Unitec Institute of Technology v Attorney-General HC Wellington CIV 2005-485-89
[2005] NZHC 513
•7 July 2005
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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2005-485-89
UNDER the Judicature Amendment Act 1972
AND UNDER section 27(1) of the New Zealand Bill of
Rights Act 1990
IN THE MATTER OF an application for establishment of a university under section 162 of the Education Act 1989
BETWEEN UNITEC INSTITUTE OF TECHNOLOGY
Plaintiff
ANDTHE ATTORNEY-GENERAL SUED IN RESPECT OF THE MINISTER OF EDUCATION AND THE ASSOCIATE MINISTER OF EDUCATION (TERTIARY EDUCATION)
First Defendant
ANDTHE NEW ZEALAND QUALIFICATIONS AUTHORITY Second Defendant
Hearing: 2 & 3 June 2005
Appearances: M Chen & L Seales for Plaintiff
K L Clark & R Schmidt for First Defendant
P Radich & J Hodgson for Second Defendant
Judgment: 7 July 2005
RESERVED JUDGMENT OF MILLER J
UNITEC INSTITUTE OF TECHNOLOGY V THE ATTORNEY-GENERAL SUED IN RESPECT OF THE MINISTER OF EDUCATION AND THE ASSOCIATE MINISTER OF EDUCATION (TERTIARY EDUCATION) And Anor HC WN CIV 2005-485-89 [7 July 2005]
Introduction
The parties
The proceedingThe Unitec application Suspension of the application The legislative framework Was the suspension lawful?
Table of Contents
[1] [5] [9] [18] [21] [41] [49]
Does the Act contemplate a ‘no additional universities’ policy?
Must the Minister accept and process an application for establishment as a university?
The Bill of Rights 1688
Events following the May 2000 suspension The “university of technology” proposal The TEAC report
The Education (Tertiary Reform) Amendment Bill and the Tertiary
Education Commission
The fate of the 2000 BillReactivation of the Unitec application Duration of unlawful suspension Acquiescence
Breach of natural justice
Delay as a breach of natural justice
Magna Carta
Legitimate expectation
Second cause of action: summaryThe New Zealand Bill of Rights Act 1990, s.27(1)
Who makes the decision to establish a university?
Is the Minister nonetheless a “tribunal or other public authority” for the purposes of s.27(1)?
Breach of s.27(1): conclusions
The New Zealand Qualifications Authority
Does s.162(3) confer a statutory power on NZQA?
Unlawful suspension by NZQA Breach of natural justice by NZQA
Breach of s.27(1) of the New Zealand Bill of Rights Act 1990 by
NZQA Waiver/acquiescence Result
[50] [54]
[63] [79] [80] [87] [98]
[105] [107] [109] [114] [122] [124] [128] [133] [140] [141] [145] [159]
[163] [164] [166] [173] [179] [183]
[185] [186]
Introduction
[1] Unitec is a polytechnic which wishes to become a university. The Minister of Education may recommend that an institution be so established by Order in Council under s.162 of the Education Act 1989. Unitec applied in August 1999. The Minister, Mr Bradford, sought advice from the second defendant, which I will
call NZQA, as the Act required him to do before making his recommendation to the
Governor-General.
[2] A new government was formed after the 1999 General Election. It adopted a policy that there should be no additional universities established pending a review of the tertiary education sector. On 15 May 2000, the Associate Minister of Education, Mr Maharey, introduced the Education (Limiting Number of Universities) Amendment Bill 2000 (‘the 2000 Bill’). It would limit the number of public universities to eight, the existing number, and provided that it would come into force on 15 May 2000. The Bill was referred to the Education & Science Select Committee. The Associate Minister told NZQA that there was no point in proceeding with the Unitec application, and NZQA suspended it.
[3] Unitec complains in this proceeding that the Associate Minister suspended its application unlawfully and refused to resume it until 31 May 2004. In the interim, the government chose not to proceed with the 2000 Bill or impose any limit on the number of universities. Instead, it decided to amend the Act to include a requirement that the Minister must consider the interests of the tertiary education system and the nation as a whole when making recommendations under s.162. The Education (Tertiary Reform) Amendment Act 2002, which I shall call ‘the 2002 Amendment’, was duly enacted, with effect from 1 January 2003.
[4] The defendants deny that Unitec’s request for establishment as a university was suspended unlawfully. They also say that Unitec cannot now seek a remedy based on delay, because it acquiesced in the delay between 15 May 2000 and 31 May
2004.
The parties
[5] Unitec began life in 1976 as the Carrington Technical Institute. It has long aspired to university status. It seeks to provide what it calls seamless learning opportunities through a portfolio of qualifications that extends across a range of relevant disciplines and from foundation certificates to doctorates. It changed its name to Unitec Institute of Technology in 1993, to reflect its aspiration to combine
the best of applied university and polytechnic education. In pursuit of that ambition, it has developed undergraduate degrees and post-graduate programmes.
[6] Unitec has its main campus in Mt Albert, Auckland, and since 2001 it has been developing a second campus at Henderson. In 2003 there were more than
61,000 students participating in 136 programmes at Unitec. Students enrolled in degree programmes accounted for some 58% of full time equivalent students. It employs almost 1,900 staff.
[7] The Attorney is sued in relation to both the Minister and the Associate Minister of Education. The Honourable Trevor Mallard was the Minister of Education at all material times since the Labour-Alliance coalition government was sworn in on 10 December 1999. He delegated his functions and responsibilities associated with tertiary education to the Associate Minister, The Honourable Steven Maharey, who held that position until December 2004.
[8] NZQA was established in 1990 and has a number of statutory functions including provision of advice to the Minister on the establishment of universities. Section 162(3) of the Act provides that before deciding whether or not to recommend to the Governor-General the making of an Order in Council establishing a body as a university, the Minister shall give NZQA a reasonable period in which to give advice to the Minister on the matter and consider any advice so given.
The proceeding
[9] Unitec says in its first cause of action that the Associate Minister suspended its application on or about 15 May 2000, and acted unlawfully in so doing, purporting to suspend the execution of s.162(3) by regal authority without the consent of Parliament, contrary to article 1 of the Bill of Rights 1688. It is said that the 2000 suspension was a refusal to exercise a statutory power of decision, unlawful, ultra vires the Associate Minister’s powers, and was imposed for the improper purpose of implementing Government policy reflected in the 2000 Bill.
[10] In its second cause of action, Unitec complains that the Minister failed to act in accordance with the principles of natural justice, which are said to include an obligation to consider its application in a reasonable time and in a manner consistent with other university status applications. The latter is a reference to the Auckland University of Technology (‘AUT’), a former polytechnic granted university status under the previous Government.
[11] In the third cause of action, Unitec pleads that the Associate Minister’s actions breached s.27(1) of the New Zealand Bill of Rights Act 1990. It also seeks compensation. However, the questions whether a breach of s.27(1) ought to result in compensation and if so, in what sum, are to be resolved in a subsequent hearing.
[12] The fourth to sixth causes of action are brought against NZQA, and mirror the first to third causes of action. It is said that NZQA told Unitec that it intended to suspend its process for advising the Minister after the Associate Minister made his wishes clear in May 2000, and subsequently refused to resume it until the Minister directed it to do so.
[13] The defendants admit that the Associate Minister decided that the Unitec application would not be progressed until the new Government undertook a review of tertiary education policy. However, they maintain that the Associate Minister’s powers extended to suspending the application while the Government’s policy objectives were being settled, that there is no right to have an application for university status considered, and that the Minister’s role under s.162 is perfectly discretionary. They also say that Unitec agreed to the delay that occurred between May 2000 and 31 May 2004. Specifically, Unitec participated until July 2001 in a review of the tertiary education sector by the Tertiary Education Advisory Commission (‘TEAC’). After that body reported, Unitec asked that its application be resumed but it then agreed to a further delay while the Tertiary Education Commission (‘TEC’), which the TEAC had recommended be created, was established under the 2002 Amendment. The defendants’ position is that not until 31
May 2004 did Unitec ask that its application be resumed.
[14] When this proceeding was filed in February 2005, a fixture was set for 2 and
3 June. The Minister subsequently sought an adjournment on the ground that he was considering the Unitec application and expected that he would be in a position, after consultation, to make a decision by 1 July 2005. Unitec, for its part, sought orders in the nature of mandamus. I took the view that such orders would require examination of the Minister’s handling of the application between commencement of the proceeding and the hearing, and indicated that I would adjourn the fixture. Faced with that intimation, Unitec elected to proceed on the basis that the relief it seeks in this judgment is confined to declarations to the effect that the alleged suspension between 15 May 2000 and 31 May 2004 was unlawful and breached Unitec’s rights under s.27(1) of the New Zealand Bill of Rights Act 1990.
[15] The principal witness for Unitec was John Webster, Chief Executive and President since March 1999. The other witnesses were; John Robb, formerly chair of the Unitec New Zealand Council; Carol Cardno, a professor at Unitec; Neil Wells, a barrister and Associate Head of the School of Natural Sciences at Unitec; Jacqueline Rowarth, former Dean of the Graduate School at Unitec; Peter Thompson, a senior lecturer in communications at Unitec; and Alan Dickinson, a member of the Unitec Council.
[16] The former Associate Minister, Mr Maharey, was the only witness for the first defendant. For NZQA, the witnesses were Norman Kingsbury, formerly Chief Executive of NZQA, and Angela Urwin, an employee of NZQA.
[17] It is convenient to address the evidence and issues by examining the Unitec application and its suspension, the legislative context, and the question whether the Minister acted unlawfully by suspending the application, before turning to the events that are said to amount to acquiescence in the delays between May 2000 and May
2004. Although acquiescence played a prominent role in the evidence and written submissions, it became clear during argument that it is a secondary issue. The central issue is whether the suspension was unlawful. It was common ground that Unitec did not acquiesce in the suspension itself since that was done without notice to it. Ms Clark accepted, inevitably in my view, that the Associate Minister cannot rely on acquiescence where it resulted from unlawful suspension of the application.
Conversely, it is difficult for Unitec to complain of delay - to which acquiescence is part of the Attorney’s and NZQA’s defences - if the Associate Minister was lawfully able to suspend its application during the very extensive and necessarily time- consuming TEAC review and any consequential amendments to the legislation.
The Unitec application
[18] Unitec first applied for establishment as a university in 1996, but agreed to defer its application until NZQA established guidelines on the criteria for university status in December 1997. The guidelines identified the characteristics of a university as development of intellectual independence, commitment to research, meeting international research and teaching standards, acting as a repository of knowledge and expertise, and accepting a role as critic and conscience of society. The guidelines expand on these characteristics in some detail.
[19] By letter of 10 August 1999, Unitec formally applied to the then Minister for designation as a ‘university of technology’. The Act does not distinguish among types of university, and Unitec explained that its application was based on the Minister’s assurance that the definition of ‘university’ in the Act was sufficiently flexible “for a university of technology to offer a good range of vocational or applied education”. There was no suggestion before me that Unitec was wrong in that view, such that its application was defective or sure to fail. The Minister sought advice from NZQA with a view to making a recommendation to the Governor-General. In accordance with its 1997 criteria, NZQA set about establishing an expert panel to evaluate the application. It told Unitec that it expected to report to the Minister in July 2000, and it scheduled a panel visit to Unitec in May 2000.
[20] The Attorney does not accept that a body or institution has a right to make an application and have it considered under s.162. But he acknowledged that Unitec and the former Minister had invoked the section. Accordingly, the issue is whether the Associate Minister could stop or suspend the s.162 process before receiving NZQA’s advice under s.162(3).
Suspension of the application
[21] The government changed on 10 December 1999. Mr Maharey referred in his affidavit to the Labour Party’s election manifesto, in which it criticised what it said was the National government’s attempts to develop a marketplace in education, in which tertiary institutions became competitors. That had led to blurring of distinctions among categories of tertiary institutions, to which Labour was opposed. Labour proposed to establish the Tertiary Education Advisory Commission to advise, after consultation, on the long-term strategic direction for the tertiary sector.
[22] In the meantime, officials formulated a public consultation process for the Unitec application and recommended it to the new Associate Minister, Mr Maharey, in February 2000.
[23] Mr Maharey wrote to the Prime Minister on 17 February 2000, noting that it was government policy to limit the number of universities in New Zealand to eight. The eight existing universities included AUT, which had changed its status from polytechnic to university with effect from 1 January 2000. He proposed, with the Prime Minister’s permission, to instruct the Chief Executive of the Ministry of Education to carry out the required consultation and seek submissions on the application. He would then exercise his discretion under the Act, noting there was no discretion to stop the process. He proposed to apply government policy as a factor in relation to the merits of the application.
[24] The government then decided to suspend the Unitec application. Mr Maharey explained in his affidavit that the government had not ruled out Unitec becoming a university. Rather, it had decided to establish the TEAC to recommend the long-term strategic direction of the sector. Until the government’s policy with respect to the tertiary sector had been determined, he did not want to make any decisions about establishing institutions. In that sense, there was a “governmental moratorium” on making “final decisions” until policy had been settled. The TEAC review would take some time. He characterised the 2000 Bill as a holding measure until the TEAC had prepared its report and policy decisions had been made.
[25] After taking advice, the Minister and Associate Minister recommended to the Prime Minister on 5 May 2000 that it would be sensible to legislate to give effect to the government’s policy, which was “not to have an increase in the number of universities”. Legislation was recommended because of legal difficulties, including the view that the procedure outlined in the Act left “somewhat unclear” the scope of the Minister’s discretion. I take this to be a concern that the legislation did not contemplate the government’s policy regarding the number of universities.
[26] It is timely to mention at this point that Ms Chen made much of various indications in correspondence or emails that the Associate Minister had legal advice to the effect that legislation was necessary to achieve his purpose. I attach no weight to these references. The issues are legal rather than factual in nature so alleged admissions are of little relevance to the Court, which will determine those issues for itself. The advice could not be evaluated without seeing the full text, which is not in evidence and in respect of which the Attorney maintains privilege has not been waived. In any event, legal advice reflects not only the advisor’s analysis of the law but also his or her understanding of the client’s appetite for risk, and I accept Ms Clark’s submission that there are indications the Associate Minister was concerned to act lawfully.
[27] Mr Maharey also pointed out that the criteria to be used to evaluate Unitec’s application were controversial, with the New Zealand Vice-Chancellor’s Committee (“NZVCC”) threatening litigation. The NZVCC wanted Unitec’s application suspended pending a review of the NZQA guidelines. This challenge was mentioned in the 5 May letter to the Prime Minister. However, I am satisfied that the NZVCC threats were not a significant factor in the decision to suspend the Unitec application, although they may have contributed in a small way to the decision to introduce a Bill for that purpose. The primary consideration was the government’s policy that the number of universities should not be increased pending the TEAC review. The decision was taken to use a stand-alone Bill, rather than a supplementary order paper to a then pending Education Amendment Bill, because a stand-alone Bill introduced under urgency would give immediate effect to the government’s policy to limit the number of universities. The NZVCC threats were not made until 28 March 2000, and there was no suggestion before me that the Associate Minister saw any merit in
the NZVCC’s criticisms of the NZQA criteria. The flavour is captured by a Cabinet minute of 8 May 2000:
At the meeting of 8 May 2000 Cabinet:
a.noted that it is the Government’s policy not to have an increase in the number of universities in New Zealand;
b.noted that the Education Act 1989 currently enables institutions to apply to become universities, and to become universities by Order in Council if they meet the statutory characteristics;
c.noted that an application for an institution to become a university has been lodged, and that court proceedings are likely to be filed in relation to this application.
[28] Perhaps more importantly, a Ministry of Education memorandum of 27 April
2000 recorded that on 20 April representatives of the parties had reached an agreement that NZQA would prepare a draft memorandum to be provided to the panel of experts. The memorandum would highlight the concerns NZVCC had regarding the guidelines so the panel could take them into consideration when interpreting the guidelines. By the time the 2000 Bill was introduced, there was no risk of litigation from the NZVCC.
[29] Matters moved quickly after the 5 May letter to the Prime Minister. Within a week, the Cabinet Legislative Policy Committee agreed there should be legislation limiting the number of universities to eight.
[30] The 2000 Bill was introduced on 15 May 2000. The Bill, which the
Associate Minister envisaged would be passed by August, provided:
Commencement
This Act is deemed to come into force on 15 May 2000. Establishment of institutions
….
The Minister may not recommend the establishment of a body as a university if, were the proposed university to be established, there would then be more than 8 universities in New Zealand.
[31] The Bill was introduced without notice to Unitec. In the interim, it had continued to deal with NZQA, supplying information as requested and preparing for the expert panel visit. On 18 February, the Associate Minister had written to Unitec and others, advising that the TEAC was to be established and enclosing draft terms of reference on which he sought comment, but nothing was said in those documents about Unitec’s application. On the contrary, the Associate Minister had told Mr Webster at a meeting on 16 March that he remained neutral on Unitec’s application, and did not intend to hold up worthwhile developments during the TEAC review. Unitec knew of the NZVCC objections but those had been resolved by agreement.
[32] The Associate Minister wrote to Unitec on 16 May, advising that:
The Government does not wish there to be more universities established in New Zealand until it has considered the advice of the recently established Tertiary Education Advisory Commission on this matter. The Government has therefore decided to introduce the legislation to give effect to its policy not to increase the number of universities until it has been able to consider the advice of TEAC …
…It is the Government’s intention that the Bill be referred to the Education and Science Select Committee, so the public and interested organisations will have an opportunity to make submissions.
In view of the Bill, I believe that it would be imprudent for the statutory process for the Unitec request to continue…
While I am willing to receive any comments on the Government’s action and my position, I am sure that you will want to make a submission on the Bill to the Education and Science Select Committee….
[33] The Associate Minister wrote in the same terms to NZQA, which replied on
16 May:
In the light of your letter referred to above we seek urgent clarification as to whether you:
• Are withdrawing your request to us for advice regarding UNITEC’s application;
• Are directing the Board to suspend the process for considering UNITEC’S application pending the passing of the Education (Limiting Number of Universities Amendment) Bill;
• Wish the Board to continue the process for considering UNITEC’s application; or
• Wish to direct the Board in some other manner.
[34] In a letter of the following day, NZQA suggested that if the Government intended that the Bill be an interim measure pending the TEAC advice, consideration might be given to a sunset clause as an alternative to the necessity for formal repeal.
[35] The Minister replied to NZQA’s correspondence on 22 May. He advised:
The Bill, which the Government introduced on Monday, offers a very clear indication of Government policy. As matters presently stand, on enactment of the Bill, there would be no basis for granting Unitec’s request.
In these circumstances there would be no point, in my view, for the Unitec request to proceed. I would certainly be concerned if any further public moneys were spent pursuing that request ….
The Government has also considered carefully whether a sunset provision should be specified in the Bill. We decided against that. While the Government has clear timelines for the Tertiary Education Advisory Commission to undertake its work, it does not wish the Commission to be driven by legislative timelines.
I do not consider that the Government could be any clearer as to its policy intentions, but I am happy for you to copy this letter to Unitec, should you wish.
[36] Unitec understandably reacted to the Bill with dismay. It protested in a letter of 17 May to members of Parliament, in which it characterised the decision to introduce the Bill as arbitrary, taken without consulting NZQA or Unitec. It advised that it would make a substantial and vigorous submission to the Select Committee, arguing that the “Unitec Bill” was unnecessary since Unitec did not object to being categorised as a university of technology.
[37] NZQA responded to the Associate Minister’s correspondence by cancelling the scheduled expert panel visit to Unitec and suspending the process for providing its advice to the Minister. Its Chief Executive, Mr Kingsbury, wrote to Unitec on 19
May:
In the light of these circumstances I have decided to cancel the scheduled panel visit to UNITEC and suspend the process for providing advice to the Minister regarding UNITEC’s application until the outcome of the Bill is clear or the Minister directs the Qualifications Authority otherwise.
[38] I find that as of 15 May 2000 the Unitec application was suspended, pending the outcome of the 2000 Bill or a Ministerial direction that NZQA resume considering it.
[39] I also find that the cause of the suspension was the government’s policy with respect to the number of universities. There was a dispute as to precisely what that policy entailed. Ms Chen argued that the policy was that there would be no new universities. She referred to a number of documents that baldly state it was government policy not to have an increase in the number of universities, the decision not to include a sunset clause in the 2000 Bill, and hearsay evidence to the effect that senior government figures have a fixed view of what a university should look like.
[40] However, the evidence does not satisfy me that the government had closed its mind to the possibility of further universities pending the TEAC review, which it had commissioned. The Associate Minister’s evidence to the contrary is borne out by subsequent experience; the legislation has been amended in a way that does not limit the number of universities, although there are now additional criteria to be met. Accordingly, I find that the policy was, as stated by the Associate Minister, a governmental moratorium on establishing new universities before government policy for the tertiary sector had been settled.
The legislative framework
[41] The provisions relating to university status are found in Parts 13 and 14 of the Education Act 1989. They were inserted under the Education Amendment Act 1990. Section 160 is the objects provision, and provides:
The object of the provisions of this Act relating to institutions [which includes universities] is to give them as much independence and freedom to make academic, operational, and management decisions as is consistent with the nature of the services they provide, the efficient use of national resources, the national interest, and the demands of accountability.
[42] The Act seeks to protect academic freedom in s.161:
(1) It is declared to be the intention of Parliament in enacting the provisions of this Act relating to institutions that academic freedom and the autonomy of institutions are to be preserved and enhanced.
(2) For the purposes of this section, academic freedom, in relation to an institution, means—
(a) The freedom of academic staff and students, within the law, to question and test received wisdom, to put forward new ideas and to state controversial or unpopular opinions:
(b) The freedom of academic staff and students to engage in research:
(c) The freedom of the institution and its staff to regulate the subject-matter of courses taught at the institution:
(d) The freedom of the institution and its staff to teach and assess students in the manner they consider best promotes learning:
(e) The freedom of the institution through its chief executive to appoint its own staff.
(3) In exercising their academic freedom and autonomy, institutions shall act in a manner that is consistent with—
(a) The need for the maintenance by institutions of the highest ethical standards and the need to permit public scrutiny to ensure the maintenance of those standards; and
(b) The need for accountability by institutions and the proper use by institutions of resources allocated to them.
(4) In the performance of their functions the Councils and chief executives of institutions, Ministers, and authorities and agencies of the Crown shall act in all respects so as to give effect to the intention of Parliament as expressed in this section.
[43] Establishment of institutions is provided for in s.162, which also sets out the characteristics of a university:
(1) Upon the commencement of this section, this Act has effect as if—
(a) Each body specified in Part 1 of the Schedule 13 to this Act was established as a university under subsection (2) of this section; and
(b) Each body specified in Part 2 of that Schedule was established as a college of education under subsection (2) of this section; and
(c) Each body that, immediately before that commencement, was established as a polytechnic, institute of technology, technical institute or community college under the Education Act 1964, was established as a polytechnic under subsection (2) of this section,—
and a reference in any other Act to an institution established under this Act shall be read as including a reference to a body referred to in paragraph (a), paragraph (b), or paragraph (c) of this subsection.
(2) Subject to subsections (3) to (5) of this section, the Governor-General may, by Order in Council made on the written recommendation of the Minister, establish a body as a college of education, a polytechnic, [a specialist college,] a university, or a wananga, as the Governor-General considers appropriate.
(3) Before deciding whether or not to recommend to the Governor-General the making of an Order in Council under subsection (2) of this section, the Minister shall—
(a) Give the Qualifications Authority a reasonable period in which to give advice to the Minister on the matter and consider any advice so given; and
(ab) satisfy himself or herself that the establishment of the institution is in the interests of the tertiary education system and the nation as a whole; and
(b) Consult with such institutions, organisations representing institutions, and other relevant bodies, as the Minister considers appropriate.
(4) In recommending to the Governor-General under subsection (2) of this section that a body should be established as a college of education, a polytechnic, [a specialist college,] a university, or a wananga, the Minister shall take into account—
(a) That universities have all the following characteristics and other tertiary institutions have one or more of those characteristics:
(i) They are primarily concerned with more advanced learning, the principal aim being to develop intellectual independence:
(ii) Their research and teaching are closely interdependent and most of their teaching is done by people who are active in advancing knowledge:
(iii) They meet international standards of research and teaching:
(iv) They are a repository of knowledge and expertise:
(v) They accept a role as critic and conscience of society;
and
(b) That—
…
(ii) A polytechnic is characterised by a wide diversity of continuing education, including vocational training, that contributes to the maintenance, advancement, and dissemination of knowledge and expertise and promotes community learning, and by research, particularly applied and technological research, that aids development:
(iia) a specialist college is characterised by teaching and (if relevant) research of a specialist nature that maintains, enhances, disseminates, and assists in the application of knowledge and expertise:]
(iii) A university is characterised by a wide diversity of teaching and research, especially at a higher level, that maintains, advances, disseminates, and assists the application of, knowledge, develops intellectual independence, and promotes community learning:
[44] The italicised provisions came into effect on 1 January 2003, under the 2002
Amendment.
[45] There are no provisions creating a right to apply for establishment, or dealing with procedure for seeking university status, or setting out what an application must contain.
[46] There is provision for disestablishment of institutions in s.164, which provides:
(1) Subject to this section, the Governor-General may, by Order in Council made on the written recommendation of the Minister, disestablish an institution.
(2) The Governor-General shall not disestablish a university [established under section 162] unless the House of Representatives has passed a resolution approving the disestablishment of the university.
(3) The Minister shall not recommend the disestablishment of an institution unless the Minister—
(a) Is satisfied on reasonable grounds that there are good reasons to do so; and
(ab) is satisfied that the disestablishment is in the interests of the tertiary education system and the nation as a whole; and
(b) Specifies the reasons in the recommendation.
(4) When an institution is, or 2 or more institutions are, disestablished, the
Governor-General may, by Order in Council made on the written
recommendation of the Minister, incorporate the disestablished institution or any one or more of the disestablished institutions in another institution, whether the other institution is—
(a) An existing institution or a new institution established for the purpose:
(b) An institution of the same class as the disestablished institution or institutions or an institution of a different class from it or them (for example, a disestablished polytechnic may be incorporated in a university).
(5) Before deciding whether or not to recommend the making of an Order in Council under subsection (1) [or subsection (4), or both subsections (1) and (4)], the Minister shall—
(a) Give to the Council of the institution or the Councils of the institutions concerned, and to every other body that the Minister considers is likely to be directly affected, written notice—
(i) Setting out the action that the Minister is considering whether to take and the reasons for that action; and
(ii) Inviting each Council or other body to make a written submission to the Minister in relation to the matter; and
(b) Publish such notices as the Minister considers appropriate inviting members of the public to make written submissions in relation to the matter; and
(c) Consider any submissions made within a reasonable period in response to the notices referred to in paragraphs (a) and (b) of this subsection.
(6) If an Order in Council is made under subsection (1) or subsection (4)[, or both subsections (1) and (4), the Minister must present to] the House of Representatives a copy of the Order in Council and a statement of the reasons for the making of the Order in Council.
[47] The 2002 Amendment inserted an objects provision, s.159AAA, which provides:
(1) The object of this Part, Parts 13A to 18, and Part 19 (which relate to tertiary education), and of the provisions of Parts 18A and 20 to 24 that relate to tertiary education, is to foster and develop a tertiary education system that—
(a) fosters, in ways that are consistent with the efficient use of national resources, high quality learning and research outcomes, equity of access, and innovation; and
(b) contributes to the development of cultural and intellectual life in
New Zealand; and
(c) responds to the needs of learners, stakeholders, and the nation, in order to foster a skilled and knowledgeable population over time; and
(d) contributes to the sustainable economic and social development of the nation; and
(e) strengthens New Zealand’s knowledge base and enhances the contribution of New Zealand’s research capabilities to national economic development, innovation, international competitiveness, and the attainment of social and environmental goals; and
(f) provides for a diversity of teaching and research that fosters, throughout the system, the achievement of international standards of learning and, as relevant, scholarship.
(2) In making decisions under this Part, Parts 13A to 18, and Part 19, and under the provisions of Parts 18A and 20 to 24 that relate to tertiary education, the Minister, the Commission, the Qualifications Authority, and the service continued by Part 22 must take into account the objects specified in subsection (1), so far as is practicable in the circumstances.
[48] The 2002 Amendment marks a significant shift towards closer government control of the tertiary sector. Section 159AA, which was also introduced under the
2002 Amendment, provides that the Minister must from time to time approve a tertiary education strategy that sets out the government’s medium to long-term strategy for tertiary education. It must address economic, social, environmental contexts and developmental aspirations of Maori and other population groups. The NZQA must have regard to a tertiary education strategy when exercising its functions. The Minister must also, under s.159AC, issue a statement of tertiary education priorities at least once in every three years. That must be based on the tertiary education strategy, and must set out the government’s priorities for tertiary education. The 2002 Amendment also established the Tertiary Education Commission. Its functions include giving effect to the statement of tertiary education priorities through, among other things, allocating funds to organisations, monitoring performance of organisations, and undertaking any functions delegated to the Commission. In performing its functions, the Commission must not only have regard to the tertiary education strategy, but must also follow directions given by the Minister under s.103 of the Crown Entities Act 2004.
Was the suspension lawful?
[49] In its first cause of action, Unitec alleged that the suspension was unlawful. I begin by considering whether the policy that there would be no more universities pending the TEAC review was consistent with the legislation, before considering whether the Associate Minister was able to stop Unitec’s application.
Does the Act contemplate a ‘no additional universities’ policy?
[50] The criteria that a body must satisfy are those set out in s.162(4)(a). They relate to what may be described broadly as the academic characteristics of a university. There is no reference to any limit on the number of universities. Rather, the legislation envisages that any body may be established as a university if the Governor-General so decides by Order in Council following a recommendation by the Minister, who must take into account the criteria in s.164(4)(a) when recommending establishment. Nothing in the section suggests a limit on the number of universities. The legislation contemplates that a body may change status; in that case, it must first be disestablished under s.164, which contemplates that the Governor-General may, by Order in Council made on the written recommendation of the Minister, incorporate a disestablished institution as a new institution of a different class. Section 164(4)(b) specifically contemplates that a disestablished polytechnic may be incorporated in a university.
[51] Asked to identify which part of the Act contemplated that the Minister might decline to recommend establishment of a university on the ground that government policy was not to create additional universities, Ms Clark referred to s.160. That section refers to the efficient use of national resources and the national interest. However, it does so only by way of qualification to the object of the relevant provisions of the Act, which is to give institutions as much independence and freedom to make academic, operational, and management decisions as is consistent with the nature of the services they provide, the efficient use of national resources, the national interest, and the demands of accountability.
[52] The Act’s emphasis on academic and management freedom is consistent with a legislative policy that there is to be no fixed limit on the number of universities, but rather that they will be established on their individual merits. That is apparent on reading the legislation, and it is confirmed when the Act is considered in its historical context: R v Z [2005] UKHL 35 at [17]. Introducing the legislation on 29
March 1990, the then Minister of Education, Mr Goff, emphasised that it extended to polytechnics and similar institutions some of the privileges of universities. Previously polytechnics had been strictly controlled. Under the Bill, they would gain freedom to make operational and management decisions, and were to be encouraged to become more entrepreneurial: 506 NZPD 1166.
[53] I conclude that a decision that a body is to be denied university status, regardless of its academic qualities, on the ground that the Minister is opposed to any increase in the number of universities would be contrary to the text and purpose of the Act.
Must the Minister accept and process an application for establishment as a university?
[54] Ms Clark argued that the Minister is under no obligation to accept an application for establishment as a university. Put another way, there is no right to make an application and have it considered. Rather, the Minister may initiate the process and certainly controls it. That is consistent with the publicly funded nature of universities. The power does not derive from s.162 at all; rather, it is prerogative in nature. She cited Daniels v Attorney-General [2004] 2 NZLR 632 at [47]-[50] for the proposition that, in their modern form, the prerogative powers of the Crown are expressed in the principle that the executive may act in the public interest without Parliamentary authority provided it does not infringe any legislation or the common law. She also contrasted s.162 with s.264A, which establishes a procedure for private establishments to obtain permission to use the term “university” in their names. Section 264A is invoked on application by the establishment concerned.
[55] Ms Clark continued that, since the Minister is under no obligation to receive and process an application, he or she logically must be entitled to bring an end to an
application that has already been made. She submitted that nothing in the Act requires the Minister to continue to process an application. She referred to an example of a body which applied for university status when it manifestly had no hope of success, and inquired whether in such a case the Minister must go through a process of seeking advice from NZQA and making a recommendation to the Governor-General.
[56] Ms Chen replied by referring to yet another Bill, the Education
(Establishment of Universities) Bill 2004, which was introduced on 17 September
2004. The Bill would establish a process under which the Minister must first determine that a new university would be in the interests of the tertiary education system and the nation as a whole, before seeking advice from NZQA. The explanatory note states that at present the Minister has no discretion to determine the matter on receipt of adverse advice from NZQA or the TEC but must complete the statutory processes before making a decision.
[57] Ms Clark’s arguments were skilfully and tenaciously advanced. But in the end I do not find it necessary to determine at what point, if at all, the Minister might reject an application that had no prospects of success on its merits. Lord Reid recognised that possibility in Padfield v Minister of Agriculture, Fisheries & Food [1968] AC 997, at 1032. But in this case the Associate Minister disclaimed any view that Unitec’s application has no prospects of ultimate success. For present purposes it must be assumed that Unitec may meet the criteria in s.162(4)(a).
[58] Nor is it necessary to determine whether Unitec had a right to apply. Its application had been accepted, and the previous Minister had sought NZQA’s advice under s.162(3). The question is whether the Associate Minister was entitled to halt the application on the ground that it was government policy that there ought to be no additional universities until the TEAC review had been completed. But for that policy, the Associate Minister and NZQA would have continued to process Unitec’s application.
[59] I turn to Ms Clark’s submission that decisions to tell NZQA that its advice was not required and, in substance, not to make any recommendation to the
Governor-General are examples of prerogative powers in action. The thrust of the submission was that the Associate Minister was not constrained by any policy to be found in the legislation, since the power that he exercised was not derived from it.
[60] I observe that the Crown’s freedom to act within the law is not necessarily prerogative in nature, since that freedom is enjoyed equally with private citizens. The term prerogative has traditionally referred to powers that are unique to the Crown: Hogg and Monahan Liability of the Crown (3rd ed, 2000) at 16, Joseph Constitutional and Administrative Law in New Zealand (2nd ed) at 591.
[61] However, I am not concerned to determine whether a refusal to act under s.162 is prerogative in nature. Nor is it necessary to embark on the jurisprudential question whether a decision not to make a recommendation to the Governor-General is an exercise of a power granted under s.162. The short answer to Ms Clark’s submission is that the Court may review a refusal to exercise a statutory power under s4 Judicature Amendment Act and will do so by reference to the statutory power concerned and its objects. By suspending the application, the Associate Minister plainly refused to exercise a statutory power to make a recommendation to the Governor-General. Indeed, that was the whole point of the 2000 Bill. This is not a case in which the Minister’s decision was of a purely administrative kind, a point which I elaborate upon at [159]-[162] below.
[62] I conclude that the Associate Minister was not lawfully entitled to halt Unitec’s application on the ground that it was government policy that there ought to be no additional universities until the TEAC review had been completed.
The Bill of Rights 1688
[63] Article 1 of the Bill of Rights Act 1688 provides:
That the pretended power of suspending of laws or the execution of laws by
Regall Authority without consent of Parlyament is illegal.
[64] Article 1 remains in effect in New Zealand: s.3 Imperial Laws Application
Act 1988. There are three New Zealand decisions in which this Court has held that
the executive has suspended laws or the execution of laws in breach of the Bill of Rights: Fitzgerald v Muldoon [1976] 2 NZLR 615; Professional Promotions & Services Limited v Attorney-General [1990] 1 NZLR 501; and Alan Johnston Sawmilling Limited v Attorney-General [2002] NZAR 129.
[65] Ms Clark sought to distinguish these authorities, and argued that the Court should not adopt a technical approach to interpretation of the Bill of Rights that would see it invoked every time the executive misapplies a statute, particularly having regard to available administrative law remedies. In this case, there was no clear and detailed statutory scheme expressly providing for an application process. She argued that the Minister had suspended the Unitec application, not the operation of the legislation.
[66] Fitzgerald v Muldoon stemmed from a press statement by the Prime Minister to the effect that the newly elected government would introduce legislation to abolish a superannuation scheme with retrospective effect. The Prime Minister announced that the requirement for employer and employee contributions to the scheme would cease as from the date of the press release. The contributions concerned were made compulsory by the New Zealand Superannuation Act 1974.
[67] Wild CJ held that, in so acting, the Prime Minister purported to suspend the law without consent of Parliament. The question whether the pretended power of suspending laws was by regal authority was to be determined by reference to the powers of the Prime Minister and his position, which were of fundamental importance in our system of government. The Prime Minister’s public announcement must be regarded as made by regal authority within the meaning of Article 1.
[68] Alan Johnston Sawmilling involved an attempt to control logging of indigenous timber by regulation. Under the Forests Act 1949, the milling and export of indigenous timber was prohibited unless taken from an area managed in accordance with a registered sustainable forest management plan. Land permanently reserved for Maori under the South Island Landless Natives Act 1906 was exempted from this requirement. By 1995 the government wanted to phase out all logging of
indigenous forests, including those subject to the 1906 Act. It took steps, in the form of Regulation 4 of the Customs Export Prohibition Order 1996, to apply to such land the same export regime that applied to other indigenous forests under the Forests Act.
[69] Wild J held that the Regulation was repugnant to the exemption in the Forests Act, which it effectively suspended, and contrary to Article 1. The relevant modern application of the Bill of Rights is to prevent the executive (which is the Sovereign in Right of New Zealand, through her representative the Governor-General, and her ministers, acting in Council – the Executive Council) suspending the operation or benefit of laws passed by Parliament.
[70] Professional Promotions concerned a decision to restructure broadcasting, which until 1989 had been tightly regulated and administered along non-commercial lines. The Minister of Broadcasting announced changes that would allow rights to use radio frequencies to be sold and traded. These changes were to be implemented under two Bills. The introduction of one of them, the Radiocommunications Bill, was delayed, with the result that the right to apply for licences existed from 1 July
1989 but there was no legislation to guide decisions on licence applications. The Minister decided to use the existing Radio Regulations 1987 to provide guidelines for the granting of licences in the interim. Those regulations provided that the Secretary for Commerce was to have regard to any statement of government policy when issuing licences. The Minister issued a statement of government policy, which claimed to be made under those regulations. It provided that the allocation of radio frequencies should in all cases be provided for under the policies to be implemented under the proposed Radiocommunications Bill. The plaintiff’s application for frequency was declined and it sought review.
[71] Jeffries J held that no one knew when this statement was issued what policies under the Radiocommunications Bill would be. It was unclear whether the statement of government policy directed that frequencies were to be allocated by a regime that was undisclosed, or that effectively no frequencies at all should be allocated. On the first interpretation, the statement was contrary to the prohibition on suspending
execution of laws, and on the second it was contrary to the suspending of laws prohibition.
[72] I respectfully agree with Wild J that the relevant modern application of the Bill of Rights is to prevent the executive suspending the benefit or operation of laws. Viewed in that way, Article 1 is concerned with the relationship between legislative and executive branches of government. In The English Constitution (Oxford University Press, 1927, at 9), Walter Bagehot referred to “the close union, the nearly complete fusion” of executive and legislative powers in the Westminster model of government. The relationship remains close in New Zealand, where ministers of the Crown must be members of Parliament: s.6 Constitution Act. But it is axiomatic, as s.15 of the Constitution Act asserts, that Parliament, consisting of the Sovereign and the House of Representatives, has full power to make laws, and Article 1 establishes that the executive cannot suspend them or their execution without its consent.
[73] It is true, as Ms Clark submitted, that Fitzgerald v Muldoon is a clearer case than this, involving suspension by press release of payment obligations that were directly expressed in legislation. However, the other two judgments show that Article 1 is not confined to cases in which suspension takes such a direct or informal guise. The three judgments have in common executive decisions to change a policy given expression in existing legislation and to implement the new policy by executive means, in circumstances where a legislative amendment was administratively or politically inexpedient. In each case the means chosen had the effect of suspending the legislation or its execution. Those qualities distinguish these cases from those involving executive error in the administration of laws.
[74] Ms Clark argued that it was Unitec’s application that was suspended, rather than the execution of the legislation generally. I reject that submission. It is true that Unitec’s application led to the 2000 Bill. It was the only application then pending. But the Associate Minister’s evidence was that the decision was not peculiar to Unitec. Nor did the 2000 Bill refer to Unitec. Rather, the reason for suspending the application was that the government wished to review the legislation to determine how many universities there ought to be, and what characteristics they ought to have.
There was to be a moratorium on making final decisions until that review was completed.
[75] Nor do I consider it material that the policy was to suspend the operation of s.162 pending a review, rather than to set a permanent limit on the number of universities. The Associate Minister knew that review, and the implementation of any resulting decision, would take a considerable time. The TEAC’s brief was nothing less than a review of the entire tertiary sector. The review might also result in legislative changes that would preclude Unitec, or any other polytechnic, from becoming a university.
[76] Ms Clark did not contend that anything turned on the government’s intention to implement its policy by means of a Bill. Under s.16 of the Constitution Act, a Bill becomes law only when it has been passed by the House of Representatives and receives the Royal assent. Prospective amending or validating legislation does not qualify the obligation of the judicial branch of government to uphold existing law: Meggitt Overseas Limited v Grdovic [1998] 43 NSWLR 527, 531 (CA). The Court may have regard to new legislation during the period between enactment of legislation and its coming into force, as was done in W v W (2000) 14 PRNZ 157, and Tyler v Attorney-General [2000] 1 NZLR 211. It has also been held that in rare cases, impending legislation, if inevitable, may justify a decision to defer judgment: Genesis Power Limited v Environment Court [2003] NZAR 371. In Fitzgerald v Muldoon Wild CJ declined to grant relief in the nature of injunction or mandamus for that reason. In this case, the Bill was to be referred to the select committee, and it cannot be assumed that the Bill would be enacted at all, or in the same form, or that its enactment was imminent. It has been held that the Court will not speculate on whether a Bill before Parliament will be passed in its present form: Willow Canal Limited v British Transport Commissioner [1956] 1 All ER 561, 569. That must be all the more so in a mixed-member proportional representation environment in which coalition or minority governments are the norm.
[77] Ms Clark did emphasise that it was the government’s prerogative to undertake the TEAC review. She also argued, as something of a last resort, that following the general election the government had an electoral mandate to undertake
that review. That may be so. However, the Court is not concerned with the content of the government’s education policy, or to restrain its freedom to develop that policy, or to assess the lawfulness of the policy by reference to the existence of an electoral mandate. If the latter argument was correct, the Court presumably might refuse to give effect to policy for which it did not discern a mandate. The Court is concerned only that the means employed to implement the policy should not contravene the law.
[78] I conclude that the suspension in May 2000 is properly characterised as a suspension of s.162 of the Education Act and accordingly breached Article 1 of the Bill of Rights.
Events following the May 2000 suspension
[79] At this point I return to the chronology. It is necessary to establish the duration of the suspension and also, should I be wrong in my conclusion that the suspension was unlawful, whether Unitec acquiesced in it. (Unitec maintains that it is still entitled to relief on grounds of delay in the event that the suspension was lawful.)
The “university of technology” proposal
[80] Immediately after the 2000 Bill was introduced, Unitec sought compromise. It proposed, without prejudice to future debate, a category of university called a university of technology, which would substantially demonstrate the essential characteristics of any other universities but be particularly distinguished by teaching at all levels, and especially at the higher levels, based on applied research and practice. It suggested that the Associate Minister ask the TEAC to examine the merits on such a category as a matter of urgency and report by 30 September 2000. Unitec would then formally request that further consideration of its current application be suspended until the Associate Minister had received, and had a reasonable time to act on, such a report from the TEAC. The parties would reserve their position in the event that the TEAC did not recommend the early introduction of such a category of university.
[81] The Associate Minister met Dr Webster and Mr Robb to discuss the proposal. Unitec also lobbied the government actively, with some effect. The Associate Minister wrote to Unitec on 12 June explaining that he had asked the TEAC to consider whether there was any need for further universities of the traditional type, but had also asked the commission to consider the establishment of a new type to be called universities of technology. He emphasised, however, that he was not willing to be “stampeded” into creating a new institutional type simply to meet Unitec’s wishes, noting that such a category would only be worth establishing if it could be framed in a way that could apply to more than one institution. The category could come to be seen as simply a label to placate Unitec, with no further meaning beyond that. He encouraged Unitec to focus on assisting the TEAC in considering how the category of university of technology could be developed.
[82] Unitec responded that “although the legal status and processing of our application remain unresolved issues between Unitec and the Government, we appreciate the clear direction that you have given to TEAC to examine the university of technology concept, and the stated intention of the Chairman of TEAC to report to you on this matter by 30 September 2000”. It added that it was a matter of regret that consideration of the 2000 Bill by the Select Committee was still to proceed in parallel with the TEAC exercise, and noted that Unitec would be making a submission that the Bill was unwarranted and unnecessary.
[83] Unitec also made submissions to the TEAC, but did so without prejudice to its application.
[84] On 17 July the Associate Minister wrote to Dr Gordon, Chair of the Education and Science Select Committee, stating that he understood Unitec was prepared to give an appropriate undertaking that it would await the outcome of advice to him from the TEAC on the university of technology concept before requiring its application to be considered by the NZQA. He noted that Unitec had also reserved its position if the TEAC did not recommend the early introduction of such a category, and that he anticipated receiving advice from the TEAC before the end of the year. He advised that he was prepared to allow the report-back date of the
Bill to be deferred from 31 July 2000 to the maximum time allowed under standing orders.
[85] On 20 July Unitec wrote to the Associate Minister thanking him for his action in permitting the Select Committee to defer the report-back date of the Bill. It advised:
We appreciate that this represents a very significant gesture of good will on your part, and wish to assure you that, as previously indicated, UNITEC will await the outcome of advice to you from the Tertiary Education Advisory Commission on the concept of a university of technology before requiring our current application to be considered by the New Zealand Qualification Authority.
[86] The report-back date was extended until March 2001.
The TEAC report
[87] The TEAC issued several reports. The second report, which was delivered on 7 March 2001, concerned the tertiary sector. Its relevant recommendations were:
• No a priori limit to the number of institutions in any category.
• No change to the criteria for a university set out in the Act.
• NZQA to continue to be responsible for assessing compliance with these criteria.
• Universities to be able to assert a special character as Universities of
Technology.
[88] The report also recommended that a Tertiary Education Commission be established. Its functions would include advising on the desirability of a proposal for any tertiary institution to change its institutional type, before the application went to NZQA for quality assessment.
[89] On 24 April 2001 Unitec wrote to the Associate Minister noting that TEAC’s recommendations cleared the way for NZQA to restart the processing of Unitec’s application.
[90] The Associate Minister replied, stating that decisions on proposals around institutional type would be considered over the next few months for legislation to be introduced before the end of the year. For that reason the report-back date of the
2000 Bill “has been deferred to 5 March 2002”. He advised that it would be “premature to restart the process for assessing Unitec’s application for university status at this particular time”. He added, however, that he was aware of his statutory responsibilities and the need to adhere to the principles of administrative law; if Unitec could provide persuasive reasons why the application should recommence, he would be pleased to consider them.
[91] Unitec was not prepared to wait. It responded in uncompromising manner on
15 June, setting out a number of reasons for resumption of the application. They were to:
• ensure that the government acts, and is seen to act, in full compliance with the principles of natural justice and with the specific requirements of the current legislation;
• avoid the difficult questions which will otherwise arise concerning procedural unfairness and constitutional impropriety arising from the anticipation of retrospective legislation;
• underline the recognition by government of the importance of innovation and the creative application of advanced technologies in fostering the emergence of a knowledge society; and
• reduce the current level of dispute and dissension between tertiary institutions which should be collaborating effectively to address legitimate government goals for higher education.
[92] Dr Webster noted that the Associate Minister wished to have the TEC in place to advise him on the merits of designating Unitec as a university but there would be a not inconsiderable lead time involved in arranging for Unitec to be assessed by an international panel. The Associate Minister’s public statements indicated that he intended the TEC to be in place in 2002, and Unitec did not expect that NZQA could submit a recommendation before mid-2002. Dr Webster assumed that the next step was for Unitec to ask NZQA to resume the assessment process.
[93] The Associate Minister responded that the TEAC report had recommended a new process involving the TEC and new criteria, in the form of desirability, which
meant showing any such proposal would be in the best interests of the nation. The Government had yet to make decisions, but was likely to do so within the next few months. A Bill would be introduced later in the year.
[94] By letter of 13 July Unitec asked NZQA to resume processing its application without further delay. Dr Webster outlined the history of the application from Unitec’s perspective, noted that in a spirit of collaboration and co-operation it had tried for the past 14 months to correct the anomalies created by hasty ministerial action, and said that TEAC’s recommendations surely cleared the way for NZQA to restart processing the application.
[95] NZQA responded on 23 July, noting that it had suspended the process for providing advice to the Minister on 19 May 2000 until the outcome of the 2000 Bill was clear or the Minister directed NZQA otherwise. Neither of those events had occurred so NZQA did not think it appropriate to resume the process. Rather, it should “remain suspended”. It noted that the Select Committee was due to report back on the 2000 Bill in March 2002.
[96] Unitec also conducted a public relations campaign called “Why Not?” after the TEAC report was released. The Associate Minister was critical of the campaign, and he urged Unitec in a letter of 25 July to engage with the process for developing the government’s tertiary education strategy.
[97] By letter of 13 August 2001 Unitec insisted that NZQA assemble an expert panel and complete its assessment. It asserted that NZQA had a statutory duty to provide advice under the Act. NZQA rejected this view by letter of 24 August, stating that Unitec’s application continued to be suspended.
The Education (Tertiary Reform) Amendment Bill and the Tertiary Education
Commission
[98] A Cabinet Policy Committee minute of 10 October 2001 records that the Committee noted decisions had been made on the role of the Tertiary Education Commission, agreed not to introduce a separate category for universities of technology, agreed not to impose legislative limits on the number of institutions of a
particular type, and noted that it would accordingly not be necessary to pass the 2000
Bill but that the Bill would remain with the Select Committee until legislation implementing new criteria was passed. Those criteria would be expanded to include consideration of the interests of the tertiary education system and the nation as a whole. The Education (Tertiary Reform) Bill was introduced on 12 December 2001 and came into effect (as what I have called the 2002 Amendment) on 1 January
2003.
[99] The TEC was established under the 2002 Amendment. Dr Webster explained that he visited the TEC on 6 May 2003. During that visit, Dr Andrew West, then Chair of the TEC, requested that if Unitec intended to reactivate its application for university status it should wait until 2004 to allow the TEC to find its feet. Dr West explained that a discussion document was due to be released in mid-2003. In the event, that discussion paper was not released by the TEC until May 2004.
[100] In the meantime, Unitec had a number of dealings with the Associate Minister and the TEC relating to funding for post-graduate research, its Charter and Profile which Unitec was required to develop under the 2002 Amendment, and the status of its application.
[101] In his affidavit, the Associate Minister stated that after his correspondence with Unitec in June and July 2001, Unitec did not raise the matter of its application with him again until 31 May 2004. That was consistent with what he understood to be Unitec’s agreement to involve itself in the advice and policy development process and await the outcome of the Government’s response to the TEAC review.
[102] This unqualified statement led to a welter of affidavits from Unitec witnesses, and the production of a number of internal documents the only purpose of which was to show that Unitec had not given up hope. In his fourth affidavit, Dr Webster referred to correspondence with the Minister of Education and a number of discussions or interactions with the Associate Minister in 2001, 2002, and 2003. The gist of this evidence was that Dr Webster raised the question of Unitec’s application on each occasion. The Minister’s response, in summary, was that the application would be considered after the TEC was established. A number of the other
witnesses report what was said to or by the Associate Minister at a professorial dinner on 8 April 2002 and a presentation on 12 June 2003.
[103] The Associate Minister did not have an opportunity to respond to this evidence, since it was filed in reply. Ms Clark objected to some of it on that ground. She also submitted that the Associate Minister was simply affirming what is said in the statement of defence. He was not referring to chance communications, but rather to the absence of any formal request that the application be resumed.
[104] On the view I take of the matter, the dispute is of no significance. On the facts, Unitec did not formally ask the Associate Minister and NZQA to resume consideration of its application between July 2001 and May 2004. However, it did not abandon its cause and I accept it did not lead the Associate Minister to think it had done so.
The fate of the 2000 Bill
[105] The 2000 Bill stood referred to the select committee until 20 May 2003, when it was discharged. In the interim its report-back date was extended on several occasions. As the Cabinet Policy Committee minute of 10 October 2001 indicates, the Government wished to keep it on foot until decisions about the shape of the tertiary sector following the TEAC review had been implemented, which was finally done when the 2002 amendment came into effect on 1 January 2003 and the TEC was established.
[106] In his letter of 25 July 2001, the Associate Minister reminded Unitec that the
2000 Bill could be enacted if necessary:
The government will not hesitate to seek to have the Education (Limiting Number of Universities) Amendment Bill reported back and passed if necessary.
Reactivation of the Unitec application
[107] Unitec sought to reactivate its application in March 2004. Dr Webster wrote to all members of Parliament to explain that Unitec had restructured itself and adopted a new brand, saying that it had become seriously misleading to describe
Unitec as an institute of technology. The Associate Minister responded, stating that he was slightly concerned about use of the term “university” if used in any public context. That provoked a response that Unitec’s legal status was an anomaly that had to be addressed with some urgency. Dr Webster advised by letter of 28 April
2004 that Unitec would be moving to have processing of its original application for redesignation as university of technology restarted as soon as Unitec could provide NZQA with comprehensive current documentation for the assessment panel.
[108] On 17 May the Unitec Council resolved to instruct Dr Webster to make a formal request that NZQA resume the processing of Unitec’s application. He did so by letter of 31 May 2004, bringing the present narrative to a close.
Duration of unlawful suspension
[109] I have found that the policy underlying the suspension in May 2000 was that there should be no more universities established until the TEAC had completed its review and the government had made decisions about the future strategic direction of the tertiary sector. That process was not completed until the 2002 Amendment came into force on 1 January 2003. In the meantime the 2000 Bill remained with the select committee, to be reported back if necessary. It was deployed in that way, I find, to ensure that Unitec did not insist on the Associate Minister and NZQA processing its application in the meantime. But for the threat that it represented, Unitec would have insisted that its application be considered.
[110] Although the 2000 Bill was not finally discharged until 20 May 2003, it became a dead letter when the 2002 Amendment was enacted. From that point on, it appears the Associate Minister’s view was that the application could be pursued under the new criteria. (Unitec does not accept that the new criteria apply, but that is an issue for another day.) There is nothing in the evidence to suggest that the Associate Minister continued to apply a “no additional universities” policy.
[111] Rather, Dr Webster’s evidence was that when he visited the TEC on 6 May
2003 he was asked to wait until the TEC had found its feet and had issued a discussion document. There is nothing to suggest that either the Associate Minister
or NZQA attempted to force Unitec to wait until the discussion document was issued in May 2004. There is reference in the evidence to a presentation given on 12 June
2003 and a discussion between Dr Webster and Mr Maharey on 23 June 2003. The gist of that evidence is that Mr Maharey said he understood the strength of feeling among Unitec staff and did not hold a personal opinion on whether there ought to be an additional university. Rather, he indicated that the application was, in effect, the responsibility of the TEC and NZQA.
[112] Ms Chen dealt with this issue by arguing that it was incumbent on the Associate Minister and NZQA to resume processing Unitec’s application. They did not do so until after 31 May 2004, so the suspension continued until that date. I reject that submission. In the meantime, Parliament had enacted the 2002 amendment under which, as Unitec plainly knew, its application could be processed and granted. It is true that Unitec was encouraged by the TEC to wait, but it was not forced to do so and there was nothing unlawful about the TEC’s request. I accept that Unitec was in a difficult position. It was naturally reluctant to offend those who would determine its future. Nonetheless, it remains the case that Unitec agreed to Dr West’s request that it wait until those steps had been taken, and the Associate Minister did not stand in its way.
[113] Accordingly, I find that the May 2000 suspension, which I have held to be unlawful, continued until 1 January 2003 but not thereafter.
Acquiescence
[114] On the view I take of the matter, acquiescence affords no defence to the unlawful suspension. Ms Clark rightly acknowledged that the Attorney could not plead acquiescence if the suspension was unlawful, in circumstances where acquiescence resulted from the suspension. I address the topic on the assumption that my conclusion that the suspension was unlawful is wrong.
[115] Acquiescence becomes an issue after the 2000 Bill was introduced. Unitec immediately promoted the university of technology proposal under which the report- back date of the Bill would be delayed while the TEAC evaluated the proposal.
[116] The correspondence outlined above shows that Unitec and the Associate Minister reached an understanding that the report-back date would be deferred while the TEAC reported and that the Unitec application would not be progressed in the meantime. The report-back date was duly deferred until March 2001. Although Unitec had suggested that the TEAC report by 30 September 2000, I infer from its letter of 20 July 2000 that it appreciated the process might take longer than that.
[117] Ms Chen pointed out that Unitec made its proposal “without prejudice” to its position. That phrase may have been used in two senses. The first was to protect negotiations in the usual way, by rendering evidence of them inadmissible. The correspondence was nonetheless put in evidence without objection. In any event, the privilege protects negotiations rather than the agreement resulting from them. The second was to ensure that the agreement would not jeopardise Unitec’s application when it was considered on its merits. That does not prevent the Associate Minister pointing to the agreement in answer to an accusation of delay.
[118] I find that, confronted with the 2000 Bill, Unitec agreed to its application not being considered while the TEAC completed its report. I am also satisfied that but for the Bill Unitec would not have agreed to that course of action.
[119] The TEAC reported on 7 March 2001 and Unitec took steps more or less immediately to have its application considered. As already noted, the Minister and NZQA were not willing to do so. NZQA insisted that the application remained suspended. The 2000 Bill had its report-back date further extended, but there was no suggestion that Unitec agreed to that. On the contrary, I infer from the Associate Minister's letter of 21 May 2001 that it was done unilaterally.
[120] I find that Unitec did not acquiesce in delay between March 2001 and 1
January 2003, when the 2002 amendment came into effect.
[121] For reasons already outlined, I find that Unitec then acquiesced in further delay while the TEC found its feet and issued its discussion paper, but that such delay was not caused by the unlawful suspension.
Breach of natural justice
[122] In its second cause of action, Unitec contended that the Associate Minister was obliged to consider its application within a reasonable time and in a manner consistent with AUT’s application. Ms Chen argued that delay attributable to the unlawful suspension is itself a breach of natural justice, citing Vea v Minister of Immigration [2002] NZAR 171. She also invoked Magna Carta as a discrete ground of review. Unitec also asserted a legitimate expectation that the application would be decided, as a result of having its application accepted and embarking on the NZQA process. It is said that the Associate Minister and NZQA fostered that expectation.
[123] For the Attorney, Ms Clark focused on legitimate expectation, arguing that there was no such expectation, that legitimate expectation cannot preclude a change of policy, and that a legitimate expectation can be revoked. She cited de Smith, Woolf & Jowell, Judicial Review of Administrative Action (5th Edition) at 8-063, Findley v Secretary of State for the Home Department [1985] AC 318, and R v Secretary of State for Health, ex parte United States Tobacco International Inc
[1992] 1 QB 353. She submitted that Unitec’s reliance on Magna Carta is an unnecessary diversion from the real issues.
Delay as a breach of natural justice
[124] Vea v Minister of Immigration arose out of an immigration amnesty. The plaintiff applied for amnesty. The Immigration Service subjected his application to extensive and unjustified delay. DAR Williams J held at 182-3:
… I consider it would be naturally and objectively accepted and expected in the relationship between the decision-maker and the applicant that the decision would be made within a reasonable time. Submission to the decision-maker’s “jurisdiction” does not entail acceptance of an arbitrary or discretionary period of resolution even if the applicant is hoping to obtain a benefit of some kind. Allowing deferment of the decision beyond a reasonable time, whether that deferment be deliberate or accidental, involves the failure to perform the duty to decide.
The duty to make a decision within a reasonable time is a general principle of administrative law. In Taylor, Judicial Review (1991), the learned author places this requirement under the heading “Failure to enter the inquiry” (at
para 12.37). The cases there cited establish that a decision-maker has to make a decision within a reasonable time: see, for example, Collector of Land Revenue South West District Penang v Kam Gin Paik [1986] 1 WLR
412 (PC) (delay of seven years) and Clarke v Minister for Corrective
Services (1989) 18 NSWLR 553.
[125] I accept that natural justice, which “is but fairness writ large and juridicially” (Furnell v Whangarei High Schools Board [1973] 2 NZLR 705, 718), requires that a decision be made within a reasonable time. In this case, NZQA had established a timetable for making its recommendations to the Minister and disclosed that to Unitec. In a letter of 7 October 1999 to the then Minister, NZQA advised that it would tender its advice by mid-July 2000. In his affidavit, Mr Kingsbury, who was NZQA’s Chief Executive at the time, noted that the process was delayed by amendments to Unitec’s application in December 1999, the need to organise panel members from overseas, and the NZVCC challenge to the guidelines. I accept that those factors caused some delay.
[126] Selection of a reasonable period is necessarily somewhat arbitrary, but I consider that the Associate Minister ought to have been in a position to make his recommendation by the end of 2000. The further two years that elapsed before Unitec was able to resume its application on 1 January 2003 were not reasonable.
[127] I find that, to that extent, there was a breach of natural justice by reason of delay.
Magna Carta
[128] Chapter 29 of Magna Carta provides:
No freeman shall be taken or imprisoned, or be disseised of his freehold or liberties or free customs, or be outlawed or exiled, or any otherwise destroyed; nor will we not pass upon him nor condemn but by lawful judgment of his peers or by the law of the land. We will sell to no man, we will not deny or defer to any man, either justice or right.
[129] I was told that there are no New Zealand authorities discussing the use of Chapter 29 in an administrative law context. There is one relevant English decision, R v Secretary of State for the Home Department, ex parte Phansopkar [1976] 1 QB
606, an immigration case concerning two foreign nationals who had allegedly
married United Kingdom citizens in their home countries. They had the right to enter the UK if their marriages were proved. The Secretary of State argued that there would be delay in proving their status, such that they should return to their home countries in the meantime. Scarman LJ held:
Delay of this order appears to me to infringe at least two human rights recognised, and therefore protected, by English law. Justice delayed is justice denied: “We will not deny or defer to any man either justice or right”. Magna Carta, chapter 29. This hallowed principle of our law is now reinforced by the European Convention on Human Rights to which it is now the duty of our public authorities in administering the law, including the Immigration Act 1971, and of our courts in interpreting and applying the law, including the Act, to have regard:
…
It may, of course, happen under our law that the basic rights to justice undeferred and to respect for family and private life have to yield to the express requirements of a statute. But in my judgment it is the duty of the courts, so long as they do not defy or disregard clear unequivocal provision, to construe statutes in a manner which promotes, not endangers, those rights. Problems of ambiguity or omission, if they arise under the language of an Act, should be resolved so as to give effect to, or at the very least so as not to derogate from the rights recognised by Magna Carta and the European Convention.
[130] Lord Denning and Lawton LJ also invoked Chapter 29.
[131] Ms Clark sought to distinguish Phansopkar on the ground that the appellants there had the right to enter the United Kingdom on proof of marriage, and had furnished the evidence on which they relied. She also cited an article by Professor Clark “The Icon of Liberty: The Status and Role of Magna Carta in Australian and New Zealand Law” [2000] MULR 34 for the proposition that Magna Carta has been invoked in specific categories of case where well-defined rights are an issue, such as the right to a trial according to law and without undue delay, the prohibition on arbitrary detention, and protection of property rights. Professor Clark observed that Magna Carta is cited with increasing frequency but rarely used, even in those categories of case, to decide modern cases. Rather, it retains an enduring symbolic value because it is often seen as the foundation of certain contemporary rights and the rule of law itself. Lord Woolf expressed similar views, while emphasising the contemporary influence of Magna Carta, in a speech entitled ‘Magna Carta: a Precedent for Recent Constitutional Change’, Royal Holloway, University of
London, 15 June 2005. Used in that way, Magna Carta provides authority, if it were needed, for the proposition that delay is a cause of injustice.
[132] I do not wish to be seen to endorse a view that Magna Carta is now of purely symbolic importance. Phansopkar holds otherwise. As Professor Clark acknowledges, Chapter 29 has been maintained under the Imperial Laws Application Act 1988, suggesting it retains contemporary force. The question whether Magna Carta supplies an independent jurisdiction to protect the rights granted under it is of real significance. It should be reserved for a case in which it may have a bearing on the result and has been fully argued. I accept Ms Clark’s submission that it is not necessary to have recourse to Chapter 29 to decide this case.
Legitimate expectation
[133] Ms Chen contended that Unitec had a legitimate expectation that its application would be determined under s.162, since it had been accepted and NZQA had begun processing it. The Associate Minister and NZQA had both fostered that expectation.
[134] Ms Clark argued that the Associate Minister was under no obligation to process the application under s.162; accordingly, legitimate expectation afforded the only ground of review on which Unitec might rely. I have already rejected the argument that the Associate Minister was able to suspend the application in reliance on the ‘no additional universities’ policy. Ms Clark also contended that a legitimate expectation did not arise on the facts, and in any event would have been revocable. Further, legitimate expectation cannot fetter a statutory discretion.
[135] Legitimate expectation may mean nothing more than that a decision maker is required to bear its previous policy or other representation in mind before deciding whether to change course. Or a promise or practice may induce a legitimate procedural expectation of, for example, consultation. Lastly, a promise or practice may induce a legitimate expectation of a substantive benefit: R v North & East Devon Health Authority, ex parte Coughlan [2000] 3 All ER 850, 871, per Lord Woolf MR. In this case, I am dealing with the second category; Ms Chen did not
suggest that Unitec had a legitimate expectation that its application would be granted.
[136] Unitec was unquestionably given to understand that its application had been accepted and would be processed in a timely way. The question is whether that gave rise to a legitimate expectation, enforceable in law, that its application would indeed be processed in that manner.
[137] A legitimate expectation of that kind is procedural in nature. Accordingly, decisions such as R v Secretary of State for Health, ex parte United States Tobacco International Inc can be distinguished on that ground. That case established that a moral obligation owed to the applicant could not fetter the exercise of a statutory discretion in the public interest. The interest said to be the subject of a legitimate expectation in that case was of a substantive kind. The speech of Lord Scarman in Re Findley [1985] 1 AC 318, 338 is to the same effect.
[138] I accept that an expectation may be revoked. De Smith, Woolf and Jowell
Judicial Review of Administrative Action (5th Edition) at 8-063 state:
An expectation need not endure eternally. It may come to an end naturally or it may be cancelled. There are sound reasons why officials ought to be able to change their policies and practices, for otherwise their discretion would be fettered.
[139] However, in this case, Unitec’s expectation arose primarily from the legislation itself. I have held that it did not contemplate a policy that there would be no additional universities. Coupled with the acceptance of Unitec’s application and its initial processing by NZQA, I find that Unitec had a legitimate expectation that its application would be considered and a decision whether or not to make a recommendation to the Governor-General would be reached within a reasonable time. I do not accept that it was open to the Associate Minister to revoke that expectation on the ground that it was government policy that there would be no additional universities pending the TEAC review. It is not necessary to decide whether he might have revoked it on other grounds.
Second cause of action: summary
[140] I find that there was a breach of natural justice by reason of delay from the end of 2000 until 1 January 2003.
The New Zealand Bill of Rights Act 1990, s.27(1)
[141] In its third cause of action, Unitec pleaded that the Associate Minister’s decision to suspend and delay consideration of its application breached s.27(1) of the New Zealand Bill of Rights Act, which provides:
Every person has the right to the observance of the principles of natural justice by any tribunal or other public authority which has the power to make a determination in respect of that person’s rights, obligations, or interests protected or recognised by law.
[142] I have already held that the Associate Minister breached the principles of natural justice. Under the third cause of action Unitec must show that the Associate Minister and the Minister, in respect of whom the Attorney is sued in this proceeding, are a “tribunal or other public authority which has the power to make a determination” in respect of Unitec’s rights, obligations, or interests protected or recognised by law.
[143] In Chisholm v Waiheke Island Country Club Limited & Ors (CA 32/02, 29
November 2002), Tipping J, delivering the judgment of the Court of Appeal, held that the word “determination” in its context in s.27(1) has an adjudicative connotation. Whatever the width of the phrase “in respect of”, s.27(1) is not engaged unless the determination in issue is of an adjudicative character. The Court was concerned not to widen the scope of s.27(1) beyond its purpose, which it held is primarily to affirm the general rule in relation to the operation of the principles of natural justice. Tipping J also held that the expression “public authority” takes some colour from the word “tribunal” with which it is conceptually linked, reinforcing the adjudicative tenor of s.27(1).
[144] Section 162(2) provides that the Governor-General may, by Order in Council made on the written recommendation of the Minister, establish a body as a
university, as the Governor-General considers appropriate. The question is; in those circumstances, is the Minister or Associate Minister of Education, in respect of whom this proceeding is brought, a tribunal or other public authority having the power to make a determination under s.162? Ms Clark argued they are not, relying on Chisholm and the proposition that the Minister has no adjudicative role under s.162.
Who makes the decision to establish a university?
[145] Ms Chen argued that under s.162(2), the effective decisionmaker is the responsible Minister, because the Governor-General acts on his or her advice by constitutional convention. Thus any adjudicative role played by the responsible Minister must be attributed to the Governor-General such that she would be a tribunal or other public authority under s.27(1). Ms Chen pointed to the absence of any requirement in the Education Act for the Minister to consult Cabinet, and referred to the paper recommending that the Auckland Institute of Technology be established as AUT, in which the then Minister stated that he had decided to make the necessary recommendation.
[146] Ms Clark noted that a university is established by Order in Council. She accepted that such an order does not involve a decision by the Governor-General personally, since constitutional convention enjoins her to accept advice tendered by the Executive Council. The Executive Council is the institution by means of which the government as a whole formally advises the Governor-General. Under the Cabinet Office Manual 2001 Cabinet must first approve most matters for the Executive Council. The manual requires that an issue of this kind be submitted to Cabinet by the Minister through the appropriate Cabinet committee. A final decision to establish a university will be a decision that must be authorised by Cabinet, because it has significant policy and fiscal implications, and because the decision taken in fact by Cabinet has then to be taken, as a matter of law, by the Governor- General in Council.
[147] It was common ground that the decision to establish a university is not a decision taken by the Governor-General personally, since by convention she acts on
advice: Crawford v Securities Commission [2003] 3 NZLR 160 at [49]. In his book Constitutional and Administrative Law in New Zealand (2nd Edition) at page 162, Professor Joseph said:
… constitutional convention obliges the Governor-General in matters of state to act on Ministerial advice. The last known occasion that a Governor- General deigned to reject advice was 1895. The only personal discretions remaining with the Crown are confined to constitutional crisis or emergency.
[148] The convention is recognised in the Interpretation Act 1999, which provides that a reference to the Governor-General in Council “means the Governor-General acting on the advice and with the consent of the Executive Council”. The convention also applies to the Sovereign under s3(2) of the Constitution Act 1986.
[149] It was also common ground that the person who makes the decision to establish a university, for purposes of s.162, is the person on whose advice the Governor-General acts. The parties joined issue on the question whether the Governor-General acts on the advice of the Minister of Education or the Executive Council. O’Regan J was not required to address that issue in Crawford, in which the decision in issue was also taken by Order in Council. The issue in that case was whether the Governor-General was required to make a personal assessment of the relevant statutory criteria for placing an entity in statutory management by Order in Council.
[150] The Executive Council is constituted by the Letters Patent Constituting the Office of Governor-General of New Zealand (SR 1983/225). Clauses VII and VIII provide:
And We do by these presents constitute an Executive Council to advise Us and Our Governor-General in the Government of Our Realm of New Zealand
The Executive Council shall consist of those persons who, having been appointed to the Executive Council from among members of Parliament in New Zealand, are, for the time being, Our responsible advisers.
[151] In CREEDNZ Inc v Governor-General [1981] 1 NZLR 172, Richardson J referred to an affidavit of the Clerk of the Executive Council and Secretary of the Cabinet, which recorded that the Executive Council shares its membership with
Cabinet, but has a different function. It acts “as a formal body giving expression to actions the decisions in respect of which have previously been taken in Cabinet”.
[152] It is customary for Cabinet to adopt the Cabinet Office Manual at the beginning of each administration. I was given to understand that the present government has done so. Paragraph 3.4 provides:
Cabinet is central to our system of government, but in legal terms it is an informal body, established by convention. The legal powers of the executive are exercised by those with statutory authority to act (for example, the Governor-General, the Executive Council or individual Ministers). In practice, however, all significant decisions or actions taken by the executive are first discussed and collectively agreed on by Cabinet.
[153] The manual provides in paragraphs 1.29 and 1.27 that Cabinet must approve the majority of matters for the Executive Council, including Orders in Council. Accordingly, Cabinet must approve an Order in Council before it is presented formally to the Executive Council for the approval of the Governor-General, usually on the same day. The Executive Council normally meets after Cabinet in the parliamentary complex.
[154] I conclude that in the ordinary way a decision to make an Order in Council is taken by Cabinet, the membership of which corresponds to that of the Executive Council. The legal power to make the decision is then formally exercised by the Executive Council.
[155] With respect to Orders in Council made under s.162, however, the Executive Council exercises the power to establish a university “on the written recommendation” of the Minister. Ms Chen invoked the doctrine of ministerial responsibility, arguing that by convention the Minister takes responsibility if his or her recommendation is wrong.
[156] I accept that Ministers are individually responsible to Parliament, from whose members they are drawn, for their personal acts and the conduct of their portfolios: Joseph (above) at 9.5.1. However, the Cabinet Office Manual distinguishes between Orders in Council and decisions taken on the advice of an individual Minister. Paragraph 1.38 records that a number of appointment, warrants, proclamations and
so on are required under statute to be made by the Governor-General on the advice of an individual Minister rather than the Executive Council. The manual provides that Cabinet must approve Orders in Council, and the Interpretation Act recognises that in making a Order in Council the Governor-General acts on the advice and with the consent of the Executive Council. In such a case, Cabinet and the Executive Council comprise the Crown’s responsible Ministers, on whose advice the Governor- General acts: CREEDNZ at 174 per Cooke J. Accordingly, Ministers are collectively responsible for a decision to establish a university.
[157] It is true, although Ms Chen did not advance this point, that a university is established ‘on’ the Minister’s recommendation. ‘On’ in that context has the connotation that a decision to establish a university will advance the Minister’s advice. In Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide Corporation (1975) 11 SASR 514, Wells J was concerned with a power to make regulations on the recommendation of a Council. He held (at 548) that a person acts on a recommendation only if, after consideration, he adopts it in substance and makes only such variations as would not forfeit the recommendation. I agree. It would follow that the Executive Council could not establish a university where the Minister recommended against it. However, the Executive Council need not establish a university if confronted with a recommendation that it does not accept. To recommend is to counsel, to advise, or to suggest. A recommendation could be interpreted as a substantive decision only with the assistance of the constitutional convention that the Governor-General acts on advice, but I have found that in the case of an Order in Council the convention is that she acts on the advice of the Executive Council. As a practical matter there would seem to be little if any prospect of the Executive Council receiving a Ministerial recommendation that it did not accept. However, that is so because Cabinet must approve Orders in Council and the Executive Council will not receive a formal recommendation from the Minister of Education until that has been done.
[158] I conclude that a decision to establish a university under s162 is taken by
Cabinet and exercised in law by the Executive Council.
Is the Minister nonetheless a “tribunal or other public authority” for the purposes of s.27(1)?
[159] It is well established that the New Zealand Bill of Rights Act is to be given a generous and purposive approach: Ministry of Transport v Noort [1992] 3 NZLR
260. The Act is intended to affirm, protect, and promote the rights and freedoms contained in it.
[160] That being so, care must be taken to avoid treating the references in Chisholm to determinations of an “adjudicative character” as a substitute for the language of the statute. In Chisholm the Court was concerned to avoid extending obligations of natural justice to a decision to which they were unsuited. The Auckland City Council had decided to invoke its emergency powers under s.330 of the Resource Management Act to use the Waiheke Island golf course as a septage dump site. The plaintiff argued that the Council had an obligation to comply with natural justice before exercising its powers under s.330. The High Court had held that the Council’s action did not determine the plaintiff’s rights; indeed, the plaintiff exercised them by applying to the Environment Court for an interim enforcement order. The Court of Appeal held that it was not the purpose of s.27(1) to widen the operation of the principles of natural justice. Conversely, there is no policy reason why s.27(1) ought not apply to a decision to exercise a statutory power or statutory power of decision of a kind that ordinarily would require observance of natural justice.
[161] I have held that the Minister’s role under s.162 is to make a recommendation to the Governor-General, who acts by convention on the advice and with the consent of the Executive Council. ‘Recommendation’ in that context has its ordinary meaning, unaffected by convention, of counsel, advice, or suggestion. But a recommendation is a prerequisite to establishment. The Minister has an effective veto, since it is only when he or she wants to make a positive recommendation that Cabinet is called on to approve it as a proposed Order in Council. And it is the Minister who is responsible for obtaining and evaluating NZQA’s advice and assessing the proposed university against the criteria in s.162(4). In operation, s.162 involves a single institution, requires consultation of that institution and other
interested parties, and leads to a Ministerial decision to make, or to refuse to make, a recommendation founded on the institution’s characteristics. Such a decision is reviewable under the Judicature Amendment Act as an exercise of statutory power; see for example New Zealand Fisheries Association v Minister of Agriculture & Fisheries [1988] 1 NZLR 544. Nor did Ms Clark point to any reason why natural justice ought not apply to the Minister’s function of investigating the institution concerned and formulating a recommendation. I conclude that the Minister has power to make a determination for purposes of s.27(1).
[162] I am reinforced in my conclusion that s.27(1) does attach to the Minister (and the Associate Minister in this case) by observations made in CREEDNZ about the implications of Cabinet attracting obligations of natural justice. Richardson J noted (at 188) that Cabinet is not a fact-finding body in the ordinary sense and is not accustomed to conducting hearings or receiving representations directly from those affected by its decisions. While that did not preclude obligations of natural justice, it did suggest it was inherently improbable that the legislation contemplated such obligations arising at that stage of the decision-making process. Those observations are also applicable to this case. Doubtless an application brought under s.27(1) against the Attorney in respect of Cabinet or the Executive Council would encounter opposition on that ground. If Ms Clark’s submission that s.27(1) does not apply to the Minister were accepted, that would raise the possibility that s.27(1) is not available at all in relation to decisions taken under s.162.
Breach of s.27(1): conclusions
[163] I conclude that Unitec’s rights to natural justice under s.27(1) of the New Zealand Bill of Rights Act 1990 were breached in the manner, and to the extent, that I have described under the second cause of action.
The New Zealand Qualifications Authority
[164] Under s.162(3) the Minister must give NZQA a reasonable period in which to give advice to the Minister on the matter, and must consider any advice so given. There is no express obligation upon NZQA to give such advice, and under ss(4) it is
the Minister who must take into account the characteristics of a university or other tertiary institution. Although a Ministerial recommendation is a prerequisite to establishment of a university, NZQA advice is not a prerequisite to his or her recommendation.
[165] However, NZQA’s principal functions under the Act concern the setting and monitoring of standards for qualifications in secondary schools and post-school education and training, either generally or in relation to a particular institution. NZQA is accordingly well-equipped, or ought to be, to answer the question whether a given institution has the characteristics of a university that are set out in s.162(4)(a). That is the role that NZQA has assumed in practice. It established the
1997 guidelines for assessing applications for university status and assessed AUT
against them in the only previous application for university status.
Does s.162(3) confer a statutory power on NZQA?
[166] Under the Judicature Amendment Act, a statutory power includes a power or right conferred by or under an Act to make any investigation or inquiry into the rights, powers, privileges, immunities, duties, or liabilities of any person. A statutory power of decision means a power or right conferred by or under any Act to make a decision deciding or prescribing or affecting the rights, powers, privileges, immunities, duties or liabilities of any person or the eligibility of any person to receive a benefit or licence.
[167] Mr Radich argued that NZQA’s role under s.162 is a function rather than a power, in that it is purely advisory in nature, citing Whale Watch Kaikoura Limited v Transport Accident Investigation Commission [1997] 3 NZLR 55. He accepted, however, that NZQA is a creature of statute with some statutory functions having public consequences that may be reviewable at common law. To the extent that NZQA’s role under s.162 is reviewable, he urged restraint.
[168] I accept that not every function exercised under a statute is a power or right for purposes of the Judicature Amendment Act. However, Whale Watch Kaikoura is distinguishable: in that case, the defendant was expressly obliged to investigate and
to publish its findings and recommendations. Accordingly, Goddard J held that there was no element of discretion about the so-called decision to publish.
[169] In Webster v Auckland Harbour Board [1983] NZLR 646, 651, Cooke and
Jeffries JJ held:
After the decision in Thames Jockey Club v New Zealand Racing Authority, noted in [1975] 2 NZLR 768, the definition of statutory power of decision was widened to include the word "affecting" and in other respects. See Daemar v Gilliand [1981] 1 NZLR 61. Thereby Parliament underlined that the modern and flexible procedural provisions of the Act are intended to have a liberal scope. If the applicants are able to show that in making any decision under attack the Board violated the express or implied requirements of some statute (which requirements could include, for instance, relevant considerations or fairness) it is highly probable that they will also be able to show that the decision decided, prescribed or affected their rights or privileges. And if their case did reach that point, we think that it would be contrary to the intent of the Judicature Amendment Act to hold that it was not sufficiently a decision under a power conferred by any Act to enable the review procedure to be used.
[170] Adopting that approach, I consider that s.162 confers on NZQA a statutory power to investigate or inquire into the attributes of an institution and advise the Minister whether NZQA considers it has the characteristics required under s.162(4). It is also at least arguable that the power is a statutory power of decision. Plainly NZQA does not prescribe or determine the rights or status of the body concerned, but it may affect them in the liberal sense used in Webster.
[171] It follows that an exercise or a refusal to exercise the power conferred on NZQA may be reviewed under s.4 of the Judicature Amendment Act. For example, it is likely to attract obligations of natural justice in the course of its investigation.
[172] However, the question in this case is whether the Court ought to review a refusal to advise that was directed not to the Associate Minister but to the applicant, in circumstances where the Associate Minister had made it plain that he did not want NZQA’s advice.
[173] In the fourth cause of action, Unitec alleged that NZQA unlawfully suspended its application. NZQA did indeed decline to complete its evaluation and tender its advice to the Associate Minister on two occasions. The first was by letter of 19 May 2000, in which NZQA cancelled the scheduled expert panel visit to Unitec and suspended the process for providing advice to the Minister until the outcome of the 2000 Bill was clear or the Associate Minister directed NZQA otherwise. It repeated that stance in its letter of 24 August 2001.
[174] In my view NZQA was acting as the instrument of the Associate Minister in suspending its process. The Associate Minister might have received NZQA’s advice and stopped the process at that point. But having made the decision that there would be no additional universities pending the TEAC review he chose, sensibly enough, to suspend the process immediately by making it clear to NZQA that its advice was not required.
[175] Ms Chen argued that NZQA had a discretion whether to provide advice to the Minister upon an application for university status and that the nature of the statutory scheme and the importance of NZQA’s unique expertise are such that any decision by NZQA not to advise could only be taken in truly exceptional circumstances. She then argued that NZQA effectively fettered its discretion by acting on the Associate Minister’s direction to suspend consideration of Unitec’s application.
[176] I am unable to accept that NZQA was required to continue its process in the circumstances. I have held that NZQA exercises a statutory power or statutory power of decision when advising the Minister under s.162. But that power does not arise unless and until the Minister requests advice. Ms Chen did not argue that NZQA is obliged to give advice, however essential its expertise, when the Minister has not asked for it. That being so, I am unable to see that NZQA retains a statutory power to advise in circumstances where the Minister has made it plain that he does not want its advice. To continue with its evaluation process and advice in such circumstances would be pointless. For that reason I would not be prepared to grant a declaration in any event. Faced with the very clearly expressed wish of the Minister
that NZQA not advise him, it is difficult to see what else NZQA could sensibly have done.
[177] I conclude that NZQA does not exercise a statutory power or statutory power of decision in circumstances where it fails or refuses to tender advice to the Minister by reason of a Ministerial instruction that he or she does not want NZQA’s advice. It is not necessary to address Mr Radich’ argument that NZQA was obliged not to advise the Minister by reason of s.268(2) of the Act.
[178] The fourth cause of action fails.
Breach of natural justice by NZQA
[179] Unitec pleaded that NZQA had an obligation to act in accordance with the principles of natural justice, including an obligation to consider the application in a reasonable time frame and in a manner consistent with previous university status applications.
[180] For reasons already outlined, I accept that NZQA is required to observe the principles of natural justice when carrying out its investigation and advising the Minister under s.162. Ms Chen argued that NZQA breached this obligation by failing to advise on the application before 31 May 2004 and submitted that NZQA did not treat the Unitec application consistently with that of AUT.
[181] The argument rests on delay and assumes that NZQA was under a continuing obligation to advise throughout the period from the filing of the application until 31
May 2004 and thereafter. I have already held that that assumption is incorrect; NZQA was obliged to investigate and advise only if the Minister sought its advice. From the date of introduction of the 2000 Bill he made it plain that he had withdrawn his request for advice on the Unitec application, pending completion of the TEAC review.
[182] The fifth cause of action fails.
[183] Ms Chen argued that NZQA is a public authority with power to make a determination in respect of Unitec’s rights for the purposes of s.27(1). NZQA’s role in advising on a university status application was said to have an adjudicative connotation, because NZQA assesses an institution against the characteristics of a university set out in s.162 and makes an expert recommendation to the Minister.
[184] On the view I take of the matter, it is not necessary to determine whether NZQA is a tribunal or public authority. For reasons already outlined, I find that Unitec has failed to establish that NZQA breached the principles of natural justice. Accordingly, the sixth cause of action also fails.
Waiver/acquiescence
[185] Both defendants pleaded waiver or acquiescence. It is not necessary to reach any findings with respect to NZQA. With respect to the Attorney, the defence fails. The delay until 1 January 2003 was attributable to the unlawful suspension, but for which I have found Unitec would have persisted with its application. As the Associate Minister did not delay Unitec’s application after that date, no question of waiver or acquiescence arises between 1 January 2003 and 31 May 2004.
Result
[186] Unitec has succeeded in large part in each of its three causes of action against the Attorney. There will be declarations as follows:
a) The Associate Minister unlawfully suspended s.162 of the Education
Act between May 2000 and 1 January 2003.
b)The Associate Minister breached the rules of natural justice by reason of delay in determining Unitec’s application between the end of 2000 and 1 January 2003.
c) The Associate Minister breached s.27(1) of the New Zealand Bill of Rights Act 1990 by reason of delay in determining Unitec’s application between the end of 2000 and 1 January 2003.
[187] Unitec has failed in each of its causes of action against NZQA.
[188] Unitec is entitled to costs against the Attorney, and NZQA is entitled to costs against Unitec. Costs will be assessed on a 2B basis. Counsel may file memoranda if costs cannot be agreed.
Delivered at 11.30 am this 7th day of July 2005.
Solicitors:
Chen & Palmer, Wellington for Plaintiff
Crown Law Office, Wellington for First Defendant
Izard Weston, Wellington for Second Defendant
F Miller J
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