Financial Services Complaints Limited v Chief Ombudsman [2020] NZCA 199 (29 May 2020)

Last Updated: 3 June 2020

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA95/2020 [2020] NZCA 199

	BETWEEN	FINANCIAL SERVICES COMPLAINTS LIMITED Applicant
	AND	THE CHIEF OMBUDSMAN Respondent

Court:	Kós P and Courtney J
Counsel:	K I Murray for Applicant M T Scholtens QC and D W Ballinger for Respondent
Judgment: (On the papers)	29 May 2020 at 11 am

JUDGMENT OF THE COURT

The application for transfer of the proceeding to the Court of Appeal, under s 59 of the Senior Courts Act 2016, is declined.
____________________________________________________________________

REASONS OF THE COURT

(Given by Kós P)

[1] FSCL provides independent dispute resolution services for financial services providers and their customers. It was the first approved scheme under the Financial Service Providers (Registration and Dispute Resolution) Act 2008. Two later‑approved schemes had previously obtained consent from the then-Chief Ombudsman, Sir John Robertson, to use the word “ombudsman” in their names under s 28A(1) of the Ombudsmen Act 1975.
[2] In May 2015 FSCL applied to the then-Chief Ombudsman, Dame Beverley Wakem, for written consent pursuant to s 28A(1) to describe itself as a “Financial Ombudsman Service”. The application was declined. In November 2015 the applicant sought judicial review. Dame Beverley applied to strike that out. Toogood J declined her application in April 2016.^[1]
[3] In May 2016 Mr Peter Boshier, by now the Chief Ombudsman, agreed to reconsider the May 2015 application and make a fresh decision. In July 2016 FSCL’s application was again declined.
[4] FSCL again applied for judicial review. Its application was dismissed by Simon France J in March 2017.^[2] FSCL appealed successfully to this Court.^[3] Mr Boshier was directed to reconsider the applicant’s application under s 28A(1). In June 2019 Mr Boshier again declined FSCL’s application.^[4]
[5] FSCL now seeks:

• (a) judicial review of this, the third declinature decision and, if successful, an order that the Court substitute its decision for that of Mr Boshier; and
• (b) an order for removal and transfer of its judicial review proceeding against Mr Boshier from the High Court to this Court under s 59 of the Senior Courts Act 2016.

This judgment deals with (b).

[6] Section 59 provides:

59 Transfer of civil proceeding from High Court to Court of Appeal

(1) A party to a civil proceeding in the High Court may apply for an order transferring the proceeding to the Court of Appeal.

(2) In determining whether to make an order transferring the proceeding, the Court of Appeal must be satisfied that the circumstances of the proceeding are exceptional.

(3) Without limiting subsection (2), the circumstances may be exceptional if—

(a) the party to the proceeding intends to submit that a relevant decision of the Court of Appeal should be overruled:

(b) the proceeding raises an issue of considerable public importance that—

(i) needs to be determined urgently; and

(ii) is unlikely to be determined urgently if the proceeding is heard and determined by both the High Court and the Court of Appeal:

(c) the proceeding does not raise a question of fact or a significant question of fact, but raises a question of law that is the subject of conflicting decisions of the Court of Appeal.

(4) In deciding whether to make an order transferring the proceeding, the Court of Appeal must have regard to the following matters:

(a) the primary purpose of the Court of Appeal as an appellate court:

(b) the desirability of obtaining a determination of the proceeding in the High Court and a review of that determination on appeal:

(c) whether a full court of the High Court could effectively determine the question in issue:

(d) whether the proceeding raises a question of fact or a significant question of fact:

(e) whether the parties have agreed to the transfer of the proceeding:

(f) any other matter to which regard should be had in the public interest.

(5) It is not a sufficient ground that the parties agree to the transfer.

(6) The Court of Appeal has the jurisdiction of the High Court to hear and determine a proceeding transferred under this section.

(7) The Court of Appeal may transfer back to the High Court a proceeding that has been transferred to the Court of Appeal.

Submissions

[7] For FSCL, Mr Murray submits that the circumstances of the proceedings are exceptional for three reasons. First, it concerns the question of whether the respondent duly considered the applicant’s application under s 28A(1) of the Ombudsmen Act 1975 as ordered in accordance with this Court’s judgment in Financial Services Corporation Ltd v Chief Ombudsman.^[5] Secondly, it also concerns the question of whether the respondent as the holder of an important constitutional office acted in bad faith when he again declined consent for the applicant to use the ombudsman name. Thirdly, it raises an important issue in administrative law, namely if a person vested with the exercise of a statutory discretion refuses to exercise the discretion in accordance with law, can the Court exercise the statutory discretion itself, or in the alternative declare that an applicant for a statutory consent is entitled to the consent?
[8] For Mr Boshier, Ms Scholtens QC and Mr Ballinger oppose the application to transfer the proceeding on several grounds. First, that the circumstances of the proceeding are not exceptional (and in particular, that none of the criteria in s 59(3) of the Senior Courts Act are satisfied). Secondly, that the Court of Appeal will benefit from factual findings made at first instance by the High Court. The issues raised on the pleadings are fact‑specific and will require close analysis. Thirdly, the statement of claim makes an allegation that the respondent has acted with a lack of good faith. Any adverse finding could have potential reputational consequences. The interests of justice require that there be one unqualified right of appeal, rather than an appeal avenue constrained by the Supreme Court’s leave criteria. Fourthly, the issue of whether a court can exercise a statutory discretion or direct the decision maker how to make its decision is not novel. And it is not sufficiently important that the proceeding should be heard at first instance by this Court. The legal position has been settled for many years; a court can in clear and exceptional circumstances substitute its own view of what decision should be made.

Discussion

[9] This Court dealt recently with another removal and transfer application in Borrowdale v Director-General of Health.^[6] As the Court there observed:^[7]

Even if the circumstances attending a proceeding are exceptional, it does not of course follow that it should be removed from the High Court and transferred to the Court of Appeal. This Court must still be persuaded that that is, in all the circumstances, the better course to follow.

In light of that observation we make six points.

[10] First, this is a proceeding of some importance. It raises issues of compliance with this Court’s prior orders and involves allegations of bad faith against a very senior Parliamentary officer. That makes it highly unusual. But it does not mean it is “exceptional” in the sense that word is used in s 59. That requires a more exacting inquiry to justify leapfrogging the High Court.
[11] Secondly, there being no challenge to any prior decision of this Court, s 59(3)(a) and (c) do not apply. In that case, and bearing in mind the injunction in s 59(4)(a) that the primary purpose of this Court is appellate rather than first instance trial work, the basis for removal might be expected to fall within s 59(3)(b): urgency. But that does not apply either. While FSCL’s judicial review plainly deserves timetabling for urgent trial, it certainly cannot be said that the case is “unlikely to be determined urgently if the proceeding is heard and determined by both the High Court and the Court of Appeal”.^[8] That suggests temporal and economic constraints, and neither apply here, at least on the evidence before us.
[12] Thirdly, it does not follow at all that the fact it is alleged this Court’s orders of February 2018 have not been complied with means this is the court to deal with the issue. Mr Murray does not exactly suggest that, in fairness. But he suggests something like it. However, in Quake Outcasts v Minister for Canterbury Earthquake Recovery the Supreme Court was faced with a leapfrog application on the basis that there had been non-compliance with a prior judgment of that Court.^[9] The Supreme Court observed:^[10]

We accept that this Court’s earlier judgment is an important part of the background to the Minister’s new decisions and is therefore relevant to an assessment of those decisions in judicial review proceedings. But it often happens that the resolution of a later case will depend upon the proper interpretation of an earlier decision of a court higher in the hierarchy, and that is not generally a reason for allowing a leapfrog appeal.

[13] Fourthly, we agree with Ms Scholtens QC and Mr Ballinger that the first appellate court will benefit from factual findings made by the High Court. Serious allegations are made against a statutory decision-maker and senior Parliamentary officer. The hearing may take some days. A slew of documents has been discovered and there is a lengthy paper trail to be analysed. Mr Murray tells us “six volumes of record material, including extensive Ministry of Justice documents” have been filed. There are likely to be interlocutory issues for resolution, which pre‑eminently is the work of trial courts. And FSCL has indicated it may want to cross‑examine Mr Boshier. The finding of facts at trial is an exacting and time-consuming task. It requires a single-minded sense of purpose, and a clarity of eye in detecting inconsistencies across the whole evidential record. It is more a solitary task than work for a committee. Like most solitary tasks, it is best tackled alone.
[14] Fifthly, while we therefore agree with the submission that those tasks are best addressed at first instance by the High Court, with appellate review if needed, it must also be borne in mind that appellate review may not be needed at all. In that case the allocation of two additional judges to the trial will have served little useful purpose, and simply delayed the despatch of other appellate business.
[15] Finally, if appellate review is needed, then two further points need to be made. The first is that the scope of the appeal may be much narrower than the trial. The second is the limitation on rights of appeal caused by leapfrog. In Borrowdale this Court observed:^[11]

The question this application begs is whether this Court should now limit the available judicial steps to two (Court of Appeal, and perhaps Supreme Court) rather than three (High Court, Court of Appeal and perhaps Supreme Court). And behind that lies another question, which is whether we should thereby deny parties’ ordinary constitutional entitlement to a first appeal as of right (any appeal to the Supreme Court being by leave only). While leave might be anticipated, that is still a step this Court should be reluctant to take, especially where the issues are ones of such fundamental importance as these.

Preserving appellate rights is a consideration that applies equally in this case. It may be less urgent than Borrowdale was at the time (before Parliament expressly legislated for Covid-19 level 2 controls), but it nonetheless concerns significant allegations of bad faith against the present Chief Ombudsman. Each party’s as-of-right rights of appeal should be preserved unless there are exceptional reasons otherwise. Here there are not.

Result

[16] The application for transfer of the proceeding to the Court of Appeal, under s 59 of the Senior Courts Act 2016, is declined.

Solicitors:
Michael Leggatt, Wellington for Applicant
Office of the Ombudsman, Wellington for Respondent

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^[1] Financial Services Complaints Ltd v Wakem [2016] NZHC 634, [2016] NZAR 717.

^[2] Financial Services Complaints Ltd v Chief Ombudsman [2017] NZHC 525, [2017] NZAR 521.

^[3] Financial Services Complaints Ltd v Chief Ombudsman [2018] NZCA 27, [2018] 2 NZLR 884.

^[4] It may be noted that in April 2019 the Ombudsmen (Protection of Name) Amendment Bill was introduced. It was passed and came into force in March 2020. It further restricts use of the “ombudsman” name in New Zealand, and transfers decision-making to the Minister of Justice. However, a saving applied to FSCL, allowing it to use the name “ombudsman” if its extant s 28A application was granted by Mr Boshier. Which it was not.

^[5] Financial Services Complaints Ltd v Chief Ombudsman, above n 3.

^[6] Borrowdale v Director-General of Health [2020] NZCA 156.

^[7] At [9].

^[8] Senior Courts Act 2016, s 59(3)(b)(ii).

^[9] Quake Outcasts v Minister for Canterbury Earthquake Recovery [2016] NZSC 166.

^[10] At [3].

^[11] Borrowdale above n 6, at [14].