s31 Replacement of board by commissioner (1) Where the Minister is seriously dissatisfied with the performance of a board of a DHB, the Minister may, by written notice to the board and the commissioner, dismiss all members of the board and replace the board with a commissioner. (1A) The Minister may also replace the board with a commissioner, by written notice to the board and the commissioner, if all the members of the board of a DHB are removed from office under this Act and the Crown Entities Act 2004. (2) Where the Minister replaces a board with a commissioner, the commissioner has all the functions, duties, powers, and protections of the board and of a member of the board ...... (6) A commissioner and any deputy commissioner hold office only until the persons elected at the next election of members of boards take office as board members."
The Minister's decision and likely judicial review throw up a number of legal questions, all which funnel into the interpretation of the words "seriously dissatisfied with the performance of a board":
- How high is this threshold and do the present circumstances pass that threshold?
- In any event, against which standard is that phrase reviewable? On the one hand it is a condition precedent to the exercise of power and therefore reviewable (ala Khawaja and Discount Brands; cf Hawkins). On the other hand, it has a subjective character, is not a pure question of interpretation, and does not necessary disclose an "ascertainable test" (ala Lord Cooke's caveat in Bulk Gas). Or is it essentially a political power for which there is "no legal yard-stick" which means it is non-justiciable (ala Curtis)?
- Assuming it is reviewable, are the factors relied on relevant?
- Are the actions of the (previous) board – particularly the adverse audit reports – relevant to assessment, given the present board was only elected in October 2007 after those issues arose?
- To what extent is the state of the relationship between Minister and Board relevant, given the entity is a Crown agent under the Crown Entities Act 2004, semi-elected, and in many respects set up as a semi-"arms length" entity (incl a number of formal relationship management tools). Or is it simply a codified example of responsible government and ministerial responsibility?
- And is the concern about the Minister being challenged in the media relevant? Might board members be able to rely on the freedom of expression provisions in the Bill of Rights (a difficult question in itself)? To what extent might that expression by board members have been in the pursuit of the board's mandate and in the best interests of the community they serve.
- The semi-election of board members raises a democratic imperative. The purpose provision of the New Zealand Public Health and Disability Act 2000 records the importance of the election:
(1) The purpose of this Act is to provide for the public funding and provision of personal health services, public health services, and disability support services, and to establish new publicly-owned health and disability organisations, in order to pursue the following objectives: ... (c) to provide a community voice in matters relating to personal health services, public health services, and disability support services— (i) by providing for elected board members of DHBs...".
- To what extent does this democratic imperative affect the threshold for removal under s31? Does it raise the bar?
- And if "unreasonableness" or "irrationality" is argued, will the traditional deferential Wednesbury standard apply or might the circumstances justify greater scrutiny of the Minister's decision, particularly as it appears to undermine the democratic imperative underlying DHBs.
More on this as it develops...