Bourneville v Legal Services Commissioner [2016] NZHC 1079 (23 May 2016)

	Home \| Databases \| WorldLII \| Search \| Feedback High Court of New Zealand Decisions

BETWEEN	MICHAEL VICTOR BOURNEVILLE AND MARK GRAHAM BLEWDEN First Applicants
AND	MARK BOURNEVILLE Second Applicant
AND	MICHAEL VICTOR BOURNEVILLE, MARK GRAHAM BLEWDEN AND MARK BOURNEVILLE Third Applicants
AND	LEGAL SERVICES COMMISSIONER First Respondent
AND	CHRISTINE JILL MARSHALL Second Respondent

Hearing:	28 April 2016
Appearances:	R J Hooker for Applicants L M Hansen for First Respondent A Hart for Second Respondent
_Judgment:	_{23 May 2016}

This judgment was delivered by me on 23 May 2016 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

[1] The applicants bring this application alleging that the decisions of the Legal Services Commissioner (the Commissioner) to initially grant legal aid to the second respondent, Ms Christine Marshall (Ms Marshall), and thereafter subsequently to decline to withdraw that grant, were decisions made contrary to law.

[2] It is unusual for a party who is not directly involved as an applicant for a grant of legal aid to seek to become involved in the issue of whether a grant should have been made, or should continue to be made. The applicants’ interest in the decisions arises directly from the fact that the legally aided litigant, Ms Marshall, is the plaintiff in a proceeding brought against the applicants, in which she pleads several causes of action but is principally seeking to establish that the applicants in the present proceeding hold certain property on constructive trust for her.

[3] Ms Marshall’s proceeding against the applicants is scheduled for hearing at a

[4] As I will set out hereunder, if Ms Marshall’s grant of legal aid were withdrawn, her ability to pursue her claim against the applicants would effectively cease with the consequence that her claim regarding the existence of a constructive trust would not be determined by the court and would remain unresolved.

[5] The full factual background to this judicial review application is set out in the

Court of Appeal judgment in Marshall v Bourneville delivered on 1 July 2013.¹

[6] Ms Marshall and the first named applicant, Mr Michael Bourneville (Mr Bourneville) were married in February 2001 and subsequently separated permanently in February 2005. The parties have been involved in extensive

[7] Prior to their marriage, Mr Bourneville and Ms Marshall had lived together in a de facto relationship commencing in February 1996. When their relationship commenced, each owned a property in Auckland. Ms Marshall owned a house in Glen Eden, and Mr Bourneville owned a house in Wood Bay. Ms Marshall subsequently sold her house and moved in with Mr Bourneville.

[8] During this period, the parties together purchased three sections at Matarangi Beach on the Coromandel Peninsula. The purchase price was $176,500 and Ms Marshall contributed $85,000 of her own money towards the purchase, being the proceeds from the sale of her Glen Eden house. Mr Bourneville contributed the balance of the purchase money. They then built houses on the three sections.

[9] In 1997, one of the properties was sold. They moved into the second house. The third house, at Corokia Place, was transferred into Mr Bourneville’s sole name and let as a holiday home. In January 1999, it was used as security to raise $160,000 towards the purchase of a property at Seabrook Avenue in Auckland.

[10] In February 1999, the Corokia Place property was sold and the proceeds were used to purchase another property located in Symonds Street, Royal Oak in Auckland.

[11] The Royal Oak property was then transferred into a family trust established by Mr Bourneville, called the Victor Frenchie Trust (the Trust). The third applicants are trustees of the Trust.

[12] In January 2000, the parties separated. In July 2000, they reconciled and, in February 2001, they married. In November 2001, Ms Marshall became a trustee of the Trust. At around the same time, Mr Bourneville transferred the Seabrook Avenue property to the Trust.

[13] In October 2002, Mr Bourneville sold the Seabrook Avenue property. [14] In February 2005, the parties separated and have since remained apart.

[15] Following the parties’ permanent separation, Ms Marshall first commenced proceedings in the Family Court in which she sought to set aside the transfer to the Trust by Mr Bourneville of both the Royal Oak property and the Seabrook Avenue property. She did that by relying on ss 44 and 44C of the Property (Relationships) Act 1976, each of which required her to satisfy the court that each disposition had been made in order “to defeat (her) claim of rights”. In a reserved decision delivered on 20 April 2007, Judge de Jong dismissed Ms Marshall’s claim. Ms Marshall then brought an appeal to the High Court which was dismissed by Wild J in a judgment delivered on 24 April 2008.

[16] Ms Marshall next made an application for leave to appeal to the Court of Appeal, which was dismissed by a judgment delivered on 2 December 2008, following which she made an application for leave to appeal directly from the High Court to the Supreme Court. The Supreme Court dismissed her application for leave to appeal by a judgment delivered on 17 March 2009.

[17] In late 2011, Ms Marshall lodged a caveat against the title of the Royal Oak property, asserting that the applicants, as trustees of the family trust, were trustees of an implied or constructive trust, having become proprietors of the property with knowledge of Ms Marshall’s claim and interest in it as a beneficiary. When the applicants invoked the caveat lapsing procedure under the Land Transfer Act 1952, Ms Marshall made an application to this Court for an order that her caveat not lapse.

[18] Prior to commencing those proceedings, Ms Marshall applied for and was granted legal aid. The grant of legal aid was notified to her by letter from the Commissioner,²dated 12 April 2011.

[19] In applying for the grant, Ms Marshall had been required to provide detailed information regarding her financial position. Presumably, by reason of the previous

_{unsuccessful proceedings, the Commissioner referred the application to a
specialist}

²The Legal Services Agency (the Agency) granted legal aid to Ms Marshall under the Legal Services Act 2000 (LSA 2000). The Legal Services Commissioner (the Commissioner) decided not to withdraw the grant of legal aid from Ms Marshall. The role of the Agency has been replaced by a Commissioner under the Legal Services Act 2011 (LSA 2011). For the purposes of clarity and consistency, I use the term “Commissioner” when referring to the role of the Agency under the old Act.

adviser for consideration and evaluation before making a decision as to whether or not to grant legal aid. It is clear from the written recommendation of the specialist adviser, dated 5 April 2011, that a careful evaluation of the prospects of success of Ms Marshall’s claim was undertaken before a conclusion was reached, recommending that there should be a grant of legal aid.

[20] Following lodgement of a caveat on the title to the Royal Oak property, counsel for Mr Bourneville, Mr Carter, wrote to the Regional Manager for the Legal Services Authority on 29 August 2012, in which he expressed his client’s concern that a further grant of legal aid had been made to Ms Marshall. In his letter, Mr Carter said:

It was my and my client’s understanding that legal aid was only granted to people who could demonstrate a reasonable chance of success. Given the position adopted by Mrs Bourneville’s lawyer in the Supreme Court, Mr Bourneville needs to know why he should be the target of a fresh round of legally aided litigation.

[21] In a judgment delivered on 2 October 2012, Associate Judge Osborne rescinded the High Court’s interim order of 19 July 2012 that the caveat not lapse and directed that the caveat should lapse forthwith.³However, the Associate Judge stayed the order for five working days to enable Ms Marshall to file an appeal to the Court of Appeal.

[22] Ms Marshall’s appeal to the Court of Appeal was heard on 20 May 2013, and the Court delivered judgment on 1 July 2013.⁴The Court allowed Ms Marshall’s appeal and made an order that the caveat not lapse, subject to Ms Marshall forthwith filing proceedings to enforce her claim for an interest in the Royal Oak property and pursuing her claim expeditiously.

[23] In relation to the claim for the existence of a constructive trust supporting the caveat, the Court of Appeal said:

[39] Like the High Court Judges in these cases, we see no reason why, in a proper case, relief by way of a constructive trust should not be ordered

against trust property. It seems to us that such an outcome might reasonably be available to Ms Marshall. On her case, an expectation of an interest in the Symonds Street property arose when it was acquired by Mr Bourneville. We see no reason why that expectation should not survive the transfer of the property to the trustees. Mr Bourneville, as settlor and trustee, obviously would have had knowledge of the circumstances giving rise to the expectation. In such circumstances, Ms Marshall could well be able to establish that a trust was impressed on the property and the trustees should reasonably expect to yield to her an interest in the property. Depending on the circumstances in which the later advance to the trust was made and forgiven, such expectation may be reinforced by later events.

[40] For these reasons, we consider that Ms Marshall has discharged the burden of establishing that she has a reasonably arguable case for the claimed interest in the property.

[24] On 8 November 2013, the Supreme Court considered and dismissed Mr Bourneville and Mr Mark Blewden’s application for leave to appeal to the Supreme Court on the basis that Ms Marshall’s claim to an equitable interest is an abuse of process given the parties’ litigation history.

[25] On 14 November 2013, a letter was sent by Mr Robin Lees on behalf of the Commissioner to counsel for Mr Bourneville, belatedly acknowledging Mr Carter’s earlier letters of 29 August and 11 October 2012. In this correspondence, the Commissioner advised that specialist advisers had reviewed the file and the Commissioner had concluded that the grant of legal aid had been properly managed and would continue.

[26] There followed a succession of correspondence written by Mr Blewden, as both a trustee of the Trust and as a friend of Mr Bourneville, questioning the grant of legal aid to Ms Marshall. In a letter sent by him to Mr Lees on 4 December 2013, he requested that the grant of legal aid be terminated, and complained that the grant was a waste of public money, saying:

Please explain why this bitter woman has been given unchained funding on a case that was sorted in 2006.

What relationship does Christine Marshall have with your Department to be singled out for “Special Treatment” for a case that you clearly can see from all the case transcripts she has no chance of winning. As her claims are completely groundless and fabricated.

December 2013, in which reference was made to earlier issues having been raised by Mr Bourneville’s counsel, Mr Carter, and to the fact that following a review of the file, the Commissioner had concluded that the grant of legal aid had been properly managed and should remain.

I am not required or able to justify a grant of legal aid or give reasons or information related to any decision or matter in the file to third parties.

I cannot assist you any further and ask that you do not contact us again in relation to this matter.

[29] On 27 March 2014, the substantive proceedings commenced by Ms Marshall were the subject of a first case management conference. Shortly thereafter, on 1

April 2014, Mr Blewden made a formal complaint to Legal Aid Complaints about the grant of legal aid to Ms Marshall and also about the conduct of Mr Lees.

[30] In May 2014, Mr Bourneville’s brother, Mark Bourneville, became involved and wrote to Mr Lees, saying that he had been drawn into the matter and was seeking an assurance that the process by which Ms Marshall had been granted legal aid was being carried out correctly. Mr Lees responded to Mr Mark Bourneville in terms similar to his earlier correspondence to Mr Blewden, concluding that he was unable to give reasons or information related to the decision to grant legal aid to third parties and further advised that he was unable to assist any further in relation to the matter.

[31] Mr Mark Bourneville thereafter became engaged in further correspondence with Mr Lees. In this correspondence, Mr Mark Bourneville made a detailed and spirited attack upon the Commissioner for having made the grant of legal aid to Ms Marshall. It is clear from this letter that what Mr Mark Bourneville was seeking was for the Commissioner to change her mind and withdraw the grant of legal aid from Ms Marshall, thereby bringing her ability to pursue her claim against his brother to an end. He said:

a) Marshall has pursued with legal aid assistance Mr Bourneville on 6 separate occasions and lost each and every time (costs to the above cases must be significant?)

b) The cases that Marshall pursues against Bourneville is in fact the same case.. how many times is Marshall being supported to get the same case reheard and reheard. Does the legal aid team just keep supporting the same cases time after time after time until they get a successful return?

c) also the word “Success” appears to be bandied around quite frequently in your grant process. Well the actual proof is that there has been NO SUCCESS, not for 7 years.. (actually 9 years of legal cases brought by Marshall against Bourneville & not a single success along the way) The only success that could be celebrated is the ability for Marshall to be successful in applying to an endless approved grants of legal aid?

The more I look at this debacle the more I am outraged when I see the wear and tear on Mr Bourneville’s health, wellbeing and finances and the effects on his own family (he has two children from a previous Marriage) and you call yourselves a Govt dept to serve “JUSTICE”! are you kidding me ...

The fact that you have not registered on your radar with all your “requirements” in assessing legal aid, that after 6 lost cases of this endless pursuit & Attack of the same individual for the same thing, time after time after time .. that there will be a reaction on the pursued side! is incomprehensible ?

I will be seeing an MP and demanding that a review of this individual case be carried out and the system in which this “One sided” supported pursuit by your dept are questioned. To think that 7 cases/caveats etc and 9 years of losing has your Dept further financing another attack on the same individual is outrageous.

Any person with an onse [sic] of intelligence that looks at the facts of this ongoing, never ending pursuit and persecution of Mr Bourneville by Marshall and her Justice Dept supporters and the toll that it must be taking on him would only come to one obvious conclusion “WHEN WILL IT STOP!” & “HOW IN THE HELL HAS IT BEEN ALLOWED TO GO ON FOR SO LONG!”

[33] Once again, Mr Lees responded to Mr Bourneville in terms similar to those set out in his letter of 29 May 2014, concluding that he was unable to assist Mr Bourneville any further and requested that he not contact him again in relation to the matter.

2014 and, on 10 August 2014, Mr Blewden wrote to the Regional Manager for Legal Aid Services, complaining of endless legal aid funding having been provided to Ms Marshall and about Mr Lees’ management of the matter, alleging that he was involved “in a corrupt unwarranted distribution of tax payers’ money”. Mr Blewden stated in this letter:

I would like to see this endless legal aid funding to Ms Marshall cease immediately and an internal investigation begun to seek out who is behind this “Special Relationship”

I am hoping this is still your policy and you have enough common sense and integrity to get this endless unwarranted Legal Aid Funding Stopped .

I am awaiting an urgent answer and some overdue action from you to put this charade to bed and get the Endless Funding to Ms Marshall stopped (as I was informed by your department is possible).

[35] In August 2014, Mr Bourneville, himself, commenced writing to Mr Lees and, in his correspondence, he asked why the Commissioner had allowed an individual to persecute him through its continued funding of litigation even though there had never been any prospects of success.

[36] In October 2014, Mr Blewden approached an electorate agent at the National Party, Helensville Electorate Office, complaining that Ms Marshall was receiving endless amounts of legal aid when her prospects of success were not strong, resulting

in the electorate agent taking the matter up on Mr Blewden’s behalf with Legal Aid

[37] On 17 November 2014, Mr Bourneville wrote to Legal Aid Services, referring to it as a “corrupt department” and expressing trenchant criticism of it for having continued to provide legal aid so as to enable Ms Marshall to continue litigation against him.

[38] In mid 2015, the substantive proceedings made progress towards a substantive fixture. On 26 June 2015, there was a case management conference before Associate Judge Bell, resulting in directions orders for the hearing and a timetable order detailing dates upon which the plaintiff, Ms Marshall, was to file and serve affidavits and the defendants were required to file and serve affidavits. The Associate Judge directed that the proceeding was to be heard over seven days, commencing on 13 June 2016.

[39] There followed an application for review made by the defendants⁵which was heard by Keane J on 15 October 2015, wherein his Honour confirmed the 13 June

Vallant Hooker & Partners letter of 10 November 2015 seeking withdrawal of legal aid

[40] On 10 November 2015, Vallant Hooker and Partners (Vallant Hooker), acting for Mr Bourneville and Mr Blewden, wrote to the Commissioner requesting that the Commissioner exercise the statutory power contained in s 30 of the Legal Services Act 2011 (LSA 2011). In that letter, Mr Hooker expressed the view that the Commissioner was required to act on the basis of s 30(2)(c) and (d), which provide:

(2) In relation to a civil matter, the Commissioner may at any time withdraw legal aid from, or amend a grant of legal aid to, an aided person in any of the following circumstances:

(c) the Commissioner is satisfied that the aided person has required the proceedings to be conducted unreasonably so as to incur an

unjustifiable expense to the Commissioner, or has required unreasonably that the proceedings be continued:

(d) the Commissioner considers that the aided person no longer has reasonable grounds for taking, defending, or being a party to the proceedings, or that it is unreasonable or undesirable in the particular circumstances for the person to continue to receive legal aid:

[41] The letter set out the history of the litigation between the parties, and referred to legal authority relating to the withdrawal of legal aid. It set out a detailed criticism of and commentary on Ms Marshall’s statement of claim against the applicants, concluding with the statement that legal aid should be withdrawn by the Commissioner.

[42] Following receipt of the letter from Vallant Hooker, the Commissioner referred the file to a panel of specialist advisers with a request that they review the file and the complaints contained in the letter, and the request therein that the Commissioner should withdraw the grant of legal aid from Ms Marshall.

[43] It is clear from their report of 24 November 2015, that the panel conducted a detailed review of the file, including the series of complaints which had been received from or on behalf of Messrs Bourneville, Blewden and Mark Bourneville, going back to August 2012. In their report, the panel referred to the criticisms and comments set out in Vallant Hooker’s letter and, particularly, those directed at the inadequacy of the pleadings and the contention that the pleadings did not sufficiently particularise or support the claim that a constructive trust had been created by reason of the circumstances and events that resulted in the transfer of the properties to the Trust. The panel noted:

Although the pleadings are poor, they do sufficiently set out direct and indirect contributions (set out in the preamble) and that Ms Marshall had a reasonable expectation of an interest.

[44] The recommendation was that the issues raised and complaint made by Vallant Hooker did not justify a withdrawal of the grant of aid. The panel remained of the view that Ms Marshall’s prospects of success were sufficient to justify the ongoing grant of legal aid.

[45] On 2 December 2015, Legal Aid Services forwarded a letter to Vallant Hooker advising that the Commissioner would not withdraw the grant of legal aid. The letter relevantly stated:

2. We have carefully reviewed the pleadings and acknowledge that they may be open to criticism. However, it is not the function of legal aid to usurp the right of a litigant to have their case determined by the Court unless there are insufficient prospects of success to justify a grant of aid.

3. In this case we remain of the view that Ms Marshall has sufficient prospects of success in the constructive trust proceedings to justify an ongoing grant of aid and we rely on the Court of Appeal’s judgment in Marshall v Bourneville [2013] NZCA 271 at [35] [sic] when the Court held:

... we see no reason why, in a proper case, relief by way of a constructive trust should not be ordered against trust property. It seems to us that such an outcome might reasonably be available to Ms Marshall.

4. We also record that over the last few years we have investigated a number of complaints from Mr Carter, Mr Blewden, Mr Mark Bourneville and Mr Michael Bourneville that Ms Marshall’s grant of aid should be withdrawn. On each occasion we have concluded that the grant should continue and in this regard we refer to our letters dated 14

[46] The applicants advance two grounds for judicial review. Firstly, that at the time that legal aid was granted to Ms Marshall on 12 April 2011, she had earnings in excess of the maximum threshold then applicable, requiring the Commissioner to refuse to grant her legal aid unless satisfied that there were special circumstances having regard to the likely cost of the proceeding and Ms Marshall’s ability to fund the proceedings herself if legal aid was not granted. The applicants allege that at the time of the grant, and at all times thereafter, the Commissioner could not have been adequately satisfied as to the existence of special circumstances that would warrant or justify a grant of legal aid being made.

[47] The second ground relied upon and advanced by the applicants relates to the decision of the Commissioner made on 2 December 2015 to decline to withdraw the grant of legal aid to Ms Marshall. The applicants argue that following receipt of the Vallant Hooker letter of 10 November 2015, the Commissioner was required, but

failed, to apply the provisions of s 30(2)(c) and (d) of the LSA 2011, thereby making an error of law. Specifically, the applicants argue that the Commissioner erroneously relied upon paragraph [39] of the judgment of the Court of Appeal and failed to examine the state of the pleadings, which they claim do not support or adequately particularise Ms Marshall’s claim regarding a constructive trust.

Application by Ms Marshall for order to strike out the application for judicial review

[48] The second respondent, Ms Marshall, has made an application to strike out the applicants’ application for judicial review. This application was filed with the Court on 22 February 2016, and set down for hearing together with the applicants’ application for judicial review. The principal ground relied upon by Ms Marshall in seeking a strike out of judicial review is that of standing; it being submitted that the applicants have no legal standing to make their application for judicial review and, further, that the applicants do not have a legitimate interest in her legal aid status.

[49] A further ground relied upon alleges that the applicants’ proceeding is vexatious and constitutes an abuse of process.

[50] Ms Marshall has not supported the application with any written submissions and her counsel, Ms Hart, has adopted the arguments advanced by Ms Hansen on behalf of the first respondent, the Commissioner.

[51] The Commissioner does not challenge the standing of the applicants to bring this application but submits that the applicants are not acting bona fide, and that their real objective here is to secure the withdrawal of legal aid from Ms Marshall in order to prevent her from continuing with her claim against them.

[52] The applicants oppose the application for strike out, asserting that they do have standing and that the proceedings are not an abuse of process or vexatious. They rely upon s 27 of the New Zealand Bill of Rights Act 1990 as persons whose rights and obligations are affected by the decision subject to review.

[53] The question of whether a third party has standing to make an application for judicial review of a decision of the Agency/Commissioner in connection with a grant of legal has been previously considered by this Court in the decision of Counties Manukau DHB v Legal Services Agency, wherein the District Health Board (DHB) sought judicial review of a decision to fund a person to commence civil proceedings against the Board.⁶In an interlocutory decision, Lang J held that a party sued by a legally aided person has the requisite standing to bring an application for judicial review to challenge a grant of legal aid, explaining:⁷

This arises from the exposure of the party that is not in receipt of legal aid to loss of the ability to obtain an award of costs from the legally aided litigant in the event that the legally aided party does not succeed at trial.

[54] However, Lang J went on to say that it would be wrong for the court to allow a judicial review application by such a third party, as a means of obtaining a collateral or improper advantage over the legally aided party. His Honour said this:

[13] I accept that it would be wrong for the Court to allow judicial review proceedings challenging a grant of legal aid to enable the opposing party to obtain a collateral, or improper, advantage in a civil proceeding brought by the legally aided person. I accept also that such a challenge has the potential to be used by an unscrupulous litigant to place pressure on a legally aided adversary in a manner that could not occur if that person was not in receipt of legal aid.

[14] Such pressure can be exerted in many different ways. It can take the direct and obvious form of enabling the applicant for judicial review to gain access to material that will assist it to defend the substantive proceeding. It can also, however, place pressure on the legally aided party in other subtle, yet equally effective, ways.

[15] A challenge to a grant of aid will necessarily divert the energy of the legally aided party and his or her advisers away from the substantive proceeding. It is also likely to lead to greater delay and increased expense in having the substantive proceeding determined. All of these matters can subject the legally aided party to greater stress and anxiety than would be the case if that party was not in receipt of legal aid. It may therefore cause the legally aided party to withdraw the substantive proceeding or to settle on terms advantageous to the other party.

⁶Counties Manukau District Health Board v Legal Services Agency HC Auckland, CIV-2005-

[55] In the substantive hearing of that proceeding, Potter J noted the submission made on behalf of the DHB that its application involved no element of collateral attack or the seeking of an unfair advantage over the plaintiff.⁸Its concern was that it, and other health boards, could be obliged to become involved in expensive litigation at the suit of legally aided persons, with no ability to recover any costs if successful, and where there was an alternative and free means by which health related claims and grievances could be pursued via the statutory remedies available through the Health and Disability Commissioner under the Health and Disability

[56] In that case, the Agency accepted that the DHB had standing to bring judicial review proceedings, and Potter J found it unnecessary to determine whether an applicant for judicial review who is a party to the civil proceeding in which the legally aided person is also a party, must be able to establish a truly “knock out” point in order to have the requisite standing to apply.

[19] A slightly awkward aspect of this case is the extent to which the tobacco companies have become involved in the decision of the LSA to fund litigation against them. Their standing to do so and, indeed, to challenge the relevant decisions made by the LSA are not in issue on this appeal. Likewise they were not in issue before Gendall J. On this point Gendall J noted at para 19 of his judgment:

But Mr Taylor [counsel for the LSA] accepted, as did counsel for the Pou children, that there is no challenge to the standing of the tobacco companies to bring this judicial review application. Although the cynical might believe their aim is to scuttle the proceedings, the interest that gives them standing is their entitlement to costs against a non-legally aided plaintiff if that person failed in an action against them and such interest is affected by a grant of aid to an opponent.

Gendall J also referred to two Australian decisions which support that proposition: Tectran Corp Pty Ltd v Legal Aid Commission of New South Wales (1986) 7 NSWLR 340; Kevin R Whelpton & Assocs (Aust) Pty Ltd v A-G (1987) 72 ALR 679; (1987) 14 FCR 293.

⁸_{Counties Manukau District Health Board v Legal Services
Agency [2007] NZHC 1747; [2007] 3 NZLR 651 (HC).}

[20] Relevant to standing may be the limited nature of the challenge advanced by the tobacco companies. If the arguments advanced by the tobacco companies are truly knockout points, it stands to reason that they are entitled to raise those arguments against the LSA (see for instance R v Manchester Legal Aid Committee, ex p R A Brand & Co Ltd [1952] 2 QB

[58] The applicants claim an interest in the decision-making of the Commissioner that led to the granting of legal aid to Ms Marshall, and the subsequent decision not to withdraw that grant, on the basis of the potential effect upon them in relation to costs should she be unsuccessful in her proceeding against them.

[59] As set out above, prior to the letter sent by Vallant Hooker to the Commissioner on 10 November 2015, there had been a succession of correspondence written by the applicants themselves in which they expressed criticisms of Ms Marshall and her claim against them, and expressed strong criticisms directed at those members of the Commissioner’s staff who had been involved in the granting of legal aid to Ms Marshall or who had declined to become engaged in extensive debate via correspondence as to whether the grant or continuance of legal aid for Ms Marshall was appropriate and the result of proper decision-making in accordance with the relevant legislation.

[60] In his letter of 10 November 2015, Mr Hooker focussed attention on the issue of whether Ms Marshall’s claim against his clients had any realistic prospects of success, and whether the Commissioner had properly considered that issue by reference to Ms Marshall’s pleadings, which he said, failed to properly or adequately particularise facts that would support the causes of action set out in Ms Marshall’s first amended statement of claim. His letter contained a detailed examination of each of the causes of action; all of which, he argued, had no prospect of success at trial. He urged the Commissioner not to approach the decision by relying on the observations of the Court of Appeal, but rather to assess the cogency of the claim in light of the pleadings. He argued that the Commissioner was required by law to consider and determine whether Ms Marshall had a reasonable prospect of success to

justify the grant of aid, and in doing so, consider whether a reasonable litigant would fund the proceedings if they had to pay for it themselves.

[61] Having reviewed the correspondence sent by the applicants (and representatives) to the Commissioner and her staff, in which they have repeatedly and vehemently demanded that she terminate the grant of legal aid to Ms Marshall, I am well satisfied that their primary and real reason for challenging the grant, rather than any concern over their eventual ability to recover legal costs, was to have the proceeding against them brought to an end by means of Ms Marshall’s inability to continue without legal aid funding.

December 2015 that she had considered and rejected the request to withdraw the grant of legal aid, the applicants were left with the prospect of the claim proceeding and the June 2016 trial going ahead. This judicial review application was then filed and commenced on 25 January 2016, at a time when the pre-trial timetable of actions required to prepare the case for hearing was well advanced. In these circumstances, it would have been well understood by the applicants that the judicial review proceedings they commenced would create a real and serious distraction for Ms Marshall and her legal representatives who would necessarily be preparing for the June trial. Moreover, the making of the application at a time when the trial date is near, must have been understood by the applicants to jeopardise the trial date, by interfering with the parties’ preparations and readiness to proceed. On a personal level, and given the nature of the parties’ relationship, the bringing of the judicial review to challenge her legal aid funding must have been known and appreciated by the applicants to be certain to cause Ms Marshall anxiety and distress, and thereby apply pressure on her that could lead to her deciding to discontinue with her case against them.

[63] In light of all the circumstances, I have concluded that the applicants have brought this judicial review proceeding motivated by an intention to employ the tactic of trying to cut off Ms Marshall’s funding as the means by which they achieve an end to her civil claim against them, and further, in order to apply pressure on her that would affect her ability, and that of her legal representatives, to prepare for the

trial in June. If successful, this tactic would prevent Ms Marshall from having the merit of her case against them determined by the Court.

[64] For these reasons, I am satisfied that notwithstanding the applicants’ explanation of having concerns regarding their ability to recover costs if they are successful, the real and operative reason for this application for judicial review, is for the applicants to attempt to secure a collateral advantage in the proceedings in which they are opposed by a legally aided litigant. There can be no other explanation for the conduct and timing of the events that appear from the evidence presented to me.

[65] Accordingly, my finding is that the applicants do not have standing to bring the application for judicial review.

[66] Alternatively, I would strike out the applicants’ claim on the same basis.¹⁰

[67] In circumstances whereby the substantive judicial review application was heard at the same time as the application for strike out, I turn to determine the substantive judicial review application.

[68] For the applicants, it is submitted that at the time Ms Marshall applied for and was granted legal aid, her earnings were well in excess of the allowable limit. Consequently, the Commissioner was bound by s 9(2) of the LSA 2000 to refuse to grant her legal aid unless satisfied that special circumstances existed.

[69] It is submitted that the issue of Ms Marshall’s earnings and the statutory criteria set out in s 9(2) of the LSA 2000 were not properly addressed at the time the

¹⁰Having regard to the principles of strike out, which apply equally to judicial review proceedings.

For a general summary of the relevant principles and authority, see Financial Services

[70] It is further submitted that, at all times following the making of the grant in April 2011, the Commissioner was from time-to-time required to reconsider whether special circumstances continued to exist and, by failing to do so, the Commissioner had failed to comply with both s 9(2) of the LSA 2000 and its successor, s 10 of the LSA 2011, pursuant to which the Commissioner was required to have regard to both factors relating to special circumstances.

[71] Mr Hooker submits that no document has been produced to demonstrate that the Commissioner did make an arithmetical calculation and assessment of the likely cost of the proceedings but rather, the Commissioner made reference to the complexity of the case and the likelihood that it would run for some time. Mr Hooker submits that such matters do not address the statutory criteria.

[72] Mr Hooker submits that if no assessment of the likely cost of the proceedings was undertaken, then consequently, no assessment of Ms Marshall’s ability or inability to pay for her legal services in the absence of a grant could be made. Furthermore, Mr Hooker submits that the Commissioner has produced no document which evidences an assessment having been made of Ms Marshall’s ability to fund the proceedings if legal aid was not granted to her.

[73] Mr Hooker notes that the Commissioner’s assessment was that Ms Marshall was “financially eligible” for a grant of legal aid but submits that without more, that assessment is inadequate.

[74] For the Commissioner, Ms Hansen submits that the grant of legal aid made to Ms Marshall on 12 April 2011 was made after a fully informed consideration of the relevant facts and by a correct application of the provisions of s 9(2) of the LSA

2000. She submits that there was no reviewable error in the process of this decision making.

[75] Ms Hansen referred to the written application for legal aid made by Ms Marshall dated 24 February 2011, which was accompanied by extensive and comprehensive financial and personal information, and which was supported by a letter from her solicitor, dated 23 February 2011, which contained a detailed review

of the background to Ms Marshall’s substantive proceeding. This letter included information as to Ms Marshall’s financial ability to fund the proceeding herself as follows:

[Mrs] Bourneville is unable to fund the proposed proceedings. She now has no home of her home [sic]. She lives at the home of her father and although she is working full time, she has no realistic hope of restoring herself to the position she was in prior to her separation and divorce. It is submitted to be important that it is recognized [sic] by the agency that Ms Bourneville is not seeking to obtain a benefit from her marriage to Mr Bourneville that she would not otherwise have. She simply seeks to recover the position she was in during the relationship due to her own efforts and contributions. Through her own efforts she had purchased her own home that increased in value over time. She invested the proceeds of her home into the joint venture with her partner and trusted him when she transferred the title of one of the properties into his name. She later transferred $60,000.00 to the trust, believing that she and her children’s interests were protected by the trust. She believed she retained her interest in the Corokia property, notwithstanding the transfer of title. It is submitted that a clear injustice would have occurred if Ms Bourneville were to be prevented from having her interest recognized [sic] by the Court, due to an inability to fund her case. It would mean that Mr Bourneville and his trust would be unjustly enriched at the expense of Mrs Bourneville. This situation would have resulted from the inequality of power between the parties, not as a result of a fair legal contest.

[76] Ms Hansen refers to the affidavit of Ms Shirley Braun who is a Team Leader, Civil, at Legal Aid Services and has held the position since 2003. In her affidavit, Ms Braun explains that although Ms Marshall’s income exceeded the prescribed maximum level, the Commissioner was nevertheless satisfied that special circumstances existed which warranted a grant of legal aid being made. In making that decision, the Commissioner applied s 9(2) of the LSA 2000 which authorised the making of a grant of legal aid after being satisfied that special circumstances exist having regard to the likely cost of the proceeding to the applicant or the applicant’s ability to fund the proceedings if legal aid was not granted.

[77] In her affidavit, Ms Braun explains the decision and how it was reached as follows:

5. By way of background, when an application for legal aid discloses that the applicant has either disposable capital or income that exceeds the relevant prescribed maximum levels then section 10(2) of the LSA requires that the application for legal aid must be refused.

6. The subsection, however, then proceeds to give the Commissioner a discretion as to whether aid should still be granted as follows:

“unless the Commissioner is satisfied that there are special circumstances, having regard to –

b) the applicant’s ability to fund the proceedings if legal aid is not granted.”

7. I refer to the decision to grant legal aid to Ms Marshall then using the surname Bourneville dated 12 April 2011. A copy of this decision letter is contained in the affidavit of Frances Gush dated 22

8. Prior to that decision the Commissioner was aware that Ms Marshall was working and that her income exceeded the relevant maximum level.

9. However, an assessment was made at the time based on the information provided that the proceedings were likely to be complex and would be likely to run for some time.

10. As a result, the discretion was invoked and the decision made that Ms Marshall would not be able to reasonably privately fund the likely proceedings.

11. As a result of this assessment, the above special circumstances criteria were used to enable a grant of legal aid to be made.

12. Although the reference to s 10(2) LSA was not used in the granting letter of 12 April 2011, I confirm that the discretionary provisos in that section were utilised to enable a grant of legal aid to be made.

13. The wording in the letter under the heading “Conditions on your client’s grant” accordingly imposed a resulting repayment based on the amount of Ms Marshall’s disclosed income. The amount of this repayment has been redacted from the copy of the letter in Ms Gush’s affidavit.

14. The Commissioner is aware that Ms Marshall’s income continues to exceed the relevant maximum level. However, the Commissioner has not been advised of any change in circumstances that would cause the Commissioner to re-evaluate Ms Marshall’s financial eligibility for legal aid in relation to the constructive trust claim.

[78] On 22 March 2011, prior to this decision being made, Ms Braun sent the file and application to a specialist adviser. In the referral, she stated her opinion as grants officer as follows:

Although the applicant is working and have [ sic] received $16,000 from her ex, the money is earmarked for repayment of debts. I am satisfied that she would be financially eligible. I would be included [sic] to grant this application but would like a recommendation as I imagine it could be a very high cost if the ex husband refuses to settle.

[79] Ms Hansen further submits that the use of the phrase “financially eligible” in the referral to the specialist adviser is a shorthand reference to the statutory criteria in s 9(2) of the LSA 2000, as Ms Braun was well aware that, despite the fact that Ms Marshall’s income exceeded the threshold maximum, she did not have sufficient money to fund the substantive proceedings.

[80] In making the grant of legal aid, the Commissioner did so on the basis that Ms Marshall was being required to repay to the Commissioner the maximum sum that she could afford to pay based upon her income. This repayment amount was calculated as $33,964.00.

[81] Ms Hansen also notes that an earlier application for legal aid made by Ms Marshall in May 2011 in relation to a proposed proceeding based on s 182 of the Family Proceedings Act 1980 (and not alleging the existence of a constructive trust) had been refused in September 2010, on the basis that her income exceeded the prescribed amount in the Legal Services Regulations, and the Commissioner had then concluded that there were no special circumstances to warrant the making of a grant.

[82] Having made that earlier decision to refuse the prior application on that basis, Ms Hansen submits that the subsequent decision to approve a grant of legal aid to Ms Marshall in relation to her application to bring proceedings alleging a constructive trust, must necessarily have required and involved consideration of the existence of special circumstances pursuant to s 9(2) of the LSA 2000. In these circumstances, says Ms Hansen, the fact that there is no document specifically referring to the s 9(2) statutory criteria is immaterial, as the decision to grant legal aid was obviously made by reference to those criteria. Furthermore, the evidence of Ms Braun, as set out in her affidavit, clearly describes the process by which the decision was reached and involved consideration and application of the statutory criteria.

[83] Ms Hansen submits that contrary to Mr Hooker’s submission that some arithmetical calculation of the likely cost of funding the proceedings was required, no such process or documentation is required by the legislation. Ms Hansen points

to the remarks of Ms Braun in her reference to the specialist adviser as a clear indication that Ms Braun, who is an experienced grants officer, had assessed the likely cost of the proceedings to be high. In reaching that decision, she had seen and reviewed the draft statement of claim and was aware of the history of the longstanding dispute between the parties.

[84] Ms Hansen submits that Mr Hooker’s submission that there needs to be an express reference to the special circumstances in the formal record of the decision made by the Commissioner, fails to recognise the expertise and experience of the Commissioner and her grants officer that was brought to bear in the decision-making process, and she submits that there was no error in the decision to grant legal aid by reference to the existence of special circumstances.

[85] Mr Hooker submits that in relation to the decision not to withdraw legal aid made in December 2015, the Commissioner was again required to assess and consider the likely cost of the proceedings and Ms Marshall’s ability to fund the proceedings. He submits that no such assessment of either ground was made by the Commissioner at that time. Accordingly, he submits the Commissioner should be directed to reconsider the application for legal aid by applying the criteria set out in s

[86] Mr Hooker submits that the Commissioner also failed to correctly undertake an assessment of the prospects of success of Ms Marshall’s claim. He refers to the Commissioner’s letter of 2 December 2015, and the way in which the Commissioner’s decision not to withdraw legal aid was communicated and briefly explained. He submits that this letter comprises the reasons for the decision and that further justifications beyond the scope of what is set out in the letter is impermissible in determining whether the decision not to withdraw legal aid was made lawfully or not. He submits that a fundamental legal requirement is that when advice is given of a decision and its reasons, it must be complete and there cannot be any other reasons

¹¹Relying on Goulding v Chief Executive Ministry of Fisheries [2003] NZCA 244; [2004] 3 NZLR 173 (CA); and

[87] Mr Hooker also refers to the two passages from the contents of the Commissioner’s letter of 2 December 2015, the first being “it is not the function of legal aid to usurp the right of a litigant to have the case determined by the Court unless there are insufficient prospects of success to justify a grant of aid”. He submits that such an approach is not correct, and there is no concept within the LSA

2011 that warrants a grant of legal aid to be made in the absence of which the Commissioner would be usurping the right of a litigant to have their case determined in court.

[88] The applicants also submit that the Commissioner erred in relying upon the contents of paragraph [39] of the judgment of the Court of Appeal and submit that, notwithstanding the observations of the Court of Appeal, the Commissioner was required to closely examine and assess the state of the pleadings when considering the prospects of success. Mr Hooker notes that when the Court of Appeal matter was argued and it issued its judgment, there were no pleadings and the Court of Appeal did not have before it the particulars relied upon to establish a constructive trust. Consequently, it is submitted, the Commissioner was required to consider the pleadings since filed by Ms Marshall and, had the Commissioner done so, the only conclusion that could be reached was that there was no sufficient pleading to support a constructive trust claim.

[89] Consequently, the Commissioner should have taken the view that the prospects of success were such that legal aid should not be either granted or continued.

[90] Next, the applicants submit that the Commissioner ought to have withdrawn the grant having concluded that Ms Marshall no longer had reasonable grounds for taking, defending or being a party to the proceedings, and that it was unreasonable or undesirable in the circumstances for her to continue to receive legal aid. Mr Hooker submits that this was a further relevant factor that ought to have led the Commissioner to conclude that legal aid should be withdrawn as Ms Marshall had by then already received legal aid over an extended period and it was unreasonable or

[91] To support this submission, reference was made to the particulars set out in the applicants’ second amended statement of claim, and a catalogue of criticisms of Ms Marshall’s conduct of her case drawn from the specialist advisers’ report is set out. Mr Hooker submits that Ms Marshall has already had considerable funding by way of the legal aid grant and that, having regard to the manner in which the litigation has been conducted and the deficiencies evident in the management and running of her case, the Commissioner ought to have concluded that it was unreasonable or undesirable for her to continue to receive legal aid.

[92] In reply, Ms Hansen submits that when dealing with the Vallant Hooker letter of 10 November 2015, the Commissioner considered all the correspondence from the applicants and the responses from Ms Marshall’s solicitor, together with supporting information, as well as relevant judgments, before reaching a conclusion that legal aid should not be withdrawn and should continue so as to enable Ms Marshall to progress her proceedings to determination by the court.

[93] Ms Hansen submits that, having regard to the observations of the Court of Appeal, the Commissioner was virtually obliged to conclude that Ms Marshall’s case had reasonable prospects of success such as to warrant the continuation of legal aid and consequently, there was no basis upon which the Commissioner could justifiably withdraw the grant of legal aid based on a negative view of the prospects of success.

[94] Finally on this issue, Ms Hansen notes that although the applicants have criticised Ms Marshall’s pleadings as being inadequate and failing to plead a cause of action, the applicants have not made any application to the court seeking to strike out the claim, presumably because they appreciate that the cause of action is likely to be repleaded so as to overcome their criticisms.

[95] In response to the applicants’ submission that the income and asset test ought to be repeated and applied when the Commissioner is considering whether to withdraw legal aid under s 30(2) of the LSA 2011, Ms Hansen submits that unless there has been a material change in the legally aided person’s circumstances, there is no basis upon which to revisit the original decision and assessment that led to the

grant of aid. She submits that here there was no suggestion of any such material change of circumstances.

[96] Ms Hansen submits further, that having funded Ms Marshall’s proceedings virtually to the eve of the trial, the Commissioner does not have an ability to simply change her mind or have second thoughts about the earlier grant. Relying on Goddard J’s comments in Legal Services v Black, she submits that a legally aided person has a legitimate expectation that once a grant is made, it will be continued to enable the proceeding to be determined by the court, unless the circumstances have

materially changed.¹²She further submits that, having regard to the considerable

funds already expended to date, it would be undesirable and unreasonable for the Commissioner not to continue aid, particularly in the absence of any material or significant change in circumstances. Ms Hansen characterises the applicants’ proposition that a decision resulting in an inability by Ms Marshall to proceed with her claim, rather than avoiding and saving any further expenditure, is in fact nothing less than self serving.

[97] The Commissioner’s decision to grant legal aid in this case arose under the LSA 2000. Parliament has since enacted the LSA 2011. Most of the statutory provisions under the 2000 Act, dealing with the grant and withdrawal of civil legal aid, are in similar terms under the 2011 Act.

(a) providing a legal aid scheme that assists people who have insufficient means to pay for legal services to nonetheless have access to them; and

¹²Legal Services v Black HC Wellington CIV-2004-404-2561, 14 October 2005 at [50]–[52].

The purpose of this Act is to promote access to justice by establishing a system that—

(a) to grant legal aid in accordance with this Act and the regulations: (b) to determine legal aid repayments where legal aid is granted:

(e) to carry out any other function conferred on the Commissioner by the Minister, by the Secretary, or by or under this Act or any other enactment.

(2) The Commissioner must act independently when performing any function stated in subsection (1)(a) to (d).

[103] Subpart 3, titled “After legal aid is granted”, contains provisions relating to

[104] Part 3 of the Acts deals with reviews and appeals relating to legal aid. Because the applicants in this case are not aided persons or applicants for legal aid, they fall outside of the scope of the provisions listed therein.

[105] It is not in dispute that the Commissioner in making grants of legal aid, exercises a power of statutory decision which is amenable to judicial review under the Judicature Amendment Act 1972.

[106] The proper focus on review is with the decision-making process, not the decision itself.¹³The Court is not at liberty to intervene on the merits and substitute its own decision.

[107] Judicial review has been succinctly described by French J in Aorangi School

... contrary to popular belief, judicial review is not an appeal. It is not about the Court considering information afresh and coming to its own views. Judicial review is primarily limited to an examination of the process, and if successful usually results in the decision maker being required to start afresh, as opposed to quashing the decision for all time.

[108] The three traditional chapter headings of judicial review are illegality, irrationality and procedural impropriety. Briefly summarised, they are:

(a) Illegality: this includes error of law, ignoring relevant considerations, taking into account irrelevant considerations, and error of fact.

(b) Irrationality: this refers to a Wednesbury-type assessment; it applies to a decision which is “so outrageous in its defiance of logic... that no sensible person who had applied his [or her] mind to the question to

¹⁴_{Aorangi School Board of Trustees v Ministry of
Education [2009] NZHC 2270; [2010] NZAR 132 (HC) at [8].}

¹⁵Associated Provincial Picture Houses Ltd v Wednesbury Corporations [1947] EWCA Civ 1; [1948] 1 KB 223 at 229.

(c) Procedural impropriety: this refers to the rules of natural justice or procedural fairness which requires governments and public bodies to act fairly and reasonably. There are two pervasive principles; (1) that persons who may be affected by the decision must be given adequate prior notice and opportunity to be heard, and (2) that the decision- maker be disinterested and unbiased.

[110] To begin with, I do not accept or agree with the applicants’ submission that the Commissioner fell into error by failing to give reasons for considering special circumstances existed when deciding to grant legal aid despite Ms Marshall’s income or disposable capital having exceeded the relevant maximum level prescribed in legislation. There is no requirement under the LSA 2000 (or the 2011 equivalent) for reasons to be given or recorded by an Agency/Commissioner when deciding whether to grant legal aid. In a decision of Glazebrook J in Brown v Attorney-General, her Honour considered the issue of the desirability of giving reasons for declining legal

while there was no obligation to provide reasons, it would be desirable to do so, especially in cases where an application for review of the decision was likely.

[111] This position is contrasted to a situation where the Commissioner proposes to withdraw a grant of legal aid. By s 27(3) of the LSA 2000 and s 31(3) of the LSA

¹⁶_{Sir Robin Cooke “Third thoughts on administrative
law” [1979] NZ Recent Law 218 at 225.}

[112] Also by contrast, s 57(3) requires the Review Panel to give “a brief summary of the reasons” for every determination of a review.¹⁸

[113] Returning to Glazebrook J’s comment about the desirability to give reasons for his or her decisions, case law appears to suggest that the Agency/Commissioner should desirably give reasons in situations where:¹⁹

[114] The desirability to give reasons in cases where an application for the grant of legal aid has been declined is so that an aided person, being the person likely to be detrimentally affected, is able to decide whether to exercise either reconsideration or review rights as a means of challenging the decision. Arguably, it is also desirable (albeit to a lesser degree) to give reasons for the grant of legal aid where, in cases such as this, the other party to the proceedings can be said to be “affected” by the decision to grant legal aid insofar as it results in a loss of the ability to obtain an award of costs from the legally aided litigant in the event that the legally aided party does not succeed at trial.

[115] However, given that the purpose of the LSA is to assist those who have insufficient means, and given there is no general duty on decision-makers to give reasons for their decisions, as well as the Court of Appeal’s observation that a degree of tolerance should be afforded to decisions of the Agency/Commissioner,²⁰I am reluctant to hold that any such desirability should extend to situations where the person likely to be affected is the opposing party to the substantive proceedings.

[116] In this case, Ms Marshall was notified of the Commissioner’s decision to

_{grant legal aid in a letter of 12 April 2011. The letter does not
contain a full}

recitation of reasons for the Commissioner’s decision. However, it did not need to. As I have mentioned, there is no statutory requirement to give reasons and, in my view, even if there is a desirability to give reasons in the circumstances, there can be no expectation that the Commissioner must do so.

[117] Having regard to the form and content of the Commissioner’s letter, and in light of my comments above, it is quite clear that the letter was not intended to be treated as a reasoned decision. It was simply a means of notifying Ms Marshall that she had been granted legal aid, and the conditions on the grant of legal aid are set out therein.²¹I accept Ms Braun’s affidavit evidence that:

12 April 2011, I confirm that the discretionary provisos in that section were utilised to enable a grant of legal aid to be made.

[118] Next, the applicants rely on Ms Braun’s affidavit evidence for the submission that the Commissioner took matters into account beyond the scope of the statutory criteria; namely, complexity and length of time. However, there is no strict test as to what the Commissioner may or may not take into account when assessing whether there are special circumstances so as to grant legal aid. Section 9(2) of the LSA

2000 states that the Agency is to “have regard to” the matters listed in ss (a) or (b). The use of the phrase “have regard to” suggests that the matters listed therein are not exhaustive; nor are they necessarily determinative.

[119] In any event, issues of complexity and length of time are, in my assessment, directly relevant considerations to the issue of the likely cost of the proceedings to Ms Marshall. The more complex and lengthy the proceedings, the more likely that the cost of the proceedings will increase. This is a general principle which is recognised in the costs regime under the High Court Rules.

[120] I do not accept the applicants’ submission that an arithmetical assessment of the likely costs of the proceeding to the applicant was required. Again, there is no

_{statutory requirement to that effect. Ultimately, the legal test
against which the}

Commissioner’s decision as to financial eligibility²²must be judged, is the purpose of the legal aid scheme as stated in s 3(a).

[121] It is implicit from Ms Braun’s comment as to the complexity and likely length of the proceedings, that she considered the likely cost of the proceedings to be a significant factor in favour of granting legal aid. Also relevant is her comment in the “Referral to Internal/External Specialist Adviser” form, which is that:

[122] Although not required to consider the matters listed in s 9(2)(a) and (b) conjunctively, it is also clear that Ms Braun considered Ms Marshall as being unable to self-fund the proceedings. Such a conclusion was reached following her request for more information concerning Ms Marshall’s financial affairs, which was made by her on 4 March 2011, and Ms Marshall’s disclosure of it, followed by Ms Braun’s opinion on 22 March 2011 that:

I am satisfied that she would be financially eligible [for the grant of legal aid]

[123] The applicants criticise Ms Braun’s comment that “the decision was made that Ms Marshall would not be able to reasonably privately fund the likely proceedings”, saying that, in circumstances where refusal to grant legal aid is the starting point, reasonableness is not a requirement under the statutory criteria. Although s 9(2)(b) does not statutorily narrow the scope of the inquiry to the reasonableness or otherwise of the applicant’s ability to fund the proceedings if legal aid is not granted, the Commissioner, in “having regard” to s 9(2)(b), was of course entitled to make an assessment on the matter. The use of the word “reasonably” in Ms Braun’s comment is merely an expression of her assessment.

[124] Lastly, the applicants say that there should be a relative approach between the

applicant’s ability to fund proceedings and the earnings of the applicant, when

_{deciding whether to grant legal aid. The point being that, in this
case, Ms Marshall’s}

²²I accept Ms Hansen’s submission that financial eligibility refers to the s 9(2) criteria. Such an interpretation is consistent with the approach set out under the Legal Aid Services Grants handbook (February 2016, online ed, Ministry of Justice).

earnings were approximately twice over the income or disposable capital threshold level. I do not agree. Section 9(2) contemplates situations where the grant of legal aid will exceed the relevant threshold. Although it may form part of the inquiry, there is nothing to suggest that the Commissioner’s decision to grant legal aid should be limited by reference to the extent to which the applicant’s income or capital exceeds the relevant threshold.

[125] It is worth adding that, when looking at the overall scheme of the grant, it is quite clear that Ms Braun took into account the fact of Ms Marshall’s income or capital having exceeding the relevant threshold. For example, one of the conditions of the grant imposed a resulting repayment based on the amount of her disclosed income.

[126] Interestingly, the approach contended for by Mr Hooker was the one already adopted by the Commissioner on a further application by Ms Marshall for the grant of legal aid. On 19 December 2014, the Commissioner declined to grant legal aid in relation to an appeal against the decision of Peters J. The Commissioner was of the view that, given the likely cost of the proceedings, Ms Marshall was in a position to fund the proceedings herself. This confirms that the Commissioner is and has been alert to Ms Marshall’s financial position, and the way in which the state of an applicant’s financial affairs may, on a case by case basis, inform an assessment of the matters listed in s 9(2)(b) of the LSA 2000/s 10(2)(b) of the LSA 2011.

[127] I note briefly that I do not agree with the applicants’ submission that, following the initial grant of legal aid and the LSA 2011 coming into force, the Commissioner should have reconsidered whether special circumstances continued to exist under s 10(2); unlike s 9(2), the matters listed in 10(2) are cumulative (and not disjunctive) provisions. Section 132 of the LSA 2011 provides that a grant of legal

aid under the LSA 2000 is not affected by that Act’s repeal.²³Therefore, the initial

decision to grant legal aid (made under the LSA 2000) is not affected by the provisions of s 10(2) of the LSA 2011. Accordingly, there was no requirement for

the Commissioner to reconsider Ms Marshall’s application in accordance with the terms of s 10(2).

[129] Section 30 of the LSA 2011 provides for the statutory withdrawal process. The Legal Aid Services Grants handbook summarises the circumstances justifying withdrawal of legal aid. They are as follows:²⁴

The Commissioner must withdraw aid under section 30(1) of the Act if the applicant:

• doesn’t meet the conditions of grant requirements within the prescribed time frame and/or

• the aided person is no longer entitled under sections 10,12 or 13 of the Act

• the aided person has required the proceedings to be conducted unreasonably so as to incur an unjustifiable expense to the Commissioner or has required unreasonably that the proceedings be continued

• that the aided person no longer has reasonable grounds for taking, defending, or being party to the proceedings, or it is unreasonable or undesirable in the circumstances to continue aid

• the aided person has intentionally or negligently made untrue statements about resources or failed to disclose material concerning them

• the aided person has intentionally contravened or failed to comply with the Act and Regulations.

[130] It goes without saying that the discretion to review and elect to withdraw the grant of legal aid is exercised with care and prudence. Case law suggests that withdrawal requires a change in circumstance in order to survive scrutiny or review.²⁵

[131] If the Commissioner proposes to withdraw a grant of legal aid, he or she must follow the procedure set out in s 31.

[132] The applicants say that the Commissioner should have withdrawn legal aid from Ms Marshall because her level of earnings meant that she was no longer a person who would be entitled to the grant of legal aid under s 30(2)(a). In her affidavit, Ms Braun deposes that the Commissioner was and is aware that Ms Marshall continues to exceed the relevant threshold but has not been notified by her of any change in circumstances so as to warrant the withdrawal of a grant of legal

aid.²⁶At best, the applicants’ submission is an allegation of ineligibility, but any

such allegation has not been supported by evidence of a change in Ms Marshall’s

[133] The applicants principally rely on the “reasons” given by the Commissioner in her letter to Mr Hooker dated 2 December 2015. I emphasise, again, that the letter is not a reasoned decision. First, the letter could not have been capable of fully setting out reasons because the applicants here are third parties and have been notified in previous correspondence that official information relating to Ms Marshall (being the legally aided person) was being withheld from them pursuant to s 9(2)(a) and (h) of the Official Information Act 1982. Secondly, Parliament has confined the requirement to give reasons to circumstances where a grant is in fact withdrawn so,

_{in circumstances where the Commissioner has not withdrawn the
grant,}²⁷_{there is}

²⁵Legal Services Agency v Black, above n 12; and Legal Services Agency v Ogilvie HC Wellington CIV-2—6-404-739, 29 June 2006. Consistent with Section 25 of the LSA 2011, which imposes a duty upon an aided person to notify the Commissioner of a change in circumstance.

nothing to suggest that the Commissioner intended the letter to be a fully reasoned decision.

[134] In this case, the Commissioner has received a number of complaints from the applicants and their representatives about the grant of legal aid to Ms Marshall, followed by numerous requests to withdraw the grant of it. It is clear that the Commissioner (or her representatives) each time,²⁸has carefully and patiently acknowledged and reviewed the applicants’ complaints and responded with the view that the grant of aid should continue. The Vallant Hooker letter of 10 November

[135] The essence of that letter was that Ms Marshall had no prospect of success. However, the contentions and arguments contained in that letter were, in substance, a detailed legal argument of the kind that would, under usual circumstances, be placed before the Court to support an application to strike out a cause of action or statement of claim. Requesting the Commissioner to undertake an examination of the prospects of success of the proceeding on that basis, was in my view, tantamount to requesting the Commissioner to finally determine the outcome of the proceeding, rather than to simply assess Ms Marshall’s prospects of success. In my view, the Commissioner’s comment that “it is not the function of legal aid to usurp the right of a litigant to have their case determined by the Court” in her letter to Mr Hooker on 2 December 2015, was an entirely appropriate comment for her to make.

[136] The meaning of the phrase “prospects of success” was considered by the

[63] We agree that there will be a range of relevant considerations to be considered when assessing the sufficiency of the prospects of success of a claimant for legal aid. This is not to suggest an exhaustive list of considerations must be identified and applied in every case. The statute deliberately avoids any listing of relevant factors. We consider that the [Commissioner] must treat each case on its merits. Each decision, be it to withdraw aid or continue the grant, is likely to turn on the particular facts of each case. The question is whether the aided person is no longer a person who would be entitled to the grant by virtue of any of the provisions of [ss

²⁸For example, on 14 November 2013; on 21 January 2014; on 29 May 2014; on 26 August 2014;

[137] In light of the history of complaints, and the letter of 10 November 2015, the Commissioner acted very responsibly by, once again, referring the applicants’ complaint to a panel of specialist advisers.

[138] In its final recommendation, the panel considered the prospects of success and recommended that “the complaint does not justify a withdrawal of the grant of aid”. Although not binding, the Commissioner was well entitled to have acted on the recommendation of the panel, comprising specialist advisers who routinely provide expert advice in relation to complex legal aid cases such as this.

[139] In her letter, the Commissioner considered and took notice of the comments of the Court of Appeal in Marshall v Bourneville, specifically that:²⁹

[140] Whilst the applicants are right to point out that the pleadings are currently defective (the state of which was not before the Court of Appeal when giving its decision), in light of the very fact that the Court of Appeal saw a reasonable prospect of success and, given that Ms Marshall is able to apply to amend her pleadings,³⁰it would have been very surprising, if the Commissioner were to take a view different from that unequivocally expressed by the Court of Appeal. In fact had the Commissioner adopted a different view on the matter than that expressed by the Court of Appeal, there would no doubt be issues arising as to the reasonableness of

[141] What is more, the state of the pleadings had already considered by the panel, and had been described as being “poor”, prior to a recommendation being made not to withdraw the grant from Ms Marshall. In relying upon the recommendations of the panel, it is apparent that the Commissioner did not consider the state of the pleadings to be determinative of her assessment of Ms Marshall’s prospects of

[142] I note that even if the applicants were able to successfully argue that the Commissioner erred in her assessment of Ms Marshall’s prospects of success (which they have not), it does not necessarily follow that the Commissioner should have withdrawn the grant. The placement of s 10(4)(d)(i) under the heading, “The Commissioner may refuse to grant legal aid to an applicant in any of the following

circumstances”,³¹makes clear that there is no mandatory requirement that a refusal

or withdrawal should necessarily follow, and in my view, requires the Commissioner to stand back and look at the circumstances of the particular case as a whole when exercising his or her discretion to refuse to grant or withdraw legal aid.

[143] Finally, I address the point raised by the applicants that the Commissioner wrongly treated Ms Marshall as, using the words of the Court of Appeal in JMM, “having a presumptive right to the continuation of legal aid”.³²However, the presumption that the Commissioner “can be expected to approach its decision making with no predetermination either way” does not operate in a vacuum.³³

Equally operative, is the presumption that once legal aid is granted, it shall continue unless some disqualifying circumstances arise. In this instance, no such matters arose which would have warranted termination and withdrawal of legal aid.

[144] Through their numerous complaints, and especially the Vallant Hooker letter of 10 November 2015, the applicants were able to achieve the outcome of having the Commissioner consider the issue of withdrawal in a setting where there is no statutory framework enabling them to directly request the Commissioner to withdraw the grant of legal aid from Ms Marshall. The Commissioner was at liberty not to entertain such a request but, instead, chose to consider withdrawal by referring the matter to a panel of specialist advisers, following which, an informed decision was made not to withdraw Ms Marshall’s grant. For the reasons I have

³¹Emphasis added. Contrast to s 10(3); the Commissioner must refuse to grant legal aid if the applicant has not shown that the applicant has reasonable grounds for taking or defendant the proceedings or being a party to the proceedings.

[145] Having concluded that the Commissioner made no reviewable error of law in making the challenged decisions, it is unnecessary for me to exercise the judicial discretion as to whether to grant relief.³⁴However, I nevertheless consider that it is appropriate in the circumstances of this case for me to set out and explain my view as to how I would have exercised that discretion had I found that a reviewable error or errors of law had been made by the Commissioner in the making of the decisions.

[146] This application has some unusual features, and having regard to them in combination, I am of the view that the clearly appropriate course would have been to exercise the discretion by refusing to grant relief notwithstanding a finding of error had that been made. The matters that I consider relevant to and which inform the exercise of the discretion in this case are: the collateral purpose for which the application was made; the delay in bringing the application; and the availability of

[147] As already noted, I am satisfied that the real reason and purpose behind the application for review is the applicants’ objective of securing an end to the litigation against them, by cutting off the availability of legal services to Ms Marshall. That being the case, the effect of an order quashing the decision to grant legal aid or quashing the decision to refuse to withdraw the grant and requiring that issue to be reconsidered, would inevitably result in Ms Marshall being unable to continue with her preparation for the hearing on 13 June 2016, and further cause the long awaited fixture to be vacated. I further consider that upon any reconsideration, the Commissioner is certain to reach the same conclusion, with the result that the whole exercise presently being undertaken would have been of no utility whatsoever, other than to disrupt Ms Marshall’s progress and add further and unnecessary delay.

[148] To grant the relief sought would therefore enable the applicants to achieve

_{their real and underlying purpose of derailing Ms Marshall’s case
against them, and}

³⁵Having regard to Hill v Wellington Transport Licensing Authority [1984] 2 NZLR 314 (CA); Duncan v Medical Practitioners Disciplinary Committee [1986] 1 NZLR 513 (HC); Wislang v Medical Practitioners Disciplinary Committee [1974] 1 NZLR 29 (SC); and New Era Energy Inc v Electricity Commission HC Wellington CIV-2007-485-2774, 4 May 2009.

the Court should not allow itself to become the means by which such a collateral and tactical objective is to be achieved. To do so would be to cause grave injustice and would be inconsistent with the purpose of the LSA 2011 which I have set out above.

[149] Furthermore, the applicants have delayed bringing this application for review until a very late stage, with the trial fixture soon to take place. As is apparent from the sequence of correspondence set out herein, the applicants have been engaged in correspondence with the Commissioner and her staff regarding and challenging the grant of legal aid to Ms Marshall since August 2012, and their delay in commencing this proceeding in late January of this year, well after the June fixture had been set, serves to emphasise the fact that the real objective of the application is to disrupt Ms Marshall’s preparation for the hearing and her ability to even conduct the hearing.

[150] The applicants’ proposition to the Commissioner was that the Court of Appeal observations as to the availability of a claim of constructive trust, needed to be re-examined by reference to the pleadings subsequently filed. The applicants have, by their submissions to the Commissioner, in effect asked her to determine a matter that should more appropriately be for the court, namely whether Ms Marshall’s statement of claim should be struck out. However, the applicants have chosen not to make an application to the court to strike out the statement of claim and have instead tried to achieve the same outcome by means of this proceeding.

[151] In contrast to all of this, the hearing date is now near and much preparation has already been undertaken by the parties to be ready to go ahead on 13 June 2016.

[152] In all the circumstances, I consider that this case falls well within the range of the type of case where it would be quite wrong and indeed unjust for relief to be granted to the applicants.

[153] I conclude with the point that the applicants are not necessarily deprived from an opportunity of recovering costs should Ms Marshall be liable for costs at the substantive proceedings. Section 45 of the LSA 2011 provides that an order for costs (not exceeding an amount that is reasonable for the aided person to pay) may be made against an aided person in a civil proceeding if the court is satisfied there are

exceptional circumstances. Pursuant to s 46, the Commissioner, thereafter, may pay some or all of the difference between the costs (if any) actually awarded and those to which the applicants would have been entitled if s 45 had not affected Ms Marshall’s liability. Having challenged the assessment of Ms Marshall’s prospects of success by the Vallant Hooker letter, in the event the applicants are successful, they will no doubt refer to that letter and employ it as grounds in favour of granting discretionary costs. For present purposes, there is considerably more in favour of enabling Ms Marshall to continue to pursue her claim with legal aid than for the proceeding to be disrupted and possibly thwarted by granting discretionary relief.

[154] To summarise, the applicants do not have standing to bring these judicial review proceedings. Even if they did, and putting the issue of collateral purpose aside, the application for judicial review would not succeed. Had there been a reviewable error, I would have exercised my discretion to refuse to grant relief for the reasons I have given.

[155] Both respondents are entitled to costs. The respondents are to file and serve memoranda as to costs within 21 days of this decision, and the applicants are to file a

High Court of New Zealand Decisions

Bourneville v Legal Services Commissioner [2016] NZHC 1079 (23 May 2016)

High Court of New Zealand

Bourneville v Legal Services Commissioner [2016] NZHC 1079 (23 May 2016)