January he spoke with the first defendant in the civil proceedings  for assault issued in the Palmerston North District Court, one Syed Wajid Hussain. He claims that Mr Hussain told him the article was offensive and they argued. Three days later Mr  Chatha says that  he  was  in  the Square at Palmerston North when Mr Hussain and another person Mr Azmat, a second defendant in the proceedings, grabbed him and assaulted him. He says that they did so because they were angry  and upset at the political views that he had expressed with respect to immigration to New Zealand. He filed proceedings in the Palmerston North District Court alleging assault and battery and seeking exemplary damages in the sum of $50,000. The first defendant has filed a statement of defence denying the allegations and says that he was assaulted by the plaintiff.

[5]    After the incident in the Square the plaintiff, Mr Chatham, was charged with two charges of assault with intent to injure. He elected trial by jury and the matter came before the District Court on 21 May 2003 and he was found not guilty on all charges. It was after the trial that these proceedings were issued. Mr Chatha made application on 11 February 2004 for legal aid to issue these proceedings. In fact the proceedings were filed by late January 2004. On 3 March 2004 the Legal Services Agency advised Mr Lewis (Mr Chatha’s barrister) that his client’s application for Legal Aid had been refused “under s9(4)(d)(ii) Legal Services Act”, the agency said:

Having regard to the nature of the proceedings in your client’s interest in them (financial or otherwise), in relation to the likely cost of  the proceedings, a grant is not justified.

You have not advised what the defendant’s financial circumstances are if an award was ordered and there have been no referrals to case authority that would support the likely chances of success with this case.

Mr Lewis was advised there were options for reconsideration and/or review if dissatisfied.

[6]    Mr Lewis then wrote to the Legal Services Agency on 19 March 2004 seeking reconsideration. His letter may be summarised as follows:

(1)That Mr Chatha was seeking exemplary damages and an action for exemplary damages was not prohibited by the Accident Prevention, Rehabilitation, and Compensation Act.

(2)Actions for punitive damages survive in personal injury situations where there is an intentional tort involved. He said that this was exactly the situation here.

(3)He submitted the Agency’s approach was that only the wealthy could seek remedies for serious battery and that those who could not afford to fund their own proceedings simply had to accept it as part of their everyday life.

(4)The costs of the proceedings would not be significant and estimated between $7,500 to $9,000.

(5)There was a cultural aspect to the claim both parties being Pakistani nationals and adhering to the Muslim faith and as a result a particular issue of personal pride.

(6)The assault had occurred because Mr Chatha has exercised his right to publish an article regarding immigration.

[7]    As I have mentioned, aid was declined by the Agency under s9(4)(d)(ii) of the Act. Section 9(4)(d)(i) and (ii) provide:

9        When legal aid may be granted: civil matters

. . .

(4)The Agency may also refuse legal aid to an applicant in any of the following circumstances:

. . .

(d)in the case of original proceedings,—

(i)the applicant's prospects of success are not sufficient to justify the grant of aid; or

(ii)the grant is not justified, having regard to  the nature of the proceedings and the applicant's interest in them (financial or otherwise), in relation to the likely cost of the proceedings.

[8]    Following Mr Lewis’ letter of 19 March, the Legal Services Agency wrote to him advising the refusal was being reconsidered and asking for the following information:

(1)The outcome of the criminal proceedings.

(2)Means of the defendant and in particular the prospects of recovering damages from the defendant if successful.

(3)And “please outline evidence in the criminal proceedings, which supports your client’s case”.

[9]    Mr Lewis replied on 17 May providing the material to questions (i) and (ii). He advised that Mr Chatha had been found not guilty and Mr Hussain was wealthy and would be in a position to pay damages if they were awarded. He advised that the second defendant had left New Zealand and the proceedings would not be pursued against him. He enclosed a copy of the criminal trial transcript. He said there were two witnesses at the trial whose evidence supported Mr Chatha’s version of events.

[10]   On 31 May the Legal Services Agency advised that they have reconsidered the matter and the decision declining Legal Aid was “confirmed”. They declined Legal Aid under s9(4)(d)(i) of the Act advising:

There is no realistic prospect of exemplary damages being awarded. A reasonable person, properly advised, would not pay for this case privately. The prospects of success are insufficient to justify the grant of legal aid.

The fact that Mr Chatha was acquitted in the criminal trial does not constitute proof that the defendants committed batter.

It simply shows that the prosecution case was not proved beyond reasonable doubt.

The transcript shows that there was animosity between the parties leading up to the fight. It also shows that there is doubt about who started the fight and that Mr Chatha bit Mr Hussain’s finger off.

The prospects of success are far too remote to justify legal aid.

[11]   Mr Chatha made application to review this decision to the Legal Aid Review Panel. He enclosed the statement of claim and statement of defence, an affidavit from a Mr Quereshi who had been present at the time of the alleged assault, and who had not been able to give evidence in the criminal proceedings because he had been overseas at the time. He also enclosed various correspondence to and from the Agency.

[12]   The matter came before the Legal Aid Review Panel. The Legal Aid Review Panel reviewed facts, the applicants and Agency’s submissions and asked the question: Was the Agency’s decision to decline Legal Aid either manifestly unreasonable or wrong in law or both? They paraphrased of the words “manifestly unreasonable” as requiring it be shown that there was a clear and unmistakably error or that the Agency’s decision was unreasonable or irrational or logically flawed.  (See Legal Services Agency v Fainu (HC, Auckland, AP 68-02, 19 November 2002, Randerson J). They also reminded themselves of the comment by John Hanson J in the Legal Services Agency v Services Agency v A (HC, Christchurch, CIV-2003-409- 000587, CIV-2003-409-000588, 22 May 2003, John Hansen J) that a determination of what is manifestly unreasonable must be made objectively by members of the Panel applying their judgment to the matter with the correct definition of manifestly

unreasonable in mind, but it was not for the Panel to substitute its view for that of the Agency.

[13]   The Panel concluded that the Agency had properly considered the prospect of success and had determined that the prospects were insufficient on the facts of this claim for there to be a real prospect of success. They pointed out that the Agency  had perused the transcript of evidence from the criminal proceeding and did not consider the facts were clear enough nor the alleged acts of the defendant outrageous enough to merit an award of exemplary damages. They said there was doubt about who had started the fight and observed the applicant had apparently bitten the defendant’s finger off. They reiterated their view that while s9(4)(d)(i) gave the Agency the power to refuse to grant Legal Aid where prospects of success were not sufficient to justify it, this would only be on rare cases. They said that in the Panel’s view this was one of those rare cases. The Panel could not find the Agency’s conclusion was manifestly unreasonable or wrong in law.

The appellant’s case

[14]   The first part of the appellant’s case, as I understood it, was that when the Agency reconsidered the refusal to grant aid, it refused aid on a different basis than originally, that is it changed the grounds of refusal from subsection (1)(ii) to subsection (1)(i). Mr Chatha said the Agency should not be allowed to do this and they should be stuck with only reconsidering the grounds upon which they had originally refused aid. I cannot see that that could possibly be correct. Section 29 of the Legal Services Act allows for a reconsideration of the decision. It provides as follows:

29       Reconsideration

(1)An aided person, or an applicant for legal aid, who is aggrieved by a decision of the Agency that affects the person, may apply to the Agency for a reconsideration of the decision.

(2)When the Agency receives an application for a reconsideration, the decision must be reconsidered by a person other than the person who made the original decision, and the person doing the reconsideration may take into

account any new or additional information supplied by the person applying for the reconsideration.

(3)The Agency may decline to reconsider a decision if the Agency has already reconsidered that decision or a decision relating to substantially the same issue.

[15]   There is no indication here that a reconsideration is limited to a reconsideration only on the grounds of an original refusal. Such a limited narrow reconsideration would be unreasonable and inappropriate.  Section 29 only refers to  a reconsideration of the decision. The decision is to refuse aid. The reconsideration should therefore focus on the refusal to grant aid and whether that is correct or not. What is reasonable and appropriate is, where the grounds upon which the refusal is made are changed, there should be a further opportunity given to the applicant for reconsideration.

[16]   Mr Chatha understandably complains because the Agency changed the grounds upon which it refused aid he did not have the opportunity of putting the additional information he had, including an affidavit from an eye witness, to the Agency. In fact, the Agency did give Mr Chatha an opportunity to seek reconsideration of the decision in terms of s29. The Legal Services Agency wrote to Mr Chatha’s barrister on 31 May 2004 explicitly advising that if he was dissatisfied with the decision to decline aid under s9(4)(d)(i) then he had an option to seek a reconsideration of that decision or to file a review. Either Mr Chatha or his counsel applied for review to the Legal Aid Panel. In those circumstances I cannot see that Mr Chatha can complain that he was not given a fair opportunity to deal with the  new ground of refusal to grant him aid. He chose the process of review rather than reconsideration. At the review Mr Chatha did have the opportunity of advising the Panel of the further factual material relevant to the prospect of success. The Panel acknowledged receipt of that information.

[17]   In the second ground of appeal Mr Chatha complains that the Legal Services Agency and Panel subsequently essentially decided on the facts that he could not successfully claim exemplary damages. He says that the Agency and  Panel could  not have reached that conclusion on the facts as known and that the Panel should have concluded that the decision by the Agency was manifestly unreasonable. Thus

he submits the review Panel erred in law in failing to understand what the case was about and failed to undertake an analysis of exemplary damages and how the facts of this case matched that claim.

[18]   I consider there is some force in Mr Chatha’s argument here. There appear to be two ways upon which one could conclude that the prospects of success were insufficient to justify the grant of Legal Aid here. Either:

(a)The Agency/Panel took the view on the facts Mr Chatha was not going to be able to establish that he was assaulted, and/or

(b)Even if he established that he was assaulted the facts were not sufficiently serious such that there was any prospect of exemplary damages being awarded.

[19]   I find it difficult to understand how these conclusions could have been reached with the degree of certainty required of the Agency/Panel (prospects of success not sufficient to justify a grant) on the facts of this case.

[20]   Clearly there is a dispute about what happened in the Square at Palmerston North on 28 January 2002 between the plaintiffs and defendants in the civil action. Mr Chatha says that he was grabbed by one man, held while assaulted by the other. The defendant disagrees with this characterisation and say that it was Mr  Chatha who was the aggressor. Mr Chatha was charged and acquitted of assault.  All that  can possibly mean is that the Crown could not prove beyond reasonable doubt that Mr Chatha was the aggressor. It does not of course mean that Mr Chatha is innocent, nor does it mean that the defendants in the civil case committed an assault on Mr Chatha.  It is clear that the issue is at large.  It could not be said to be clear one way  or the other currently. It is difficult to see, therefore, how the Agency and the Panel could possibly have concluded that there was insufficient evidence to justify the grant of legal aid because the prospects of success in establishing an assault occurred were so low. Most litigation of this type will reduce to a “did so” “did  not” argument. It is inappropriate for the Legal Services Agency and Panel to refuse

Legal Aid where there was essentially a dispute between the parties as to what happened and no clear and compelling reasons to choose one version over another.

[21]   It seems more likely the Agency and Panel refused aid not because Mr Chatha did not have a reasonable prospect of success on the allegation of assault, but because in their opinion there was no reasonable prospect of an exemplary damages award. I do not intend in this judgment to deal with what must be established to obtain an order of exemplary damages. It is sufficient for this purpose to say that clearly in an ordinary “assault” such an award is unlikely. The circumstances  must be quite out of the ordinary to justify such an award.  Punishment  of the defendants is a key element. Here, Mr Chatha claims that he was assaulted and beaten because of his political views. I make the observation that the rights of freedom of speech  and expression are emphasised in our New Zealand Bill of Rights Act. Where an assault occurs in an attempt to prevent the exercise of the freedoms guaranteed by  the New Zealand Bill of Rights Act then this is obviously a very serious circumstance where exemplary damages could be awarded. As I took it, counsel for the respondent in this appeal accepted that proposition. Neither the Agency nor the Review Panel illustrated that this issue had occurred to them and was properly considered by them.

[22]   I reject the proposition that a serious assault perpetrated for the purpose of preventing someone expressing a political opinion and therefore in exercising those rights guaranteed under the New Zealand Bill of Rights Act, had no reasonable prospect of in an award of exemplary damages. I repeat, that issue did not seem to have been canvassed by either the Agency or the Panel. That, however, is  the essence of the plaintiff’s claim for exemplary damages.

[23]   It does not seem to me, therefore, that the Agency/Panel ever really came to grips with Mr Chatha’s claim. They have, therefore, in my view made their decision without the benefit of appreciating the material facts which may give rise to an exemplary damages claim. That is an error of law both by the Agency and the Panel. If the Panel had understood this relevant fact then in my view it must have reached the conclusion that the Agency’s decision was manifestly unreasonable in that it was clear that the Agency’s decision was beyond what was reasonable and was logically

flawed to use the words of Randerson J. (See Legal Services Agency v Fainu (supra)). And if a decision maker fails to take into account a relevant  matter, then that can be an error of law. Here the Agency and Panel failed to take into account  the basis of the appellant’s exemplary damages claim and therefore fall into error of law.

[24]For the reasons given, therefore, this appeal is allowed.

[25]   I think the appropriate course is to refer it back to the Legal Services Agency for reconsideration. Mr Chatha should have proper opportunity to provide all of the relevant factual material which might support both his allegation of assault and his claim for exemplary damages before the Legal Services Agency. However, I make it clear that on the material currently before this Court I can see no reason why aid should not be granted.

“Ronald Young J”

Solicitors:

Crown Solicitor, Palmerston North