Te Tai Tokerau Mapo Trust v Chief Executive of Ministry of Health HC Whangarei Civ-2010-488-307
[2011] NZHC 834
•5 August 2011
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
CIV-2010-488-307
UNDER the High Court Rules
IN THE MATTER OF an application for judicial review of decisions made by the Ministry of Health affecting Te Tai Tokerau MAPO Trust
BETWEEN TE TAI TOKERAU MAPO TRUST Plaintiff
ANDTHE CHIEF EXECUTIVE OF MINISTRY OF HEALTH
Defendant
Hearing: 10 December 2010
Counsel: W Peters for the Plaintiff
A Williams and T Bromwich for the Defendant
Judgment: 5 August 2011 at 4:00 PM
JUDGMENT OF WOODHOUSE J
This judgment was delivered by me on 5 August 2011 at 4:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.
Registrar/Deputy Registrar
……………………………………
Solicitors:
Mr W Peters, Wayne Peters & Associates, Solicitors, Whangarei
Ms A Williams, Crown Law, Wellington
TE TAI TOKERAU MAPO TRUST V THE CHIEF EXECUTIVE OF MINISTRY OF HEALTH HC WHA CIV-
2010-488-307 5 August 2011
Table of Contents
Para No Introduction [1] The factual background
The genesis of the MAPO [8] The Memorandum of Understanding [11] The Deed of Partnership [16]
1997 legislative changes [26]
2000 legislative changes [28] Dealings between the parties from 2001 : the evidence [37] Dealings between the parties 2001- 2002 [39] Review of the MAPO in 2003 [42] Following the review [49] The first challenged decision : 19 December 2008 [70] The second challenged decision : 28 April 2009 [74] July to December 2009 : the Whanau Ora concept [77] The third challenged decision : 4 February 2010 [80] The fourth challenged decision : 26 February 2010 [83]
Discussion : primary conclusion : the legal nature of the matters challenged : the primacy of contract
The legal nature of the matters challenged [86] The nature of judicial review : the relevance of contract [91] The plaintiff’s claim is contractual in substance [98] The relevance of the contracts preceding the 28 April 2009 agreement [101] The 28 April 2009 agreement [110] The other “decisions” [116] Conclusion [118]
Are the decisions open to judicial review? [119] The four grounds for judicial review [132] Breach of contract [133]
Breach of natural justice [138]
Ultra vires [141]
Breach of legitimate expectation [145]
Conclusion [152]
Introduction
[1] In 1996 the plaintiff and the Northern Regional Health Authority (North Health) entered into two agreements concerned with health and disability services for Maori people in Tai Tokerau.1 The agreements give some emphasis to matters arising under the Treaty of Waitangi. The plaintiff was funded by North Health.
[2] Since 1996 there have been significant legislative changes relating to the provision of public health in New Zealand. In particular, Regional Health Authorities no longer exist. In broad terms, their functions have been taken over by District Health Boards.
[3] Other legislative changes resulted in the rights and obligations of North Health under its agreements with the plaintiff being transferred to the defendant. From around 2001 until 2009 there were extensive dealings between the plaintiff and the defendant concerned, in broadest terms, with questions as to whether the agreements would continue and, if so, the party with whom the plaintiff should have a direct relationship in respect of matters covered by the agreements.
[4] Over this period the agreements were extended a number of times. The defendant eventually declined to extend them beyond 30 June 2009. Funding of the plaintiff by the defendant then ceased.
[5] The plaintiff has now sought judicial review of what it contends was an impermissible unilateral decision of the defendant to “terminate” the plaintiff by ceasing payments.
[6] The plaintiff advances four grounds for judicial review. These are described as breach of contract, breach of natural justice, ultra vires and breach of legitimate
expectation.
1 Defined for the purposes of the agreements as including “all of Whangarei across to, but excluding
Dargaville, and the area North of Dargaville up to and including Cape Reinga”.
[7] The defendant opposes the application on two broad grounds. The first, and primary, ground is that the decision challenged by the plaintiff is a “commercial decision”; a decision not to continue the contractual relationship with the plaintiff. For this reason it is contended that the decision cannot be subjected to judicial review except for fraud, corruption, bad faith or analogous situations, and there is no contention of fraud, corruption, bad faith or analogous situations. The defendant argues in the alternative that, if the decisions are reviewable, the grounds advanced by the plaintiff are not established.
The factual background
The genesis of the MAPO
[8] In 1996 the principal statute governing the provision of public health services in New Zealand was the Health and Disability Services Act 1993 (the 1993 Act). Under the 1993 Act Regional Health Authorities had responsibility for funding public health services. Regional Health Authorities were bodies corporate established by Order in Council. There were four Regional Health Authorities with responsibility for defined areas of New Zealand. North Health had responsibility for the upper part of the North Island and including all of Tai Tokerau.
[9] The Regional Health Authorities were required by Government policy guidelines to develop strategies to improve Maori health. In response to the 1994/95
Maori health policy guidelines, North Health developed its first three year strategy to improve Maori health. This included the development of what became known as MAPO. “MAPO” stands for Maori Co-Purchasing Organisation. Following consultation by North Health representatives with representatives of iwi and hapu of Tai Tokerau, the plaintiff MAPO was established as a charitable trust with the assistance of North Health. Two other MAPO were established in the North Health region south of Tai Tokerau; the Tihi Ora MAPO (through Te Runanga O Ngati Whatua) and the Tainui MAPO.
[10] On 24 October 1996 two agreements were signed by the plaintiff and North Health: a “Memorandum of Understanding” and an “Agreement for Co-purchasing Health and Disability Support Services”. I will refer to the Memorandum of Understanding as “the Memorandum”. I will refer to the second agreement as “the Deed of Partnership”. I use this abbreviation because it is an abbreviation used by the parties in supplementary agreements and it is reflective of provisions in the agreement. I will refer to the agreements collectively as “the Agreements”.
The Memorandum of Understanding
[11] The Memorandum is central to the plaintiff‘s claim. Mr Peters, at the outset of his oral submissions for the plaintiff, said that if the Memorandum is no longer binding the plaintiff has no case. Mr Peters‘ submissions placed substantial emphasis on the terms of the Memorandum.
[12] The Memorandum records at the outset:
TTTM [the plaintiff] and North Health wish to enter into a partnership for the co-purchasing of health and disability services (health services) in the co- purchasing region of Te Tai Tokerau. This Memorandum of Understanding sets out the basis of the partnership. …
[13] The next two sections are as follows:
2. BACKGROUND
Te Tiriti O Waitangi as New Zealand‘s founding document, establishes the nature of the relationships between Te Tino Rangatiratanga and Kawanatanga. The parties now seek to define the nature of those relationships, pursuant to the provisions of Te Tiriti O Waitangi and the terms of this memorandum. These principles include partnership, authoritative agency, acknowledgement and enactment of obligations, co- operation, goodwill, mutual respect for cultural diversity and equality.
TTMT accepts and acknowledges the rights and duties bestowed upon North Health, as an agent of the Crown, by the Treaty. In turn, North Health accepts and acknowledges the rights and duties of Te Tino Rangatiratanga of Tai Tokerau.
North Health, by statutory and Treaty obligations, intention and explicit expression, will diligently pursue improvements in the general Maori health status. Therefore, the parties now agree to establish relationships, aimed at enabling the achievement of mutually greed Maori health objectives.
Additionally, the parties further agree, pursuant to the provisions and principles of the Treaty and the principles and terms of this memorandum, to diligently pursue, by all measures that are lawful and in the common good, the ways and means of establishing relationships leading to contracts for health service provision. The provision of these health services shall protect and enhance the particular and general good health status of all iwi Maori, resident within the Tai Tokerau region.
INTERPRETATION OF PARTNERSHIP
3.PARTNERSHIP, within the meaning of this memorandum shall include the acknowledgement and acceptance by both parties;
a)that each is a bona fide member of a “health partnership”, based upon the Treaty, which is committed to the co-purchasing, of health services primarily for Maori within the Tai Tokerau region, as the partnership‘s primary purpose.
b)that the nature of human relationships, essential to the conduct of business between the parties, shall be characterised by equality of status and respect.
c)that TTMT shall be consulted early and entitled, under Treaty obligation, to be involved as a Co-Purchaser in all North Health‘s planning, purchasing and monitoring decisions impacting upon Maori health, within the Tai Tokerau region2.
d)that North Health as an agent of the Crown, shall ensure that the working relationships between the parties, encourages equal opportunities and outcomes.
e)that contractual relationships between the parties are devised, determined and performed, according to the criterion of the Treaty.
f) that the parties are entitled to practise their respective individual duties, according to the cultural values of each and that this right shall be subsequently referred to as Nga Kaupapa Tikanga e Rua (two independent cultural forms of conduct)3.
g) that the parties either by explicit agreement or accepted general behaviour, may conduct their dealings with each other in a bi- cultural manner.
h) the parties will always seek to reach mutual agreement.
2TTMT has agreed not to exercise its Co-Purchaser role where a conflict of interest may occur eg. where it is the Provider of a specific health service.
3The parties acknowledge that interpretations of this clause may be difficult and that any differences should be dealt with on the basis of
good faith and recognising the needs firstly of the persons receiving
any health or disability services.
[14] The Memorandum then sets out four protocols. Protocol 1 is headed
“Awareness Of Relationships And Issues”. It provides that the parties are to be represented by personnel who are “closely aware of” the provisions of the Treaty of Waitangi and of the Memorandum itself. It records that the parties are to “increase their awareness” of matters “impacting upon the relationships between Maori and the Crown and its agencies”. It records obligations of assistance to each other, early notice of “anticipated impediments to progress”, co-operation in negotiations, recognition that “the Maori health status requires urgent and co-operative attention” and acknowledgement of particular attributes of the personnel representing each party.
[15] The content of the remaining protocols is broadly indicated by the headings. Protocol 2 is headed “Meetings And Procedures”. The first provision is that “the parties shall meet whenever mutually agreed” with further provisions made in respect of meetings. Protocol 3 is headed “Information Sharing”. In broad terms it requires each party to make full disclosure of relevant information and not to use it in ways that are stipulated. Protocol 4 is headed “Relationships with Third Parties”. It recognises that each party may, for the purposes of the joint interests, have a need on occasions to deal with third parties. The first provision records that this may happen “upon mutual agreement”. The remaining provisions make more detailed stipulations. This includes an obligation on the parties to “retain the primary Te Tiriti O Waitangi relationship of partnership between themselves” in dealings with third parties.
The Deed of Partnership
[16] The Deed of Partnership is the agreement referred to in the preamble to the Memorandum as the “partnership for co-purchasing” that the parties “wish to enter into”. It was entered into contemporaneously with execution of the Memorandum.
[17] The Deed of Partnership contains a background section explaining the status and functions of the two parties. It refers to statutory and government policy objectives relating to health and disability services for Maori people. In respect of these it records:
[T]he parties wish to enter into this Agreement within the concept of “partnership” established under Te Tiriti O Waitangi. Where the word “partnership” is used in this Agreement it refers to this concept of partnership rather than the legal definition of partnership and consequently this Agreement does not create a partnership resulting in joint and several liability.
[18] The Deed of Partnership then provides:
THE PARTIES AGREE AS FOLLOWS:
1. MEMORANDUM OF UNDERSTANDING
The principles contained in the Memorandum of Understanding …
are incorporated in this Agreement.
2. PARTNERSHIP CONCEPT
The parties agree that they will work in partnership in respect of the purchasing of health and disability services for Maori people living in the North Health region. They agree that they will deal with each other in good faith, with honesty and integrity.
TTMT will assign a representative to participate with North Health’s Board on a committee of the Board in respect of the purchasing of health and disability services for Maori people. This committee will comprise all the members of the north Health Board and one representative of each MAPO which has entered into a co- purchasing agreement with North Health.
[19] The committee of North Health‘s board which included the representatives of each MAPO – Te Kaunihera – held its inaugural meeting in April 1996 and convened monthly after that. North Health‘s board delegated full decision-making authority in relation to Maori health to Te Kaunihera. At an operational level, where Te Kaunihera‘s decisions were implemented, the plaintiff (or whichever of the other MAPOs was involved) shared responsibility with North Health‘s purchasing teams for relevant activities. However, North Health had sole legal and financial liability for the decisions taken by Te Kaunihera, and for the implementation of those decisions in the form of service contracts with providers of the particular service, as noted at [23] below.
[20] Section 3 of the Deed of Partnership is headed “Partnership Principles”.
There are eight provisions in this section. The first is as follows:
a.Te Tiriti O Waitangi is central to the establishment of a “health partnership” between the parties. Paramount are the principles of partnership, participation and active protection.
This provision reflects the statement in the preamble, recorded at [17] above, and the operative provision in clause 1 incorporating the principles of the Memorandum in the Deed of Partnership. The remaining provisions of section 3 amplify aspects of the broad statement of principles in paragraph a., and also record a range of specific interests requiring recognition and protection, and, in particular, various Maori interests.
[21] Section 4 provides:
This Agreement is for no fixed term but may be terminated by either party giving to the other at least twelve months notice in writing.
[22] Section 5 is headed “Statutory and Contractual Obligations”. This section contains acknowledgements by the plaintiff that, amongst other things: North Health was a statutory authority which was bound to act in accordance with the provisions of the 1993 Act; nothing in the Deed of Partnership could abrogate North Health‘s statutory responsibilities, or contractual responsibilities to other parties; and North Health was obliged to comply with the provisions of an annual funding agreement made (in terms of the 1993 Act) between the Crown and North Health.
[23] Section 6 of the Deed of Partnership has a brief provision dealing with confidentiality. This requires no comment. Section 7 is headed “Operations”. The plaintiff agreed to establish a management unit which would then “work in partnership with North Health‘s various divisions, especially the Maori Health Development Division”. This involved shared responsibility for, in particular, consultation with Maori people in Tai Tokerau, assessment of their health needs, and provision of reports and recommendations for the purchase of health and disability services for Maori people. Purchase of and payment for health and disability services was the sole responsibility of North Health. This was provided for in clause
7.3 as follow:
7.3For the actual purchase of health and disability services for Maori people in the Rohe of TTMT, North Health will be the party which contracts with providers, and will be responsible for payment and
general contract administration, including effectiveness monitoring and audit.
[24] Section 8 makes provision for various payments by North Health to the plaintiff. Clause 8.1 records that North Health had provided the plaintiff with two grants “for the purpose of Health Service & Investigation and the Establishment of it‘s [sic] operational services”. Clause 8.2 makes provision for North Health to make further payments to the plaintiff of “an amount agreed by both parties for ongoing operational costs” of the plaintiff. There is provision for the parties to meet at least once a year “to review the operational costs and analyse expenditure”.
[25] The final section of the agreement is headed “Arbitration/Dispute resolution”. This section requires disputes that cannot be resolved by agreement to be referred to mediation and then, if necessary, to arbitration. The final clause provides that mandatory mediation and arbitration “will not apply to any termination variation or re-negotiation of the co-purchasing agreement”.
1997 legislative changes
[26] In 1997-1998 there was a restructuring of the public health sector. In June
1997 the Regional Health Authorities were dissolved by Order in Council. On 1 July
1997 all the assets and liabilities of the Regional Health Authorities were transferred first to the Transitional Health Authority and then, from 1 July 1998, to the Health Funding Authority. The Health Funding Authority was a body corporate under s 32 of the 1993 Act.
[27] The plaintiff and the Health Funding Authority entered into five agreements recording the sums agreed to be paid by the Health Funding Authority to the plaintiff, either to meet the plaintiff‘s operational budget for a financial year, or to meet additional services the parties had agreed were to be provided by the plaintiff for the partnership. These agreements were effected as variations of the original Agreements. An example is the “Budget Agreement” entered into in July 1998. It also has a relevance as a form of consolidation of the preceding agreements, including the Memorandum and the Deed of Partnership. It is headed “Addenda
[sic] to Deed of Partnership (Agreement for Co-purchasing Health and Disability
Support Services)”. The first clause explains the background as follows:
1.1The Health Funding Authority and Te Taitokerau MAPO Trust are parties to a Memorandum of Understanding (contract number
07877_01), a Partnership Deed (contract number 07878_00) and an
Addenda to the Partnership Deed (contract number 07878_01) and an Agreement for the Provision of Additional Services (contract
number 07878_02). Together these contracts form the contractual
basis of the agreement for co-purchasing health and disability support services between the parties, and are the foundation for the
partnership relationship between the Health Funding Authority and
Te Taitokerau MAPO Trust‘s Maori Co-purchasing Organisation, the
Te Taitokerau MAPO.
One of the headings to this agreement indicates that it is an agreement made pursuant to clause 8.2 of the Deed of Partnership: see [24] above. Clause 4 of this agreement provides that it is for a term of 12 months ending on 30 June 1999. The Health Funding Authority agreed to meet the plaintiff‘s operational budget for the financial year of $460,000, plus GST, by equal monthly payments.
2000 legislative changes
[28] The New Zealand Public Health and Disability Services Act 2000 (the 2000
Act) effected a further and major restructuring of the public health sector. The 2000
Act came into force on 1 January 2001 (apart from three provisions which are not relevant). There were two changes of particular relevance to the present case. The first was that, from 1 January 2001, the Health Funding Authority was dissolved and its assets and liabilities were vested directly in the Crown, with the Crown acting through the defendant (except in relation to shares): s 94(3). The second was the creation of District Health Boards (DHBs) as the organisations with primary responsibility for purchasing and providing health services.
[29] The 2000 Act contains provisions to address matters relating to Maori health. The first is in s 3 which sets out the purpose and objectives of the 2000 Act. Relevant provisions of s 3 are:
3 Purpose
(1) The purpose of this Act is to provide for the public funding and provision of personal health services, public health services, and disability support services, and to establish new publicly-owned health and disability organisations, in order to pursue the following objectives:
(a) to achieve for New Zealanders—
(i) the improvement, promotion, and protection of their health:
(ii) the promotion of the inclusion and participation in society and independence of people with disabilities:
(iii) the best care or support for those in need of services:
(b) to reduce health disparities by improving the health outcomes of Maori and other population groups:
(c) to provide a community voice in matters relating to personal health services, public health services, and disability support services—
(i) by providing for elected board members of DHBs: (ii) …
(d) …
(2) The objectives stated in subsection (1) are to be pursued to the extent that they are reasonably achievable within the funding provided.
(3) To avoid any doubt, nothing in this Act—
(a) entitles a person to preferential access to services on the basis of race; or
(b) limits section 73 of the Human Rights Act 1993 (which relates to measures to ensure equality).
(4) In giving effect to the purposes set out in subsection (1), the Crown and DHBs must endeavour to promote the integration of all health services, especially primary and secondary services.
…
[30] Section 4 provides:
Treaty of Waitangi:
In order to recognise and respect the principles of the Treaty of Waitangi, and with a view to improving health outcomes for Maori, Part 3 provides for
mechanisms to enable Maori to contribute to decision-making on, and to participate in the delivery of, health and disability services.
[31] Section 5 provides an outline of the 2000 Act. It includes the following: 2
5 Outline
(1) In general terms, this Act relates to, and reorganises, the public health and disability sector.
(2) Ministerial responsibilities (Part 2) include—
(a) determining health and disability strategies (section 8):
(b) negotiating and entering into agreements under which the Crown provides a person money in return for the person providing or arranging for the provision of health services or disability support services (section 10):
(c) …
(3) District Health Boards (DHBs) are established (Part 3 and Schedules
1 to 3), and take over functions like those of Hospital and Health
Services (HHSs), which are dissolved (Part 7). DHBs—
(a) have boards that include members elected by the community and representation of Maori:
(b) will provide, or fund the provision of, health services and disability support services:
(c) have the objective of reducing health disparities by improving health outcomes for Maori and other New Zealanders:
(d) are [statutory entities] rather than companies:
(e) are accountable in a number of ways ([under the Crown Entities Act 2004 and sections 38 to 42]), for example, through [plans prepared under section 38], and statements of intent.
(4) …
[32] Part 3 of the 2000 Act, referred to in s 4, makes provision for DHBs. The sections referred to in the following paragraphs – ss 21, 22, 23 and 29 – are all in
Part 3.
2 The amendments shown in s 5(3)(d) and the first amendment in s 5(3)(e) were made by the Crown
Entities Act 2004, s 200.
[33] Section 21 provides that each DHB is a Crown entity owned by the Crown for the purposes of s 7 of the Crown Entities Act 2004, except to the extent that the
2000 Act expressly provides otherwise (and there are no relevant exceptions). In terms of s 7 and Schedule 1 of the Crown Entities Act 2004, DHBs are Crown agents.
[34] The objectives of DHBs are specified in s 22(1) and include the following:
(a) to improve, promote, and protect the health of people and communities:
(b) to promote the integration of health services, especially primary and secondary health services:
…
(e) to reduce health disparities by improving health outcomes for Maori and other population groups:
(f) to reduce, with a view to eliminating, health outcome disparities between various population groups within New Zealand by developing and implementing, in consultation with the groups concerned, services and programs designed to raise their health outcomes to those of other New Zealanders:
[35] Section 23(1) prescribes a wide range of functions for DHBs for the purpose of pursuing the objectives. These include the following:
(d) to establish and maintain processes to enable Maori to participate in, and contribute to, strategies for Maori health improvement:
(e) to continue to foster the development of Maori capacity for participating in the health and disability sector and for providing for the needs of Maori:
(f) to provide relevant information to Maori for the purposes of paragraphs (d) and (e):
[36] Section 29 makes provision for the membership of the board of each DHB. It is to consist of seven elected members and up to four members appointed by the Minister of Health. Section 29(4) is a provision to give effect to s 5(3)(a)3 and
provides:
3 See above at [31].
In making appointments to a board, the Minister must endeavour to ensure that—
(a) Maori membership of the board is proportional to the number of Maori in the DHB's resident population (as estimated by Statistics New Zealand); and
(b) in any event, there are at least 2 Maori members of the board.
Dealings between the parties from 2001 : the evidence
[37] Reference was made in the introduction to extensive dealings between the plaintiff and defendant from 2001. These dealings are referred to in two affidavits for the plaintiff from Dr Bruce Craig Gregory, the chairman of the plaintiff since
2006, and in an affidavit of Theresa Aroha Wall, the Deputy Director-General, Maori Health, in the defendant Ministry. There is also an affidavit for the defendant from Leigh Mihikore Andrews. He was a senior analyst in the Maori Health Directorate of the defendant from October 2007 until February 2010. He confirmed the evidence of Ms Wall for that period.
[38] The principal deponents, Dr Gregory and Ms Wall, describe various dealings. Dr Gregory‘s first affidavit and Ms Wall‘s affidavit, have annexed to them copies of correspondence, minutes and other documents recording the dealings as they proceeded. This applies in particular to the affidavit of Ms Wall which has over 80 documents annexed to it. To some extent, what the deponents say amount to submission on the meaning of documents, or a gloss on a written agreement – the addition of something not actually recorded or reasonably to be inferred from what is recorded. I have, of course, had regard to what the deponents have said on matters of fact. But there is a substantial body of contemporaneous documentary evidence – agreements, letters, e-mails, minutes, some reports, and other types of document. In respect of the central issues in this case, this contemporaneous documentary evidence provides the most assistance. I do not intend to refer to all of this material. However, in order properly to address the parties‘ contentions, it is necessary to provide a reasonable amount of detail from the documents.
Dealings between the parties 2001-2002
[39] In unchallenged evidence Ms Wall said, in respect of the changes effected by the 2000 Act:
During the transition period between the disestablishment of the [Health Funding Authority] and the establishment of the DHBs the Ministry inherited the MAPO contracts, along with all other health sector contracts. As the DHBs were established the Ministry, in a staged process, transferred most personal health service contracts to the DHBs, and that included all Maori health service contracts, but retained responsibility for purchasing aged care (although this was devolved to DHBs in 2005), disability support services for people aged under 65 years and public health (population health) services.
The MAPO relationship and funding were to be devolved to the respective DHBs as the [2000 Act] made DHBs accountable for the health of the population resident in their districts, and required, amongst other things, the DHBs to ensure Maori participation and decision making and the provision of health services.
[40] It appears, from correspondence put in evidence, that the defendant initially proposed that the MAPO agreements (that is to say, the agreements with all three MAPO, including the one with the plaintiff) would be “devolved” to the appropriate DHBs on 1 July 2001 but that, following a meeting or meetings, this was deferred. Following some further correspondence, the defendant agreed that it would retain responsibility for the “Treaty Based Relationships agreements” until 30 June 2002, with an opportunity to review the date before that time. This was confirmed in a letter from the defendant to the plaintiff dated 20 August 2001.
[41] Following agreement on extension to 30 June 2002, there were further negotiations through to the end of 2002. This led to two further agreements, although details of the preceding negotiations have not been provided in evidence. The first agreement, made around 28 November 2002 between the three MAPOs and the Ministry, was that there should be an independent review of the MAPOs on agreed terms of reference. The second agreement followed from the first: the plaintiff and the defendant agreed to an extension of the Agreements from 1 July
2002 until 30 June 2005. This extension agreement, signed by the plaintiff on 23
December 2002, was, as before, effected as a variation of earlier extensions, and in
essence as described at [27] above. This extension made further provision for monthly payments to the plaintiff. The agreement also records:
The Ministry of Health agree [sic] to enter into contract negotiations with Te Tai Tokerau MAPO Trust following the proposed review, with the understanding that final agreement of any proposed contract changes will be by mutual agreement of both parties on completion of the review.
Review of the MAPO in 2003
[42] The terms of reference were signed by the three MAPO and the defendant on various dates between January and April 2003. The terms of reference set out background facts which include the following:
The MAPO contracts and relationships were established in 1995-98 by the Northern Regional Health Authority (NRFA) [sic] … The primary purpose of the MAPO Strategy was to operationalise the Treaty of Waitangi in the health funding environment … The rationale underpinning the MAPO Strategy was to enhance the operational performance of the then Funder (NRHA) by providing the basis for the Crown and Iwi to take joint responsibility for Maori health gain and development in respect to Auckland/Northland.
[43] Key objectives in the terms of reference are as follows:
Key Objectives for Joint Review of MAPO
To review, consider, and identify the following:
§ The future role of the MAPO in the DHB environment (including the relationships and role with Māori providers, other providers, Māori communities and DHBs)
§ The relationship of the MAPO (at both the specific and collective level or Tri-MAPO) with the MoH (locality and national levels), including Te Kete Hauora [The Maori Health Directorate]
§ What structures and systems need to be altered or strengthened in order to more effectively achieve the objectives of the MAPO strategy in the new health sector environment
§ At what level should the MAPO operational contracts sit (national or district) to give effect to MAPO objectives in the new health sector environment
§ The development of a generic costing framework which can be consistently applied to ensure the equitable resourcing of MAPO
[44] The review and subsequent report were completed by two consultant companies appointed by the parties. The principals of the companies were Mr John Whaanga and Mr Herewini Te Koha. With the consent of both parties, Messrs Whaanga and Te Koha continued to act after the review was completed as facilitators to assist with further negotiations.
[45] The review was carried out between March and June 2003. The reviewers obtained information from, and interviewed a number of, representatives of the three MAPO and the defendant, as well as chief executive officers and managers of the relevant DHBs, and others. The final report was completed in September 2003, and released in December 2003.
[46] One main section in the report, arising from the first objective recorded in the terms of reference, concerns “the future role of the MAPO in the DHB environment”. The reviewers found, as recorded in their summary of findings and recommendations, that:
(a) the current environment [meaning the legislative environment] promotes and requires the DHBs to establish practical and effective relationship arrangements with Maori, inclusive of hapu and iwi, and this requirement needs to be reflected in the governance arrangements for the MAPO in the future in terms of alignment with their respective relationship arrangements in place and/or being developed;
(b) the MAPOs‘ core role and functions align directly with the new sectoral requirements, and offer DHBs in particular a ready relationship to help them to meet their statutory function of improving Maori health outcomes; and
(c) MAPOs‘ key stakeholders, including their affiliated iwi and provider networks, support the retention of the MAPO‘s current role and functions.
[47] A further section addressed “the relationship of the MAPO with the Ministry
of Health”. Findings in this section included the following:
(a) The future relationships between the Ministry and the MAPO should be aligned with the future role and functions of the Ministry.4
4 The reviewers noted in this section that the role and functions of the Ministry were “primarily operational, covering the Ministry‘s current roles as policy setter, funder of some services (e.g. disability services, public health) and in terms of areas such as consultation”.
(b) …
(c) The MAPO view their relationship with the Ministry as also being more than just one of contract management, but a Treaty-based relationship.
Recommendations are made based on these findings. These include the following:
The issue of higher level health sector Treaty arrangements is a separate issue from that of contract management, and there are other means to better initiate and locate these arrangements.
[48] The report concludes (section 7) with recommendations of a timetable to implement changes proposed in the report. The authors record the defendant‘s preference that “the MAPO contracts transfer to relevant DHBs during 2005 and by no later than 30 June 2006”. The resolution of the three MAPOs in this regard, recorded in the report, was:
[The] current relationships, inclusive of the MAPO operational contracts, [be] retained with the Ministry of Health until 30 June 2006, in order to safeguard Maori health development in [Te Tai Tokerau, Ngati Whatua and Tainui ki Tamaki] collective Rohe through the continuance of the MAPO co- funding model as a practical expression of Te Tiriti O Waitangi/Treaty of Waitangi in action.
There were reasonably detailed recommendations for various steps to be taken on specified dates, including consultation, through to transfer of all MAPO contracts to DHBs by 1 July 2006. A transfer date of 1 July 2006 was stipulated to provide for the minor divergence between the date proposed by the defendant and the date proposed by the three MAPOs for transfer.
Following the review
[49] On 10 March 2004 there was a meeting between the defendant and the three MAPO concerning implementation of the review recommendations. The defendant wrote to the plaintiff on 6 April 2004 and said:
As agreed at the Ministry of Health and Tri-MAPO meeting on 10 March
2004, this letter confirms a number of key matters in regard to the implementation of recommendations arising from the MAPO Review
completed last year.
The Ministry confirms that the Review implementation timeline and key
actions thereof are as outlined in Section 7 of the Review report …
[50] On 2 December 2004 Dr Gregory and others wrote to the Minister of Health. The letter was from Dr Gregory, as chair of Te Hauora o Te Hiku o Te Ika Trust, and others representing iwi and Maori health providers in the far north. They said:
At a recent hui held on the 29th November 2004 at Kaitaia comprising Te Hauora o te Hiku o te Ika Trust, and representatives of Maori Health Providers in the Far North of Te Rarawa, Ngati Kuri, Ngaitakoto, Ngati Kahu and Te Aupouri iwi, the following unanimous decisions were reached:-
§ That the relationship between Te Tai Tokerau MAPO, with the Ministry of Health is recognised by iwi, as a Tiriti / Treaty based partnership in health which has proved successful with iwi and that it continue.
§ That Te Tai Tokerau MAPO contract remain with the Ministry of Health continuing the independence of relationship which has best served Maori Health Development with iwi in Te Tai Tokerau
[51] The Minister of Health replied by letter dated 2 February 2005. She said, amongst other things:
As you will be aware, Te Tai Tokerau MAPO‘s Treaty-based relationship was first established in 1995 by the Northern Regional Health Authority.
At present the Ministry‘s Māori Health Directorate retains all three MAPO contracts in a ‗Kaitiaki‘ caretaker role until the recommendations in the MAPO review report, released in December 2003, have been implemented. The review recommendations include the transfer of the MAPO contracts to their respective district health boards by 30 June 2006.
I am aware that the Ministry is working closely with all three MAPO and their respective district health boards in order to progress the MAPO review recommendations. This work will continue throughout 2005.
[52] On 10 February 2005 there was a meeting between the plaintiff, the defendant and the Northland DHB concerning the future role of MAPO and contract management. This was followed by a meeting on 24 February 2005 between the three MAPO and the defendant concerning the future relationship and contract management. Messrs Te Koha and Whaanga acted as facilitators. Minutes were taken. Ms Lynette Stewart, the chief executive officer of the plaintiff is recorded as saying:
… [A]ll the MAPO governance bodies were unanimous in agreeing that they had grave concerns regarding the implementation of the MAPO Review,
especially as it related to the on-going Treaty of Waitangi relationship with the Ministry of Health and the devolution of the MAPO contracts to the DHBs. In regard to the former point, the MAPO governance bodies were clear that the Treaty relationship with the Ministry was a “first order” relationship and were averse to jeopardising that relationship. In regard to the latter point, the MAPO governance bodies noted that the Review had identified the independent “leverage” of the MAPO are crucial to their success to date and that the transfer of the MAPO contracts to the DHBs would compromise this role.
Lynette also indicated that the MAPO governance bodies had agreed that they wished to arrange to meet with the Prime Minister and the Minister of Health to discuss their concerns. With that in mind, they had instructed the [Chief Executives] to meet with the Ministry to progress operational matters.
[53] Sir Hugh Kawharu was a board member of Tihi Ora MAPO. On 16 March
2005 he wrote to the Minister of Health on behalf of the three MAPO inviting the
Minister to a meeting. He said:
The purpose of the meeting is simply stated. It is to clarify the relationships that have evolved between the three MAPO, the Crown, and District Health Boards since the signing of each inaugural MAPO Memorandum of Understanding upwards of ten years ago.
It is evident to MAPO trustees that the periodic policy shifts and consequent restructuring within the health system at both central and regional levels, has resulted in an incremental loss of the original Treaty determined focus in the delivery of health care services to Maori within each MAPO mana whenua. Unfortunately this is a matter that was not examined in the recent MAPO review.
While the commitment of the three MAPO to the raising of Maori health levels has never weakened or been compromised by themselves, mounting uncertainty about the acceptance of underlying Maori cultural and Treaty values among their partners has given them (MAPO) cause for much concern. If this uncertainty continues MAPO believe that it will jeopardise the current health policies and practices affecting Maori in the northern half of the country.
Tai Tokerau, Ngati Whatua, and Tainui MAPO therefore look forward to an opportunity to learn from you the present Government‘s position on these and related matters the better to maintain levels of confidence and efficiency in their part of the Maori health sector.
[54] On 3 May 2005 the defendant‘s Deputy Director-General, Maori Health, reported to the Associate Minister of Health. He recorded a proposal of Ministry officials that, contrary to the proposal in the MAPO review that the MAPO contracts be transferred to the DHBs on 1 July 2006, the Memorandum and “operational
protocol contracts” between the MAPO and the defendant be retained. The report includes the following advice to the Associate Minister:
7.The MAPO have carried out consultation hui with their key stakeholders (Maori providers, and iwi) and each of them has reported strong views from these meeting [sic] that the contractual arrangements should not be devolved to DHBs. The issues revolve around: (i) on-going Treaty-based arrangements between the Ministry (the Crown) and the MAPO; and (ii) the transfer of the (operational) MAPO contracts to the respective DHBs.
The Associate Minister declined to approve the officials‘ proposal pending a meeting between the Minister of Health and the three MAPO.
[55] A meeting between the Minister and the three MAPO was arranged for 15
June 2005. On 8 June 2005 the Minister received two reports from Ministry officials. The Minister was advised of meetings of officials with the MAPO, including the plaintiff, and DHBs. The Minister was advised that two major issues had “been consistently raised by the MAPO; the status of the Treaty based relationship, and the devolution of MAPO contracts (operational) to the respective DHBs”. The Minister was advised:
15.The MAPO represent a Treaty-based model for promoting effective Māori participation in health and disability sector decision-making at a regional level. The MAPO have successfully aided the development of Māori health service providers within their local districts.
16.The MAPO offer real scope and potential to assist District Health Boards within the Northland and Auckland regions to increase Māori health services and assist DHBs with the capacity and capability development of Māori providers in the region.
[56] The meeting took place on 15 June. The Minister proposed that the date for transfer to the DHBs be shifted from 1 July 2006 to 1 July 2007. On 16 June 2005 the plaintiff wrote to the Minister and said:
The [plaintiff] delegation appreciated your consideration of the issues raised, and your proposition that more time should be allowed for the Ministry of Health and the MAPO to come to agreement on an appropriate pathway for the future.
[57] Deferral of the transfers to the DHBs until 1 July 2007 was agreed. It was therefore necessary to extend the existing Agreements. This was done in two stages.
The first followed directly from the review recommendation. By agreement signed by both parties in August 2005, there was an extension to 30 June 2006. The further extension to 30 June 2007 was recorded in a written agreement signed by the parties on 10 and 14 July 2006. Consistently with earlier extensions since 1998, this extension agreement referred back to the “consolidation” agreement that had been
entered into in July 1998.5 The extension agreement recorded:
The Agreement
In 1998 both of us entered into a Health and Disability Services Agreement
(the Agreement). The Agreement commenced on 1 July 1998 and ended on
30 June 1999 and was numbered (419840 / 158092/04).
“The Agreement” as defined here is a reference to the agreement described at [27]
above.
[58] Dr Gregory said in his first affidavit that, “between January and June 2006 the MAPO entities, the Ministry and the DHBs engaged in a series of meetings to develop and implement appropriate documentation to clarify the framework within which the relationships and services were expected to continue”.
[59] By letter dated 24 July 2006 the defendant gave the plaintiff formal notice as follows:
Following on from rolling over the current contract for one year and in accordance with the Agreement for Co-Purchasing Health and Disability Support Services, Term 4 which states “This agreement is for no fixed term but may be terminated by either party giving to the other at least 12 months notices [sic] in writing” the Ministry of Health submits this letter as providing 12 months notice of termination of contract 158092-09 and all variations, in order to allow a path to negotiate any future contract.
This is merely a process and does not in any way hinder or deter the current negotiations we are working on.
“Contract 158092-09” is the agreement for the extension to 30 June 2007.
[60] Dr Gregory said in his first affidavit:
5 See above at [27].
15.Work on the initial drafts of the aforementioned documentation6 was progressing well until the Ministry convened a meeting with the MAPO entities in November 2006 and announced that it intended to halt the collaborative process. A letter dated 27 November 2006 was forwarded to the MAPO entities soon afterwards advising that the Ministry intended to proceed with “the devolution of the MAPO funding and funding role to the relevant DHBs.”
[61] Ms Wall produced the minutes of a meeting on 16 November 2006 between representatives of the three MAPO (including Dr Gregory) and the defendant (including Ms Wall). Messrs Te Koha and Whaanga again attended as facilitators. This is presumably the meeting Dr Gregory refers to. No minutes for any other meeting in November 2006 have been produced. The minutes do not bear out Dr Gregory‘s recollection of what was said on behalf of the defendant. The meeting took approximately 2 ½ hours. The minutes record a detailed exchange of views but not an announcement by the defendant to the effect that “it intended to halt the collaborative process”. The plaintiff may have construed the advice for the defendant as constituting a halt to a collaborative process because the defendant was not agreeing with the plaintiff‘s proposals, but that, of course, is a proposition different from the one stated by Dr Gregory. Ms Wall said in her affidavit, in reference to Dr Gregory‘s statement, that, in addition to finding “no reference to such a statement in the minutes” she confirmed that no such statement was made by her or by her colleague at the meeting, Mr Rangi Pouwhare.
[62] What the minutes do record is the point of difference that had been noted in the 2003 review report and other documents: the MAPO, in broad terms, considered that a continuing partnership between each MAPO and the Ministry was necessary in order adequately to reflect the Treaty relationship between iwi and the Crown. The Ministry, reflecting the views of the Government, did not consider that such was necessary because the fundamental Treaty relationships were between iwi and the Crown and the new legislative framework, centred on DHBs, meant that the MAPO relationships should be with DHBs. Representatives of MAPO also expressed concern that DHBs were not dealing adequately with matters relating to Maori health requirements. Towards the end of the meeting the chief executive officer of the
plaintiff requested that the defendant commit to work on key matters, assist the
6 That is, the documentation noted at [58].
MAPO to “turn around poor DHB performance”, and agree to a transitional period to
30 June 2008.
[63] On 9 March 2007 there was a meeting between the plaintiff, the defendant and the Northland DHB. One of the review authors attended as a facilitator. At this meeting Ms Lynette Stewart, the plaintiff‘s chief executive officer, said, as recorded in the minutes:
Lynette noted that iwi did not support the position that the Ministry was proposing, and had previously said in consultation that they wanted the MAPO to continue to have a firm relationship with the Ministry. She did note, however, that it was never intended that the MAPO should continue past “it‘s [sic] use-by-date”, but that there was some work still to be undertaken before iwi and providers were ready to take up the role that the MAPO had undertaken on their behalf in the past. Lynette noted that she had always been of the view that the transitional timeframe for any changes to the current arrangements should be December 2008. This would allow time to deal with any transitional issues (including the potential for a
“Master/Servant” relationship developing if the DHB managed the MAPO
contract), and allow for iwi/provider capacity to be enhanced for the future.
Ms Stewart is also recorded as saying that “it was possible to move along the direction proposed by the Ministry”, but the matters referred to needed to be addressed.
[64] Ms Wall, on behalf of the defendant, is recorded as saying:
[T]he Ministry had already signalled that it was committed to the proposed direction, but also committed to working with the DHBs and the MAPO to ensure the transition period was sufficient to allow for all relevant matters to be addressed with the future in mind.
Ms Wall agreed that a timeframe of 18 months, which would take it to December
2008 as proposed by Ms Stewart on behalf of the plaintiff, appeared reasonable.
[65] In a letter dated 25 May 2007 from the plaintiff to the defendant a further extension, to 30 June 2009, was sought to enable further time for the transition. The letter records that the matters to be addressed were:
The development of a Te Tai Tokerau Maori Health Strategic Plan, led out under the collective auspices of the Te Tai Tokerau Maori Health Strategic Alliance (of which TTTM and [Northland]DHB are founding members). The focus of the plan will be long-term
sustainability of Maori Health development in Te Tai Tokerau, inclusive of the DHB, MAPO, Maori and community health providers and PHOs.
The development of a collaborative decision-making framework for [Northland] DHB which incorporates Treaty-derived partnership and participation, as well as broader Maori health stakeholder involvement (as represented by the Alliance).
This was supported by a letter from the Northland DHB.
[66] A further extension to 31 December 2008 was agreed. This was recorded in an agreement signed by the plaintiff on 20 June 2007. This again referred back to
“the Agreement” as defined in the agreement providing for the extension from July
1998.7 What amounts to a preamble to the June 2007 agreement records:
The Ministry and the Contractor [the plaintiff] wish to enter into a further variation to the Agreement in order to extend the term of the Agreement until the [sic] 31 December 2008 in order to meet the Ministry‘s objective of transferring the contractor‘s existing contracts (and associated agreements) to DHBs.
The agreement also contains notice from the defendant that it “wishes to exit the current agreement with the contractor on the 31 December 2008 without exception”. The defendant agreed to pay the plaintiff a total of $1,095,000 by equal monthly instalments from July 2007 to December 2008.
[67] In his first affidavit, Dr Gregory said in respect of this agreement:
Despite [the plaintiff]‘s strong misgivings about the process and timing of this decision, the contract was signed by [the plaintiff]. However, this was in a context of significant pressure, given that the [defendant] had stipulated that, unless the contracts were signed prior to 30 June 2007, all operational funding for the MAPO entities would cease as at that date. The MAPO entities were effectively presented with the option of signing the contracts or facing extinction.
There is no evidence that the plaintiff told the defendant that it was, in effect, signing under duress. The plaintiff had, of course, expressed firm disagreement with the defendant‘s proposals, over an extended period, but that is quite different from the
critical proposition contained in this statement.
7 See above at [27].
[68] On 4 February 2008 the three MAPOs wrote to the Prime Minister advising that they had passed a resolution seeking the support of the Prime Minister “to retain the Treaty relationship with the Ministry of Health”. They said:
The Ministry of Health wishes to devolve the three MAPO contracts to the northern region … District Health Boards at the end of 2008. The Tri- MAPO firmly believes that this move would be premature and highly detrimental to Maori health development.
A representative of the plaintiff (and possibly representatives of the other MAPO) met the Prime Minister at Waitangi over the following weekend. This was followed by discussions at a Ministerial level.
[69] From March 2008 until December 2008 the issues continued to be dealt with in correspondence and meetings between the parties. There were also meetings between the Minister of Health and the plaintiff on 10 April 2008, between the Associate Minister of Health and all three MAPO on 24 September 2008, and between the Associate Minister and the plaintiff on 30 September 2008. Correspondence and meetings included the following: a letter from the defendant to the plaintiff on 2 October 2008; a letter from the Associate Minister of Health to the Northland DHB on 3 October 2008 including proposals for meetings between the three MAPO, the DHBs and the defendant; a meeting on 9 October 2008 between the three MAPO and the defendant; a joint letter from the Northland DHB and the plaintiff to the defendant seeking postponement of a meeting; a meeting on 11
December 2008 between the three MAPO, the Northern Region DHBs and the defendant.
The first challenged decision : 19 December 2008
[70] At paragraph 71 of its original statement of claim, the plaintiff contended that the defendant had “made a decision to act in a manner that disregards the fundamental principles of the relationship between” the defendant and the plaintiff. The plaintiff provided some particulars of the way in which it contended this had been done, but there were no particulars of the “decision” save from what could be taken from the contentions in the preceding 70 paragraphs. Particulars were
provided in an amended statement of claim. Four decisions were identified. I will now turn to the first of these.
[71] At the meeting on 11 December 2008 between the three MAPOs, the Northern Region DBHs and the defendant, all parties agreed that new MAPO operational contracts were to be concluded by 31 March 2009. The plaintiff (and the other two MAPO) sought further funding from the defendant after 31 December
2008, being the existing termination date. The defendant did agree to provide further funding for three months. Ms Wall refers to this in her affidavit as follows, and consistently with the minutes of the 11 December meeting:
54. I agreed a new short-term contract would be offered to the three
MAPO to provide a temporary funding for three months from 1
January 2009 to 31 March 2009 so that the MAPO could continue to work while negotiating the new operational contracts. This was a
gesture of good faith by the Ministry. I made it clear to the MAPO
that if the contract negotiations failed the contract would not be renewed.
[72] This was followed by a letter of 19 December 2008 from the defendant to the plaintiff confirming the proposed extension to 31 March 2009 and making provision for the plaintiff to sign the letter as an agreement, if it agreed. The defendant‘s letter also records the defendant‘s intention that the agreement would not be renewed after
31 March 2009. This is the first of the four decisions in respect of which the plaintiff seeks judicial review. I will refer to this as “decision 1”.
[73] The letter of 19 December 2008 was followed by further correspondence and meetings through to 19 February 2009. On 19 February 2009 there was a meeting between the three MAPO and the defendant which included negotiation over the proposed new contracts. Over the Waitangi day weekend there had also been a meeting between the plaintiff and the Deputy Prime Minister. The result was an agreement between the plaintiff and the defendant based on the defendant‘s letter of
19 December 2008 (decision 1) with some amendments. The letter was signed as an agreement by the plaintiff on 19 February 2009. This again records the notice from the defendant to the plaintiff that the defendant would not renew the agreement after
[144] As this passage makes clear a duty to act fairly – in accordance with the rules of natural justice – is a duty that may not apply at all. It is not a duty imposed in this case by the 2000 Act, or any other statutory provision; at least not in respect of any issue arising in this case. In respect of the decisions impugned in the present case, the obligation to act within any powers granted by Parliament has also been considered. So too has the obligation positively to advance the statutory objectives, being objectives inconsistent with what the plaintiff was seeking.
Breach of legitimate expectation
[145] Ms Williams and Ms Bromwich, for the defendant, provided a concise summary of legal principles applying to an application for judicial review founded on breach of legitimate expectation. Mr Peters did not challenge these submissions.
With some modifications, and without recording qualifications or exceptions that
33 Peters v Davison [1999] 2 NZLR 164 (CA).
34 O’Regan v Lousich: Proprietors of Mawhera v Maori Land Court [1995] 2 NZLR 620 (HC) at 626-
630.
35 At 262.
may be relevant in other cases, I set out the defendant‘s submissions as a general outline sufficient for present purposes:
(a) Two ways in which a legitimate expectation may arise are from an express promise given on behalf of a public authority, or from the existence of a regular practice that the claimant can reasonably expect to continue.36 In some cases, a legitimate expectation can arise from a combination of the two.37
(b)Any legitimate expectation must have a reasonable basis; it cannot be founded on a hope or unsubstantiated belief.38 In order for a representation to found a legitimate expectation, it must be “clear, unambiguous and unqualified”.39
(c) New Zealand law recognises a legitimate expectation of a particular decision making process.40 The general principle in this regard is that: 41
… when a public authority has promised to follow a certain procedure, it is in the interest of good administration that it should act fairly and should implement its promise, so long as it does not interfere with its statutory duty. … The principle [is] that a public authority is bound by its undertakings as to the procedure it will follow, provided they do not conflict with its duty.
(d)The content of a legitimate expectation can change over time. By making a promise or following a practice, a public authority cannot
36 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 347 at 408 per Lord Diplock; Talleys Fisheries Ltd v Cullen HC Wellington, CP287/00, 31 January 2002 per Ronald Young J at 48.
37 See GDS Taylor Judicial Review: A New Zealand Perspective (2nd ed, LexisNexis, Wellington,
2010) at [13.84].
38 Talleys Fisheries Ltd v Cullen at 48; New Zealand Association for Migration and Investments Inc v
Attorney-General [2006] NZAR 45 (HC) at [143] per Randerson J.
39 R v Inland Revenue Commissioners, ex p MFK Underwriting Agents Ltd [1990] 1 WLR 1545 (QC);
Talleys Fisheries Ltd v Cullen at 48.
40 Whether New Zealand law recognises a legitimate expectation of a substantive outcome is moot.
See GXL Royalties Ltd v Minister of Energy for New Zealand [2009] NZAR 478 (HC) at [44]-[45] per Wild J. The case was appealed to the Court of Appeal ([2010] NZAR 518), but this point was not argued on appeal (see the Court of Appeal‘s judgment at [21]).
41 Attorney General of Hong Kong v Ng Yuen Shiu [1983] 2 All ER 346 (FC) at 351 per Lord Fraser, as quoted in NZ Association for Migration and Investments Inc v Attorney-General at [139].
“preclude any possible need to change it”.42 If a public authority gives notice that the procedural benefit no longer applies, then that may bring to an end any expectation founded upon the earlier promise or practice.43 Similarly, as noted in the passage cited at (c), clear statutory words override any expectation.
[146] The legitimate expectation pleading is as follows:
80. TTTM had a legitimate expectation that:
(i) TTTM would be consulted by the Ministry in regard to both decisions intended to be made by the Ministry and the terms of contracts proposed to bind TTTM and the Ministry; and
(ii) The relationship and dealings between TTTM and the Ministry would be conducted in accordance with the principles of the Treaty of Waitangi.
81. TTTM‘s legitimate expectation arose from:
(i) the terms of the MOU;
(ii) the terms of various policy documents, including the 2002
Guidelines;
(iii) the principles of the Treaty of Waitangi; and
(iv) the history of the relationship between TTTM and the Ministry and the corresponding obligations observed since the execution of the MOU in 1996.
82.In breach of TTTM‘s legitimate expectation, the Ministry has failed to consult TTTM in respect of proposed changes to the structure of the delivery of Maori health services in Te Tai Tokerau and in relation to the changes in the contractual relationship between TTTM and the Ministry. Specifically, the Ministry has made a decision to devolve its relationship with TTTM to regional DHBs and to unilaterally alter the terms of the operational contract between TTTM and the Ministry.
[147] The factual contentions of wrongful actions by the defendant are, in large measure, contentions advanced in one or more of the preceding grounds for review
and the preceding conclusions apply.
42 R v Home Secretary, ex p Ruddock [1987] 1 WLR 1482 (QB) at 1497 per Taylor J; and see New
Zealand Association for Migration and Investments Inc v Attorney-General at [140].
43 GDS Taylor Judicial Review: A New Zealand Perspective at [13.84] and [13.87].
[148] The pleading at 81(i) reinforces this conclusion. It is also an illustration of the misapplication of administrative review concepts to what are in fact contentions of breach of contract. The plaintiff could not have any “legitimate expectations” arising from the terms of the Memorandum, with those terms properly construed by reference to all relevant agreements, other than those that arose from the terms of the Memorandum. That is the extent of that pleading and it is not converted into a ground for judicial review by adding the label “legitimate expectation”.
[149] The pleading in paragraph 81(iv) is much the same. Part of the pleading in sub-paragraph (iv) again makes express reference to the terms of a contract. The other aspect of sub-paragraph (iv) is “the history of the relationship between” the plaintiff and the defendant. There is no evidence of any representation by an officer of the defendant, or by a Minister, which could be said to have given rise to a legitimate expectation on the part of the plaintiff that matters would be dealt with in a manner contrary to the way in which matters were in fact dealt with by the defendant. The opposite is established. The fundamental complaint is that the agreement was brought to an end. From 2001 the plaintiff was on notice from the defendant that it was, at the least, reasonably likely that the relationship between the defendant and the plaintiff, established by the Agreements in 1996, would come to an end sooner rather than later. The defendant continued to give express notice to the plaintiff of an intention to terminate the Agreements unless a new agreement could be entered into. The plaintiff could not have been under any illusion. This was further reinforced by other matters, such as the recommendations in the 2003 review report.
[150] The legislative history, from 1996 when the Agreements were made, coupled with the identity of the party with whom the plaintiff originally contracted, are further reasons why the factual foundation for the plaintiff‘s claim of a legitimate expectation is not made out. These are matters already touched on. The plaintiff entered into the Agreements with a statutory body, North Health. For three years or so, as a consequence of what was effectively imposed on the plaintiff by statute, the other contracting party was another statutory body, the Health Funding Authority. When the 2000 Act came into force the Agreements were vested in the defendant, but that did not occur for the purpose of giving effect in any way to any expectation
the plaintiff may have had, or any aspiration the plaintiff may have had. The clear direction of the 2000 Act was that the plaintiff ‘s new contracting partner should be the DHB. The vesting in the defendant was an interim arrangement in terms of the statutory provisions.
[151] The evidence also does not bear out the contentions that the legitimate expectation pleaded in paragraph 80 arose from either of the matters pleaded in paragraph 81(ii) and 81(iii). I agree with the submissions for the defendant that, in the light of the general principles as to when a legitimate expectation may arise to give grounds for judicial review, the matters referred to in sub-paragraphs (ii) and (iii) are not matters the plaintiff can rely on. The “2002 Guidelines” referred to in the statement of claim is a reference to consultation guidelines drafted in 2002 which applied to DHBs, not to the Ministry. The broad appeal to “the principles of the Treaty of Waitangi” also does not avail the plaintiff. The Treaty of Waitangi does not
impose a discrete duty of consultation on government decision-makers.44 In other
respects the discussion at [99] and [129]-[130] applies.
Conclusion
[152] The claims are dismissed.
[153] In accordance with the general rule, the defendant would be entitled to costs, but costs may not be sought by the defendant. If costs are sought a memorandum should be filed and served in the usual way. A response for the plaintiff should be
filed and served three weeks after receipt of the defendant‘s memorandum.
Peter Woodhouse J
44 New Zealand Maori Council v Attorney-General [1987] 1 NZLR 641 (CA) at 665 per Cooke P,
682-683 per Richardson J; Te Waero v Minister of Conservation HC Auckland, M360-SW01, 19
February 2002, Harrison J at [54]-[65].
0
0
1