25 April 2010

The context of natural justice

The Supreme Court doesn't get many pure administrative law cases.  So it was a pleasure to read the recent decision in Wyeth (NZ) Limited v Ancare New Zealand Limited and Environmental Risk Management Authority [2010] NZSC 46.

And it was also nice to see a robust attitude taken to the question of the content of natural justice.  Too often, in my view, people try to blindly apply court-based features of natural justice to other administrative situations, without taking into account the nature and context of the different setting. 

But the Supreme Court's decision contains some useful statements to reinforce the contextual nature of the natural justice (the case was about a competitor's request for access to confidential information in a contested approval process under the Hazardous Substances and New Organisms Act 1996):

[40] The argument raises the question of what the Act and common law principles of natural justice together require in relation to the Authority’s hearing and process. Natural justice is a common law principle and what it requires will reflect any relevant statutory provisions. As Cooke J said in Daganayasi v Minister of Immigration, it has become “fairly elementary” that:

"The requirements of natural justice vary with the power which is exercised and the circumstances. In their broadest sense they are not limited to occasions which might be labelled judicial or quasi-judicial. Their applicability and extent depend either on what is to be inferred or presumed in interpreting the particular Act ... or on judicial supplementation of the Act when this is necessary to achieve justice without frustrating the apparent purpose of the legislation ..."

[41] Appropriate and fair proceedings for a statutory tribunal, such as the Authority, will not always equate to those of a court. Such bodies are often established for administrative reasons to provide a less formal decision-making mechanism with an emphasis on greater accessibility, less cost and greater speed in decision-making. Often, as with the Authority, they are structured to include members with expertise in relation to their special area of jurisdiction. Legislation establishing tribunals sometimes also recognises that in reaching administrative decisions they often must take into account conflicting interests in a pragmatic way. Parliament’s purpose in establishing a tribunal is often not necessarily to provide the highest standard of process but a standard that is consistent with efficient administration of matters over which they are given jurisdiction. These features of the statutory process are all relevant to the requirements for participants to enjoy an appropriate and fair hearing.

[42] Also of relevance to the requirements of natural justice under the Act is the nature of the public submitter’s interest in the proceeding before the Authority. Public powers exercised on a large scale must be distinguished from those relating solely to the treatment of an individual. In Public Disclosure Commission v Isaacs, members of the public were entitled to make submissions to the Commission. The Privy Council observed that such persons were not personally affected by the Commission’s decision:

"[T]he complainant is not liable to be subjected to any pains or penalties or exposed to prosecution. He is not seeking to enforce any private right, so there is no question of depriving him of any remedies or redress to which he may be entitled. He is acting as a public spirited citizen in giving information to the commission to assist them in the performance of their public duty. Any personal or political interest he may have in the outcome is irrelevant. He cannot be “told the case made against him and be afforded a fair opportunity of answering it” because no case is made against him; it is he who makes a case against the declarant."

[43] Wyeth was entitled to make a submission on Ancare’s application and to be heard in support of it at a public hearing where it could make representations and call evidence. That did not, of course, mean that the Authority would become concerned with any effect on Wyeth of granting or refusing Ancare’s application. Wyeth was confined in putting its perspective to matters that were relevant to and might assist the Authority in performance of its functions under the Act. That was also a relevant consideration for the Authority in assessing what procedure would ensure Wyeth had an appropriate and fair hearing in the circumstances. This is not to diminish the importance of the right Wyeth had, in common with other members of the public, to make submissions. The statutory scheme recognises that public participation in hearings is an important means by which the Authority becomes informed of relevant matters to the standard required by the Act for its decision-making. It is not, however, the only, nor in any case necessarily the principal, means by which it does so.

[44] The Act expressly contemplates that the Authority will have access to more complete information than the public. The Authority must, where appropriate, engage expert bodies to provide additional information, or to review and verify information or submissions received “so that the Authority may be expertly informed for the purposes of decision-making”. If further information is required, the Authority may notify the applicant that this is required or obtain information itself, including commissioning expert reports and reviewing information from any source. Confidential information that is withheld from the public may be considered by the Authority.

[45] The Act incorporates aspects of the regime under the Official Information Act in relation to confidential information. Under s 9(2)(b) of that Act, there is good reason for withholding official information if making it available would disclose a trade secret or unreasonably prejudice the commercial position of the person (applying to the Authority) or the subject of the information. This is subject to the overriding provision in s 9(1) that good reason for withholding the information will not exist if in the circumstances of the particular case the reasons for withholding are outweighed by other considerations which make it desirable in the public interest to make the information available. The purpose of the Hazardous Substances and New Organisms Act is relevant in determining what that public interest entails.

[46] There is a procedure in the Hazardous Substances and New Organisms Act for dealing with requests for release of information held by the Authority which has been classified as commercially sensitive by the person providing it, or which in the Authority’s opinion is able to be withheld under s 57(2)(b). The person who provided the information is to be given the opportunity to say why it should be withheld. The Authority then has power to release the information in accordance with the Official Information Act’s provisions. As previously indicated, the Authority’s decision is subject to review by the Ombudsman.

[47] There is, of course, a conflict between allowing participants in the Authority’s hearings sufficient information to fairly present their case and respecting the confidentiality of some of the material supplied to the Authority for the purposes of the application. The mechanism in the Act for resolving this conflict when it arises is to require the Authority to weigh the claims for confidentiality against the public interest considerations that make release of information desirable. This, of course, is the test specified in the Official Information Act. It is supplemented in the Hazardous Substances and New Organisms Act with special provisions giving the persons providing the information to the Authority, or who are the subject of it, the right to make submissions on whether the information should be withheld. As well, information held on behalf of an applicant must be returned if it decides not to proceed to make an application. These provisions indicate the significance the Act attaches to due protection of confidential information in achieving its purpose.

[48] It is by this means that the Authority determines what a fair and appropriate hearing that is consistent with natural justice requires in the particular circumstances. Matters weighed will include the relevance and importance of the information that is sought to the fair determination of the issues before the Authority on the one hand and the nature and degree of confidentiality that is involved on the other. Where withholding relevant information may impact on effective participation, the likely degree of intrusion on that right should be assessed by the Authority along with measures it may take to minimise the effects of that intrusion. As already indicated, the nature of the interests of the participants involved will also often be relevant, including whether or not the decision may affect a participant’s own interests.

[49] The Act states that information withheld from a party may be considered by the Authority in reaching a decision on an application. This recognises that the Authority will at times be able to accord participants a fair and appropriate hearing in the circumstances, despite withholding information from them that it takes into account. The Authority is not required to follow any specific procedures just because a court might apply them in litigation. In particular, it was not required in this case to release information on the basis of counsel’s undertakings as to confidentiality being provided to the Authority.

Also, the other pleasing thing about the judgment is that it's broadly consistent with the schematic approach to I've suggested in my teaching. Phew.   

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Course Outline

Lord Justice Lawton in Maxwell v Department of Trade and Industry [1974] 2 All ER 122 said:

"From time to time ... lawyers and judges have tried to define what constitutes fairness. Like defining an elephant, it is not easy to do, although fairness in practice has the elephantine quality of being easy to recognise. As a result of these efforts a word in common usage has acquired the trappings of legalism: 'acting fairly' has become 'acting in accordance with the rules of natural justice', and on occasion has been dressed up with Latin tags. This phrase in my opinion serves no useful purpose and in recent years it has encouraged lawyers to try to put those who hold inquiries into legal straitjackets.... For the purposes of my judgment I intend to ask myself this simple question: did the [decision-maker] act fairly towards the plaintiff?"

This course examines the elephantine concept of fairness in the law, along with other contemporary legal issues.

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