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High Court of New Zealand Decisions |
Last Updated: 30 July 2011
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV 2010-419-000006
BETWEEN CHERYL YVONNE SIMES Plaintiff
AND LEGAL SERVICES AGENCY Defendant
Hearing: 18, 19 April 2011
Appearances: P Gorringe for Plaintiff
G D S Taylor and R Taylor for Defendant
Judgment: 13 June 2011 at 2:00 PM
(RESERVED) JUDGMENT OF ANDREWS J
This judgment is delivered by me on 13 June 2011 at 2:00pm pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
Solicitors:
Purnell Creighton, PO Box 13376, Armagh, Christchurch 8141 (Roger Simes) (for Plaintiff)
Bartlett, Partners, PO Box 10852, The Terrace, Wellington 6143 (for Defendant) info@btlaw.co.nz
Counsel:
G D S Taylor, PO Box 8045, Wellington g.taylor@barristerscomm.com
SIMES V LEGAL SERVICES AGENCY HC HAM CIV 2010-419-000006 13 June 2011
Introduction
[1] The plaintiff, Ms Simes, has sought judicial review of the decisions of two Panels established by the defendant, the Legal Services Agency (―the Agency‖) to consider whether Ms Simes’ listing as an approved provider of legal services should be cancelled. The first decision was by a Cancellation Consideration Panel (―the Consideration Panel‖), which decided that Ms Simes’ listing approvals in the civil- general and family areas of law (―the listing approvals‖) should be cancelled. The second decision was by a Cancellation Review Panel (―the Review Panel‖), which upheld the decision of the Consideration Panel.
[2] On behalf of Ms Simes, it was submitted that the Panels:
(a) failed to take a relevant consideration into account, namely an audit report prepared at the instigation of the Agency;
(b) made an error of law as to the interpretation of s 24 of the Lawyers and Conveyancers Act 2006 and of the Agency’s policy as to assignment of work to secondary and non-legal providers;
(c) were in breach of a legitimate expectation that a dispute resolution process would be engaged before cancellation was considered;
(d) were in breach of natural justice; and
(e) reached decisions (to cancel Ms Simes’ listing approvals and to uphold the cancellation, respectively) which were unreasonable in the circumstances, or disproportionate.
Background
Grants of legal aid
[3] Legal aid schemes, and the provision of legal services to legally-aided
persons, are governed by the Legal Services Act 2000 (―the Act‖). Pursuant to s 69
of the Act, a person may not provide legal services to a legally aided person unless he or she is a ―listed provider‖. ―Listed provider‖ is defined in s 4(1) of the Act as:
in relation to the provision of particular services under a [Legal Aid] scheme,
... a natural person who is listed as approved to provide those services.
[4] Once approval has been given to a listed provider, a contract for services is entered into between the Agency and the listed provider, covering (among other things) the services to be provided, the parties’ obligations, and a provision for the resolution of disputes arising in connection with the contract. The relevant contract between Ms Simes and the Agency was entered into in March 2003 (―the contract‖).
[5] Each grant of legal aid is to a ―lead provider‖, who is a listed provider who has met listing criteria (―the listing criteria‖),1 as to relevant post-admission legal experience and training. The lead provider has overall responsibility for the management and conduct of the legal aid case. The lead provider submits claims, and receives payment, for the legal services provided. Services may be provided to the legally-aided person by persons other than the lead provider, but those persons must also be listed providers, with approvals as lead providers, ―secondary providers‖, or ―non-lawyer providers‖.
[6] The Agency has produced a Legal Aid Provider Manual, which sets out the Agency’s policies, and specified procedures relating to the various types of grants of legal aid (―the Provider Manual‖).
Ms Simes’ practice
[7] Ms Simes practises in Hamilton as a barrister. As submitted by her counsel, Mr Gorringe, during 2008 and 2009, her practice largely comprised acting for applicants in the Family Court jurisdiction seeking protection and related childcare orders. Almost all of her clients had been granted legal aid. Ms Simes was listed as an approved lead provider for family law on 30 January 2001, and for civil-general law on 27 August 2001.
[8] During 2008 and 2009, Ms Simes employed between four and 12 staff members, comprising employed barristers and non-lawyers, who had listing approvals as secondary providers or non-lawyer providers. Ms Simes was the sole lead provider.
The first advertisement
[9] In August 2008, Ms Simes placed an advertisement in the local Law Society newsletter, seeking staff. The advertisement was also sent to the Institute for Professional Legal Studies and the College of Law (―the first advertisement‖). The Agency expressed concern to Ms Simes about the first advertisement in a letter dated
15 October 2008, saying that it ―is aggressive and negative in its tone and content, and may breach the good faith provisions of the Contract for Services‖. The Agency’s concern related to the following statements in the first advertisement:
REQUIRED ATTRIBUTES: ... and have adequate anger-management skills to cope with communications from Legal Services Agency.
Bad news: Most of the work is legal aid.
Still more bad news: I can’t pay you as much as you deserve, because 90%
of the work is legal aid.
An hour of legal aid work paid at maximum rates pays $14.37 less than the average cost of doing the work.
[10] Ms Simes was asked to respond, which she did on 29 October and 6
November 2008. The Agency considered the responses in conjunction with other information relating to the conduct of her practice. It is apparent from internal Agency memoranda dated 17 and 26 November 2008 that the Agency was concerned as to Ms Simes’ billing practices, the quality and value of services provided to clients, the general quality and substance of supervision of the legal executives and secondary providers within her practice, the first advertisement, and Ms Simes’ relationship with, and attitude to, Agency staff.
Audit report
[11] In a letter to Ms Simes dated 26 November 2008, the Agency set out concerns that had been identified:
You are the sole lead provider in a legal aid practice supervising six legal executives and three secondary providers working on approximately 130 open legal aid files. This workload appears to have created an overload on you personally and has contributed to some stress-related health issues.
A combination of these issues has resulted in the closure of your practice to clients for a two week period last month.
A lack of staff training has contributed to a number of mistakes being made by staff involving additional time to resolve.
The level of tasks undertaken by your legal executives and secondary providers for legally aided clients appears to be at variance with what the Agency considers they are contractually able to undertake.
Your current business and management practices are not sufficient to sustain the level and size of your current legal aid workload.
[12] The Agency went on to say that it was concerned that:
... due to reasons of work overload, inadequate management practices, inadequate staff supervision and your stress-related health issues you may currently not be able to effectively provide services to legally aided clients.
The Agency is of the view that it may not be receiving ―quality and value‖ (section 78(3) Legal Services Act 2000) in relation to the services provided by you ...
[13] The Agency advised Ms Simes that it had decided to undertake an audit of her practice, pursuant to s 78 of the Act. It was a ―special audit‖, which could be carried out ―where it is clear that the interests of the [legal aid] schemes, the public or the accountability of the Agency are not being upheld‖.2
[14] The audit was carried out by a family law practitioner appointed by the Agency and involved a review of ten client files selected at random, and a visit to Ms Simes’ office. The auditor’s findings were discussed with Ms Simes during the auditor’s visit to her office, and she was also sent a draft copy of the audit report. Ms Simes’ comments were incorporated into the final report, dated 24 March 2009.
[15] The auditor’s findings may be summarised as follows:
(a) Ms Simes’ written communication with clients was excellent;
(b) Ms Simes always responded to clients’ instructions in a timely manner;
(c) in all files, bills sent by Ms Simes represented value for service;
(d) in all matters where invoices were selected and arithmetic and correct category rating assessed, the documents were correct;
(e) Ms Simes had applied for legal aid in a timely manner and adhered to the requirements of s 21 of the Act;
(f) in all matters, files were maintained to a reasonable standard; (g) a legal aid processing checklist was comprehensive;
(h) where a notification under s 21 of the Act could not be effected, the file was marked for notification to be effected when the client was located;
(i) a court fixture had been missed on each of three files (―the three missed court appearances‖). Ms Simes’ explanations for these were set out;
(j) there was not always a timely response to the Agency. Ms Simes’
response in relation to an example given by the auditor was set out; (k) there was some duplication in documents sent to the Agency;
(l) there was some inappropriate/casual correspondence with clients. Ms
Simes’ comment on this was included;
(m) save for one file, there were no time records for Ms Simes, although staff members kept records. Ms Simes’ comment (that the matter had now been addressed) was included;
(n) there appeared to be some inconsistency with regard to clients being kept abreast of legal aid matters; and
(o) the auditor expressed concern about the level of supervision Ms Simes could provide, given the number of fee authors she was responsible for, and her own busy hands-on practice. Ms Simes’ comment on this was included.
[16] The auditor provided the following recommendations for Ms Simes:
(a) Quality of the Service Provided
No recommendations
(b) Value of the Service Provided
Time records to be kept for each file, by all fee authors
(c) Relationship with the Agency
Information requested by the Agency to be provided promptly
A checklist system to be used to ensure no duplication of documents sent to the Agency
Consider how to address the breakdown in relationship with the local Agency branch
(d) Obligations under the Act
No recommendations
(e) Case Management
A better diary system be implemented to ensure no Court fixtures missed
(f) File Management
Copies of all Form 9s and 10s to be sent to the client.
The legal aid processing checklist to be used for all legal aid files
[17] The auditor also noted that the biggest issue appeared to be the breakdown in the working relationship between Ms Simes and the local Agency branch. The auditor said that consideration needed to be given as to how to address this, and Ms
Simes needed to accept her role in the breakdown, and work on improving the relationship.
The second advertisement
[18] Before the audit report was released, Ms Simes published a second advertisement for staff (―the second advertisement‖). She submitted a copy to the Agency on 17 March 2009. The second advertisement included the following:
REQUIRED ATTRIBUTES: ... and have adequate bomb-defusing skills to cope with captain on occasions when she receives provocative communications from the Legal Services Agency (usually from head office).
[19] The Agency advised Ms Simes in a letter dated 24 March 2009 (among other things) that ―this form of public criticism‖ could not achieve the objective of improving the relationship between Ms Simes and the Agency.
Agency concerns
[20] On 4 June 2009, the Agency wrote to Ms Simes setting out, in detail, key points the Agency wanted to address with her. Briefly summarised, these were:
(a) ―Client complaints‖ (which concerned eight client grievances), received by the Agency between December 2008 and May 2009. The matters raised included the quality and timelines of legal advice,
―bullying‖ by Ms Simes, secondary providers and non-lawyer providers working on client files rather than Ms Simes, different staff members working on files at different times, clients being interviewed in a non-private environment, and disclosure of a confidential document without the authority of the Court (―the disclosure issue‖).
(b) ―Agency concerns regarding the quality and value of legal advice‖, relating to excessive time taken to prepare an application, and the number of non-lead providers working on a file. This concerned two client files.
(c) The audit findings relating to the three missed court appearances.
(d) ―Invoices and Amendments‖, which comprised general concerns expressed by the Agency regarding the manner in which Ms Simes invoiced the Agency, and amendments she had made to the form of invoices.
(e) ―Relationship with the Agency‖, where the Agency noted a significant deterioration in the contractual relationship between Ms Simes and the Agency. The Agency accepted some responsibility, saying it had failed to raise ―long held concerns ... regarding the quality and value of the services‖ Ms Simes provided to legal aid clients. The Agency commented that it could not resolve the contractual and interpersonal difficulties without Ms Simes’ support and commitment, and asked that she provide a detailed response to the concerns raised.
Cancellation Consideration Panel
[21] Section 73 of the Act provides that the Agency may cancel one or more of a person’s listing approvals, on a number of specified grounds. Section 73(1)(d) provides, as one of the grounds on which approval of a person’s listing may be cancelled:
...
(d) the person is not providing, or has not provided, the service for which he or she is approved to a standard that is acceptable to the Agency:
...
[22] In an internal Agency memorandum dated 14 September 2009, a recommendation was made that a Cancellation Consideration Panel be appointed to consider cancellation of Ms Simes’ listing approvals, under s 73(1)(d) of the Act. The memorandum referred to the matters covered in the Agency’s letter of 4 June
2009, and the following additional matters:
(a) a further client complaint received in July 2009;
(b) the Agency’s concern as to Ms Simes’ failure to provide a
―substantive response‖ to some of the matters raised in the letter of 4
June 2009, and subsequently;
(c) concern as to Ms Simes’ supervision of secondary providers and non- lawyer providers;
(d) concern that a staff member who was approved as a non-lawyer provider had appeared for clients in court;
(e) concern that for a period of four weeks Ms Simes had been overseas, and no lead provider was present to undertake the lead provider’s responsibilities; and
(f) breaches of listing approval conditions, legislative requirements, and professional obligations.
[23] The recommendation to appoint a Consideration Panel was accepted. The Consideration Panel met on 14 December 2009, and comprised two Agency senior staff members: the Manager Service Contracts, and Manager Grants. An external lawyer assisted, pursuant to the relevant provisions of the Provider Manual:3
The external lawyer will participate in and provide the panel with his/her views on the matter as a legal practitioner. The external lawyer will not take part in the decision making.
Ms Simes attended the meeting, accompanied by one of her staff members, as a support person. An Adviser Service Contracts (who had prepared the internal memorandum of 14 September 2009) also attended as note taker.
[24] The Consideration Panel’s decision that Ms Simes’ listing approvals be cancelled was given on 5 January 2010. In reaching its decision, the Consideration Panel upheld 11 complaints concerning legal services provided to clients, as well as
Agency concerns regarding supervision of secondary providers and non-lawyer
3 Legal Services Agency ―Provider Manual (Service Contracts): Part 5 – Suspension
Consideration and Review‖ (June 2008) at 5.9.
providers, breaches of approval conditions, legislative requirements, and professional obligations.
[25] The Consideration Panel set out the reasons for its decision by way of ten bullet point paragraphs,4 which may be summarised as follows:
(a) Ms Simes had not met her professional, ethical and contractual obligations to ensure that services provided to clients were of an appropriate standard.
(b) The Panel was not satisfied that Ms Simes had appropriate methods in place to ensure a quality and standard of legal services. Given the frequency and severity of client complaints, allowing her to continue to provide legal aid would place the integrity of the legal aid scheme at risk.
(c) Ms Simes seemed unable to understand the seriousness of the situation.
(d) Given the lack of supervision and Ms Simes’s attempts to mislead the Agency as to the types of work staff were engaged in, the Agency could not have confidence that conditions of listing approvals would be effective.
(e) Given Ms Simes’ refusal to engage with the Agency to address concerns, the Panel had no confidence that Ms Simes would work within conditions of listing approval, without significant Agency resources being used to monitor conditions.
(f) Ms Simes’ disagreement as to the legitimacy and legality of the Agency’s policies, processes and investigation of concerns did not give confidence that she would work with the Agency to ensure that
appropriate standards of service were provided.
4 Consideration Panel decision, 5 January 2009 at [39].
(g) Having considered the frequency and severity of client complaints, and their common themes, the Panel could not ignore the impact on legally aided clients.
(h) Ms Simes’ mental health, and its impact on her ability to deal professionally with clients, provide a good standard of representation, and show good judgment, were of concern to the Panel.
(i) Ms Simes’ admission that she had knowingly misled the Agency by invoicing for work undertaken by a non-lawyer provider (―the incorrect invoicing‖), and requesting court staff to incorrectly record counsel appearing, was a breach of s 69 of the Act, damaged the integrity of the legal aid scheme, and irrecoverably breached the relationship of trust between Ms Simes and the Agency.
(j) In the totality of the information before it, the Panel concluded that Ms Simes had not upheld the integrity of legal aid scheme services and appropriate levels of client services. Ms Simes’ continuing to provide services would pose an unacceptable level of risk to legal aid clients.
Cancellation Review Panel
[26] Pursuant to s 73(5) of the Act, a person who receives a notice of cancellation may seek a review of that decision. Ms Simes sought a review by way of a letter dated 5 January 2010. A Cancellation Review Panel was convened, and met on 19
February 2010. The Panel comprised the Manager Corporate and the Northern Regional Manager Grants of the Agency. Again, an external lawyer assisted the Panel, and the Adviser Service Contracts was present as note taker. Ms Simes attended and was represented by counsel, Mr Gorringe. Written submissions had been filed in advance, and oral submissions were made at the meeting.
[27] The relevant section of the Provider Manual provides that the Review Panel will either review the Consideration Panel’s decision, or hear the matter de novo.5 If the Review Panel decides to review the Consideration Panel’s decision, then it is to look at the reasons for the decision and assess whether it was made correctly, having regard to the Provider’s submissions. In this case, the Review Panel elected to review the Consideration Panel’s decision.
[28] Mr Gorringe submitted that the Consideration Panel was in error on a large number of findings, placed too much weight on those matters where Ms Simes could have done better, and too little on Ms Simes’ positions, did not allow for error by the Agency, and, without good grounds for doing so, excluded the option of engagement between the Agency and Ms Simes.
[29] In his ―overall assessment‖, Mr Gorringe submitted that before approvals were cancelled, there ought to be clear evidence of significant fault by the Provider. He submitted that at the time, there was no serious fault on Ms Simes’ part, either individually or collectively. He also submitted that Ms Simes was ready to engage with the Agency in a process designed to restore a functional working relationship where needed.
[30] The Review Panel upheld the Consideration Panel’s decision with respect to
each of the ―client complaints‖.6
[31] Regarding supervision, the Review Panel heard oral submissions from Ms Simes as to her supervision of staff, her approach to client and file management, and steps taken to make improvements. The Panel recorded that Ms Simes had acknowledged that during the period pertinent to their review, 2008 to 2009, the systems in place did not readily identify where clients’ needs were not being met, nor where service to clients could have been better. The Panel concluded that Ms Simes’ submissions appeared to minimise the importance, and the impact, of the lack of supervision on legal aid clients. The Panel also said that it was not clear that Ms
Simes understood or accepted her contractual and legislative obligations in relation
5 Legal Services Agency ―Provider Manual (Service Contracts): Part 5 – Suspension
Consideration and Review‖ (June 2008) at 5.14.
6 Review Panel decision, 8 April 2010 at [19]–[59].
to secondary providers and non-lawyer providers substantive services to clients. The Panel upheld the Consideration Panel’s decision that Ms Simes had not provided an adequate level of supervision.7
[32] The Review Panel then considered the matter of the incorrect invoicing. The employee who appeared in Court only had listing approval as a non-lawyer provider. The Review Panel noted that trust is a fundamental principle of the way in which the Agency conducts business with its providers. It considered that the incident showed a deliberate decision to ignore the listing procedures, and put into question Ms Simes’ professional obligation to submit claims for services that were accurate and met contractual requirements to act with good faith towards the Agency. The Review Panel considered that Ms Simes had acted in breach of listing and legislative
requirements and her professional obligations.8
[33] The Review Panel then referred to further oral submissions made on behalf of Ms Simes, and Ms Simes’ responses to questions asked by the Panel. In its discussion of the ―issue for consideration‖, the Review Panel noted:9
(a) Ms Simes’ admission that on some occasions she had failed to adequately supervise work undertaken by secondary providers and non-lawyer providers;
(b) her admission that on two files, she had invoiced for work completed by an employee as if she had done it, and had asked Court staff not to change their practice of not noting the change of counsel appearing;
(c) her admission that there were instances of delays in responses to clients;
(d) her admission concerning the disclosure issue – that she had released parts of a confidential report to third parties without the consent of the
7 At [60]–[65].
8 At [66]–[72].
9 At [75] (a)-(l).
Court (noting that she did not consider this to be a breach of Court rules or the relevant legislation);
(e) the Agency’s responsibility under the Act to ensure that services provided under legal aid schemes meet expected standards, and that clients are represented by those deemed to have met or exceeded criteria for that area of law; and
(f) that alternative solutions had been considered by the Consideration Panel, and the consequences of cancelling listing approvals had been considered by both Panels, but the administrative costs of the only option acceptable to Ms Simes (regular review by the Agency of her work practices) would very likely exceed the benefits to be derived.
[34] The Review Panel concluded that a continuation of the cancellation of Ms Simes’ listing approvals would be proportional to decisions relating to other providers, particularly given the nature of the complaints and concerns raised about the standard of service provided to clients. It was not confident that Ms Simes would work with the Agency to ensure an appropriate standard of service was provided to clients, and concluded that it would be difficult to achieve
proportionality by assigning conditions to the listing approvals.10
[35] The Review Panel upheld the decision of the Consideration Panel. It found that the Consideration Panel had considered all submissions and material thoroughly, and agreed that the Consideration Panel’s decision was appropriate and proportional to the issues raised for consideration.11
Application for judicial review
[36] Ms Simes’ fourth amended statement of claim pleaded seven causes of action. Some of these were abandoned (in whole or in part) at the hearing. One cause of action was based on a pleading that a dominant reason for the Agency’s decision to
refer her listing approvals to the Consideration Panel was the Agency’s response to
10 At [76]–[78].
11 At [79]–[81].
the first and second advertisements. Specifically, it was pleaded that the response breached Ms Simes’ right to freedom of expression under the New Zealand Bill of Rights Act 1990 (―NZBORA‖).
[37] Such a pleading requires the participation of the Attorney-General. While the Attorney-General was originally named as second defendant in the proceeding, appearances on his behalf have been excused since 15 September 2010,12 meaning that he was not represented at the hearing. This cause of action could not, therefore, be considered, and has been deferred to a later fixture date.
[38] I therefore turn to consider only the causes of action advanced at the hearing.
Did the Panels fail to take a relevant consideration (the audit report) into account?
[39] This cause of action was originally pleaded in three sub-parts. However, Ms Simes only proceeded with the pleading that both Panels failed to take the audit report into account.
Submissions
[40] Mr Gorringe submitted that the audit report was relevant, important, and required to be taken into account by both Panels. This was for the following reasons:
(a) The Agency is given the power to order an audit report under the Act.
Failure to co-operate with the auditor may, pursuant to s 79 of the Act, be an offence. By virtue of its statutory status, the audit report was required to be taken into account.
(b) The audit report was obtained at the instigation of the Agency, to investigate Ms Simes’ practice, as a result of the Agency’s concern that it was not receiving ―quality and value‖.
(c) The report was by an independent, objective, assessor, and had indicated that Ms Simes had provided a good standard of service. There was no indication that Ms Simes was not providing a service to an appropriate standard. The auditor had concluded that the larger problem was not Ms Simes’ practice, but rather the relationship between the Agency and Ms Simes, in respect of which both parties were responsible for the rift and for repairing it.
(d) The report covered the same period (2008–2009) as did the
Consideration Panel.
(e) The auditor’s recommendations were significant; in particular there was no recommendation as to the quality of service provided. Further, Ms Simes’ comments on the recommendations showed clearly that each had received, or were receiving, attention.
[41] Mr Gorringe submitted that, in substance, both Panels ignored the audit report, leaving the impression that it had been an inconvenient obstacle which had to be circumvented.
[42] Mr Taylor submitted that this cause of action must fail on the facts, because submissions had been made on the audit report by or on behalf of Ms Simes to the Consideration Panel and then the Review Panel, and both Panels had referred to the report in their decision. He submitted that it was fanciful to say that the audit report had not been considered. He referred to the judgment of the Court of Appeal in
Hayes v Fighter Trainers Ltd.13
[43] Mr Taylor also submitted that the audit report was of little relevance. This was because:
(a) a random selection of files had been submitted to the auditor, rather than files the Agency might have selected to give a slant to the audit;
(b) the auditor had found three missed court appearances;
(c) the auditor had identified a problem with Ms Simes’ supervision;
(d) it was arguable how supportive the audit report was; and
(e) matters had moved on since the report, in that the Panels considered
11 client complainants, none of which were part of the audit report.
Discussion
[44] Counsel agreed that the statement of Cooke J in CREEDNZ Inc v Governor- General,14 set out the governing principle:
A point about the legal principle invoked by the plaintiffs should be underlined. It is a familiar principle, commonly accompanied by citation of a passage in the judgment of Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, 228; [1947] 2 All ER 680, 682: ―If, in the statute conferring the discretion, there is to be found expressly or by implication matters which the authority exercising a discretion ought to have regard to, then in exercising the discretion it must have regard to those matters‖. ...
What has to be emphasised is that it is only when the statute expressly or impliedly identifies considerations required to be taken into account by the authority as a matter of legal obligation that the Court holds a decision invalid on the ground now invoked. It is not enough that a consideration is one that may properly be taken into account, nor even that it is one which many people, including the Court itself, would have taken into account if they had to make the decision. ...
[45] I do not accept Mr Taylor’s submission that the Court of Appeal’s judgment in Fighter Trainers is of assistance. The Court of Appeal there was considering an appeal against the exercise of a discretion as to awarding costs after the appellant had been unsuccessful at a High Court trial. That situation is not comparable with the present case, where the Consideration Panel’s assessment of the matters before it was clearly at a substantive level. The Review Panel’s assessment was also substantive, in light of the requirement that it look at the reasons for the Consideration Panel’s decision, and assess whether it was made correctly, having regard to Ms Simes’
submissions.
14 CREEDNZ Inc v Governor-General [1981] 1 NZLR 172 (CA) at 182–183.
[46] It is apparent from the Agency’s letter of 26 November 2008 that the audit report was ordered (as a ―special audit‖) as a result of the Agency having identified particular concerns regarding Ms Simes’ practice.15 The identified concerns are identical to the issues traversed by the Consideration Panel and, subsequently, by the Review Panel.
[47] I accept Mr Gorringe’s submission that the audit report was an independent, objective, assessment of Ms Simes’ practice and that it was, therefore, likely to be a valuable component of the Consideration Panel’s assessment of Ms Simes’ practice and the Review Panel’s review of that assessment. Further, it covered a similar time period to that considered by the Consideration Panel. I also accept his submission that the audit report was important in that it made findings that were favourable to Ms Simes, and made no recommendation as to the quality of the service provided (an indication that the auditor had no concern in that respect, or that any concern was not at a level that required a recommendation to be made). The recommendation that both parties consider how to address the break down in their relationship indicates fault on both sides.
[48] I therefore conclude that the audit report was relevant to the Consideration Panel’s assessment of Ms Simes’ practice, and to the Review Panel’s review of that assessment. I do not accept that ―matters had moved on‖ such that it was not relevant. For the same reasons, I find that both Panels were required to take the audit report into account.
[49] The issue now becomes whether the audit report was taken into account by both Panels? Mr Gorringe submitted that both Panels, in substance, ignored it. Mr Taylor submitted that it could be assumed, from the fact that both Panels referred to it, that they had taken it into account.
[50] The submissions made by or on behalf of Ms Simes to each Panel were included in the material before me. It is clear that the audit report was referred to in
the submissions to each Panel, and its favourable tenor stressed.
15 See [10]–[13] above.
[51] In the Consideration Panel decision, the audit report is noted in the background narration,16 as a matter to be taken into account,17 in the summary of Ms Simes’ submissions,18 and in the Panel’s discussion of Ms Simes’s submissions regarding the three missed court appearances.19 Those references focused almost solely on the three missed court appearances. In the summary of Ms Simes’
submissions, the Consideration Panel also noted her submission that the audit (and the Agency’s investigation) had caused increased mental stress to herself and her staff. The Consideration Panel did not refer to any of the auditor’s findings that were favourable to Ms Simes.
[52] In the Review Panel decision, the audit report is listed as having been provided to the Panel,20 there is a reference to the missed court appearance (identified in the audit report) in respect of which Ms Simes’ explanation was not accepted by the Consideration Panel,21 there is a review of the three missed court appearance client files,22 and there is a record of Mr Gorringe’s oral submission that if no further complaints had been introduced after the audit report in April 2009, the Panel could have confidence in the work undertaken in Ms Simes’ practice.23 Again, there is no reference to any of the auditor’s favourable findings.
[53] I am led to the conclusion that the audit report was noted by the Consideration Panel but only considered relevant to the extent that the auditor had identified three missed court appearances. It was also noted by the Review Panel, but only to the extent that it reviewed the client files for the missed court appearances. There is no indication, in either decision, that the Panels gave any consideration to the auditor’s other findings, particularly those favourable to Ms Simes.
[54] In the light of the importance of the audit report, the Consideration Panel should have given it careful and thorough consideration. If it had concluded that the
16 Consideration Panel decision at [3] and [7].
17 At [10].
18 At [12].
19 At [25].
20 Review Panel decision at [1].
21 At [17].
22 At [56]–[59].
23 At [73](f).
auditor’s findings were not, in fact, as favourable as had been submitted, it should have set out its reasons for that conclusion. Similarly, if it had concluded that the audit report was no longer relevant, it should have set out its reasons. The Consideration Panel could not isolate one aspect of the audit report without taking other aspects into account. If the Consideration Panel had done that, then the Review Panel could have considered submissions on the issue.
[55] As noted earlier, submissions were made to the Review Panel as to the auditor’s favourable findings. However, I am led to the same conclusion I reached for the Consideration Panel. There is no indication in the Review Panel’s decision that it gave any consideration to any aspect of the auditor’s findings other than the identification of three missed court appearances. Nor is there any reason given for rejecting or ignoring any other findings.
[56] Accordingly, I find that the audit report, a relevant consideration required to be taken into account by both Panels, was not taken into account. This finding is important because, if taken into account, the audit report may have materially affected the Panels’ decisions.
Error of law
Introduction
[57] Ms Simes proceeded with only one of the two sub-parts of this cause of action, which was that the Panels erred in their interpretation of s 24 of the Lawyers and Conveyancers Act 2006 (―the LC Act‖), and of Part 13 of the Provider Manual (―Part 13‖).24 At the hearing, leave was given to amend the relevant pleading ([85] of the fourth amended statement of claim) to read:
In addressing the areas or kinds of legal work which the non-lawyer, Mr Hanna, employed by the plaintiff carried out, the Panels erroneously concluded that certain of such legal work was:
(i) contrary to section 24 Lawyers and Conveyancers Act 2006 as being reserved areas of work;
24 Legal Services Agency ―Provider Manual (Grants): Part 13 – Confirm Provider‖ (March 2007).
(ii) contrary to the Defendant’s Policy in Part 13 Provider Manual
(Grants) as to minor matters.
A: Error of law as to the interpretation of s 24 Lawyers and Conveyancers Act 2006
Submissions
[58] Mr Gorringe submitted that the following statements demonstrate the alleged errors of law as to the interpretation of s 24 of the LC Act. It was accepted that the non-lawyer provider referred to in the extracts from the Panels’ decision set out below was Mr Hanna, who was employed by Ms Simes and had a non-lawyer listing approval.
(a) The Consideration Panel said, in its conclusion as to one of the client complaints, that:25
The Panel members considered that the level of service provided to [name] was not of an acceptable standard and that there was a non lawyer providing substantive services to a client (drafting notices of defence and application to vary parenting order) which by Ms Simes’ own admissions would not have been checked.
The Review Panel repeated the Consideration Panel’s comment regarding that client complaint26 and went on to say, in its conclusion as to that complaint:27
Further, section 24 of the [LC Act] does not permit a non lawyer to provide substantive services to a client and it is concerning that Ms Simes does not accept this as relevant to the [Consideration Panel’s] decision.
(b) Regarding another client complaint, the Review Panel said:28
The [Review] Panel noted that the services provided by the non lawyer provider in this instance appeared to breach not only the requirements of [Part] 13 of the provider manual but also section 24 of the [LC Act]. ...
(c) In its conclusion as to a further client complaint, the Review
Panel said:29
25 Consideration Panel decision at [18].
26 Review Panel decision at [32].
27 At [35].
28 At [31].
29 At [49].
In reviewing the decision reached on this complaint the [Review] Panel also considered submissions by Counsel regarding supervision in addition to the specific comments relating to this client’s file. The Panel considers that [Part] 13 of the provider manual clearly sets out the type of work that can be undertaken by a non lawyer. This does not include substantive work and is also in accordance with section
24 of the [LC Act] that prohibits non lawyers from undertaking such work as they are not qualified to do so. The Panel considers the
submissions do not recognise the impact that additional time spent
working on a matter may have on a client, nor the risks to the client in receiving substantive advice from a non lawyer.
[59] Mr Gorringe also referred to the following statement in the evidence on behalf of the Agency:30
It should go without saying that a non lawyer provider cannot assist by giving legal advice to a client or by interviewing and completing affidavits nor by appearing in mediations between parties or negotiating contact between parties relating to children, or other services limited by s 24 of the [LC Act].
[60] Mr Gorringe submitted that the Panels, and the Agency, had misinterpreted s 24 of the LC Act as meaning that Mr Hanna was necessarily precluded from doing
―substantive‖ work – that is, work that was more than ―minor‖. He submitted, further, that the Panels’ error had had a bearing on, or influenced, the Panels’ decisions that Ms Simes’ conduct and attitude were such as to warrant cancellation of her listing approvals. In the alternative, Mr Gorringe submitted that on the facts found, or assumed to be found, by the Panels, they could not, if properly instructed as to the interpretation of s 24 of the LC Act, have determined that there was a breach of s 24.
[61] Mr Taylor submitted, first, that the statements made by the Panels were not findings, but rather tentative expressions of view, and secondly, that they were not material to the conclusions reached by the Panels. Mr Taylor also submitted that Ms Simes’ cause of action as to error of law could not succeed, as neither Panel stated what meaning it gave to s 24 of the LC Act. Regarding Mr Gorringe’s alternative submission, Mr Taylor submitted that neither Panel had made a finding that there had
been a breach of s 24 of the LC Act.
30 Affidavit of Angharad Lowri Edmonds 15 October 2010, at 34.
[62] Mr Taylor also submitted that even if it were assumed that the Panel’s statements were ―decisions‖, and were material to their findings regarding the relevant client complaints, the Panels had evidence before them that Mr Hanna was not supervised by Ms Simes and could therefore correctly find that there was a breach of s 24 of the LC Act. He submitted that there was, therefore, no error of law.
Discussion
[63] Counsel’s alternative submissions reflect the judgment of the House of Lords in Edwards (Inspector of Taxes) v Bairstow,31 in which Lord Radcliffe described two forms of error of law. The first was described thus:32
[W]here there is an actual statement in the case which shows a misconception of the law, no one feels any difficulty.
...
If the case contains anything ex facie which is bad law and which bears upon the determination, it is, obviously, erroneous in point of law.
The second form of error of law was described by Lord Radcliffe as follows:33
But, without any such misconception appearing ex facie, it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the Court must intervene. It has no option but to assume that there has been some misconception of the law and that this has been responsible for the determination. So there, too, there has been an error in point of law.
[64] Section 24 of the LC Act provides, as relevant:
Reserved areas of work for lawyers and incorporated law firms
(1) A person commits an offence—
(a) who, for gain or reward (whether direct or indirect) and not being a lawyer or an incorporated law firm, carries out work
of a kind described in paragraph (a) of the definition of
―reserved areas of work‖ (as set out in section 6); or
(b) who, not being a lawyer, carries out work of a kind described in paragraph (b) or paragraph (c) or paragraph (d) of the definition of ―reserved areas of work‖ (as set out in section 6).
31 Edwards(Inspector of Taxes) v Bairstow [1955] UKHL 3; [1956] AC 14 (HL).
32 At 34 and 36.
33 At 36.
...
(2) This section is subject to the exceptions set out in sections 25(2) and
(27).
[65] The definition of ―reserved areas of work‖ in s 6 of the LC Act is as follows:
reserved areas of work means the work carried out by a person—
(a) in giving legal advice to any other person in relation to the direction or management of—
(i) any proceedings that the other person is considering
bringing, or has decided to bring, before any New Zealand court or New Zealand tribunal; or
(ii) any proceedings before any New Zealand court or New
Zealand tribunal to which the other person is a party or is likely to become a party; or
(b) in appearing as an advocate for any other person before any New
Zealand court or New Zealand tribunal; or
(c) in representing any other person involved in any proceedings before any New Zealand court or New Zealand tribunal; or
(d) in giving legal advice or carrying out any other action that, by
section 21F of the Property (Relationships) Act 1976 or by any provision of any other enactment, is required to be carried out by a
lawyer.
[66] Mr Gorringe did not submit that the exceptions in either s 25(2) or s 27 applied in this case. He submitted that the Panels’ error of law, demonstrated by the statements referred to, lay in an incorrect reading of the phrase ―direction or management of ... proceedings‖, in the definition of ―reserved areas of work‖.
[67] I accept Mr Gorringe’s submission that the phrase ―direction and management‖ of legal proceedings does not preclude a non-lawyer from giving any advice, at all, about such proceedings. ―Direction‖ and ―management‖ are not defined in the LC Act. Mr Gorringe referred me to dictionary definitions of
―direction‖ and ―management‖ and their associated verbs, for example:34
―Direct‖ (verb): to regulate the course of, to guide, conduct, to advise ... to give authoritative instructions to, to ordain, order, or appoint (a person) to do a thing.
―Manage‖ (verb): to conduct ... to control ... to bring to pass.
[68] I accept that it can be inferred from these definitions that s 24 does not preclude a non-lawyer from giving legal advice about legal proceedings. Such
34 Mr Gorringe cited Shorter Oxford English Dictionary (3rd ed).
advice may include general advice as to the availability of court procedures, and as to whether a client may meet the applicable criteria. Section 24 precludes a non- lawyer from acting at the level of ―directing‖ or ―managing‖ proceedings.
[69] I am not able to reach a conclusion as to whether the statements referred to by Mr Gorringe show that the Panels erred in interpreting the LC Act. The statements concern the services provided to two clients. The services provided to one client (―client 1‖) were described as ―conducted the client interview, given legal advice and prepared the clients affidavit‖.35 The Consideration Panel said of these services that
―the level of work undertaken was not of a level appropriate for a non lawyer to
undertake‖.36 The Review Panel said in its review of the Consideration Panel’s decision regarding the services to client 1 that ―The [Review] panel noted that the services provided by the non lawyer provider in this instance appeared to breach ... section 24 of the [LC Act]‖.37
[70] The services provided to another client (―client 2‖) were described by the Consideration Panel as ―substantive services to a client (drafting notices of defence and application to vary parenting order)‖.38 The Review Panel said with respect to these services: ―Further, section 24 of the [LC Act] does not permit a non lawyer to provide substantive services to a client‖.39
[71] It may be that the work done by Mr Hanna, as described, was not at the level of ―direction and management‖ of proceedings. It is not possible to decide this on the information before me. However, even if I were to conclude that Mr Hanna’s work was not at the level of ―direction and management of proceedings‖ (such that the Panels had erred in their interpretation of s 24), I could not conclude that that error of law would have had a bearing on, or influenced, the Panels’ decisions.
[72] In the case of each client the focus was on Ms Simes’ supervision of the non-
lawyer, and the Panels’ decisions were made with reference to supervision. For
example, for client 1, the Consideration Panel noted that Ms Simes had admitted in
35 Agency’s letter to Ms Simes 4 June 2009 at [6].
36 Consideration Panel decision at [17].
37 Review Panel decision at [31].
38 Consideration Panel decision at [18].
39 Review Panel decision at [35].
her oral submissions that the non-lawyer’s work was not checked. The Panel determined that she had not satisfied the Agency’s requirement for supervision, and that the standard of services provided was not of a standard acceptable to the Agency.40 For client 2, the Consideration Panel went on to say, after noting the
―substantive services‖ provided, that those services ―by Ms Simes’ own admissions would not have been checked‖.41
[73] Accordingly, I accept Mr Taylor’s submission that the cause of action based on that error of law cannot succeed.
B: Error of law as to the interpretation of Part 13 of the Provider Manual
Introduction
[74] The second limb of the amended pleading of error of law is that both Panels erred in interpreting Part 13 of the Provider Manual as restricting the work that can be delegated to a non-lawyer provider to ―minor matters‖ such as research, document drafting, and other minor preparation for a case, even with the Agency’s prior approval. Part 13 sets out the Agency’s ―Policy on Assignment, Termination of Assignment, and Reassignment‖. At [5] under the heading ―Guidelines –
Assignment‖ it states:42
Minor matters to be carried out in the course of an assignment can be delegated by the lead provider without the prior approval of the Agency. The conditions for this are outlined in paragraphs 6–12 below.
[75] Paragraph 12 is relevant to the present case. It provides:
In civil and family cases, matters such as research, document drafting and other minor preparation for the case may be delegated to an appropriately qualified listed provider, for example a junior, legal executive, or clerk. ...
40 Consideration Panel decision at [17].
41 At [18].
42 Legal Services Agency ―Provider Manual (Grants): Part 13 – Confirm Provider‖ (March 2007)
at 5.
Submissions
[76] Mr Gorringe submitted that a ―plain words‖ reading of [5] and [12] of Part 13 is that ―minor matters‖, as defined in [12], may be delegated to another listed provider without the Agency’s approval. He submitted that there is nothing in Part 13, a provider’s contract, the Act, or elsewhere, to say that other work cannot be delegated with the Agency’s approval.
[77] Mr Gorringe submitted that the Review Panel erred in its interpretation of
Part 13 when it said:43
The [Review] Panel considers that [Part] 13 of the provider manual clearly sets out the type of work that can be undertaken by a non lawyer. This does not include substantive work ...
Mr Gorringe submitted the Review Panel was also in error when it said:44
[Part] 13 of the provider manual sets out what work can and cannot be delegated, with and without agency approval, to non lead providers.
Discussion
[78] I accept that [5] and [12] of Part 13 only set out what ―minor matters‖ (as they are described in [12]) may be delegated to a non-lawyer provider, without the Agency’s prior approval. There is no comprehensive definition of ―minor matters‖, and it is arguable whether, for example, ―document drafting‖ will in every case be a
―minor matter‖. Further, there is no statement as to what may be delegated with
prior approval.
[79] However, while it is arguable that the Review Panel erred in its interpretation of Part 13, I am not satisfied that Ms Simes can succeed on this limb of the cause of action, for the following reasons. First, where the Review Panel referred to Part 13, it was focusing on Ms Simes’ supervision of work delegated to the non lawyer
provider. Secondly, there was no suggestion in the pleadings or submissions that
43 Review Panel decision at [49].
44 At [65] (a).
there was a relevant issue as to any work said to have been able to be delegated, with
the Agency’s approval.
[80] Accordingly, Ms Simes fails on this cause of action.
Breach of legitimate expectation
Introduction
[81] In this cause of action, Ms Simes pleaded that:
(a) there were differences between herself and the Agency as to work her staff were entitled to do pursuant to the ―Assignment Policy‖,45 the LC Act, and the contract between herself and the Agency;
(b) clause 21 of the contract (―the dispute clause‖) created a legitimate expectation that differences in contractual interpretation relevant to the exercise of the Agency’s statutory powers would be addressed pursuant to the dispute clause;
(c) notwithstanding her offers to participate in dispute resolution, the
Agency had refused to do so; and
(d) the Agency’s consideration of the interpretation of documents had affected its assessment of what an adequate standard of service, is and whether Ms Simes had provided such.
Submissions
[82] Mr Gorringe submitted, in essence, that Ms Simes had a legitimate expectation that ―contractual disputes‖ should be dealt with pursuant to the dispute clause, and only ―standard of service‖ issues fell to be determined pursuant to
s 73(1)(d) of the Act. He submitted that issues as to delegation of work, what work
45 ―Assignment Policy‖ is not defined in the fourth amended statement of claim, but appears to be a
reference to Part 13 of the Provider Manual.
could be undertaken by non-lawyer providers, and whether Ms Simes had appropriately supervised staff, were all contractual issues. Further, he submitted that the Panels should have considered only ―standards‖ issues, without reference to other (contractual) issues. He submitted that, in breach of Ms Simes’ legitimate expectation, the Panels had conflated the contractual and standards issues.
[83] Mr Taylor submitted that it is not appropriate to separate contractual and standards issues; ―supervision‖ is a standards issue (the purpose of supervision being to ensure that the services provided are of the appropriate standard), as is whether work has been done outside the terms of a listing approval (a listing approval being confirmation that a person is competent to provide services to a particular standard). He submitted that even if the matters described by Mr Gorringe as contractual issues were isolated, the Panels considered significant standards issues, namely:
(a) the incorrect invoicing, which he characterised as a fraud on the
Agency;46
(b) the disclosure issue;47
(c) Ms Simes’ mental health;48
(d) the non-viable business model of Ms Simes’ practice;49 and
(e) that Ms Simes had not accepted the seriousness of the issues raised by the Agency.50
He also submitted that Ms Simes could not establish that any expectation was
―legitimate‖.
46 Consideration Panel decision at [27]; Review Panel decision at [75](b) and (g).
47 Consideration Panel decision at [27]; Review Panel decision at [75](d).
48 Consideration Panel decision at [28]–[31], [34]–[35].
49 Consideration Panel decision at [33].
50 Consideration Panel decision at [36]–[37].
Discussion
[84] Mr Gorringe accepted that to succeed in this cause of action, Ms Simes must persuade the Court that the contractual provisions cannot be overridden by the statutory cancellation process, and that the dispute clause in the contract is not subservient to the provisions of s 73 of the Act as to cancellation.
[85] In Legal Services Agency v Meyrick,51 the High Court considered the relationship between the provisions of the Act and a provider contract. A listed provider’s listing approvals were suspended pursuant to s 73(1)(d) after he was charged with criminal offences.52 Subsequently, the provider sought to reinstate his listing approvals. He then sued the Agency for damages for breach of contract in respect of the suspension and the refusal to reinstate.
[86] The Agency applied to strike out the proceeding, arguing that the Agency had acted under statutory authority and that the appropriate challenge would be by judicial review. In the District Court, it was held that the suspension of the provider’s listing approvals could give rise to either a claim for judicial review, or a claim based on the provider’s contractual rights. The Judge refused to strike the proceeding out. The Agency appealed to the High Court. In his judgment Stevens J
noted that:53
A critical aspect of the case relates to the ability of the agency, outside the provisions of the contract, to exercise its statutory power of suspension under s 73 of the [Act].
[87] His Honour said:54
... I accept the submission of Mr Taylor that the statutory power of suspension exists for the public interest and to protect the users of the services of legal aid listed providers. It is trite law that public authority cannot disable itself by contract from exercising its statutory powers conferred upon it in the public interest. I consider that, in entering into the contract for services, the agency did not do so in the circumstances of this case.
51 Legal Services Agency v Meyrick [2007] 3 NZLR 518 (HC).
52 Section 73 was amended as from 1 March 2007 so as to refer to ―cancellation‖ rather than
―suspension‖.
53 Meyrick, at [2].
54 At [66].
[88] Mr Gorringe sought to distinguish Meyrick on its facts: the case concerned an application to strike out a proceeding for breach of contract, while the present case is a claim for judicial review of decisions to cancel a listing approval, in which one of the causes of action is based on a legitimate expectation that contractual issues would be dealt with pursuant to the contract.
[89] I accept, first, Mr Taylor’s submission that many of the issues characterised by Mr Gorringe as contractual are intimately related to the standard of services provided by Ms Simes – in particular, her supervision of employee providers, and the type of work delegated to secondary providers. Leaving aside, for the moment, the judgment in Meyrick, I accept that it would have been artificial, and inappropriate, for those ―contractual issues‖ to have been pursued under the dispute clause, while other issues were considered under s 73(1)(d). The Agency must administer legal aid schemes in ―as consistent, accountable, inexpensive, and efficient a manner as is
consistent with the purpose of‖ the Act.55 It would be inconsistent with the Agency’s
function to require it to deal separately with ―contractual‖ and ―standards‖ issues in
this case.
[90] Returning to Meyrick, I also accept, with respect, the reasoning of Stevens J which, in my view, applies equally to the present case. Although there is some difference in the background facts, this is a case where it must be said that the Agency ―cannot disable itself by contract from exercising its statutory powers conferred upon it in the public interest‖. In this case, the public interest required an examination of Ms Simes’ practice, and that included an examination of her supervision and delegation of work to secondary providers.
[91] Accordingly, I reject Ms Simes’ claim that she had a legitimate expectation that the disputes she characterised as ―contractual‖ would be dealt with pursuant to the dispute clause in the contract, to the exclusion of the provisions of s 73(1)(d).
This cause of action fails.
55 Legal Services Act 2000, s 92(a).
Breach of natural justice
Introduction
[92] The fourth amended statement of claim pleaded breaches of natural justice in three respects, namely that:
(a) at the Consideration Panel, Ms Simes did not have an adequate opportunity to make submissions as to supervision;
(b) at the Consideration Panel, Ms Simes did not have an opportunity to respond to, or make submissions on, observations and notes written by an Adviser Service Contracts on her submissions; and
(c) at the Review Panel, Ms Simes did not have an opportunity to make submissions about other decisions relating to cancellation of listing approvals.
A: Supervision
Submissions
[93] Mr Gorringe submitted that, at the Consideration Panel, Ms Simes was surprised to find that there was an issue as to her supervision of staff. Mr Taylor submitted that Ms Simes had notice that supervision was an issue and that, in any event, any ―unfairness‖ at the Consideration Panel was cured by the fact that at the Review Panel, Ms Simes had a full opportunity to give evidence and make submissions as to her supervision of staff.
Discussion
[94] An issue as to Ms Simes’ supervision of staff was raised in the Agency’s letter to her of 4 June 2009, which set out the Agency’s concerns. Supervision was noted as an issue in respect of client complaints, and as arising out of the audit report. Supervision was noted again in the Agency’s letter to Ms Simes dated 20
July 2009, in relation to the Agency’s concern as to supervision during a period while she was overseas. In the Agency’s internal memorandum dated 14 September
2009, which recommended that the Consideration Panel be appointed, issues as to supervision were again noted. Ms Simes was given a copy of that memorandum. Supervision was also noted (albeit somewhat obliquely) in the Agency’s letter of 16
September 2009, in which the Agency gave Ms Simes formal notice that the
Consideration Panel was to be convened.56
[95] Further, Ms Simes presented submissions to the Consideration Panel, addressing supervision in her practice. In the circumstances, I am satisfied that Ms Simes had adequate notice that her supervision of employed providers was an issue, and had the opportunity to address it before the Consideration Panel.
[96] In any event, any perceived unfairness on this issue at the Consideration Panel stage was cured when Ms Simes both gave evidence and made submissions as to supervision to the Review Panel.57
[97] Accordingly, Ms Simes cannot succeed on this aspect of her claim of a breach of natural justice.
B: Notes on Ms Simes’ submissions to the Consideration Panel
Submissions
[98] Before the Consideration Panel meeting, an Adviser Service Contracts made notes and observations on Ms Simes’ submissions, at the request of one of the members of the Consideration Panel. Ms Simes did not learn of this until some time after the Preview Panel issued its decision. Mr Gorringe submitted that Ms Simes did not know anything about the notes and observations, that none of them were put to her for comment, and that it could be assumed that the Consideration Panel (in
particular the member who received them) was influenced by them. He submitted
that if Ms Simes had known of the notes and observations, she could have responded to them.
[99] Mr Taylor submitted that the notes and observations were used exclusively by one member of the Consideration Panel, and that there was no evidence that they were disclosed to the second Panel member. He submitted that the notes and observations were similar to notes made by a Judge’s clerk, to assist the Judge in preparation for a hearing, so not required to be disclosed. He submitted that to require disclosure would be to go far beyond the usual authorities.
[100] Mr Taylor further submitted that even if the notes and observations should have been disclosed, there was no breach of natural justice, because their general content was already well-known to Ms Simes, from the Agency’s letter of 4 June
2009, and the memorandum of 14 September 2009.
[101] In Ali v Deportation Review Tribunal,58 Elias J considered a claim for judicial review for (among other things) a claim of breach of natural justice based on allegations that the plaintiff had not been shown a copy of a letter that had been part of material submitted to the Minister of Immigration who was considering whether to make a deportation order, and that he had not been made aware that a Family Court judgment had also been supplied to the Minister. Elias J noted that in case involving immigration status, high standards of fairness were required by natural justice, because of the profound implications for the lives of those affected. She noted their description of the ―underlying principle‖ by Fisher J in Khalon v
Attorney-General:59
... a party should normally be given the opportunity to respond to an allegation which, with adequate notice, might be effectively refuted.
Elias J went on to say:60
I agree also with [Fisher J’s] view that ―the key elements are surprise and potential prejudice.‖ If, therefore, there is no surprise in an allegation or if, even if there is surprise, there could be no prejudice because further notice would not have assisted the person affected to meet the allegation, then there
58 Ali v Deportation Review Tribunal [1997] NZAR 208 (HC).
59 Khalon v Attorney-General [1996] 1 NZLR 458 (HC) at 466.
60 Ali at 220.1
is no unfairness in process. It perhaps goes without saying that where surprise is established and especially where the decision is of great significance for the person affected, it will not be right to infer absence of prejudice easily.
[102] Applying those principles, Elias J was satisfied that there was nothing in either document which was of surprise to the plaintiff, and to which he lacked the opportunity to respond.
[103] In Wolf v Minister of Immigration,61 Wild J was concerned with an appeal against a decision of the Deportation Review Tribunal, on the grounds that it was erroneous in point of law. One of the grounds on which the appeal was allowed was that the Tribunal had made certain inferences (adverse to Mr Wolf) from the evidence before it, without putting its concerns, and the inferences it was considering drawing, to Mr Wolf when he gave evidence before the Tribunal.62 Wild J held:63
I consider it was a breach of natural justice – unfair, of the [Tribunal] to draw an adverse inference against [Mr Wolf], and on a critical point, without alerting him to it, and giving him an opportunity to counter it.
[104] I accept, first, that there is no evidence to suggest that the notes and observations were disclosed to anyone other than one member of the Panel, or that they influenced either member of the Panel. Secondly, I accept Mr Taylor’s submission that there is nothing in the notes and observations which would have been a matter of surprise to Ms Simes: the Agency’s views were well known to her as a result of her extensive correspondence and other communications with the Agency. Further, I accept Mr Taylor’s submission that Wolf does not assist Ms Simes. It is clear from Wild J’s judgment that the matter not disclosed to Mr Wolf was ―a critical point‖. I accept that it could not be said that the notes and observations concerned ―critical points‖ not already known to Ms Simes.
[105] I would hesitate to accept Mr Taylor’s likening the notes and observations to preparation notes made by a Judge’s clerk. There is an important distinction here in that the Adviser was intimately connected with the Agency’s earlier dealings with
Ms Simes. A Judge’s clerk would not have had such a connection with one of the
61 Wolf v Minister of Immigration [2004] NZAR 414 (HC).
62 See [68]–[69].
63 At [71].
parties to a proceeding. However, given my findings that the notes and observations cover matters already well known to Ms Simes, and that they do not cover ―critical points‖ not known to her, I am not required to reach a decision on Mr Taylor’s submission, that in principle, they were not required to be disclosed. I am satisfied that Ms Simes cannot succeed on this aspect of her claim of a breach of natural justice.
C: Failure to disclose other decisions
Submissions
[106] The Review Panel said that cancellation should be continued because that would be consistent, in terms of proportionality, with decisions relating to other providers.64 Mr Gorringe submitted that the ―other decisions‖ had not been made known to Ms Simes before, during, or since the hearing, and she had not been invited to make any submissions in respect of those other decisions as they related to her case. He also submitted that the other decisions were pivotal to the decision to uphold the cancellation.
[107] Mr Taylor submitted that the other decisions were not pivotal. He submitted that the Review Panel had found that Ms Simes had failed to provide service of a standard acceptable to the Agency and that a remedy was needed. He further submitted that the Review Panel had identified and considered alternatives, and concluded that there was no available practicable alternative. He submitted that it was only then that the Review Panel referred to the other decisions; after the decision to continue cancellation was confirmed, and by way of a cross-check. From the bar, Mr Taylor referred to three cancellation cases of which he was aware. It is not clear to me whether it can be assumed that those were the other cases the Review
Panel had in mind.
64 Review Panel decision at [76].
Discussion
[108] I am not able to downplay the possible significance of the other decisions in the manner submitted for by Mr Taylor. The Review Panel said:65
In conclusion, the Panel considers that it has given due regard to the issue under consideration, the points raised in Counsel’s written and oral submissions presented on behalf of Ms Simes in response to the [Consideration Panel’s] decision, and Ms Simes own submissions. In particular, the Panel is aware of the implications that a continuation of cancellation of listing approvals has both at an access to justice and at a personal level. However, the Panel considers that a continuation of the cancellation of listing approvals would be consistent in terms of proportionality with other decisions in relation to other providers – particularly given the nature of the complaints and concerns raised about the standards of service provided to clients.
[109] I conclude that the reference to other decisions was an important factor in the Review Panel’s decision to uphold cancellation. I am satisfied, in the circumstances, that natural justice required that the Review Panel disclose what other decisions it was measuring Ms Simes’ cancellation against, and that she be given the opportunity to make submissions as to whether her circumstances were less serious, and did not, therefore, require cancellation. Accordingly, I find in favour of Ms Simes on this aspect of her breach of natural justice claim.
Unreasonableness/disproportionality
Submissions
[110] Mr Gorringe submitted that the decisions of the Consideration Panel to cancel Ms Simes’ listing approvals, and of the Review Panel to uphold the cancellations, were unreasonable, or disproportionate.
[111] Regarding unreasonableness, Mr Gorringe submitted that in the present case the stringent test of establishing that the decisions were perverse, or irrational, or such that no reasonable body of persons could have arrived at,66 should not apply.
He submitted that in this case, a less stringent test applies, which is whether the
65 At [76].
decision was unreasonable in the circumstances. He set out the factors which, he submitted, pointed to cancellation not being reasonable in the circumstances.
[112] Mr Taylor submitted that the stringent Wednesbury/Woolworths test applied, and that a lesser test had only been applied in cases involving human rights (including immigration cases). Mr Taylor also submitted that, on any test, Ms Simes could not succeed on the facts.
Discussion
[113] Mr Gorringe did not seek to argue that the Panels’ decisions were unreasonable in the Wednesbury/Woolworths sense. They could not be seen as perverse or irrational in that sense. But I accept Mr Taylor’s submission that this case does not fit into the group of cases where a less stringent test has been applied. In cases where fundamental human rights are involved (the prime example being cases under the NZBORA or the Human Rights Act 1993) the Courts have tended to
adopt a ―structured proportionality‖ test.67 That test has not been extended beyond
those cases, as discussed by Baragwanath J in Mihos v Attorney-General.68
[114] I have concluded that even if a less stringent test is applied, I still could not find the Panels’ decisions to be unreasonable. While there may be challenges to the Panels’ assessment of the standard of Ms Simes’ services, and the process by which the Panels reached their decisions, I do not accept that the issues of concern to the Panels could not reasonably justify cancellation.
Summary of conclusions
[115] I have found that:
(a) both Panels failed to take into account a relevant factor, namely, the audit report; and
67 As devised by Dickson CJC in Reference re Public Service Employee Relations Act (Alberta)
[1987] 1 SCR 313.
68 Mihos v Attorney-General [2008] NZHC 2207; [2008] NZAR 177 (HC) at [82]–[97].
(b) the Review Panel was in breach of natural justice in failing to provide Ms Simes with references to the other decisions to which it referred when deciding whether cancellation of her listing approvals should be upheld.
[116] In the circumstances, the appropriate course is to remit the matter back to the
Review Panel for reconsideration, in the light of this judgment. I so order.
[117] Costs should follow the event. Ms Simes is entitled to costs on a 2B basis, together with disbursements as fixed by the Registrar.
Andrews J
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