Parker v Legal Services Commissioner

[2015] NZHC 524

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2013-485-1650 [2015] NZHC 524

UNDER	the Legal Services Act 2011
IN THE MATTER	of an appeal from a decision of the Legal Aid Tribunal dated 28 May 2013
BETWEEN	JONATHAN EDWARD PARKER Appellant
AND	THE LEGAL SERVICES COMMISSIONER Respondent

CIV-2014-485-3986

UNDER  the Legal Services Act 2011

IN THE MATTER             of an appeal under s 59 of the Legal Services Act 2011 and Part 20 of the High Court Rules

BETWEEN  THE LEGAL SERVICES COMMISSIONER Appellant

ANDJONATHAN EDWARD PARKER Respondent

Hearing:	26-27 November 2014
Counsel:	S Cooper and A Hill for J Parker F Cooke QC for Legal Services Commissioner
Judgment:	26 March 2015

JUDGMENT OF GODDARD J

This judgment was delivered by me on 26 March 2015 at 4.00 pm, pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

JONATHAN EDWARD PARKER v THE LEGAL SERVICES COMMISSIONER [2015] NZHC 524 [26 March

2015]

Introduction

[1]      Before  the  Court  are  two  appeals  concerning  Mr  Parker  and  the  Legal Services Commissioner (the Commissioner).  Both arise from a protracted series of events following Mr Parker’s dismissal in 2007 from his employment at Silver Fern Farms Ltd (Silver Fern), a freezing company.

[2]      There has been an extensive background of litigation leading to the appeals, involving a large number of applications, decisions, reconsiderations and appeals which are detailed in a chronology below.   Complicating this to some extent has been a dearth of information about responsibility for apparent delays in prosecuting Mr Parker’s application for legal aid. An affidavit sworn by Ms Finlayson of Cooper Legal and produced at the commencement of these appeal hearings has now elucidated on these delays and where responsibility for them is said to lie.   It is unnecessary to go into the detail except to state that the greatest period of delay is identified as having occurred between February and 11 September 2009 and is said

to have largely been Mr Parker’s responsibility.1

[3]      Both appeals are against decisions issued by the Legal Aid Tribunal (the Tribunal).   The first concerns a decision of the Tribunal given on 28 May 2013 upholding a decision by the Commissioner to decline an application to write-off a legal aid debt incurred by Mr Parker.  The second is an appeal by the Commissioner against a decision of the Tribunal given on 12 March 2014, reversing a decision by the Commissioner to decline legal aid to Mr Parker.

The employment dispute and initial proceedings

[4]      In October 2007, a private investigator retained by Silver Fern searched a number of vehicles belonging to Silver Fern’s employees.  Cannabis was allegedly found in Mr Parker’s vehicle. As a consequence, he was asked to remain on site and meet with management and was advised by a union representative that he should do

so.  Notwithstanding, Mr Parker left the premises and failed return to work for five weeks. In due course he furnished a medical certificate to explain his absence.

[5]      The  legality of  the  search  is  an  unresolved  matter  about  which  there  is relatively little information before the Court.

[6]      As a condition of Mr Parker’s return to work, Silver Fern required him to undergo a drug test.  He refused to do so and claimed that the company’s own drug and alcohol policy precluded it from making this a condition of his return.  He was dismissed on 10 December 2007 and subsequently brought a claim for unjustified dismissal against Silver Fern.

[7]      On 7 November 2008, his claim for unjustified dismissal was dismissed by the Employment Relations Authority (ERA).2    Mr Parker decided to appeal to the Employment Court.   The time period for lodging an appeal was 28 days.   The necessary documentation comprised a copy of the ERA’s determination and a statement of claim.3  The last day for filing the appeal was 8 December 2008.

[8]      Mr Parker’s  advocate before  the  ERA,  Ms  G,  assisted  him  in  finding  a

lawyer, Mr C, who was instructed and accepted a retainer to act.

[9]      On 14 November 2008, Mr Parker signed a legal aid application for his anticipated appeal to the Employment Court.

[10]     On 3 December 2008, his legal aid application was received by the Legal Services Agency (the Agency).  The covering letter noted that only two days of the appeal period remained.

[11]     On 7 December 2008, the day before the appeal documents were to be filed in the Employment Court, Mr Parker contacted his advocate and advised her that he had the appropriate filing fee.   However, Mr Parker says he was advised by his advocate that she had been advised by Mr C not to file the appeal documents until

the Agency had responded to the legal aid application.

2      Parker v Silver Fern Farms Ltd ERA Wellington WA148/08, 7 November 2008.

3      Employment Relations Act 2000, s 179(2).

[12]      On 6 January 2009, the Agency declined legal aid on the basis that the appeal had no prospect of success.  Mr C then advised Mr Parker that he could not proceed to represent him without proper funding.  While Mr C had already prepared a basic statement of claim, more work was apparently required.  Mr Parker sought Ms G’s  assistance  once  again  to  help  him  locate  another  lawyer,  which  proved difficult given the time of year.  Lawyers were approached but none were prepared to work without a guarantee of payment.

[13]     Eventually, in April 2009, Mr Parker obtained the services of Mr A who agreed to act for him, provided that legal aid was granted.  On 27 April 2009 Mr A applied to the Agency for reconsideration of its decision to decline Mr Parker legal aid and drafted a second statement of claim for the proposed appeal to the Employment  Court.  He  also  submitted  it  to  the Agency  for  the  purposes  of  a reconsideration of a grant of aid.

[14]     On 5 June 2009, the Agency declined legal aid for a second time, on the basis that Mr Parker was unlikely to succeed in the Employment Court.  The Agency also raised the issue of contributory conduct on Mr Parker’s part relevant to his dismissal, which would reduce the available remedies.  On that basis the case did not appear economic; and there had been considerable delay in filing the documents.

[15]     On 16 June 2009, Mr Parker wrote to the Legal Aid Review Panel (the Panel) the predecessor body to the Legal Aid Tribunal), expressing his disappointment at the Agency’s decision.  He filed an appeal with the LARP, acting on his own behalf.

[16]     On 29 June 2009, the Panel requested copies of Mr Parker’s employment agreement and of Silver Fern’s drug and alcohol policy.

[17]     On 2 September 2009, the Panel issued its decision, reversing the Agency’s decision and granting legal aid to Mr Parker to make an application to the Employment Court for leave to challenge the ERA’s determination out of time.4

Mr Parker then advised Mr A of this on 7 September.

[18]     On 10 or 11 September 2009, the appeal was filed in the Employment Court, some nine months out of time, together with an application for leave to appeal out of time.

[19]     On 16 November 2009 the application for leave to appeal out of time was heard by Chief Judge Colgan. It was declined on 18 November 2009.5   Inter alia the Judge found that while Mr Parker had a substantially arguable case concerning Silver Fern’s policy to demand a negative drug test as a condition of his returning to work; and there was genuine dispute about the interpretation of Silver Fern’s drug testing policy; and the case was, on its merits, finely balanced; the delay had been long and unexplained and it was unjust for Silver Fern to have to defend a challenge after such a  delay.    The  Judge  also  noted  significant  disentitling  contributory  conduct  by

Mr Parker which would significantly reduce any monetary remedy.  He observed that Mr Parker could be compensated adequately “if those responsible for these gross, largely unexplained and inexcusable delays, were negligent”.

[20]     Mr Parker subsequently filed two applications in the Court of Appeal.  The applications were heard together by the Court of Appeal.

[21]     The first application was for leave to appeal on a question of law arising from Judge Colgan’s decision of 18 November 2009.   The points of law advanced in support were that:

(a)     A significant error of fact has been made by the Court (no adequate explanation for delay, and wrongful attribution to solicitors) such that no reasonable decision maker should have reached a conclusion – this amounting to a point of law, because the conclusion could not reasonably have been entertained.

(b)    Alternatively, the Court proceeded on the basis of an incorrect appreciation of principle, as to the duties owed by a solicitor/advocate to a client applying for legal aid, amounting to a point of law.

(c)     A breach of the principles of natural justice occurred, in that the Court did not make it clear it was contemplating there was a potential negligence claim involving Counsel as being a determinative point – a point not raised by Counsel for the Respondent, and not flagged by the Judge either.   Such a breach of the principles of natural justice constitutes an error of law.

[22]     The second application was for judicial review, to be heard in conjunction with the application for leave to appeal and contingent upon its success.  The basis for both applications was the same.

[23]     The Court of Appeal heard the applications on 20 April 2010 and dismissed them on 28 May 2010,6 finding the following in relation to the application for leave to appeal against Judge Colgan’s refusal to grant leave to appeal:

[19]     In relation to the first of the proposed questions, we accept that an error of law may arise where a fact-finder makes factual findings that have no basis in the evidence.7   But we do not consider that any such error arose in the present case.  The delay was lengthy, around nine months.  The public interest in finality was engaged, albeit that this was not determinative.  The explanation for the delay was that legal aid was not finally granted until September 2009.  The Judge considered the circumstances of that, as he was obliged to do.  He did not accept that the explanation was adequate.  Without going into the merits of that conclusion, we do not consider that it raises a question of law, there being some basis in the facts for it.

[20]     Moreover, we consider that in this context Chief Judge Colgan was entitled  to  take  account  of  the  fact  that,  if  Mr Parker’s  challenge  had succeeded, the amount  awarded  would  have  been reduced  to  reflect  his disentitling conduct in leaving his employer’s premises despite being asked to stay and despite the union official’s advice that he should stay.

[24]     The following further point was made by the Court in relation to the second and  third purported  points  of  law in the context of the separate but contingent judicial review application:8

…  these  issues  are  raised  in  the  judicial  review  proceedings,  so  that Mr Parker will have the opportunity to air his concerns even if the appeal does not proceed.

While we will not express a concluded view given the scope of the judicial review proceedings, we record that there is an issue as to whether there is a factual basis for the proposed questions.  It will no doubt be argued that he merely flagged the possibility and suggested that Mr Parker may be entitled to recover something from them, which is a common enough suggestion in situations where timeframes have expired as a result of apparent inactivity on the part of legal advisers.   We see no proper basis for allowing these matters to be aired in an appeal setting as well.

6      Parker v Silver Fern Farms Ltd [2010] NZCA 218.

7      Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 at [26].

8      Parker v Silver Fern Farms Ltd, above n 6, at [21](b) and (c).

[25]     The application for judicial review of the Employment Court’s decision was considered on 27 May 2011 and on 8 November 2011 the Court found no jurisdiction in respect of this proceeding.9   The Court noted that applications for judicial review in respect of proceedings before the Employment Court are brought in the Court of Appeal and the Court’s decision on such an application is final and conclusive.

[26]     The Court  then  went  on  to  state that,  following the hearing,  the  Judges became aware of s 193 of the Employment Relations Act 2000 and ultimately found no jurisdiction in respect of alleged breach of natural justice or mere error of law. Errors of those kinds were susceptible to correction in the Court of Appeal, but only if the errors met the standard appeal criteria.

The  appeal  against  the  Commissioner’s  refusal  to  write-off  the  legal  debt arising

[27]     This appeal concerns a decision of the Legal Aid Tribunal (the Tribunal) to uphold the Commissioner’s decision not to write-off the legal aid debt incurred by Mr Parker.  Mr Parker contended the particular circumstances of his case warranted a write-off, but the Commissioner found otherwise, and the Tribunal found no error with the Commissioner’s decision.

The debt arising

[28]     On 27 February 2012, the Commissioner, who had replaced the Agency as the decision-making entity, advised Mr Parker that the final cost of the proceedings to his office was $9,468.10.   The final repayment was set at that amount, plus registration costs for the charge.

[29]     On 6 July 2012, Mr Parker was advised by the Commissioner that the process of obtaining a statutory land charge over his property had commenced.

[30]     On  24  July  2012,  Mr  Parker  completed  a  form  requesting  that  the

Commissioner write-off the legal aid debt, and exempting his property from the charge.  An accompanying letter was sent with the form, pointing to the delay in the

9      Parker v Silver Fern Farms Ltd [2011] NZCA 564, [2012] 1 NZLR 256.

grant of aid (which it was contended had been fatal to the Employment Court appeal despite the merits of an arguable case).   It was said Mr Parker had no redress to challenge his unfair dismissal and had been rendered unemployable.

The Commissioner’s decisions

[31]     On 16 January 2013, the Commissioner declined the request to write-off the legal aid debt, on the grounds it would cause Mr Parker no substantial hardship, given its nature as a statutory land charge.10    The Commissioner observed the debt was small; it did not bear interest; and it would not be payable until the property was sold, transferred or encumbered.  Furthermore, it would not be “just and equitable” to permit the write-off because the debt was not “disproportionately high”.

[32]    In reaching this decision, the Commissioner had regard to the financial information on file; the submissions in support of reconsideration; the nature, cost and outcome of the case; the fact that Mr Parker had been effectively represented as a result of the publicly funded legal aid scheme; a presumption of full repayment in a grant of legal aid; that the debt appeared small compared to the value of Mr Parker’s property; that the cost of the case was not unusually high in the circumstances; taking into account matters of justice and equity; and on the basis that the write-off process could not be used as de facto litigation or as a de facto appeal.

[33]     On   10   February   2013,   Mr   Parker   sought   a   reconsideration   of   the

Commissioner’s decision.

[34]     On 19 March 2013, the Commissioner confirmed his original decision on essentially the same grounds as in his 16 January 2013 decision, although more fully stated.11

The Decision of the Tribunal

[35]     On 28 May 2013, the Tribunal confirmed the Commissioner’s refusal  to write-off the debt on 19 March 2013,12  finding Mr Parker had not established any grounds  for  a  write-off;  and  that  the  decision  of  the  Commissioner  was  not manifestly unreasonable or wrong in law.

[36]     The Tribunal noted that legal aid is a loan; accordingly there is a presumption that the debt will be paid in full.13     It recorded Mr Parker’s lack of success in challenging his dismissal before the Employment Relations Authority (on the merits of the case); and in the Employment Court (because of delays), and in the Court of Appeal (because of a lack of jurisdiction).   Whilst noting Chief Judge Colgan’s observation  that  Mr  Parker  had  a  “substantial  arguable  case”,  the  Tribunal

emphasised this was merely an observation, and that it would be speculative to make findings on what the outcome of any substantive hearing in the Employment Court might have been, had leave to appeal been granted.   The question of “significant disentitling contributory conduct” by Mr Parker was also referred to.

[37]     The Tribunal found Mr Parker had not established serious hardship; that he clearly had an interest in residential property, given that a charge over it had been obtained; that, although he said he was unemployed, no financial information had been put before the Tribunal to show hardship to the extent that he could no longer meet minimum living expenses according to normal community standards; that he had not disclosed his income to the Tribunal; and that, in any event, the debt was not presently payable.

[38]     Nor, the Tribunal further found, had Mr Parker established the “just and equitable” ground.   While he may well regard himself as unlucky, given the Employment Court’s observation of a potentially arguable case, unsuccessful proceedings did not of themselves render the payment of a legal aid debt unjust. Mr Parker was not free of blame for his predicament and, given the circumstances of

his dismissal, the difficulty he now faced in obtaining employment and the injury caused to his reputation were unsurprising.

[39]     The Tribunal further noted that Mr Parker had failed to show any conduct on the part of either the Agency or Commissioner to render a write-off just or equitable. The debt was small – approximately $10,000 – and therefore observed to be modest in comparison with the stated value of his property.  He would not be required to pay the debt until the property was sold, transferred or encumbered; and in the interim the charge would not bear interest.

[40]     Overall, the Tribunal concluded that Mr Parker had not established any of the grounds required for a write-off; and the decision of the Commissioner was not manifestly unreasonable or wrong in law.   Thus the Commissioner’s decision was confirmed.

The argument on appeal

[41]     Eight separate grounds were advanced in support of the appeal.  The majority of those grounds allege that the Tribunal took into account or gave undue weight to irrelevant considerations.

[42]     The first ground concerns the reference to “significant disentitling conduct” in the Tribunal’s decision.  Mr Parker’s complaint under this head is that an accurate assessment of his behaviour during the dismissal process is central to his complaint about the findings of the ERA.   There has been no facts based assessment.   The Employment Court made no finding about his conduct but simply referred to it in the context of remedies, had leave to appeal out of time been granted.  Thus the Tribunal was in error in placing weight on this factor.

[43]     The  second  concerns  the  assumption  that  Mr  Parker  should  be  seeking redress from his previous counsel for any negligent delays.  The argument on behalf of Mr Parker is that he is entitled to choose his defendant and thus choose the Commissioner as defendant in his civil claim of negligence, rather than his previous lawyers.  It was argued that as no negligence proceedings have been brought against counsel,  and  in  the  absence  of  such  findings,  all  comments  on  the  topic  are

speculative.  Thus, it is contended, the Tribunal breached natural justice by relying on an assumption of counsel’s negligence in declining to write-off Mr Parker’s legal aid debt.

[44]     The  third  concern  involves  factors  relevant  to  the  “just  and  equitable” ground.  The argument here is that the Tribunal placed undue weight on the size of the debt in comparison to the value of Mr Parker’s property; and did not balance these factors against submissions as to his financial circumstances.  In particular, the fact that he is unemployed required the Tribunal to assess the debt on the basis of his obligations and income. As this information was not before the Tribunal, it could not determine the size of the debt relative to Mr Parker’s financial situation and thus it was not open to the Tribunal to assess the debt as “modest”.

[45]     The fourth concern was directed to access to justice.  The submission here was that the Tribunal had erred in placing weight on the fact of a hearing before the Court of Appeal and that this had necessarily afforded justice.   It was argued that access to justice had not occurred merely because the issues had been aired in a number of fora.

[46]     The  fifth  concern  was  Mr  Parker’s  alleged  loss  of  opportunity.    It  was submitted that the Tribunal had not taken into account that the delay in granting aid had significantly contributed to the chain of events that led to the legal aid debt being accumulated in the first place.  It was contended that a de novo hearing on appeal in the Employment Court could have succeeded, had legal aid been granted in a timely manner.

[47]     The sixth concern related to natural justice and due process issues.   It was contended that the Tribunal’s decision was wrong in law because it failed to take into account the natural justice issues raised by the aforementioned points.  It was further contended that the Tribunal had failed to consider the delay of six months between the application for a write-off and the Commissioner’s decision to decline this.

[48]     The seventh concern related to the allegedly incorrect basis on which the

Commissioner’s decision was reached.   It was submitted that the Commissioner

incorrectly noted there was an absence of explanation for the appellant’s failure to lodge an appeal while the decision whether to grant aid was under consideration; and the Tribunal had failed to draw attention to this.  It was further contended that the Tribunal had also misunderstood the Court of Appeal decisions, because it did not appear to have requested or reviewed them.

[49]     The eighth concern was directed to an alleged excess of jurisdiction.  It was submitted that the Tribunal’s findings had gone beyond a review of the Commissioner’s decisions and amounted to a substantive assessment of the merits of Mr Parker’s actions and his financial situation, and were also speculative as to the outcome  of  the  Employment  Court  proceedings.    Therefore  the  Tribunal  had exceeded its jurisdiction.

Respondent’s submissions

[50]     The respondent’s submissions were brief, simply noting there is nothing to suggest the Commissioner, or subsequently the Tribunal, failed to take into account any relevant matter Mr Parker offered in support of his application; or took into account any irrelevant matters.  Mr Cooke said none of the criticisms demonstrate the decision was wrong in law.  Rather, they merely constitute an attempt to have the High Court substitute its decision for that of the Tribunal.  Specifically, Mr Cooke submitted, the Tribunal was not wrong to take into account the appellant’s conduct. His behaviour was relevant to his failure before the ERA and to his failure to obtain leave to appeal out of time from the Employment Court.  His conduct formed part of the overall circumstances of the case and was therefore part of the factual matrix to which the Tribunal needed to have regard.

[51]     Secondly, Mr Cooke pointed out that the Tribunal had not accorded weight to any question about Mr Parker’s previous counsel but had merely mentioned it in passing.   In any event, such information formed part of the circumstances of the case.

[52]     Thirdly, there was nothing to suggest the Court of Appeal proceedings had

played any part in the Tribunal’s conclusions.

[53]     Fourthly, the Tribunal had taken into account Mr Parker’s claims that the ERA did not follow the requirements of natural justice.   It noted that he regarded himself as unlucky, but observed this did not mean he had established the requisite grounds for a write-off of his legal debt.

[54]     Fifthly, the timeliness (or otherwise) of the Commissioner’s decision was

irrelevant to whether it was wrong in law or not.

[55]     Sixthly,  the  Tribunal  had  not  misunderstood  why  the  appeal  to  the

Employment Court had not been filed in time.

Law

[56]     The Legal Services Act 2011 (the Act) contains two provisions that provide for the non-repayment of a legal aid debt.  Section 42 permits the Commissioner to not recover debt in certain circumstances:

42Commissioner  may  decide  not  to  recover  debt  in  certain circumstances

(1)      The Commissioner may decide not to recover any debt due to the

Commissioner under a grant of legal aid if—

(a)     the enforcement of the debt would cause serious hardship to the aided person:

(b)     the cost to the Commissioner of enforcing the debt is likely to exceed the amount of the debt that is likely to be repaid:

(c)     the  Commissioner  considers  that  it  would  be  just  and equitable not to recover the debt.

(2)      The Commissioner may make a decision under subsection (1) at the time that legal aid is granted, or at any time after it is granted.

(3)      If the Commissioner decides not to recover a debt,—

(a)     the debt must be treated as being written off for the purposes of section 43; and

(b)     section 43(2) to (5) apply accordingly.

(4)      In  subsection  (1),  serious  hardship  means  significant  financial difficulties that arise because of—

(a)     the aided person's inability to meet minimum living expenses according to normal community standards; or

(b)     the cost of medical treatment of an illness or injury of the aided person or the aided person's dependant; or

(c)     a serious illness suffered by the aided person or the aided person's dependant.

[57]     Section 43 allows the Commissioner to write-off accumulated legal debt in particular circumstances. This section is relevant for the purposes of this appeal:

Commissioner may write-off amounts payable

(1)       The Commissioner may write off all or any part of any repayment, interim repayment, interest, or any other debt payable to the Commissioner by an aided person in any of the following circumstances:

(a)      the enforcement of the debt would, in the opinion of the

Commissioner, cause serious hardship to the aided person:

(b)      the cost to the Commissioner of enforcing the debt is likely to exceed the amount of the debt that is likely to be repaid:

(c)      the  Commissioner  considers  that  it  would  be  just  and equitable to write off the debt.

(2)      When   a   debt   has   been   written   off   under   this   section,   the

Commissioner must give notice to the debtor of the write-off.

(3)       When a debt is written off under this section, the debtor is, from the date of the write-off, no longer liable to pay the debt.

(4)       If, despite the write-off, a debtor repays some or all of a written-off debt, the Commissioner must return the amount that was written off.

(5)       The write-off of a debt does not affect the Commissioner's obligation to pay any person who provided legal services under the relevant grant of legal aid.

(6)      In subsection (1), serious hardship has the meaning given in section

42(4).

Jurisdiction for and approach on appeal

[58]     Appeals against decisions of the Tribunal may be brought in the High Court pursuant to s 59 of the Act. That section limits such appeals to questions of law.

Appeal on question of law

If the Commissioner or an applicant considers that the Tribunal's determination is wrong in law, the Commissioner or the applicant (as the case may be) may appeal to the High Court on the question of law, and the appeal must be dealt with in accordance with the rules of court.

[59]     In Legal Services Agency v Brown, Miller J noted (with reference to the predecessor bodies, the Agency and the Panel), that the question of whether there has been an error in law is:14

…ordinarily answered by inquiring whether the Panel was right to conclude that the Agency erred in law or was manifestly unreasonable, since that is the test  that  must  be  satisfied  in  law  before  the Agency’s  decision  may  be reviewed.

[60]     The meaning of error in law was examined by Randerson J in Legal Services Agency v Fainu,15    subsequently approved by the Court of Appeal in JMM v Legal Services Agency:16

It is undesirable to suggest any exhaustive list but a decision may be wrong [in law] if it derives from an incorrect application or interpretation of the statute; or if it is wrong in principle; or if the decision-maker has failed to take into account some relevant matter; or has taken account of an irrelevant matter;  or  if  it  depends  upon  findings  which  are  unsupported  by  the evidence.   There may be other grounds upon which the decision may be wrong in law but this short recitation of possible grounds shows that the legislature must have meant that the “manifestly unreasonable” ground was something different from a decision which was “wrong in law” on all or any of those grounds.

[61]     The meaning of manifestly unreasonable was outlined by O’Regan J in Legal Services Agency v Tana,17  again subsequently approved by the Court of Appeal in JMM v Legal Services Agency:18

[23]     This is a different statutory formulation from the “plainly wrong” formation often used in relation to appeals from the exercise of a discretion, where the appeal body focuses on whether a decision is correct or incorrect, and has to form the view it is not only incorrect but plainly so.  In this case the focus is not on whether the decision is incorrect, but whether it is unreasonable,  and  the  legislature  has  stipulated  that  the  Panel  should

14     Legal Services Agency v Brown (2005) 17 PRNZ 523 (HC) at [30].

15     Legal Services Agency v Fainu (2002) 17 PRNZ 433 (HC).

16     JMM v Legal Services Agency [2012] NZCA 573, [2013] 1 NZLR 517 at [103]–[111].

17     Legal Services Agency v Tana HC Whangarei AP26/02, 9 December 2002 at [23]–[25].

18     JMM v Legal Services Agency, above n 16, at [97]–[99].

intervene only where the decision is not only unreasonable, but is clearly and unmistakably unreasonable.

[24]      That formulation rules out completely an approach on the part of the Panel that it considers matters afresh and substitutes its own view.  It also rules out the approach taken by the Panel in this case, that “manifestly unreasonable”  simply  means  unreasonable  on  the  face  of  the  papers presented to the Panel.  As Mr Taylor said, that approach fails to recognise that the statutory test requires not only a finding that the Agency’s decision is unreasonable, but that it is manifestly so.   It is only when the degree of unreasonableness has reached a clear and unmistakable level (or to use the statutory term “manifest”), that the Panel is permitted to intervene.

[25]      That means the Panel is required to exercise a considerable degree of restraint in determining review applications based on the “manifestly unreasonable” ground.  It is clear from a review of the statutory history ... that the legislature has deliberately imposed a high threshold for intervention by the Panel.   That implies that the legislature intended there should be a degree  of tolerance  about decisions  of the Agency which  would  not  be appropriate where there was a full right of appeal, on the basis the Agency was exercising a discretion.

Discussion

[62]     The various arguments advanced on behalf of Mr Parker fail to persuade the Court that the Tribunal’s determination was wrong in law.  In large part, most of the factors on which Mr Parker contends the Tribunal placed undue weight were simply part of the relevant factual background and provided context.

[63]     For  instance,  the  Tribunal  did  not  place  undue  weight  on  Mr  Parker’s disentitling conduct.  That factor was referred to only briefly in passing, and thus it cannot be said the Tribunal placed undue weight on it.  Furthermore, the Tribunal’s comments on this matter were largely restatements of references to Mr Parker’s behaviour by Chief Judge Colgan in the Employment Court.  By way of example, the Tribunal’s comment at [32] that “[h]e is not free of blame for his predicament, the Court finding ‘significant disentitling contributory conduct’”, simply references the observations made by the Chief Judge.  In the context of the write-off decision, those references were in reality directed towards Mr Parker’s present difficulties in finding employment, rather than being determinative of the write-off decision.

[64]     The Tribunal likewise did not place undue weight on the possibility that

Mr Parker’s  previous  counsel  had  been  negligent.   All  references  to  this  in  the

Tribunal’s judgment are again either part of the factual background; or are brief

references to Chief Judge Colgan’s remarks in the Employment Court.

[65]     Nor did the Tribunal place undue weight on the size of the debt.  The debt itself is modest, being under $10,000.  Mr Parker’s assertion that the modesty of a debt  (or  otherwise)  is  to  be  assessed  purely in  relation  to  his  circumstances  is misconceived and the Tribunal did not err in making an observation about the size of the debt relative to other debts it has encountered.  Furthermore, the fact Mr Parker is presently unemployed  does  not  alter the fact  that  the debt  owed  in  his  case is relatively small.  Nor does the fact that he did not provide detailed information about his finances preclude the Tribunal from describing the debt as modest.

[66]     There was no suggestion by the Tribunal that Mr Parker had necessarily received justice on the basis of a hearing in the Court of Appeal.  Therefore no undue weight was placed on that fact.   Again, the Tribunal’s discussion of the Court of Appeal hearing was concerned with setting out the factual background to the case.  I note this factor was mentioned in the Commissioner’s decision, in which it was

observed that the purpose of legal aid is access to justice.19   The Commissioner did

not,  however,  state  that  Mr  Parker  had  “received  justice”;  rather  that  he  had “received  effective  representation”  as  a  result  of  the  publicly  funded  legal  aid scheme.      This   argument   is   therefore   premised   on   a   misreading   of   the Commissioner’s decision.

[67]     Nor did the Tribunal err in failing to consider Mr Parker’s loss of opportunity. The submission in that regard pointed to the counter-factual of a de novo hearing that would have succeeded.  In that event, Mr Parker would have been able to repay his debt notwithstanding any deduction for contributing conduct.   That submission is, however, entirely speculative.  It would have been inappropriate for the Tribunal to place weight on the outcome of a case that was never heard; and inappropriate to project, on the basis of the Employment Court’s observation, that Mr Parker had a

substantial arguable case that would necessarily have succeeded.

19     Legal Services Act 2011, s 3.

[68]     The point about failing to take into account natural justice and due process issues was framed as a “holistic” ground that synthesised all preceding points.  On that basis it has little merit, apart from concern over a seeming unexplained delay of six months between the application for a write-off (24 July 2012) and the Commissioner’s decision to decline the application (16 January 2013).   It cannot, however, be said that this delay, whilst concerning of itself, had any effect on the quantum of the debt.   It did not establish serious hardship nor make it “just and equitable” to write-off the debt.

[69]   The alleged failure to take into account the incorrect basis of the Commissioner’s decision has the appearance of a challenge to merely peripheral elements of the Tribunal’s decision.   For example, the fact the Tribunal did not request or review the Court of Appeal’s decisions does not demonstrate any error on its part.  Further, it is unclear how an examination of the Court of Appeal’s decisions would have affected the Tribunal’s reasoning.  Similarly, there is no indication of the Commissioner adopting an incorrect approach in relation to Mr Parker’s failure to lodge an appeal in a timely manner.  No reference to this was made in either of the Commissioner’s decisions.

[70]     Finally, it cannot be said that Tribunal exceeded its jurisdiction.  It did not go beyond a review of the decision in issue. There was no substantive assessment of the merits of Mr Parker’s actions, or of his financial situation, or speculation as to the outcome of the Employment Court proceedings.  Rather, the Tribunal simply upheld the  Commissioner’s  reasoning  without  substituting  its  own  view.     It  merely explained its reasoning in some depth, in accordance with its appellate function.

Result

[71]     The appeal against the decision of the Legal Aid Tribunal given on 28 May

2013 is therefore dismissed.

Costs

[72]     As Mr Parker is legally aided there will be no order for costs.

Legal Services Commissioner v Parker: CIV-2014-485-3986

Introduction

[73]     The second appeal relates to the decision of the Tribunal to reverse a decision of the Commissioner declining to grant legal aid to Mr Parker for a civil claim against the Agency, as the Commissioner’s predecessor.  This centred on Mr Parker’s allegation that the Agency had failed to act in a timely manner in considering his application for legal aid.   In determining that legal aid should be granted for this purpose, the Tribunal considered whether Mr Parker’s proposed claim had sufficient prospects of success.

[74]     The Tribunal’s conclusion was that the Commissioner had erred in law when reconsidering his original decision and failing to grant aid.   It found the Commissioner had mischaracterised the nature of Mr Parker’s claim (as being premised mostly on delay rather than negligence) and had assessed it on the wrong basis.   It further found that the Commissioner had placed too much emphasis on Mr Parker’s potential to sue his former lawyers.   The Tribunal also undertook the unusual step of itself considering the application for legal aid afresh, and concluded that Mr Parker’s prospects of success were sufficiently arguable to merit a grant of legal aid.

The claim against the Agency for negligence

[75]     On  29  July 2013,  Mr  Parker  filed  an  application  for  legal  aid  with  the Commissioner to the value of $6,060.50, for the purpose of filing High Court proceedings against the Agency (the Commissioner’s predecessor) alleging negligence in respect of its decision of 5 June 2009.20   The facts said to give rise to the claim were set out as follows:

On  7  November  2008,  the  Employment  Relations  Authority  dismissed Mr Parker’s  claim for  unjustified  dismissal.    Mr  Parker  and  his  support persons considered this decision, and the procedure by which it was reached, to have been deeply flawed.  Accordingly, on 3 December 2008, an urgent legal aid application to appeal that decision was lodged.  This was declined on 6 January 2009.

20     See paragraph [14] above.

On 27 April 2009, a second urgent legal aid application was lodged, with considerably more detail. This was again declined, on 5 June 2009.

On 16 June 2009, Mr Parker reviewed the decision declining legal aid.  In a LARP decision dated 2 September 2009, the Panel reversed the Legal Services  Agency’s  decision  on  the  grounds  that  it  was  quite  clearly manifestly unreasonable and wrong in law.  The Legal Services Agency did not appeal this decision, and must be taken as having accepted it.

An application to file an appeal out of time was promptly lodged in the Employment Court, but refused on 18 November 2009.  The Employment Court stated that the issue was finely balanced, and that Mr Parker had a “substantial arguable case” for unjustified dismissal.

Mr Parker tried appealing that decision to the Court of Appeal, but was unable to do so, on grounds of jurisdiction.

The  argument  Mr  Parker  wishes  to  pursue  is  that  the  Legal  Services Agency’s decision of 5 June 2009 – a decision which the Legal Aid Review Panel found to be quite clearly manifestly unreasonable and wrong in law – was a direct cause of his lost opportunity to appeal.  Mr Parker’s inability to challenge the ERA decision has left him unemployable, as well as considerably out of pocket in terms of possible awards.

[76]     The prospects of success of the claim were said to be high for the reasons set out above. The essence of the claim was encapsulated as follows:

Aid sought

At this stage, we are seeking funding of 30 hours for filing High Court proceedings in order to pursue this claim against Legal Aid.

The claim for loss of chance will require considerable legal research on our part.   Similarly, Mr Parker’s substantive claim is exceptionally complex, having  progressed  through  the  Employment  Relations  Authority, Employment Court, and Court of Appeal.   Similarly, his funding has been challenged through the review of a reconsidered legal services agency decision to the Legal Aid Review Panel at first instance, and through a review of a reconsidered Legal Aid decision to the Legal Aid Tribunal.  We will need to be familiar with all these decisions, in which Mr Parker was represented by an advocate and a series of lawyers, to varying degrees.  We will also need to be familiar with the various communications between Legal Aid and Mr Parker (and his representatives).

Once the claim is filed, we will seek funding for the next steps.

While the writer will undertake the bulk of the work on this file, Ms Cooper (who has experience in employment law issues, unlike the writer) will need to provide oversight.   We reiterate that this is a complex matter, and will have a considerable number of documents that we will need to familiarise ourselves with.

Prospects of success

In our view, prospects of success are good, for the reasons identified above. Had Legal Aid not made a decision that was wrong in law and manifestly unreasonable, Mr Parker’s appeal would have been filed more than five months earlier.  It is highly likely that this difference would have affected the otherwise “finely balanced” decision on the application for leave to appeal out of time.

[77]     On 30 August 2013, the Commissioner declined to grant legal aid for the claim, on the grounds that Mr Parker’s prospects of success were not sufficient to justify a grant.   The Commissioner noted that in respect of the delay in filing his appeal to the Employment Court, Mr Parker needed to look to his previous lawyers and not the Agency. Additionally, private law remedies were excluded because legal aid decisions are made within a statutory framework.

[78]     On   24   September   2013,   Mr   Parker   sought   reconsideration   of   the

Commissioner’s decision.  The reconsideration was made on the basis that the 5 June

2009 decision was manifestly unreasonable and wrong in law.

[79]     On 31 October 2013, the Commissioner confirmed his earlier decision on the grounds that there was an insufficient prospect of success, and that the case would not be cost-effective.  The reconsideration inquired into whether the Agency owed a duty of care to the applicant.

[80]     On   12   March   2014,   the   Tribunal   issued   a   decision   reversing   the

Commissioner’s decision of 31 October 2013 and granted legal aid in the sum of

$6,060.50.21

The Commissioner’s Decision

[81]     Before the Commissioner, it had been argued that the Agency’s decision of

5 June 2009 was a direct cause of Mr Parker’s lost opportunity to appeal to the

Employment Court; and the Panel in its 2 September 2009 decision had found the

5 June decision to be clearly manifestly unreasonable and wrong in law.

21     Re IT (Civil) [2013] NZLAT 083.

[82]     On 30 August  2013,  the Commissioner issued the first  of two decisions declining to grant legal aid, on the ground that Mr Parker’s prospects of success were insufficient.  The Commissioner noted that Mr Parker should instead be directing his energies to the lawyers he had dealt with during the early part of his employment dispute, rather than the Agency.  Additionally, the Commissioner found no basis on which it could be argued that the 5 June decision was a direct cause of any lost opportunity to appeal, citing the lawyers’ conduct in failing to expedite the case; the fact that the appeal was already well out of time when reconsideration of the refusal to grant aid was sought in April; that the statutory framework within which legal aid decisions are made precluded any foundation for a private law remedy; and the Agency’s decisions about the prospects of success were correct and vindicated by the Employment Court Ruling.  The Commissioner also noted that, even if a claim could be brought for loss of a chance to appeal, the monetary amount would be reduced due to Mr Parker’s disentitling conduct.

[83]     On 31 October 2013, the Commissioner reconfirmed his decision on much the same grounds.   He observed the case would not be cost-effective, whilst nevertheless appearing to conclude it was possible the Agency owed a duty of care to Mr Parker.   Notwithstanding, the delay in question had not caused any loss of a chance  to  challenge  the  ERA decision.    Additionally,  Mr  Parker’s  contributory conduct would inevitably reduce any damages to which he might otherwise have been entitled.

The argument before the Legal Aid Tribunal

[84]     Before the Tribunal, a number of grounds were advanced.   First that the Commissioner had erred by assuming Mr Parker’s case relied exclusively on the Agency’s delays and was centred on negligent decision-making.   The focus was rather on the Commissioner’s failure to consider what might have happened had legal aid been granted in June 2009 (rather than in September 2009).  Further, that the Commissioner had placed too much weight on the possibility of a claim against Mr Parker’s former lawyers and on his alleged “significant disentitling contributory conduct”.  The view that the statutory framework governing legal aid did not allow for a private law remedy was also challenged.

The Legal Aid Tribunal’s decision

[85]     Before reaching its decision the Tribunal reminded itself of the grounds on which it has jurisdiction to review a legal aid decision as follows:

[33]      The grounds for reviewing a decision of the Commissioner are set

out in s 52(1) of the Legal Services Act 2011 (“Act”):

An aided person or an applicant for legal aid may apply to the Tribunal for a review of the Commissioner’s reconsideration of a decision referred to in subsection (2) on the grounds that it is–

(a)       manifestly unreasonable; or

(b)       wrong in law.

[34]      A decision is manifestly unreasonable where “it is shown, clearly and  unmistakably,  that  the  decision  made  by  the  [Commissioner]  went beyond what was reasonable or was irrational or logically flawed”: Legal Services Agency v Fainu (2202) 17 PRNZ 433 at [28].   Manifestly unreasonable   requires   “not   only   that   the   decision   be   found   to   be unreasonable, but that [the Tribunal] forms the view that the decision is so clearly unreasonable that the intervention of the [Tribunal] is called for”: Legal Services Agency v A (2003) 17 PRNZ 443 at [11](c). The threshold for intervention by the Tribunal is a high one and it is necessary for the Tribunal to exercise restraint: JMM v Legal Services Agency [2013] 1 NZLR 517 at [97] and [99].

[35]     A decision may be wrong in law “if it derives from an incorrect application or interpretation of the statute; or if it is wrong in principle; or if the decision-maker has failed to take into account some relevant matter; or has taken account of an irrelevant matter; or if it depends upon findings which are unsupported by the evidence”: Legal Services Agency v Fainu at [27], approved by the Court of Appeal in JMM at [103] and [111].

[36]     The Tribunal is required to conduct reviews on the papers and to provide a brief summary of the reasons.

[86]     The Tribunal noted the submission that the Commissioner had misunderstood the nature of Mr Parker’s claim and had mischaracterised it as one exclusively about delay, and accordingly had failed to consider how the Agency’s 5 June 2009 decision may have contributed to his loss of ability to file proceedings in the Employment Court.  The Tribunal found the Commissioner had not considered what might have happened, had legal aid been granted in April 2009; and had perfunctorily concluded any delay was not causative of the loss of a chance.  Accordingly, the Commissioner had failed to consider the essence of Mr Parker’s proposed claim that the Agency’s

decision of 5 June 2009 was negligent, particularly in light of the Panel’s critical

review of it.  In particular, it was said:

[45]      In the decision under review by the Tribunal, the Commissioner failed  to  consider  the  applicant’s  claim  that  the Agency’s  5  June  2009 decision was negligent.  He did not refer to the content of LARP’s decision. As the applicant submits, the Commissioner focused on the Agency’s delays in making its decision, rather than the decision itself. Although the applicant says the delay is also relevant, he made it clear that he wishes to rely more particularly on what he alleges to be negligent decision-making.   The erroneous focus of the Commissioner is perhaps best captured by the commencement of his decision of 31 October 2013, entitled “summary of issues”:

Whether aid should be granted to take a civil claim for negligence against the Legal Services Agency (“LSA”) for failing to process the applicant’s application for legal aid in a quick enough fashion with the delay to the grant of legal aid meaning that the applicant had to proceed out of time in the Employment Court in relation to a challenge to an adverse decision of the Employment Relations Authority of 7 November

2008.

[46]      Similar sentiments  were repeated throughout the  Commissioner’s

decision:

But the issue here is not one of a challenge to the decision but the fact that a decision was not made within the timeframe for filing the substantive claim.

…

… this is a situation where the application for aid was simply

not processed in time.

[47]      Because the Commissioner mischaracterised the applicant’s claim as one exclusively about delay, he failed to properly consider causation issues, so far as they related to the Agency.  He did not consider how the Agency’s decision of 5 June 2009 might have contributed to the applicant losing the ability to challenge the ERA’s decision in the Employment Court.   He did not ask what might have happened if the Agency granted legal aid, as the applicant says it should have done, shortly after the 27th April 2009 application for reconsideration.  Rather, the Commissioner simply noted that legal  aid  was  initially  refused  and  that  remained  the  position  until  the decision was reversed by LARP.    He  concluded “any delay then is  not causative of the loss of the chance”.

[87]     The Tribunal then observed that the Commissioner had placed too much weight on the prospect of proceedings against Mr Parker’s former lawyers.   The application before him had not related to the legal advice received and, accordingly, this factor should have had little impact.  Little information was in any event known

about the nature and detail of the retainers in each case.  Whilst acknowledging that some responsibility could be attributed to the lawyers, the Tribunal noted this did not preclude the Agency’s decision from having causative effect, had it been negligent or not delivered in a timely fashion.   The possibility of such causative effect was exacerbated by the Commissioner’s mischaracterisation of the central issue as delay, because such a narrow focus had inevitably led back to the lawyers concerned.  The application before the Commissioner had in fact been of wider ambit than simply that issue, and the Commissioner needed to consider that alongside the other grounds and had failed to do so.

[88]     Thirdly, the Tribunal found the Commissioner had not erred in law by taking into account the possible effect of Mr Parker’s contributory conduct on the likely outcome.  His conduct on the day of the search was a key part of the factual matrix and  therefore  a  relevant  consideration.    In  this  regard,  the  Tribunal  noted  the following passage in the Employment Court’s decision of 18 November 2009:

… Any prospective success enjoyed by Mr Parker, had his challenge been prosecuted promptly would almost certainly have had to have been tempered by application of s 124 of the Act.   It is clear that there was significant disentitling contributory conduct by the plaintiff on the day when his vehicle was searched which would have to reduce significantly any monetary remedies to which he might be entitled.

[89]     A related aspect relied upon before the Tribunal was the Panel’s observations that  a degree of  misinformation  relating to  the  legality of  the search  had  been provided to the decision-maker by a grants officer.   In this regard the Panel had stated in its 2 September 2009 decision:

[32]      The second statement of claim, however, raised what appeared to be some new matters. In particular, the Panel noted the significance of the various issues about the legality of the search which began the train of events leading to his dismissal. It appeared that while some of the other “new” matters might have been advanced at the ERA hearing (but just not recorded in the determination) the search issues had not been, because, if they had been raised they were so significant that the determination would have recorded a finding on them. To  clarify the  position the Panel requested further information from the Applicant. The Applicant’s employment advocate advised that the legality of the search had not been raised and neither the CEA nor the policy specifically provided for a search.

[33]      The Agency took a different view of the “new material”. While the grant’s (sic) officer identified the search issue as being “new”, she then proceeded to misinform the second specialist adviser in her referral opinion.

She  stated inaccurately that  the  employer’s  policy was  clear  as to  drug searches and was only slightly more onerous than the previous employer policy on searches. The Agency, however, never had a copy of the policy (or its predecessor) or the CEA. It states this in its submissions and neither document was in the material provided in the Panel’s file. (The Panel has copies now after having requested them from the Applicant). The referral opinion also stated that the Applicant did not come to the matters with “clean hands” because he did not “allow a drug search”. This is also incorrect as the information the Agency had at that stage was the Applicant allowed at least a partial drug search.

[90]     In  reaching  its  determination,  the  Tribunal  noted  that  the  Commissioner should generally be directed to reconsider his decision, in light of the Tribunal’s reasoning and conclusions.   However, the Tribunal considered this to be an appropriate case for it to determine the review by confirming, modifying or reversing the decision pursuant its powers under s 56(1) of the Act, adverting to the risk of apparent bias if the Commissioner were to reconsider his decision, given he would be being asked to grant legal aid to fund an action against his predecessor.   This, notwithstanding  the Act  vests  all  of  the Agency’s  liabilities  in  the  Ministry  of

Justice,22   and  the Commissioner is  required  to  act  independently in  making his

determinations.23

[91]     Accordingly, the Tribunal proceeded to consider the prospects of success of Mr Parker’s proposed claim against the agency.   In respect of a duty of care, the Tribunal noted the Commissioner himself had considered it arguable that the Agency owed Mr Parker a duty of care, because “[a] duty of care is consistent with what the legislation requires of the [Agency] or what the statute empowers the Agency to

do”.24   The Tribunal found Mr Parker was in a position of vulnerability and reliance

in relation to the Agency, as it held the purse strings; and that a duty of care was “distinctly  arguable”  in  his  case  and  could  not  “confidently  be  excluded”.    In passing, the Tribunal acknowledged that the statutory context may provide adequate recourse for negligent decision-making, thus precluding the imposition of a common law duty of care.  However, in this case, the Tribunal thought the duty alleged to be a novel  area  relative  to  the  case  law.    Special  care  was  therefore  needed  when

assessing prospects of success.

22     Legal Services Act 2011, s 119(1).

23     Section 71(2).

24     The Commissioner’s reconsideration, 31 October 2013.

[92]     In respect of the breach of duty, the Tribunal found it arguable that the factual matrix  gave rise to  a breach.   Amongst  other  factors,  the Panel  had  found  the Agency’s decision fell foul of a reasonable decision because the lawfulness of the search had been overlooked, and the Agency had made pronouncements on Silver Fern’s drug policy without accessing a copy of the policy.  The Agency’s six week delay in reaching its decision was also seen to be problematic, because it knew the appeal period expired in December 2008, so that by 2009 when it was considering the application, time was very much of the essence.

[93]     In respect of causation, the Tribunal acknowledged Mr Parker’s contention that had the Agency acted reasonably and competently, it would have granted legal aid, and could have done so within two weeks, so that the application for leave to appeal out of time would have been four months rather than nine months late.  The Tribunal noted that, although this was but one factor, a shorter delay could arguably have tipped the balance, especially given the Chief Employment Court Judge’s observation that the case was “finely balanced”.  Arguably, the prior conduct of the lawyers had heightened the need for a more timely response by the Agency.   If, ultimately, any delays by the lawyers were found to be causative, that would reduce the amount of damages recoverable from the Agency.

[94]     In respect of damages, the Tribunal acknowledged that the assessment of the quantum of damages, if awarded, would be difficult, given their formulation as a loss of chance.  However, the Tribunal did not consider the likely quantum of damages to be out of proportion to the proposed legal costs of bringing the proceedings.

[95]     The Tribunal therefore concluded that the claim’s prospects of success were sufficient to justify a grant of legal aid, describing the case as “novel but not hopeless”.

The grounds of appeal

[96]     Mr Cooke submitted the Tribunal had erred in three respects:

·        in concluding that the Commissioner had misunderstood Mr Parker’s claim of

negligent decision-making.    The law recognises no such tort, although it

recognises that a duty to act timeously can arise in certain circumstances. The Tribunal was, however, wrong in law to recognise a tort of negligent decision-making;

·in respect of the Commissioner’s analysis of the relevance of potential claims against Mr Parker’s legal advisers; and

·in substituting its opinion for that of the Commissioner, even taking into account the issues involved in an apparent conflict of interest.

A        First Ground

[97]     This  ground  of  appeal  centres  on  the  essential  question  of  whether  the Tribunal was correct in finding the Agency could be sued in negligence for making “wrong” decisions.   In Mr Cooke’s submission no cause of action in negligence could lie against a statutory body over the substance of its decision-making.  There was no duty of care on such a body to  reach  a particular decision.   Errors  of judgement or approach were properly to be corrected by way of appeal or judicial review.   The Tribunal had therefore erred in concluding that a duty could arise supporting a claim of what the Commissioner characterised as “negligent decision making”.

[98]     In support, Mr Cooke referred to and relied on X (Minors) v Bedfordshire County Council, in which Browne-Wilkinson LJ held that a common law duty of care in relation to the making of statutory and discretionary decisions involving policy matters does not exist.25    This approach was also adopted by the Court of Appeal in Minister of Fisheries v Pranfield Holdings Limited.   In that case it had been alleged that a fishing permit had been wrongly declined under the Fisheries Act

1983 and there had been unreasonable delay in processing the application.26    The

Court of Appeal found there could be no duty of care in relation to a decision to decline a permit, even if the decision itself was wrong.  Poor decision-making was simply not actionable in tort.  Mr Cooke said, to depart from that line of authority

and  hold  otherwise  in  Mr  Parker’s  case  would  render  the  Agency  and  the

25     X (Minors) v Bedfordshire County Council [1995] 2 AC 633 (HL).

26     Minister of Fisheries v Pranfield Holdings Limited [2008] NZCA 216, [2008] 3 NZLR 649.

Commissioner liable whenever a Court later concluded they had wrongly decided to decline civil legal aid, as each such case would involve a loss of a chance to pursue an underlying civil proceeding.

B        Second Ground

[99]     In  support  of  the  second  ground,  Mr  Cooke  submitted  the Tribunal  had wrongly concluded the Commissioner erred in giving weight to the potential relevance of claims against Mr Parker’s legal advisers.  The Employment Court had not focused on any delay by the Agency and the focus had inevitably been on the conduct of his legal counsel, a matter about which a number of questions were outstanding.  For example, why was the legal aid application sent to the Agency two weeks after it was signed on 14 November 2008?   Why had there been a delay between 6 January 2009 and 27 April 2009 in filing a reconsideration application on expanded grounds?

C        Third Ground

[100]   In support of this ground of appeal, Mr Cooke said the Tribunal had erred in substituting  its  own  analysis  and  views  for  that  of  the  Commissioner,  because primary decisions on legal aid availability should remain with the Commissioner, with the Tribunal simply overturning a decision where it is wrong in law or manifestly unreasonable.   He said the Tribunal had also misunderstood the law in relation to when and how a duty of care might be imposed in the context of a statutory framework.

[101]   Mr Cooke said, furthermore, that although Mr Parker acknowledged some awkwardness in the fact that the Agency is the Commissioner’s predecessor, this is inherent in the legislation itself, as the Commissioner is empowered by statute to make the legal aid decision.   In any event, the Commissioner had appointed an external advisor to make a recommendation on the matter, so could not be accused of predetermination or apparent bias.  Furthermore, the Tribunal itself is a part of the same decision-making structure and could be accused of similar bias.  In any event, it would be the Ministry of Justice rather than the Commissioner who would be the

defendant in any legal proceedings, and the Commissioner is independent of the

Ministry.

The response

[102]   In response, Ms Cooper contended there was a reasonably arguable case to support a negligence action against the agency.   She argued that the appropriate approach to determining whether a duty of care exists in this case was that followed in Couch v Attorney-General and North Shore City Council v Attorney-General (The Grange).27

[103]   In seeking to apply that approach, Ms Cooper referred to Mr Parker as in a vulnerable class of persons (those requiring a grant of legal aid to access justice), who the Agency knew or should have known was at a risk of distinct harm.

[104]   Following that line of reasoning, she submitted that a consideration of the statutory context and the particular statutory body’s functions and responsibilities, issues of foreseeability and proximity, the wider effects of the decision before the Court on society, and whether it was just and equitable for the claim to proceed, were required.   The broad question was justiciability.   Such an approach, she argued, would not amount to a floodgates-type decision, as Mr Parker’s case was rare, spanning, as it has done, many years.   His situation was, in Ms Cooper’s view, unique and would not render every wrong decision of the Agency or the Commissioner actionable at law.

[105]   Ms Cooper further submitted that the Commissioner’s decision is actionable at law because it was an administrative decision, not a quasi-judicial, political or discretionary decision, and there is no remedy provided in the legislation for the loss that Mr Parker suffered.  She asserted that there was no other way for Mr Parker to seek a remedy.

[106]   Ms Cooper refuted that the Tribunal had erred in substituting its opinion for

that of the Commissioner, because she said it is empowered by the Act to “determine

27     Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725; North Shore City Council v

Attorney General [2012] NZSC 498, [2012] 3 NZLR 341.

a review by confirming, modifying or reversing the decision under review”.28    In Ms Cooper’s submission, if the submissions of the Commissioner were accepted, the Tribunal’s powers of decision as prescribed by the legislation would be rendered nugatory.  She submitted that, where the Commissioner is found to be wrong in law, the decision should be corrected and the Tribunal was being criticised for simply performing its statutory role.

Law governing appeal

[107]   The Legal Services Act 2011 provides a right of appeal to this Court:

59       Appeal on question of law

If the Commissioner or an applicant considers that the Tribunal's determination is wrong in law, the Commissioner or the applicant (as the case may be) may appeal to the High Court on the question of law, and the appeal must be dealt with in accordance with the rules of court

Therefore, for an appeal to be successful, it must be shown that the Tribunal made an error of law.

Discussion

Did the Tribunal err in finding the Agency owed the respondent a duty of care?

[108]   The question of whether a private law duty of care exists in the context of an exercise of statutory power or duty is complex.  Negligent conduct by a public body may give rise to liability in negligence at  common law, but the existence of a statutory duty does not of itself create a duty of care.  There must be a duty of care

owed at common law.29

[109]    The respondent’s submission that the distinction between decisions of policy and operational decisions is not helpful, and the ultimate question is whether the particular issue is justiciable, is correct.  However, given the quasi-judicial nature of the Agency’s decision and its statutory context, it is not appropriate to impose a

private law duty of care on the Agency.

28     Legal Services Act 2011, s 56.

29     See generally Stephen Todd (ed) The Law of Torts in New Zealand (6th ed, Thomson Reuters, Wellington, 2013) at [6.6].

[110]   In  determining  whether  a  duty  is  owed  at  private  law,  the  courts  must consider whether the imposition of such a duty would be coherent with the statutory context and the legal system as a whole.  The primary policy issue when imposing a duty of care on public bodies, in line with Court of Appeal authority, is whether, “the imposition of a duty of care would be consistent with the terms and policies of the

statute which governed the functions of the [public body]”.30

[111]   It is trite that functions which amount to the exercise of quasi-judicial powers are not appropriately the subject of a duty of care.31     The Agency, in deciding whether to grant legal aid, is clearly exercising a quasi-judicial function, and is not simply conducting an administrative exercise without determining anything whatsoever.    In  carrying  out  its  function  the  Agency  is  required  to  hear  and determine applications for legal aid, make decisions based on facts, and follow the statutory procedure for doing so, set out in the Legal Services Act 2000.

[112]   Another factor that precludes finding a duty of care as contended for in this case is the availability of rights of reconsideration, review and subsequent appeal. The legislative scheme prescribes a process for challenging the Agency’s decisions, by applying first for reconsideration, and then for a review by the Tribunal, and

finally by way of an appeal to the courts and thus provides remedies.32   To impose a

private law duty on  the Agency in  this  context  would  cut  across  that  statutory scheme.33    The right of review has already been pursued in Mr Parker’s case.  To impose a duty of care, which allows for a claim of negligence to be brought, would be  to  essentially  authorise  a  collateral  attack  on  the  remedial  process  already provided for by Parliament.   In the case of error by the Agency in its decision making, the proper remedy, as pursued, was to seek a review of its decision.

[113]   I am satisfied that the Tribunal erred in finding, as a matter of law, that the

Agency owed a duty of care in private law to Mr Parker.   The Commissioner’s

30     Attorney-General v Body Corporate 200200 [2007] 1 NZLR 95 (CA) at [39].

31 At [41]. Also see Cooper v Hobart (2001) 206 DLR (4th) 193 (CSC) at [52].

32     Legal Services Act 2011, ss 51 and 52.

33     See Morrison v Upper Hutt City Council [1998] 2 NZLR 331 (CA) at 338, confirmed by Bella

Vista Resort Limited v Western Bay of Plenty District Council [2007] NZCA 33, [2007] 3 NZLR
429.

assessment of the prospects of success in a claim of negligence was therefore sound and the Tribunal erred in finding his recommendation wrong in law.

Did the Tribunal err in finding the Commissioner was wrong to consider the role of

the respondent’s solicitors?

[114]   The Commissioner, in assessing the likely success of a claim in negligence against the Agency, considered whether the Agency’s decision of 5 June 2009 was a cause of Mr Parker’s failure to bring a timely appeal to the Employment Court.  In his assessment, the Commissioner took into account that the Employment Court had not placed any weight on delay by the Agency and instead had focused on the periods of unexplained delay, which inevitably called into question steps taken by the lawyers acting for Mr Parker.

[115]   The role of Mr Parker’s lawyers in causing delays clearly has relevance to

whether a claim of negligence could properly lie against the Agency.

[116]   Although not central to the argument as advanced on appeal, the failure of Mr Parker’s legal advisers to challenge the legality of the search of his vehicle from the outset, also raises questions about the efficacy of his representation.  Establishing the legality or otherwise of that search was of potentially fundamental importance to all of the actions undertaken by Silver Fern thereafter.  The legality of that search was not raised as an issue until the second statement of claim was drafted and submitted by Mr Parker’s then counsel.  This was around the end of April 2009.  It was the subject of particular note by the Panel in its 2 September 2009 decision.  In that  decision,  the  Panel  “noted  the  significance  of  the  various  issues  about  the legality of  the  search  which  began  the  train  of  events  leading  to  [Mr Parker’s] dismissal”.

[117]   The Panel also noted that the Agency had, in its 5 June 2009 decision, taken a different view of the new material raised in the second statement of claim and had also been misinformed to a degree by the grants officer through the second specialist adviser.  I have already referred to these passages in extenso in paragraph [88] above.

[118]   The passage in  the Panel’s  decision  which  then  follows  those  quoted  in paragraph [88] is undoubtedly at the heart of the present argument, that Mr Parker was the victim of a negligent decision on 5 June 2009 which materially affected his ability to challenge the ERA’s decision in the Employment Court.  Of this, the Panel said:34

[34]     The second specialist adviser did not even refer to the search.  He took the view that there was no new information, referring instead to the allegations being expanded and reformulated.  To some extent that is correct. However, in reiterating that the heart of the case was whether the employer had the grounds to require the Applicant to have a drug test before he came to work, the specialist adviser made a significant oversight.

[35]     The Panel cannot see how the search issues were overlooked.  The Panel acknowledges that the Agency does not have to ask for more information; it is up to the Applicant to show why he should receive aid. However, in the absence of further clarification, the Panel finds that the only reasonable position to come to would be to take the view that the legality of the search was the starting point or the heart of the matter i.e. if the Applicant’s pleaded version of events around the search is correct then what flowed on from that could be seen in a very different light and end up with a different result.

[36]      Accordingly the Agency’s decision to refuse aid for the appeal was manifestly unreasonable.  Also, although not advanced as a ground in this review, the Panel notes that the Agency made errors of law in not taking relevant information into account and misapplying the statutory tests as a result.

[119]   The Panel also correctly recognised however that the errors in the Agency’s

5 June 2009 decision lay in its failure to take into account relevant information and its misapplication of the statutory tests.   Errors of omission and law are classic judicial review or appeal points.  They are not properly the subject matter of a claim for breach of a duty of care in tort.

[120]   It is clear, however, that the issue of the legality of the search and drug testing by Silver Fern was aired before the Chief Employment Court Judge, who expressly dealt with these matters in his judgment, as well as the issue of delay.   Whether Silver Fern was prejudiced by the delay in prosecuting Mr Parker’s appeal was a matter for the Chief Judge to weigh and determine after hearing argument.   The decision he reached on that issue was open to him and well within his judicial

discretion.   Inter alia, the Judge observed that Mr Parker may have grounds for

34     Legal Aid Review Panel decision dated 2 September 2009.

redress against his legal advisers for delays that had occurred.  Such an expression of opinion was also open to the Chief Judge and was not determinative of the central issues.

[121]   It follows that it was not open to the Tribunal to find the Commissioner had erred in taking the role of the Mr Parker’s legal advisers into account, in assessing the likely success of his claim.

[122]   Even if the Agency’s decision of 5 June 2009 were manifestly unreasonable and wrong in law, as the Panel in its 2 September 2009 decision found, this was not a direct cause of Mr Parker’s lost opportunity to appeal to the Employment Court. While delay was a factor in his lack of success, the issue of to whom the delay was attributable  was  a  relevant  question  of  fact  and  degree,  and  concerned  both Mr Parker and his legal advisers.

Did the Tribunal err in substituting its own views?

[123]   A review may only proceed on the grounds that a decision is manifestly unreasonable or wrong in law.35    The Tribunal has two options for dealing with a review of a Commissioner’s decision.   First, it can determine the review by confirming, modifying or reversing the decision under review.36    Secondly, it can give a direction to the Commissioner to reconsider all or part of the decision.37

[124]   The Tribunal opted to determine the review by reversing the decision under review.  It was entitled to do so, even if its reluctance to direct the Commissioner to reconsider the decision resulted from problematic reasoning.   However, the determination on review must proceed from one of the grounds of review being made out.  When determining a review, the Tribunal ought to correct only the errors of law or manifest unreasonableness.

[125]   In  JMM  v  Legal  Services  Agency,  the  Court  of Appeal  noted  that  one consideration on review will be whether an error of law was made regarding the

35     Legal Services Act 2011, s 52(1).

36     Section 56(1).

37     Section 57(1).

causes of action in the litigation for which the claimant is seeking aid.38   Therefore, where the tribunal had found such an error of law, it was right to correct this.  Where the Tribunal erred is in substituting its own views where there was no error of law or manifest unreasonableness.  In particular, the weight that the Commissioner gave to each consideration should not have been modified on review.

Conclusion

[126]   There are two aspects to consider: the effect of delay and to whom that delay was attributable; and the issue of redress for negligent decision making.

[127]   In terms of delay, the only certainty is that had legal aid been granted in June

2009 (rather than in September 2009) an argument about the legality of the search would have been pursued at that time.  What the outcome might have been cannot however now be known.   While it is unfortunate the issue of the legality of the search was not able to be argued shortly after 5 June 2009, the question of whether that argument would have been sufficiently timely even at that stage, to persuade the Employment Court to grant leave to appeal out of time, is not at all certain.

[128]   In terms of overall delay, it is notable, as the Commissioner found, that a year

had already elapsed before Mr Parker’s claim for unjustified dismissal was heard on

7 November 2008.   That  in  itself  was  a significant  period  of delay and  it  was followed by a further period of delay from 6 January to 27 April 2009.   Whilst difficulties in obtaining legal services may provide an explanation for that further period of delay, the fact is it occurred.  The Agency took only five weeks from the date it received Mr Parker’s legal aid application in late April 2009 to process and decline it for a second time.   That five week period, even when coupled with the period 5 June to 2 September when the Agency’s decision was reversed, is not of itself a significant period of delay when the overall timeframe is considered.

[129]   A  further  period  of  about  12  weeks  subsequently  elapsed  following

Mr Parker’s request for a review of the Agency’s 5 June 2009 decision and the

Panel’s   2   September   2009   decision   reversing   the  Agency’s   decision.      By

38     JMM v Legal Services Agency, above n 16, at [111].

16 November 2009, when Chief Judge Colgan heard Mr Parker’s application for leave to appeal out of time, two years had elapsed since his vehicle was searched. As I have observed it is therefore unsurprising that the Chief Judge was persuaded Silver Fern may by then have been materially prejudiced in its ability to meet any argument about the legality of its drugs search policy and its ability to prove that cannabis had been found in Mr Parker’s car.

[130]   In terms of overall delay, therefore, the period of two months and four weeks between 5 June and 2 September 2009, cannot be seen as solely determinative of, nor constitute a direct cause of, any lost opportunity for Mr Parker to appeal to the Employment Court.  Nor can the greater period of 27 April to 2 September 2009.

[131] It follows that I find the Tribunal erred in assessing the weight the Commissioner gave to the potential involvement of Mr Parker’s legal representatives in causing delays.

[132]   The second aspect for conclusion is whether Mr Parker’s proposed civil claim against the Agency for failure to grant him legal aid on 5 June 2009 could have sufficient prospects of success.

[133]   As discussed, negligent or wrong decision making by a quasi-judicial body does not give rise to a potential claim in negligence based on a duty of care in private law.  Rather, such decisions are properly the subject of remedial processes provided for under the relevant statutory scheme or of judicial review.  Thus, a civil claim, as contended for in Mr Parker’s case, can have no prospects of success.

Result

[134]   The appeal is allowed.

Costs

[135]   As Mr Parker is legally aided there will be no order for costs.

Goddard J

Solicitors:

Cooper Legal, Wellington for J Parker
National Specialist Advisers, Wellington for Legal Services Commissioner