Delamere v Attorney-General HC Auckland Civ 2008-404-1377
[2010] NZHC 188
•3 March 2010
IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
CIV 2008-404-1377
BETWEEN TUARIKI JOHN EDWARD DELAMERE
Plaintiff
ANDTHE ATTORNEY-GENERAL Defendant
Hearing: 25 February 2010
Counsel: B P Henry and G Church for Plaintifff
J Pike and V Casey for Defendant
Judgment: 3 March 2010
JUDGMENT OF HEATH J
This judgment was delivered by me on 3 March 2010 at 10am pursuant to Rule 11.5 of the High
Court Rules
Registrar/Deputy Registrar
Solicitors:
Dennis J Gates, PO Box 222, Whangaparaoa, Hibiscus Coast 0943
Crown Law, PO Box 2858, Wellington 6140
Counsel:B P Henry, PO Box 4070, Auckland 1140
DELAMERE V THE ATTORNEY-GENERAL HC AK CIV 2008-404-1377 3 March 2010
Introduction
[1] Mr Delamere is a former Minister of Immigration. In April 2000, after leaving Parliament, he commenced business as an immigration consultant. In that role he provides advice to potential immigrants, many from mainland China.
[2] Mr Delamere has issued proceedings against the Attorney-General based on the tort of misfeasance in public office. He alleges that six named employees of Immigration New Zealand engaged in conduct that was designed to cause harm both to himself personally and to his business interests.
[3] The Attorney-General applied to strike out the claim. Although discovery has not been completed, extensive disclosure has been made by the Crown under the Official Information Act 1982.
[4] In a judgment given on 14 August 2009, Associate Judge Christiansen struck out the claim holding that Mr Delamere’s contentions were untenable on five grounds:
a) Mr Delamere had no standing to sue in relation to decisions which remain valid and affect persons other than him. Applicants for immigration approvals adversely affected by the decisions had not (or had not successfully) sought review of them.
b)There is no identifiable person holding any public office sued in relation to abuse of that office.
c) The claim is barred by the proviso to s 6 of the Crown Proceedings
Act 1950.
d) Mr Delamere does not plead any special damage.
e) Damage to reputation per se is actionable by a pleading in defamation, and in no other case.
[5] Mr Delamere applies to review the Associate Judge’s decision.
Strike out application
[6] The law, on the circumstances in which a claim may be struck out without a trial, is settled. There is a high threshold. An applicant must demonstrate, on the assumption that each allegation in the Statement of Claim is capable of being proved
at trial, that the proceeding is clearly so untenable that it cannot proceed.[1]In a
developing area of the law, in which policy arguments might ultimately tip the balance, the Court should be slow to strike out a claim before trial.[2]
Review of Associate Judge’s decision
[1] See Takaro Properties Ltd (in rec) v Rowling [1978] 2 NZLR 314 (CA) and Attorney-General vPrince and Gardner [1998] 1 NZLR 262 (CA).
[2] Couch v Attorney-General (on appeal from Hobson v Attorney-General) [2008] 3 NZLR 725 (SC) at [43] (Elias CJ and Anderson J) and [130] (Blanchard, Tipping and McGrath JJ).
[7] Section 26P of the Judicature Act 1908 governs the circumstances in which a decision of an Associate Judge made in chambers may be reviewed by a Judge. Rule 2.3 of the High Court Rules provides more specific guidance on the approach to be taken. Rule 2.3(4) states:
2.3 Review of decision
...
(4) If the order or decision being reviewed was made following a defended hearing and is supported by documented reasons,—
(a) the review proceeds as a rehearing; and
(b) the Judge may, if he or she thinks it is in the interests of justice, rehear the whole or part of the evidence or receive further evidence.
[8] Judge Christiansen’s decision falls within the ambit of r 2.3(4)(a), requiring a full rehearing.
The nature of the claim
[9] As a result of a dialogue between us, Mr Henry, for Mr Delamere, was able
to articulate the structure of the claim more specifically than before the Associate Judge. I summarise its essence, leaving aside the precise form of the existing pleading:
a) The six named employees acted together, with malicious intent, by placing information on the AMS computer system (used by immigration officers) that wrongly alleged that Mr Delamere had deliberately provided false documents in support of applications for immigration approvals.
b)Based on the false information loaded and maintained by the six named employees, decision-makers (in respect of individual applications for immigration approvals) became innocent conduits in implementing the malicious purpose of the six named employees. That implementation resulted from decisions, adverse to the interests
of Mr Delamere’s clients, made in reliance on the false information contained in the AMS computer system.
c) The conduct of the six employees has caused damage to Mr
Delamere’s reputation and business interests.
[10] The present iteration of the claim is an Amended Statement of Claim, dated
15 May 2009. It alleges that the six named employees all held positions of public office and were obliged to discharge their functions without influence and with impartially. Precisely what “public office” was held by each is not altogether clear.
[11] I provide two examples of the alleged malicious conduct, taken from the pleading:
a) In 2002 Mr Delamere applied (unsuccessfully) for accreditation under the Provisions of the Work to Residence – Talent Visa Category.
Having received his application and accepted payment of the required fee, no accreditation was forthcoming because an officer of Immigration New Zealand (not one of the six named employees) was instructed neither to acknowledge nor to process the application.
b)A complaint was made to the Serious Fraud Office, that Mr Delamere had committed a series of frauds in respect of immigration applications, involving a company called Golden Harvest Ltd. That complaint led to criminal proceedings. Charges brought against Mr Delamere were resolved after a trial by jury in this Court, in March
2007, when he was acquitted on all charges.
[12] While particulars are given of specific applications with which Immigration New Zealand is said to have dealt, there are no primary facts pleaded from which an inference of malicious intent might reasonably be inferred. Rather, Mr Henry submitted that the inference could be drawn because the only explanation for the conduct alleged is that the six named employees acted collectively, with malicious intent, towards Mr Delamere.
[13] The claim is made in respect of reputational damages:
Damage
40.That the defendants’ conduct has caused the plaintiff loss in that it has damaged his reputation and generally brought him into disrepute.
41.That the defendants have caused the plaintiff general damage in the sum of $500,000.
[14] Mr Henry submits that reputational damage may be claimed under the tort whereas Mr Pike, for the Crown, contends that only specific damages arising out of
economic loss are properly claimable.[3]
Analysis
[3] Watkins v Secretary of State for the Home Department [2006] 2 All ER 353.
[15] Because Mr Henry formulated his claim before me somewhat differently than
it was explained to Judge Christiansen, there is no need to refer to the Associate
Judge’s reasons, other than in the briefest of terms.
[16] Misfeasance in public office is concerned with the abuse of public power. The tort is committed whenever a public officer, qua public officer, knowingly or recklessly acts either with malice towards another or in the knowledge that he or she
is acting unlawfully and is likely to injure the plaintiff. The tort necessarily involves
an element of bad faith: Garrett v Attorney-General,[4] Three Rivers District Council v
Bank of England (No 3)[5] and New Zealand Defence Force v Berryman.[6]
[4] [1997] 2 NZLR 332 (CA).
[5] [2001] 2 All ER 513 (HL).
[6] [2008] NZCA 392.
[17] Mr Pike, while indicating that the Crown reserved its position with regard to whether any of the six named employees held “public office” for the purposes of the tort, was content, for the purpose of this application, to accept that they were. The breadth of the concept of public office was something left open by the Court of
Appeal in Berryman.[7] Similarly, there is genuine debate about whether the tort is
[7] Ibid, at [63].
available only in respect of the purposes or purported purposes of public functions.[8]
See also Calvely v Chief Constable of the Merseyside Police[9] and Jones v Swansea
City Council.[10]
[8] Ibid, at [64].
[9] [1989] 1 All ER 1025 (HL) at 1031-1032.
[10] [1989] 3 All ER 162 (CA) (reversed on other grounds at [1990] 3 All ER 737 (HL).
[18] Nevertheless, I do not accept Mr Henry’s submission that the law is in a developing state and that Mr Delamere’s proceeding ought to proceed to trial on that basis. While there are aspects of the tort that remain ill defined,[11] there is no dispute
[11] See New Zealand Defence Force v Berryman [2008] NZCA 392, at [63] and [64].
about its essential elements. They were captured by Tipping J in Rawlinson v Rice.[12]
[12] [1997] 2 NZLR 651 (CA) at 661
I paraphrase the elements as follows:
a) The plaintiff has standing to sue.
b)The person alleged to have abused his or her office held and was acting in the course of a public office.
c) The alleged public official knew, or is presumed to have known (showed reckless indifference to whether) he or she was acting outside the limits of his power.
d)The alleged public official knew, or is presumed to have known (in the same sense as above) that his or her conduct was likely to harm the plaintiff, as an individual or as a member of a class.
e) The alleged public official’s conduct did in fact cause the plaintiff qualifying harm.
[19] In the way in which Mr Henry has reformulated the claim, the question of standing[13] falls away. If Mr Delamere could prove that the six named employees maliciously manipulated the decision-making of innocent adjudicators, he would have standing to sue.
[13] See para [4](a) above.
[20] In relation to questions of damage,[14] I would not be prepared to strike out the claim on that basis. While I accept, on the basis of Watkins v Home Secretary for the Home Department,[15] that special damage is required, it seems clear that such a claim could be formulated, namely an amount calculated by reference to the difference between projected profits for Mr Delamere’s business (at the time of the alleged malicious acts) and the actual profit derived from the business for the relevant period.
[14] See para [4](d) and (e) above.
[15] [2006] 2 All ER 353 (HL) [23-27] (Lord Bingham), [32] (Lord Hope), [62-66] (Lord Rodger) and [73 and 76] (Lord Walker).
[21] Given that the alleged acts are said to have been designed to destroy
Mr Delamere’s business reputation, it is difficult to see how loss of personal reputation can be distinguished, in real terms, from economic loss suffered by the
business. Because the actual damage alleged could be specifically pleaded, time to
re-plead would ordinarily be given if that were the sole ground on which strike-out was to be allowed.
[22] A claim for misfeasance in public office is directed to the office holder, not the Attorney-General as representative of the Crown. For that reason, Courts have drawn a distinction between an (illegitimate) institutional claim made against the Crown and (a legitimate) one directed to specific acts of a public official. Mr Pike submitted that the claim fell into the former category, even as re-formulated during the course of the hearing.
[23] The need to distinguish between an individual claim against a public officer and an institutional claim against the Crown arises out of the proviso to s 6(1) of the Crown Proceedings Act 1950. That provides:
6 Liability of the Crown in tort
(1) Subject to the provisions of this Act and any other Act, the Crown shall
be subject to all those liabilities in tort to which, if it were a private person of full age and capacity, it would be subject—
(a) In respect of torts committed by its servants or agents;
(b) In respect of any breach of those duties which a person owes to his servants or agents at common law by reason of being their employer; and
(c) In respect of any breach of the duties attaching at common law
to the ownership, occupation, possession, or control of property:
Provided that no proceedings shall lie against the Crown by virtue of paragraph (a) of this subsection in respect of any act or omission of a servant
or agent of the Crown unless the act or omission would apart from the provisions of this Act have given rise to a cause of action in tort against that servant or agent or his estate.
[24] The 1950 Act was based on the Crown Proceedings Act 1947 (UK). The scope of the 1947 Act was discussed in Chagos Islanders v Attorney-General.[16]
[16] [2004] EWCA Civ 997 at [20, 26 and 27].
Delivering the judgment of the Court of Appeal, Sedley LJ explained the nature of
the Crown’s liability, in the context of a claim based on the tort of misfeasance in public office:
20.... the English common law has no knowledge of the state. Public law recognises the Crown as the repository of a range of prerogative and statutory powers. By the prerogative writs and orders, it has for centuries called ministers to account if they abuse the latter, and in recent years if they misuse the former. But the State has no tortious liability at common law for wrongs done by its servants, from ministers down. In England at least (Scottish law has historically differed) either the Crown's servants are personally liable or there is no redress. It was to change this anomalous situation that the Crown Proceedings Act 1947 was passed. But the 1947 Act does not work by making the state a potential tortfeasor: it works by making the Crown vicariously liable for the torts of its servants. It has only been with the enactment of the Human Rights Act 1998 that the Crown, in the form of a 'public authority', has acquired a primary liability for violating certain rights. Where, of course, a limb of the state has corporate legal personality – a local authority, for example, or the Bank of England – no such problem arises; but this is not such a case.
...
Misfeasance in public office
26.[Counsel's] principal contention, here too, has been that the state can be institutionally liable. But the same fundamental problem arises: the state is not a potential tortfeasor. The nature of misfeasance in public office is tailored to this fact: it is concerned with individuals who consciously abuse powers entrusted to them by the state and do so knowing that it may well harm someone: see Three Rivers DC v Bank of England (No 3),[17] per Lord Steyn at page 191.
[17] [2003] 2 AC 1 (HL).
27.[Counsel]founds upon what Lord Hutton said at paragraph 126 of his speech on the application to strike out the claims against the Bank of England: "It is clear from the authorities that a plaintiff can allege misfeasance in public office against a body such as a local authority or a government ministry: see Dunlop v Woollahra Municipal Council[18] and Bourgoin SA v Ministry of Agriculture, Fisheries and Food.[19]" But Dunlop self-evidently concerned a local corporation. The claim against the nominated department of state in Bourgoin[20] depended on proof that "the minister's motive was to further the interests of English turkey producers by keeping out the produce of French turkey producers – an act which must necessarily injure them" (per Oliver LJ at 777). In other words, if the necessary knowledge and motive could be brought home to the minister, the Crown in the nominal form of MAFF (pursuant to the list of authorised departments published under s.17 of the Crown
Proceedings Act 1947) would be vicariously liable. It is in that sense that Lord Hutton was speaking of departmental liability for misfeasance in public office.
[18] [1982] AC 158 (PC).
[19] [1986] QB 716 (CA).
[20] Bourgoin SA v Ministry of Agriculture, Fisheries and Food [1986] QB 716 (CA).
[25] Mr Henry rejects the notion that Mr Delamere’s claim is institutional in nature. He submits that it is directed specifically at the six named employees. The foundation for that submission is that the decisions involving specific applications
for immigration approvals could not be explained without reference to malicious acts
on the part of those six people.[21] On the other hand, Mr Pike’s contention is that the Amended Statement of Claim itself and the thrust of its content are all directed to acts or omissions of “Immigration New Zealand” (as “the Crown”), as opposed to the six named employees.
[21] See para [9] above.
[26] The proceeding is brought against the Attorney-General, not the six named employees. The claim is replete with reference to “Immigration New Zealand” and, despite Mr Henry’s urgings to the contrary, I consider that the claim is one based on institutional liability.
[27] Although there has been disclosure under the Official Information Act, there
is no specific pleading linking particular acts of any of the six named employees to the type of malicious conduct alleged to have led to decision-makers acting contrary
to the interests of Mr Delamere’s clients by relying on false information placed on the computer system. While Mr Henry (understandably) rejected this label, he is effectively alleging that the six named employees reached an agreement to act maliciously and do harm to Mr Delamere’s business interests; in effect, that they conspired to do economic harm to him. In substance, the allegation is institutional in nature. The proviso to s 6 of the Crown Proceedings Act 1950 therefore prevents a claim for misfeasance in public office against the Attorney-General.
[28] In my view, the propositions set out by Sedley LJ in Chagos Islanders v Attorney-General[22] are applicable in New Zealand. The absence of any pleaded foundation for the primary allegations of misfeasance against the named employees means that the claim must be struck out.
Result
[22] [2004] EWCA Civ 9097 at paras 20, 26 and 27.
[29] I agree with the order made by Judge Christiansen. The application for review is dismissed and the claim stands struck out.
[30] Costs are awarded in favour of the Attorney-General against Mr Delamere on
a 2B basis, together with disbursements. Both costs and disbursements shall be fixed
by the Registrar.
P R Heath J
Delivered at 10am on 3 March 2010
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