Dance Aotearoa New Zealand Limited v Arts Council of New Zealand Toi Aotearoa
[2021] NZHC 1980
•2 August 2021
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2020-485-000755
[2021] NZHC 1980
BETWEEN DANCE AOTEAROA NEW ZEALAND LIMITED
ApplicantAND
ARTS COUNCIL OF NEW ZEALAND TOI AOTEAROA
Respondent
Hearing: 21 and 28 June 2021 Appearances:
R A Kirkness, J A Tocher and J B C Trezise for the Applicant W L Aldred and E J Watt for the Respondent
Judgment:
2 August 2021
JUDGMENT OF GRICE J
Contents
Para
Introduction[1]
Summary of claims[6]
Grounds of review[15]
Statutory framework[17]
Strategic approach to funding[22]
Request for Proposal for the 2019 investment funding round[33]
Legal principles: review of funding processes[52]
I. Failure to follow the Request for Proposal process[79]
Feedback to external assessor[86]
Provision of Sector Overviews to the peer panel[95]PowerPoints[99]
Panel discussions[101]
Summary “alignment tables” prepared for panel[103]
Summary of points raised by Investment Assessors on each proposal[104]
Panel meeting minutes[106]
The Chief Executive’s report to the Board[111]Claims based on breach of RFP process[122]
Analysis of the claims concerning the RFP process (first ground of review)[128]
The Chief Executive’s recommendations to the Board: the fourth, and seventh grounds of review
[160]
The staff recommendation included false claims about DANZ (sixth ground of review)[168]
DANCE AOTEAROA NEW ZEALAND LIMITED v ARTS COUNCIL OF NEW ZEALAND TOI AOTEAROA [2021] NZHC 1980 [2 August 2021]
Failure to consider Dance Aotearoa’s position as the sole national service provider for dance:
(fifth ground of review) [169] Conclusion [173] II. Legitimate expectation [176] Long-term funding and relationship (third ground of review) [176] III. The complaints process [189] Discretion to grant relief [206] Conclusion [208] Costs [210] Attachment 1 page 63 Attachment 2 page 64
Introduction
[1] Dance Aotearoa New Zealand Ltd (Dance Aotearoa)1 has been largely, if not entirely, funded through the Arts Council2 to operate as a national service organisation for the New Zealand dance community for the past 26 years. It has provided services to the dance industry since 1993 and is the only national provider organisation for dance in New Zealand.
[2] The Funding Agreement for Dance Aotearoa, along with most other Arts Council funding arrangements, was to come to an end in December 2019. The Arts Council did not accept Dance Aotearoa’s proposal for services, which would have provided it with operational and related funding beyond that.
[3] The decision not to accept the proposal was made in July 2019. The result meant that Dance Aotearoa would not receive more than the $300,000 it had previously received from the Arts Council annually for operational funding. However, it received funding of 75 per cent of its previous annual grant paid over six months as a transitional payment.
[4] Dance Aotearoa has been unable to secure replacement funding since it was advised of the decision by the Arts Council in August 2019. It says it will have to cease operations in November 2021, unless the Arts Council reconsiders and provides funding for the company or it is able to find other funding. The latter is unlikely.
[5] After the Arts Council conveyed its decision not to accept Dance Aotearoa’s proposal on 9 August 2019, Dance Aotearoa made a complaint about the Request for Proposal (RFP) and decision-making process.3 In the period since the decision on the proposal Dance Aotearoa has obtained information concerning the decision through the Official Information Act processes, and spoken to officials and to ministers, including the Prime Minister, in an attempt to have the funding decision reconsidered. Dance Aotearoa says these steps explain the delay up to
1 Also referred to as DANZ. It is a not for profit organisation and a registered charity.
2 A statutory body established under the Arts Council of New Zealand Toi Aotearoa Act 2014 (the Act).
3 Request for Proposals: Toi Tōtara Haemata and Toi Uru Kahikatea investment programmes
(Arts Council of New Zealand Toi Aotearoa, February 2019) [“Request for Proposals”].
18 December 2020 when it filed these proceedings. In addition, it points to the effects of the COVID-19 crisis. Many dance organisations were placed under considerable financial pressure. Dance Aotearoa says it was supporting the sector through that crisis, as well as managing its own problems.
Summary of claims
[6] Dance Aotearoa says that the Request for Proposals process (RFP) leading to the Arts Council decision did not follow the process that had been set by the Council and breached the Arts Council’s obligations of fairness to Dance Aotearoa.
[7]In particular it says:
(a)staff of Creative NZ (which is the executive of the Arts Council) influenced the process and the funding decision to such an extent that the process was unlawful in the public law sense;
(b)Dance Aotearoa had an expectation that the funding would continue based on the length and circumstances of the existing funding arrangements;
(c)the Arts Council should have, as a matter of natural justice, consulted with Dance Aotearoa before terminating its funding and should have provided it with an opportunity to comment before the final decision not to accept its proposal was made;
(d)the decision was made without properly taking into account the fact that Dance Aotearoa is the peak dance body service provider in New Zealand; and
(e)that the Arts Council did not follow its own complaints process in dealing with a complaint made by Dance Aotearoa about the process and the decision.
[8] Dance Aotearoa seeks a declaration that the decision was unlawful and invalid and a direction that the Arts Council be required to reconsider the decision.
[9] The Arts Council says its investment strategy, upon which funding decisions from 2018 to 2023 were based,4 was developed in 2018 after widespread consultation with the arts sector. This investment strategy (Investment Strategy) moved the focus of the Arts Council funding grants away from preferential status for organisations holding defined “key roles” in the arts infrastructure to the alignment of funding decisions to a number of public service values and outcomes.
[10] The 2019 funding round was the first under the Investment Strategy. It followed an RFP process. Dance Aotearoa submitted a funding proposal along with about 85 other arts organisations. The respondent says Dance Aotearoa’s proposal was considered and assessed in accordance with the RFP. The process involved Creative NZ’s Chief Executive making recommendations to the Arts Council Board. Following consideration of his report and recommendations, and other material, the Board had decided not to accept Dance Aotearoa’s proposal.
[11] The Council says the Investment Strategy was a change in focus for the Council, which had been clearly signalled to the sector. It had been the subject of consultation with the sector. The strategy represented a move away from the “key role” funding, which had been benefitted Dance Aotearoa in the past. The applicant had, until then, received long term funding under the Toi Tōtara Haemata (Tōtara) programme. The shorter-term investment funding provided by the Arts Council was largely funded through the Toi Uru Kahikatea (Kahikatea) funding programme.
[12]The Arts Council said the RFP specifically set out:
a.Proposals for funding under the Tōtara programme (which provided longer term funding) needed to demonstrate how the organisation delivered to all three features of the Investment Strategy;
b.Proposals for Kahikatea funding (which was for a shorter term) would need to deliver to at least one feature of the Investment Strategy;
4 Investment Strategy: Te Ara Whakamua 2018–2023 (Arts Council of New Zealand Toi Aotearoa, April 2018) [“Investment Strategy”].
c.The decisions regarding allocation of investment funding would be made by the Arts Council; and
d.The process could result in organisations receiving neither form of investment funding. Those organisations whose proposals were unsuccessful would have the benefit of a transition procedure. Under that procedure, CNZ would pay an unsuccessful applicant 75% of the amount paid under their existing funding agreement for six months following the end of that agreement.
[13] The Arts Council says that it followed the process set out in the RFP. It says Dance Aotearoa had no basis to expect that funding would continue based on its long-term funding relationship with the Arts Council. The Arts Council pointed out that nothing in the RFP suggested that a history of prior funding from Creative NZ (the Arts Council) was relevant to the Arts Council’s decision.
[14]The Council says that it has not acted unfairly:
(a)It followed the process that it had set out.
(b)It gave adequate notice of the fact that funding might not be forthcoming to all existing proposers.
(c)There was no basis for an expectation that the Arts Council funding would continue for Dance Aotearoa.
(d)It was not obliged to consult Dance Aotearoa outside the RFP process over the intention not to accept its proposal, nor was it required to give any further notice nor provide more transitional funding than it did.
(e)It also says it dealt with Dance Aotearoa’s complaint following its published complaints process.
Grounds of review
[15]The specific grounds of review set out in the statement of claim are:
First ground of review – Failure to follow the assessment process set out in the RFP
Second ground of review – Failure to follow the complaints process set out in the RFP
Third ground of review – Failure to put DANZ on notice
Fourth ground of review – Decision not supported by evidence
Fifth ground of review – Failure to consider DANZ’s position as the sole national service provider for dance
Sixth ground of review – the Staff Recommendation included false claims about DANZ
Seventh ground of review – Misinterpretation of the Panel’s findings
[16] Before I look at the grounds in more detail I review the statutory framework, the background, and the RFP process.
Statutory framework
[17] The Arts Council is a statutory body whose purpose is to “encourage, promote, and support the arts in New Zealand for the benefit of all New Zealanders”.5 It is an autonomous Crown entity. It was established by the Arts Council of New Zealand Toi Aotearoa Act 1994 (Act). Its principal statutory functions are set out in s 7:
7 Functions of Arts Council
(1)The principal functions of the Arts Council are to—
(a)encourage, promote, and support the arts in New Zealand for the benefit of all New Zealanders:
(b)promote the development of a New Zealand identity in the arts:
(c)allocate funding to projects for professional and community arts, including funding for—
(i)Māori arts; and
(ii)the arts of the Pacific Island peoples of New Zealand; and
(iii)the arts of the diverse cultures of New Zealand:
(d)uphold and promote the rights of artists and the right of persons to freedom in the practice of the arts:
5 Arts Council of New Zealand Toi Aotearoa Act 2014, s 3(1).
(e)maintain relationships with other agencies and organisations:
(f)give advice to the Minister on any matter relating to or affecting the functions of the Arts Council:
(g)perform any other functions conferred on it by this Act, any other enactment, or the Minister.
(2)In carrying out its functions, the Arts Council—
(a)must set guidelines for the allocation of funding; and
(b)may set guidelines for community arts councils and community arts providers; and
(c)must establish assessment processes for the allocation of funding including, if the Arts Council considers it appropriate, the use of peer assessment; and
(d)may obtain any advice that it considers appropriate.
…
[18] The Arts Council executive is referred to as Creative NZ (also known as CNZ). The Chief Executive of Creative NZ reports to the Board of the Council. It was the Chief Executive and his staff who managed the RFP process.
[19] Creative NZ has 63 staff based in Tāmaki Makaurau/Auckland and Te Whanganui-a-Tara/Wellington and operates in four divisions. Dance is only one of a number of art forms funded by the Arts Council.
[20] The legislation allows for the nomination of peer assessors for the purposes of carrying out the Arts Council’s functions in s 7(2). However, only the Arts Council has the statutory power of decision-making regarding the allocation of funding. The Act does not provide for it to delegate any decision-making power to peer assessors or others.
[21] The Arts Council comprises 13 board members and was chaired by Michael Moynahan at the times relevant to this application. The Arts Council governs Creative NZ and is responsible for setting its strategic direction for Creative NZ, monitoring its performance, and decision-making regarding the allocation of funding.
Strategic approach to funding
[22] There is little dispute about the background to the funding arrangements and the relevant strategy of the Arts Council/Creative NZ.
[23] The Council said that the Tōtara and Kahikatea funding, or investment programmes, were first introduced in 2012. The Investment Programmes provided funding under fixed-term contracts to arts organisations. Creative NZ said those Programmes were revisited following the development of the Investment Strategy.
[24] From 2012 to 2018, the Arts Council granted funding on the basis of factors including the quality of art produced, the service provided to the sector and general public, and quality and quantity of audience engagement where the organisation presented art. Investment funding was granted to arts organisations identified as filling “key roles”. Some key roles were filled by service organisations, including DANZ. Proposals for Tōtara funding had been invited from arts organisations to deliver specified key roles in the arts infrastructure. Funding was provided for two to five years.
[25] In 2016, the Arts Council had decided to review its approach to investment funding. It said the review arose from:
(a)growth in the number of arts organisations funded by Creative NZ;
(b)the need to consider long-term historical funding of a number of organisations from a values and outcomes perspective; and
(c)awareness that the portfolio of arts organisations did not represent Aotearoa’s diversity.
[26] The Investment Strategy was published in 2018 following extensive consultation with the sector. Dance Aotearoa made submissions at both consultation phases for the strategy. The 2018 strategy outlined three investment features by which the Arts Council intended to align its investments (in bold):
Diversity and reach – maintain and develop:
•Investment in a range of arts practices reflecting New Zealand's growing diversity
•Investment that ensures communities across New Zealand can participate in and experience the arts, and investment that engages with under-represented communities
•Investment that engages with new audiences, in New Zealand and internationally
•Investment in the delivery of art through digital channels in order to increase arts participation and audience size
•Investment aligned with international opportunities that expand arts practices and demand for New Zealand arts
Dynamic arts – maintain and develop:
•Investment that supports innovation in New Zealand arts practice
•Investment in the development of New Zealand arts in New Zealand and internationally
Resilient arts sector – maintain and develop:
•Investment that supports capability and capacity building in organisations and the arts sector for long-term benefit, including new ways of working and new models of value creation that drive resilience
•Investment that demonstrates relevance to current and changing communities.
[27] The Arts Council says the terms of the Investment Strategy made the new principles underlying the Arts Council's funding decisions clear. It had informed organisations in the sector, including Dance Aotearoa, that the Investment Strategy would, among other things:6
(a)inform resource allocations from 2018/2019;
6 Investment Strategy, above n 4, at 3.
(b)provide clarity to the arts sector about Creative NZ’s expectations and approach to investment decisions;
(c)shift Creative NZ to an impact and outcomes-based investment model;
(d)lead to changes to:
(i)the level of investment across investment programmes in response to the changing face of the arts sector;
(ii)investment programme design; and
(iii)how funding proposals are prioritised or assessed.
[28] The Investment Strategy recorded that in 2018, the Arts Council would prioritise reviewing the Tōtara key roles to provide greater alignment with the Investment Strategy.
[29] The Arts Council says it reviewed all its programmes to align them to the new Investment Strategy. To do this it says it undertook extensive consultation on the proposed changes to the Investment Programmes:
(a)In May 2018, it released a discussion paper on the review of the Investment Programmes.7 It explained there would be a two-stage consultation process prior to any changes being made to the Investment Programmes. The discussion paper noted that the Arts Council was reviewing the key roles and sought feedback from arts organisations and stakeholders on the review, including whether any of the key roles should be changed, added, or dropped.
(b)93 per cent of Tōtara clients provided feedback. This included Dance Aotearoa, which submitted that the dance service’s key role should be maintained.
7 Review of investment categories: Toi Tōtara Haemata and Toi Uru Kahikatea investment programmes (Arts Council of New Zealand Toi Aotearoa, Discussion Paper, May 2018).
(c)In September 2018 it published a paper outlining the Proposed Changes to the Investment Programmes. That paper set out the proposed changes to the criteria for Tōtara funding as follows:8
The proposed new approach to the investment programmes will see a focus on arts sector outcomes, derived directly from the Investment Strategy's features. This approach will empower the arts sector to propose how it can contribute in the most effective way possible to realise outcomes identified in the Strategy. At present, the Tōtara roles prescribe the type of activities Creative New Zealand will support for a key role. We think this often leads to an overly large emphasis on producing outputs without focussing on the intended results for New Zealanders.
The changes we are proposing are intended to directly align the Tōtara and Kahikatea programme funding with the diversity and reach, dynamic arts and resilient arts sector features of the Investment Strategy.
To achieve this the key changes we are proposing for the Investment programmes are:
•to require organisations in the programme to demonstrate delivery to the features of the Investment Strategy (all three features for Tōtara and at least one feature for Kahikatea)
•to replace the current Tōtara key roles with three categories (General New Zealand Arts, M[ā]ori-led Arts, Pasifika-led Arts) plus two opportunities to deliver to identified infrastructure gaps (Arts by, with and for Young New Zealanders; National Touring)
•to simplify the funding formulae guidelines for the Tōtara programme and reduce the number of formulae from 15 to five
•to only open the 2019 Investment programmes funding round to organisations that have a 2019 funding contract for either Tōtara or Kahikatea. The Arts Council will then consider if there are gaps and whether to invite proposals from new entrants in 2020, for either or both the programmes.
•to apply priorities to the investment portfolio to ensure the balance of the overall portfolio is aligned to the Investment Strategy.
[30] Mr Moynahan, the Chair of the Board of the Arts Council, said in his affidavit that historically the funding had not been considered from a values and outcomes
8 Review of investment categories: Toi Tōtara Haemata and Toi Uru Kahikatea investment programmes: Proposed Programme Changes (Arts Council of New Zealand Toi Aotearoa, September 2018).
perspective and the bulk of the funding was supporting largely “Western heritage” arts organisations. The new strategy was intended to provide a portfolio representative of “Aotearoa’s diversity”.
[31] The Arts Council had suggested steps applicants might take to fit within the proposed criteria and thereby “strengthen their chances of being funded”. It considered feedback received in the consultation in respect of both investment papers. The Arts Council says a significant majority of organisations supported the proposal to replace the Tōtara key roles. Dance Aotearoa provided feedback on this. It disagreed with the Arts Council’s proposal to replace the Tōtara “key roles”, but it agreed with the proposal to require delivery to the features of the Investment Strategy.
[32] In November 2018, the Arts Council published a Results Paper announcing the changes to the Investment Programmes, which notified arts organisations that:
(a)The previous key roles would be replaced with three broad categories (General New Zealand Arts; Māori-led Arts; Pasifika-led Arts).
(b)The Tōtara and Kahikatea Investment Programmes would be changed as proposed to align with the Investment Strategy.
(c)To succeed in a funding proposal:
(i)For Tōtara funding, an organisation would need to deliver to at least one outcome under each of the three investment features of the Investment Strategy (Diversity and Reach, Dynamic Arts,
Resilient Arts Sector); and
(ii)For Kahikatea funding, an organisation would be expected to contribute to at least one feature of the Investment Strategy (but could deliver to more).
(iii)The 2019 funding round would only be open to organisations that had a current Tōtara or Kahikatea funding contract, to
provide those organisations an opportunity to adjust to the Investment Strategy.
Request for Proposal for the 2019 investment funding round
[33] The 2018 funding round was structured so that Tōtara and Kahikatea organisations could apply at the same time for funding and would commence in 2020. This was designed to implement the Investment Strategy.
[34] Creative NZ published its “Request for Proposals Toi Tōtara Haemata and Toi Uru Kahikatea Investment Programmes” (RFP) in February 2019.9 The features that proposers would need to demonstrate for each investment programme were set out in the RFP:
(a)An organisation seeking funding under the Tōtara programme needed “to demonstrate how they deliver to all three investment features and specifically contribute to arts sector capability and development”.
(b)An organisation seeking funding under the Kahikatea programme needed “to deliver to at least one outcome under at least one feature of the Investment Strategy”.
[35] The assessment process was set out in a diagram to the RFP document. A copy of that assessment process is set out at Attachment 1.
[36]The respondent noted that the RFP:
a.Stated expressly that some organisations might not receive investment programme funding as a result of the round.
b.Included a “transition procedure” to assist organisations who would be exiting the investment programmes at the end of their existing contract.
c.Noted that organisations who were unable to deliver to the investment strategy outcomes for the programme they were applying for “should consider that they will not benefit from submitting a Proposal”.
9 Request for Proposals, above n 3.
[37] In summary, the RFP process was designed to gather information on each proposal through:
(a)a “delivery outcome” assessment by two external assessors with artform expertise making comments, and providing scoring according to a numerical scale;
(b)deliberations by a meeting of panel peer assessors, who had considered each of the proposals as well as the external assessments, to discuss how the applications deliver to the intended outcomes of the investment programmes; and
(c)moderation by Creative NZ staff involving a high level verification of, among other things, sector coverage; and
(d)that information was then considered by the Chief Executive who made recommendations to the Arts Council Board which made the final decision on each proposal.
[38]The decision by the Arts Council would then be made on each proposal.
[39] Creative NZ said it consulted extensively with arts organisations on the RFP. It held a series of briefing sessions for eligible organisations, around the country and online. It said that to ensure fairness and transparency, questions and answers submitted at the briefing sessions were published online for the benefit of all participating organisations.
[40] The RFP set a deadline for questions from proposers a week out from the deadline for submitting proposals. No questions would be accepted after that date. Any uncertainty by a proposer was to be clarified with Creative NZ before the deadline for questions.
[41] In response to Dance Aotearoa’s suggestion that the Arts Council should have worked with it to ensure its proposal satisfied the RFP criteria, it says it was up to the applicants to prepare their proposals to meet the RFP criteria. Creative NZ said it
would not allow some participants a second chance to modify their proposals as that would be inconsistent and unfair. The respondent says the rationale for not engaging with organisations after proposals were submitted was to ensure a fair and consistent process for all participants.
[42] The respondent pointed out that it had published an answer to one of the questions on the Creative NZ online client portal available to all the proposers, which emphasised the nature of the engagement as follows:
13.Is there a process for receiving feedback on our proposal once it’s been lodged?
No, we are unable to provide you any feedback on your proposal prior to the Arts Council’s decision in order to preserve transparency and fairness. We will be able to provide feedback once the notifications of funding have been released.
[43] The “Investment Feature Outcomes” for Kahikatea and Tōtara funding were tied to the “Investment Strategy features of diversity and reach; dynamic arts; and resilient arts sector”. Each of those three then tied to “Investment Strategy sub-features” and then the “Investment Feature Outcomes”. For instance, under the first strategic outcome of “Greater Engagement with the Arts” for Kahikatea funding, the proposal needed to “deliver at least one feature of the Investment Strategy”. In order to achieve the outcomes for the first strategic outcome a proposal needed to deliver as follows:10
CNZ
STRATEGIC OUTCOMES
INVESTMENT
STRATEGY FEATURES
INVESTMENT
STRATEGY SUB-FEATURES
INVESTMENT FEATURE OUTCOMES Greater public engagement with the arts
Diversity and Reach
Investment in a range of arts practices reflecting New Zealand’s growing diversity.
Arts practices reflect New Zealand’s growing diversity.
Investment that ensures communities across New Zealand can participate in and experience the arts, and investment that engages with under-represented
communities.
Communities across
New Zealand participate in and experience the arts.
Under-represented communities engage with New Zealand arts.
10 Request for Proposals, above n 3, at 6.
[44] Whereas for the Tōtara programme funding the proposal needed to “deliver to all [features] of the Investment Strategy” but if the proposer did not meet that requirement it would automatically be considered for Kahikatea funding. The Tōtara outcomes on the first strategic outcome were as follows:11
CNZ STRATEGIC OUTCOMES INVESTMENT STRATEGY FEATURES
INVESTMENT STRATEGY SUB-FEATURES
INVESTMENT FEATURE OUTCOMES
Greater public engagement with the arts
Diversity and Reach
Investment in a range of arts practices reflecting New Zealand’s growing diversity.
Arts practices reflect New Zealand’s growing diversity.
Investment that ensures communities across New Zealand can participate in and experience the arts, and investment that engages with under-represented communities. Communities across New Zealand participate
in and experience the arts.
Under-represented communities engage with New Zealand arts.
Investment that engages with new audiences, in New Zealand and internationally. New audiences in New Zealand and
internationally are engage with New Zealand arts.
International opportunities expand New Zealand arts practices and demand for New Zealand art.
Investment in the delivery of art through digital channels in order to increase arts participation and audience size. Participation and audiences are grown through digital channels.
11 Request for Proposals, above n 3, at 7.
[45] Assessment criteria were set out in the RFP documents and a scale was indicated as follows:12
3.3 Assessment criteria Scale
Excellent – Exceeds all indicators
7
Very good – Satisfied all indicators and exceeds in four or more
6
Good – Satisfies all indicators and exceeds in two or more
5
Acceptable – Satisfies all indicators
4
Minor reservations – Does not satisfy more than two indicators
3
Major reservations – Does not satisfy more than four indicators
2
Unacceptable – Does not meet the indicators
1
[46] There were a number of criteria against which proposals were to be assessed: quality; alignment to investment strategy; financial health (calculated by staff); and organisational health (calculated by staff). Under each criterion were a number of “indicators” to consider. For instance, under “Quality” the indicators included whether the programme was well thought through and whether it was likely to be one of the best examples of its type.
[47]The RFP stated the following evaluation:13
3.4Evaluation process
Your application will be assessed by external peer assessors who are experts in their field. We ensure that Pasifika or Māori artists and practitioners are involved in assessing applications that choose to be assessed as Pacific Arts or Māori Arts.
All organisations going through the application process will be given a score (0-7) in each of the four criteria and assessors will be asked to flag risks in any activities as needed.
12 Request for Proposals, above n 3, at 13.
13 At 14.
[48]The table below followed that section:14
CRITERIA ASSESSED BY EXTERNAL
EXPERTS
CONSIDERED AT PANEL MEETING CONSIDERED AT MODERATION Quality
Assessed by two external assessors with artform expertise
One panel of a group of peers meet to discuss how the applications deliver to the intended outcomes of the investment programmes.
For all funding decisions, a moderation process will be conducted by staff to verify:
- whether potential Tōtara organisations adequately complement infrastructure funded by central and local government and the private sector
- whether the potential mix of Tōtara/Kahikatea/‘infrastructure funded by others’ achieves a balanced arts infrastructure that develops the arts, which are experienced by more
New Zealanders
- whether the initial priorities are adequately addressed by the ranking of applications via external assessment across the two programmes
- whether critical gaps in infrastructure, capacity or practice have been identified through the process. This may lead to recommendations about
future (2020) investment programme priorities.
Alignment to Investment Strategy
Assessed by two external assessors with artform expertise (the same two as
Quality)
Financial Health
Staff to calculate Past Performance Score
Organisational Health
Staff to Calculate Past Performance Score
Activity risk flagging
Noted
14 Request for Proposals, above n 3, at 15.
[49] The RFP did not create a process contract nor did it create any legal relationship between Creative NZ and any respondent except in respect of, among other things, “the Evaluation Approach to be used by Creative NZ to assess Proposals as set out in Section 3 and in the RFP-Terms…”.15
[50] The proposals were open for acceptance by Creative NZ for a set period. The terms and conditions set out in the RFP included the following:
(a)Creative NZ may, at any time, request from any respondent clarification of its Proposal as well as additional information about any aspect of its Proposal. Creative NZ “is not required to request the same clarification or information from each Respondent”.16
(b)Creative NZ may negotiate with each respondent with a view to contracting.17
(c)Creative NZ would offer all respondents not shortlisted a debrief, if so required, which would:18
-provide the reasons why the Proposal was or was not successful
-explain how the Proposal performed against the preconditions (if applicable) and the evaluation criteria
-indicate the Proposal's relative strengths and weaknesses
-explain, in general terms, the relative advantage/s of the successful Proposal
-seek to address any concerns or questions from the Respondent
-seek feedback from the Respondent on the RFP and the RFP process.
15 Request for Proposals, above n 3, at 36.
16 At 33.
17 At 34.
18 At 34.
(d)Creative NZ was empowered to: “liaise or negotiate with any Respondent without disclosing this to, or doing the same with, any other Respondent”.19
(e)Creative NZ was entitled to accept or reject any proposal or part of a proposal, accept or reject any non-compliant, non-conforming or alternative proposal, and decide not to enter into a contract with any respondent.20
[51] A further clause in the RFP relevant to these proceedings related to the “Active Engagement and On Notice” provision as follows:21
Creative New Zealand may place an organisation on Active Engagement if there are concerns that the organisation may be facing systemic issues in the areas of quality, alignment to Creative New Zealand's strategy, financial health or organisational health. An organisation may be placed On Notice if Creative New Zealand is planning to disinvest in the organisation due to a breach of the Funding Agreement or a failure of the organisation to meet Active Engagement requirements.
Both of these statuses remain in existence. Organisations that are currently on Active Engagement will have the same requirements and opportunities to apply as any other organisation. Creative New Zealand may choose to place an organisation on, or remove an organisation from, Active Engagement as part of its decision-making process.
Legal principles: review of funding processes
[52] Dance Aotearoa pointed to the underlying principle set out in the Attorney-General of Hong Kong v Ng Yuen Shiu.22 The Privy Council said that it was in the interests of good administration that a public authority acts fairly and implements its promises. In this case the appellant’s concerns largely focus on an alleged failure to follow the RFP process.
19 Request for Proposals, above n 3, at 37.
20 At 37.
21 At 11.
22 Attorney-General of Hong Kong v Ng Yuen Shiu [1983] 2 All ER (PC) at 351.
[53] A detailed exposition of the principles of legitimate expectation in the context of an RFP were set out in the High Court decision in Problem Gambling Foundation v Attorney-General (Problem Gambling Foundation) as follows:23
Legitimate expectation
[118] It has been widely recognised that two types of legitimate expectation can arise. One is a substantive legitimate expectation: an expectation of a particular outcome. The other is a procedural legitimate expectation: an expectation that certain procedural steps will be taken before making a decision.
…
[120] In Comptroller of Customs v Terminals (NZ) Ltd the Court of Appeal discussed legitimate expectation as follows:
[123] Establishing a legitimate expectation in administrative law is not dependent on the existence of a legal right to the benefit or relief sought. The expectation might be engendered by promises that a particular authority will act in a certain way or by the adoption of a settled practice or policy which the claimant can reasonably expect to continue. A promise of the kind alleged may be express or implied.
[124] Legitimate expectation is to be distinguished from a mere hope that a cause of action will be pursued or a particular outcome gained. To amount to a legitimate expectation, it must, in the circumstances (including the nature of the decision-making power and of the affected interest) be reasonable for the affected person to rely on the expectation.
[121]The Court set out a three step test:
[125] Where legitimate expectation is raised, the inquiry generally has three steps. The first is to establish the nature of the commitment made by the public authority whether by a promise or settled practice or policy. This is a question of fact to be determined by reference to all the surrounding circumstances. A promise or practice that is ambiguous in nature is unlikely to be treated as giving rise to a legitimate expectation in administrative law terms.
[126] The second is to determine whether the plaintiff’s reliance on the promise or practice in question is legitimate. This involves an inquiry as to whether any such reliance was reasonable in the context in which it was given.
23 Problem Gambling Foundation v Attorney-General [2015] NZHC 1701 [“Problem Gambling Foundation (HC)”] at [118] and [120]–[121] (footnotes omitted). The High Court decision was overturned by the Court of Appeal in this case. However, there was no issue taken with the articulation of the principles in the High Court. The High Court determination that the provisions of the RFP had not been followed was overturned.
[127] The third, and often most difficult part of the inquiry, is to decide what remedy, if any, should be provided if a legitimate expectation is established.
[54] A clear and unambiguous promise in an RFP may give rise to a legitimate expectation at public law. No issue was taken by the Court of Appeal with the High Court’s outline of the legal principles of “legitimate expectation”, but the appellate court did not agree with the High Court’s view that the Problem Gambling Foundation had a legitimate expectation as to process that had been breached.
[55] The Court of Appeal in Problem Gambling,24 had before it an RFP for the procurement of problem gambling services by the Ministry of Health. The Court of Appeal decision provides guidance in relation to the approach of the Court in a review of a procurement proposal process, which is akin to a funding proposal process in many respects.
[56] The Court allowed the appeal. The High Court had quashed the Ministry of Health’s decision on the Foundation’s proposals for the provision of problem gambling services. The Foundation had been an incumbent provider for 10 years. This was the first funding round since problem gambling services had been established. The Foundation’s proposals were not accepted by the Ministry, despite its provision of significant services for the previous 10 years.
[57] The Court of Appeal rejected the findings of the High Court that there had been public law breaches by failure to follow the RFP, particularly by inserting a moderation process and failing to adhere to a scoring system set out in the RFP.
[58] The Court of Appeal said that the assessment process was an “intensely human process…” and that different expertise and knowledge was required to evaluate the proposals.25 It noted the assessment was a qualitative not quantitative assessment. While the RFP contained a scoring process that had been severely criticised by the Foundation’s experts, the Court of Appeal said the expert evidence was unhelpful
24 Attorney-General v Problem Gambling Foundation of New Zealand [2016] NZCA 609, [2017] 2 NZLR 471 [“Problem Gambling Foundation (CA)”].
25 At [98].
and the criticisms had led to the Judge delving into the merits of the funding application.
[59] One of the grounds for judicial review pursued by the Foundation was that the Ministry had incorporated a “moderation” process, which the High Court had found was not part of the published RFP process and therefore breached the Foundation’s legitimate expectation as to process. The High Court had also found that a breach by the Ministry of the mandatory rules for government procurement (promulgated by cabinet) provided a successful ground for review.
[60] The Court of Appeal noted that the scope of review for a procurement contract was narrow unless the context indicated otherwise. This included: the nature of the decision; the nature of the body; statutory setting; or that the nature of the interests sought to be protected in the judicial review indicated the need for broader review on the panoply of judicial review grounds. The Court said that the factors on which the High Court had sought to distinguish the RFP from the RFP process in an earlier decision where the Court of Appeal had indicated that the scope for judicial review of a commercial contract by a public body was narrow, did not stand up.26
[61] In the Problem Gambling Foundation case, the Court of Appeal noted that while problem gambling did have social overtones, the procurement process for public health and clinical services was nevertheless commercial. The Court noted the procurement process there had not created contractual relations despite the fact that there was no requirement for the Ministry of Health to act in a commercial manner in the relevant legislation under which the services were being procured.
[62] The Court of Appeal also noted there were alternative avenues for complaints about the RFP process, such as to the Ombudsman, Auditor-General, and Parliament. It noted a broader review might handicap the Ministry’s ability to meet its objective of providing public health services. In addition, the Court noted that while the mandatory procurement rules bound the Ministry, there was no reason to impose procedural obligations in terms of those rules that were enforceable by disappointed
26 Problem Gambling Foundation (CA), above n 24, at [44]; citing Lab Tests Auckland Ltd v Auckland District Health Board [2008] NZCA 385, (2009) 1 NZLR 776.
potential contractors. The Ministry had not bound itself to a process contract to that effect and while public interest undoubtedly existed in the quality and integrity of procurement processes, that requirement was dealt with in the particular case by the availability of the other complaint mechanisms.
[63] The Court of Appeal noted the reference in the High Court to Re Erebus Royal Commission as follows:27
[89] The Judge said the ground of review advanced was similar to that discussed by the Privy Council in Re Erebus Royal Commission in the following passage:28
The first rule is that the person making a finding in the exercise of such a jurisdiction must base his decision upon evidence that has some probative value in the sense described below. ...
The technical rules of evidence applicable to civil or criminal litigation form no part of the rules of natural justice. What is required by the first rule is that the decision to make the finding must be based upon some material that tends logically to show the existence of facts consistent with the finding and that the reasoning supportive of the finding, if it be disclosed, is not logically self-contradictory.
[64] The Court of Appeal found the Foundation was merely a disappointed commercial party seeking public law remedies to address prejudice to its contracting prospects.
[65] In this case Mr Kirkness submitted that the RFP process for funding or grants from the Arts Council was not a commercial process. He said it was different in nature and therefore the Court of Appeal’s comments in the Problem Gambling Foundation case were not pertinent.
[66] However, in at least some respects the RFP process in this case was similar to the Problem Gambling Foundation RFP. The Court of Appeal there had rejected an argument that public health services, such as problem gambling, were addressing social issues therefore were not comparable to the Lab Tests case.
27 Problem Gambling Foundation (CA), above n 24, at [89]; citing Air New Zealand Ltd v Mahon (Re Erebus Royal Commission) [1983] NZLR 662 (PC) [“Re Erebus Royal Commission”].
28 Re Erebus Royal Commission, above n 27, at 671.
[67] The Court of Appeal rejected the High Court reasoning that the fact there was no statutory provisions requiring the Ministry in Problem Gambling Foundation to act commercially, such as the legislation relevant to the decision in Lab Tests and in other legislation relevant to earlier cases, made a difference.29 The Court of Appeal said:30
[41] We agree with the Crown that where the decision the subject of review is a procurement (contracting) decision made in a commercial context, that is the starting point for consideration of the appropriate scope of review. We understand the High Court Judge’s analysis to be that the decisions were not taken in a commercial context. However, that analysis gave no weight to the fact that these were procurement decisions. We agree with the Ministry that where decisions are made by the Crown in the course of a procurement process, that will usually provide the commercial context. It follows the prima facie position will be that only narrow review is appropriate, subject to any relevant contextual matters indicating a need for the High Court to have broader powers of review.
[68] It concluded that the procurement process was subject to a scope of judicial review on limited grounds. The contextual matters pointed to by the Foundation did not support its case. These included: the fact problem gambling was a social issue and one of public, not private health; the absence of statutory procedural protections; and the absence of contractual obligations created by the RFP process. The Court of Appeal said these factors did not support the High Court’s approach to judicial review, which had involved scrutinising every stage of the decision-making and insisting on a statistically valid outcome, merely because a scoring methodology was one of the processes involved in the assessment of the proposals. The Court said the Ministry of Health’s RFP process was not prescriptive despite mandatory procurement rules being promulgated by Cabinet applied.
[69] The Foundation was also a charity but despite that and the fact that problem gambling is a social and public health issue, the Court of Appeal found that the Foundation was merely a disappointed commercial party seeking to take advantage of public remedies in a commercial context.31 The Court of Appeal acknowledged there was a public interest in the Ministry discharging its statutory duty to formulate a plan and provide problem gambling services, but the Judge was wrong to conflate the public interest in the Ministry discharging its duty to provide those services with the
29 Problem Gambling Foundation (CA), above n 24, at [40](b).
30 Footnotes omitted.
31 Problem Gambling Foundation (CA), above n 24, at [42]–[43].
need for a broad review by the Court. The appellate Court concluded that although the development of the problem gambling strategy was a public act with public consequences, entering into individual contracts through a procurement process to implement that strategy does not have public consequences which would attract the full panoply of judicial review. It said to the extent there was a public interest in the procurement process, the challenge by the Foundation did not engage that interest as its complaint “was the prejudice to the Foundation’s contracting prospects”.
[70] The Court of Appeal contrasted the facts of that case to those before the Supreme Court in Ririnui v Landcorp Farming Ltd.32 In Ririnui, Landcorp had agreed to sell land contrary to an agreed protocol it had with the Crown in relation to land that might be subject to claims under the Waitangi Tribunal process. Landcorp had received erroneous advice from the Office of Treaty Settlements about the land and relied on that in its sale process. The review was brought by a representative of an iwi claiming interest in the land. In addition, the Minister had intervened in the process requesting that Landcorp consider an offer from another iwi. As well as the issue of the breach of the process agreed to in the protocol, the Supreme Court found that there had also been the exercise of a statutory power.
[71] In Ririnui the resolution of Treaty claims brought a broader public interest into play. That contrasted with the Foundation’s claim, which was grounded firmly upon unfairness to it and disappointment of its own private interests. The Court of Appeal noted it had a complaint which could have been advanced through contract if the process had given rise to a process contract. It said that the only way in which its allegations engaged with the public interest in the provision of public health services was the Foundation’s “attempted invocation of that contextual feature in favour of broad judicial review”.
[72] While the absence of a statutory direction to act commercially was a factor to be considered, the Court of Appeal in the Problem Gambling Foundation found:
[47] We also do not see the various absences the Judge identifies (see [40] above) as supporting the conclusion he reached as to the scope of review.
32 Problem Gambling Foundation (CA), above n 24, at [46]; citing Ririnui v Landcorp Farming Ltd
[2016] NZSC 62; [2016] 1 NZLR 1056.
Although we agree the absence of a statutory direction to act commercially is a factor to be considered, as we have noted, the fact that this was a procurement process is a powerful indicator that the context was commercial. So too was the direction in the Mandatory Rules that procurement decisions were to be made on the basis of value for money of services to be supplied in terms of the essential requirements and evaluation criteria.
[73] In this case the Arts Council is an autonomous Crown entity under Part 2 of the Crown Entities Act 2004. It is subject to most of the obligations under the Crown Entities Act.33 The Crown Entities Act requires the Arts Council Board to act consistently with its objectives, functions, statement of intent and performance expectations. The Board must ensure the Council acts efficiently and effectively. The Council must operate in a financially responsible manner including prudently managing its assets and liabilities and endeavouring to ensure its long-term viability.
It must act as a successful going concern.34
[74] The Council receives substantial amounts in public funding to execute its statutory functions.35 There is no doubt therefore it must act in an efficient manner and is responsible for the prudent management of the funds allocated to it by government to undertake its statutory functions.36 The Council speaks of its “investment” in the Toi Tōtara Haemata and Toi Uru Kahitakea Investment Programmes, as well as its grants programmes and creative communities scheme.
[75] The Arts Council is responsible to the Ministry of Culture and Heritage, the responsible Minister and to Parliament as to how it spends its funding.
[76] The extent to which a public funding decision sits in a commercial context will always be a question of degree. In this case the Arts Council is required to implement a strategy designed to more effectively meet its statutory objectives. To do that it has developed an investment/strategic plan, which it is now implementing in a
33 Arts Council of New Zealand Toi Aotearoa Act 2014, s 6(2).
34 Crown Entities Act 2004, ss 50(b) and 51.
35 In 2016/17, publicly available information indicates the Arts Council is funded principally through two avenues: Vote: Arts, Culture and Heritage (administered by the Ministry for Culture and Heritage) from which Creative New Zealand expected to receive $15.689 million, and the New Zealand Lottery Grants Board, from which it expected to receive an estimated $28.665 million based on Lotto New Zealand’s forecast payment.
36 The Board must also ensure that the Arts Council acts in a manner consistent with its objectives, functions, current Statement of Intent, and current Statement of Performance Expectations: Crown Entities Act 2004, s 49.
business-like and commercial manner. It undertook that using a similar process to that used by the Ministry in procurement of services to implement its strategic plan for problem gambling services.
[77] While it is involved in the arts and culture sector, not the health sector, the Arts Council must act in a business-like manner and in relation to its processes by which it selects and contracts with organisations to provide the required investment outputs to meet the Council’s strategic plan. The Arts Council Board must ensure the Council acts in an efficient, effective manner and is financially responsible. It is responsible for the spending of its public funding to further its statutory functions and meet the requirements of its Statement of Intent and Statement of Performance Expectations. It is in a similar position to the Ministry of Health in the Problem Gambling Foundation case. It must act in a business-like manner in the assessment of proposals, despite the lack of specific reference to a commercial imperative in the relevant legislation. Although it is “investing” in proposals to further the social and public functions it is charged to provide in the support and development of the arts. It must act in the “procurement” of the contracts following the proposal process, which at least on one level is a commercial process in a similar way to that which the Court of Appeal found that the Ministry of Health in Problem Gambling Foundation was required to act.
[78] I now turn to consider the specific grounds of review under the headings: “process and decision”, “legitimate expectation” and “complaints process”.
I. Failure to follow the Request for Proposal process
[79] As is apparent from the Assessment Process diagram (Attachment 1), there was to be an external assessment of the proposals. That external assessment, in the case of the Dance Aotearoa proposal, was carried out by two assessors with artform expertise, in this case dance expertise. Their reports were checked by staff and then went to a panel of approximately six people. The panel members came from different artform backgrounds and experience. Two had experience in dance.
[80] The panel’s function was to “meet to discuss how the applications deliver to the intended outcomes of the investment programmes”.37
[81] Following the panel meeting minutes were prepared, including the panel’s recommendations on the proposals. A moderation process was then undertaken by staff. The Chief Executive then finalised his recommendation, with the assistance of staff, which went in the form of a report to the Arts Council Board, which made the final decisions on the proposals.
[82] Dance Aotearoa says that the RFP process was intended to be “externally led”. It says this meant that the external dance assessments and the panel input were crucial parts of the process. In general terms it says the staff of Creative NZ interfered with the external assessors’ reports and “framed the … thinking” of the panel to influence the process and final decision to the extent that the process adopted was unlawful in the public law sense. In addition, it says the staff ignored panel recommendations and made recommendations to the Arts Council contrary to the recommendations of the panel. Dance Aotearoa said it was the Creative NZ staff, not the Chief Executive, who made the recommendation to the Arts Council. It says this was a breach of the process and contributed to the unlawfulness of the process as a whole.
[83] Dance Aotearoa does not allege that the Creative NZ staff acted in bad faith, but that for whatever reason they influenced the external assessment process to such an extent that the RFP process and the decision not to fund Dance Aotearoa was tainted.
[84]The factual matters behind the allegations in the first ground of review are:
(a)Creative NZ’s Senior Advisor Assessment Services, Ms Lee Martelli-Wood, in email feedback, persuaded one of the external assessors to change his scores in the external assessment report.
37 Request for Proposals, above n 3, at 15.
(b)Ms Martelli-Wood unlawfully influenced the members of the peer panel by providing them with sector overviews of each art form, which were prepared by Creative NZ Art Practice Directors (Sector Overviews).
(c)Creative NZ staff prepared a PowerPoint and other material (summary alignment tables and summary points) for the use of the panel facilitator, Toby Behan, in the panel meeting. The PowerPoint included comments detrimental to Dance Aotearoa.
(d)The staff attended the panel meeting and influenced discussions.
(e)Creative NZ staff did not follow the recommendations of the panel in the report and formulated the recommendations made by the Chief Executive to the Board.
[85]I deal with each of those factual matters in turn.
Feedback to external assessor
[86] Dance Aotearoa says that the Creative NZ staff were only entitled to have input in the RFP process, according to the published Assessment Process, in the following ways:
(a)Providing the assessments on:
(i)financial health; and
(ii)organisational health.
(b)A moderation process to verify:38
-whether potential Tōtara organisations adequately complement infrastructure funded by central and local government and the private sector;
38 Request for Proposals, above n 3, at 14. These are also set out above at [48].
-whether the potential mix of Tōtara/Kahikatea infrastructure funded by others’ achieves a balanced arts infrastructure that develops the arts, which are experienced by more New Zealanders;
-whether the initial priorities are adequately addressed by the ranking of applications via external assessment across the two programmes; and
-whether critical gaps in infrastructure, capacity or practice have been identified through the process. This may lead to recommendations about future (2020) investment programme priorities.
[87] Dance Aotearoa says that other than that Creative NZ were to have no involvement at all in the process or the assessment.
[88] Mr Kirkness, for Dance Aotearoa, conceded that Creative NZ needed to manage the RFP process. Nevertheless, he said that “externally led” means that the external assessors should be left to their own devices and staff should have had no moderation input other than on the limited verification matters set out in [86] above.
[89] Dance Aotearoa pointed to emails from Ms Lee Martelli-Wood, Senior Advisor, Assessment Services at Creative NZ, to one of the external assessors as evidence of influence. In an email to one of the two assessors dated 9 June 2019 Ms Martelli-Wood noted that she was at the proofing stage of the assessor’s assessment and said:
…In terms of your scores for this assessment, I have read your commentary and I am wondering if you have selected the best scores to match your commentary?
For question 1, you say that the applicant has (I think you mean “met all indicators and exceeded in”?), met all indicators, and exceeded in one. According to our scale, this would produce a score of 4/7.
Would you like me to alter the score for this question, to match your commentary?
For question 2, you seem to be saying that the applicant is weak in one area, and meeting the others. This would be a score of 3/7; then you believe they deliver to priority areas, so you could add a point to your score for this – this process would produce a score of 4/7 for this question.
Shall I change this score to match your commentary?
[90] The assessor responded to the query by email saying “Yes” on the same date. The following day Ms Martelli-Wood responded to that assessor by email as follows:
Great thanks [redacted name]
Here is how your assessment appears in our system now FYI:
[91] The email then attached the assessment with the relevant changes. It is common ground the amended assessment sent back to the assessor reflected the assessor’s agreed changes. The assessment had been amended by changing the question 1 score from 5 to 4 and the question 2 score from 6 to 4, in terms of Ms Martelli-Wood’s query and suggestion. The comments by the assessor were not otherwise altered.
[92] On question 1, which related to “Quality”, the assessor had been required to consider the indicators concerning programme and budget. The assessor’s commentary had been to the effect that there was significant misalignment in both but, in particular, the budget. The assessor’s comments on their face did not justify a score of 5 based on the assessment criteria scale.39 On the scale, 5 indicates “good – satisfies all indicators and exceeds in two or more”. The score of 4, which Ms Martelli-Wood had noted reflected the assessor’s comments, indicated: “acceptable – satisfies all indicators”.
[93] Question 2 of the External Assessor’s report related to “Alignment to Investment Strategy”. The assessor’s commentary notes some initiatives proposed by Dance Aotearoa were positive but was critical of its proposed budget, including in its partnership proposals and diversity and reach. The adjustment to the score suggested by Ms Martelli-Wood also appears to reflect the comments of the assessor. She adjusted the score from 6 to 4. Again, the external assessor specifically approved the change by email.
[94] Dance Aotearoa submits that it does not quibble with Ms Martelli-Wood pointing out any inconsistency between the comments and the score but that she had stepped over the line and unlawfully influenced the external assessor by suggesting a
39 See above at [45].
score and changing the numbers. This was despite the fact the material was referred back to the external assessor who confirmed she should make the changes.
Provision of Sector Overviews to the peer panel
[95] The allegation under this heading is that Ms Martelli-Wood, on 24 June 2019, emailed Mr Toby Behan, the facilitator of the external peer assessors, sending copies of Sector Overviews of each art form which had been prepared by Creative NZ’s arts’ practice directors. Ms Martelli-Wood indicated in the email that she had been asked to send to Mr Behan three documents: the Sector Overviews, a full copy of all the assessments submitted in the 84 applications,40 and a PowerPoint. She said in the email:
Kia ora Toby
Belinda asked me to send you three further documents:
1.Sector overviews of each art form, created by our Arts Practice Directors. These have been sent to the panel members to help frame their thinking. Note that panel members do NOT have to agree with the APDs. We are externally-led in our organisational structure, so from that perspective, the sector overviews are not instructive – if you see what I mean? This may be something that could be useful to state at the start of the panel meeting also, as the APDs will be attending – so the panel members don't have to agree with what the APDs say at the panel meeting. They can ask the APDs Qs, but they can then discuss on their own (amongst the panel members) and come to their own conclusions, if they desire
2.A copy of all the assessments that have been submitted on the 84 applications. Note each applicant had 2 assessments, and some had three for sub-genre and cultural perspectives on programmes/proposed activities
3.The PowerPoint that you had today. Arohamai [sic] that you had trouble with sound?!
FYI– at the panel meeting I will have a copy of all the individual scores each assessor submitted on each application; the COIs recorded against each applicant; and be available to write anything the panel may need on a whiteboard – in case visual representation is better!
Just let me know if you have any questions. Thanks! Ngā mihi,
40 The number of proposals were referred to variously as 84, 86 and 87. The discrepancy is not material.
[96] Mr Kirkness says that these Sector Overviews should not have been sent to the facilitator to be distributed to the panel because the Sector Overviews operated on panel members to “frame their thinking” using the words of Ms Martelli-Wood. He said the process was “sector led” therefore the overviews were not helpful. Mr Kirkness explained by this he meant the Sector Overview for the dance sector would influence the panel members’ considerations of the proposals to an unlawful extent in public law terms.
[97] Mr Kirkness emphasised that he did not say that the material was supplied by Creative NZ staff in bad faith. He said the documents were intended to be fair but contained material which was detrimental to Dance Aotearoa.
[98] The Sector Overview for dance was produced. It contains a SWOT (strengths, weaknesses, opportunities and threats) analysis for the dance sector. It sets out basic statistical detail such as an estimate that more than 630,000 people from all backgrounds, abilities and ages, dance regularly. It provides statistics about the market, an overview of dance festivals and companies, as well as outlining opportunities and threats. It then goes on to provide, in bullet point form, “how well do the proposals within this art form/area of arts practice deliver to the investment strategy features? What are the key differences from past proposal delivery?” There follows a bullet point analysis of new initiatives in general terms.
PowerPoints
[99] Included in the email from Ms Martelli-Wood to Mr Behan was a set of PowerPoints and associated notes for his assistance in facilitating the panel meeting. The PowerPoints set out the background to the new strategy and the RFP process as well as some questions for the panel. Dance Aotearoa says that one of the overheads contained comments detrimental to Dance Aotearoa. It reads as follows:
STAFF & ASSESSOR COMMENTARY – RISKS AND ISSUES41
·Alignment with T[ō]tara programme eg [redacted three names of organisation]
41 Redactions have been made for the purposes of the judgment.
·High scoring but issues raised in commentary eg [redacted], DANZ, [redacted four names of organisation]
·Active engagement clients: [redacted five names of organisation]
·Budget – risks: [redacted seven names of organisation]
[100]Dance Aotearoa says the reference to DANZ’s proposal was detrimental to it.
Panel discussions
[101] Dance Aotearoa says that Creative NZ staff were present during the panel discussions and made themselves available to answer questions at the meeting. The presentation notes made by staff for the PowerPoint presentation included comments that the applicant says were indicative of inappropriate involvement of staff in the meeting. An example was:
May move people along, balance everyone’s input to ensure all panellists have fair input, may encourage panellists to speak up… APDs can take Qs, may speak to applications provide additional background. Panellists can feel free to disagree with their opinions/perspectives.
[102] Dance Aotearoa also says that the Creative NZ arts practice directors must have offered “opinions/perspectives” on individual proposals during the panel discussions and this was inconsistent with the moderating role that Creative NZ staff should have taken. It says that despite the fact panellists could disagree with staff, nevertheless, no views should have been expressed by Creative NZ staff at all.
Summary “alignment tables” prepared for panel
[103] Dance Aotearoa further criticised the provision by staff to the panel of a table that summarised which investment features each proposal aligned with. It said this was further material which could influence the panel. It is a table that reproduces the RFP criteria and sets out a brief summary on each proposal under headings. The entry for Dance Aotearoa (DANZ) in the table is reproduced in Attachment 2 below.
Summary of points raised by Investment Assessors on each proposal
[104] Further material Dance Aotearoa pointed to as detrimental to it was a summary prepared by staff of the two external assessors’ reports. Dance Aotearoa says this did
not, nor was it intended to, provide an accurate reflection of the external assessments of Dance Aotearoa. They had each been sent to panel members in full. The table had only two columns, the name of the Applicant and a column headed “Points of note raised by the assessors”. The information for other applicants is redacted. For Dance Aotearoa the following bullet point notes appeared:
·Feel they should be supporting Māori contemporary dance practice more
·Feel they need an indigenous network
·Assessors don’t agree on the priorities being delivered to
[105] The panel members had received all proposals and external assessors’ reports. The panel had five weeks in which to read the proposals.
Panel meeting minutes
[106] The panel meeting minutes were compiled by staff in the form of a table which included discussion points about each proposal, panel feedback/comments, alignment and a recommendation on each proposal.
[107]The comments recorded for the Dance Aotearoa proposal were as follows:
The panel agreed that DANZ supports all forms of dance from professional to community. The panel noted DANZ has the potential to bridge support between graduates and early practitioners.
The panel noted that a significant amount of DANZ's activity was a duplication of, or a crossover with, high-quality activities and services provided by dance organisations.
The panel questioned if the mission 'to make dance visible' is sufficient to build the sector. It was noted that professional dance companies don't use their services and they are not a key agent in developing international opportunities.
It was acknowledged that when DANZ was created there was a real need for them, but the sector has changed and relevancy is an issue.
The proposal did not demonstrate strong focus on a resilient arts sector or authentic delivery to diversity and lacked innovation in building collaborative partnerships, new audiences and the sector.
The panel discussed whether the proposal aligned to the Kahikatea programme and recommended that if it were offered Kahikatea funding, it should be at a reduced amount.
[108]The panel feedback/conditions said:
The panel recommended DANZ focus on:
•strategic planning to understand what their role is, who they are serving, and how to bring people together.
•research, archiving and developing a digital strategy.
[109]In relation to alignment the panel said:
The proposal did not demonstrate strong alignment to all three Investment Strategy features for Tōtara.
Alignment to Resilient Arts Sector, Dynamic Arts, and Diversity and Reach need further development.
[110] In the final column, headed “Recommendation”, the minutes record: “Recommended for Kahikatea funding”.
The Chief Executive’s report to the Board
[111] The RFP said that the decisions on the proposals were to be made by the Board on the recommendation of the Chief Executive. The external assessors provided input as did the panel. Their summarised comments went into the recommendation to the Board. Dance Aotearoa says it expected the external assessors and panel would make the decisions, or at least they would make recommendations, which would be adopted without demur by the Board.
[112] Dance Aotearoa refers to articles and media commentary by Creative NZ to the effect that the assessment was “sector led” or “led by peers” as supporting its submissions. These comments were made after the close of the RFP process so could not have been relied upon by Dance Aotearoa. In any event these comments are consistent with the relevant art sector experts providing input into the assessment as they did.
[113] A question and answer table was published as part of the process in the RFP. This stated that the external peer assessors could be nominated by anyone and those suitable would be selected. It went on to say “[i]t’s important to remember that the
assessors don’t make the decision on who gets funding – the Arts Council makes the final decision”.
[114] The report of the CEO was on the Agenda for the Arts Council meeting for 24 July 2021 under the entry: “Tōtara and Kahikatea Funding Recommendations 2020-2026. Responsible Manager: Cath Cardiff, Manager Arts Development”. The “Action Required” was a decision. Annexed to the Executive Summary was a set of detailed recommendations set out in table format as an appendix. The report was endorsed and signed by Stephen Wainwright, Chief Executive of Creative NZ.
[115] The Chief Executive’s report noted the recommendations were for the funding of organisations under the Tōtara and the Kahikatea programmes “in terms of alignment with the features of the Investment Strategy Te Ara Whakamua 2018–2023 and with consideration of the Te Hā o Nga Toi Māori and the Pacific Arts Strategy”.
[116] While the report was compiled by staff, the report and the recommendations were those of the Chief Executive. They had been considered amended and endorsed by Mr Wainwright, the Chief Executive, and the report is signed by him.
[117] The report sets out the process undertaken. It explained that the panel had received all applications and assessments as well as summary tables of the total scores and alignment of the relevant proposal with features and priorities as based on assessments as well as sector overviews by its art practice directors. The report notes that following the assessment process staff undertook a moderation process and it listed the four areas of verification set out in the assessment process.42
[118] Each proposal was the subject of recommendations and comments by the Chief Executive. In relation to the Dance Aotearoa proposal the Chief Executive’s report and recommendation noted that it delivered nationally and read as follows:
Panel comments: The proposal did not demonstrate strong alignment to all three Investment Strategy features for Tōtara. Alignment to Resilient Arts Sector, Dynamic Arts, and Diversity and Reach need further development.
42 See below at Attachment 1.
The panel noted that a significant amount of DANZ’s activity was a duplication of, or a crossover with, high-quality activities and services provided by dance organisations.
The panel questioned if the mission ‘to make dance visible’ is sufficient to build the sector. It was noted that professional dance companies don’t use their services and they are not a key agent in developing international opportunities.
It was acknowledged that when DANZ was created there was a real need for them, but the sector has changed and relevancy is an issue.
The proposal did not demonstrate strong focus on a resilient arts sector or authentic delivery to diversity and lacked innovation in building collaborative partnerships, new audiences and the sector.
Despite this lack of alignment, Panel still recommended it for Kahikatea funding.
Staff recommendation: that this organisation exits the programme. The organisation did not make a compelling case in terms of alignment with any features of the investment strategy and organisations within the sector did not support the organisation or find it fit for purpose.
[119] Dance Aotearoa says that the panel recommendation had been that it received Kahikatea funding but that was not what the Chief Executive recommended to the Arts Council. This, the applicant says, is further evidence of interference by staff.
[120] The Arts Council submits that the recommendation for Kahikatea funding was not adopted by the Chief Executive in his recommendation to the Arts Council Board because he considered there was no outcome in the investment strategy features which Dance Aotearoa’s proposal satisfied. It says this was apparent from the comments and the feedback from both the expert assessors and the panel. Therefore, the proposal did not meet the requirements for Kahikatea funding. Those requirements or indicators had been set out in the RFP as follows:43
Kahikatea Indicators:
1.Delivers to one outcome under one feature (exceeded=delivery to more than one outcome).
2.Delivery to outcome/s is well thought through and constructed.
3.Delivery to outcome/s is focussed on results desired.
43 Request for Proposals, above n 3, at 13.
4.Delivery to outcome/s is strongly aligned to Creative New Zealand's stated outcome.
[165] The Court of Appeal in Problem Gambling Foundation criticised the High Court for delving into the merits and examining each stage of the decision-making in detail. The appellate court said it was as not appropriate to delve into the merits in the circumstances. That is what Dance Aotearoa invites here.
[166] I am satisfied here there was evidence upon which the Board could reach its decision. That evidence was apparent from the Panel’s comments and the Chief Executive’s recommendation. As noted in Re Erebus,58 there must be some evidence upon which to base the decision. The RFP process and decisions on the proposals, like the exercise in Problem Gambling Foundation,59 was a human qualitative assessment. The final decision was for the Board of the Arts Council on the recommendation of the Chief Executive.
[167] The Chief Executive did not mislead the Board nor were there any mistakes or errors in the public law sense in relation to the recommendations to the Board. There was sufficient evidence upon which the Board could rely in order to make its decision not to accept Dance Aotearoa’s proposal.
55 Request for Proposals, above n 3, at 3.
56 See above at [118].
57 See above at [107] and [118].
58 See above at [63].
59 Problem Gambling Foundation (CA), above n 24.
The staff recommendation included false claims about DANZ (sixth ground of review)
[168] This matter is dealt with under the first ground relating to the Chief Executive’s recommendations to the Board. The report recorded in summary the comments and recommendations of the panel. This ground fails.
Failure to consider Dance Aotearoa’s position as the sole national service provider for dance: (fifth ground of review)
[169] A decision-maker must take into account relevant considerations. Failing to take into account a relevant mandatory consideration is a reviewable error of law.60 The Court of Appeal has noted that there is no ready template by which to distinguish mandatory and merely permissible considerations.61 However, the considerations may arise expressly by implication from a statutory scheme or from the context of the decision-making.
[170] The allegation in this case is that the mandatory consideration was the fact that Dance Aotearoa was the peak dance body. Mr Tocher submitted that “facts obviously material to the mandatory statutory considerations as were or ought to have been known” to the decision-maker.62 Mr Tocher submitted that the fact that Dance Aotearoa was the peak body for dance in New Zealand was material to a mandatory consideration.
[171] However, I am not persuaded that this was a mandatory relevant consideration for the decision-maker. There is nothing in the RFP that would indicate this. In fact, given the investment strategy and investment criteria were designed to focus on outputs, having a national reach might assist this but the fact that an organisation was a “peak body” in and of itself would not be a mandatory consideration.
[172] There is nothing to suggest this was a mandatory consideration in the public law sense. This ground is an invitation to consider the merits. This ground fails.
60 Philip A Joseph Joseph on Constitutional and Administrative Law (5th ed, Thompson Reuters Wellington, 2021) at 1009.
61 CREEDNZ Inc v Governor-General [1981] 1 NZLR 172 (CA) at 183.
62 New Zealand Fishing Industry Association Inc v Minister of Agriculture and Fisheries (1988) 1 NZLR 544 (CA) at 552 per Cooke P.
Conclusion
[173] As the Court of Appeal noted in Problem Gambling Foundation, an assessment process, such as in the present case, is intensely human. It is not appropriate for the court to focus on each stage of the process and substitute its own views for that of the decision-maker. In this case the RFP process was followed, and the recommendation made by the Chief Executive, as contemplated by the process, with a final decision being made by the Board. I have not identified any step which was defective, and the allegations taken together do not affect that assessment.
[174] In conclusion, in relation to the claims relating to the RFP process and the decision-making, standing back and looking at the claims as a whole, I do not consider there is any basis for the claims of improper interference by the staff such as to influence the outcome to the extent that the interference was unlawful at public law.
[175] I now turn to the grounds based on the legitimate expectation by Dance Aotearoa alleged to have come into existence due to the long-term funding arrangements.
II. Legitimate expectation
Long-term funding and relationship (third ground of review)
[176] Dance Aotearoa submits that because of its 26-year relationship with the Arts Council and its funding during those years it should have received early notice of its termination or more notice than it did receive.
[177] Briefing sessions had been held both on the new investment strategy formation and on the RFP. These were attended by Dance Aotearoa. The evidence is that Dance Aotearoa understood that the funding was to effect a significant change in focus. Existing providers were told there was no guarantee that incumbent providers would be awarded funding. This was specifically set out in the RFP.
[178] Questions from individual proposers were invited for a two-month period from the issue of the RFP to 26 April 2016. Only one point of contact was in place for all proposers. The emphasis was on the fact that proposers were required to put their
“best foot forward” and that an organisation would not be consulted about concerns on the proposal before the application was submitted nor during the assessment and decision-making process prior to the decision being made on the funding.
[179] The RFP made it clear that each proposal would be considered on its merits. The question and answers also said there would be no feedback on proposals until after the notifications as to funding had been released. The question and answer table noted that the assessments would be moderated internally by Creative NZ staff, but the final decision was made by the Arts Council.
[180] Dance Aotearoa says that it should have been put on notice, or consulted before the decision was made, that its proposal would not be accepted and so its funding would cease. It points to provisions in the RFP document which would have allowed the Arts Council to seek further information from it, given the Arts Council had queries about its proposal. For instance, in the “RFP process, terms and conditions”, under the heading “Creative New Zealand’s clarification” is a clause which allows Creative NZ at any time to request clarification of a proposal, as well as additional information, without obliging it to request the same clarification or information from each respondent. Similarly, under section 10, Creative NZ may, despite any other provision in the RFP, “liaise or negotiate with any respondent without disclosing this to or doing the same with any other respondent”.63
[181] These are permissive provisions. If Creative NZ had pointed out shortcomings in one proposal, or suggested to an organisation how it might fill gaps in the proposals made or provide other material in support of its application, without allowing all proposers to do the same, it would be in breach of its obligations to be fair.
[182] The fact that Creative NZ was permitted to do this, as a standard term of an RFP document, does not mean it had any obligation to do so. The fact that Dance Aotearoa had previously been funded by the Council would not justify such an approach on its own. The fact that all funding was to be contestable had been made clear by Creative NZ at the time the RFP was published. In addition, the RFP referred
63 Request for Proposals, above n 3, at 37.
to “transitional funding” for organisations required to “exit” the funding as a result of the proposals process.64
[183] A hope by Dance Aotearoa that it might be contacted to amend its proposal to fill in the gaps staff had identified in the proposals could not amount to a legitimate expectation in view of the clear messages during the consultation process and in the RFP itself that the proposals would be considered on their merit. Previous discussions referred to by Dance Aotearoa with Creative NZ staff gave rise to no basis for a legitimate expectation.
[184] The mere fact of the length of time of funding does not give rise to a legitimate expectation of consultation. In this case the explicit wording of the RFP and the messages from the Creative NZ staff doing the consultation on the RFP and in its responses to the questions on the accessible Q and A website forum reinforced those. The provision of transition funding was a recognition that an unsuccessful proposer needed time to either find other funding or reorganise its business. In those circumstances no legitimate expectation could arise of further notice or consultation.
[185] A related point taken by Dance Aotearoa was that there existed a protocol for Creative NZ to deal with organisations who were not meeting performance expectations under a funding agreement. This was called the “on notice policy”. It had been developed between 1998 and 2000. The form of policy which applied from 2016 onwards was before the court.65 A former chair of the Arts Council who had been involved in the development of an earlier policy in similar terms to that presently in place provided an affidavit saying that he considered it would be unfair for the Arts Council to cease funding an organisation that had been recurrently funded, without warning.
[186] Nevertheless, the active engagement and on notice policy had no application in this particular case. There was no suggestion that Dance Aotearoa’s performance under the previous funding agreement was such that it should have been put on notice in terms of that policy.
64 Request for Proposals, above n 3, at 13.
65 A copy of the earlier Policy was not produced.
[187]The legitimate expectation ground (third ground of review) fails.
[188] The next issue relates to a complaint lodged by Dance Aotearoa about the decision-making process. It alleges it was not properly dealt with in terms of the complaints process.
III. The complaints process
[189]The Creative NZ complaints process was referred to in the RFP as follows:66
8.Issues and complaints
·A Respondent may, in good faith, raise with Creative New Zealand any issue or complaint about the RFP, or the RFP process at any time.
·Creative New Zealand will consider and respond promptly and impartially to the Respondent's issue or complaint.
·Both Creative New Zealand and Respondent agree to act in good faith and use their best endeavours to resolve any issue or complaint that may arise in relation to the RFP.
·The fact that a Respondent has raised an issue or complaint is not to be used by Creative New Zealand to unfairly prejudice the Respondent's ongoing participation in the RFP process or future contract opportunities.
[190] A detailed complaints procedure is published on Creative NZ’s website. Dance Aotearoa submitted that process was applicable to its complaint. The published process required that the complaint in the first instance be directed to the staff member that had been dealing with the matter. Following that, a formal complaint could be submitted to the compliance officer.
[191] Step three was an independent complaints review. This provided that if the complainant was not satisfied with Creative NZ’s response the matter could be referred to the Ombudsman. Details of how to contact the Ombudsman and make a complaint were provided as part of the published complaints information.
66 Request for Proposals, above n 3, at 35.
[192] A section of the published complaints process was headed “Appeals Against Funding Decisions”. It read as follows:
Appeals against funding decisions
If your complaint is an appeal against a funding decision we've made, we can provide feedback about your application or proposal. We do not reconsider decisions where we have followed our decision-making process correctly.
If your complaint is an appeal about a Creative Communities Scheme funding decision, contact the administrative contacts for the Creative Communities Scheme
Other complaints
If your complaint is about:
·a funding policy, email the Chief Executive Stephen Wainwright at [email protected]
·a decision not to provide information or to charge for information, a government policy grievance, or an allegation of fraud, refer to the Office of the Ombudsmen website.
[193] Mr Tocher argued that the complaint made by Ms Lowe,67 on behalf of Dance Aotearoa, about the RFP process was not dealt with by Creative NZ in good faith nor did it use “best endeavours” to resolve it. He said these obligations were specifically incorporated in the complaints process in the RFP. He said this was an agreement that the parties would act in good faith and “use their best endeavours to resolve” the complaint in relation to the RFP.
[194] Mr Tocher said that the cases that had considered contractual obligations requiring parties to use “best endeavours to resolve” issues in “good faith” were analogous to those requirements in the complaints process.
[195] Mr Tocher said those obligations required Creative NZ to do more than it had done. The complaint raised on behalf of Dance Aotearoa outlined the concerns it had with the decision and in particular: the sudden and unexpected nature of the decision given the longstanding co-operative relationship; the inappropriate involvement of Creative NZ staff in the decision-making; the indication that Creative NZ would not
67 The Chief Executive of Dance Aotearoa.
review the decision; the inconsistency with Creative NZ’s statutory mandate to promote the arts sector and the inadequacy of the transitional funding.
[196] Dance Aotearoa lodged the complaint following a meeting with Mr Moynahan, Mr Wainwright, and a Creative NZ staff member on 5 August 2019.
[197]The response from the Chief Executive to the complaint noted:68
(a)The fact that the Arts Council had provided regular funding in the past was never a “lifelong guarantee”. The possibility that the proposal by Dance Aotearoa would not be successful was reflected in the RFP.
(b)The process as outlined in the RFP ensured the end result was based on the most robust understanding possible of the organisation and its proposal. Ultimately the funding decisions were made by the Arts Council and not Creative NZ staff.
(c)As set out in the RFP, Creative NZ would respond promptly and impartially but the matters raised by Dance Aotearoa in the complaint did not highlight any “flaws” in the decision-making.
(d)Dance Aotearoa was able to apply for other funding through Creative NZ.
(e)The offer of transitional funding had been an act of good faith. It would allow Dance Aotearoa the time and resources to consider different operating models.
68 The complaint was dated 13 September 2019. The response by Creative NZ was dated 27 September 2019.
[198] A further detailed response was provided by Creative NZ following an additional complaint made on 24 December 2019 concerning the staff involvement. The Creative NZ Chief Executive responded on 7 February 2020 concerning the role of the staff in the external assessment. He said:
(a)The staff were required to check for errors which were then brought to the attention of the external assessor. Further, they were to ensure the assessor provided adequate commentary and the scores matched the commentary.
(b)In the meeting of the panel the information provided by staff did not include recommendations regarding specific organisations such as Dance Aotearoa. It was not correct that “CNZ staff were contributing actively to the decision-making dynamics”.
(c)That the panel members consisted of arts sector peers, who were experienced and respected artists and practitioners, and who represented a range of artform, strategic, location, and other expertise.
(d)That the recommendation was made concerning funding, but the ultimate decision was made by the Arts Council after consideration of the proposal, the comments of the external assessors, external panel and Creative NZ’s recommendation.
(e)It was for an applicant for funding to ensure that its proposal was supported by evidence.
(f)Creative NZ considered it had responded as required in the terms of the RFP to the complaint.
[199] Mr Tocher argues that these responses dismissed Dance Aotearoa’s concerns out of hand. He pointed to comments in a paper to the Minister of Culture and Heritage, where the Ministry appeared to indicate it had received legal advice on some
vulnerabilities in relation to the Arts Council’s RFP process insofar as staff involvement was concerned.
[200] Mr Tocher pointed to principles developed in contract law where the concept of “best endeavours” had been examined.69 He said it had a well-established legal meaning requiring the party to do all they reasonably could in the circumstances. Mr Tocher submitted that this was not what happened in this complaint. He said that at the least the Board should have been advised of the complaint and Creative NZ should have met with Dance Aotearoa in an attempt to resolve the complaint. The complaints process did not incorporate those steps.
[201] However, a complaints process is quite a different process to a contractual conflict where the parties have agreed to negotiate in good faith using their best endeavours to resolve a dispute. The aim there is to negotiate an agreed resolution. In this complaints process the reference to “good faith” means not in “bad faith”. No allegations of bad faith have been raised, at least of the nature that would provide grounds for judicial review. The use of the words “best endeavours” does not require that Creative NZ negotiate an agreed resolution in the sense that the words are used in contract law. What was required of Creative NZ here was it would properly investigate the complaint in good faith. The complaint procedure is for handling complaints and does not indicate that the intent is to negotiate an agreed outcome, as is the intent of a “best endeavours clause” in a contract. Creative NZ did what was required to investigate and resolve the complaint in the circumstances.
[202] Creative NZ responded in detail to the complaints made about the process. The response indicates the Chief Executive had taken the time to investigate the complaint about the role of the staff and provide information on that.
[203] Dance Aotearoa refers to a paper obtained prepared by the Ministry of Culture and Heritage for the Minister concerning the Creative NZ process after Dance Aotearoa’s approach to the Minister following the Arts Council decision not to accept its proposal. It commented that the process could be vulnerable because of the staff involvement. It is not clear who was making the comments about the Creative NZ
69 Referring to Centaur Investments Co Ltd v Joker’s Wild Ltd (2004) NZCPR (HC).
process, nor whether Creative NZ was aware of those comments. But even if it were, when a process is being critiqued for a Minister, any possible legal grounds are likely to be highlighted whether those grounds are or are not of substance. The fact that the Ministry pointed out a possible vulnerability to the Minister does not lead to a conclusion that the complaint was not dealt with in good faith.
[204] The complaint process said that if the complaint was about a funding decision Creative NZ could provide feedback on the application but would not reconsider decisions where the decision-making process was followed correctly. The complaint was investigated, and the outcome was that no error in the process was found.
[205] If the complainant was not satisfied, it could seek an independent review with the Ombudsman. That would have been the appropriate next step for any complainant who was unsatisfied with the response of the complainant in this case.
Discretion to grant relief
[206] Mr Tocher also addressed me on the discretion to grant relief which he said should be exercised in favour of Dance Aotearoa if it established grounds. Ms Aldred, for the Arts Council, pointed out that the funding decisions were made by the Arts Council on 24 July 2019 and the decision was conveyed to Dance Aotearoa at a meeting on 5 August 2019. On 9 August Creative NZ provided Dance Aotearoa with a document entitled “Decision-Making Comments for Dance Aotearoa New Zealand”, which was the feedback on its application. From that date until it filed proceedings Mr Tocher said Dance Aotearoa was meeting with ministers, seeking Official Information Act documents and dealing with the effects of COVID-19 both on it and the dance sector. It commenced these proceedings on 18 December 2020. Mr Tocher submitted that it had not been sitting on its hands so delay would not count against it.
[207] In the circumstances, as the application fails on all grounds it is not necessary for me to consider the discretion to grant relief. Nevertheless, in this situation the fact that the funding round decisions were completed almost two years ago, means there has been substantial delay in bringing this application. While other avenues were being pursued which might explain a short delay it does not explain two years of delay.
That would have been a factor that weighed against the exercise of the discretion. Nevertheless, it is not necessary for me to finally determine that matter in the circumstances.
Conclusion
[208] Dance Aotearoa is an unsatisfied applicant for funding. Much of the argument related to the merits of the proposal. In the absence of any public law error, mistake, or other unlawfulness, the court will not enquire into the merits of a funding decision.
[209] For the reasons set out above the judicial review application is dismissed. In relation to the grounds pleaded:
(a)Ground 1: Failure to follow the process set out in the RFP: the Arts Council followed the process as required, not all steps taken by staff in the process needed to be explicitly laid out. It made no error.
(b)Ground 2: Failure to follow the complaints process: Creative NZ fulfilled its responsibilities in relation to responding to the complaint. It investigated appropriately and met the requirements of the complaints process.
(c)Ground 3: Failure to put Dance Aotearoa on notice of possible termination: Dance Aotearoa was expressly advised that it may not be successful in obtaining funding, despite the long-term nature of the funding relationship with Creative NZ. There is no basis for any legitimate expectation it would be consulted or notified other than actually occurred.
(d)Ground 4: The decision is not supported by the evidence: there was sufficient evidence upon which the Arts Council could make its decision.
(e)Ground 5: Failure to consider the Arts Council as a peak body: this was put forward as a mandatory consideration: it was not a mandatory
consideration. No basis for it to be a mandatory consideration was advanced. Dance Aotearoa was one of 84 proposers whose proposal was required to be assessed in terms of the RFP process.
(f)Ground 6: This related to false claims alleged to be made by Creative NZ in the Chief Executive’s Board recommendation in relation to Dance Aotearoa not being fit for purpose and similar comments: this was a general comment in the Board recommendation which was a summary for the Board. The comments of the panel were before the Board with an explanation as to why that comment was made.
(g)Ground 7: Misinterpretation of the panel’s findings which amounted to a mistake of fact: the panel’s recommendation was before the Arts Council: the Chief Executive’s recommendation was based on evidence. There was no mistake in the public law sense.
Costs
[210] Counsel agreed that 2B was the appropriate categorisation for costs and that costs should follow the event. The Arts Council is the successful party. Costs on a 2B basis are therefore awarded in favour of it, together with reasonable disbursements accordingly. I note that counsel for Dance Aotearoa indicated that the legal work in this matter had been carried out pro bono.
[211] If any matters arise in relation to the award of costs or otherwise, counsel have three days to file a memorandum.
Grice J
Solicitors:
Russell McVeagh, Wellington for the applicant. Crown Law, Wellington for the respondent.
Attachment 1
Attachment 2
See below for typed version
Extracts from Attachment 2 for Dance Aotearoa – typed version Programme: TOT
Organisation: DANZ Dance Aotearoa New Zealand
Total score /28: 18
Assessment Risks/Issues: !
Staff Analysis Risks/Issues: !
Artform: Dance
Programme Description: towards a programme of support services, skills development and sector engagement for the dance sector
Alignment to Tōtara: 1
Diversity + Reach (What area of practice?): Dance
Diversity + Reach (Where?): National
Diversity + Reach (For whom?): dancers, producers, writers
Diversity + Reach (National/International/Both):
Diversity + Reach:
Dynamic Arts (Investment that supports innovation in NZ arts practice): Experimental Dance Week
Dynamic Arts (Develop New Zealand arts in NZ & internationally (as applicable) National/International/Both):
Resilient (Building sector capability): Provide professional development, NZ Dance Film Archive
Resilient (Building organisational capability): Partner organisations; new Māori staff
Resilient (New models for value creation): aligning to Living Standards Framework
Priorities (Cultural Diversity):
Priorities (Māori-led org):
Priorities (Pasifika-led org):
Priorities (Regions):
Priorities (Youth):
0
3
0