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High Court of New Zealand Decisions |
Last Updated: 29 January 2018
For a Court ready (fee required) version please follow this link
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2011-485-1562
CIV 2011-485-2052 [2012] NZHC 3229
UNDER The Human Rights Act 1993
BETWEEN THE ATTORNEY-GENERAL ON BEHALF OF THE MINISTRY OF HEALTH
Appellant
AND IDEA SERVICES LIMITED (IN STATUTORY
MANAGEMENT) Respondent
Hearing: 30 April 2012-4 May 2012
Additional submissions on 31 May and 18 June 2012
Memorandum of counsel of 26 November 2012
Counsel: M Coleman and G J Robins for the Appellant
A S Butler, O C Gascoigne and P Barnett for the Respondent
Judgment: 3 December 2012
JUDGMENT OF MALLON J,
MS J GRANT MNZM AND MS S INESON QSM
Contents
Overview ............................................................................................................................................ [1] The facts ............................................................................................................................................. [8] What is a disability? ....................................................................................................................... [8]
An intellectual disability................................................................................................................. [9] Disability Support Services .......................................................................................................... [10] Day services ................................................................................................................................. [11] Funding for disability services ..................................................................................................... [13] Appropriations.............................................................................................................................. [19] Present funding responsibilities as between government bodies .................................................. [22]
The MOH funder/provider arrangements ..................................................................................... [24]
The contract with IDEA Services.................................................................................................. [29] The contract with NASC ............................................................................................................... [33] Back on budget ............................................................................................................................. [34] The MOH’s decision ..................................................................................................................... [36] Explanation for the SMT decision ................................................................................................ [38] Financial effect of SMT decision .................................................................................................. [42] Preliminary issue no 1: Breach of contract ................................................................................... [44]
THE ATTORNEY-GENERAL ON BEHALF OF THE MINISTRY OF HEALTH V IDEA SERVICES LIMITED (IN STATUTORY MANAGEMENT) HC WN CIV 2011-485-1562 [3 December 2012]
The issue ....................................................................................................................................... [44] The Tribunal’s decision................................................................................................................. [45] MOH submissions......................................................................................................................... [50] IDEA Services submissions .......................................................................................................... [53] Our assessment ............................................................................................................................. [55] Preliminary issue no 2: Who is the claim made against ............................................................... [58] The issue ....................................................................................................................................... [58] The Tribunal’s decision................................................................................................................. [59] The submissions............................................................................................................................ [61] Our assessment ............................................................................................................................. [65] The pleading ................................................................................................................................. [70] Preliminary issue no 3: did the MOH have funding responsibility?........................................... [75] The issue ....................................................................................................................................... [75] The Tribunal’s decision................................................................................................................. [76] Submissions .................................................................................................................................. [77] Consideration given to who should have funding responsibility – pre the NZPHD Act ............... [78] Funding responsibilities post the NZPHD Act.............................................................................. [91] Summary ..................................................................................................................................... [121] Discrimination ............................................................................................................................... [124] The statutory test for discrimination .......................................................................................... [124] The relevant comparison ............................................................................................................ [126]
A) The Tribunal’s decision .......................................................................................................... [128] B) The submissions ..................................................................................................................... [129] Our assessment ........................................................................................................................... [134] Differential treatment on the basis of age................................................................................... [141] A) The Tribunal’s decision .......................................................................................................... [142]
B) Submissions ........................................................................................................................... [143]
C) Our assessment ...................................................................................................................... [146] Material disadvantage................................................................................................................ [160] A) The legal test .......................................................................................................................... [160] B) The Tribunal’s decision .......................................................................................................... [162] C) Submissions ........................................................................................................................... [163] D) Our assessment...................................................................................................................... [164]
Justification.................................................................................................................................... [165] The statutory test ........................................................................................................................ [165] Was the SMT decision “prescribed by law”? ............................................................................. [167] A) The issue ................................................................................................................................ [167] B) The Tribunal’s decision .......................................................................................................... [168] C) The submissions ..................................................................................................................... [171] D) Our assessment...................................................................................................................... [174] Reasonable and justified............................................................................................................. [194] A) Deference ............................................................................................................................... [196] Did the SMT decision serve a purpose sufficiently important to justify curtailment of the right to be free from discrimination? ........................................................................................................... [206] Was the SMT decision rationally connected to its purpose?....................................................... [218] Did the SMT decision impair the right to be free from age-related discrimination no more than reasonably necessary for its purpose? ....................................................................................... [222] Was the SMT decision in due proportion to the importance of its objective? ............................. [232]
Result on Part 1A claim ................................................................................................................ [236] Costs appeal ................................................................................................................................... [237] Introduction ................................................................................................................................ [237] Discretion to award costs ........................................................................................................... [239] The Tribunal’s decision............................................................................................................... [242] Consistency................................................................................................................................. [256] Were actual costs reasonable...................................................................................................... [261] High Court scale costs ............................................................................................................... [266] Increased costs ........................................................................................................................... [269] Conclusion.................................................................................................................................. [271] Costs on this appeal....................................................................................................................... [273]
Overview
[1] Around 31,000 people in New Zealand suffer from an intellectual
disability.1
Their disability means that they require support to do everyday tasks. This
includes support to do activities in the community, such
as to take a trip to
the library or the local swimming pool. This case is concerned with the
decision of the Ministry of Health
(“the MOH”) not to fund the
support needed for community activities (called “day services”) for
people with
an intellectual disability who are over the age of 65
years.2
[2] The respondent (“IDEA Services”) is a provider of those
day services. It says that the MOH’s decision
discriminated against those
affected by the decision on the grounds of age in breach of Part 1A of the Human
Rights Act 1993 (“the
HRA”). The case is before us by way of appeal
from the Human Rights Review Tribunal. The Tribunal found that the decision
breached
Part 1A. It held that the decision discriminated on the grounds of
age, was not prescribed by law and was not justified. The Attorney-General
appeals against that decision.
[3] The MOH’s decision arose in the context of split responsibility for the funding of services to people with an intellectual disability. One of the funders is the Ministry of Social Development (“the MSD”). The MSD is responsible for funding vocational services, which is funding intended to assist people with disabilities to engage in work or work training. As part of that funding, the MSD provides funding to support people with an intellectual disability to engage in community activities. The community activities funding is available from the MSD even if a person’s disability means that they have no prospect of ever engaging in work. The MSD funding ceases, however, when a person turns 65 years (at which point, as with the rest of the New Zealand population who turn 65, they are eligible for government
superannuation).
1 Ministry of Health Health Indicators for New Zealand with Intellectual Disability (Ministry of Health, September 2011). This may slightly understate the number because the study does not appear to include the entire New Zealand population.
[4] For some time, once a person with an intellectual
disability turned 65, at least some of them would continue to receive
funding for community services. Sometimes this funding continued to be
provided by the MSD even though under the MSD’s
criteria they were no
longer eligible. However in other cases this funding came from the MOH. An
issue in this case is the extent
to which the MOH (or its predecessors) ever had
responsibility to provide this funding and the extent to which it actually
provided
this funding. The MOH says that it was not given that responsibility
by its Minister or Cabinet and the extent to which it provided
that funding was
ad hoc and inconsistent. IDEA Services says that the MOH has
responsibility and that its consistent
practice and policy was to provide the
funding.
[5] In any case, in March 2005 a decision (the “SMT decision”) was made by a team of senior managers within the MOH (“the SMT”) that no further funding for day services was to be provided to any person with an intellectual disability who was exiting MSD funding because they had turned 65 (the “affected group”).3 The decision was made in response to MOH disability support services overspending by
$15.7 million in the 2003/2004 financial year and a projected budget overspend for disability support services of $30 million for the 2004/2005 financial year. The MOH says it was made because the senior managers believed that the MOH did not have the funding responsibility for these services. Following that decision, the
funding for day services for the affected group
ceased.4
[6] The principal issues in this case are:
(a) some preliminary issues: whether the SMT decision breached the contract between the MOH and IDEA Services; whether it is only the actions and responsibilities of the MOH (rather than other government agencies or the executive) that are relevant to the claim that Part 1A of the HRA is breached; and whether the MOH had funding
responsibility for day services for the affected
group;
(b) whether
the SMT decision was discriminatory: is the appropriate comparator group
only other groups which MOH has responsibility to fund or is it those funded by
MSD who are
under the age of 65; is there discrimination on the basis of age if
the MOH made the decision because it understood that it did not
have
responsibility to fund day services for those who were no longer
receiving MSD funding because they had turned 65;
and is there material
disadvantage to the affected group if the funding is stopped;
(c) whether the SMT decision was justified: whether the
decision was “prescribed by law” because it was made under the New
Zealand Public Health and Disability
Act 2000 (“the NZPHD Act”); if
budget constraints was the reason for the decision should the Court defer to
whether the
decision was a reasonable and justified limit on the right to be
free from discrimination on the ground of age; and is the process
by which the
decision was made relevant to the level of deference appropriate.
[7] The appeal is against the Tribunal’s finding of breach, the
declaration it made that there was a breach, and its decision
to award costs of
$165,000 in favour of IDEA Services. Other remedies are sought by IDEA
Services. These have been referred to
the High Court for determination in the
event that the appeal is dismissed.
The facts
What is a disability?
[8] Disabilities may be physical, sensory, psychiatric, intellectual or age-related.5
A person may be considered to have a disability if they have one or more of
these disabilities, which is likely to continue for a
minimum of six
months,6 and which
5 That is, a physical, intellectual or psychiatric condition related to the on-set of age.
results in reduced independent
functioning to the extent that ongoing support is
required.7
An intellectual disability
[9] Intellectual disability is one kind of disability.8 There is a spectrum of disability within those who meet eligibility for government funded support because of their intellectual disability. However, as discussed in evidence before the Tribunal, in general terms a person with an intellectual disability is less able to self- motivate and is therefore dependent on others to organise their lives for them, is less likely to be financially independent, is restricted in mobility (being largely dependent on others to provide transport for them or to help them with public transport), and have difficulty in carrying out everyday activities, such as reading, writing, toileting
and socialising, without support.9
Disability support services
[10] Disability support services are services which are provided to people with disabilities, for their care, or to support or promote their inclusion or participation in society and their independence.10 Examples include personal care services (e.g. washing and dressing), domestic services (e.g. cooking and cleaning), rehabilitation services (e.g. speech therapy), behavioural support services (e.g. crisis intervention)
and day services (the services which are at issue in this
case).
which is similar, but not identical, to that set out in the Diagnostic and Statistical Manual of Mental Disorders, 4th Ed, (DSM-IV). The criteria for an intellectual disability as set out in the Diagnostic and Statistical Manual of Mental Disorders, 4th Ed, (DSM-IV) is: (a) the person must have an IQ of 70 (+/-5) or below, placing them at or below the 2nd percentile of the population (i.e. 98 percent or more of the general population are more able than them, as assessed on culturally and age-appropriate standardised intelligence tests); (b) The person’s disability must have first occurred before the age of 18 years; and (c) The person must have deficits in two or more adaptive functioning domains listed as communication, self-care, home living, social skills, community use, self direction, health and safety, functional academics and work.
9 There was evidence before the Tribunal about this from Dr Olive Webb.
10 New Zealand Public Health and Disability Act 2000, s 6.
Day services
[11] Day services, sometimes referred to as day activity programmes or
services, or community participation services,11 are a subset of
disability support services. They are activities which may provide assistance to
the person in recreation and leisure,
socialisation, daily living skills,
education and learning, exercise and fitness and vocational and work
experience.12 They may teach skills or provide stimulating activity
which is seen as contributing to the quality of life, wellbeing, dignity, and
life purpose of those with an intellectual disability.13
[12] The day services that are usually funded tend to be group
activities. They are typically provided in two sessions a day,
morning and
afternoon. There are some specific programmes and outings for those who are
unable or do not want to take part in all
ten sessions per week.
Funding for disability services
[13] The current “umbrella”14 legislation under which disability support services are provided is the NZPHD Act. The purposes of that Act include providing funding for “disability support services” in order to pursue various objectives.15 Disability
support services, as defined by the Act, includes the day services at
issue here.16
12 This description is the one provided in the service specification for IDEA Services in the
Southern region, for example.
IHC makes boarding arrangements and provide ongoing support]) or supported independent
living.
14 Ministry of Health v Atkinson [2012] NZCA 184, [2012] 3 NZLR 456 at [6].
15 Section 3(1).
16 Section 6 defines “disability support services” as follows:
“disability support services includes goods, services, and facilities—
(a) provided to people with disabilities for their care or support or to promote their inclusion and participation in society, and independence; or
(b) provided for purposes related or incidental to the care or support of people with disabilities or to the promotion of the inclusion and participation in society, and independence of such people.”
[14] Under the NZPHD Act, the objectives to be pursued from the public
funding include achieving for New Zealanders:17
(i) the improvement, promotion, and protection of their
health;
(ii) the promotion of the inclusion and participation in society and
independence of people with disabilities;
(iii) the best care or support for those in need of
services;
[15] These and the other objectives “are to be pursued to the
extent that they are reasonably achievable within the
funding
provided”.18 Funding is provided to persons who arrange
or provide services pursuant to Crown funding
agreements.19
[16] The Act provides that the Minister of the Crown who is responsible for disability issues must determine a strategy for disability support services. This is called “the New Zealand Disability Strategy”. This strategy is to provide the framework for “the Government’s overall direction of the disability sector in
improving disability support services”.20 It can be
amended and replaced at any
time. The Minister is required to make the strategy publicly available and
to present it to the House of Representatives. The Minister
is also required to
report each year on progress in implementing the
strategy.21
[17] The New Zealand Disability Strategy was formulated in April 2001.
The foreword from the Minister for Disability Issues
said that “The
Government [was] committed to the New Zealand Disability Strategy”. The
Strategy included the following:
Summary
...
Underpinning the New Zealand Disability Strategy is a vision of a fully
inclusive society. New Zealand will be inclusive when people
with impairments
can say they live in:
17 Section 3(1)(a).
18 Section 3(2).
20 Section 8(2).
21 Section 8(4).
‘A society that highly values our lives and continually enhances our
full participation.’
Achieving this vision will involve ensuring that disabled people have
a meaningful partnership with Government, communities
and support
agencies, based on respect and equality. Disabled people will be integrated
into community life on their own terms,
their abilities will be valued, their
diversity and interdependence will be recognised, and their human rights will be
protected.
Achieving this vision will also involve recognising the principles
of the Treaty of Waitangi.
...
Vision of a non-disabling society
...
Disabled people are treated equitably, regardless
of gender, age, cultural background, type of impairment or
when and
how the impairment was acquired.
...
[18] The “Government Objectives” included the
following:
...
Objective 8:
Support quality of living in the community for disabled people
Provide opportunities for disabled people to have their
own homes and lives in the community.
Objective 9:
Support lifestyle choices, recreation and culture for disabled
people
Create and support lifestyle choices for disabled
people within the community and promote access to recreation and cultural
opportunities.
...
Appropriations
[19] Appropriation of public money occurs each year via Appropriation Acts. At the time the SMT decision was made “Vote Health” had an appropriation for “Disability Support Services – National” of $666,844,000 for the 2004/05 year with supplementary funding of $46,072,000 later obtained. The appropriations were derived from a document “The estimates of Appropriations for the Government of
New Zealand for the year ending 30 June 2005”. That document described
the scope of the appropriation as being for the “[f]unding
of disability
support services from District Health Boards and other Disability Support
Service Providers.” It did not otherwise
breakdown how that funding was
intended to be applied.22
[20] The estimates document included a “Statement of Objectives and
Trends”. Under that heading “Key Government
Goals” were set
out as follows:
Strengthen national identity and uphold the principles
of the Treaty of Waitangi – the Ministry and District Health Boards
(DHBs) will recognise the principles of the Treaty of Waitangi in its policies
and
activities.
Restore trust in Government and provide strong social
services – the Ministry and DHBs will work to ensure the
public has confidence in the health and disability system through
efficient,
effective and safe services, which improve health and participation
outcomes.
Reduce inequalities in health, education,
employment and housing – the Ministry will maintain and strengthen
its focus on reducing inequalities in health status across population
groups.
Improve New Zealanders’ skills – the
Ministry and wider sector will work to further develop the health and disability
support workforce, its capability and
skills.
[21] It also stated the ultimate outcome Vote Health aimed to
achieve was “Healthy New Zealanders”. It
then set out
“Contributing Outcomes” which included “Equity and
Access” with the explanation that:
New Zealanders in similar need of services have an equitable opportunity to
access equivalent services and resources are allocated
in a manner that reduces
inequity of outcomes.
Present funding responsibilities as between government
bodies
[22] The funding of day services for those with disabilities is
split between different government bodies as
follows:
(a) The
Accident Compensation Corporation (the ACC) is the responsible funder for
those with disabilities arising from
a personal injury covered by the
accident compensation legislation who need day services.
(b) District Health Boards23 are responsible for funding day
services for:
(i) those whose need is due to aging (they are generally, but not
entirely, over 65 because the eligibility is on the basis
of need due to aging
not on the basis of any specific age); and
(ii) those with psychiatric illnesses or addiction issues.
(c) The MSD24 is responsible for funding “community participation services” (which are similar to day services) as part of its funding of “vocational services” for those with disabilities who are aged between
16 and 65. (This is discussed further below).
(d) The MOH is (and accepts that it is) responsible for
funding day services for people with intellectual disabilities:
(i) who were deinstitutionalised as part of a formal
deinstitutionalisation plan;25
(ii) who are subject to the Intellectual Disability
(Compulsory
Care and Rehabilitation) Act 2003 (“the IDCCR
Act”);26 and
24 Previously the Department of Work and Income (or DWI or WINZ) and, before that, the
Department of Social Welfare (DSW).
these people were in institutional care, the Health sector was responsible for the provision of day services. In 1993 the Government decided that the Health sector would have responsibility for funding day services for intellectually disabled people who were “deinstitutionalised”.
(iii)
who have very high and complex needs similar to those under the IDCCR Act, but
who are not subject to that Act (whom the
MOH refers to as “civil
clients”).
[23] In addition the MOH has funded day services for others with disabilities, including those with intellectual disabilities who are not in the above categories. As the claim relates to funding for day services for people with intellectual disabilities, there is limited information before us about the extent to which this has occurred and
the reasons for that in relation to disabilities other than intellectual
disabilities.27 The
extent to which this has occurred in relation to people with intellectual
disabilities and the reasons for this are in dispute in
this case. It is
discussed further below.
The MOH funder/provider arrangements
[24] In accordance with the NZPHD Act, disability services are
provided to people by providers who are funded by the
MOH pursuant to contracts
entered into by the MOH and each provider. There are approximately 800
providers of disability services
to people with disabilities funded by the MOH
and 93 providers28 for the provision of day services to disabled
people.
[25] IDEA Services is one such provider. It is a subsidiary of IHC New Zealand Incorporated (IHC). IHC is the largest provider in New Zealand of services to people who have an intellectual disability.29 It is a not for profit organisation with a history stretching back sixty years. IHC provides services in its own name and with
its own funding, such as its advocacy and volunteer services, and it
provided a range
28 As at December 2011.
with intellectual disabilities. However there is information that at some point IDEA Services provided 58 per cent of MSD funded community participation services for people with intellectual disabilities and that, of 244 people over the age of 65 years receiving MOH funded day services, IDEA Services was the provider for 161 of them. But the scope and accuracy of these figures is not clear.
of government funded disability support services through its subsidiary
companies, one of which is IDEA Services.
[26] In order to receive funding, a person with an intellectual
disability is assessed by a Needs Assessment Service Co-ordination
Organisation
(referred to as a “NASC”). There are 15 NASCs.30 They
are independent organisations which assess a disabled person’s needs and
prioritises those needs, and identify and co-ordinate
available resources to
meet the prioritised needs. If the person meets the eligibility criteria for a
MOH funded service they are
referred to a provider for that service.
[27] This is represented diagrammatically as
follows:
Ministry of Health
(Funder)
MOH/NASC Contract
MOH/Provider
Contract
Needs Assessment/Service Co-ordination
Refer for MOH-funded service
Service Provider
[28] A provider with a contract with the MOH will not necessarily receive
any funding. The funding depends on whether the provider
has actually provided
disability support services. For example, of the 113 contracts the MOH has in
place with the 93 providers
of day services,31 15 of these are
“zero volume”.
The contract with IDEA Services
[29] IDEA Services provides day services under a contract with the MOH. The contract is made up of a Heads of Agreement (between IDEA Services and Her
Majesty the Queen in right of her Government in New Zealand acting by
the MOH),
30 Seven are non-government organisations, one is a private company and seven are DHB owned.
31 Some providers have more than one contract.
four service schedules covering different regions throughout New
Zealand32 and variations to the agreement (extending the expiry date
of the agreement and setting price components for the services).
[30] Under the Heads of Agreement:
(a) “[MOH] agree to purchase and [IDEA Services] agree to
provide
Services on the terms and conditions set out in the Agreement
...”
(b) IDEA Services agrees to claim payments in respect of
“Services”
provided to “Eligible Persons”.
(c) Services are defined as meaning the services in the
service specification schedules.33
(d) An Eligible Person is defined as meaning any individual who
“is in need of the Services as determined by a DHB or
DHB/MOH authorised
Needs Assessment Co-ordination Service” (i.e. a NASC) and who meets the
essential eligibility criteria and
other criteria.
[31] At the time of the MOH’s decision at issue here, the service
specification under the IDEA Services contract for
each region provided
under the heading “Community Day Activity Programmes”:
DSD Philosophy
The aim of the Disability Services Directorate is to build on the vision
contained in the New Zealand Disability Strategy (NZDS)
of a fully
inclusive society. New Zealand will be inclusive when people with impairment
can say they live in:
‘A society that highly values our lives and continually enhances our full
participation.’
With this vision in mind, disability support services aim to promote a person’s quality of life and enable community participation and maximum independence. Services should create linkages that allow a person’s needs to
32 Largely reflecting the regions covered by the former Regional Health Authorities (“the RHAs”).
be addressed holistically, in an environment
most appropriate to the person with a disability.
Disability support services should ensure that people with impairments have
control over their own lives. Support options must be
flexible, responsive and
needs based. They must focus on the person and where relevant, their family and
whanau, and enable people
to make real decisions about their own lives.
1. Definition And Principles
The MOH wishes to purchase community day activity services for people with an
intellectual disability.
The following service principles will be incorporated in the provision of
support services by the Provider under this service specification:
Service users are individuals who have the inherent
right to respect for their human worth and dignity
Service users have the right to live in and be part
of the community
Service users have the right to realise their
individual capabilities for physical, social, emotional and intellectual
development
Service users have the same rights as other members
of society to services, which support their attaining a reasonable quality
of
life
Service users have the right to make choices
affecting their lives and to have access to information and services in a manner
appropriate to their ability and culture
Service users have the same rights as other members
of society to participate in decisions which affect their lives
Service users have the same rights as other members
of society to receive services in a manner which results in the least
restriction of their rights and opportunities
Service users have the right to pursue any grievance
in relation to services without fear of the services being discontinued
or any
form of recrimination
2. Service Objectives
2.1 General
Day activity programmes will assist integration of service users into the
community, enable service users to have regular meaningful
social contact and
improve their personal skills through provision of stimulating
activities.
...
3. Service Users
Day activity services as described in this specification are for people with
intellectual disabilities who have been referred to the
Provider for service by
a Needs Assessment Service Co-ordination Service (NASC) provider contracted by
the MOH.
4. Access
4.1 Inclusions
Access to the day services described is by referral from the NASC Service
following a formal individual needs assessment process.
This specification
relates particularly to the purchase of Day Activity programme services for
people living in community settings.
4.2 Exclusions
Excluded from services under this Specification will be any
individual whose primary need for support is not as a result
of an intellectual
disability or an individual who has a claim accepted by ACC or funded by
Department of Work and Income NZ for
vocational services.
4.3 Service Access
4.3.1 Entry
The NASC provider will make referral of a person requiring Day Activity
programme services to the Provider. The referral will:
Be for a specific number of half days of Day Activity
programmes services per week
Be in the format to be agreed between the NASC provider and
the
MOH
Provide all the information required for the Provider to
commence delivery of the Day Activity Programme Service
It is expected that the Provider will be able to exercise a degree of
flexibility within the scope of the approved level of half days
as service
user’s needs fluctuate week by week. However any permanent revision to
the half days of Day Activity service delivered
by the Provider must be
authorised by the NASC Provider.
4.3.2 Exit
People may be discharged from the service if the service no longer meets their needs, or they reach retirement age and wish to retire, or move into other forms of day activity services. Any possible discharge will be managed by the NASC provider. It is expected that subject to the Health Information Privacy Code, appropriate information will be made available to the alternative service provider so that a smooth transition will be made into alternative services.
4.4 Prioritisation criteria
In order to equitably manage available resources the MOH may from time to
time advise NASC Providers (and Providers of Day Activity
services), of
guidelines for maximum hours per week of Day Programmes available for people
with intellectual disability, and protocols
for prioritisation and organisation
of any “waiting list” which may be required.
[32] The service specification goes on to set out “service
components”. This includes setting out the types of activities
that may
be part of day services. This includes “Recreation and
Leisure”, “Socialisation”, “Daily
Living
Skills”, “Education and Learning”, “Exercise and
Fitness” and “Vocational and Work
experience”. Under that
last heading, the service specification states:
Vocational and Work experience
For service users who would clearly benefit from such opportunities
provided that:
all avenues for accessing vocational and work
related services through Department of Work and Income NZ funding have been
thoroughly researched and have proved to be unavailable
the Provider does not receive funding from both
Community
Funding Agency and the MOH for the same programme components
The contract with NASC
[33] The MOH also has in place contracts with NASCs. The MOH
issues guidelines to NASCs in respect of those contracts.
At the time of the
MOH decision that is challenged in this proceeding, the contracts provided that
the NASC should “work within
the funding and policy boundaries of the
funder when allocating public resources”.
Back on budget
[34] The evidence is that by mid-2004 it had become clear that the MOH had “overspent” in respect of disability support services. For the 2003/2004 financial year, total expenditure exceeded funding by $15.7 million. Also, a $30 million overspend was projected for the coming year. Between July 2004 and March 2005, the MOH put in place a work programme called “Back on Budget” to address
overspending and projected expenditure growth. The initiatives taken to
address this included:
(a) closer monitoring of NASC allocation of services;
(b) more rigorous analysis of services and the clients to whom they were
provided, so the MOH could better understand demand growth
issues;
(c) closer working relationships with the newer NASCs to stress their
accountability to the MOH; and
(d) analysis of growing discretionary funding expenditure by NASCs and
correction of trends to use it for purposes unintended by the
funder.
[35] The Back on Budget programme seems to have been effective. As
matters transpired Disability Support Services finished the
financial year 30
June 2005 under budget by $1.077 million.
The MOH’s decision
[36] In the context of the Back on Budget programme, and in
response to clarification sought by IHC (discussed below)
the SMT considered
the funding of day services for people aged over 65 at a teleconference on 21
March 2005. The minutes of that
telephone conference call record the
following:
Vocational Services for People in IHC over 65 years
Note: Further work needed to be carried out about this
issue as DSD [Disability Support Directorate] does not have an up-to-date
policy
on this matter.
Agreed: No new referrals to be accepted. Only services
already in place to continue until our position is confirmed.
[37] The “agreement” of the SMT was that NASCs were not to make new referrals for day services for people in IHC’s care who were over 65 years. This was applied to all people with intellectual disabilities over 65 years regardless of whether IHC/IDEA Services was the provider. This meant that providers (including IDEA
Services) no longer received funding for day activities for people with
intellectual disabilities, once they were no longer eligible
for funding from
MSD for vocational services because they had turned 65. The MOH
“grandparented” those who prior to
March 2005 received MOH funded
day services on exit from MSD funded community participation services. It
regarded these as “over
referrals”. It continued the funding of
those who had been over-referred because this was “standard Government
practice”.
Explanation for the SMT decision
[38] There is no evidence of any briefing to the SMT before the decision
was made on 21 March 2005. However an internal MOH briefing
to a member of the
SMT dated 5 April 2005 sets out a view from within the MOH as to the historic
position for funding these services.
It was as follows:
Background
Vocational services are not routinely purchased by the Ministry of Health
(MOH) but are purchased alongside day services of a non-vocational
nature on an
individual and highly variable basis. The primary responsibility for purchasing
services that enable people to progress
towards workforce participation has been
considered to rest with the Ministry for Social Development (MSD).
However, this has not been the practice for people who have previously lived
in long-stay residential institutions. In September
2003 a snapshot of day
services indicated that 457 users of day services had been resettled following
deinstitutionalisation. The
approval of such funding was necessary to ensure
that people received at least comparable levels of support when they moved from
residential institutions to community-based services.
People who have not previously lived in one of the 14 residential
institutions that have been closed since the late 1980’s have
also been
funded, often on a highly variable basis, by the Ministry of Health.
Such practices have emerged in acknowledgement
of the fact that MSD funded
services are not always available, and when available, are not always
able to provide adequate
support to people with higher levels of need.
Custom and Practice
While the official position of DSD is that the MOH only routinely purchases day services for people who have relocated from long-stay residential facilities to the community, it is clear that the MOH and NASCs have established numerous precedents by funding a variety of day services for people who have not previously lived in residential institutions. Around
1550 users of MOH funded day services accessed 127 funded services in
September 2003.
The September 2003 snapshot found that approximately 70% of users of day
services funded by MOH had not been resettled as a result
of
deinstitutionalisation. Intellectual disability was also identified in the
snapshot report as the population group that represented
the “vast
majority of the clients” using MOH funded day services.
A common justification for MOH funding of day services is that gaps in the
delivery of vocational services have created a supply shortage
that places
pressure on the residential service provider when residents are unable to gain
access to a specialist vocational service.
In such cases, MOH service managers
may have encouraged NASCs to seek alternative solutions and in some instances
apparently directed,
NASCs to fund day service solutions from their
discretionary budgets.
...
Access
...
In the absence of operational policy, service providers have interpreted the
official position of MOH from informal communications
received from Ministry of
Health employees. Although operational policy has not been defined, it is
reasonable to assume that the
sector will insist that future access should be
based on historical precedents that have been set.
A current claim by IHC that the funding responsibility for day service for
people over 65 years of age rests with the MOH could be
considered a liberal
interpretation of a historical practice. Such an interpretation has originated
because of a MOH practice of
funding a variety of alternative day services for
some people over 65 years of age who are no longer able to use MSD funded
services.
[39] There was also evidence before the Tribunal from Ms Woods,34
who was part of the SMT that made the decision. She said that
“[b]udget pressures informed that decision” of the SMT
because the
MOH needed to focus on its core responsibilities “as determined by
Government.” The SMT did not view the
decision as representing a change in
policy or responsibilities within the MOH. She expanded on this in
cross-examination as follows:
[I]t was our understanding that we were not responsible for this group and,
therefore, we needed to actually limit within the bounds
of what we
had
already accepted and were doing, we said no more while the policy and
responsibilities were resolved.
34 The Director of National Services Purchasing in the National Health Board.
...
[40] And later:
Q: And the Ministry of Health understood that [constraining
the community participation opportunities available to
this group] would be a
consequence of its decision to chop that funding?
A: Well, it wasn’t chopping the funding, we just were more
concerned that actually the quality of our 24/7 services,
the residential
services, and more particularly at that time the home and community services,
some of which are provided to people
with an intellectual disability and some
aren’t, that’s people’s physical and sensory [disabilities].
They were
actually in serious financial strife and under massive stress, and we
actually needed to ensure that those services were operating
well and so
there was a compromise.
...
From my perspective the core things I needed to make sure happened is that
those [residential] services were properly shored up and
they were the core
services I had responsibility for, and the Day Services were not the core
services, but in the meantime I was
concerned that we needed to get some policy
work done on that so the agency [responsible] would pick that up and then start
to try
to address that through the policy process and through the Government
budget process.
But I couldn’t, in my own conscience, continue investing money in
services that I didn’t have a core responsibility for
and see other
services fail and risk the quality of care and support to those
individuals.
[41] There was also evidence before the Tribunal from Mr Powell.35 He was the manager of the team within the MOH with responsibility for contracting with NASCs. He said that the decision to stop funding the affected group “was not driven by age”. He said the rationale was that Health should not fund something for which it was not responsible. He said the “over 65” wording was a convenient way to
describe the group that had retired from MSD funded vocational
services.
35 A manager of the Service Access Team for the Disability Support Services Group in the National
Health Board.
Financial effect of SMT decision
[42] The Tribunal summarised the financial effect of the SMT
decision as follows:36
In fact the number of service users whose eligibility to be considered for funding for community participation activities has been affected by the SMT decision is relatively small. At the time of the hearing37 in the Tribunal there had been 105 people who, but for the SMT decision, would have been funded by the MOH notwithstanding having ‘retired’ from the MSD (although we note that of these 15 had ‘exited’ the group, so that the number of people affected by the SMT decision at the date of the Tribunal hearing was presumably 90).
...
For present purposes, however, it is enough to note:
[a] It will take some years before the financial situation
‘matures’; in other words, before a long run pattern of demand for the services settles out. In the short term the analysis is
influenced by (for example) attrition from the group of those
whose funding has been protected by the MOH’s commitment to
de-institutionalised service users, and those for whom the funding
has been
grand-parented;
[b] On any view, however, over the next 20 years the number of people in
the group will almost certainly increase;
[c] Looking at the anticipated picture in 20 years’ time (and again focussing on people with intellectual disabilities) the MOH evidence suggests that the per annum cost of funding the community participation services at issue in this case will be in the region of $8 to $15 million, and most likely around
$12.5 million. The same analysis by Idea Service’s expert (but using
the different inputs he regarded as appropriate) yielded
a range between $7.4
and $8.8 million, although he went on to say that as much as $4.3 million of
that will be faced in any event,
so that he would have put the additional cost
to the MOH at something closer to $4 million in all.
We do not find it necessary to resolve the detail of the issues between the
experts. For our purposes it is enough to know that in
the medium to long run
(particularly when the de-institutionalised and grand-parented service users are
no longer a factor) the annual
cost of providing the community participation
activities that we are concerned with in this case is likely to fall somewhere
between
about $4 million to maybe as much as $15 million (but
36 Idea Services Ltd v Attorney-General [2011] NZHRRT 11 at [40]- [44].
37 That is, for the period between 2005 and 2011.
more likely less than $12.5 million). We agree with the succinct conclusion
of the expert who was called for the MOH, who said that:
“ ... I think there’s so many imponderables, ... what is
important here is to get a sense of the order of magnitude, so
we’re not
talking about hundreds of millions of dollars, were talking somewhere in this
region, I’ve put it at $12 million,
perhaps it’s 8, perhaps its 15,
who knows, it’s in that region, not hundreds of millions of dollars; I
think that’s
the useful part of this.”
In order to put these figures into perspective:
[a] In the 2009/2010 financial year the total budget available to the MOH
for purchase of disability support services from District
Health Boards and all
third party providers was $970 million;
[b] The evidence was that in that financial year the MOH in fact spent
$38.9 million funding community participation activities;
[c] 2,167 service users accessed the services thus funded
(although not all of them were Idea Services-related referrals);
[d] Of the total $38.9 million, $4.3 million was spent on:
[i] Services users who either had high and complex needs or were subject
to a compulsory care order under the Intellectual Disability
(Compulsory Care
and Rehabilitation Act 2003);
[ii] De-institutionalised service users;
[iii] Service users referred by a Needs Assessment and Service
Co-ordination agency “ ... in keeping with historic practice in some
regions ...”
[iv] Service users who retired from MSD-funded community participation
activities at age 65 before the SMT decision;
[e] We were given several different figures for the average cost of
providing community participation activities per service user
per annum, ranging
from $16,170.00 to $17,150.00 (although because the system is needs based and
individually assessed, the actual
cost of providing the funds to individual
users will vary user by user).
[43] The MOH accepts this summary but makes two additional
points:
(a) the above does not refer to the Ministry’s projected overspend of its budget by $30 million. The MOH needed to cut its expenditure by
over three per cent to get back on budget and if those cuts were to be spread
evenly across all services, this would mean cutting
$700,000 from its day
services budget; and
(b) the above costs are only part of the picture because they deal only with those who have an intellectual disability, when there is no principled basis to distinguish them from persons with other disabilities. The MOH’s expert at the Tribunal hearing gave evidence estimating the cost of providing services to all persons with a disability to be more than twice that for providing day services to only persons with an intellectual disability. After one year this would mean costs of $1,958,040 (compared with $864,801) and after twenty years
$28,552,253 (compared with $12,610,578) according to the MOH
expert’s calculations.
Preliminary issue no 1: Breach of contract
The issue
[44] The Tribunal found that, by the SMT decision, the MOH breached its
contract with IDEA Services. The MOH says that the Tribunal’s
finding was
wrong. IDEA Services supports the Tribunal’s decision on this point.
Although this is not a claim for breach
of contract, the parties consider the
issue needs to be addressed because it is relevant to some of the issues that do
need to be
determined in a claim of this kind.
The Tribunal’s decision
[45] The Tribunal saw the issue as providing relevant context. It considered the issue to have relevance to whether the conduct complained of was or was not “prescribed by law” as referred to in s 5 of the NZBORA. It saw it as potentially relevant to the issue of “deference” under the justified limb. It also saw it as relevant
in relation to relief.38
38 Referring here to the relief claimed by IDEA Services under ss 92I(a),(b),(c) and (e) of the
[46] The Tribunal’s decision was that:39
... By entering into the contract the MOH undertook to fund Idea Services to
provide day services, subject only to the exclusions
identified. Service users
over the age of 65 who, by virtue of turning 65, are no longer eligible for
vocational services paid under
the MSD are not excluded. They must therefore
be included.
[47] This conclusion was on the basis that the contract provides
what was included (cl 4.1 of the contract) and what
was excluded (cl 4.2) and
nowhere in the contract is there any suggestion that persons over 65 years are
to be treated any differently.
The Tribunal considered that the reference to
the philosophy and the principles in the service schedule demanded that cl 4 of
the
contract be interpreted as including eligible people who would not otherwise
be funded at all. The philosophy was viewed as governing
the MOH’s
commitment to funding these services.
[48] The Tribunal rejected the submission for the MOH that service users
who are in residential care will have their essential
needs met by community
residential support services funding. It noted that there are different payment
schedules under the contract
for community participation services and
residential support services. It considered that the specification for day
services was
about getting service users out into the community during the day
and does not include home-based daytime activities for service
users. By
contrast it considered that the residential services specification was about
providing support to allow service users
to live in homes in the
community.
[49] The Tribunal concluded this topic by saying “it is our conclusion that the MOH was (and still is) obliged by the contract to fund day services for ex-MSD service users under the care of Idea Services” and that “the SMT decision was a
breach of that
contract”.40
Human Rights Act 1993.
39 Idea Services Ltd v Attorney-General, above n 36, at [74].
40 At [106].
MOH submissions
[50] The MOH submits that the contract creates a relationship between
IDEA Services and the MOH for the potential purchase of
day services only. It
submits that the contract merely establishes that IDEA Services may seek
payment for services delivered
according to the contract service specification
once the NASC process of assessment and service co-ordination has occurred,
including
a proper NASC referral. It submits that the contract does not
stipulate the volume of services to be provided to service users.
[51] It submits that it is the role of government policy, which NASCs are
required to abide by, rather than the contract which
determines whether or not
the MOH is responsible for funding day services for any particular person. An
obligation to fund service
provision under the contract, and IDEA
Services’ entitlement to claim payment for providing services, only
arise
following a NASC assessment and referral to the MOH for day services.
This requirement is contained in the clause describing
who day services are for,
as well as in the clause dealing with access to day services.
[52] It submits its interpretation is supported by the exclusion
provision: that is those who have a claim accepted by ACC or
who are funded by
WINZ (MSD) are excluded. It submits that if the contract conferred a right to
funded services, then anyone who
was not receiving MSD funded services, for
whatever reason, would be entitled to be provided with funded services on the
same basis
that IDEA Services now claims for those over 65. It submits that
the provision is aimed to prevent double funding not to confer
entitlements.
IDEA Services submissions
[53] IDEA Services submits that under the contracts those who are over 65 were “eligible” to be considered for day services. It submits that effectively a new eligibility criterion has been introduced. The specification was not limited to the deinstitutionalised group and it did not exclude people from consideration because
they were 65 or older. Via the direction to NASCs, that has now been
changed. This is said to be a breach of contract.
[54] The MOH response is that the NASC/MOH contract enables the MOH to
adjust referrals based on changes to policies of funding
boundaries, so that
when changes occur it is not necessary to renegotiate 800 provider contracts.
The terms of the NASC contract
are publicly available and known to IDEA
Services. The MOH submits that it is implausible for IDEA Services to expect
that the MOH
cannot alter the volume of services it funds via a direction to the
NASCs about who can be referred for funding.
Our assessment
[55] We agree with the MOH’s submission. The contract does not
commit the MOH to continuing to provide funding for day
services to those who
are not funded by (now) MSD or ACC. Although it is within the Disability
Services Directorate philosophy to
fund these services where there are
“funding gaps”, that philosophy is not converted to a contractual
obligation because
the philosophy is set out in the contract. The philosophy
serves as an explanation to the services that are to be funded under
the
contract.
[56] The principles set out in the contract also do not bear upon whether
the MOH is contractually obliged to fund the day services.
Those are principles
that are said to apply to IDEA Services, as provider. They are about IDEA
Services’ responsibilities,
not the MOH’s commitment to
funding.
[57] The contractual commitment is that if the person meets the eligibility criteria, is not funded by MSD or ACC, and is referred to IDEA Services by a NASC for one of the services in the service specification, then IDEA Services is to provide the service and the government is to pay for it. It would be a breach of contract if the MOH refused to pay for day services provided by IDEA Services to such a person. But it has always been the case that NASCs have been subject to priorities and guidelines as advised to them from time to time. That is stated in the contract and known to IDEA Services. If NASCs are advised that people over 65 years are not to
be referred for day services to providers, the contract between IDEA Services
and the MOH is not breached. For these reasons, we
conclude that the SMT
decision did not breach the contract between IDEA Services and the
MOH.
Preliminary issue no 2: Who is the claim made against
The issue
[58] This issue arises because the MOH says that the Court’s
determination of whether there was a breach of Part 1A must
focus on the
MOH’s actions and not the Government’s actions. It says that it is
not discriminatory for the MOH to stop
funding services that the Government has
not made it responsible to fund. It says that if there is a gap in the funding
for day
services for people aged 65 years or older, Part 1A does not require the
MOH to fill that gap.
The Tribunal’s decision
[59] The Tribunal said that when the SMT made its decision it was acting as a body exercising a public function and Part 1A applied for that reason. It said that although the delivery of government funding will always be through specific ministries and departments “when all is said and done the anti-discrimination standard set by NZBORA and Part 1A of the HRA applies to the executive branch of
‘the Government of New Zealand’”. It
concluded:41
We return to the matter below, but we will say at the outset that there must
be a limit on the extent to which ‘... the executive branch of the
Government of New Zealand ...’ can escape responsibility for an act
or omission that is in contravention of Part 1A of the HRA just because one of
its agencies
considers that another of its agencies should be meeting the
obligation in question.
[60] The Tribunal went on to reach the view that the MOH was “the default funder” of day services for those who exited MSD funded vocational services
because they were 65.42 This meant that the
Tribunal’s decision on a breach of Part
41 Idea Services Ltd v Attorney-General, above n 36, at [25].
42 At one point in the decision this was said to be “because of the contract if nothing else” (at fn
67) but elsewhere the Tribunal refers to the MOH being the “conduit through which Government
1A proceeded to focus on the MOH’s actions or omissions rather than the
MSD’s or
the actions of the executive.
The submissions
[61] IDEA Services’ principal submission is that the
MOH had formal responsibility to fund day services
and that its decision was
discriminatory because its decision created a funding gap for those aged 65 or
over (this is discussed
under the next heading: Preliminary Issue no 3).
However IDEA Services goes on to submit that, regardless of whether the
MOH/Department
had formal responsibility to fund day services for those aged 65
or over, the party to this proceeding is the Attorney-General.
It submits that
it is the executive branch of government that is ultimately responsible for
compliance with the HRA. It submits
that the Attorney- General cannot seek to
justify the MOH’s decision by reference to a more systemic failure by the
executive.
[62] Idea Services submits that Ministry of Health v Atkinson supports this submission.43 In that case the MOH’s policy to exclude family members from payment for the provision of disability support services to their adult children was at issue. IDEA Services submits that the MOH, as the agency which gave effect to the policy, was found to breach Part 1A even though it was not the sole lead agency involved in examining the appropriateness of the policy and there had been Cabinet
and other ministerial involvement.
[63] The MOH submits that Atkinson was quite different to the
present case. It says that in that case the MOH was assigned clear
funding responsibility for the particular disability support services in issue
by Ministers and Cabinet. Further the MOH acknowledged that it had adopted the
policy.
[64] In this case the MOH submits that the Attorney-General was not facing a claim that the executive had breached the HRA. Nor was the claim made against the
Attorney-General, on behalf of the MOH and the MSD. The MOH submits
that, in
funding has flowed” and it fell within the philosophy of the Disability Services Directorate and
the MOH’s wider obligations (at [129] to [131]).
43 Ministry of Health v Atkinson, above n 14.
bringing the claim against the Attorney-General on behalf of the MOH, the
pleading limited the claim to actions or omissions of the
MOH. The MOH further
says that if this had been framed as a claim against the Government as a whole,
the claim would be that there
was a positive obligation on the Government to
fund day services if you can “search around” and find “another
government
agency that will in other circumstances fund them” and
“anti-discrimination law has never stretched that far”.
Our assessment
[65] We agree with the MOH that Atkinson does not raise the same
point as that raised here: namely, whether our assessment of the claim must
focus on MOH’s responsibilities
only rather than the Government’s
responsibilities. In Atkinson there was no suggestion that any other
agency had funding responsibility for the affected group and, consistent with
that, the only
named defendant was the MOH. The Court therefore did not
consider a situation where the responsibility for government
funding of a
particular service was split between government agencies.
[66] However we agree with IDEA Services that a claim for breach of Part
1A of the HRA does not depend only on the funding responsibilities
of the
MOH. It is an “act or omission of a person or body referred to in
section 3 of the New Zealand Bill of Rights Act 1990” to
which Part 1A of
the HRA applies.44 That is, an act or omission of “the
legislative, executive, or judicial branches of the government of New
Zealand” is
in breach if the act or omission is inconsistent with s 19 of
the NZBORA.
[67] Neither party referred us to s 92B(1)(b) of the HRA. That provides that civil proceedings for breach of Part 1A that is “an enactment, or an act or omission authorised or required by an enactment or otherwise by law” is to be brought against the Attorney-General. In our view, this section is consistent with our view that it is the actions of the executive (through its departments and ministries) that are relevant
to whether a breach of Part 1A is
established.45
44 Section 20I and 20J.
[68] In
this case, the MOH made a decision the effect of which is that those
aged
65 years or older (outside the historic categories) will not receive funding. The MOH may have considered it needed to make that decision because it had not been allocated funding responsibility for the services. But if the effect of that decision is that the Government treats those aged 65 years or older differently from those under
65 years, then the MOH’s decision is an act or omission of the
executive which may be discriminatory in breach of the HRA unless
it is
justified (under s 5 of the NZBORA).46
[69] The question that then arises is whether the claim as pleaded was
limited to a claim in respect of the acts and omissions
of the MOH. As was said
in Atkinson “the nature of the case the government agency is
facing has to be clear” given the “potential outcome of
Part 1A
cases for the government.”47 It is therefore necessary to
consider what was pleaded.
The pleading
[70] The claim was brought before the Human Rights Review Tribunal by way
of a statement of claim. The claim48 named as the defendant
“the Attorney-General, sued on behalf of the Ministry of Health, a
Ministry of the Crown established
under section 27 of the State Sector Act
1988.” The claim repeated this in the pleading. It further pleaded
that:
(a) The MOH purchased day services from IDEA Services, including for
service users aged 65 years and over from at least 1998.
(b) In 2002 IDEA Services and the MOH entered into an agreement under which the MOH purchased disability support services, including day services. The terms of this agreement were repeated and replaced
with a contract in April 2004.
46 Section 20L.
47 Ministry of Health v Atkinson, above n 14, at [63].
48 As per the Amended Statement of Claim dated 11 May 2010 which is the relevant pleading.
(c) The MOH agreed under the contract to purchase day services. From
July 2002 until May 2005 the MOH complied with the terms
of the contract and
purchased day services irrespective of age on the basis of need.
(d) In March 2005, the MOH determined that it would not pay for day
services for someone who was aged 65 years or over unless
that person was
already in receipt of day services from the MOH prior to this
decision.
(e) This decision was made “notwithstanding that no other
government agency” would pay for day services for them.
(f) The MOH’s decision created a funding gap for service users
aged 65 years and over and the MOH has not devolved funding
responsibility to
another government agency nor finalised an alternative funding
source.
(g) The MOH’s decision not to pay for day services for those aged
65 years and over distinguishes persons on the basis
of age. This distinction
is a prohibited ground of discrimination pursuant to s 21(1)(i)(ii) of
the HRA, which is
not prescribed by law, is not “expressed as an
exclusion criterion in the Contract”, and is not justified in terms
of s 5
of the NZBORA.
[71] Two causes of action are pleaded:
(a) The first cause of action: “... the Ministry has refused to
pay for Day Services provided by IDEA Services, on the
prohibited ground of age,
by reason of a discriminatory interpretation and application of the
Contract”;
(b) The second cause of action: “[t]he Ministry has refused to pay for,
and
has omitted to resolve the funding gap caused by its refusal to pay for,
Day Services provided by IDEA Services on the prohibited ground of
age in breach of 21(1)(i)(ii) of the HRA”.
[72] The relief sought in respect of both causes of action is
declarations and orders in respect of the MOH. For example, a declaration
“that the Ministry’s refusal to pay for IDEA Services to provide day
services to service users aged 65 years and over
(unless they were existing
clients of the Ministry) is unlawful under the HRA in that it amounts to
unjustified age discrimination”;
and an order “restraining the
Ministry from continuing or repeating the breach ... or causing, or permitting
others to engage
in, conduct of the same kind as that constituting the breach
...”.
[73] It can be seen that, although the named party was the
Attorney-General, the claim was focussed on the MOH’s acts or
omissions.
The claim does not, for example, plead that the executive breached the
HRA through the actions or omissions
of the MOH or the acts or omissions of
the executive following the MOH’s decision to cease to make referrals.
The claim does
not challenge the MSD’s decision to fund vocational
services only up to the age of 65 years
[74] We therefore consider that the question is whether, given that the
MSD does not fund day services after the age of 65 years,
the SMT decision
(being the MOH’s acts or omissions) was a breach by the Government of its
obligations under Part 1A of the
HRA. We return to this issue when consider the
“comparator group” issue and the question of
justification
Preliminary issue no 3: did the MOH have funding
responsibility?
The issue
[75] This issue arises because the MOH says it is not discriminatory for the MOH to stop funding services that the Government has not given it responsibility to fund. It says that if those aged 65 years or older had no right to day services funded by the MOH, then it cannot be discriminatory to stop that funding. IDEA Services submits that the MOH did have that responsibility.
The Tribunal’s decision
[76] The Tribunal’s view was that:
(a) The MOH had and continues to have an obligation under the contract
to provide funding for day services for those who are
over 65 years.
(b) More importantly the contract reflected the historical pattern of
government funding for day services.
(c) “Whether the MOH likes it or not, it has been the conduit through
which Government funding for the affected group has flowed”.49
(d) The MOH decision to grandparent those already receiving funding for
day services who were over 65 years was really only
explained by the MOH
recognising that the history of day services funding imposed some obligations on
it.
(e) Even if the MOH did not have an explicit statutory or regulatory
obligation to fund day services for those over 65, that
funding was squarely
within the philosophy of the Disability Services Directorate and the MOH’s
“wider obligations in
respect of disability
issues”.50
(f) “[A]s a matter of past practice and the MOH’s wider
obligations in respect of the delivery of disability services”
the MOH
“did have responsibility as the conduit for Government funding for day
service users after they turned 65.”51
Submissions
[77] IDEA Services submits that since the dissolution of the HFA, the MOH has
been the government agency responsible for funding day
services. It says that
this
49 Idea Services Ltd v Attorney-General, above n 36, at [129].
50 At [131].
51 At [133].
follows from what it says is the MOH’s “longstanding policy and
practice”, the nature and extent of the MOH’s
responsibilities
for funding disability support services and the MOH’s contract with
IDEA Services. The MOH submits that
the correspondence illustrates that that
there was no formal policy and that the default position was that the formal
obligations
of the MOH would prevail. It says that these formal obligations
did not include day services funding for people exiting the MSD
funding when
they turned 65. We turn to consider the evidence.
Consideration given to who should have funding responsibility – pre
the NZPHD Act
[78] In 1992 the Government established the Regional Health Authorities
(RHAs) which would purchase health services from
a range of providers.
At Cabinet meetings in July 1992 the Government decided that in principle the
RHAs would be allocated
responsibility for purchasing disability support
services. This did not include vocational rehabilitation services. At that
time “vocational services” for persons with disabilities were
provided by what was then the Department of Social Welfare
(DSW) (now MSD).
Vocational services included “community participation services”,
which are similar to and are sometimes
referred to as day services (discussed in
more detail below). The Government set up a working group to report on the
preferred agency
to purchase vocational services.
[79] These Cabinet decisions were set out in an August 1992 Government statement, issued by the Minister of Health and the Minister of Social Welfare, on “Support for Independence for People with Disabilities: A New Deal”. The working group reported to Government. Its report was considered by Cabinet in December
1992. Cabinet directed the working group to consult about the options and to
report back by March 1993. This occurred and a number
of options were put
forward for consideration.
[80] In April 1993 Cabinet decided that the assessment process for vocational services for people with disabilities would be integrated into the assessment process for other disability support services, but otherwise the current purchasing arrangements were to remain. Under those arrangements the DSW purchased vocational services (described as being made up of day activities, social
rehabilitation, life skills training, education and training for sheltered,
supported and unsupported employment). It was also recognised
that RHAs
currently purchased “vocational services” (the Cabinet papers do not
specify who these were purchased for).
Officials were directed to report on
“the management of the interface” between vocational services and
disability support
services, it being recognised that the purchasing overlap
“could result in service gaps and/or double funding”.
[81] Following that further work, in 1996 Cabinet agreed in relation to
vocational services for people with disabilities that,
subject to fiscal
implications, RHAs would be the sole purchaser of “day activities”,
the New Zealand Employment Service
(under the Department of Labour) would be
the sole purchaser of employment support and the Education and Training
Support
Agency would be the sole purchaser of the remainder of education and
training.
[82] Further reforms in the health sector took place. The RHAs became
the Transitional Health Authority which was renamed the
Health Funding Authority
(“the HFA”) from 1 January 1998. On 20 March 1998 a MOH paper was
provided to the Minister
of Health, providing an updated summary of issues
relating to the proposed transfer of vocational services and day activities. The
paper:
(a) noted that a decision regarding the transfer of daily activities
had been delayed as a result of joint Ministers not having
an agreed position
regarding the transfer;
(b) noted the potential for fiscal risks of transferring these activities to
the
MOH and to the Department of Labour; and
(c) set out the daily activity services which were funded by the HFA (community-based day programmes for clients who were part of a deinstitutionalisation plan), by the DSW (day programmes provided by a residential care provider for their residents only and community- based day services not attached to a residential service) and where there was both HFA and DSW funding (community-based day services for people with psychiatric disability).
[83] In December 1998 it seems that an agreement was entered into by HFA
and IHC to replace the RHA contracts.52 Under this agreement the
HFA agreed to purchase the services set out in the schedule and IHC
agreed to provide these services.
The services set out in the schedule
included “day programmes” with the note that the HFA did not
“currently have
the resources or mandate to purchase the range of
vocational and employment services”.
[84] The decision to transfer responsibility for the day services
aspect of vocational services to the RHAs, and
subsequently the HFA,
did not proceed. Instead, on 1 July 1999, funding responsibility for
vocational services transferred
from the DSW to the Department of Work and
Income (“DWI”) (also referred to as Work and Income New Zealand
(“WINZ”).
Daily activities that were purchased by the DSW were
viewed as part of the continuum of employment-related activities which were
consistent with the core business of WINZ. The transfer of day services to WINZ
was seen by officials as consistent with the Government’s
mainstreaming
policy and acceptable to the disability services sector which had expressed
support for the concept of a “one-stop
shop” for vocational
services. The relevant appropriations would transfer from DSW to WINZ.
Officials noted that
if the criteria for accessing daily activities services
became more tightly linked to future entry into employment, then clients
with
higher levels of need might not easily be able to access services under this
programme. Officials noted that this “may
result in some fiscal risk to
HFA, which may then be required to provide for high-need clients who are
excluded.”
[85] The focus of all the above Cabinet documents was on “vocational services” which were purchased by DSW and later (WINZ). They do not discuss whether these services were available for people who had reached the age where they qualified for government superannuation. IHC’s view, as set out in a letter dated
30 March 1999 to the HFA, was that this was the HFA’s responsibility. We do not know what the HFA’s response to the letter was. However in response to another letter from IHC about the funding for people aged over 65 years, a letter from an
HFA employee dated 23 August 1999 said this:
52 The copy in the bundle is not signed on behalf of the HFA.
As [DSW] is not responsible for the funding of day programmes when people
turn 65, the HFA will increase your current contract
from 15 day/vocational
service placements to 22.
Please note that this does not set a precedent for future clients turning 65.
We will need to review available funding before making
decisions for these
people.
[86] Consistent with this position, the contract between the DWI
and IHC described the client group as someone with
a significant disability who
is aged between 16 and Guaranteed Retirement Income payments
eligibility.
[87] Around this time, the HFA sought policy clarification
“on the issue of funding responsibility for day programmes
for people
aged 65 (and older)”. The MOH’s response (from the Portfolio
Manager of Disability Support Services, policy
branch) was provided in December
1999. The response advised that:
(a) In November 1997 the Government confirmed that the purpose of
DSW’s funding for daily activities was to assist
people with
disabilities into work wherever possible. This focus meant that
funding for people aged 65 and older would
not be a funding priority for WINZ
and historically, DSW was not funded for vocational services for people with
disabilities aged
65 and older.
(b) Neither the HFA nor WINZ are “explicitly
funded” for day
programmes for people aged 65 and older.
(c) The MOH’s view was that people receiving residential care
subsidies (funded by the HFA) in most circumstances would
receive some form of
day activity from this care. For people aged 65 and older, who were not
receiving a residential care subsidy,
“funding for day activities ...
should be considered within relative HFA funding priorities”.
(d) The HFA and WINZ should agree on a mechanism to ensure that transition arrangements for people with disabilities aged 65 and older were clarified.
[88] On 25 January 2000 a MOH paper was provided to the Minister and the
Associate Ministers of Health. The purpose of the report
was to brief the
Ministers on the differences between day/vocational services for people with
disabilities who were part of a planned
deinstitutionalisation process and those
who were not. The paper advised the Ministers that the HFA purchased a limited
range of
day services for those covered by a planned deinstitutionalisation
process and for some people with psychiatric illness. Differences
between these
services and those provided by WINZ included that the HFA services funded
full five day per week activity
programmes whereas WINZ provided a
contribution only, which was often as little as 30 per cent of the cost. The
paper noted that
there was no overarching policy framework linking HFA and WINZ
day/vocational services for people with disabilities.
[89] In April 2000 a Cabinet paper recommended that Cabinet agree that
the eligibility criteria for WINZ vocational services be
retained. This
criteria was said to include that an individual be aged between 16 and 65 years.
Cabinet so agreed in May 2000.
[90] After this, IHC again raised with the HFA funding for day services
for those over 65. In a letter dated 22 September 2000,
IHC:
(a) referred to its contract with WINZ which excluded people over the
age of 65 from accessing their funding and said that the
clause was not new but
that WINZ had become “more stringent in enforcing it”;
(b) said that WINZ insisted it was a Disability Support Services
responsibility;
(c) noted that the HFA already purchased day services for people over the age of 65 but there was no agreement on “how IHC, on behalf of individuals, access this funding when people reach [65]”;
(d) said that this was a “gap” between government
department policies and one that the HFA needed to discuss internally
and with
WINZ; and
(e) said that “given Localities have already accepted
responsibility to
fund these people, we may only need to add them to the
contract”.
Funding responsibilities post the NZPHD Act
[91] Further health sector reforms took place. On 14 December 2000 the
NZPHD Act was enacted. The HFA was dissolved and its
functions, including the
funding of disability support services, were transferred to the MOH. The DHBs
were also established.
[92] In April 2001 the Minister of Health published the New Zealand
Disability Strategy as required by the NZPHD Act. As discussed
above, it set out
a vision for a fully inclusive society. It also set out a number of objectives.
One of these was to “create
and support lifestyle choices for disabled
people within the community and promote access to recreation and cultural
opportunities.”
[93] In May 2001 the Hawke's Bay DHB inquired of a MOH official (Ms
Barry) in "the disability support area", as to MOH funding
of service users aged
above 65 retiring from the WINZ funded day programmes:
Another query for you. I received a note from our local IHC, asking for
funding to provide daycare activities for 2 of their residents
who turned 65
recently. The Head Office of IHC advised the local branch that when people
reach 65, WINZ funding stops and Health
are expected to take over. I argued
that resthomes need to provide day programmes from their fees, but IHC claim
their residential
fees do not cover daytime care as the daycare funding is
provided to cover this care.
Could you please look into and advise thank you
[94] The MOH official responded as follows:
In IHC there are people over 65 who are identified in the current contract with individual day programme packages - most of these are over 65.
The expectation is that as clients turn 65 MOH will have to pick up
responsibility for day programme, and likewise there will be some
dropping off
the list as they die. I would expect that NASC would look after this as part of
the reassessment / service coordination
process.
[95] On 12 June 2001 IHC (Ms Win) met with MOH officials to discuss the
service specifications for the 2001-2 contract. Included
in the items raised
was a query about the specification for community day activity programmes. IHC
wanted to know if this was only
for those who were over 65 years or were
“ex institutional”. It thought that the current drafting created a
tension with
the contract IHC had with DWI for day services. The MOH was to
consider this further. A further meeting between IHC and MOH officials
was held
on 3 July 2001 to discuss the proposed terms of the contract. The notes of
that further meeting record in respect of community
day activities that
“[t]he issue of services and funding for over 65 year old clients will
have to be resolved prior to the
roll out of the transparent
pricing”.
[96] After this meeting, IHC’s view in respect of vocational
services (as set out in an internal communication) was
that “[t]he
contract with MOH allows for the funding of people leaving institutions
under a deinstitutionalisation plan
and people over the age of 65 years but this
needs to be negotiated at the Regional level”. It was said that the
Regional
General Manager would either undertake this or delegate it to the Area
Manager via the NASC agencies.
[97] In September 2001 the Government released its Strategy for Vocational Services, called Pathways to Inclusion.53 This noted that there had been an ad hoc development of these services which, amongst other things, had resulted in a “lack of clarity about the boundaries between services funded by different government agencies”. It said that the Government had decided that the objectives of vocational services funded by DWI were to increase the participation of people with disabilities in employment and in their communities. It said that services which did not have either employment or community participation aims were not included in the new
direction and further work would be carried out to manage boundary issues with other government agencies. It said that the 16-65 age eligibility criteria would be
continued for DWI funded vocational services, but that DWI would
continue to
53 This was published by the Department of Labour with a foreword from the Minister of Disability
Issues/Associate Minister of Social Services and Employment.
support people who were older than 65 who were employed and continued to need
support.
[98] In November 2001 Cabinet directed officials to undertake further
work on boundaries between the MSD and the MOH, including
determining whether
the MOH was funding any vocationally focussed services that did not fit within
its funding responsibilities.
The work did not proceed at this time, however,
due to other priorities.
[99] Prompted by an inquiry from IHC (Ms Win), in March 2002 a MOH
official (Mr Brown, who was the Senior Locality Manager for
the Midland locality
of the Disability Services Directorate and the contract relationship manager
within the MOH for IHC contracts
for the four regions) sent an email to three
MOH officials, and requested that they forward it to NASC managers. He copied
the
email to a fourth MOH official and three people at IHC. The email
read:
I have been contacted by IHC who have found some difficulty in arranging
funding for day programme for a number of clients in IHC
care when they turn age
65. Three particular cases are in Horowhenua/Kapiti however as the
question may come up anywhere here is situation as we have discussed
in meetings
in each Locality between myself, Jeff Sanders, Locality Managers, and NASC
staff. (Auckland June 2001, Central November
2001, Southern March 2002.)
Prices with IHC for Residential Group Homes under the current SNC A, B, C etc
and under the new Transparent Prices when introduced,
do not include care during
the day. The assumption is that the person will attend a day programme for
10 half days a week either funded by DWI in most cases or by
MOH.
(IHC does provide care during statutory holidays and if the client has to
stay home sick)
In the case of a client in IHC care who turns age 65 and has been funded by
DWI in a day programme - the DWI funding ceases at age
65, and it is
therefore necessary for MOH to pick up funding for these clients at that
point. If we do not do so there will be a gap in their services for the day
time hours Monday to Friday. As no rate is specified in
the current contract
with IHC, it is suggested that the rate recently agreed on with IHC for
introduction with the new Transparent
Prices should be used for any new
arrangements - $26.72 plus GST per half day session. (Clients who are currently
on different day
programme rates will remain grand-parented on those
rates.)
Could you please forward this to your NASC managers, and let me know if you
have any queries.
[Emphasis added.]
[100] In October/November 2002 the MOH entered into the Head
Agreement referred to above. The service specifications at
this time included
“community day activity programmes”. The specification for that
service was as per the later specifications
set out above. It therefore
expressly excluded those who had claims accepted by ACC or WINZ. It otherwise
contemplated that the
services would be provided to those referred by a NASC,
but subject to guidelines and protocols as advised to the NASCs by the MOH
from
time to time “[i]n order to equitably manage available
resources”.
[101] On 28 April 2003 an internal MOH email (from Ms Merrilees, an analyst
in the Disability Services Directorate, to Ms Rydz)
was as follows:
Val has forwarded your e-mail to me asking what is our directorate's
policy / approach in terms of funding of vocational support for disabled
people?
The Ministry fully funds day services/programmes for people with intellectual
disabilities of any age who have been resettled into
the community, and day
activities for people over 65. There also seem to be a smaller no. of
people with physical/sensory disabilities who are fully-funded by the Ministry.
The decision
for the Ministry to fund these services for individuals is made as
part of the assessment process through the NASC.
Often these services for people under 65 are referred to as "vocational
services".
There have been on-going concerns by people with disabilities and providers
at the lack of opportunities to participate in employment
and community
activities, and lack of clear policy and funding direction. The roles of the
different government agencies have also
been unclear. To address these issues,
in September 2001, the Associate Minister of Social Services and Employment
released "Pathways
to Inclusion", the vocational strategy for people with
disabilities. Under this strategy, MSD's Work and Income NZ is responsible
for
providing better quality outcome-focused employment and training opportunities,
and community participation activities, for people
with disabilities from 16-65
years of age.
Obviously, this strategy has implications for DSD-funded 'vocational'
services. Currently we are asking localities to provide information
on the type
of day/vocational services/programmes being funded through DSD so we can try to
determine how these services sit in relation
to the vocational strategy.
Hope this information helps. Happy to discuss. [Emphasis added.]
[102] In May 2003 there was a “Day Programme Providers
Meeting”. It is unclear who attended this meeting. However
the notes of
that meeting refer to a distinction in funding services for “community and
DI clients” [DI clients presumably
referring to deinstitutionalised
clients]: the MOH funded DI clients but not “non DI people”. The
distinction was said
to be because DI clients had less opportunity to develop
the sort of skills they would learn from the community. Access to services
is
based on NASC but funding lies with the MSD.
[103] In June 2003 there was a meeting between IHC and MOH officials which
discussed vocational services for people over 65 and
in frail health. An IHC
filenote of that meeting recorded:
MOH agreed that NASCs should assess and provide funding for people who can no
longer access DWI funding due to
being over 65
having poor health which means they cannot attend
vocational services
Action:
Erica [Heeley, of the MOH] will inform NASCs and then IHC
to refer people
Suzanne [of IHC] to provide lists of those over 65 not
being funded
Where a person is living at home or with another
provider, the
NASC will need to look at how to fund.
[104] Meantime, work was being carried out in accordance with the direction
from Cabinet in November 2001. The MOH had difficulty
in obtaining detailed
information. To remedy the information gap, in September 2003 the MOH sent out
questionnaires to the NASCs
to take a “snap shot” of day services
funded by the MOH. This was intended to exclude information on those over 65
because
it was anticipated that those over 65 would be devolved to DHBs
shortly.
[105] In October 2003 Government devolved the responsibility for the funding for older peoples’ support services from the MOH to DHBs. This did not extend to those with long-term impairments who were already receiving MOH funded support services unless they were assessed as needing aged residential care. The table of
services to be devolved from the MOH to DHBs included
“Day/vocational
Programmes and Day Care Services”.
[106] On 1 April 2004 the MOH and IDEA Services agreed to further schedules to replace the 2002 schedules that were due to expire on 30 June 2005.54 These new schedules were due to expire on 30 June 2008. The service specification is set out in detail above. However, in short it excluded day services if a person was receiving them from ACC or WINZ. Otherwise day services were available pursuant to a referral from a NASC, with NASCs potentially subject to prioritisation criteria from
the MOH.
[107] Queries continued to arise about funding responsibility for day
services for people with intellectual disabilities aged over
65. In September
2004 the Nelson Marlborough DHB (Ms McCorkindale) sent an email to the MOH (Mr
Powell) saying:
There seems to be some confusion occurring when ID clients come into the
service on Individual Contracts as to who pays for their
Day Services, MOH
dollars via Nasc approval or Winz...
Heather Williams [of a Nelson NASC] has advised that over 65's & DI
clients the Ministry pay for, all others are via WINZ...
Can you please clarify for me when the MOH via Nasc pay for Day Services
...
[108] The MOH (Mr Powell) confirmed to the Nelson Marlborough DHB (Ms
McCorkindale) that “Yes, Heather [Williams] is correct
that over 65's
& DI clients the MOH pay for, all others are via WINZ.” Mr Powell
copied his reply to others at the Nelson
Marlborough DHB (Ms Fenwick) and the
MOH (Ms Smith, a senior advisor (disability policy) at the Disability Services
Directorate of
the MOH). Those copied apparently did not reply saying that Mr
Powell was wrong about this.
[109] On 18 November 2004 there was a meeting between IDEA Services
and
MOH representatives. The notes of the meeting record that:
Over 65 years day service vocational funding
IHC raised issues
that many NASC are not aware of their funding obligations for over 65
year vocational programmes which
needs to be followed up with them. Recommended
this be included in communication letter to all NASC.
[110] A similar note was made in the record of a meeting between IDEA
Services and MOH representatives on 15 December 2004. The
“Action”
item from this was that the MOH was to “clarify the policy and notify NASC
of their obligations and inform
IHC.”
[111] In December 2004 the MOH produced a draft report on the September 2003 snap shot. The draft report stated that of the 1550 people in receipt of MOH funded day services, only 457 were subject to a deinstitutionalisation plan.55 This came as a surprise to the report writers as they understood the MOH’s mandate to be only in relation to deinstitutionalised people. The MOH understood that this had occurred because NASCs were responding to the needs of those who might otherwise have not had access to day services. That was usually because they had high support needs. The MOH also considered there to be regional variations. It seems that historically the old Midland RHA would routinely refer disabled persons to RHA
funded day services if MSD day services were not available or unable to
support the person’s needs. Northland RHA would
also refer people
for RHA funded day services where MSD services were not available. The NASCs
in those areas continued those
historic practices. Further work was proposed
on the “interface” between MSD and MOH funding.
[112] The issue of funding for day services for those over 65 was again raised at a meeting of IDEA Services and MOH representatives on 9 February 2005. At this meeting it was said that NASCs remained confused as to their responsibilities, and IHC was to “provide information to MOH verifying that Vote Health is responsible for over 65 year olds’ day programme funding”. IHC was to send MOH a “copy of MSD vocational service specification and any other correspondence confirming Vote
Health responsibility for over 65s or those
retired”.
[113] The MOH was also making its own enquiries. An
internal MOH email dated
14 February 2005 said that IHC had provided Mr Brown’s email of March
2002 to show that “a formal MOH position was conveyed”
then and
asked whether there was “anything that resembles a formal policy that
could be used as the basis for a statement
to NASC managers and
IHC?”
[114] This MOH enquiry was forwarded to a Senior Advisor, Disability Policy
with the MOH. The advisor said she was “hesitant”
to confirm the
decision of Mr Brown that automatically people with an intellectual disability
(and presumably other disabilities)
should transfer from the MSD to the MOH at
aged 65. She referred to the Pathways to Inclusion and that the intended
“flow on boundary work” had not happened at the aged 65 and over
end. She said that the issue had
been clouded by devolution decisions whereby
there was not a straight aged 65 cut for transfer to DHB funding (the assessment
instead
being made on when a person was in need of “aged residential
care”) and that people with an intellectual disability are
likely to be in
IHC care and to remain there even when they age.
[115] Following that, the response from the MOH recipients of the MOH
internal enquiry was provided on 15 March 2005 as follows:
... Unfortunately the short answer to your question is that there is not a
formal policy position that you can convey to NASC managers
and IHC. There are
some outstanding issues that need to be addressed – for example whether
Mark Brown’s decision was
associated with a decision made by SMT at the
time, where funding went at devolution, and we need to clarify a Human Rights
opinion
that the Department of Labour sought around this question of what
happens when people reach the age of 65. ...
[116] On 21 March 2005 the SMT teleconference took place at which it was agreed that there were to be no new referrals for vocational services for those aged over 65 year with an intellectual disability until the MOH’s decision was confirmed (refer [36] above). On 5 April 2005 there was the internal MOH briefing to a member of the MOH SMT referred to above which, amongst other things, referred to the “numerous precedents” for funding day services for those who were not part of deinstitutionalised plans but also suggesting that IHC’s claim “that the funding responsibility for day service for people over 65 years of age rests with the MOH could be considered a liberal interpretation of a historical practice.”
[117] On 20 April 2005 there was a meeting between MOH and IDEA Services
representatives which discussed day services. The notes
of the meeting record
that the MOH was reluctant to fund day services for people that will turn 65 and
that there was a general discussion
about whether the MSD was in breach of the
HRA by excluding people on the basis of age.
[118] Meanwhile, the “interface” work proposed after the draft
December 2004 report on the snap shot had not proceeded
at that time.
Eventually, however, the work resumed. In September 2008 the MOH provided
advice to the Minister of Health on a
Cabinet paper which proposed transferring
the responsibility for funding all day services to MSD, except those provided to
people
under the IDCCR Act. In that advice the MOH said:
There is an existing risk that MSD will be unable to address current gaps in
community participation services, such as:
a. a lack of services in some locations;
c. the exclusion of people from MSD funded services when they turn
65 (when, we assume, they are no longer considered to be of
working age).
To date, the MOH has used some of its funding to address some of these
service gaps even though the main group it has an obligation
to fund day
services for is people who were de-institutionalised under formal de-
institutionalisation plans. After the transfer,
however, the MOH will no
longer have funding available that it can use for this purpose. ...
[119] The Cabinet paper from the Minister of Health and the Minister for Social Development and Employment similarly noted that the MOH “funds people under a range of local and individual arrangements, including some services for people not able to be accommodated in a community participation service”. Cabinet agreed with the proposal that the MSD should be responsible for funding vocational services for people with physical, sensory and intellectual disabilities, except those under the IDCCR Act at a meeting on 29 September 2009. The rationale for the transfer was for there to be a consistent approach to the delivery of all community participation services based on the 2001 Pathways to Inclusion strategy.
[120] This decision, however, was put on hold in January 2009. This followed concerns about the different funding models (the MSD provided partial funding whereas the MOH provided full funding) and that the MSD stopped funding at age
65. As noted in advice to the Minister of Health, a “substantial budget
bid” would be required to address MSD current
funding and service gaps.
Work on the proposed transfer was to continue. As at the date of the hearing
no formal Government decision
to transfer had been made.
Summary
[121] From the material above we conclude that:
(a) Government allocated responsibility for purchasing disability
support services to Health (the RHAs, the HFA and the MOH/DHB).
(b) Vocational services, which included community participation
services, was an exception to the general position that Health
was responsible
for purchasing disability services.
(c) Over the years vocational services remained with Social
Welfare/Work and Income (DSW, WINZ, MSD) although from time
to time the
possibility of this changing was raised.
(d) The MSD vocational services funding had an age limit (linked to
eligibility for government superannuation) which Cabinet
was aware of and had
endorsed,56 the funding model differed from MOH funded day services,
and the MSD was not able to provide services for people with high needs and
income locations services were not available.
(e) The Government was aware of the potential for funding gaps for day services where a person exited MSD funding because they were over
65 years and intended that work would be carried out on
boundary
56 Refer April 2000 Cabinet agreement referred to at [89] above; and September 2001 Pathways to
Inclusion referred to at [97] above.
issues with the MOH57 and DHBs.58 However the
policy work was not completed by the time of the SMT decision and at no stage
did the Government specifically direct whether
and, if so, how the gap was to be
addressed. Nor did the MOH have a formal policy in place addressing
this.
(f) Over the years, in practice the funding gaps were met by the MOH,
sometimes because the RHAs/local NASCs assumed that there
was that
responsibility and were responding to an unmet need59 and sometimes
because HFA or MOH employees confirmed that this was to happen60
although sometimes explicitly noting that it was subject to “funding
priorities”.61
(g) It is unclear how widespread this practice was but IHC was aware of
the potential funding gap and took steps intended to
ensure that it would
receive funding from the MOH, and there is no evidence that the MOH ever
declined funding for day services where
there was an unmet need (whether because
there were no appropriate MSD day services or because the person had turned
65).
(h) Day activities/community participation services were within the
Government’s philosophy/vision for disability services
and properly could
be paid from the Vote Health appropriations for disability support services
where such services were not being
met by the MSD, DHBs or ACC.
(i) The contracts in place with IHC/IDEA Services at the time of the
SMT decision did not expressly exclude funding for day services to people who
did not have that funding from elsewhere, and provided
57 Refer April 2003 at [101] above; and November 2001 at [98] above.
58 Refer internal MOH enquiry in February 2005 at [113] above.
59 Refer the December 2004 draft report after snap shot at [111] above.
61 Refer HFA letter of 23 August 1999 at [85] above; refer MOH response dated December 1999 at
[87] above.
that payment would be made for day services to people who met the eligibility
criteria as assessed by NASCs and referred to IDEA Services.
[122] In short, we agree with the Tribunal’s conclusion on this
topic, except in one respect – that is whether there
was a contractual
obligation to continue to fund day services. There was no such contractual
obligation. While there was no specific
decision from Cabinet that the MOH was
to fund day services for those exiting MSD funding because they were over 65
years, nor was
there any decision from Cabinet that these services were not to
be funded. Similarly, although there was no formal policy within
the MOH that
it would fund day services for those exiting MSD funding because they were over
65 years, nor was there a formal policy
that they were not to be funded. A
practice of MOH funding for the affected group developed and this was consistent
with the New
Zealand Disability Strategy. Such funding was properly payable
from Vote Health disability support services funding and, prior to
the SMT
decision, the contracts with IDEA Services required the MOH to fund day services
where they were provided to an eligible
person referred by a NASC to IDEA
Services for such services.
[123] Returning to the MOH’s submission that it did not have “formal responsibility” to fund day services for the affected group, we agree that at no time did Cabinet say that day services were to be funded to all those in need of those services and that the MOH was to provide that funding. But for reasons that we will come to, we consider that this does not alter the choice of “the comparator group” (discussed below at [126] to [140]) for the purposes of considering whether the SMT decision was prima facie discriminatory, although it is potentially relevant to whether the SMT decision was justified (discussed below at [165] to [235]).
Discrimination
The statutory test for discrimination
[124] An act or omission breaches Part 1A of the HRA if it is inconsistent
with s 19 of the NZBORA.62 An act or omission is inconsistent with
s 19 of the NZBORA if the act or omission:
(a) limits the right to freedom from discrimination on various grounds,
including age;63 and
(b) is not a justified limitation on that right under s 5 of NZBORA.64
[125] The first requirement for a breach of Part 1A therefore is
that there be discrimination on a prohibited ground
(here, age). This is the
issue we consider under this heading. In Atkinson it was said that there
are two steps to determining whether there has been discrimination under s
19:65
(a) First, there must be differential treatment or effects as
between persons or groups in analogous or comparable
situations on the basis of
a prohibited ground of discrimination.
(b) Secondly, there must be a discriminatory impact (meaning that the
differential treatment imposes a material disadvantage
on the person or group
differentiated against).
The relevant comparison
[126] The first step is sometimes approached by identifying the group
affected by
the decision at issue (“the affected group”) and comparing them
with those “whose
treatment is logically relevant to the person or group alleging
discrimination” (the
62 Section 20L(1).
64 Human Rights Act 1993, s 20L(2).
65 Ministry of Health v Atkinson, above n 14, at [55] and [109].
“comparator group”).66 That is because
“[t]he essence of discrimination lies in difference of treatment in
comparable circumstances”.67 Identifying the affected group
and the relevant comparator group assists in making an assessment of whether
there has been a difference
in treatment of people in comparable
circumstances.
[127] The Tribunal in this case approached the question of differential treatment in this way. The parties do not take issue with that approach.68 However the MOH does take issue with the comparator group identified by the Tribunal. It says that the chosen comparator group was not in comparable circumstances to the group affected by the SMT decision because the source of funding derived from a different government agency. It says that this meant that the situations of the two groups were
insufficiently analogous for discrimination to arise. We therefore consider
whether the Tribunal erred in its assessment of the relevant
comparator
group.
A) The Tribunal’s decision
[128] On the question of comparison between the affected group and
the comparator group, the Tribunal said this:69
As a matter of past practice and the MOH’s wider obligations in respect
of the delivery of disability services, we think the
MOH did have responsibility
as the conduit for Government funding for day service users after they
turned 65. To invite a
comparison based on the proposition that no day service
users were eligible to be considered for MOH funding for day services
is to suggest a comparison that is, in our view, at best theoretical. We do not
accept that it reflects the realities of the situation.
We therefore agree with the comparison proposed by Mr Butler for Idea
Services. Putting aside day service users for whom funding
comes from another
Government agency, and those who the MOH will continue to fund anyway, the
affected group are day service users
over 65 years of age. The comparator group
are day service users who are under 65 years of age.
The groups are treated differently:
[a] Since March 2005 the affected group has had no
Government funding for day services;
66 Quilter v Attorney-General [1997] NZCA 207; [1998] 1 NZLR 523 (CA) at 573 per Tipping J.
67 At 573.
69 Idea Services Ltd v Attorney-General, above n 36, at [133]-[136].
[b] In the same period the comparator group has had
Government funding for day services (albeit that the funding
comes via the
MSD).
We conclude this section of our decision by observing that the outcome is
consistent with the approach for which Mr Linkhorn argued
– in the sense
that, once the question of eligibility is removed from the equation, then the
two groups that we have compared
do share all of the same characteristics save
only for their age, which is the ground upon which discrimination is
alleged.
B) The submissions
[129] IDEA Services submits that the affected group and the comparator
group are as follows:
Affected group Comparator group
Over 65 years of age Under 65 years of age
Have an intellectual disability
Have an intellectual disability
Characteristic
Need day services Need day services
Live in a Residential Group
Home, Contract Board or
Supported Independent
Living
Do not fall within one of the exceptions*
Result of SMT decision Ineligible to access Crown funded day services
Live in a Residential Group
Home, Contract Board or
Supported
Independent
Living
Do not fall within one of the
exceptions*
Eligible to access Crown funded day
services
*Exceptions: IDCCR care recipients, subject to a formal
deinstitutionalisation plan, high needs (i.e. 1:1), grand-parented, eligible
for
ACC funded day services, or eligible for DHB funded day services IDEA
Services.
[130] The MOH disagrees with IDEA Services’ submissions. Fundamental to the MOH’s position on the question of discrimination is that the claim has been brought against it (not the Government as a whole) and it is not responsible for funding day services for people exiting MSD funded community participation services because they have turned 65 years. It says that to find discrimination on its part amounts to a finding that one government agency has acted unlawfully because of the operation of the policies and rules of another. It submits that it must be wrong to hold one government agency responsible for failing to respond to the policies of another government agency about which it might have no control, let alone knowledge.
From here the MOH submits that it does not treat people differently based on
their age. It submits that it does not fund the affected
group under the age of
65 and it does not fund them over that age. They are therefore treated the
same. It submits that where it
has funding responsibility it continues to fund
day services to that group past the age of 65, so again it treats them the
same.
[131] The MOH submits that this is one of those cases where the choice of
comparator may be assisted by focussing on the reason why
the SMT decision was
made, namely that it did not have funding responsibility. The MOH refers to a
number of cases from Canada
which it submits focus on what the
government scheme in those cases was seeking to achieve. For
example:
(a) Hodge v Minister of Human Resources:70 Binnie J
said that, “in a government benefits case, the initial focus is on what
the legislature is attempting to accomplish”
and that it was “not
open to the court to rewrite the terms of the legislative program except to the
extent the benefit is
being made available ... on a discriminatory
basis.”
(b) Lovelace v Ontario:71 The Court held that, for legitimate public policy reasons, the government was targeting aboriginal communities,
not aboriginal individuals.
the definition of "spouse", which was defined by reference to co-habitation, and if that did not apply, by marriage. She claimed that the policy discriminated against her on the basis of marital
status, because if she had been married but no longer living with the deceased (a "separated married spouse") she would have received the pension. Therefore she claimed "separated common law spouses" were treated differently from "separated married spouses". The Supreme Court of Canada disagreed. It found that the proper comparator for a "former common law
spouse" was a "former married spouse" (i.e. a divorced spouse), neither of which qualified for a
survivor's pension.
groups and Métis (i.e. “non-status Indians”) did not have access to these profits. They claimed
discrimination because they were non-status Indians. The Court disagreed
finding that the claimants’ exclusion from access to
the profits was not
discriminatory. It considered that the casino project was targeted at First
Nations bands’ needs. It was
designed to ameliorate specific social,
health, cultural and other disadvantages experienced by First Nations bands to
enable them
to proceed towards self-governance, within the framework of the
Indian Act.
(c) Harris v Canada (Minister of Human Resources and Skills
Development):72 Evans J considered that the claimant’s
argument was in effect that “the Constitution prevents Parliament from
designing
a program for the benefit of the parents of pre-school age children,
without also extending it to those whose children, regardless
of age, are unable
to attend school by virtue of a disability ...”.73
[132] The MOH submits that the only possible comparator groups are those
for which it has funding responsibility which are as follows:
(a) The deinstitutionalised group: Responsibility for this group arose
out of an agreement at the time the institutions were
closed.
(b) The IDCCR Act group: This Act provides a compulsory care and
rehabilitation regime for people with high and complex needs
who fall within
that Act’s jurisdiction.
(c) Other high and complex needs: The MOH has assumed responsibility for others who have high and complex needs similar to those under
the IDCCR Act but who are not within that Act’s
regime.
72 Harris v Canada (Minister of Human Resources and Skills Development) 2009 FCA 22, (2009)
305 DLR (4th) 498 at [81]. This case concerned a claim for a disability pension under the Canada Pension Plan. To qualify for the pension the claimant needed to have made contributions to the Plan in at least four of the preceding six years. This requirement was relaxed for parents who temporarily left the workforce due to child-rearing responsibilities, so that the years in which the claimant was out of the workforce caring for children under the age of seven were not considered as part of the six years. The applicant cared for her disabled child for a time when he was over the age of seven years which meant that she did not qualify for a
pension. She claimed that the plan discriminated against parents with disabled children who had to remain at home to care for them after they turned seven years of age. The majority of the Court of Appeal held that the provisions were not discriminatory. It noted that the relaxation
was defined by reference to the age at which children at Canada can attend public school.
Viewed in that light, the provisions applied equally to all. Thus parents of children under the age of seven, regardless of whether or not they have a disability, are eligible for the relaxation provisions of the payment, while parents of children over the age of seven are not.
73 At [85].
(d) Over referrals: In this group the MOH includes those who have
funding for day services due to the historic practices
of the NASCs in the
Midland region74 and the Northern region.75
[133] The MOH submits that the affected group are IDEA Services clients who
have exited MSD funded vocational services.76 It submits that when
consideration is given to each of the groups in respect of which it does have
funding responsibilities, it can
be seen that the affected group are not within
the “schemes” of each of those groups.
Our assessment
[134] We consider that the MOH’s starting point is wrong. The MOH is
asking this Court to consider only whether there was
differential treatment of
anyone which it accepts responsibility to fund. We consider that takes too
narrow an approach. The relevant
comparison is not with other groups within MOH
which have funding for day services when day services are funded through the
combined
efforts of various government entities. It is the executive branch of
government that must not discriminate. If the executive
branch of government,
through the combined efforts of the government entities, leaves funding gaps for
people in comparable positions
then there is differential treatment. The Court
must then go on to determine whether this differential treatment is by reason of
a prohibited ground (here, age).
[135] The MOH submits that it was only facing a claim in respect of the MOH’s actions. In our view, however, the pleading against the MOH does not require the narrower approach which the MOH advocates. As set out above, IDEA Services alleges that the SMT’s decision created a funding gap. It alleges that from at least
1998 the MOH had been purchasing day services for service users aged 65 years
and
over from IDEA Services and others, and then it determined in March 2005
that it
75 The MOH submits that this was as a result of a whole series of individual ad hoc practices.
would not
do so. It alleges that the MOH made the decision even though no other
government agency would pay for those services and
without devolving funding
responsibility to another government agency. The allegation is therefore
concerned with alleged discrimination
brought about by the MOH’s
decision.
[136] The MOH submits that because there is no universal entitlement to day services it is necessary to consider the purpose of each scheme under which day services are funded. We agree that in some contexts this may be relevant in assessing whether there has been discrimination, but whether it should be taken into account in identifying the comparator group or at a later stage is less clear. A potential problem with incorporating it at the comparator group stage is that it can
deprive part of the statutory scheme of its operation.77 It
does this if it builds in
contested assumptions which neutralise the prohibited ground and thereby lead
to the result desired by, in this case, the MOH.78
[137] Here the MOH says that the comparator analysis must take into account that it was not responsible for funding day services for the affected group. The Tribunal rejected that starting point because it considered that the MOH was in reality responsible for funding those services because of its past practice and its wider obligations in respect of the delivery of disability services. We agree that was the reality. But we consider that this is not material in identifying the comparator group. The source of the Crown funding might be relevant in determining the purpose of the funding, which in turn might assist with determining whether the differential treatment is on the basis of a prohibited ground and/or whether (at the second stage of the Part 1A determination) any differential treatment is justified. But if it is included when determining the comparator, in our view that “artificially rules out
discrimination at an early stage of the
inquiry.”79
[138] We consider there is a further problem with the approach
the MOH
advocates. That is, we do not know that the Government intended there
to be any
78 This was the reason why the MOH’s comparator group was rejected by the High Court and
Court of Appeal in Ministry of Health v Atkinson at [67].
79 Air New Zealand Ltd v McAlister, above n 77, at [51].
funding gaps for day services. Universal entitlement to day services
(subject to there being funds available to meet these services)
may have been
intended. That is supported by the Cabinet papers identifying that there could
be service gaps because of the different
agencies involved in funding disability
services. There is no indication in those papers that the Government
understood that the
MOH would allow any such gaps to go unfilled. To the extent
there are any indications at all, it was that DWI funding would be aimed
at the
16-65 eligibility criteria but “further work would be carried out to
manage boundary issues with other government agencies”.
That work was not
completed by the time of the SMT decision, but the NZPHD Act’s objectives
for funding included “the
promotion of the inclusion and participation in
society and independence of people with disabilities” and “the best
care
or support for those in need of services”, and the New Zealand
Disability Strategy vision and objectives were for a fully inclusive
society
with disabled people having access to recreation and cultural opportunities.
The practice the MOH adopted, of funding day
services where gaps were identified
(e.g. in the Midland and Northern regions and when approached by IDEA Services),
was consistent
with those Government objectives and its vision.
[139] We consider that if the comparator group is to be used to assist in determining whether there is discrimination, the selection of the comparator group “must be conducive to a determination of the potential impact of the impugned policy without a negation of its relevance.”80 From the perspective of those with intellectual disabilities who need day services the source of government funding is irrelevant. What is relevant to them is that they are able to participate in government funded day services up until the age of 65 but when they turn 65 they cannot. The only difference in their circumstances is their age. The comparator group selected should
be one that enables a determination of whether this difference is on the
basis of age or on some other (non-discriminatory) basis.81
[140] We therefore consider that the proper comparator group in this case
is one where the group differs in their circumstances
from the affected group
only on the
80 Hutchinson v B.C. (Ministry of Health) (2004) BCHRT 58 at [100], affirmed in R v Hutchinson
2004 BCSC 1536, (2004) 261 DLR (4th) 171.
basis of the alleged ground of discrimination (here, age). That enables a comparison to be made of like with like.82 The question can then be asked whether that different treatment is “on the basis of” age or not. For these reasons we consider that IDEA Services’ comparator group is appropriate. Apart from age, the characteristics of each group and their circumstances are the same. Those in the comparator group are able to access government funding for day services (through the MSD’s vocational
services funding). Those that are over 65 years cannot. We consider
that the different source of government funding potentially
can be considered at
the next stage (that is whether the difference is on a prohibited ground) and/or
when considering whether the
differential treatment is justified.
Differential treatment on the basis of age
[141] Having identified the comparator group, the next step is for the
claimant to show that the differential treatment between
the affected group and
the comparator group is on the basis of age (being the relevant prohibited
ground of discrimination in this
case). IDEA Services submits that this is the
basis of the difference in treatment. The MOH submits that the basis for the
differential
treatment is not age but funding responsibility.
A) The Tribunal’s decision
[142] As set out above,83 the Tribunal rejected the submission
that the MOH did not have funding responsibility. It held that the
differential treatment
between the relevant groups was on the basis of age.
It said this:84
The reality, however, is that the SMT decided that day service users reaching
65 years of age after 21 March 2005 were no longer to be considered for
referral for day services. That was the expressly stated intention
of the
SMT;
the claimant group save only for the discriminatory factor. However this is not the place to consider whether any retreat is appropriate in the New Zealand context, when the comparator group we are using is the logical and natural one as the starting point in the analysis of whether there is discrimination.
83 Refer [128] above.
84 Idea Services Ltd v Attorney-General, above n 36, at [138]-[140].
it is exactly what the minute of its 21 March 2005 decision said it was going
to do. Putting aside some aberrations, it is also the
rule that has been
applied ever since. Furthermore, as Mr Butler observed in his submissions, when
the SMT decision was later communicated
to NASCs it was in terms that there were
to be no new referrals for day services “... for people in IHC over 65
years.”
We do not accept the submission [for the MOH] that this was just an
unfortunate way of expressing the idea that people over 65 had
never been
eligible for MOH funding for day services, and that the eligibility point was
going to be implemented in future. There
is no satisfactory basis to conclude
that the SMT’s decision was not recorded in a way that was faithful to
what was discussed
and resolved by the SMT when it met.
The SMT decided to stop future Government funding for day services for people
in the care of the IHC/Idea Services who were over 65.
We have no doubt that
age is the ground on which service users who can access Government funding for
day services, and those who
cannot, are treated differently by the SMT’s
decision.
B) Submissions
[143] IDEA Services says that the difference in treatment is by
reason of age because:
(a) This conclusion is inescapable given that age is the only
difference between the affected group and the comparator group.
(b) The SMT decision was phrased in terms of no new referrals for
“over
65 years” and the MOH’s instructions to NASCs were phrased in
the
same way.
(c) The differentiation is a direct result of the SMT decision - before
the SMT decision the affected group could access
funding for day
services and after they could not.
(d) Irrespective of the MOH’s view of its funding
responsibilities, that reason was inextricably linked to age because
(in the
MOH’s view) responsibility turned on age.
[144] The MOH submits that this part of the test is a factual question.
That is, the
question is “what were the facts that the alleged discriminator considered to be
determinative when making the relevant decision?”85 As
applied to the present situation, it submits that the question is whether the
SMT advised NASCs to cease new referrals because
it was not responsible for
funding day services to the affected group or because the group had turned 65
years. It submits that
it was the former. It submits that it cannot be
discriminatory to uphold that funding boundary even if those affected are over
the
age of 65. The MOH submits that even if the MOH was wrong about its funding
responsibilities, it would not be making its decision
on a prohibited ground
provided that the MOH reasonably believed that it was not responsible for
funding day services for this group
(i.e. those exiting MSD
funding).
[145] The MOH says that it does not matter that the MOH was in fact funding
day services for some people who had exited MSD funding
at age 65. It says
that otherwise, a government department or agency which has provided a benefit
to someone or some group not
actually entitled to it could not stop providing
the benefit when it discovers the error. It submits that IDEA Services clients
only obtained MOH funding for day services due to some practices that developed.
It says that IDEA Services clients exiting MSD funded
vocational services after
the SMT decision are not being discriminated against on the grounds of age, they
are being discriminated
against on the basis that there is a different
eligibility that applies. Looking at those it funded pursuant to those
practices
prior to 2005, they are over 65. The group after 2005 are also over
65. The MOH submits that both groups are the same age so the
difference in
treatment is a point in time, not age at all. The MOH accepts that there is a
funding gap for those who currently
receive MSD funding but that does not mean
there is discrimination on the MOH’s part. It says that the situation
might be
different if access to MOH funded day services was universal, but it is
not.
C) Our assessment
[146] The question is whether the difference in treatment is because of age
or for some other reason. This is a factual question.86 We begin
that factual assessment by
85 R (E) v Governing Body of JES [2009] UKSC 15, [2010] 2 AC 728 at [16].
86 Air New Zealand Ltd v McAlister, above n 77, at [40].
looking at the facts that the MOH determined were relevant in making the
SMT
decision. The evidence that relates to this issue is: (a) the record of the SMT decision;
(b) the evidence of Ms Woods before the Tribunal; (c) the briefing to a member of the SMT; and
(d) the evidence of Mr Powell before the Tribunal.
[147] The SMT decision itself is brief. It is a decision about
“Vocational Services for People in IHC over 65 years”.
It is noted
that there is a need for further work because the Disability Support Directorate
(being the relevant division of MOH)
does not have an up to date policy on this.
It says that there are to be no new referrals until our position is confirmed.
We accept
that the record of the SMT decision indicates that the SMT was at
least uncertain about whether it should be funding these services
in the absence
of an up to date policy. It seems that the SMT viewed the existence of a policy
as determining its responsibilities.
[148] Ms Woods’ evidence confirms that the decision was made because
of the SMT’s understanding of the MOH’s responsibilities.
Budget
pressures meant that there was a need to focus on the MOH’s
“core” responsibilities. The MOH accepted
responsibility to fund
day services to some groups. Ms Woods said that they believed they
should limit funding to those
groups only “while the policy and
responsibilities were resolved” after further work. This evidence is
consistent with
the internal briefing provided shortly after the SMT decision
(that the MOH had no official position that it would fund these services
but
some precedents had been established) and also with Mr Powell’s evidence
that the decision was made because of the MOH’s
understanding that it was
not responsible for funding these services.
[149] We therefore can accept that the MOH’s motive for its decision was that it had not accepted that it was responsible for funding these services. It accepted it was responsible for some groups (e.g. those under deinstitutionalisation plans and
those under the ICCDR Act) and, in light of the budget constraints, it should
not continue to fund others until further policy work
was carried out. However
we do not accept the next part of the MOH’s submission, i.e.,
that this means the differential
treatment between the groups is not on the
basis of age. We consider that the MOH’s motive is not determinative of
whether
the affected group has in fact been treated differently from the
comparator group because of their age.
[150] In the first place we consider that it is wrong to consider the
reason for the differential treatment only from the MOH’s
perspective. As
we have said, it is the executive branch of government which has the obligation
under Part 1A. Although we do not
have evidence from the MSD as to why the
vocational services funding ended at 65, we do know that it was linked to the
age at which
the person would then be eligible for government superannuation.
An available inference, which finds support in the Pathways to Inclusion
is that, as community participation services was seen as part of
vocational services funding, and the focus of that funding
was intended
to be about potential employment, the funding would end at an age when the
person might no longer be seeking employment.
Age may have been a proxy for
when employment opportunities were less likely to be sought by disabled people.
Government funded
superannuation may have been seen as replacing vocational
services funding. Possibly it was envisaged that any need for day services
after vocational services funding ended would fall for consideration by the
MOH.
[151] However we cannot be sure about what, if anything, was envisaged
after age
65 (e.g. if they still wished to seek employment beyond 65) because our
information about this is limited. This point was raised
with counsel for the
MOH at the hearing. The extract below summarises the MOH’s view about this
aspect of the case:
THE COURT:
... does that point also apply to the scheme as carried out by the MSDs and
if so, how would you define the purpose of that benefit
or the intended targeted
audience for that.
MS COLEMAN:
But I don't have any instructions from MSD on that point because the claim has never been taken against them so, I mean, that’s the first point and I think that’s an extremely important point. If the claim was that somehow Government, the Minister of Social Development and the Minister of Health
had, between them, failed this group then that’s the claim that should
have been brought so it hasn't been brought like that,
it’s a claim
that’s simply been brought against the –
THE COURT:
I understand that – MS COLEMAN: Yes.
THE COURT:
– but your answer is “I’ve got no instructions on that part
of it”?
MS COLEMAN:
I have no instructions on that part of it and clearly there will be a, a lot
of information that would be available because there
was a, there was a
considerable piece of work done with pathways to inclusion, that actually set
that out so to that extent, I think
that, that document is before the Court and
it is something that the Court might wish to refer to. There are other
statements
in the documents, of course, that do talk about it but if there had
been a claim that the MSDs scheme was discriminatory because
it’s age 65
cut-off, then clearly we would have been bringing evidence from ministers or
Government officials who are involved
in determining what the scope of that
eligibility was.
[152] In any event, whatever the Government’s rationale for the 16 to
65 eligibility criteria for MSD funded day services,
if there is government
funding (through MSD) for day services up to age 65 but no government funding
(through any agency) after age
65 this means that when an intellectually
disabled person has their 65th birthday they can no longer receive
government funding for day services. The only thing from their perspective
that has changed
is that they have turned 65. We consider that, if government
is to apply an age criterion when determining funding, it should have
to justify
that.
[153] This leads us to the other reason why we do not accept the MOH’s submission on this aspect of the case. In our view it is wrong to focus solely on a decision maker’s motive. The decision maker may be acting on erroneous assumptions. Here the MOH doubted that it had funding responsibility for the affected group. Should the MOH’s decision be immune from challenge under Part
1A if it was wrong about that? In our view it should not be. If the effect of its
decision is to differentiate on the basis of age, the MOH should be required
to justify that.
[154] We consider that the basis on which the decision is made is an
inquiry directed to the criteria that the MOH used to
make its decision, rather
than the underlying rationale for that decision. The MOH submits that this is
not the correct approach.
It refers to two United Kingdom decisions in the
context of the Race Relations Act 1976.87 Those cases were
concerned with the treatment of persons less favourably “by reason
that” the person has done various
specified things. In that context the
view is taken that this does not involve a “strict causation” test.
Rather the
question is what consciously or unconsciously was the decision
maker’s reason for the treatment about which there is complaint.88
As has been said in a number of New Zealand decisions, overseas decisions
in this area are of limited assistance unless there are
distinct similarities in
the statutory schemes and the type of discrimination alleged. We consider that
in the New Zealand context
of alleged discrimination on the basis of age in
breach of Part 1A, the subjective intentions of the decision maker should not be
determinative.
[155] Both parties referred to Air New Zealand v McAlister in support of their positions.89 In that case a personal grievance claim was brought by Mr McAlister alleging, under the Employment Relations Act 2000, that he had been discriminated against by reason of age. Mr McAlister was a senior pilot employed by Air New Zealand. He flew as a pilot-in-command of Boeing 747-400 aircraft. The United States adopted a rule prohibiting persons over the age of 60 from being pilots-in-
command. This affected all Air New Zealand 747 flights as they either went to the United States or required a United States territory as a diversion destination. In response, Air New Zealand adopted a policy that persons over the age of 60 could not be pilots-in-command of 747s while these restrictions were in place. As a result
of this policy, Mr McAlister was demoted to First
Officer.
87 Chief Constable of the West Yorkshire Police v Khan [2001] UKHL 48, [2001] 1 WLR 1947;
Nagarajan v London Regional Transport [1999] UKHL 36; [2000] 1 AC 501 (HL).
88 Chief Constable of the West Yorkshire Police v Khan at [29]; Nagarajan v London Regional
Transport at 511.
89 Air New Zealand v McAlister, above n 77.
[156] Judgment was given in favour of Mr McAlister in the Employment Court. On appeal to the Court of Appeal, the Employment Court judgment was overturned. Mr McAlister then appealed to the Supreme Court. To succeed in his claim for discrimination under the relevant legislation Mr McAlister needed to show that the decision was made “by reason of” his age. The submission for Air New Zealand was that he had been demoted only because of the United States’ rule. The majority of the Supreme Court considered that age was “a material ingredient in the making of
the decision”90 or “directly causative of the
demotion” even though Air New Zealand
would not have acted if the United States’ rule had not applied to Mr
McAlister.91
[157] IDEA Services submits, on the basis of McAlister, that it does
not matter that the SMT made its decision because of its view of its funding
responsibilities. It says that funding
responsibility, in the MOH’s view,
turned on age just as the Air New Zealand policy did. The MOH seeks to
distinguish McAlister on the basis that there was a clear correlation
between age and the United States rule but that is not the case here. It says
that
there are all sorts of reasons why funding responsibility might not
exist.
[158] We consider that McAlister shows that the motive of the
decision maker is not the relevant test. If it was, Air New Zealand would have
been able to say that
it had treated Mr McAlister differently because of the
United States rule. That rule meant that it could not have pilots over 60
in
command of 747s. Air New Zealand was therefore motivated by something other
than Mr McAlister’s age but the effect of
its decision was to
discriminate against Mr McAlister because of his age. Although this
decision was in the context of
the Employment Relations Act we do not see any
reason to take a different approach here.
[159] Here the MOH’s reason for its decision was its belief that it did not have responsibility to fund day services once the MSD’s funding ended. That decision meant that those exiting MSD funding because they were 65 would be treated differently than those who were under 65 years. The only difference in whether they
would receive government funding for day services was their
age. That is
90 At [49] per Tipping J.
91 At [40] per Elias CJ, Blanchard J and Wilson J.
differential treatment on the basis of age which ought to be subject to
inquiry under the second part of the Part 1A test (that is,
whether the
different treatment is a justified limitation on the right to be free from
discrimination). Funding responsibility
can be considered as part of that
inquiry.
Material disadvantage
A) The legal test
[160] For there to be discrimination, the claimant must show that there is a discriminatory impact on the affected group. What this involves has been an issue in other cases. In Atkinson, for example, the MOH submitted that to be discriminatory for the purposes of Part 1A, the differential treatment on the prohibited ground must be based on prejudice or stereotyping or must perpetuate the disadvantage of
subordinated groups in New Zealand society.92 The Court of
Appeal in that case
rejected that approach.93 It held that this step required the
claimant to show a “material disadvantage” to the person or group
who were subject
to the differential treatment.94 It preferred
“material” as the descriptor rather than “real” or
“more than trivial” but considered
there to be no substantive
difference in these terms.95
[161] The Court of Appeal decision in Atkinson was delivered after this hearing. However the MOH’s position at the hearing before us was that it was prepared to proceed on the basis of the test adopted in Child Poverty Action Group Inc v Attorney-General of “real” disadvantage.96 IDEA Services submitted at the hearing that it was enough to show disadvantage, providing the disadvantage was not de minimis. The Court of Appeal saw each of those descriptions as equivalent to its
“material disadvantage” test. We proceed on that
basis.
92 Ministry of Health v Atkinson, above n 14.
93 At [108] to [110].
94 At [110].
95 At [136].
96 Child Poverty Action Group Inc v Attorney-General HC Wellington CIV-2009-404-273,
25 October 2011 at [124].
B) The Tribunal’s decision
[162] The Tribunal considered that IDEA Services had established that the
SMT decision gave rise to real disadvantage for the affected
group.97
Its reasons were as follows:98
... our conclusion is that the disadvantages for day service users over 65
years of age which flow from the SMT’s decision are
real and obvious.
Before the SMT decision they would have expected to be able to continue to take
part in day services after turning
65. Although Government funding via the MSD
would end on turning 65, Government funding would continue to flow via the MOH.
But
after the SMT decision no Government funding for day services has been
available for them. Were it not for the fact that Idea Services
has carried the
costs in the interim, they would be left at home, without any opportunities to
engage in and with their communities.
That is the impact of the SMT decision.
It cannot sensibly be suggested that it does not leave the affected group in a
disadvantaged
position vis-à-vis the comparator group, who are still able
to engage in community participation activities as a result of
Government
funding which flows through the MSD.
C) Submissions
[163] The MOH’s submissions again come from the perspective that it
does not have funding responsibility for the affected
group. It submits that
the affected group should not have been referred by NASCs for funding for day
services because they were
outside the MOH’s funding responsibilities.
It submits that if they were not entitled to the funding, there is no real
disadvantage
if the funding is stopped. IDEA Services submits that the affected
group have a need which is not being met as a result of the SMT
decision. As
compared with the comparator group whose needs are met, there is a disadvantage
which is not de minimis.
D) Our assessment
[164] We have rejected the MOH’s submissions on whether there is differential
treatment on a prohibited ground. We consider that to focus on funding
responsibilities is the wrong approach to the issue of discrimination.
It
follows that
98 Idea Services Ltd v Attorney-General, above n 36, at [150].
we reject the MOH’s submission that the affected group are not materially disadvantaged. The affected group do not have funding for day services and therefore do not have the same opportunities as the comparator group to participate in the community. That is contrary to what is envisaged by the objectives in NZPHD Act (which include promoting the inclusion and participation in society and independence of people with disabilities) and the New Zealand Disability Strategy (the objectives of which include supporting lifestyle choices for disabled people within the community, and promoting access to recreation and cultural
opportunities).99 These legislative and policy objectives show
that it is important
that people with intellectual disabilities are able to participate in the
community and that therefore those over 65 years are materially
disadvantaged if
they do not have access to government funding to assist that participation, as
those under 65 do.
Justification
The statutory test
[165] Section 5 of NZBORA provides that the rights and freedoms in that Act “may be subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society”. The idea here is that once a claimant has shown that their right to be free from discrimination on the grounds of age has been limited by the actions of government, the government must show that the limit has
legal authorisation and that the limit is a reasonable one.100
To show the latter, the
limit must be demonstrably justified in a free and democratic society. [166] The statutory test can therefore be approached in two parts:
(a) whether the SMT decision (being the limit) was “prescribed by
law”;
and
99 Refer [14] and [17]-[18] above.
(b) whether the SMT decision was a “reasonable
limit” which can be
“demonstrably justified in a free and democratic
society.”
Was the SMT decision “prescribed by law”?
A) The issue
[167] The parties differ on what is required in order for a decision to be
prescribed by law. The MOH submits that limits that
derive from the exercise of
a statutory discretion are still “prescribed by law”. If the
decision is within the discretion
conferred, that is sufficient. The MOH
submits that its decision was within the discretion conferred by the NZPHD Act
and was therefore
prescribed by law. IDEA Services submits that the MOH must
show that the law relied upon contemplates that discrimination may occur
and
that the (discriminatory) decision discriminates in the contemplated manner.
It says that the NZPHD Act does not contemplate
that decisions will be
made on discriminatory grounds and that therefore the SMT decision was
not prescribed by law.
B) The Tribunal’s decision
[168] The Tribunal had “considerable sympathy” for the
MOH’s view on the question of whether it was
enough that a decision be
within a broad statutory power. This was because it accepted that it could
create significant practical
difficulties for the business of government if
government had to enshrine all initiatives in legislation or regulation in some
way.
However it also had reservations about this for two reasons:
(a) First, it considered that the SMT decision was inconsistent with the MOH’s contractual obligations to IDEA Services. It considered that the NZPHD Act did not provide the MOH with a statutory power “to ignore or dishonour the very funding arrangements that s 10 permits”. It considered that this could not be reconciled with the purpose of the NZPHD Act when there remained an ongoing need for the services
and an acknowledgment that the Government should still be funding such
services.
(b) Secondly, it could not “find anything in the NZPHD Act that
might permit the MOH to discriminate against those who
need disability support
services.”
[169] The Tribunal went on to consider whether, if the limit was prescribed by law, it was “neither ad hoc nor arbitrary” and its nature and consequences clear. It took these words from R v Hansen.101 It said that the “nature and consequences of the
SMT’s decision were clear enough”.102 As to whether
it was ad hoc or arbitrary, the
Tribunal said:103
We leave aside the question of whether or not the SMT decision ought to be
described as ‘arbitrary’. We do so because
it seems to us to be
clear that it was an ad hoc decision. ... it was made as a cost cutting
measure without any underlying policy work; it was at odds with the MOH’s
contractual
obligations; and there is no evidence that the possibility that
there might be human rights issues involved was even recognised.
Nor
is there any evidence that the SMT took any steps before the decision was made
to check that its decision, would be an
appropriate exercise of its statutory
powers under, for example, the NZPHD Act.
[170] The Tribunal therefore concluded that the SMT decision did not meet
the test in R v Hansen and so was not prescribed by law. This meant that
it did not matter whether the SMT decision could be demonstrably justified
because
it had failed the first part of the s 5 NZBORA test.
C) The submissions
[171] The MOH submits that:
(a) The Tribunal was wrong because the SMT decision did not breach
the
Ministry’s contract with IDEA
Services.
101 R v Hansen [2007] NZSC 7, [2007] 3 NZLR 1.
102 Idea Services Ltd v Attorney-General, above n 36, at [175].
103 At [176].
(b) The Tribunal was wrong to find the decision was ad hoc and
therefore not prescribed by law. The inquiry as to what is prescribed
by law is
not about the decision making process (which is a judicial review question). A
decision will be arbitrary or ad hoc only
if it is not authorised by
law.
(c) New Zealand and Canadian cases show that if a limit derives from
the exercise of a statutory discretion it is prescribed
by law. In this case,
the SMT decision is authorised not only by the general contracting power in s 10
of the NZPHD Act but also
by the express instruction to the MOH in s 3(2) to
pursue its objectives to the extent it can within the allocated
funding.
[172] IDEA Services submits that:
(a) To be prescribed by law, the legislative context must contemplate
discrimination (legitimately) occurring. It submits that
this is not the case
with the NZPHD Act because the s 3 objectives are about providing
services on the basis of need, and
there is nothing in the NZPHD Act purposes or
objectives that suggests that funding allocations can be made on the basis of a
prohibited
ground. It says that the SMT decision was not authorised by the
NZPHD Act because age has no bearing on whether an intellectually
disabled
person needs day services. It further says that s 10 does not permit the MOH
to impose a new exclusionary criterion and
to alter the status quo.
(b) To be prescribed by law, the SMT decision must be a limit which is expressed with sufficient precision, and it is not because it is couched as an interim measure until the MOH’s position is confirmed following further work. The SMT decision must also be adequately accessible to the public, and it was not because it was made during a teleconference which was not the subject of legislation or executive approval by Cabinet, and it was not made known to IDEA Services until it made enquiries following a series of referral refusals. As the
SMT decision making process was arbitrary and ad hoc (because it was made
without policy work, proper financial analysis, consideration
of the impact
on intellectually disabled people etc), the SMT decision is not prescribed by
law.
[173] These submissions raise two main points of difference. The first is
whether the legislation must contemplate discrimination
occurring or whether it
is enough that the decision is within the statutory discretion granted. The
second is whether the form that
the decision takes and the way in which the
decision was made is relevant to whether it is a limit “prescribed by
law”
rather than whether it is a “reasonable”
limit.
D) Our assessment
[174] As set out above,104 when allocating public funding for
disability support services, various objectives are to be pursued. Day
services are within those
objectives. This is subject to s 3(2) of the NZPHD
Act which provides that the objectives are “to be pursued to the extent
that they are reasonably achievable within the funding required”.
Funding is provided to people who arrange or provide disability
support services
via Crown funding arrangements. In relation to such agreements, s 10
provides:
10 Crown funding agreements
(1) In this Act, Crown funding agreement means an agreement that the Crown enters into with any person, under which the Crown agrees to provide money in return for the person providing, or arranging for the provision of, services specified in the agreement.
(2) The Minister may, on behalf of the Crown,—
(a) negotiate and enter into a Crown funding agreement
containing any terms and conditions that may be agreed; and
(b) negotiate and enter into an agreement that amends a Crown funding
agreement; and
(c) monitor performance under a Crown funding agreement.
...
104 Refer [14] and [17]-[18] above.
(3) Except to the extent that the Minister determines by written
notice to the Ministry of Health, the Ministry of Health may
exercise the
Minister's powers under subsection (2) on the Minister's behalf.
[175] In our view the SMT decision was within the statutory discretion
conferred under s 10. The effect of the SMT decision
was to amend
what funding was provided under the IDEA Services contract by altering
the eligibility criteria (through
the instructions to NASCs). The negotiated
terms of the funding agreement permitted an amendment to be made in this way.
The amendment
to the eligibility criteria reduced the funding available for
services to people with intellectual disabilities. To the extent that
the SMT
decision limited the pursuit of the objectives of the NZPHD Act, it was made
because of perceived budgetary constraints.
It was therefore a limit
contemplated by the NZPHD Act because the objectives are to be pursued to the
extent they are reasonably
achievable within the funding required.
[176] Is that sufficient to be prescribed by law? Starting first with
principle, we find the discussion by Professor Peter Hogg,105 on the
same wording in s 1 of the Canadian Charter of Rights and Freedoms (the Canadian
Charter), helpful. As he explains, the requirement
is to ensure that if an
action is not legally authorised it can never be justified, even if the action
appears to be reasonable or
justified.106 For example, a police
officer may consider he or she is justified in denying an accused the right to
counsel, but no law authorises
this so the limit on the rights in the Charter
can never be justified.
[177] As Professor Hogg says:107
The requirement that any limit on rights be prescribed by law reflects two
values that are basic to constitutionalism or the rule
of law. First, in order
to preclude arbitrary and discriminatory action by government officials, all
official action in derogation
of rights must be authorised by law. Secondly,
citizens must have a reasonable opportunity to know what is prohibited
so
106 At [38.7(a)] and [38.11].
107 At [38.7(a)]. Hogg refers to European Court of Human Rights and Canadian Charter decisions
in Canada which have viewed the “prescribed by law” requirement in this way.
that they can act accordingly. Both these values are satisfied by a law that
fulfils two requirements: (1) the law must be adequately
accessible to the
public, and (2) the law must be formulated with sufficient precision to enable
people to regulate their conduct
by it, and to provide guidance to those who
apply the law.
[178] There is limited case law in New Zealand on what “prescribed by
law” entails
in the s 5 NZBORA context. In R v Hansen McGrath J suggested
that:108
To be prescribed by law, limits must be identifiable and expressed with
sufficient precision in an Act of Parliament, subordinate
legislation or the
common law. The limits must be neither ad hoc nor arbitrary and their nature
and consequences must be clear,
although the consequences need not be
foreseeable with absolute certainty.
[179] The requirements of accessibility and precision are reflected in the first sentence in this passage. The second sentence, in referring to a limit which is clear as to its nature and consequences, reflects the need for people to be able to regulate their conduct and the need to provide guidance to those who apply the law. The
passage is therefore consistent with Professor Hogg’s
commentary.109 The passage is
directed at limits in “an Act of Parliament, subordinate legislation or
the common law”. It does not refer to decisions
made under statutory
discretions and so does not address the requirements of accessibility and
precision and that the limit must
not be ad hoc or arbitrary in that
context.
[180] In Atkinson the issue of whether the Ministry’s decision (a policy) was prescribed by law was not the subject of submissions because the respondent accepted that the policy was prescribed by law.110 The issue was, however, raised during the Court of Appeal hearing and the Court of Appeal judgment included an “addendum” briefly discussing the topic.111 The Court noted that the discussion was about “whether the authorisation for the policy was sufficiently specific and publicly accessible to meet the requirement in s 5 ... that the limit is one ‘prescribed by law’”. It said that the issue “potentially arises” because s 10 of the NZPHD Act was a general provision as to funding arrangements, with the decision at issue in the case
being made under a policy, the specifics of which were found in various
service
108 R v Hansen, above n 101, at [180].
109 Hogg, above n 105.
110 Ministry of Health v Atkinson, above n 14, at [181]-[184].
111 At [181]-[184].
specifications and in contractual arrangements. The Court of Appeal
referred to
McGrath J in R v Hansen (set out above) and
said:112
The need to be able to identify the limit with precision reflects the nature
of the analysis required under s 5 to determine whether
the limit is indeed
reasonable and demonstrably justified. It would be open to argument therefore
that an administrative policy
not prescribed in that manner did not meet the
requirement.
[181] However the Court of Appeal did not decide the issue because it had
not been the subject of full argument and the High Court
decision did not
consider the issue. In these comments, the Court of Appeal appears to be raising
for consideration the point that
IDEA Services raises here, namely whether the
authorising statute must contemplate the discrimination. The discussion is
brief
and the issue not finally determined.
[182] On this issue, we consider that the comments of Lamer J in Slaight Communications Inc v Davidson, discussed by Professor Hogg and relied on by the MOH in the present case, are helpful.113 That case was concerned with orders made by an adjudicator on a claim by a dismissed employee that he was unjustly dismissed. The legislation under which the adjudicator was acting, empowered an adjudicator to make any order “to remedy or counteract any consequence of the dismissal” if the adjudicator decided that the employee was unjustly dismissed. The adjudicator in Slaight Communications Inc made orders as to the content of the
employer’s recommendation, and prohibiting the employer from responding
to a request for information about the former employer
except by sending the
prescribed letter of recommendation. The orders were challenged as infringing
the employer’s freedom
of expression guaranteed by the Canadian
Charter.
[183] Lamer J distinguished between two kinds of
situations:114
(a) One situation was where the legislation under which the decision was made confers, either expressly or by implication, the power to infringe
a right protected by the Canadian Charter. In that situation, it was
the
112 At [183].
114 At 1080.
legislation that was subject to the test of whether it was a reasonable limit
that could be justified in a free and democratic society;
(b) The second situation was where the legislation pursuant to which
the decision was made confers an imprecise discretion,
and does not confer,
either expressly or by implication, the power to limit the rights guaranteed by
the Canadian Charter.
In that situation it is the decision, and not
the legislation, which is subject to the test of whether it is a
reasonable
limit that can be demonstrably justified in a free and democratic
society.
[184] Lamer J considered that the orders in that case were examples of the
second situation. He acknowledged that the orders limited
the employer’s
freedom of expression. He said:115
However, this limitation is prescribed by law and can therefore be justified
under s. 1. The adjudicator derives all his powers from
statute and can only do
what he is allowed by statute to do. It is the legislative provision
conferring discretion which limits
the right or freedom, since it is what
authorises the holder of such discretion to make an order the effect of which is
to place
limits on the rights and freedoms mentioned in the Charter. The
order made by the adjudicator is only an exercise of the discretion conferred on
him by statute.
[185] On the question of whether the limit was justified, Lamer J’s
approach was as
follows:116
To determine whether this limitation is reasonable and can be demonstrably
justified in a free and democratic society, therefore,
one must examine whether
the use made of the discretion has the effect of keeping the
limitation within reasonable limits
that can be demonstrably justified in a free
and democratic society.
[186] So, on this approach in this case, the MOH’s decision was a limit prescribed by law (because it was within the discretion conferred under the NZPHD Act), and it is the decision (not the statute) which is subject to the test of whether it is reasonable
and can be demonstratively justified in a free and democratic society.
We consider
115 At 1080-1081.
116 At 1081. This approach was again taken in Multani v CSMB 2006 SCC 6, [2006] 1 SCR 256 at
[22]-[23].
that the New Zealand cases referred to in the MOH’s
submissions on what constitutes a limit “prescribed by
law” align
with this view. The MOH refers to:
(a) Federated Farmers of New Zealand Inc v New Zealand Post
Ltd:117
In this case postal increases imposed by New Zealand Post for rural
deliveries were challenged as a breach of the right to freedom
of expression.
New Zealand Post operated under the State-Owned Enterprises Act which required
it to carry on a “successful
business”. Inherent in this was that
commercially necessary charges would be imposed. The charges therefore had a
“foundation
in law” and were viewed as meeting the “prescribed
by law” test.
(b) Christchurch International Airport Ltd v Christchurch City Council:118 In this case the Court was concerned with an application to the City Council by certain landowners for resource consents to permit dwellings to be built on their land, which was in the vicinity of the airport. The airport company sought conditions including that the consent holders could not complain about airport noise. The
landowners were willing to accept the condition but the Council considered it would breach the right to freedom of expression. Tipping J (then in the High Court) held that the Resource Management Act (the law) allowed consent authorities to issue resource consents on such conditions as they considered appropriate. His Honour said that if the condition qualified as appropriate “the limitation on freedom of expression which may be inherent is in my judgment, a limitation prescribed by law which can be demonstrably
justified.”119
[187] The approach also aligns with the practicalities of government decision- making. This point is discussed in Wynberg v Ontario which the MOH has also
referred us to.120 In that case the statute
conferred on the responsible Minister a wide
117 Federated Farmers of New Zealand Inc v New Zealand Post Ltd [1992] 3 NZBORR 339 (HC).
118 Christchurch International Airport Ltd v Christchurch City Council [1997] 1 NZLR 573 (HC).
119 At 586.
120 Wynberg v Ontario (2006) 269 DLR (4th) 435 (ONCA).
and imprecise discretion to provide services and to make agreements for the provision of services. Under this discretion the Ministry announced a programme that provided or funded intensive behavioural intervention for children with autism between the ages of 2 and 5. The trial Judge concluded that the programme was “prescribed by law” as being within the statutory discretion, and the Government was therefore entitled to an opportunity to justify the age limit contained in the programme as a reasonable limit. The Ontario Court of Appeal agreed, stating that
the:121
... requirement that a limit be “prescribed by law” does not mean
that the limit must be found in a statute or regulation.
Rather, it means that
the limit must be authorised by statute or regulation. This is evident from
the reasoning in Slaight Communications Inc ...
[188] The Ontario Court of Appeal went on to note that much governmental
action is undertaken by means other than statute or regulation.
It agreed with
the trial Judge that difficulties would arise if the choice of instrument by
which the government enacts such a
programme were to determine whether the
governmental action can be justified under the Canadian Charter. It agreed with
the trial
Judge’s reasoning that:122
... it would have the effect of forcing government to enshrine in legislation
or regulation all programs where there might be an even
remote prospect of a
Charter violation in order to ensure access to a s.1 justification. That
would impede the ability of governments to respond to government
priorities and
would be inconsistent with a purposive approach.
[189] Under the NZPHD Act the MOH is authorised to make decisions that some people will get funding for some services and some will not. Some of those decisions may exclude people on grounds that are, or may be challenged as being, prima facie discriminatory.123 The approach the New Zealand cases have taken to the question of whether there is prima facie discrimination could be said to be
narrow in that it does not incorporate any issues which can be
considered at the stage
121 At [151].
122 At [157].
of whether the discrimination is
justified.124 That reflects the point that where a criterion is
applied that differentiates on the basis of age (or some other prohibited
ground),
it is proper that it be subject to scrutiny as to whether it is
reasonable and justified. But the fact that a decision is made under
a wide
statutory discretion which does not necessarily involve discrimination on the
prohibited grounds, should not preclude consideration
as to whether it is
reasonable or justified. If it does, Parliament would need to enshrine in
legislation any programmes which
might have some prospect of breaching Part 1A
of the HRA and that is likely to be unworkable and impractical.
[190] The next question is whether, when a decision is authorised under a
statutory discretion (as here), the form in which it takes
is relevant to
whether it is a limit which is “prescribed by law”. IDEA Services
complains that the SMT decision was
expressed as an “interim one”
and so was not “precise”, and that it took the form of a
communication to NASCs
and so it was not “accessible”. In our
view, the SMT decision’s intended interim status does not take it outside
the authority of the law. For so long as the decision was operative, it
was a decision made under the discretion provided
by the NZPHD Act.
In our view it was also sufficiently accessible. Those potentially
affected by the decision had access
to that decision and the statute under which
it is made. Precision and accessibility are not required in absolute terms
(they underlie
the “prescribed by law” test) and the particular
context will be relevant to the degree to which precision and accessibility
are
required.
[191] Sections 3 and 10 of the NZPHD Act are accessible. As Professor Hogg
says, the clearest example of accessibility is statute
law.125 As to
precision:
(a) Sections 3 and 10 give fair notice to the public that the services to be funded will be those provided for in the negotiated funding agreements. The public also have notice of the objectives to be pursued and that they are to be pursued to the extent they are
reasonably achievable within the funding provided. The public
also
125 Hogg, above n 105, at [38.7(a)].
have notice that the Government’s strategy for disability services will
provide the Government’s framework, and that
this strategy is
publicly available. Therefore the public know that not all health needs will be
met and that decisions will have
to be made as between competing priorities but
in accordance with the objectives and under the framework of the strategy. The
public
know that the negotiated funding agreements will set out the services
that will be funded.
(b) Sections 3 and 10 also provide guidance to the MOH, because the
discretion conferred on the MOH is constrained by the objectives
in s 3 (and the
Government’s strategy) and the negotiations contemplated by s 10 which
will culminate in a funding agreement.
The statutory discretion is broad but,
if the decision made under that discretion is a reasonable limit that can be
demonstrably
justified in a free and democratic society, then it is a limit
which Parliament has authorised the MOH to make.
[192] Turning then to whether the “prescribed by law” test
involves the question of whether a decision is “ad
hoc or
arbitrary”, all the factors IDEA Services rely on are factors that are
relevant to whether the decision is a reasonable
limit (rather than whether it
has the “authority of law”). We consider these matters (such as the
failure to postpone
the decision pending the intended policy work or to consider
impacts on those affected) are better considered under the second part
to the s
5 test.126
[193] We conclude that the “prescribed by law” requirement is met. The decision made was authorised by the NZPHD Act and was sufficiently precise and accessible. The matters which IDEA Services says render the decision ad hoc and arbitrary will be considered when determining whether the limit is reasonable and demonstrably
justified.
126 We are not sure that “ad hoc and arbitrary”, as referred to by McGrath J, is about these kinds of deficiencies. But, in any event, provided they are considered at some point in the s 5 analysis it should not matter at which stage they are.
Reasonable and justified
[194] The parties agree that the approach to determining whether a
limit is reasonable and justified is to ask:127
(a) does the limiting measure serve a purpose sufficiently important to
justify curtailment of the right or freedom?
(b) (i) is the limiting measure rationally connected with its
purpose?
(ii) does the limiting measure impair the right or freedom no more than
is reasonably necessary for sufficient achievement of
its purpose?
(iii) is the limit in due proportion to the importance of the
objective?
[195] The onus of proof lies on the MOH. 128 The standard of
proof is the balance of probabilities, but guided by the context and the level
of deference properly accorded to the
SMT decision.129
A) Deference
[196] The idea of deference is that in the area of human rights, “difficult choices may have to be made by the executive or the legislature between the rights of the individual and the needs of society.”130 The courts recognise that there is a need to give some weight to the decision maker’s judgment as to whether the choice made is reasonable and justified.131 The deference appropriately given to Parliament may be
greater or lesser according to the
circumstances.132
128 Human Rights Act 1993, s 92F(1).
129 Ministry of Health v Atkinson, above n 14, at [166], citing RJR-MacDonald Inc v Canada [1995]
3 SCR 199.
130 R v Director of Public Prosecutions; ex parte Kebilene [1999] UKHL 43; [2000] 2 AC 326 at 381.
131 This is expressed in various ways. See, for example, R v Hansen, above n 101, at [104] cited in
Child Poverty Action Group Inc v Attorney-General, above n 96, at [133] referring to "latitude"; Ministry of Health v Atkinson, above n 14, at [172] referring to "space"; and the discussion in Beatson and others Human Rights: Judicial Protection in the United Kingdom (Sweet & Maxwell, London, 2008) at 267-268.
132 R v Hansen at [108] and [111] cited in Child Poverty Action Group Inc v Attorney-General at
[133].
[197] In considering what circumstances will indicate that a greater or lesser degree of weight to the decision maker is appropriate it is helpful to consider the reasons underlying the deference principle. Reasons sometimes given by the courts are discussed by Beatson.133 On the one hand, it is to be remembered that Parliament has made it the task of the court to determine whether a limit is reasonable and demonstrably justified. But on the other hand, where the legislation concerns, for
example, broad social policy it has been said that “on democratic
grounds” the judiciary should defer “to the considered
opinion of
the elected body or person whose act or decision” is incompatible with the
NZBORA.134 It is also said that deference is appropriate where the
“nature, scope and implications of the policy decision rest on
judgments
requiring particular expertise or knowledge that the courts
lack”.135 This in turn “provides justification for
affording weight to the views of representative institutions that represent a
cross-section
of society, in particular where a judgment is required on
controversial ethical issues, social policy, public opinion or public
confidence.”136
[198] The MOH submits that considerable deference ought to be accorded to the SMT decision. It submits that subject matter is an indicator of the level of deference that should be accorded. It submits that decisions involving highly complex social and economic issues are usually more appropriately dealt with by the executive or
legislature because of their sources of knowledge and expertise.137
It says that in this
area, the government is institutionally better qualified to decide the matter.138 The MOH submits that the SMT decision was one of a range of measures intended to bring its spending on disability support services back within its budget, while at the same time ensuring that it met its core responsibilities as directed by Ministers and Cabinet. It submits that how that was best done, is a matter on which the MOH is
better placed to assess than this Court.
133 Beatson and others, above n 131, at 276-290.
134 R v Director of Public Prosecutions; ex parte Kebilene, above n 130, at 381 referring to the
European Convention for the Protection of Human Rights and Fundamental Freedoms (the
Convention) rather that the NZBORA.
135 Beatson and others, above n 131, at 288. This issue is discussed in Beatson at 284-288.
136 At 286.
137 Referring to Wynberg v Ontario, above n 120, at [184].
138 Referring to Lord Steyn "Deference: A Tangled Story" [2005] PL 346 at 350.
[199] IDEA Services agrees that subject matter may be one of the objective circumstances that determine whether there is a need for deference in a particular case. The parties differ, however, on whether the quality of the decision making process is relevant to the degree of deference appropriate. The MOH submits that process is not relevant, and that the Court’s assessment of the proportionality of the limit must be based on the evidence before it, regardless of the evidence before the
decision maker or the decision maker’s reasoning.139 IDEA
Services submits that the
process by which the decision was reached will be relevant, not in determining whether the decision maker reached his or her decision in the right way as in judicial review, but rather in determining whether there is a need for deference in a particular case. It submits that the authorities are to the effect that deference cannot be
asserted, but must be deserved.140
[200] Taking the approach that process is relevant to deference, IDEA
Services submits that little or no deference is appropriate
to the SMT decision
because:
(a) The decision was not reasoned, considered, or refined, and was not
expressed as firm and final. It was made without consideration
of past practice
and policy, the New Zealand disability strategy, the impact on service users and
other considerations.
(b) The decision was not endorsed by Parliament or Cabinet.
The experience and expertise of the decision makers was
not the subject of much
evidence. Subsequently a Ministry official observed that little progress had
been made on the policy work
that was to accompany the decision and that it was
becoming quite embarrassing.
(c) This Court is as institutionally competent as the SMT to determine
whether the denial of eligibility for day services on
the basis of
age
139 Referring to Wilson v First County Trust Ltd (No 2) [2003] UKHL 40, [2004] 1 AC 816 at 843-
844; R (Begum) v Governors of Denbigh High School [2006] UKHL 15, [2007] 1 AC 100 at [68]
per Lord Hoffmann; Belfast City Council v Miss Behavin’ Ltd [2007] UKHL 19, [2007] 1 WLR
1420 at [13] per Lord Hoffmann, at [24], [26]-[27] per Lord Roger, at [31] per Baroness Hale, at
[44] per Lord Mance and at [90] per Lord Neuberger.
140 Referring to Ministry of Health v Atkinson [2010] NZHC 2401; (2010) 9 HRNZ 47 (HC) at [147];
R (SB) v Governors of Denbigh High School at [31] and [34] per Lord Bingham.
was a justified limitation on the right of those people to freedom from
discrimination.
[201] The Tribunal’s view was that any deference the Tribunal owed to
the SMT decision was “at the lower end of the
spectrum”. It
considered that this was appropriate because the decision makers did not appear
to have recognised that there
were potential human rights issues involved. The
Tribunal also took into account that the SMT decision was made without having
made policy inquiries and without considering whether the contract between the
MOH and IDEA Services permitted the decision to be
made. The Tribunal also
noted that the SMT decision did not disclose any concern by the MOH as to what
might happen to ex-MSD service
users without government funding to append day
services.
[202] We consider that the factors the Tribunal referred to are relevant to the degree of deference that is appropriate. We disagree with the MOH that process is not relevant to the level of deference that is appropriate. We consider the correct approach “when assessing proportionality” is whether “a measure strikes a fair balance and not whether the process by which the primary decision maker reached his [or her] or its decision was adequate” (which is a judicial review question).141
However the process can nevertheless be relevant to the weight to be given to
the
decision maker because:142
As a rule of thumb ... the greater the efforts that a decision maker has made
to investigate and identify the potential implications
of a decision, and the
greater care with which it has sought to reach a decision, the less likely the
courts will be to find that
the decision that it has struck was disproportionate
or otherwise unlawful.
The process of investigation, which may include consultation with experts and
affected individuals, will provide the authority with
an insight and capacity
that the court is unlikely to possess.
...
[203] The idea is partly that the process may show the court that the
decision maker has addressed the competing considerations
and determined where
the balance is to
141 Beatson and others, above n 131, at 289, referring to R (Begum) v Governors of Denbigh High
School, above n 139.
142 Beatson and others at 289.
be struck. If this has not been done the court is “deprived of the assistance and reassurance” that the decision maker has made a considered opinion on the NZBORA issues and the court has “no alternative but to strike the balance for itself”.143 The other idea is that a thorough process may provide expertise to the decision maker that the court cannot hope to replicate. It can be seen, therefore, that process may be relevant both to the “democratic” and the experience and expertise
reasons for deference.
[204] The same applies in relation to whether the decision maker has given
reasons for its decision. This is explained as follows:144
There are two reasons why it would be appropriate to give weight to a
decision because of the thoroughness with which it has been
reasoned. The first
relates to a situation where a decision maker is better placed than the court to
make a particular decision
or assessment ...The important point to recognise,
however, is that the reasons supplied for a decision, and the structure
of the reasoning process, do not themselves provide a reason to give
weight to the decision. Weight is given to the reasoning because there is some
other reason why the decision
maker is better placed to make the decision. The
second reason for deferring to a well-reasoned decision is that it provides
evidence
that the decision maker has, through the process of making the
decision, acquired an insight and knowledge not possessed by the
court.
[205] In light of these considerations, we consider that the Tribunal was correct in its assessment that the weight to be given to the SMT decision was low. We agree with the MOH, that on democratic and experience/expertise grounds, the MOH is better placed to determine the priorities of competing health needs from the limited budget. However the process by which the SMT made its decision about those priorities does not provide us with comfort that the SMT obtained the relevant available information which would thereby provide it with the experience/expertise that this court could not replicate, nor (importantly) that it understood that there was a balance to be struck between fiscal objectives and human rights and that it made a considered assessment of where that balance was to be struck. With that in mind we proceed to consider whether the SMT decision was a reasonable and justified limit
on the right to be free from discrimination on the grounds of
age.
143 At 291 referring to Belfast City Council v Miss Behavin’ Ltd, above n 139.
144 At 291-292.
Did the SMT decision serve a purpose sufficiently important to justify
curtailment of the right to be free from discrimination?
[206] It is necessary to consider the objective of the decision in order to
consider whether that is a sufficiently important objective
to justify the
curtailment of the right to be free from discrimination (in this case on the
basis of age).
[207] The MOH describes its objective in this way:
In this case, the Ministry’s objective is better described as to ensure
compliance with s 3(2) of the NZPHDA, which
had two facets: the
imperative to “get back on budget” as well as to ensure the Ministry
was able to continue to meet
its funding obligations in respect of its core
responsibilities. Working to ensure nationally consistent NASC referral
behaviour
as part of improving fiscal management is also an important and
legitimate task.
[208] The Tribunal considered that the MOH’s objective was
“cost cutting” and “to stimulate or accelerate
debate about
what the source of funding for day services should be generally, specifically
with a view to the possibility that responsibility
would be transferred to the
MSD”.145 The Tribunal found:146
[183] We do not accept that either of those objectives served purposes
sufficiently important to justify curtailment of the right
to be free from
discrimination:
[a] In this case, the MOH was not looking to cut a cost on the basis
that the Government should not be meeting the cost at
all. What it was looking
to do was to shift the cost burden to some other agency of Government (most
likely, the MSD);
[b] In financial terms, the immediate impact of the SMT’s
decision cannot have been material to the MOH. ...;
[c] ... instead of simply cutting off the funding as it did, the SMT
could have continued to fund the service users concerned
whilst signalling and
promoting the need for a policy change and decision-making within
Government;
[d] .... There is no reason we can see why the policy work and
discussion needs to have been taken what is now six years, with
the issue still
effectively unresolved;
[e] The point is that the MOH could have accelerated the policy
discussion if it had wanted to, and the debate could have
145 Idea Services Ltd v Attorney-General, above n 36, at [182].
146 At [183].
been completed, within a time frame during which the actual additional cost
to the MOH of continuing to fund ex-MSD service users
was negligible;
[f] Of course, if the outcome of that debate were to leave
funding responsibility with the MOH, then our conclusion
(i.e., that the
MOH’s decision to summarily stop paying for day services for ex-MSD
service users does not justify curtailment
of the right of those service users
to be free from age-related discrimination) would be all the more obvious. On
the other hand,
if the result of the policy work were to see responsibility
transferred to the MSD, then that could have been done without having
to leave
any service users without funding in the interim.
[209] The MOH criticises the Tribunal’s view that the
decision was aimed at moving funding responsibility from
the MOH to another
government agency. We agree that the evidence does not show that the SMT
decision was made with a view to move
funding responsibility to another
government agency. The focus of the SMT was on whether it should be funding
these services in
the absence of an up to date policy on the matter (which would
presumably clarify its responsibility) and when the MOH was undertaking
a
“back on budget” programme to address overspending and projected
expenditure growth.
[210] As to the budgetary objective, we consider that the
Tribunal’s reasoning strayed into the weighing of the competing
objectives and effects rather than making an abstract inquiry about the
objective. The Tribunal’s approach is less about what
the MOH’s
objective was and more about whether it was an objective justified on the
evidence and in light of the outcome of
work yet to be carried out.
[211] The Tribunal’s approach was influenced by a decision of the Supreme Court of Canada in Nova Scotia (Workers’ Compensation Board) v Martin, on which IDEA Services relies.147 That case concerned legislative provisions excluding chronic pain from the regular workers’ compensation system. These provisions were challenged on the basis that they discriminated against those with the disability of chronic pain
attributable to a work-related injury. The Government identified four
objectives
147 Nova Scotia (Workers’ Compensation Board) v Martin 2003 SCC 54, [2003] 2 SCR 504.
including “to maintain the viability of the accident fund”. As
to this, the Court
stated:148
The first concern, maintaining the financial viability of the Accident Fund,
may be dealt with swiftly. Budgetary considerations
in and of themselves cannot
normally be invoked as a free-standing pressing and substantial objective for
the purposes of s 1 of
the Charter ... It has been suggested, however,
that in certain circumstances, controlling expenditures may constitute a
pressing and substantial
objective ... I find it unnecessary to decide this
point for the purposes of the case at bar. Nothing in the evidence establishes
that the chronic pain claims in and of themselves placed sufficient
strain upon the Accident Fund to threaten its viability,
or that such claims
significantly contributed to its present unfunded liability . ...
[212] We are not so sure that this decision supports the approach the Tribunal took. In this passage the Supreme Court of Canada rejected that budgetary considerations “in and of themselves” can be invoked as a sufficiently important objective but also contemplated the possibility that “in certain circumstances” controlling expenditure might be a sufficiently pressing and substantial objective. This objective, however, failed in that case through lack of evidence. We agree that it is not a sufficient basis on which to discriminate for a government agency to say that it will cost us too much if we do not discriminate. On the other hand, “the Supreme Court of Canada has recognised that the proper allocation of limited resources is an important government
objective that requires the government to make difficult policy
choices.”149
[213] In Atkinson the High Court said
this:150
We consider that the analysis at this first stage enquiry concerning the
importance of the policy is rather abstract. There is no
weighing at this first
point of the four-stage inquiry of competing objectives and effects. We do not
consider counter-veiling arguments,
or carry out a balancing exercise. The
importance is considered on a stand-alone basis. Are the identified objectives
in themselves
genuine concerns and sufficiently important in themselves to
warrant a curtailment of the right to be free from discrimination?
[214] We prefer this approach to the approach taken by the Tribunal. We
consider that issues such as whether the decision could
and should have been
delayed pending
148 At [109].
150 Ministry of Health v Atkinson, above n 140, at [216].
further policy work can be addressed at a later stage of the inquiry (i.e.,
whether the decision impairs the right to be free from
age-related
discrimination no more than reasonably necessary for its purpose). Otherwise
the factors to be considered under the
four steps of the legal test become
unnecessarily duplicative.
[215] In Atkinson the MOH submitted that there were nine objectives
of its decision including “to be fiscally sustainable”. The High
Court
rejected the first of the nine objectives. In relation to the others it
concluded:151
It is certainly arguable that individually each reason, if it stood alone,
would not be sufficient, with the possible exception of
fiscal sustainability,
but if they are taken collectively, the limiting measure can be seen as serving
purposes of sufficient
importance to justify curtailment of the right
to freedom from discrimination.
[216] We accept that budgetary constraints which required the MOH to make
decisions about competing priorities for disability services
funding is an
objective which is sufficiently important to justify a curtailment of the right
to be free from discrimination. In
our view, given that health funds are
limited, and the MOH is to pursue the objectives of the NZPHD Act “to the
extent that
they are reasonably achievable within the funding provided”,
we agree that a limiting measure taken because expenditure had
to be controlled
and prioritised is a sufficiently important objective which can justify
curtailment of the right to be free from
discrimination.
[217] There must of course be evidence that the need to control expenditure and to choose between priorities was the objective. In this case the evidence of Ms Woods provides evidence that it was. Ms Woods saw the decision as warranted because of the budget pressures and the risk to core services if the day services funding was continued. We make no comment on whether the objective of a nationally consistent NASC referral behaviour is a sufficiently important objective because the evidence does not show that this was one of the objectives. The evidence shows only that the decision was made for fiscal reasons and, given the fiscal issues, the uncertainty about whether it should be funding day services in the absence of a formal up to date
policy on the matter.
151 At [219]. This was not in issue on the appeal.
Was the SMT decision rationally connected to its
purpose?
[218] The Tribunal found:152
The SMT’s purpose in making its decision was to cut costs. There was
also a related purpose of moving funding responsibility
out from the MOH to
another Government agency, most likely the MSD. As a matter of logic, we accept
that the decision was rationally
connected to those purposes.
[219] As discussed the MOH takes issue with the Tribunal’s view that
it had a purpose of moving funding responsibility from
the MOH to another
government agency. The MOH does, however, support the Tribunal’s
decision that the SMT decision was rationally
connected to its purpose of
getting back on budget and ensuring its ability to continue to meet its funding
obligations in respect
of its core responsibilities.
[220] IDEA Services submits that, in order for a limit to qualify as being rationally connected to the objective, there has to be a minimum level of rational inquiry made as to whether that limit assists in achieving the objective. It submits that there was no such rational inquiry. It says that there was no financial or cost benefit analysis, there were no documents to show that the MOH wished to safeguard services to its core responsibilities and the MOH simply saw cutting funding for day services over
65 as an easy option. The MOH submits that the rational connection test,
like the sufficiently important objective inquiry, is a
threshold issue, largely
considered on an abstract basis without any qualitative analysis of the
argument, and is usually readily
satisfied by government. That is the
view expressed in R v Hansen153 and
Atkinson154 and we agree with it.
[221] In this case it was reasonable for the SMT to suppose that no new referrals for day services for people in IHC over 65 years would assist Disability Support Services in getting “back on budget”. That view is supported by the evidence of Ms Woods before the Tribunal that its services were in “serious financial strife and under
massive stress” and that there was a need to compromise on the
services being
152 Idea Services Ltd v Attorney-General, above n 36, at [187].
153 R v Hansen, above n 101, at [121].
154 Ministry of Health v Atkinson, above n 140, at [222].
funded to ensure the quality of care and support in respect of the
MOH’s core responsibilities was not at risk. We therefore
agree with the
Tribunal that the SMT decision was rationally connected to the objective of
getting back on budget and ensuring that
the MOH was able to continue to meet
its funding obligations in respect of its core responsibilities.
Did the SMT decision impair the right to be free from age-related
discrimination no more than reasonably necessary for its
purpose?
[222] The next question is whether the SMT decision impaired the right to be free from age-related discrimination no more than reasonably necessary for its purpose (referred to as “the minimal impairment” question). Here the Court is considering whether any less rights-intrusive means of addressing the objective would have a
similar level of effectiveness.155 A decision will meet
the minimal impairment
standard if it falls within a range of reasonable alternatives. A decision
is not disproportionate merely because the Court “can
conceive of an
alternative which might better tailor objective to
infringement.”156
[223] The Tribunal found:157
In our view the SMT decision impaired the right of ex-MSD service users to be
free from age-related discrimination very much more
than was reasonably
necessary for its purpose. Our reasons are effectively set out at [183] and
[184] above. There was no demonstrable
need for the MOH to cut the funding,
and then try to have the discussion about where responsibility for providing it
should lie within
Government. The cost to the MOH of seeing that the policy
decision was addressed before any funding was cut would have been insignificant
in the overall context of things.
There was no need that we can see for the MOH to act in the peremptory way
that it did.
[224] In referring back to [183] and [184] of its decision the
Tribunal’s main
concerns were that:
155 R v Hansen above n 101, at [42] per Elias CJ, at [79] per Blanchard J, at [104] and [126] per
Tipping J, at [269] per Anderson J.
157 Idea Services Ltd v Attorney-General, above n 36, at [190]-[191].
(a) the MOH was not cutting costs because the services were of a kind
that should not be met by government;
(b) the immediate fiscal impact was small; and
(c) although the fiscal impact would increase over time, the policy
work could have been done within the timeframe when the
additional cost was
negligible.
[225] The MOH submits that the fiscal situation confronting it was
that there needed to be immediate reductions in the
funded services. It
submits that neither the Tribunal nor this Court is better placed than the MOH
to determine how best to get
back on budget. It submits that considerable
deference to the SMT is required. It submits that it is relevant that age is
not a
“suspect” ground of discrimination and that the service
provider’s obligations under the residential care contract
involve
providing meaningful activities for those under the provider’s
care.
[226] IDEA Services submits that the SMT decision was a fundamentally
flawed decision which did not enable the MOH to assess whether
there were
reasonable alternatives. We agree with that submission. We note
that:
(a) there is no evidence that the SMT considered
whether the Government intended that day services provided
for intellectually
disabled people over 65 would be funded;
(b) there is no evidence that the MOH considered the disconnect between
their decision and the Government strategy for an inclusive
society;
(c) there is no evidence that the MOH considered the scope of the
service specification under the residential care contracts
to determine
the extent to which there would still be funding for any activities outside of
the home;
(d) there is no evidence of any financial analysis as to the likely impact of continuing to fund day services for the affected group over the short,
medium or long-term (when, for example, day services for the
deinstitutionalised group would presumably decline over time);
(e) there is no evidence that the MOH considered the impact of their decision
on human rights issues; and
(f) there is no evidence that the SMT considered whether any non-
discriminatory options were available.
[227] As discussed above, the MOH approached the Part 1A claim brought by
IDEA Services as concerning only its responsibilities
rather
than the responsibilities of the Government. That was also how the SMT
decision approached the matter. In circumstances
where the SMT knew that the
MOH had been funding day services to those exiting MSD vocational services
funding, and that MSD funding
stopped at age 65, we consider it was incumbent on
the MOH to clarify with the Minister whether the MOH should be funding these
services.
In a meeting between the MOH and IDEA Services shortly after the SMT
decision was made there was a query about whether the MSD was
in breach of the
HRA. But it does not seem that the MOH requested the MSD’s advice on this
(or, if it did, we were not shown
this). If the human rights implications of
this were considered by MSD, that may have been relevant to the MOH’s
decision.
Nor did the MOH seek to produce evidence from MSD in this claim. We
therefore do not know that the Government intended that there
be government
funding for day services only up to the age of eligibility for government
superannuation, with day activity needs then
to be met in some other
way.
[228] We therefore cannot give any weight to the SMT decision as reflecting a considered assessment of an appropriately informed and expert decision maker, of where the balance appropriately lay between the need to get back on budget, the health services that should have priority, and the rights of intellectually disabled people aged over 65 years to be free from discrimination. As in Atkinson the MOH’s submission really suggests that in the face of fiscal unsustainability a court
should accept (because it should simply defer to the government agency) that
the decision made is justified.158 As in Atkinson we do not
accept that submission.
[229] In Moore v British Columbia (Education) the Supreme Court of
Canada considered a claim for discrimination where a school for special needs
education for a boy with severe
dyslexia was closed because of a
“budgetary crisis”.159 The Supreme Court of Canada
noted that the decision was made with:160
... no assessment, financial or otherwise, of what alternatives were or could
be reasonably available to accommodate special needs
students if the Diagnostic
Centre were closed ... The failure to consider financial
alternatives completely undermines
what is, in essence, the District’s
argument, namely that it was justified in providing no meaningful access to an
education
for Jeffrey because it has no economic choice. In order to decide
that it had no other choice, it had at least to consider what those other
choices were.
[230] We consider that there were likely to be reasonable alternatives
available to the MOH which were non-discriminatory. For
example, reasonable
alternatives may have been to:
(a) defer a decision pending an urgent review of whether the MOH was
the appropriate funder of the services and the financial
impact of funding these
services was assessed, and to seek a supplementary appropriation if necessary to
continue to fund these services
(noting, for example, that there was a human
rights issue at stake);
(b) reduce the funding of day services for intellectually disabled
people over 65 years on a pro rata basis (e.g. by reducing
the number of funded
hours) or by requiring the NASCs to prioritise on the basis of need.
[231] Like Moore the failure to consider any alternatives undermines the MOH’s
position that the decision was a minimal impairment to the right to be free
from discrimination on the ground of age. The MOH had
the burden of proving
that its
158 Ministry of Health v Atkinson, above n 140, at [280].
159 Moore v British Columbia (Education) 2012 SCC 61.
160 At [52].
decision impaired the right no more than reasonably necessary for its
purpose. We are not persuaded that it has discharged that burden.
Was the SMT decision in due proportion to the importance of its
objective?
[232] The last step in determining whether a limit is reasonable
and justified requires the Court to “stand back
and make a broad
assessment” as to whether the discrimination is in due proportion to the
MOH’s objective.161
[233] The Tribunal found:162
Our answer to this question is also in the negative. Once again, we cannot
see that there was any reason for the MOH to cut funding
to ex-MSD service users
in the peremptory way that it did. Not only was that a step that was
inconsistent with its contractual obligations,
but the amounts involved in the
short run were for all intents and purposes immaterial to the MOH. The
decision to cut the funding
did not need to be made before the internal debate
between the MOH and the MSD had been concluded.
[234] The submissions by both parties are brief on this part of the case.
In essence, the MOH submits that it was not disproportionate
for the MOH to stop
funding services for which it was not responsible, in order for it to have
sufficient funds for the services
for which it was responsible. IDEA Services
submits that the process by which the SMT decision was reached meant that the
MOH was
not able to make the relevant inquiry and that the effect of the
decision seriously impacts on the quality of life of vulnerable
members of
society.
[235] The SMT’s response to the need to get back on budget was a blanket prohibition on day services for intellectually disabled persons exiting MSD funding (and not within other groups for which it accepted funding). The MOH has not persuaded us that this was a proportionate response at the time it was made, in the
absence of any consideration of other
alternatives.
161 Ministry of Health v Atkinson, above n 140, at [284]; Child Poverty Action Group Inc v
Attorney-General, above n 96, at [224]; R v Hansen, above n 101, at [134].
162 Idea Services Ltd v Attorney-General, above n 36, at [192].
Result on Part 1A claim
[236] For these reasons we agree that the SMT decision breached Part 1A of
the
HRA. The appeal is dismissed.
Costs appeal
Introduction
[237] The Tribunal awarded costs of $165,000 in favour of IDEA Services.
The
MOH appeals against this award. It says that the Tribunal erred
because:
(a) the Tribunal’s award bears no resemblance to prior costs awards
and
therefore failed to conform to the principle of consistency;
(b) in determining a reasonable contribution to actual costs, the Tribunal
failed to assess whether the actual costs incurred were
reasonable;
(c) the Tribunal wrongly applied the High Court Rules costs scale for
category 3C proceedings;
(d) the Tribunal failed to assess whether increased costs were
justified.
[238] IDEA Services contends that there was no error in the
exercise of the
Tribunal’s discretion.
Discretion to award costs
[239] The Tribunal’s power to award costs is set out in s 92L of the
HRA which provides as follows:
(1) In any proceedings under section 92B or section 92E or section 97, the Tribunal may make any award as to costs that it thinks fit, whether or not it grants any other remedy.
(2) Without limiting the matters that the Tribunal may consider in
determining whether to make an award of costs under this
section, the Tribunal
may take into account whether, and to what extent, any party to the
proceedings—
(a) has participated in good faith in the process of information gathering by
the Commission:
(b) has facilitated or obstructed that information-gathering
process:
(c) has acted in a manner that facilitated the resolution of the issues that
were the subject of the proceedings.
[240] The parties are agreed that the principles relevant to the exercise
of this discretion are as summarised in Herron v Speirs Group Ltd as
follows:163
(a) The discretion to award costs is largely unfettered, but
must be exercised judicially;
(b) Costs in the tribunal will usually be awarded to follow the event,
and quantum will usually be fixed so as to reflect a
reasonable contribution
(rather than full recovery) of the costs actually incurred by the successful
party;
(c) The Tribunal’s approach to costs is not much different from
that which applies in the Courts although, as there is
no formal scale of costs
for proceedings in the Tribunal (as there is in the Courts), caution needs to be
exercised before applying
an analysis of what might have been calculated under
either the High Court or District Court scales of costs. Such an analysis can
be no more than a guide.
(d) An award of costs that might otherwise have been made can be
reduced if the result has been a part-success, only;
(e) Assessment of costs must take account of the relevant features of
each case, but there must be some consistency in the
way costs in the Tribunal
are approached and assessed;
(f) Offers of settlement “without prejudice except as to costs” are a
relevant consideration.
[241] The parties are also agreed that, because this is an appeal against the exercise of a discretion, the MOH must show that the Tribunal acted on a wrong principle, took into account irrelevant factors or failed to take into account relevant factors, or
was plainly wrong.
The Tribunal’s
decision
[242] The Tribunal began by noting that IDEA Services was seeking an award of costs on a reasonable contribution basis. IDEA Services submitted that an award of
$235,000 would be an appropriate contribution given that its actual costs
were more than $385,000. The Tribunal noted that the MOH
accepted that an award
of costs would be made against it, but submitted that the proper range was
somewhere between $36,500
to $43,000. The question for the Tribunal was
therefore one of quantum.
[243] The Tribunal referred to s 92L and the approach to costs as set out
in Herron v Speirs Group Ltd and other cases.
[244] As to the conduct of the litigation, the Tribunal
said:164
Idea Services won; neither side can sensibly be criticised for the way their
respective cases were presented; there is no suggestion
that the hearing was
lengthened unnecessarily because of any default on either side; this was an
important case involving factual
and legal complexities; as noted significant
time was required to prepare the matter; and we do not see that either side took
any
points the argument of which should now count against them in the costs
assessment. We also agree that costs should be assessed
on the basis that Idea
Services was wholly successful in its claim.
[245] On the topic of consistency with previous awards the Tribunal said
this:165
The Tribunal has never before made a costs award at or anywhere near the
level sought by Idea Services. As the MOH observes, the pattern
of previous
awards made from a reasonable contribution starting point have often
worked out at about $3,750.00 per day of
hearing time. In this case that would
yield a figure of around $26,500. The MOH accepts however that the award in
this case needs
to reflect the necessity of second counsel, and that it was a
complex matter. It is on that basis that the MOH suggests a range
of between
say 36,500 to $43,000 (we understand that $43,000 is also roughly what might
have been expected if the District Court
scale had been applied).
[246] The Tribunal’s view about why the costs being sought were so
much higher
that other awards was as
follows:166
164 Idea Services Ltd v Attorney-General (No 3) [2011] NZHRRT 21 at [66].
165 At [67].
166 At [71].
The reason why the amount of costs sought here is very much greater than any
previous award is quite simply that Idea Services has
had to spend an
unprecedented sum of money to bring its claim. We emphasise again that there is
no suggestion that the amount spent
was unreasonable; it is just that this
really was a complex case that raised significant issues of fact and law, all of
which required
careful preparation.
[247] The Tribunal agreed that awards in previous cases can be used to
calculate a rough average of costs awarded per day of hearing,
although said
that this was no more than a factor to be used at most as a guide. It said that
another approach to the same data
is to look at how the costs awards that have
been made on a reasonable contribution basis compare with the actual costs
reported
as having been incurred in those cases. Recognising that the
calculation was not precise, the Tribunal said that on this approach
the
upshot was that historically the Tribunal had awarded an average of around
30 per cent of actual costs incurred. Applying
the approximate 30 per cent of
actual costs guideline, the Tribunal said that the starting point for its
assessment of a reasonable
contribution award would be in the order of $115,500.
It said that the figure should be uplifted because it would not really have
been
possible to run the claim without two counsel. It considered that any uplift
should be above the $10,000 that the MOH
accepted under this heading
because it viewed that amount as manifestly inadequate.
[248] The Tribunal recognised that there may be some who viewed historic
awards as generally too low, but there were access to justice
issues involved
and it was important that the risk of an adverse costs award did not have too
much of a chilling effect on cases
that are brought to the Tribunal.
[249] The Tribunal rejected the MOH’s submission that, if the
case was so complex, then the matter would have been
removed to the High Court
at the outset. The Tribunal noted that it had the first instance jurisdiction
and that it had dealt with
other complex cases without there being any
suggestion in those cases that they ought to have been remitted to the High
Court for
a first instance decision.
[250] The Tribunal recognised that an award for costs at the level claimed by IDEA Services would be for an amount that exceeded its power to award damages. It agreed with the MOH that it should be slow to do that. It expressed no view on
whether and when it could do that because its award was well under the
damages maximum in any event.
[251] The Tribunal said that the application of court scales was “at
best a guide”.167
It agreed with IDEA Services that, if it was to look at court scale costs, it was the High Court scale rather than the District Court scale that was most relevant. This was because of the complexity of the case, the significance of the issues, and the effort and skill that were expended on the matter. On a 3C basis the MOH calculated that an award of costs would be about $135,000 whereas IDEA Services’ calculation was that it would have been about $165,000. On this point the Tribunal concluded
that:168
... we think that it is relevant to our assessment to know that if the case had been heard in the High Court costs would not likely have exceeded $165,000
– notwithstanding that actual costs were over $385,000. We think we
would need good reason to award a figure above the highest
figure that the High
Court would have been likely to have awarded;
[252] The Tribunal noted the MOH’s submission that a high costs award might impact upon the work of the Director of Human Rights Proceedings. The Tribunal understood that concern but considered that the costs award should not be tailored “to provide the Director with a protection that the legislation does not confer”.169 It also considered that it did not necessarily follow that an unsuccessful plaintiff in HRA litigation would face awards at the same kind of level as an award of costs
against a government agency.
[253] The Tribunal referred to a submission from the MOH that IDEA Services was a commercial entity that brought its claim for commercial reasons. The Tribunal noted that IDEA Services was a not for profit organisation and that, in any event, even if costs should be restricted because the plaintiff was a commercial entity that was more than taken care of in this case by the Tribunal’s award representing less
than half of the actual costs
incurred.
167 At [76(c)].
168 At [76(c)].
169 At [76(d)].
[254] Lastly the Tribunal referred to the matters set out in s 92L(2) of
the HRA. The Tribunal described IDEA Services’
submission about this
as “a bit of an afterthought”.170 Having
reviewed the affidavits relating to these matters, the Tribunal
considered that only s 92L(2)(c) was engaged. It said:171
... neither of the parties [h]as criticised the other for its conduct during
the Human Rights Commission’s information gathering
process (such as that
was). But we do regard the MOH’s reluctance to really try to resolve the
concerns raised by Idea
Services as a matter that should be taken
into account as an upward pressure in the assessment of costs to be awarded to
Idea Services.
[255] The Tribunal concluded:172
In the circumstances, pursuant to s.92L of the Act we award costs to Idea
Services in the sum of $165,000.00.
Consistency
[256] The MOH submits that the Tribunal’s award was not consistent with other awards because it represented an amount of $25,000 a day, which was well in excess of previous awards. It submits that the complexity and significance of the case did not justify such a departure. It says that although discrimination is a complex area of law, this is not novel in the context of the Tribunal’s jurisdiction. It makes a comparison with Smith v Air New Zealand which was acknowledged by the Tribunal at that time as at the complex end of the spectrum, and which was widely regarded as
a test case, and where the award of costs was $16,500.173 It
also makes a comparison
with a case which had the longest hearing time (eight days) and where the
award of costs was $22,000.
[257] The Tribunal expressly took into account its awards in other cases. The principle of consistency does not require the Tribunal to make awards similar in quantum to previous cases without regard to the circumstances of this case. Nor does it require the Tribunal to make an award that equates to a similar rate per day of
hearing. The cases the Tribunal hears vary widely in their
complexity and
170 At [78].
171 At [81].
172 At [82].
173 Smith v Air New Zealand Ltd HRRT 37/02, 4 April 2006.
significance. Complexity and significance are not accurately
measured by the number of hearing days before the Tribunal.
[258] This was without doubt at the high end of the complexity and
significance spectrum. As our judgment shows, the claim raised
a number of
difficult issues and the issues are of considerable significance to IDEA
Services’ clients. The issues we had
to grapple with were all issues
before the Tribunal as well. The comparison with the award in Smith is
not apt for the reason that the Tribunal gave – the actual costs of the
defendant in that case were $60,000, whereas here
they were over
$385,000.
[259] The Tribunal’s approach was to look at what previous cases
indicated was a reasonable contribution to actual costs.
This gave it a figure
of 30 per cent of actual costs which in this case would give an award of
$115,000. We consider that this
approach was more likely to give an
accurate comparison with other cases (providing actual costs were
reasonable). We
consider therefore that there was no error in this
approach.
[260] The Tribunal considered that this amount should be increased because
of the need for two counsel. We are not sure whether
the other cases involved
two counsel. It appears that Smith did and that this was included in the
30 per cent average calculation which the Tribunal calculated. In any event, if
the approach
is to take a percentage of actual costs, the need for two counsel
will be accounted for in the actual costs. We consider that in
adding something
for second counsel, the Tribunal was effectively double counting this factor.
In this respect we consider the Tribunal
erred.
Were actual costs reasonable
[261] The MOH submits that the Tribunal wrongly understood that the reasonableness of IDEA Services’ actual costs was not challenged. It submitted to the Tribunal, and it submits to us, that costs should not be set by reference to the actual costs of a large commercial law firm. It says that if a party chooses to instruct counsel from a large commercial law firm, it cannot expect the other party to pay for the additional cost in so doing. It also submits that a reasonable contribution should
be assessed by reference to deemed reasonable costs (as the High Court scale
does)
and not by reference to actual costs.
[262] We agree with IDEA Services that the Tribunal had express regard to
the reasonableness of actual costs. In a footnote it
compared the actual costs
with the MOH’s total costs of defending the matter, which were
$220,000 calculated at
Crown rates. We also agree with IDEA Services
that the complexity and significance of the claim justified experienced
counsel with special skill in human rights claims. Whether that counsel came
from a large commercial law firm or the independent
bar or elsewhere is beside
the point providing the costs are reasonable for experienced counsel with
special skill in human rights
claims.
[263] We also agree with IDEA Services that the 30 per cent of actual costs
was one factor that the Tribunal took into account.
Guidance was also provided
by considering category 3C High Court costs. As calculated by the parties, the
3C scale gave a higher
figure than the 30 per cent of actual costs calculation.
This indicates that actual costs were reasonable.
[264] The MOH also submits that awards of costs calculated with reference
to a reasonable contribution of the actual costs charged
by a large commercial
law firm will put HRA claims out of reach of the citizen of ordinary means. It
also submits that such awards
are likely to have a chilling effect on the
Director’s decision to represent complainants and potentially to affect
the budget
of the Office of Human Rights Proceedings.
[265] The Tribunal expressly considered this issue. In the end it considered that cost awards should not be tailored to provide the Director with a protection that the legislation did not confer. It also considered that awards of costs against a government agency would not necessarily be the same as awards of costs against unsuccessful plaintiffs. We see no error of principle in the Tribunal’s approach on this topic. Its view was not plainly wrong. We agree that costs in a particular case will depend on its particular circumstances. The Tribunal’s approach to costs in this case was appropriate.
High Court scale costs
[266] The MOH submits that the Tribunal was wrong to conclude that the High
Court scale was a more appropriate guide than the District
Court scale. It
bases this submission on s 92Q of the HRA which limits the Tribunal’s
jurisdiction to award damages or any
other remedy to awards or remedies that are
within the District Court. We do not accept that the jurisdiction on awards or
remedies
dictates the level of costs that are appropriate in any given case
before the Tribunal. It is the complexity and significance of
the case which
provides the better guidance.
[267] The MOH submits that if High Court scale costs are to guide the Tribunal and if category 3C costs are appropriate that begs the question of why the matter is heard in the Tribunal in the first place. The MOH submits that costs awards made at this level by the Tribunal may inappropriately become a factor in a party’s decision as to whether they seek to have the claim transferred to the High Court. We do not accept these submissions. The Tribunal is a specialist jurisdiction. It is well able to adjudicate on complex proceedings in its specialist area of expertise as is illustrated
by such cases as Atkinson174 and Child Poverty Action
Group Inc.175 Again it is the
complexity and significance of the claim which makes category 3C the
appropriate comparator.
[268] The MOH submits that if category 3C costs are properly calculated, the amount should have been $135,975 and not $165,000. The difference is that IDEA Services’ calculation included a step which only applies if a “trial does not eventuate”. IDEA Services does not challenge this. We agree with the MOH that the Tribunal’s award has apparently adopted IDEA Services’ calculation without resolving the discrepancy in the two calculations. The Tribunal appears to have justified the use of the higher calculation because of the view it took of the MOH’s reluctance to resolve the concerns raised by IDEA Services. Given the error in IDEA Services’ calculation we consider the Tribunal was in error in adopting the higher
figure.
174 Atkinson v Ministry of Health [2010] NZHRRT 1; (2010) 8 HRNZ 902 (HRRT).
175 Child Poverty Action Group Inc v Attorney-General HRRT 41/05, 16 December 2008.
Increased costs
[269] The MOH submits that the Tribunal was wrong to increase costs for the
MOH’s approach to resolution of the matter. The
MOH says that it did
invite IDEA Services to meet to discuss its concerns. It also says that once
IDEA Services filed its claim,
IDEA Services refused to mediate. IDEA Services
refers to the MOH’s decision to decline IDEA Services’ invitation to
mediate prior to commencing the claim.
[270] We do not consider it necessary to decide whether parties should or should not have sought to resolve matters prior to the claim being commenced. Ordinarily increased costs are appropriate for post proceeding conduct rather than events prior to the proceeding being commenced. In this case the Tribunal accepted that neither party’s conduct could be criticised in relation to the conduct of the proceeding. We also note that s 92L(2)(c) is put in positive terms. That is, if a party has acted in a manner that facilitated the resolution of the issues then the Tribunal may take that into account. It does not say that if a party has acted in a manner that has not facilitated the resolution of the issues then that should be taken into account. We therefore conclude that the Tribunal was in error in finding that the MOH’s conduct
“should be taken into account as an upward pressure in the assessment
of costs”.176
Conclusion
[271] We consider that the Tribunal’s award was too high
because:
(a) the Tribunal took into account second counsel when that was already
accounted for in its 30 per cent of actual costs calculation;
(b) the Tribunal took the upper boundary of High Court 3C costs
as
$165,000 when it was not;
(c) we do not agree with the Tribunal’s view that increased costs
were
warranted for MOH’s conduct.
176 Idea Services v Attorney-General (No 3), above n 164, at [81].
[272] We consider that the 30 per cent of actual (which the Tribunal accepted were reasonable) costs calculation was an appropriate one. It is slightly less than category
3C costs, but they are no more than a guide. We therefore quash the
Tribunal’s
award and substitute it with an award of $115,000.
Costs on this appeal
[273] IDEA Services has succeeded on the appeal to this court. We can
indicate our preliminary view that it should have an award
of costs on a
category 3C basis. If the parties are unable to agree costs, they may submit
brief memoranda (limited to no more than
3 pages) on the issues in dispute,
within two months of this judgment (to allow for the Christmas
break).
Mallon J Ms J Grant MNZM
Ms S Ineson QSM
Solicitors:
Crown Law, Wellington for the Appellant
Russell McVeagh, Wellington for the Respondent
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