Financial Services Complaints Ltd v Chief Ombudsman
[2017] NZHC 525
•22 March 2017
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2015-485-877 [2017] NZHC 525
BETWEEN FINANCIAL SERVICES COMPLAINTS
LIMITED Applicant
AND
CHIEF OMBUDSMAN Respondent
Hearing: 2 February 2017 Counsel:
K I Murray and C D Schreiber for Applicant
M T Scholtens QC and J B Watson for RespondentJudgment:
22 March 2017
JUDGMENT OF SIMON FRANCE J
Introduction
[1] The Financial Service Providers (Registration and Dispute Resolution) Act
2008 required all financial service providers to sign up with an approved dispute resolution service. Four such resolution services have been approved:
(a) Financial Services Complaints Limited (the plaintiff); (b) The Banking Ombudsman Scheme (emphasis added);
(c) The Insurance and Financial Services Ombudsman Scheme
(emphasis added); and
(d) Financial Disputes Resolution.
FINANCIAL SERVICES COMPLAINTS LTD v CHIEF OMBUDSMAN [2017] NZHC 525 [22 March 2017]
[2] The plaintiff applied to the Chief Ombudsman for permission to use the label “Ombudsman”, as two of its competitors are able to do. Section 28A of the Ombudsmen Act 1975 (the Act) prohibits use of the name “Ombudsman” unless authorised by statute or the Chief Ombudsman agrees. The Chief Ombudsman has declined Financial Services Complaints Limited’s application.
[3] Judicial review of that decision is now sought. It is submitted the Chief Ombudsman has misinterpreted the width and purpose of his discretion under s 28A of the Act, and has followed a policy that effectively forecloses any successful application.
Some background
[4] Originally there was no prohibition in the Act on other bodies using the term Ombudsman. Section 28A was added in 1991 at the request of the then Ombudsman, Sir John Robertson.1 It provides:
28A Protection of name
(1) No person, other than an Ombudsman appointed under this Act, may use the name “Ombudsman” in connection with any business, trade, or occupation or the provision of any service, whether for payment or otherwise, or hold himself, herself, or itself out to be an Ombudsman except pursuant to an Act or with the prior written consent of the Chief Ombudsman.
(2) Every person commits an offence and is liable on conviction to a fine not exceeding $1,000 who contravenes subsection (1).
[5] There have been three approvals since s 28A was enacted. Two are for the organisations already noted – the Banking Ombudsman Scheme (approved
2 April 1992) and the Insurance and Financial Services Ombudsman Scheme (approved February 1994). Both of these bodies existed well before the Financial Service Providers (Registration and Dispute Resolution) Act came into force. Since consent was given to those two bodies, and apart from one unique situation that
arose in 2011, no further consent has been issued. The plaintiff contends that given
1 Section 28A was inserted by s 3 of the Ombudsmen Amendment Act 1991. It appears the first Ombudsman, Sir Guy Powles, had unsuccessfully sought protection of the name around the time the Bill was enacted.
the strength of its unsuccessful application, it is plain no further consents will be given. This in turn points to an unlawful fettering of discretion.
[6] The unique situation that occurred in 2011 involved a New Zealand resident obtaining a position with a Californian based entity – the Internet Corporation for Assigned Names and Numbers. The relevant position in that organisation was labelled Ombudsman, and permission was given for the officer to use the term, albeit subject to strict conditions that emphasised the disassociation of the position with New Zealand. I do not consider this approval sheds any light on the likely exercise of the statutory discretion as regards use within New Zealand.
[7] For completeness it should be noted that although not a fresh approval, in
2015 what was formerly the Insurance and Savings Ombudsman Scheme was allowed to change its name to Insurance and Financial Services Ombudsman Scheme (ie “Savings” became “Financial Services”). The evidence suggests that this event sparked the plaintiff to make its application.
[8] The policy governing the giving of consent to use the name has changed over time. Sir John Robertson identified initial guidelines which focused on the structure and procedures that the applicant body would need to have, and which clearly contemplated approvals would be given.2 That is not to say overuse of the name was still not a consideration, but Sir John clearly anticipated some industry organisations would be able to use the term. However, Sir Brian Elwood, a subsequent
ombudsman, became concerned about potential proliferation of the name, and about the confusion he considered had arisen since the initial two approvals were given. Accordingly, Sir Brian engrafted onto the initial guidelines a public interest criteria which gave pre-eminent weight to protecting the Office of Parliamentary
Ombudsman from confusion stemming from proliferation of the name.3
2 John Robertson Protection of the Name “Ombudsman” (International Ombudsman Institute,
Occasional Paper 48, February 1993).
3 Brian Elwood Notice by the Chief Ombudsman concerning restrictions on the use of the name
“Ombudsman” (February 2002).
Present guidelines
[9] As part of his Report for the year ending 30 June 2001, Sir Brian Elwood
appended a “Special Report” which addressed the use of the name “Ombudsman”.4
He noted that in that year there had been five approaches to use of the name, one of which had carried on to becoming a formal application – namely a proposal to create an Electricity Ombudsman.
[10] The Report detailed what can be termed the structural and process features that are considered essential before an organisation can use the name. They cover matters such as independence, security of funding, and dispute resolution processes. Seven such criteria are listed. The Report then discussed the introduction of the
public interest criteria:5
Given the intent of s. 28A, the protection of the name “Ombudsman”, those criteria were to be considered having regard to the overriding question of whether, in the public interest, another Ombudsman institution should be created. Never before had there been so many approaches in such a short period to use the name. It therefore became necessary to focus finally more on the wider public interest associated with the use of the name than the application of specific criteria. I consulted the Officers of Parliament Select Committee and observed that was happening around the world where proliferation in the use of the name “Ombudsman” was occurring. …
Clearly Parliament intended that the name “Ombudsman” be protected. Although two private sector Ombudsmen associated with particular private sector industries have been approved, I think it is time to reflect upon whether or not there should be any extension in the use of the name “Ombudsman” to situations where the name is proposed to be associated with a consumer complaint resolution process. …
My experience with the requests to use the name Ombudsman in the year under review has caused me to focus more definitively upon the wisdom of permitting the name Ombudsman to be used outside of a Parliamentary or Public Sector context. In most countries where the name is used, it is applied to the particular circumstances of the Public Sector providing for an independent inquisitorial review of the administrative conduct of the agencies of Government. It is an Office of last resort, with powers of a Commission of Inquiry and the ability to report publicly to Parliament. It is a special and specialised process for righting the wrongs against individual citizens during the conduct of the administrative business of Government. …
4 Brian Elwood Report of the Ombudsman for the year ended 30 June 2001 at 27–32.
5 At 28–32, emphasis added.
The New Zealand Parliamentary Ombudsmen hold a special place in New Zealand’s constitutional arrangements. An Ombudsman is an Officer of Parliament appointed by the Governor General on the recommendation of Parliament and emphasises that all authority derives from Parliament itself. Parliament has given to the Ombudsmen some of the authority and power it would otherwise retain to investigate complaints about the administrative conduct of Executive Government and of government agencies. I have come to the view that the name “Ombudsman” should basically be protected to be used to achieve that purpose. Only on rare occasions when the public interest suggests that the name should be further or more widely used in a particular circumstance, should the name be used outside of the Parliamentary process or Public Service.
[11] This approach has continued since then. The guidelines have been reissued with largely the same content. However, the gate-keeping role of the public interest criteria has now been made clear:6
… the first consideration where any request for consent under section 28A of the Ombudsmen Act is made, would be to balance the public interest served by the establishment of an additional, non-parliamentary “Ombudsman” against the public interest in the non-proliferation of the name.
[12] The guidelines then continue:
Secondly
Where in a particular case the public interest that would be served in having an additional, non-parliamentary “Ombudsman” is seen by the Chief Ombudsman as greater than the need to limit the proliferation of the use of the name, the request for consent would be further considered against the following factors. …
Current decision
[13] Consistent with these guidelines, in relation to the present application the Chief Ombudsman, Judge Peter Boshier, addressed first the public interest.7 Several matters were noted, the first of which was the history of the Financial Service Providers (Registration and Dispute Resolution) Act. Judge Boshier noted there was nothing in the legislation or its history to suggest that a dispute resolution scheme
approved under it was to have the status and function of an Ombudsman.
6 Elwood, Notice, above n 3.
7 Letter from Judge P Boshier (Chief Ombudsman) to Susan Taylor and Ken Johnston (Financial
Services Complaints Limited) regarding the use of the word Ombudsman (17 June 2016).
[14] It is next noted that there are a number of consumer complaint mechanisms that operate apparently successfully without being called “Ombudsman”. Further, the label was not attached to a body such as the Independent Police Complaints Authority and indeed, since s 28A was enacted, Parliament has not attached the name to any other structure. Other examples of comparable bodies are the Inspector-General of Intelligence and Security, and the Judicial Conduct Commissioner.
[15] Turning then to the particular applicant, the Chief Ombudsman notes that despite its claimed competitive disadvantage, the organisation in fact is the largest of the three bodies in issue, having as many members as the others combined. The plaintiff had submitted it could do its job better if it had the label because there would be greater public awareness of its existence. The Chief Ombudsman noted, however, (in a later response) that the consumer in fact has no choice as to which
dispute resolution service is used.8 The consumer must use whatever scheme its
financial services provider has signed up to.
[16] In relation to the issue of confusion, the Chief Ombusdman considered there continued to be a risk of confusion with his office if another Ombudsman was recognised and within the financial services industry there would still be a fourth scheme that did not have the label (albeit a very small scheme). The Chief
Ombudsman’s conclusion was:9
Summary
In short, I am not persuaded that:
a.FSCL requires the use of the name to establish itself as having the necessary qualities displayed by other approved schemes under FSPRDR Act because two previously existing industry schemes had consent to use the name;
b.Publicly available information could mislead FSCL as to how requests for consent would be considered;
c. FSCL has been disadvantaged in any material way by its inability to
use the name “Ombudsman”.
8 Letter from Judge P Boshier (Chief Ombudsman) to Susan Taylor and Ken Johnston (Financial
Services Complaints Limited) regarding replying to further comment (15 July 2016).
9 Letter, above n 7, at 10–11.
I consider that:
a. the history of section 28A of the [Act];
b.the subsequent experience of Chief Ombudsmen of the use of the name “Ombudsman” in New Zealand by non-Parliamentary Ombudsmen; and
c.the likely impact on the public understanding and perception of using the name “Ombudsman” for a scheme specifically established for the purposes of the FSPRDR Act
mean that extending its use to FSCL is not only unnecessary, but would likely have similar detrimental effects to those previously experienced.
An unfavourable conclusion to the plaintiff having been reached, part two of the criteria was not considered.
Issues
[17] Financial Services Complaints Limited advances three main challenges. It is first said that s 28A has been misinterpreted: it does not allow the Chief Ombudsman to take any account of proliferation concerns, or to protect the office of the Parliamentary Ombudsman. It is solely about ensuring the label is attached only to appropriate bodies. The second challenge is that if proliferation is a relevant consideration, the policy is nevertheless unlawful because it represents, in practice, a prohibition on further use of the name. Or, if it is not in fact a complete ban, then the present application has been unreasonably declined because, in the plaintiff’s submission, it is difficult to envisage a better applicant.
Is the Chief Ombudsman’s policy consistent with the purpose of s 28A?
[18] It is well settled that the exercise of a discretion may be controlled by a policy, or guidelines governing its exercise. That policy, however, must not be inconsistent with the purpose of the statute conferring the discretion. The following passages from Unison Networks Ltd v Commerce Commission are sufficient to
illustrate the principle:10
10 Unison Networks Ltd v Commerce Commission [2007] NZSC 74, [2008] 1 NZLR 42, footnotes omitted.
[51] Public bodies must exercise their statutory powers in accordance with the statutes which confer them. If they make decisions that are outside the limits of their powers they abuse them. The courts control any misuse of public power through judicial review.
…
[53] A statutory power is subject to limits even if it is conferred in unqualified terms. Parliament must have intended that a broadly framed discretion should always be exercised to promote the policy and objects of the Act. These are ascertained from reading the Act as a whole. The exercise of the power will be invalid if the decision maker “so uses his discretion as to thwart or run counter to the policy and objects of the Act”. A power granted for a particular purpose must be used for that purpose but the pursuit of other purposes does not necessarily invalidate the exercise of public power. There will not be invalidity if the statutory purpose is being pursued and the statutory policy is not compromised by the other purpose.
[54] Ascertaining the purpose for which a power is given is an exercise in statutory interpretation which is not always straightforward. This is partly because legislative regimes differ in the specificity with which they grant powers. In this area the courts are concerned with identifying the legal limits of the power rather than assessing the merits of its exercise in any case. They must be careful to avoid crossing the line between those concepts.
[55] Often, as in this case, a public body, with expertise in the subject-matter, is given a broadly expressed power that is designed to achieve economic objectives which are themselves expansively expressed. In such instances Parliament generally contemplates that wide policy considerations will be taken into account in the exercise of the expert body’s powers. The courts in those circumstances are unlikely to intervene unless the body exercising the power has acted in bad faith, has materially misapplied the law, or has exercised the power in a way which cannot rationally be regarded as coming within the statutory purpose.
[19] The present situation is an example of where ascertaining the purpose of the power is not straightforward. The starting point is that there were no limits on the use of the word “Ombudsman”, but then by virtue of s 28A, enacted some 15 years after the Act first came into force, it became an offence to use the word. The only exceptions to this prohibition are where Parliament itself allocates the name to a statutory body, or where the Chief Ombudsman gives his or her consent. No guidance on when consent should be given was provided. It is left to the Chief Ombudsman to decide.
[20] It was quite a significant change to the landscape to go from unrestricted use to it being an offence to use the label, yet the legislative history itself provides very little assistance. However, other extrinsic material that is available shows that the legislative change was promoted by the Chief Ombudsman of the time, Sir John Robertson.11 There was what could be termed a lack of enthusiasm to the proposal from relevant departmental officials, but eventually the Ombudsman carried the day. Section 28A was included in a collection of miscellaneous amendments known as the Law Reform (Miscellaneous Provisions) Bill 1988.12
[21] The legislative history of the provision following introduction is quite murky. Counsel have not located an introduction copy, but it is known the provision reached the third reading before it stalled.13 Again, the extrinsic documentation shows this to have been because the Minister of Consumer Affairs belatedly raised objection to the provision.14 It seems nothing was then resolved before the 1990 election at which there was a change in Government.
[22] The provision next emerges in 1991, still at the third reading stage, and, as far as is known, unchanged in its text from what it had always been.15 The Hon David Caygill, a Minister in the former government, told the House that he thought the delay had been due to his Government having second thoughts about it.16
However, the provision was nevertheless enacted in 1991 with no other comment
relevant to these proceedings.
11 See, for example, letter from John Robertson (Chief Ombudsman) to Rt. Hon Geoffrey Palmer (Prime Minister) regarding use of the name Ombudsman (21 May 1987); and letter from John Robertson (Chief Ombudsman) to Rt. Hon Geoffrey Palmer (Prime Minister) regarding protection of the name Ombudsman (8 January 1988).
12 Law Reform (Miscellaneous Provisions) Bill 1988 (122–1), cl 152.
13 By that stage s 28A was included in the Ombudsmen Amendment Bill (No 3) 1989 (122–3Zi), cl 152.
14 Memorandum from Margaret Shields (Minister of Consumer Affairs) to the Chairman, Cabinet
Policy Committee regarding the Ombudsmen Amendment Bill (No 3) (4 December 1989).
15 Ombudsmen Amendment Bill (No 3), above n 13.
16 (28 November 1991) 521 NZPD 5739–5740.
[23] The best history of the matter comes from an Occasional Paper
Sir John Robertson wrote in 1993 for the International Ombudsman Institute.17
Sir John recorded that he first raised the need for statutory protection in 1985. He had by then become concerned about proliferation in overseas jurisdictions, and wished to avoid that occurring in New Zealand. He considered there was a risk of confusion if there were numerous bodies or persons using the label, and confidence in the integrity of the Parliamentary Ombudsman could be undermined.
[24] Sir John notes the enacted provision did not provide the blanket prohibition he had sought, and he linked this outcome to opposition from consumer authorities, including government sources and the Consumer Institute. He described the power to consent which he was given in these terms:
… This enables me (and my successors in office) to exercise control over the use of the term and to ensure, as far as possible, that it is not used in a way which would undermine the public’s understanding of the ombudsman concept or would create unnecessary confusion in the minds of the public.
[25] As has been noted, Sir John then drafted criteria which plainly envisaged there would be consents given, albeit in a controlled manner to bodies meeting carefully prescribed criteria. The article concludes:
While I have not achieved the total prohibition sought in the first place, the statutory power which I now have to control the use of the term “Ombudsman” is a practicable and sensible solution to the problems which I foresaw in 1985, at least insofar as New Zealand is concerned. We are a small country population-wise, where the Parliamentary Ombudsman is a well-established and, relatively speaking, well-known and understood concept. It was, therefore, important not to allow the positive influence which the office has been able to bring over the past thirty years, to the understandably at times contentious edge between the authority of the state and the rights of the citizen, to be diminished unnecessarily by the word “Ombudsman” becoming trivialized.
I think there is some magic in the name “Ombudsman” which needs to be
nurtured and protected in the public interest.
[26] The article is a helpful record of the history of the matter, and sets out the then Ombudsman’s approach to the power he is given by the provision. But that of course does not mean his is the only available approach, or that his policy necessarily represents the limits of the power. Those limits can only be determined by reference to the provision itself in its statutory context.
[27] The plaintiff’s proposition that proliferation is irrelevant is based on the use of the word “name” in the title to s 28A. Mr Murray submits that by labelling the section “Protection of Name”, Parliament was emphasising that it was not the Office of Parliamentary Ombudsman that was being protected, just the trivialisation of the name by attaching it to inappropriate bodies. It was therefore submitted that if an applicant meets the structure and process requirements (the second part of the current guidelines), approval must be given. Part one, the public interest inquiry, is said to be unlawful.
[28] This submission gives insufficient weight to the placement of the provision within the Ombudsmen Act, and to the status of the office holder on whom the power is conferred. The external material reveals that originally it was thought the provision could go into the Flags, Emblems and Name Protection Act 1991. Its ultimate placement in the Ombudsmen Act points to a much stronger connection to the office of the Ombudsmen than the plaintiff’s submission recognises. On its face an unfettered power to control use of the word is placed in the hands of the Chief Ombudsman, and there is no reason to conclude it cannot be used to protect the integrity of the very office the Act creates. The statute in question is the Ombudsmen Act, and as Unison emphasises, the power is to be exercised for the
purposes of that Act.18
[29] The features of the Ombudsman’s office, as established by the Act, are well known. Ombudsmen are appointed by the Governor-General on the recommendation of the House of Representatives.19 They may hold no other office, and special rules apply to their removal.20 Their salaries are secured without further appropriation than the Act, a device used only in a few situations such as the judiciary to ensure independence.21 The investigative functions are broad, and
protected by a privative clause.22
[30] All this serves to emphasise the significance of the Chief Ombudsman’s role, and its special place in the constitutional arrangements. Against that background, it would be incorrect to interpret a provision of the Act that protects the name Ombudsman as having nothing to do with protecting the office the Act establishes. I accordingly reject the proposition that it is not open to the Chief Ombudsman to consider the integrity of the office, and its reputation, and the avoidance of confusion, when exercising the s 28A power.
Is the present policy an unlawful fetter?
[31] Policies may be restrictive, so long as they are not inconsistent with the statutory purpose. In Practical Shooting Institute (New Zealand) Inc v Commissioner of Police, Tipping J identified from the authorities three categories of power, although himself doubting the reality of the third:23
The cases suggest that there are two, possibly three, categories into which discretionary powers of this kind can be put:
(1) First there are those powers which require an individual case by case examination without any predetermined fetter on the exercise of the discretion, other than what might be explicit or implicit in such criteria as may be set out in the enabling instrument.
19 Ombudsmen Act 1975, s 3.
20 Sections 4 and 6.
21 Section 9.
22 Section 13.
23 Practical Shooting Institute (New Zealand) Inc v Commissioner of Police [1992] 1 NZLR 709 (HC) at 718.
(2) Second there are those powers which by dint of the nature of the subject-matter justify the establishment as a matter of discretion of a carefully formulated policy, but always with the reservation that no case is to be rejected automatically because it does not fit the policy. In this category all cases must be considered to see if they are sufficiently special to warrant a departure from the general policy.
(3) The third category, if it exists at all, represents cases where the discretionary decision maker is implicitly authorised to exercise his discretion to establish for himself an immutable policy admitting of no exceptions.
[32] Mr Murray submits that the policy is a de facto example of the third category, and is unlawful because it is not authorised by the statute. Ms Scholtens QC contends the policy falls within the second category, and it is illustrated by the present case. It is a restrictive policy but it contemplates approval may be given, and the decision-maker has considered the present case against the policy, and on its own merits. No more is required.
[33] The policy here is written in a manner that contemplates the possibility of further consents. It is therefore quite different from that under discussion in Practical Shooting where the Commissioner advertised an inflexible ban on certain weapons. When a policy is appropriately worded, it is obviously a difficult task to reason from one decision declining consent to a proposition that consent will never be given. It is even harder to do when applications are infrequent.
[34] There are some considerations here that support the plaintiff’s contention. Most obviously, putting to one side the 2011 outlier, it has now been 23 years since a consent was given. Second, the present application arose within an industry area, financial services, where the only industry ombudsman operate. It could be argued that the risks of both confusion and proliferation of the label “Ombudsman” are at their lowest in this context.
[35] Third, the policy has become self-fulfilling. The Chief Ombudsman notes that many industry dispute resolution bodies have become established without using the name.24 But that is of course because they have had to since there have been no
consents. Relevant to this, the risks of proliferation and confusion that are cited by
24 Letter from Judge P Boshier, above n 7, at 9.
the Chief Ombudsman as illustrating the concern continue to be those raised by Sir Brian Elwood in 2001. These experiences are now 15 years old and it can be rhetorically asked how will that be tested if no consents are ever forthcoming?
[36] It was not argued on behalf of the Chief Ombudsman that s 28A was the type of power that enabled the decision maker to completely ban further use of the word. So, the Court must be satisfied that the policy genuinely allows for approval in an appropriate case. On its face it does, but I consider there is room for doubt in its effect. It cannot, however, be put higher than that and I do not consider the case has been made out to hold it unlawful for this reason.
[37] The Court has not been provided with any information about the number of applications since 2001, nor the detail of them. Without that information, an inference that consent will never be given can only be drawn from the content of the guidelines and the refusal in this particular case. For reasons to be discussed in the next section, the present application does not present so overwhelming a case so as to point to the conclusion the plaintiff seeks. Further, the guidelines on their face allow for exceptions, and accordingly this aspect of the review must be rejected.
[38] The decision maker, however, will need to remain alert to the fact that the Act, while conferring a broad discretion, did not effect a blanket prohibition. Further, there is a freedom of expression overlay to be borne in mind, although I do not doubt protection of the name is a reasonable limit. Nor in that regard do I consider that the policy, so long as it genuinely allows for exceptions, is an unreasonable limit or one that is ultra vires the power.
Was the decision to decline the application of Financial Services Complaints
Limited an unreasonable one?
[39] The factors Mr Murray relies on have been noted. The plaintiff is the largest provider within an area where there are two smaller providers already called Ombudsmen. Its processes have been approved under the Act and would comfortably meet the second part of the Chief Ombudsman’s guidelines. Financial Services is an area where there has been considerable public concern and damage, and an effective dispute resolution process is important. Anything that raises the
profile of the biggest scheme and thereby promotes use of such services must be seen as being in the public interest.
[40] These are valid points, but they were not overlooked by the Chief Ombudsman who decided the balance lay elsewhere. There was a case to say the proliferation concern is much less valid in the present unique circumstances (ie two other ombudsman services in the same area) but weight is a matter for the decision maker.
[41] However one frames this unreasonableness inquiry,25 I consider the plaintiff falls short of meeting that standard. A discretion is conferred on an officer holder of significant status who has properly considered the application. The reality is that the plaintiff has achieved considerable success without the label, and the proposition that it would encourage consumer use is not compelling given the lack of choice a consumer has in this industry. These were points made by the Chief Ombudsman and were open to him.
[42] This ground of review fails but before leaving it I address one other of Mr Murray’s challenges. He submits the decision is invalid because the Chief Ombudsman did not go on to consider whether the applicant met the second stage of the guidelines, namely the process and structural aspects an applicant must display. Mr Murray submits that when exercising a statutory duty, the decision maker is permitted to apply a policy but must always consider whether an exception is warranted in the particular case. Not considering the second part of the guidelines shows a closed mind to the possibility of an exception.
[43] There is no doubt that such a requirement exists, but it is not correctly called in aid here. The part of the policy the plaintiff fails is the public interest inquiry, stage one. Consideration needs to be given to whether, notwithstanding that, an exception to the policy should be made. If so, there would then need to be an assessment whether the step two criteria were met. However, Mr Murray could not
identify any factors supporting the case for an exception to part one that had not been
25 See the helpful discussion in Philip A Joseph Constitutional and Administrative Law in
New Zealand (4th ed, Brookers, Wellington, 2014) at 956–961.
considered by the Chief Ombudsman. That being so, there is no merit in the complaint.
[44] Further, it is doubtful that compliance with step two, however sound an applicant’s processes may be, would ever of itself provide a basis for an exception being made if the problem lies with step one. The process requirements of step two are not particularly unusual. For example, the Act here imposes its own procedural and structural obligations on bodies such as the Plaintiff in order for them to be approved under the Act. It is likely all bodies approved under the Act would comply with step two. The reality is that compliance with step two is likely to be a static factor present in the large majority if not all applications and for that reason will not provide a basis for being an exception o the guidelines.
Conclusion
[45] The application fails. The Chief Ombudsman’s policy is not inconsistent with the statutory purpose. Although it is legitimate to ask when a consent will ever be given under s 28A of the Act, the restrictive policy cannot be said at this point to have closed the door to any successful application in the future. The decision was not unreasonable.
[46] Costs memoranda can be filed if needed but this appears to be a case where costs should follow the event on a 2B basis.
Simon France J
3