Skills Active Aotearoa Limited v Minister of Education
[2019] NZHC 2800
•31 October 2019
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-485-212
[2019] NZHC 2800
BETWEEN SKILLS ACTIVE AOTEAROA LIMITED
Applicant
AND
THE MINISTER OF EDUCATION
First Respondent
AND
THE CHIEF EXECUTIVE OF THE MNISTRY OF EDUCATION
Second Respondent
AND
THE CHIEF EXECUTIVE OF THE
TERTIARY EDUCATION COMMISSION
Third Respondent
Hearing: 22–23 July 2019 and 7 August 2019 Appearances:
H J P Wilson and S I Jones for Applicant M S Smith and S Connolly for Respondent
Judgment:
31 October 2019
JUDGMENT OF GRICE J
SKILLS ACTIVE AOTEAROA LIMITED v THE MINISTER OF EDUCATION [2019] NZHC 2800 [31
October 2019]
Contents
Introduction[1]
Background[15]
Formal consultation process[21]
Law[31]
Justiciability[38]
The Treaty of Waitangi[44]
Natural justice and legitimate expectation[68]
Period before February 2019 [83]
Context[83]
Legitimate expectation[98]
Natural justice[106]
Justiciability[116]
Conclusion[117]
After February 2019 [119]
Law[119]
Decision two: setting the consultation period and engagement[123]
Decisions three and four: refusals to extend time[152]
Requests for information[161]
Other engagement[178]
Level of consultation[182]
Other matters[188]
Analysis of submissions[188]
Preliminary decisions[193]
Failure to consider relevant considerations [205]
Discretion[207]
Conclusion[209]
Costs[212]
Introduction1
[1] The roles and responsibilities of providers in the vocational education training sector (VET sector) are under consideration by the government as part of a major reform. The sector is responsible for the education of learners (students, trainees and apprentices) at a tertiary level and aims to equip them with the knowledge, skills and qualifications to enable them to perform in a specific role or kind of work in a specific industry.
[2] At present learners can work toward qualifications by enrolling in a programme of study and doing mainly classroom based learning or alternatively by industry learning. The latter involves formal education and training in the workplace and most of the learning happens on the job.
[3] Any reform will impact on the scope, role and responsibilities of education providers including New Zealand’s Institutes of Technology and polytechnics (ITPs/polytechs) as well as Industry Training Organisations (ITOs) which operate in the industry training area.
[4] Skills Active Aotearoa Limited is an ITO. It operates in the sport, exercise, recreation and performing arts sector.
[5] The Minister of Education (the Minister) is the Minister responsible for the sector.2 The Chief Executive of the Ministry of Education (the Ministry) heads the government department responsible for vocational education and is the second respondent to these proceedings. The Tertiary Education Commission funds vocational education providers and its Chief Executive is the third respondent to the proceedings. I refer to the respondents collectively as the Crown.
[6] Skills Active seeks to judicially review four decisions made by the Crown. These decisions were made in the course of the development of reform proposals by
1 On 7 August 2019 I dismissed the application for judicial review. This decision sets out my reasons.
2 The Minister is the Hon Chris Hipkins.
the Crown, which were put out for consideration in a formal consultation process which ran from 13 February 2019 to 5 April 2019.
[7] The relevant decisions are the decisions: not to consult directly with Skills Active either before or during the formal consultation period (decision one); to set a six-week consultation period with the ITOs including Skills Active (decision two); to refuse to extend that period on 20 February 2019 (decision three); and to refuse to extend that period on 4 March 2019 (decision four).
[8] Skills Active says that the four decisions were in breach of Skills Active’s rights and the Crown’s public law obligations as follows:
(a)Decision one was made in a breach of natural justice, a breach of legitimate expectations, and the Crown failed to have regard to relevant considerations.
(b)Decision two was made in a breach of natural justice, a breach of legitimate expectations, and the Crown failed to have regard to relevant considerations.
(c)Decision three was made in a breach of natural justice and the Crown failed to have regard to relevant considerations.
(d)Decision four was made in a breach of natural justice and the Crown failed to have regard to relevant considerations.
[9] Skills Active raised a number of additional matters in its submissions, in particular:
(a)It criticised the analysis by the Crown in its published analysis of the submissions made in the formal consultation period.
(b)It suggested that the Crown had shown “flickers” of predetermination as to the final outcome of the reforms.
[10] A theme running through Skills Active’s submissions and evidence was that it was entitled to a high level of engagement, approaching negotiation, with the Crown in the development of any reform proposals.
[11] Mr Wilson for Skills Active nevertheless emphasised there was no legal claim based on bias or predetermination by the Crown. He also accepted that the Crown was not required to negotiate the reform proposals with Skills Active.
[12] Skills Active says this Judicial Review is based on the relevant supervisory jurisdiction of this Court which arises at common law.
[13] The underlying questions are: whether the Crown was required to directly consult Skills Active in the development of the reforms, if so what was the appropriate level of consultation required and did that occur?
[14] An overview of the background and the consultation and engagement process that took place is necessary.
Background
[15] There are 16 New Zealand polytechs and Wānanga throughout New Zealand as well as several hundred private training establishments. These organisations are education providers and offer qualifications. The 11 ITOs offer vocational education qualifications and coordinate training for the learners.
[16] New Zealand’s polytechs face significant financial challenges. A number of the polytechs were or are insolvent. They continue to have significant financial difficulties. The government has had to provide millions of dollars to some to keep these bodies going. Their financial problems were projected to get worse if there was no change in the sector.3 This added an element of urgency to the VET sector reforms from the Government’s point of view.
3 Financial modelling by KPMG indicated the majority of Polytechs would not be financially viable by 2022.
[17] The 11 ITOs are government funded and must be approved for the specialty or sectors in which they operate.4 They organise the delivery, assessment and/or monitoring of training for trainees and apprentices. They do not actually deliver education but coordinate arrangements with education providers and employers who provide the work place training.
[18] The genesis of the VET reforms was in the 2017 election Labour Education Manifesto. Reviews of the sector were commenced in earnest in April 2018 by the Ministry of Education and the Tertiary Education Commission (VET Review). Any reforms were intended to provide a sector capable of equipping learners with the skills needed to participate in the workforce. The rapid changes in workforce requirements meant employees were likely to change jobs more often and engage in more frequent vocational training.
[19] The VET Review was to be an examination of the wider VET policy. It involved wide engagement, including with learners, employers, industry representatives, ITOs and polytechs as well as parties in the education sector generally. At the same time, a review of the polytechs was underway called the ITP Roadmap 2020 Project. This was to look at how to ensure a sustainable future for polytechs. Generally, the Crown was gathering information on what was required to make the VET system “fit for purpose” now and in future. In addition, the Crown needed to address the financial unsustainability of the polytech subsector.
[20] In December 2018, the two reviews were merged into a single work programme to carry on the review and reform process. The new programme was called the Reform of Vocational Education (RoVE). Skills Active (and other stakeholders) were advised of the merged workstreams and told that public consultation on the VET reforms would take place in early 2019.
4 The ITO funding includes a contribution from relevant industry sectors. ITOs must apply for re- recognition and gazetted scope every five years.
Formal consultation process
[21] The Minister launched a six week formal consultation process on the VET reforms on 13 February 2019. A consultation discussion paper set out an integrated package of reforms for consideration (the Consultation Document). The paper set out the background to the reforms, explained why the changes were being proposed and gave an overview of what the changes would mean for various groups. It also set out other options for reform which had been considered and reasons why those had not been pursued.
In the forward to the Consultation Document the Minister said:
We propose to establish a unified, co-ordinated national system of vocational education and training.
The roles of industry training organisations (ITOs) would be re-shaped so that they are much more focused on skills leadership and making sure that the education and training provided meets the needs of employer.
…
Our proposals are ambitious, and necessarily so. We cannot continue to tweak the system knowing the model is fundamentally broken, and isn’t delivering our work force the skills they need to thrive.
[23] The three main proposals for consideration were set out in the document as follows:
The government’s integrated programme of reform comprises three main proposals:
(a)Redefined roles for education providers and industry bodies;
(b)An institution with the working title of New Zealand Institute of Skills & Technology [(NZIST)], bringing together the 16 existing ITPs as a single entity; and
(c)A unified vocational education funding system.
These proposals are a linked and interdependent package. Collectively, they will result in a single streamlined and effective system of vocational education and training to meet New Zealand’s current and future needs.
[24] The Consultation Document stipulated a six week consultation period during which there was also to be extensive engagement and consultation across the country with all stakeholders. It sought feedback on specific questions concerning the
proposals. It also noted that feedback and submissions were not limited to the questions or the proposals. In addition, it expressly sought “other ideas or models” that submitters thought the government should be considering.
[25]The Consultation Document also:
(a)provided internet address links to online fact sheets and technical discussion documents to assist submitters to learn more about the proposals and encourage feedback on specific design elements. A regularly updated data base of frequently asked questions (FAQs) was linked.
(b)provided information on proposed face to face consultation events. These included community engagements, hui for iwi and Māori stakeholders, fono for Pacific stakeholders, “engagement with ITOs boards, followed by 11 visits to ITOs”, meetings with polytechs and Wānanga as well as with universities and peak bodies in the private training establishment sector.
(c)noted that if the changes went ahead the government would need to provide support for the change processes to ensure they were smooth and effective. This was so that any changes from 2020 onward would be implemented in a way that minimised disruption to learners and employers.
(d)noted that changes could be “stressful and disruptive” and that ongoing uncertainty would make it harder for vocational education organisations to continue delivering the best for their learners, employers and communities. Therefore, it said, the government would consider all feedback received during consultation and make a decision quickly, likely in May or June 2019, about how to proceed and would aim to pass any new legislation during 2019 to enable a new institution to be in place from 1 January 2020.
(e)noted that whatever the change it would work closely “with stakeholders to support those affected to make the most of the opportunities it presents”.
[26] The formal six week consultation period was to close on 27 March 2019, however, the period was extended for a further week and actually closed on 5 April 2019.5 Skills Active made a written consultation submission on the reforms, as did other ITOs. The Chief Executive of Skills Active, Dr Davidson, is also the Deputy Chair of the Industry Training Federation (ITF), the ITO umbrella organisation which represents the ITO sector. Skills Active contributed to the submission made by ITF. In addition, Skills Active assisted its stakeholders to submit individual submissions. Over 300 submissions were made on the templates provided by Skills Active.
[27] Skills Active acknowledged that the proposals set out in the Consultation Document were not set in stone and that alternative proposals were invited. In its written consultation submission Skills Active made alternative proposals for sector reforms.
[28] During the formal consultation period representatives of Skills Active attended a number of engagement events with the Crown. Skills Active also hosted Crown officials for discussions of the proposals.
[29] Skills Active representatives met directly with the Minister and the Associate Minister of Education, who is also the Minister of Māori Crown Relations – Te Arawhiti,6 during the consultation period. The Crown submitted that the two Ministers did not meet with any other ITOs in this way. In addition, during that period senior Crown officials attended a Skills Active board meeting.
[30] The Crown continued to engage with Skills Active and other ITOs following the close of the formal consultation period. While Skills Active submitted that any consultation or engagement in the period after the close of the formal consultation period was irrelevant and outside the scope of these proceedings, it continued to
5 The extension was due to the Christchurch Mosque shootings which took place on 15 March 2019.
6 The Hon Kelvin Davis.
engage with the Crown in discussions about the reforms. However, Skills Active says it was too late by then for it to have the opportunity to persuade the Crown to change the direction of the reforms.
Law
[31] Skills Active says that its right to be consulted directly arose from obligations on the Crown based on natural justice and legitimate expectation. It also says the Crown’s obligations arose or were enhanced by obligations flowing from the Te Tiriti o Waitangi/Treaty of Waitangi.7
[32] Skills Active accepts that any substantive decision on the reform to be adopted is one of policy and is for the Minister, cabinet and ultimately the legislature. It says its challenge is not to the substantive decision. It does not seek to review government policy decisions. Rather, the challenge is to process decisions made in the course of the government’s development of the reform policy, including in the formulation of the three proposals put out for consultation. It seeks to distinguish the present case from those in which the Courts have declined to interfere with government policy development and parliamentary processes.
[33] Skills Active says the Crown’s four decisions on process took away the last opportunity for it to have a proper say on the proposals for reform. It says those decisions, therefore, affected Skills Active’s right to be heard directly by the Crown and to have an appropriate part in shaping the reforms.
[34] This is not a case where the Crown had an explicit statutory obligation to consult ITOs. Such statutory obligations may be imposed by statute.8
[35] The supervisory function of the Court can arise where there is an exercise of public power whatever its source. Nevertheless, it is generally accepted that some
7 I deal with the ground of failure to have regard to relevant considerations separately below.
8 For example: The Retirement Villages Association of New Zealand Inc v Minister for Building and Construction Wellington HC CIV-2007-485-2139, 19 December 2007 at [59]–[70]. A statutory requirement to consult rest homes in the process of approval by the Minister of a code of practice.
exercises of public power are not suitable for review because of their nature or subject matter – in shorthand they are described as being not justiciable.
[36] Skills Active pointed to the comments in Thomson v Minister for Climate Change Issues as indicating that justiciability is dependent on the ground of review, rather than the subject matter:9
[134] … The subject matter may make a review ground more difficult to establish, but it should not rule out any review by the Court.10 The importance of the matter for all and each of us warrants some scrutiny of the public power in addition to accountability through Parliament and the General Elections. If a ground of review requires the Court to weigh public policies that are more appropriately weighed by those elected by the community it may be necessary for the Court to defer to the elected officials on constitutional grounds, and because the Court may not be well placed to undertake that weighing.
[37] The reference to “justiciability” may be misleading. It suggests that some acts of the Crown may not be judicially reviewable. That is not necessarily the case, rather some decisions are not suitable for judicial review. A close examination of the decisions challenged is necessary to ascertain whether they involve public law error of the kind that should be corrected by the Court. Similarly, an assessment of the grounds of review will be necessary as well. I will undertake that analysis before determining the issue of justiciability.
Justiciability
[38] In Ririnui v Landcorp Farming Ltd, Elias CJ and Arnold J described the type of decisions that may not be suitable for judicial review as follows:11
… the courts accept that some exercises of public power are not suitable for judicial review because of their subject matter. Decisions about the allocation of national resources or involving issues of national defence or national security or involving national political or policy considerations have been held to be not reviewable by the courts, although courts in recent times have been more willing to review decisions in areas previously regarded as inappropriate for review, the most obvious example being decisions in relation to national security. Courts have treated decisions about Treaty of Waitangi settlements as inappropriate for judicial review, not simply because they often involve
9 Thomson v Minister for Climate Change Issues [2017] NZHC 733, [2018] 2 NZLR 160.
10 See for example Chris Finn “The Justiciability of Administrative Decisions: A Redundant Concept?” (2002) 30 FLRev 239.
11 Ririnui v Landcorp Farming Ltd [2016] NZSC 62, [2016] 1 NZLR 1056 at [89] (footnotes omitted).
legislation but also because the issues involved in settlements – such as the nature, form and amount of redress – are quintessentially the result of policy, political and fiscal considerations that are the proper domain of the executive rather than the courts.
[39] As is apparent from Ririnui the Courts have typically exercised restraint when called to assess considerations involving national political or policy development.12
[40] The more that the impugned decision lies in the macro–economic political field the less intrusive the Court’s supervision is likely to be. The reason for this is based on the general principles of deference given to a government’s policy development process leading to legislation. That restraint will usually apply in the context of decisions made in the course of development of government policy which will ultimately be implemented by legislation.13 The constitutional and institutional factors involved may be such that a Court will decline to intervene by way of judicial review because its adjudicative function is not appropriately exercised in the circumstances.14
[41] The Court of Appeal has noted that the larger the policy content and the more the decision is within the “customary sphere of those entrusted with the decision, the less well equipped the Courts are to reweigh considerations involved and the less inclined they must be to intervene”.15
[42] The rationale for the deference and reluctance of Courts to intervene in government processes leading to the development of legislative proposals was articulated in Christchurch City Council v Attorney-General.16 In that case the court noted the possibility of extensive and delaying litigation in the event of judicial supervision of such processes particularly in controversial matters. The challenge there was based on a legal error apparent in the consultation document upon which submissions were based. The Court elaborated on the undesirable outcome of judicial intervention. It said:17
12 Phillip A Joseph Constitutional and Administrative Law in New Zealand (4th ed, Thompson Reuters, Wellington, 2014) at 872–873.
13 At 874.
14 At 872–873. I use “justiciability” in that context.
15 Wellington City Council v Woolworths New Zealand Ltd [1996] 2 NZLR 537 (CA) at 546.
16 Christchurch City Council v Attorney-General [2005] NZAR 543 (HC).
17 At 548.
The Solicitor-General has emphasised the unfortunate consequences which could be expected to follow upon judicial intervention in a case such as this. It is agreed by all parties that if cabinet had chosen not to consult the public at all, then there could have been no complaint. If consultation gives rise to legal challenges in cases such as this, then it is hardly likely that government would be encouraged to pursue a course of what the Solicitor-General described as open government of this kind in the future.
[43] Whether government decisions made in breach of rights based on Te Tiriti o Waitangi and tikanga should be justiciable has been the subject of recent Supreme Court consideration.
Te Tiriti o Waitangi/The Treaty of Waitangi
[44] Skills Active says that it holds a unique position as an ITO as it is a Māori provider. It says it has a high percentage of Māori learners, it is bicultural in its approach and it has a 50 per cent Māori shareholding as well as Māori Board representation.
[45] Skills Active says this supports a right to be consulted directly on policy development and reforms based on the Crown’s Treaty obligations.
[46] In the New Zealand Māori Council case, Cooke P noted that a general duty to consult with Māori based on Treaty obligations was “elusive and unworkable”.18 He said it would be difficult or impossible to lay down exactly who should be consulted before any particular legislative or administrative step which might affect some Māori was taken. Moreover, wide ranging consultations would hold up the processes of government in a way contrary to the principles of the Treaty.19 The President went on to say:20
The principles of the treaty do not authorise unreasonable restrictions on the right of a duly elected government to follow its chosen policy. Indeed to try to shackle the government unreasonably would itself be inconsistent with those principles. The test of reasonableness is necessarily a broad one and necessarily has to be applied by the Court in the end in a realistic way.
18 New Zealand Māori Council v Attorney-General [1987] 1 NZLR 641 (CA) at 665.
19 At 665.
20 At 665–666 per Cooke P and at 693 per Somers J.
[47] The Court of Appeal Milroy v Attorney-General reiterated the reluctance of the Courts to interfere in the formulation of government policy. It rejected the notion of a spectrum of policy where the reluctance would be greater in areas of high policy or constitutional content. The Court of Appeal said:21
[17] The established test is not by reference to remoteness in time or evolution but by function. The formulation of legislative proposals is part of the business of government.
[18] The importance of the process for addressing claims in respect of breaches of the Treaty is fully recognised. Where that involves the exercise by the Executive of statutory or prerogative powers, lawfulness can be challenged on established grounds for judicial review. But where the action challenged does not itself affect the rights of any persons and is undertaken in the course of policy formulation preparatory to the introduction to Parliament of legislation, the Courts will not intervene. Proposed legislative conduct of the Crown said to depart from a previous stance and to be inconsistent with Treaty rights may be within the jurisdiction of the Waitangi Tribunal and may be the subject of representations to the Select Committees of Parliament. But, as Goddard J said, the Courts cannot help.
[48] However, recently the Supreme Court in Ngāti Whātua Ōrākei Trust v Attorney-General raised questions about the exact scope and basis of the principle of non-interference in parliamentary proceedings when Treaty rights were in issue.22 It said:23
It would be over broad to suggest that the fact a decision may, potentially, be the subject of legislation would always suffice to take the advice leading up to that decision out of the reach of supervision by the courts. That would be to ignore the function of the courts to make declarations as to rights.
[49] Ngāti Whātua Ōrākei Trust based its judicial review application on a claim of rights to land, including tikanga rights arising from occupation of land. The Crown had preliminarily decided to transfer the relevant land to Ngāti Paoa. The proceedings had been struck out in the High Court on the basis that the impugned decisions were political in nature and concerned decisions made in the context of preparing legislation. The Court of Appeal dismissed an appeal from the High Court decision. While criticising some factual determinations made in the High Court, it dismissed the
21 Milroy v Attorney-General HC Wellington CP 77/02, 30 August 2002 [Milroy v Attorney-General (HC)]; Milroy v Attorney-General [2005] NZAR 562 (CA) [Milroy v Attorney-General (CA)].
22 Ngāti Whātua Ōrākei Trust v Attorney-General [2018] NZSC 84 at [46]. It involved a shift away from the previous position articulated in Milroy v Attorney-General that the Treaty process was generally non-justiciable as Treaty settlements were given effect to by legislation.
23 At [46] per Ellen France J.
appeal on the ground that the claim would constitute an unwarranted interference in parliamentary proceedings and so was not justiciable.
[50] The Supreme Court disagreed. It concluded that the proceedings should not be struck out in their entirety and allowed various heads of relief to be reinstated. Those heads of relief could be characterised as those relating to Ngāti Whātua Ōrākei’s legal claims including its rights under tikanga.24 Elias CJ suggested such claims may no longer be regarded as interfering with policy development given the maturity of Treaty settlement processes and the post settlement relationships now in place.25
[51] The Supreme Court sounded a note of caution on the extent to which the principle of non-interference in parliamentary proceedings had been held to apply where the decision was distant from the decision of a Minister to introduce a bill to the house or from debate in the house.26 Elias CJ observed there had been creep in the restriction of established constitutional obligations of the Courts not to interfere in proceedings in parliament on the basis of “comity” between the Courts and the legislature.27
[52] Elias CJ went on to note that Ngāti Whātua Ōrākei should not be deprived of the opportunity to have its case heard. She said the issues raised by it concerning its status in relation to the central Auckland land which was the subject of a proposed transfer by the Crown, raised matters which should be considered at a substantive hearing. Her Honour went on to say that as the matter before the court was only a preliminary strike out application there had been no development of the issues in question nor of the Crown’s obligations and the reasonableness of the Crown’s approach in the case.28
[53] Mr Smith, for the Crown in this case, also referred to a recent decision of the Supreme Court of Canada which had been heard but the judgment not released at the
24 At [117].
25 At [113].
26 At [118].
27 At [116].
28 At [124] and [125].
time the New Zealand Supreme Court heard Ngāti Whātua Ōrākei Trust.29 He suggested that the comments of the Canadian Supreme Court assisted in considering whether decisions were “justiciable” in the sense of whether the Court should interfere with them.
[54] The Canadian Court articulated the reasons for the traditional reluctance to interfere with the development of high level government policy. In Mikisew Cree First Nation v Canada the Mikisew sought judicial review of the failure by the government to consult it about policy decisions leading to the introduction of legislation into parliament which had significant effects on Canada’s environmental protection regime.30 The Mikisew argued that the Crown had a duty to consult it on the development of the legislation which had the potential to adversely affect its relevant treaty rights. The majority of the Supreme Court held that the development of legislation in that case by Ministers did not trigger a duty to consult.
[55] On the reasons that development of policy by the government was not to be subjected to judicial review, Karakatsanis J said:31
… constitutional principles — the separation of powers and parliamentary sovereignty — dictate that it is rarely appropriate for courts to scrutinize the law-making process. The process of law-making does not only take place in Parliament. Rather, it begins with the development of legislation. When Ministers develop legislation, they act in a parliamentary capacity. As such, courts should exercise restraint when dealing with this process. Extending the duty to consult doctrine to the legislative process would oblige the judiciary to step beyond the core of its institutional role and threaten the respectful balance between the three pillars of our democracy. It would also transpose a consultation framework and judicial remedies developed in the context of executive action into the distinct realm of the legislature. Thus, the duty to consult doctrine is ill-suited to the law-making process; the law-making process does not constitute “Crown conduct” that triggers the duty to consult.
[56] The Canadian Court recognised the government had obligations to consult with Aboriginal people, nevertheless, it was of the view that mandating consultation
29 The Canadian Court of Appeal decision was referred in Ngāti Whātua Ōrākei Trust v Attorney-General, above n 22, at [109]; Canada (Governor-General in Council) v Mikisew Cree First Nation 2016 FCA 311, (2017) 405 DLR (4th) 721.
30 Mikisew Cree First Nation v Canada [2018] 2 SCR 765 (SCC).
31 At [2].
because of a potentially adverse effect on an Aboriginal right or claim would have far reaching implications. It commented:32
… Imposing a duty to consult at this stage could effectively grind the day‑to- day internal operation of government to a halt. What is now complex and difficult could become drawn out and dysfunctional. Inevitably, disputes would arise about the way that this obligation would be fulfilled. This is why the separation of powers operates the way it does. The courts are ill-equipped to deal with the procedural complexities of the legislative process.
[57] The Canadian Supreme Court noted that it was a matter of practice and of good public administration to consult on policy options in the preparation of legislation and it often occurred. However, it was not constitutionally required.33
[58] As Skills Active pointed out, the Canadian case was decided in a different constitutional context. In addition, it said that the Mikisew case involved legislation that had already been passed unlike the situation in the present case. However, I have set out the comments from Mikisew as they provide a useful summary of the implications of interference with decisions of the Crown made in the process of policy development. Similar considerations apply in the New Zealand context despite the constitutional differences.
[59] Ngāti Whātua Ōrākei involved claims of mana whenua and claims arising from the Treaty and tikanga. These were effectively claims to customary title and not dissimilar to the recognition of legal rights over which there is a dispute. Skills Active have no such recognised tikanga or Treaty rights.
[60] It was also relevant that Ngāti Whātua Ōrākei was dealing with a strike out application so the rights claimed, the Crown’s obligations and its responses had not been developed in evidence. The Supreme Court decided the claims should not be struck out in their entirety. That would have prevented a substantive hearing of the judicial review claims in relation to the Crown’s decision made under the Ngā Mana Whenua O Tāmaki Makaura Collective Redress Act 2014 on the disposition of the relevant land said to be in contravention of Ngāti Whātua Ōrākei rights.
32 At [164] per Rowe J.
33 At [166] per Rowe J.
[61] This case is not a strike out application. It has involved a full examination of Skills Active’s claims, evidence and the basis for those claims. Therefore, I am able to determine on the evidence whether Treaty obligations arise in favour of Skills Active.
[62] The Crown has developed methods to work and consult with Māori in government policy development. It is assisted by Te Arawhiti, the Office for Māori Crown Relations. That office has been, and it was intended would continue to be, involved in the RoVE policy development process.
[63] Dr Klinkum and Mr Fowler for the Crown referred in their evidence to the engagement with Māori during 2018. The Crown had a dedicated team to lead engagement with Māori on the reforms involving officials from the Ministry, the Tertiary Education Commission and New Zealand Qualifications Authority. The Minister also met the chairman of Skills Active and Mr Napia and they discussed how best to engage with Māori.
[64] Skills Active criticised the length, nature and depth of the Crown engagement with Māori. However, I do not have the information nor are the appropriate parties before the Court to undertake an assessment of the Crown’s engagement with Māori generally in this case. There is no reason to reject the evidence of the Minister and officials on the fact of this engagement and the integrity of the processes which the government has put in place to achieve this. I also note the analysis on the feedback from the formal consultation process indicated general support by Māori submitters for change in the sector. In addition, Dr Klinkum and Mr Fowler say that the numbers of Māori are greatest in the provider based training institutions such as Wananga, ITPs and PTEs (private training establishments). They say Māori are not over represented in ITO delivery. The engagement with Māori using the processes developed by the Crown was also intended to continue beyond the formal consultation process.
[65] If Treaty based obligations were imposed on the Crown to consult a particular private provider in a case such as this, it would create significant complications for government policy development processes. It would import the general and open ended formless duty to consult that was rejected by the Court of Appeal in
New Zealand Māori Council v Attorney-General.34 Not only would there be confusion as to who should be consulted about what but it could lead to substantial delay and litigation as the various individual stakeholders sought to promote their competing interests.
[66] I note also that a Skills Active board member is pursuing Treaty related issues insofar as they are relevant to the VET reform process in the Waitangi Tribunal. That is the appropriate forum to undertake that inquiry.
[67] I conclude that there are no Treaty-based rights established which required or enhanced an obligation on the Crown to consult directly with Skills Active.35
Natural justice and legitimate expectation
[68] The requirements of natural justice are based on a duty to act fairly. They are variable and depend on the circumstances.36 Legitimate expectation to a certain extent overlaps with the natural justice ground in this case.
[69] Skills Active says its right to be consulted by the Crown arose because the reforms proposed might lead to changes to the sector which would affect it detrimentally as a significant ITO. In addition it pointed to a practice in past major reforms to include all key stakeholders in various processes. Therefore, it said the same should occur here. It further argued the polytechs had been given more time and engagement by the Crown in the review and the development of the reform proposals than was allowed to Skills Active/ITOs. It says it should have received a proportionate amount of time and engagement as the polytechs.
[70] Skills Active said the obligation to consult it was similar in nature to that which was recognised in Coal Producers Federation of New Zealand Inc v Canterbury Regional Council.37 That case involved a summary decision by the Regional Council
34 New Zealand Māori Council v Attorney-General, above n 18, at 683 per Richardson J.
35 Beyond the consultation actually undertaken in that period.
36 Graham Taylor Judicial Review: A New Zealand Perspective (4th Ed, LexisNexis, Wellington, 2018) at 556.
37 Coal Producers Federation of New Zealand Inc v Canterbury Regional Council [1999] NZRMA 257 (HC).
to ban the domestic burning of coal in order to manage emissions in the region. The Coal Producers Federation, the umbrella organisation for the coal industry, sought judicial review of the banning decision. It said that it and its members had been closely involved with the Council in the development of a path to managing emissions but the Council had then made the abrupt decision to ban without further consulting Coal Producers representatives. This occurred in circumstances where they had been plainly led to believe the industry would be consulted and be allowed to present research to the Council before any decision was made. The Court commented:38
To a certain extent, the Council has brought this situation upon itself. Notwithstanding that it was working closely with the coal industry (and others) on the various options, it chose not to take the plaintiff into its confidence when it must have been aware that a summary ban on coal … was a real possibility and after the knowledge of the proposed ban.
[71] The High Court in Coal Producers proceeded on the basis of a concession that the decision was justiciable. The decision involved was reviewable as an exercise of statutory power under the Judicial Review Amendment Act 1972, now the Judicial Review Procedure Act 2016.
[72] There was no dispute that the Regional Council had made a sudden about turn and had deliberately set out to try and disguise the fact that it had decided to summarily ban coal burning using a fast track process under the Resource Management Act 1991 (RMA) without warning Coal Producers it was intending to do so.
[73] The RMA banning provision had not been mentioned to the Coal Producer representatives. They had been led to believe that a different path would be followed and that they would have ample opportunity to present their case in a formal process. In addition, that process was to be subject to the scrutiny of the Environment Court. The Regional Council had reneged on that process and withdrew its engagement without notice.
[74] In those circumstances the Judge held that it was reasonable for Coal Producers to have expectations that it would be consulted before the banning decision, so it
38 At 278 (emphasis added).
followed that the rules of natural justice had been breached.39 The Court found that clear representations as to process had been made by the Council and Coal Producers had been deprived of a proper opportunity to be heard. Therefore, the summary ban was the result of a serious abuse of process with significant consequences for Coal Producers and its members.
[75] The claim the Regional Council had “deliberately” set out to lead the Coal Producers representatives to think they would have the opportunity to present their arguments within a formal process was not challenged.40 In that case “in all the circumstances the Council was under a duty to act fairly” to allow Coal Producers to present its arguments but it did not do so.41
[76] Conduct or statements by a public authority may give rise to a legitimate expectation to be consulted. This is because if the authority indicates that a certain course will be taken and that path is not followed but instead a different one is taken by the authority, detriment may result to the person who held the expectation.
[77] The issue of fairness “is inextricably bound up with detrimental reliance” by the promisee.42 While, reliance is not a necessary requirement to establish legitimate expectation it helps distinguish a “legitimate expectation from one which is a mere hope that a course of action will be pursued”.43 For instance reliance may not be required in a situation where the representation is published to the world at large, such as formally promulgated in a set of government guidelines.44
[78] The crucial question is “whether, viewed objectively, … a legitimate expectation could have arisen” in the circumstances.45 While one party may perceive that it would have a role in the decision making, that perception must be more than a hope or expectation on that person’s part. Without any action or assurance by the other
39 At 275.
40 At 275.
41 At 276.
42 Wellington International Airport Ltd v Air New Zealand [1993] 1 NZLR 671 (CA) at [70].
43 Green v Racing Integrity Unit Ltd [2014] NZCA 133 at [15].
44 E v Attorney-General [2000] NZAR 354 (HC).
45 Te Heu v Attorney-General [1999] 1 NZLR 98 (HC) at 127.
offering something which it had failed to deliver, a legitimate expectation is unlikely to arise. A hope is not an expectation in public law terms.46
[79] For a legitimate expectation to arise in public law, a public body must make a clear and unequivocal representation.47 Unambiguous indications by politicians without committing themselves to a course of action are insufficient.48 In general terms policy advice to decision makers will not give rise to a legitimate expectation,49 nor do equivocal remarks by a Minister.50 The case law illustrates that the establishment of a legitimate expectation is highly contextual but the representation must be clear.
[80] Skills Active pointed to the High Court decision of Talleys v Cullen which summarised the relevant principles relating to legitimate expectation.51 In that decision Ronald Young J said:52
The relevant principles can be summarised as follows:
(1)These are four categories of legitimate expectation (a) of a substantive right; (b) of an interest in a benefit which the claimant hopes to retain; (c) of a fair procedure; (d) of a procedure not required by law will be held. (see Baker supra)
(2)The expectation must be reasonable.
(3)Detrimental reliance upon representation is not essential but it is relevant. Absence of detrimental reliance will be rare. The principles of good administration prima facie require adherence by public authorities to their promises.
(4)The representation must have been clear, unambiguous and unqualified.
(5)Courts will not give effect to legitimate expectation if to do so would require public bodies to act contrary to law.
46 New Zealand Association for Migration and Investments Inc v Attorney General [2006] NZAR 45 (HC) at [143].
47 R (on the application of Royal Brompton and Harefield NHS Foundation Trust) v Joint Committee of Primary Care Trusts [2012] EWCA Civ 472 [Royal Brompton] at [104].
48 Imported Motor Vehicle Industry Association v Minister of Transport HC Wellington CIV-2011- 485-1972, 1 December 2011 at [52]–[53].
49 Whitehouse Tavern Trust Board v Department of Internal Affairs [2014] NZHC 662, [2014] NZAR 605 at [65(2)].
50 McLellan v Attorney-General [2015] NZHC 3218, [2016] NZAR 859 at [75].
51 Talleys Fisheries Ltd v Cullen HC Wellington CP287/00, 31 January 2002.
52 At 47–48.
(6)Legitimate expectation may arise either from an express promise given on behalf of the public authority or from the existence of a regular practice which the claimant can reasonably expect to continue.
(7)Legitimate expectations to either procedural or substantive benefits can arise.
(8)The more the decision is in the policy/political field the less intrusive the courts supervision is likely to be.
Three questions assist in analysis in this area:
(i)What has the public authority whether by practise or by promise committed itself to?
(ii)Has the public authority acted or does it propose to act unlawfully in relation to its commitment?
(iii)What should the Court do?
[81] Even when a legitimate expectation is recognised, the Court must put that expectation in context and weigh it up with all the other considerations in the case.
[82] I now consider the circumstances in this case which Skills Active say gave rise to the legitimate expectation and/or natural justice obligations by the Crown that it would consult it directly in the period before February 2019.
Period before February 2019
Context
[83] The present Minister took over the education portfolio in October 2017. From then until February 2018 the officials and the Minister gathered information on the VET system. The Minister released details of the education portfolio work proposed by the government including a programme of change for the polytech and vocational educational sector more generally on 2 February 2018.
[84] In early 2018 the Minister informed cabinet of his intention to review the VET system to identify what changes needed to be made so it could produce the volume and quality of skills to support industries and the government’s economic development plan. The proposals for evidence gathering and analysis as well as engagement with a range of sector groups and stakeholders with an interest in the VET system were set
out in a report by officials to the Minister in April 2018. Information was to be gathered to inform the development of proposals for the reform of the system.
[85] In April 2018 following cabinet briefings by the Minister, work was commenced on the VET review. The review team travelled around the country and spoke to a range of stakeholders. It prepared a summary of stake holder views from that engagement, which included the views of ITOs. The engagement in August 2018 included an ITO workshop at which a sample of ITOs and the umbrella ITO organisation ITF were represented. While Skills Active was not an invited member of that particular group, Dr Davidson (the deputy chair of the ITF Board) reported to the Skills Active Board as its Chief Executive on 22 August 2018 (covering the period July/August 2018) that:
Skills Active is engaged in providing feedback to the Ministry of Education as consultation as underway on the various education/reforms being commissioned by the Minister of Education, Chris Hipkins. The ITF is also taking a lead on providing feedback and on taking part in consultative interest groups to promote the interests of ITOs in these changes.
…
Josh Williams53 and I met with Minister Hipkins three weeks ago. I was there in my capacity of Deputy Chair of the ITF. The Minister restated his commitment to industry training, but that we would have to wait for the VET review and ITP review to run their course before we would see any positive outcomes.
[86] In the course of the VET review the Crown also heard from other stakeholders including iwi, business, community groups and local government organisations at meetings around the country between June and August 2018. The ITP (polytech) project team sought and received stakeholders’ views through surveys, online submissions and other channels.
[87] The Ministry and Commission say that the Crown’s objective over the period up to December 2018 was to gain information to help inform policy options for changes to the polytech sub-sector and the VET system more generally. It says it was not consulting on specific policy proposals, but rather the engagement was designed to provide the Crown with a range of relevant information.
53 The Chief Executive of ITF.
[88] The Crown says that its engagement/information gathering in the review process included discussions with ITF as well a sample selection of ITOs covering primary (agriculture), traditional trades and manufacturing (electrical) and services (aged care) sectors. It said that sample and targeted engagement allowed it to go deeper into understanding the issues. The Crown said that overall it engaged with around 100 stakeholders across the sector and that level of engagement was not a- typical in information gathering for an ongoing policy development process.
[89] On 28 September 2018 Skills Active and others were updated on the Crown’s progress in the review of the VET sector. The Crown noted it had received a number of responses to its requests for information and it had taken those into account. It said a consultation process would begin in the first quarter of 2019.
[90] Skills Active continued to actively monitor the progress of the reforms. In Dr Davidson’s Chief Executive board report to the Skills Active board of 21 November 2018, he said:
The Minister had indicated that there may be some preliminary findings circulated prior to the Christmas but we have not heard anything yet. Both of these reviews (which seem to be converging into one overarching future strategy) are vital to our future as an ITO.
[91] Cabinet at its meeting on 10 December 2018 following a recommendation from the Minister decided that the ITP (polytech) review project and the VET review should be combined into a single Crown work programme under the title RoVE. The rationale for this identified in the officials’ papers prepared at the time was that many industries were frustrated by the inability to manage their pipeline of skilled workers and learners; the unhealthy tension between ITOs and polytechs competing for public funding rather than collaborating to get the best results for learners and employers and the operation of two separate but interrelated systems or models was not efficient nor was it user friendly. That made it difficult for students to move between the different models. These problems, it was suggested, called for fundamental reforms to create a nationally and a regionally networked VET system which would result in a significantly improved system that was sustainable and fit for the future of work.
[92] Skills Active and others were informed of the decision to combine the reviews the day after the cabinet decision was made. It was advised that a public formal consultation process was expected to start early in the new year, possibly around February 2019. The Crown wrote to Skills Active and others in the sector acknowledging the input from the sector and its stakeholders in the initial discussions on the VET review and the ITP review.
[93] Skills Active says the Crown made express statements or promises to consult directly with it. These generally relate to the period following the launch of the formal consultation process. The statements include:
(a)A statement in a letter by Crown officials to Skills Active and other ITOs dated 11 December 2018 that the Minister “has made it clear that he wants us to continue working closely with you once proposals for change are released for consultation next year”; and “once the government has determined the range of the proposals it wants to consult on, we will work with you to test these alongside wider public consultation. We will provide materials and opportunities for a wide variety of stakeholders to provide feedback on proposals”.
(b)A statement by Crown officials on 9 February 2019 that “we will be following through in a more a deliberate and tailored way with Māori and iwi across the country. … Keen to catch up with you and [Dr Davidson] at the announcement [on 13 February] or ASAP thereafter. We also want to meet specifically with the Māori and iwi entities that are shareholders in Skills Active. We would appreciate any guidance that you might have on best how to do that”.
(c)A statement in the Consultation Paper that the government would be “undertaking an extensive engagement and consultation process across the country”.
(d)Advice in an email on 13 February 2019 to Skills Active and other ITOs from Crown officials saying that in the consultation period there would be engagement with ITOs (among others) around New Zealand.
(e)An indication by officials that a meeting of ITOs, CEs and Chairs proposed for 21 August 2018 (which subsequently took place on 7 March 2019) would focus on feedback, clarifying issues and working together on options and approaches and would “… be separate to the formal consultation visits planned to ITOs and to the public consultation sessions …”.
(f)Various other general statements that there would be a process of regular engagements as early as possible and that the Minister was committed to working with Skills Active and to understand industry and ITO’s perspectives;
(g)General statements by officials that indicated a commitment to meet the Crown obligations under the Treaty of Waitangi and to work closely with Te Arawhiti and the Office of the Honourable Kelvin Davies (Associate Minister of Education) “to ensure that our consultation work to date is appropriate”.
[94] Skills Active also points to the speech by Minister Hipkins on 13 February 2019 at the launch of the consultation process in which he said that the Crown would be “working closely with education providers and ITOs to seek their input on designing on the new system and managing the transition”.
[95] These statements indicated that the Crown would engage and consult with ITOs and Skills Active but there is nothing in those statements that would support a claim that the Crown made a promise to Skills Active to consult directly with it in a particular way.
[96] The Crown was aware that Skills Active and other ITOs could be affected to their detriment if the reform proposals were implemented. This is not unusual as many
government policy reforms bring changes which may be detrimental to participants in the relevant sector. That does not of itself introduce a public law obligation on the crown to directly consult or negotiate with parties who may be affected by policy reforms.
[97] With that background in mind I now turn to consider Skills Active’s claim that it had a right to be consulted directly arising from expectations based on the Crown’s processes in other policy reviews and/or by virtue of its level of engagement with the polytech sector.
Legitimate expectation
[98] Skills Active says that processes adopted by the Crown in other policy reviews of significance gave rise to an expectation by it that the same or a similar process and timeframe would be adopted in this reform. An example in the education sector to which it pointed was the process for the review of the national curriculum for educational achievement system (NCEA). This is the national framework of qualifications and achievement for educational achievement recognition in New Zealand and provides the main national qualification for secondary school students.
[99] Skills Active had gathered information about the NCEA review taken from the RoVE website. However, no detailed analyses was provided of the issues involved, who the stakeholders were nor of the precise engagement with various sectors which took place. The NCEA review is a large project involving many different issues, individuals and stakeholders. It may well have called for different processes than those undertaken here. The Minister also said that the NCEA review did not have the urgency of the VET sector review.
[100] This Court does not have the information which would be required to make a proper comparison between the two review processes, let alone a comparison of the level and quality of engagement of the individuals who could be affected by each of the reviews. In any event the Court is not equipped to make that type of comparison in this case.
[101] The second comparison that Skills Active says supports its claim to be consulted directly was the engagement by the Crown in 2018 with the polytech sector leading up to the development of the proposals for reform.
[102] Skills Active says the Crown spent more time with and had better engagement with polytechnics throughout 2018 in the ITP project review than it did with the Skills Active or ITOs generally in the VET review. It says a proportionate amount of time and attention should have been given by the Crown to Skills Active and ITOs generally. In addition the merging of the ITO and polytech/ITP reviews was criticised by Skills Active as being unfair to it as it meant the whole VET review process was accelerated.
[103] Skills Active does acknowledge that there was engagement with its representatives and ITOs in the period leading up to December 2018. It, however, says that the engagement was not sufficient and in any event, it was only for the purpose of information gathering and for the officials to gain an understanding of the sector so it was not consultation.
[104] In my view, a comparison of the processes and engagement undertaken between polytechs on the one hand and ITOs or Skills Active on the other would be a difficult, if not an impossible, task for the Court. As with the suggested NCEA process comparison, the information required to make such a comparison is not available. In any event it would be difficult to make a meaningful comparison between the level, quantity and quality of engagement occurring between the Crown and various bodies or stakeholders in each sector likely to be affected by the reforms. The Crown’s engagement will necessarily differ depending on the issues involved including in this case, the financial position of some of the ITPs.
[105] It must also be borne in mind that the plaintiff in this case is Skills Active. While the evidence suggests that some ITOs and the ITO sector generally may not have supported all or some of the proposals for reform, the proceedings are brought by Skills Active alone which is seeking to establish the Crown had an obligation to consult with it directly. These are not proceedings brought on behalf of the ITO sector generally. The evidence shows that ITF and various individual ITOs were involved in
engagement with the Crown on behalf of the ITO sector over the reforms in the period leading up to the development of the proposals and formal consultation. ITOs provided information and comments to the Crown as well as meeting with Crown officials. The ITF and a sample of ITOs were involved in a workshop on the reforms in August 2018. While Skills Active says it was inappropriate that only some ITOs were involved it acknowledges that ITF circulated notes of meetings in which it was involved in to Skills Active and other ITOs. There is no doubt Skills Active had input and gave its views to the Crown, through Dr Davidson at least. His reports to the Skills Active Board indicated Skills Active was involved in the engagement with the Crown and he was satisfied that Skills Active was providing input, whether directly or through his involvement in ITF, and was taking an appropriate part in that engagement.
Natural justice
[106] The Ministry wrote to Skills Active and other ITOs on 28 September 2018 updating it on the review process and advising that a formal consultation process was to commence the first quarter of 2019. That letter attached summaries of stakeholders’ views gathered from providers, ITOs and employers, learners and other stakeholders. The summaries highlighted the good points about the existing VET structure but also pointed to the problems. In the letter officials noted that they had reported to the Minister on their assessment of the VET system including a summary of stakeholders’ views and the policy changes raised. This advice to the Minister also took into account a range of other information including the government’s education work programme, relevant research, developments in similar education systems as well as “… an internal analysis of a new dataset focussed on VET”. The letter noted that the ITO review team and ITP (polytech) review team had been working closely together in the process up to that date.
[107] On 11 December 2018 immediately following the cabinet decision to merge the workstreams for ITPs/polytechs and the VET reviews, officials wrote to Skills Active and other ITOs advising that workstreams had been merged into RoVE. It also recorded the input made by the sector and stakeholders and acknowledged the “complex nature of the sector and the issues that tertiary education organisations are
currently facing”. The letter also noted the Minister “… had made it clear he wants
… to continue working closely with you once proposals for change are released next year”. The letter confirmed that public consultation would occur in early 2019.
[108] Skills Active says that the government decision to accelerate the VET reforms and merge the reviews due to the urgency generated by the financial plight of a number of the polytechs was unfair to it. It says that urgency was not the fault of Skills Active nor the ITO sector and any reforms to the ITO sector could have been decoupled from those of the polytech sector.
[109] Skills Active also says it had information which would assist the Crown in the reforms. The fact that Skills Active was an ITO and had information that would assist in the reforms was recognised by the Crown. As is apparent from its Chief Executive’s Board reports Skills Active was aware that the Crown was intent on gathering information from the sector in its engagement with Skills Active and ITOs as well as other stakeholders leading up to the February 2019 consultation. It was open to Skills Active to provide whatever information it thought the Crown should be aware of at any stage. That it did so is apparent from Dr Davidson’s reports to the Skills Active Board.
[110] The letters from the Crown to Skills Active of 28 September 2018 and 11 December 2018 confirmed that the process to date had been one of information gathering as well as gathering views from stakeholders. The Crown had said it was not seeking to consult with anyone until the formal consultation process began. Until then it had no proposals upon which to consult.
[111] In my view the process for information gathering and the analysis undertaken was a matter for the Crown. The merging of the processes into RoVE did not make the process unfair in a public law sense. The decision to merge the reviews was one for the Crown and it was not required to consult Skills Active on that decision. From a practical point of view the two work streams had been working together closely. It would have been difficult for the government to deal with the polytechs separately from the ITOs when they were each important parts of the VET sector. Skills Active acknowledges the two streams were interlinked and that polytechs and ITOs competed
for students to a certain extent. The government viewed the vocational education training as one sector and saw it as key to equipping vocational learners to adapt to the future work force requirements. The Crown’s only promise to Skills Active was that there would be an opportunity to make submissions at the formal consultation stage and it would work with it and other ITOs to test the proposals.
[112] No specific policy proposals had been put to either the polytechs or the ITOs before the February 2019 consultation process began. The Crown said it did not consult with any stakeholders on the three proposals that were put out for consideration in the formal consultation nor on the content of the Consultation Document prior to its publication.
[113] The process adopted by the Crown to gather information, research and analyse data and how it chose to engage with the ITP and ITO sector was one for it. It was entitled to design its process, choose a timeframe and merge the reviews as it did. Imposing an obligation to consult or other general public law obligations on the Crown to engage with specific shareholders would make the process time consuming and uncertain.
[114] In September 2018 the Crown signalled it would formally consult in early 2019 and it did so. It also engaged directly with Skills Active and ITOs during the consultation period and beyond. It had given Skills Active ample notice of the process to be adopted.
[115] I conclude that in the period leading up to the consultation process commencing on 13 February 2019 the Crown was under no obligation to consult with or otherwise engage particularly with Skills Active directly on the reforms. The Crown had notified Skills Active of when and how it would undertake formal consultation. I note, however, while it was not obliged to consult or engage with Skills Active, it is apparent that, nevertheless, Skills Active and the ITOs generally did engage and provide information and views to the Crown during the 2018 review process.
Justiciability
[116] Up until February 2019 the Crown was in the process of developing high level government policy to enable it to formulate proposals for consideration. The policy involved consideration of polycentric issues involving workforce development and the education sector as a whole as well as financial economic and political issues. The Crown was entitled to adopt and adapt processes for its policy development in the sector as it needed to in the circumstances. The process decisions made by the Crown in that policy development period are decisions in which this Court should not interfere. The Crown was entitled to decide how best to design and run its policy development process without having to consult Skills Active. Therefore, in that sense the process of policy development and decisions made in the course of that process are not justiciable in the circumstances of this case.
Conclusion
[117] I conclude that on the grounds advanced Skills Active had no particular right to be heard. Neither the process adopted by the Crown in other major policy reforms (in particular in NCEA) nor the 2018 engagement of the Crown with the polytech sector gave rise to a public law right to be heard in favour of Skills Active. Therefore, in relation to the grounds raised by Skills Active I conclude:
(a)Natural justice: The circumstances did not give rise to a right based on natural justice that Skills Active should be heard on the reforms.
(b)Legitimate expectation: no clear and unequivocal representation was made by the government nor were there any practices which could give rise to a legitimate expectation by Skills Active to be heard in the circumstances.
[118] The Crown was not under any public law obligation to consult with Skills Active directly in the development of the proposals. However, the Crown did commit to a formal consultation process and engagement to commence in February 2019. I now turn to the claims concerning that process.
After February 2019
Law
[119]The requirements of consultation are not in dispute. The Court of Appeal in
Wellington International Airport Ltd v Air New Zealand described them as follows:54
If the party having the power to make a decision after consultation holds meetings with the parties it is required to consult, provides those parties with relevant information and with such further information as they request, enters the meetings with an open mind, takes due notice of what is said, and waits until they have had their say before making a decision, then the decision is properly described as having been made after consultation.
[120] The Supreme Court in New Zealand Pork Industry Board emphasised that consultation did not mean negotiation:55
… “consultation” is not synonymous with “negotiation” and that there is no requirement that the persons consulted agree with the final decision…
[121] Skills Active says the Crown should have consulted it directly rather than as part of a public consultation process undertaken in February 2019.
[122] The Crown commenced the formal public consultation process on 13 February 2019. Skills Active alleges that the Crown made reviewable decisions concerning that process. In particular, those relating to the length of the consultation period (Decision 2), the refusal of requests by Skills Active for extensions of time (Decisions 3–4) and the failure to provide sufficient information.56 I deal with these below.
Decision two: setting the consultation period and engagement
[123] In this case the Crown decided to approach the policy development in stages. It wished to first determine the high level policy, including the general structure of the sector. Then it would develop the details. The purpose of the formal consultation was to obtain feedback on the high level proposals for reform, invite other proposals and gather information.
54 Wellington International Airport Ltd v Air New Zealand, above n 42, at 683–684.
55 New Zealand Pork Industry Board v Director-General of the Ministry for Primary Industries
[2013] NZSC 154, [2014] 1 NZLR 477 at [168].
56 The refusal to provide information was not pleaded as a separate decision.
[124] Skills Active claims that the Crown made decision two (that is, to set the consultation period at six weeks) in breach of its public law obligations to Skills Active. It says that the six week period set for it and other ITOs to respond was made in breach of Skills Active’s legitimate expectation as to the process and in breach of natural justice.57
[125] The basis for the legitimate expectation was because of the significant scope and effect of the proposed reforms. Skills Active says that the Crown should have adopted a process similar to those in other reforms and that proportionate time for engagement should have been allowed as between the polytechs and the ITOs.
[126] The Crown says it decided to set the six (extended to seven) week consultation period because it needed to urgently address the polytech’s financial stability as well as to provide certainty for the sector including learners. It says it already had information from the 2018 review work which included the ITO and other stakeholder views. It also intended to undertake more targeted engagement at the close of the formal consultation period which would involve ITOs including Skills Active. This was in order to develop more detailed reform proposals once the high level decisions had been made. This process had been conveyed to the ITOs including Skills Active.
[127] I have already concluded that the Crown had no obligation to consult Skills Active in the process it employed up to the formal consultation process. That included the setting of the period for the consultation. There is no suggestion that the polytechs were given any longer than the six to seven weeks that Skills Active and others were given to make submissions during the formal consultation process.
[128] The consultation period may have been shorter than Skills Active had hoped for but at seven weeks it was not unreasonable in the circumstances.58 The issues were clear as were the proposals. Skills Active questioned the need for urgency as expressed
57 The third cause of action is failure to have regard to relevant considerations which I deal with below.
58 Consultation periods of one, two and five weeks have been found not to be unfair: Greenpeace New Zealand Inc v Minister of Health HC Wellington CP85/99, 7 May 1999; Island Bay Residents’ Association v Wellington City Council [2019] NZHC 1240; Wellington City Council v Minotaur Custodians [2017] NZCA 302, [2017] 3 NZLR 464.
by the Minister, but that was a proper matter for the Minister to consider. He was in a better position to make the assessment than this Court.
[129] Skills Active says that the Crown made express promises or statements which gave rise to a legitimate expectation that the consultation period would be longer. I have set these out above at [93]. These were general statements to the effect the Crown wanted to consult and engage with Skills Active and other stakeholders in 2019. It was clear this was to be during and after the formal consultation process scheduled for 2019. No legitimate expectation for a longer consultation period than was set could arise from those statements.
[130] In addition to the written submission process, the Crown had laid out a programme of face to face engagement as part of the consultation process. The Consultation Document set out the proposed engagement as follows:
86.1Four community engagement days, in Auckland, Rotorua, Palmerston North and Christchurch.
86.2Six dedicated hui for iwi and Māori stakeholders, in Northland, Auckland, Gisborne, Rotorua, Wellington and Christchurch, as well as iwi and Māori engagement in each region via the community engagement days and visits to ITPs.
86.3Two fono for Pacific stakeholders, in Auckland and Porirua.
86.4Engagement with ITO boards, followed by 11 visits to ITOs.
86.516 meetings with individual ITPs, at a major campus with each ITP, with separate feedback sessions for management teams, staff and students.
86.6Partnership meetings with the three Wānanga.
86.7Meetings with Universities New Zealand and with peak bodies in the PTE sector.
[131]The Crown says it actually undertook more engagements than those proposed.
[132] The Crown had a separate session for ITOs on the afternoon of the launch of the formal consultation on 13 February 2019 at which the Crown provided additional information on the proposals specific to ITOs and responded to initial questions and feedback from ITO representatives.
[133] On 7 March 2019 a facilitated meeting was held between the Ministry and the Commission and all ITO chief executives and chairs. It included Skills Active representatives. The meeting was intended to obtain early feedback from ITOs, as well as “clarifying issues, and working together on options and approaches”. Dr Davidson said of that meeting that points were made by ITOs about the lack of evidence justifying the reforms. They emphasised their “emphatic position” that they did not want their responsibility for the job training “stripped away”. He said officials showed a lack of understanding of the problem. Dr Davidson says this meeting did not involve consultation because, among other things, “the Proposed Reform had already been decided upon and there was no meaningful opportunity to improve it”. However, the feedback and comments were listened to by the officials and there is no evidence that the information discussed and ideas put forward by Skills Active and other ITOs at the meeting was not considered by the Crown.
[134] The real complaint, as is apparent from Dr Davidson’s comments, is that he thought the reform proposals had already been determined. There is no evidence of that, nor is a claim of predetermination pursued in these proceedings.
[135] Crown officials met separately with representatives of each of the 11 ITOs over the course of the consultation period. The Minister also met with some of the ITOs.
[136] The officials met with Skills Active representatives on 14 February, 1 March and 3 April 2019. The Minister and Minister Davies (the Associate Minister of Education) both met with Skills Active Chair, Mr Napia and Chief Executive, Dr Davidson in person on 2 April 2019.
[137] The Crown says that during the formal consultation period it provided equal opportunity to all ITOs and ITPs to engage and consult on the RoVE proposals but it was up to the individual ITOs and ITPs as to how they wished to engage.
[138] Skills Active does not say that engagement with the Crown did not occur during and after the consultation period. Rather, it says more direct and meaningful engagement should have been arranged by the Crown with it. It criticises the nature of the engagement and says it was not consultation. It points also to delays in the
making of arrangements for meetings by the Crown and says that it had to chase things up.
[139] The Crown said that in the case of Skills Active some of the engagement events took some time to organise. The Crown says the engagement with Skills Active was not always easy or constructive and initially Skills Active representatives were reluctant to have any consultation meeting that did not have a minister present. That led to the delay in organising some of the meetings. However, the Crown says that at the meetings there was a high degree of engagement by Skills Active with the proposals, both at the Skills Active meetings and at events involving other stakeholders.
[140] This accords with Dr Davidson’s evidence. He said “… while Skills Active has been critical of one particular aspect of the proposed reforms, we have strongly supported other aspects and have constructively put forward options to improve the proposals, should they be adopted”.
[141] Skills Active further says that the consultation at these engagements was not true consultation. For instance, it says that the meeting with the Ministers on 2 April 2019 that was a “rangatira ki te rangatira” (leader to leader) meeting and so it was not a consultation meeting. Nevertheless, Skills Active said that at the meeting it explained its concerns about the proposed reform, issues concerning implementation and the effects they would have on learners as well the lack of justification for the proposed reform generally (insofar as it related to ITOs) and the inadequate length of consultation. It also prepared a document for the Minister entitled “Industry Training Works” which showed that the ITO sector was thriving and performed strongly when compared to the polytech sector. The conclusions were said to be drawn from data published by the Ministry, the TEC and various other Crown agencies.
[142] Skills Active says the Ministers did not appear receptive to Skills Active’s views and it blamed officials for briefing the Ministers with a slant against Skills Active. However, it is not alleged that the Minister had a closed mind, or that he had predetermined the outcome of the reforms in a public law sense.
[143] While the engagement with the Crown might not have been all that Skills Active had hoped for, it met the Crown’s obligations to consult and engage as it had promised. That engagement must also be seen in context. There were many other stakeholders with whom the Crown was engaging. It provided Skills Active with the opportunity to engage and consult and it was up to Skills Active to use that opportunity.
[144] Skills Active made its formal written submission within the consultation period. The submission noted that it had been prepared in consultation with shareholders, industry stakeholders, employers, employees, trainees, iwi groups and its board and staff although said that its consultation had been limited due to the restricted timeframe imposed by the Minister. In its submission Skills Active referred to the over 330 electronic individual supportive submissions.59 It also said it supported the submission of the ITF and had included parts of that submission in its own response.
[145] Skills Active’s submission set out its opposition to the proposed transfer of the ITOs’ role of arranging and facilitating work place learning and assessment to a large new institute and other vocational education providers; suggested an alternative for dealing with the urgent issue of the sustainability of the polytechs; went into detail about the contribution that ITOs made to the sector and set out its view of what was needed from the VET system. It outlined its vision for an “effective and cohesive VET system” as well as its view of what the effect would be on industries if the proposals put forward for consideration by the Crown were adopted.
[146] Skills Active’s submission demonstrates that it was aware of the problems in the sector, understood the detail of the proposals being considered by the government and had sufficient information to make a full submission addressing the high level principles as well as putting forward alternative proposals. It says it could have made a better submission if it had further time.
[147] The ITF submission ran to over 20 pages. ITF said that it was collective voice of the ITO industry and was supported by its members in the submission. Like
59 The template submissions referred to below.
Skills Active it opposed the proposal to place responsibility for arranging training for industry trainees and apprenticeship with a New Zealand Institute of Skills and Technology and other providers. It went into some detail about the likely effect of that. It set out a financial analysis of the sector as well as an analysis of the participation of learners in various industries. ITF made a proposal which it said would strengthen the ITOs, reconfigure the polytechs and provide consistent funding across the sector as well as introducing an employer incentive scheme. It also said the Crown had failed to engage properly with the industry training sector. It noted information was missing as to the “lack of clarity around possible roles of ISBs,60 the financial rates that might be used in a consolidated funding model, the costings for the proposed system restructure, metrics for success and timelines around the implementation of elements of the proposal”. These comments reflect the type of detailed information sought by Skills Active/ITOs in the course of consultation. I deal with that below.
[148] Skills Active also had the opportunity to engage and make submissions direct to Crown officials who met with Skills Active board and invited shareholders as well as meeting two Ministers face to face. This engagement, together with the other engagement by the Crown with ITF and ITOs generally met any obligations on the Crown to engage and work with Skills Active and the ITOs in terms of the Crown’s express statements.
[149] The issues and proposals for consultation were clearly set out in the Consultation Discussion paper. It contained links to further information. Skills Active’s submissions including its views on the proposals were received by the Crown in the consultation process. The Crown had made it clear the consultation was on high level proposals and that further engagement on the detail would follow once those principles were decided. That engagement did follow although Skills Active says that engagement is irrelevant for the purposes of these proceedings.
[150] The time period set for consultation was reasonable in the circumstances. Six (or seven) weeks was more than a sufficient period to set for the formal consultation
60 Industry Standards Boards. There were proposed new bodies for standard setting in the industry.
on the high level principles. There had been ample notice of the impending formal consultation. The issues and proposals were clear. The Crown engaged with Skills Active during the consultation period as it said it would. In addition, the Crown had proposed there would be further engagement with Skills Active and others to work out the detail once the high level decisions had been made.
[151] In my view there were no defects in the public law sense in the manner in which the Crown consulted with Skills Active nor in the setting of the consultation period. The Crown did what it said it would do and had given notice of the proposed process almost six months earlier.
Decisions three and four: refusals to extend time
[152]These decisions are:
(a)Minister Hipkins refusing to extend the consultation period on 20 February 2019 (the Third Decision); and
(b)Minister Hipkins refusing to extend the consultation period on 4 March 2019 (the Fourth Decision).61
[153] The Minister responded in writing to each of the two requests to extend the formal consultation period. The period for consultation was set out in the Consultation Document. It was to close on 27 March 2019 (extended to 5 April 2019).
[154] The first request for further time was made by a group of ITOs including Skills Active on the launch date of 13 February 2019 in the course of the meeting between the Minister and representatives of the ITOs. This included Dr Davidson of Skills Active. At that meeting Crown officials were requested to seek an extension of the consultation period.
[155] The Minister responded in writing to Dr Davidson on 20 February 2019 giving his reasons for refusing to extend the consultation period. In his response, the Minister
61 Two other refusals to extend time were referred to in the course of submissions. However, they were repeats of the pleaded requests and add nothing further.
recognised the possible impact of the proposals on ITOs and the undertaking which would be involved in the making of submissions. However, he declined to extend the consultation period for Skills Active/ITOs because he considered it was essential to proceed in order to provide certainty for learners and employers as well as the providers. However, he said he was asking officials to lighten the administrative workload on ITOs to free up their time and resources over the consultation period. He asked for suggestions as to how to achieve that.
[156] The officials followed up on the Minister’s offer and exempted Skills Active and other ITOs from a number of their reporting requirements.
[157] A further request for an extension of the consultation period was made by ITF on behalf of ITOs on 22 February 2019. The Minister, again, considered the request. In his response of 4 March 2019, he declined to extend time because of the need for certainty that he had outlined in his letter of 20 February 2019. He noted that further work would be undertaken with the ITO sector once the first set of cabinet decisions had been made. The work would include determination of the details that would need to be considered in the design of the new system and to identify appropriate transitional arrangements.
[158] The Minister’s decisions and his responses to the two specified requests for extensions of time are consistent with the reasons he gave for setting the timeframe initially. These were proper reasons for refusal. It was for the Minister to weigh up the issues. The Court is not required to inquire further into the sufficiency of the reasons.
[159] As I have noted above the period of consultation of six to seven weeks was not unreasonable in the circumstances. Skills Active was able to make a comprehensive written submission within the consultation period and to contribute to ITF’s submissions. The submission itself indicates Skills Active had sufficient information to understand the issues in the reforms, what the proposals were and to make alternative proposals.
[160] There is no reviewable error in the Minister’s failure to agree to Skills Active requests for extensions of time for the consultation.
Requests for information
[161] It is common ground that the obligation to consult carries with it an obligation to provide sufficient material to enable the person consulted to make sensible submissions. The extent of information depends on the information available and what it is reasonable to provide in relation to the matters consulted upon.
[162] Skills Active said that on a number of occasions it had sought information from the Crown which was either not provided or was provided incompletely or late.
[163] The level of detail required to be provided must be assessed in each case by looking at the context and the nature of the issues under consultation. In Buckinghamshire County Council the England and Wales High Court considered a complaint about a lack of detailed information forthcoming from the Secretary of State for Transport during a consultation process.62 The information sought included details about various routes which were to be affected by a proposal for a new high speed railway between London and the West Midlands. The applicants also complained about the failure to provide to certain data supportive of their case and a failure to reconsult affected individuals who had been significantly disadvantaged by post consultation changes. The Court noted that the Secretary for State disputed that he needed to provide a business case or an assessment of the degree of impact which the link would have on the operation of various highways. The Court said that the Secretary was not bound into a specific decision-making framework and was entitled to take what he regarded as a broader view and promote a project in which he saw benefits.63
[164] Skills Active says officials failed to answer a list of detailed questions presented to them during the consultation period. It also says it was promised a “problem definition” by officials but only received that three days before the formal
62 R (on the application of Buckinghamshire County Council) v Secretary of State for Transport
[2013] EWHC 481 (Admin) [Buckinghamshire County Council].
63 At [774].
consultation closed. These failures it says meant it had insufficient information upon which to properly respond in the consultation period.
[165] Dr Klinkum and Mr Fowler replied to the letter requesting the detailed information on 18 March 2019, 10 days after the request. The response noted that:
(a)The consultation was on high level proposals presented by the Minister on 13 February and the officials were not able to answer all the questions.
(b)Many of the questions asked were on factors open to consultation and there would be later opportunities for discussion and possibly “co- design on specific issues”.
(c)Many of the concerns raised were under consideration. This included: “… ensuring a new model delivers better educational outcomes for Māori learners and fosters collaboration between providers …”.
[166] The letter noted that many of the questions asked were related to factors open to consultation and upon which the Crown was seeking input from the ITO sector. Skills Active was directed to a range of information set out on related websites with the links included in the letter. The letter noted further work would be needed later on the detail. The letter noted that there would be further work undertaken with the ITO sector once the first round of decisions had been made by cabinet “including on what details may need to be considered in the design of the new system, and to identify transitional arrangements that may take place”.
[167] The letter concluded with an invitation to make a specific information request if the information could not be obtained from the material provided on the website. A contact person and email address was provided for that purpose. It is unclear whether Skills Active requested specific information through this channel. However, there is no pleaded allegation of a failure to provide specific information in that regard.
[168] The Crown says it could not have been reasonably expected to answer many of the questions in the request for information. For instance, Skills Active requested a detailed analysis of the various costs which might be involved in any proposed reforms. The relevant questions included “what is the estimated costs of transitioning from the current system to the proposed RoVE system?” and “what will be the cost for employers of the new model?”. These were questions that the Crown said would require analysis later but that would only be done following the high level decisions as to which proposals would be pursued by the government.
[169] Those are questions of a “business case” nature such as those referred to in Buckinghamshire County Council.64 The Crown was entitled to make decisions on the high level issues such as structure to be followed by a process to develop the detail which then might provide the information and analysis that Skills Active sought. In the circumstances the detail and analysis sought in the questions did not need to be supplied by the Crown. It did not need to provide a “business case” for the proposed reforms as part of the consultation information.
[170] Other questions on the list included a number under the heading “Consultation and Process”. This sought information on about what consultation had occurred, including with iwi and asked whether the Minister believed that the consultation to date and the period of time allowed had met Treaty obligations.
[171] The Crown submitted that these questions were well beyond the information required for consultation in this case. I agree. Many of the questions resemble, as the Crown submitted, interrogatories. They were not questions that sought information necessary for the purposes of the consultation on high level proposals and reforms.
[172] It would be difficult, if not impossible, to develop any policy proposals for reform of any sector if the decision maker was required to provide a comprehensive costing and analysis before making decisions on high level proposals. The time and resources required on the Crown’s part to answer many of the questions and provide the analysis, even if the information were available, would have been excessive in the circumstances. In addition, the material collected in the course of the consultation
64 Buckinghamshire County Council, above n 62.
process was intended to inform the more detailed analysis and granular costing which might be needed later.
[173] The information provided in the Consultation Document and on the RoVE website to which the document referred provided sufficient information for Skills Active to make a submission on the matters being consulted upon. That information outlined the proposals for consideration, the background and why the proposals had been formulated as well as setting out in general terms why the changes were needed. The consultation document set out the present vocational education structure, and pointed to a number of changes and challenges. These included the complexity of the system, the fact that education providers (polytechs in particular) and ITOs competed over funding rather than collaborating to offer effective training and that the sector as a whole was unsustainable.
[174] Skills Active as an ITO likely had more detailed financial information on the costs of the provision of its services and the benefits of its model than the Crown was likely to have. Skills Active was given ample opportunity to present that information and advocate for its position in the course of the engagement and in its written submissions.
[175] In addition to information set out in the Consultation Document and the range of material that was released generally to assist parties making submissions, Skills Active was provided with some specific information requested by it and relevant to the reform processes. This included the problem definition provided by officials on 2 April 2019. While this was similar to information already set out in the consultation document it had a more ITO centric focus. The problems, questions and comments set out in the “problem definition” supplied to Skills Active by the Crown included:
(a)The divided system means that the industry and learners are not coherently addressed.
(b)Employers have told us the lack of industry input with off job training is frustrating.
(c)We need greater levels of work integrated learning.
(d)We need to broaden the reach of work based training.
(e)If ISBs65 are to have much wider powers than ITOs currently do, they need to be separate from the arranging training function.
(f)How the proposal will address these issues.
(g)What are our measures of success?
[176] Skills Active say this information was provided only days before the close of the consultation period. However, in view of the nature of the information and the fact that it had been set out in the consultation document generally, Skills Active cannot have been taken by surprise. It left Skills Active sufficient time to take the information into account in its submissions.
[177] Skills Active was in possession of sufficient information for the purposes of making its submission. In addition, Skills Active and ITF were uniquely placed to provide submissions based on their extensive knowledge of the sector. The Crown did not breach any public law obligation in relation to the provision of information to Skills Active.
Other engagement
[178] I have outlined the consultation and engagement that occurred in the review and in the consultation process with Skills Active and the ITOs.
[179] Dr Davidson also confirmed there had been “extensive engagement” by the Crown with Skills Active on the RoVE reforms. He noted also that, Skills Active took other opportunities to put forward its views. It had contacted other Ministers including the Prime Minister. Skills Active’s representative’s involvement in the reform process up to 1 April 2019 was outlined by Dr Davidson as follows:
65 Industry Standards Boards.
·Skills Active had sent, as at 1 April, more than 100 letters to government, seeking meetings and discussions on the topic of the ROVE reforms.
·We had numerous email exchanges with officials from the MOE and TEC seeking the same.
·Staff attended the government’s local ROVE consultation meeting here in Wellington (Porirua in fact; there was no public ROVE consultation in Wellington).
·We hosted our shareholder hui, sent a list of questions from shareholders to officials at the TEC and MOE. Senior representatives of both organisations chose not to answer any of these questions.
·We prepared and disseminated a continuous stream of documents, updates and statements to keep our industries and stakeholders informed, as the situation continued to develop.
·We created a simple process to empower people in our industries to send their own individual submissions to government, and more than 300 people had done so by 1 April.
·We played a major role in helping convene a hui of Māori/iwi leaders to consider the ROVE proposals, hosted by Waikato-Tainui.
·We attended all convened meetings between ITO CEs and MOE/TEC officials to discuss the proposed reforms.
·We had been preparing a very carefully composed and evidence-based submission on the reforms, with a strong focus on workable solutions for a better VE system.
[180] More detailed design work in order to implement any agreed high level proposals for reform was to take place with the ITOs including Skills Active following the close of the formal consultation period. The Crown had earlier said the timeframe and the implementation of any changes would be considered then with input from Skills Active.
[181] Skills Active says that the period after the close of the consultation period was outside the scope of this judicial review. However, in my view it is artificial to not take into account the fact that engagement was to follow from the high level decisions on reform. The evidence suggests that there was ongoing engagement between Skills Active/ITOs and the Crown. However, as that is not under consideration it is not necessary to go into any detail.
Level of consultation
[182] The Minister confirmed at the meeting on 2 April 2019 with Skills Active representatives that the final policy proposals remained open and decisions had not been made. There is no reason to doubt the Minister’s assurance. Skills Active expressly says that it does not claim that the Crown (in particular the Minister) had a closed mind at any stage. Skills Active had the opportunity and it took it to put forward its views of the proposals and information in support of those views both direct to the Minister and officials as well as in its written submission.
[183] Mr Wilson for Skills Active did not claim a legal right of engagement bordering on negotiation but it is apparent that Mr Napia had such an expectation.
[184] The Crown says Skills Active’s complaint is not that it has not had a fair opportunity to be heard, but rather that there has been no agreement reached between it and the Crown on the shape of the proposed reforms. It is apparent from the evidence filed that Mr Napia’s views of what makes ITOs critical to the sector are at odds with those held by the Crown. For instance, Mr Napia says that the ITOs relationships are exclusively with employers not with learners. On the other hand Dr Klinkum/Mr Fowler say that ITOs should have a relationship with both the employer and the learner.66 They say that the ITOs’ exclusive relationship with employers is problematic and has in fact contributed to the current fractured to incompatible system model which is a driver for the reforms.
[185] Skills Active’s chair, Mr Sam Napia, acknowledged Skills Active has had the opportunity to discuss its concerns and take its views directly to the responsible Minister and officials “on numerous occasions, including in our submissions on the Proposed Reform”. However, the concern expressed by Mr Napia for Skills Active was that there remained “differences between our position and the governments in relation to the Reform”.
66 In view of the provisions of the relevant legislation.
[186] The officials and the Minister say the fact that there was no pre-determination of the shape of the reforms is supported by the fact that changes were made to the proposals following the consultation undertaken by the Crown.67
[187] There was no legal obligation on the Crown to negotiate with Skills Active either on the process it developed to develop the government policy and proposals or on its final decisions on the reforms. The policy development process would be stymied if the Crown were required to negotiate with stakeholders that had antagonistic interests as in this case.
Other matters
Analysis of submissions
[188] Skills Active criticised the analysis by the Crown of the consultation submissions in a summary and analysis of feedback produced by the Crown following the close of the formal consultation process. The analysis was published in a public document entitled “What we heard”. This criticism was not pleaded.
[189] There were 2,904 submissions received and over 5,000 people had attended the consultation meetings or events. The criticisms by Skills Active largely relate to the treatment in the analysis of some 345 submissions made by Skills Active stakeholders using templates provided by Skills Active. Other shareholders had also provided templates for submissions by stakeholders. In total 1,479 template submissions were received.
[190] These template stakeholder submissions were referred to in the analysis. The analysis document noted the fact that the submissions in question had been made and the nature of the views expressed in them. The document also recorded the strong opposition indicated by the ITOs and some other stakeholders against the shifting of the arrangement of training from the ITOs. The document noted that others had seen
67Dr Klinkum/Mr Fowler noted that the proposed reforms evolved from those set out in the consultation document based on feedback received. One of the refinements was in relation to the functions of ISBs and relevantly for ITOs (in the event that they seek registration as ISBs) officials recommended to the Minister that ISBs retain a brokerage role in facilitating work based training.
a role change to be a key opportunity for them. A summary of all submissions was provided to the Minister and cabinet who made the decisions on which proposals to adopt.
[191] The analysis and presentation of the results gathered from a process such involved here requires considerable experience. No relevant expert evidence was before the Court and even if it were the Court is not equipped to make the calls required to classify submissions and present feedback and comments gathered in the consultation process and engagement. In any event the issue was not properly before the Court and had not been pleaded.
[192] I conclude the basis criticism of the feedback analysis is not made out. In any event, it is not pleaded. I therefore put it to one side.
Preliminary decisions
[193] The Crown says for a decision to be judicially reviewable it must be final and affect rights. It says the relevant decisions in this case were not final decisions. I deal with this argument for completeness, although it is not necessary as I have concluded that the grounds pleaded in support of the application are not made out.
[194] The Crown cites Christchurch City Council v Attorney-General in support of its submission. In that case the High Court dealt with an application based on a claim that a report on road funding and management released by the government for consultation had contained an error of law.68 The Court was required to consider whether the government by initiating a process of consultation was susceptible to intervention by the Courts on the basis there was an error in the consultation document. The applicant said the report was wrong legally on whether rights of public access and public roads were retained. The plaintiff said that contrary to the assertion in the consultation document the proposals would erode existing rights. The plaintiff said that the government in deciding to adopt the proposals contained in the report had
68 Christchurch City Council v Attorney-General, above n 16, at 556.
based its decision on submissions which were based on wrong assumptions. So, the plaintiff said the consultative process was fatally flawed.69
[195] In response the Attorney-General said there was no justiciable issue before the Court because the only decision that had been made by the government was the decision to release the report for public discussion. That was not an exercise of public power affecting anyone. Gallen ACJ said:70
In my view the Solicitor-General is right. The intervention of the Courts in this as in other areas, depends upon the administrative action the subject of criticism being one which of itself affects or has the potential to affect the rights of individuals or organisations. When government or indeed any other decision-making entity seeks consultative input in the formulation of future policy or action, there can be no justiciable issue unless the process itself in some way affects the rights or integrity of individuals or has the immediate potential to do so. That cannot be the case here. It is not a consultative review process which leads to a decision. Rather it is one which informs a subsequent decision. Before any rights can be effected at all, a whole chain of decisions need to take place. Cabinet must consider submissions made to it and arrive at decisions which include the decision to place the matter before Parliament. It cannot be postulated that Parliament would necessarily pass legislation of the kind feared by the plaintiff, even if the cabinet against the stated policy contained in the evidence intended to proceed regardless of the submissions made. It is however appropriate to go further.
[196] As is apparent His Honour was of the view that any decisions made along the way in the consultation process leading to the formulation of future policy or action by a government, raised no justiciable issue because the process itself did not affect the rights or integrity of individuals.
[197] To similar effect, the Crown pointed to Milroy v Attorney-General. The Court of Appeal noted there that the actions taken in the course of the development of policy formulation prior to the introduction of legislation did not affect the rights of any persons as it was the legislation which would impact on rights.71 For that reason, the actions (said to be misleading briefings by officials) could not be impugned. The briefings did not affect the rights of any persons although any resulting legislation would have that impact.72
69 At 548.
70 At 555–556 (emphasis added).
71 Milroy v Attorney-General (CA), above n 21, at [18] (emphasis added).
72 At [12].
[198] The Crown says in this case, that any decisions along the way relating to engagement or consultation with Skills Active are not themselves decisions affecting rights, but rather they are part of a process designed to inform the decision. It says it is cabinet which determines the policy to be enacted with the final decision being made by parliament.
[199] The Crown says, in a process where the government seeks consultative input in the formulation of policy there is no justiciable issue unless the process itself in some way affects the “rights or integrity” of individuals or has the immediate potential to do so. In this case the Crown says this did not happen, so no individual rights were affected. That will not occur until the whole process has been completed including cabinet’s consideration of the Minister’s proposals, the bill passes through the Parliamentary process and it is enacted.73 The Crown says that the final decisions to be implemented once that process is complete cannot be predicted at this stage.
[200] Skills Active dealt with the Crown’s engagement by separating the policy development process into three time periods. The first, was the period leading up to the formulation of the three proposals for reform set out in the February 2019 formal consultation document. The second period was the formal consultation period – from 13 February 2019 to 5 April 2019. The third period, which Skills Active says is irrelevant for the purposes of these proceedings, was the period following the close of the formal consultation. This was the period in which the Crown said it would engage with, among others, Skills Active to deal with the detail once the high level decisions on the proposals had been determined by cabinet. The Crown on the other hand says the reform process cannot be divided into three silos and that it is necessary to look at the process as a whole to consider whether the Crown’s public law obligations were met.
73 Christchurch City Council v Attorney-General, above n 16, at 556. The case went on appeal to the Court of Appeal in Christchurch City Council v Attorney-General [2005] NZAR 558 (CA). The Court of Appeal focused on the claimed error of law and noted that as it was contained in report which was a consultation document if anyone disagreed with it they could make that clear in submissions. The Court of Appeal found it unnecessary to discuss the questions of justiciability to which I have referred. The Court noted that the High Court decision was correct in striking out the causes of action.
[201] The High Court in Trust Power Limited v Electricity Authority noted it is a well-accepted public law principle that the availability of judicial review before a final decision has been made is “wholly exceptional”.74 However, it noted it could occur where the relevant procedure could be viewed as part of the decision itself so in that respect a preliminary process is justiciable. The Electricity Authority in that case had refused to grant Trust Power’s request for extensions of time to make written submissions and other procedural requests.
[202] The Electricity Authority was exercising a statutory power of decision. In the context of that case the High Court found the Authority’s decision to refuse the extensions of time might be justiciable but nevertheless exercised its discretion not to intervene on the basis that the authority was still considering submissions including the challenged procedural decisions.75
[203] Skills Active says that the preliminary process decisions at stake here are reviewable as it is attacking the method by which the Crown was developing the policy.
[204] Process decisions may be reviewable in certain circumstances. However, in my view in this case the impugned decisions are not final decisions affecting individual rights. They are preliminary decisions and are not justiciable in this case. There would be significant dangers in intervention by the Court at the early stages of the process under consideration here.76 There was no statutory process which had to be followed and no extraordinary circumstances which would warrant this Court’s intervention. In addition the engagement and consultation process was due to enter a third phase following the formal consultation and if there had been any defects the process may well have self-corrected in that phase.
Failure to consider relevant considerations
[205] The ground relied upon of failure to have regard of relevant considerations must fall away with the disposition of the claims based on public law breaches already
74 Trustpower Limited v Electricity Authority [2016] NZHC 2914, [2017] 2 NZLR 253.
75 At [122].
76 At [104].
dealt with. There can be no error in failing to take into account representations Skills Active might have advanced had further consultation or engagement been required.77
[206] In addition, there was no statutory power being exercised by the Crown as to who to consult with, how and when. Therefore, there were no express or mandatory relevant considerations to be taken into account. There can be no error of law in failing to take into account permissible but not mandatory considerations.78
Discretion
[207] In view of my conclusions that the grounds for judicial review have not been made out it is not strictly necessary to deal with the exercise of my discretion. Nevertheless, in this case I would have exercised my discretion not to grant relief because:
(a)The policy development process relating to the VET sector was an ongoing process. Skills Active continued to actively participate in that process by attending further engagement events. Any defect in consultation or engagement might have been remedied in that ongoing process. Skills Active expressly excluded that part of the process from consideration in these proceedings.
(b)There was a substantial fiscal risk to the Crown as well as uncertainty surrounding both learners and employers in allowing the current VET system to continue operating. The resolution of this uncertainty through reform involves consideration of policy, financial, economic and wider education and work force issues. Those considerations are for the Crown. This Court has neither the information nor could it undertake the balancing of the polycentric issues involved in this case.
77 There is no suggestion that the Minister was obliged to consider arguments or information that were not put to him at the time he refused the extensions of time. It is wrong in principle to invalidate a decision on the basis that the decision maker did have regard to considerations that could have been but were not put to him by the party requesting the decision in issue: D v Immigration and Protection Tribunal [2014] NZHC 3017 at [32].
78 Petrocorp Exploration Ltd v Butcher [1991] 1 NZLR 1 (CA) at 33.
(c)To require the reconsideration of, or interfere with, the process decisions as to who and how to consult would result in a significant disruption to the policy making process. The reform process is nearing completion. Its disruption would affect the position not only of Skills Active but also that of other stakeholders. The process would become complicated, costly and time consuming. This would weigh heavily against relief being granted.
[208]Accordingly, I would have exercised my discretion to refuse relief.
Conclusion
[209] I have concluded that the Crown was not required to hear from or consult directly with Skills Active in the development of the reform proposals and that in any event the Crown met its public law obligations.
[210] The decisions complained of were not made in breach of the Crown’s public law obligations. If the Crown had been in breach of its obligations I would have exercised my discretion to refuse relief.
[211]The application for judicial review is dismissed.
Costs
[212] Counsel indicated that it would be appropriate that costs follow the event calculated on a 2B basis. However, if the parties are unable to agree any application and submissions as to costs should be filed by memoranda by the respondents within seven days of the delivery of this judgment by the applicants in response within a further five days and any reply by the respondents within a further two days.
Grice J
Solicitors:
Kensington Swan, Wellington for Applicant
Crown Law Office, Wellington for Respondent
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