|
|
Home
| Databases
| WorldLII
| Search
| Feedback
High Court of New Zealand Decisions |
Last Updated: 13 November 2018
|
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
|
|
CIV-2017-485-962
[2018] NZHC 2884 |
|
UNDER
|
the Declaratory Judgments Act 1908
|
|
BETWEEN
|
CONTACT ENERGY LIMITED
Plaintiff
|
|
AND
|
NANETTE ALICE MOREAU
First Defendant
MINISTER OF COMMERCE AND CONSUMER AFFAIRS
Second Defendant
|
|
Hearing:
|
13 and 14 August 2018
|
|
Counsel:
|
S M Bisley and O C Gascoigne for Plaintiff
A L Holloway and E B Moran for First Defendant W L Aldred for Second
Defendant
|
|
Judgment:
|
7 November 2018
|
JUDGMENT OF THOMAS J
Section 7A of the Consumer Guarantees Act 1993 [29]
Contact Energy Ltd v Jones [33]
CONTACT ENERGY LIMITED v MOREAU [2018] NZHC 2884 [7 November 2018]
The Energy Complaints Scheme [71]
Approach to interpretation [89]
The Disputes Tribunal Act [94]
(i) England and Wales [100]
(ii) Australia [104]
What does the Scheme require? [126]
What does natural justice require? [128]
Should the declaration be made? [134]
Introduction
[1] On 4 June 2015, an unknown third party crashed a car into a power pole owned by the electricity distribution company, Vector Ltd, damaging the pole and power lines. This caused over-ground high-voltage lines conveying 11 kV of electricity to come into contact with low-voltage lines designed to convey 400 V of electricity. The low voltage lines were connected to a nearby house owned by Mr S. As a result, an unknown, but high, voltage entered the electrical circuits in Mr S’s house, causing damage.
[2] Mr S sought compensation from his electricity retailer, Contact Energy Ltd (Contact). He then made a complaint under the Electricity and Gas Complaints Commissioner’s Scheme of which Contact is a member (the Complaint). The first defendant (the Commissioner) dealt with the Complaint. She found Contact had breached the guarantee of acceptable quality for the supply of electricity under s 7A of the Consumer Guarantees Act 1993 (CGA) and recommended Contact pay Mr S a sum of money in compensation.
[3] Contact and the Commissioner have agreed to seek the Court’s guidance on how the acceptable quality guarantee in s 7A applies in relation to adverse events over which the electricity provider has no control.
[4] Contact also seeks declarations as to the approach the Commissioner should follow in determining complaints under the Energy Complaints Scheme (the Scheme) approved by the Minister of Commerce and Consumer Affairs under the Electricity Industry Act 2010 (EIA), in particular as to her obligation to comply with applicable legal authority and observe the principles of natural justice. The Commissioner opposes the making of these declarations.
[5] The Minister of Commerce and Consumer Affairs (the Minister) abides the decision of the High Court but was heard on the declarations sought in relation to the Scheme.
Background
[6] Before embarking on an analysis of the declarations sought, some background into New Zealand’s electricity industry is required. This comes from the undisputed evidence of Contact. Further, as the genesis for the proceedings was the Complaint, which provides much needed context, the circumstances of the Complaint will be described in more detail.
The electricity industry
[7] In New Zealand, electricity is generated by five major electricity generating companies across more than 200 generation plants. It is then transmitted by 29 distribution/lines companies to homes and businesses over the national grid operated by Transpower. Lines companies connect to the national grid and transport electricity to consumers via overhead wires and underground cables. Distribution line voltages vary between 11 kV and 33 kV. Most consumers receive voltages between 230 and 400 V.
[8] Most lines companies sell their services to retailers. As a retailer, Contact purchases its electricity from the wholesale electricity market to meet customers’
demand. As a generator, Contact also sells electricity to the wholesale electricity market.
[9] Contact pays charges to Transpower for the delivery of electricity across the national grid, as well as to local lines companies (such as Vector) who deliver electricity from the national grid to customers’ homes and businesses. These charges are bundled together with Contact’s charges for supplying electricity and invoiced by Contact to its customers.
[10] Contact is entirely dependent on lines companies to deliver electricity across the local lines network to its customers. It has very limited ability to influence the design, maintenance and upgrading of the network. As such, it has very little control over the reliability and quality of supply experienced by its customers (insofar as they are affected by issues with the lines).
[11] Although Contact is not directly responsible for the physical delivery of electricity to consumers, it is usually the only interface its customers have with the various electricity companies which are involved over the network.
Power disturbances
[12] Given the nature of New Zealand’s electricity infrastructure, it is impossible to guarantee a power supply free from voltage sags, spikes and surges. The majority of lines, especially in rural areas, are overhead. Where overhead lines are used, both the distribution network (11 kV) and the low voltage network (400 V) are supported on the same poles. Distribution lines are sometimes underground. There are advantages and disadvantages to each of overhead and underground lines. Overhead lines are cheaper to install, repair and maintain but are more susceptible to damage. Underground lines are expensive to install but less likely to be damaged. They are, however, more difficult to repair and maintain.
[13] An outage is a loss of supply which can be either planned (for instance, maintenance or new construction) or unplanned. Unplanned outages can be caused by transmission problems within the national grid, equipment failure within a distribution network, trees growing into lines or falling, lightning, storms, animals or birds,
subsidence affecting poles, or third party actions such as vehicle accidents or people accidentally severing underground cables when digging.
[14] Surges are instances of temporary excess voltage beyond the tolerance permitted under the Electricity (Safety) Regulations 2010. Most of the causes are associated with the distribution network and cannot be attributed to generators or retailers.
[15] Retailers routinely advise customers of potential quality issues and recommend consumers take certain protective measures. Contact’s terms and conditions for residential and business customers inform customers that: 1
(a) Surges or spikes can happen at any time and are not treated as interruptions.
(b) Except insofar as it is required to comply with its obligations under the CGA, it takes no responsibility for any loss or damage caused to equipment, property or appliances, including loss of data, arising from surges or spikes.
(c) The supply of electricity may be affected by force majeure events, including (among other things):
(i) storms, lightning, flood, earthquake, fire, volcanic eruption, landslide, accumulation of snow or ice, or acts of animals;
(ii) motor vehicle or other accidents; and
(iii) faults in the network or acts or omissions by the network operator or meter owner.
[16] Contact recommends that customers take steps to protect themselves against those events by installing surge protection devices for sensitive appliances and taking
1 Effective 17 March 2015.
out insurance against surges, spikes and other fluctuations or interruptions in electricity supply.
The Complaint
[17] Mr S reported being awoken by explosions. The light fittings in his bedroom were blown from the ceiling and all that remained of the lightbulbs were parts of the bayonet bases. The light switch had burn marks around the bezel and both the switch contacts and dimmer unit were “vaporised”. A mains power outlet had blown clear from the wall and computer equipment connected to it was destroyed. A closed laptop was so badly damaged that some of its keys had blown from the keyboard, the screen had blown open and a hole burned all the way through its middle. His power meter was blown from the wall and ceramic fuses littered his kitchen. Other damage was also reported.
[18] The electrical design and auditing specialist engaged as an expert on behalf of the Commissioner said:
In my view, electrical damage of the type described by Mr S is extreme. I have not encountered electrical damage of this extent in a domestic context before.
...
Based on the reported damage, in my view it would be reasonable to conclude that the variation in voltage caused by the surge that entered Mr [S]’s property was so significant that commercially available surge protection devices from retail outlets would likely not have prevented damage to his appliances.
[19] The actual voltage Mr S’s property received is unknown but it is accepted it would have been much higher than is usual. It is also apparently accepted that neither Contact nor Vector could practically have either:
(a) altered the design of the power-pole, or the arrangement of its lines, to prevent the surge from occurring. There was no evidence the pole was not maintained or industry practice was not complied with; or
(b) taken any other realistically practicable steps to prevent either that accident or accidents of the type which resulted in the surge. The
Commissioner accepts the only failsafe step would be to put the lines underground.
[20] The Complaint was made under the Electricity and Gas Complaints Commissioner Scheme, since replaced by the Scheme, operated by Utilities Disputes Ltd (UDL).2 The Commissioner is appointed by UDL to deal with and, where necessary, make decisions on complaints.
[21] The Commissioner was of the opinion that Contact had breached the guarantee of acceptable quality for the supply of electricity under s 7A of the CGA. She made a final recommendation (the Final Recommendation) that the Complaint should be settled by Contact paying Mr S $12,997.86.
[22] The Commissioner directed herself on s 7A in the following terms:
(a) She was not obliged to take a purposive approach when interpreting the CGA. A plain reading of the CGA did not exclude retailer liability for events caused by third parties, in essence because such events are not included in the exclusions in s 7A(4). If Parliament intended to exclude a supplier’s liability in those circumstances, it would have been included as an exclusion to the guarantee.
(b) The CGA does not exclude retailer liability for events wholly caused by third parties. The Commissioner concluded that the electricity supplied by Contact during the surge failed to comply with the acceptable quality guarantee because:
(i) it breached s 7A(2)(a) of the CGA because it was not as safe as a reasonable consumer would expect the supply to be; and
(c) Although Contact and Vector had “very limited control” over the event, that “would not change a reasonable consumer’s view”. A reasonable consumer would consider the supply of electricity capable of causing the damage which occurred in this case to a domestic installation unsafe regardless of whether anyone involved in the supply of electricity could have prevented the supply. In her view, the reasonable consumer would consider the electricity supply did not meet their expectations of quality when balancing the magnitude of the voltage fluctuation against the degree of control Contact and Vector had over the event.
[23] After the Final Recommendation, Contact entered into a settlement agreement with Mr S.
Declarations sought
[24] Contact seeks the following:
Purpose
(1) A declaration that the Commissioner is required to interpret the CGA not only in accordance with its text, but also in light of its purpose, and that meaning should always be cross-checked against purpose, even if the meaning of the text appears to be plain.
Section 7A of the CGA
(2) A declaration that a reasonable consumer would:
(a) Understand that there will be events, including third party or force majeure events, that:
(i) are practically outside the control of the retailer, lines company or any other person involved in the supply of electricity; and
(ii) substantially affect the reliability, safety or usability of the electricity supplied.
(b) Therefore, not consider that the supply of electricity, when affected by such an event, would be: (1) less safe; or (2) less
reliable; or (3) of a different quality; than a reasonable consumer would expect.
Clause 24 of the Rules of the Scheme
(3) A declaration that when discharging her functions under the Scheme:
(a) The Commissioner is required to deal with each complaint on its merits and with the objective of reaching an outcome that, in her opinion, is fair and reasonable in all the circumstances having regard to (among other things) any legal rule or judicial authority that applies.
(b) In doing so, the Commissioner may depart from applicable legal rules or judicial authority. However, in doing so she must:
(i) Identify, and correctly interpret and apply, any applicable legal rules or judicial authority.
(ii) State that she has chosen to depart from those applicable legal rules or judicial authority, and explain her reasons for doing so.
(iii) Not act in an arbitrary manner.
Natural justice
(4) A declaration that, when discharging her functions under the ECS Scheme Document Scheme Document, the Commissioner is obliged to follow the principles of natural justice by allowing each party full access to the evidence she takes into account, and a reasonable opportunity to respond to that evidence.
Damages
(5) A declaration that, before awarding damages for any loss or damage to a complainant resulting from a failure to meet the acceptable quality guarantee, the Commissioner must:
(a) be satisfied on the basis of cogent evidence that the complainant has suffered loss or damage resulting from the failure, and only award compensatory damages in respect of loss or damage that is established on the basis of such evidence; and
(b) quantify any compensatory damages on the basis of what is required to place the complainant in the same financial position he or she was in prior to the failure (eg, the cost of repairing or replacing second-hand goods to their market value at the time of the failure).
Complaint
(6) A declaration that in the Final Determination the Commissioner’s interpretation of the Acceptable Quality Guarantee, and her application of the principles of natural justice, were wrong.
[25] The Commissioner’s response is:
(a) The Court should exercise its discretion to decline making the proposed declarations as to the Complaint and requirement to interpret the CGA in light of its purpose on the basis these are not helpful or appropriate subject matter for a declaratory judgment. The Commissioner did not issue a final determination under the Scheme Rules because of the settlement which occurred following the Final Recommendation. The Commissioner therefore queries whether a declaration could be made in respect of the Complaint. In Mr Holloway’s submission, for the Commissioner, what Contact is seeking is a judicial review but in another form and where the facts have not been fully canvassed before the Court.
(b) The Court should decline making the proposed declarations as to r 24 of the Scheme Rules, damages and natural justice on the basis they are wrong in law.
(c) To assist Contact and the Commissioner, the Court should consider making a declaration on the proper construction of s 7A of the CGA but not in the terms sought, as to do so would be wrong in law.
Purpose
[26] Before turning to consider s 7A of the CGA, I will address the issue of whether the purpose of the CGA is relevant to its interpretation. There is no dispute on this issue. The relevant principles relating to statutory interpretation are well known. Section 5(1) of the Interpretation Act 1999 provides:
5 Ascertaining meaning of legislation
(1) The meaning of an enactment must be ascertained from its text in the light of its scheme and purpose.
[27] In Commerce Commission v Fonterra Co-operative Group Ltd, the Supreme Court unanimously stated:3
It is necessary to bear in mind that s 5 of the Interpretation Act 1999 makes text and purpose the key drivers of statutory interpretation. The meaning of an enactment must be ascertained from its text in the light of its purpose. Even if the meaning of the text may appear plain in isolation of purpose, that meaning should always be cross-checked against purpose in order to observe the dual requirements of s 5. In determining purpose the court must obviously have regard to both the immediate and the general context. Of relevance too may be the social, commercial or other objective of the enactment.
[28] In the Final Recommendation, the Commissioner stated that a purposive approach was not necessary in interpreting s 7A. This was incorrect and the Commissioner now acknowledges the requirements of s 5(1) of the Interpretation Act.
Section 7A of the Consumer Guarantees Act 1993
[29] I turn now to consider the guidance sought by Contact and the Commissioner. The issue is whether the acceptable quality guarantee in s 7A of the CGA can be breached if the safety, reliability or quality of the electricity supply is affected by an adverse event over which neither the retailer, lines company nor any other person involved in the supply of electricity has any practical control.
[30] Section 7A of the CGA provides:
7A Guarantee of acceptable quality in supply of gas and electricity
(1) There is a guarantee that the supply of gas by a gas retailer, and the supply of electricity by an electricity retailer, to a consumer is of an acceptable quality.
(2) The guarantee of acceptable quality is a guarantee that—
(a) the supply of gas or electricity is as safe as a reasonable consumer would expect it to be; and
(c) the quality of the gas or electricity supplied is such that it can be consistently used for the things that a reasonable consumer would expect to use gas or electricity for.
(3) When determining what a reasonable consumer would expect, it is assumed that the consumer has considered—
(a) that the supply of gas or electricity may be affected by emergencies, or other events or circumstances, outside the control of the retailer or any other person involved in the supply of gas or electricity; and
(b) that the supply of gas or electricity may be interrupted for safety, maintenance, or other technical reasons; and
(c) that the quality of gas or electricity supplied may fluctuate, but that fluctuations are acceptable only within tolerances permitted by gas and electricity safety regulations; and
(d) that the reliability and quality of the supply of gas or electricity may vary depending on the location of the place to which the gas or electricity is supplied; and
(e) that reliability and quality of supply may be related to price.
(4) The supply of gas or electricity will not fail to comply with the guarantee of acceptable quality—
(a) if the gas or electricity has been used by the consumer in an unreasonable manner or to an unreasonable extent, and the supply of gas or electricity would have complied with the guarantee of acceptable quality if it had not been used in that manner or to that extent; or
(b) if, in a case where the quality and reliability of supply by a gas or electricity retailer to a particular consumer is likely to be significantly worse than the quality and reliability of supply that generally applies to gas or electricity supplied by the retailer,—
(i) the retailer or the person supplying line function services has specifically explained to the consumer the ways in which the supply is likely to be significantly worse; and
(ii) the consumer has accepted the supply on that basis, even if an otherwise reasonable consumer may not regard that supply as acceptable.
(5) In this section and section 7B,—
electricity retailer means a retailer as defined in the Electricity Industry Act 2010
gas retailer means a gas retailer as defined in the Gas Act 1992.
Background History
[31] The Bill that became the CGA was introduced in 1992 to address the changing nature of relationships between manufacturers and domestic consumers. Because of the growing scale of manufacturing, market forces were becoming less effective in ensuring the quality of consumer goods. Implied contractual warranties previously relied upon to ensure quality were regarded as having become ineffective due to contractual privity issues. Following Professor David Vernon’s report to the Minister of Justice entitled An Outline for Post-sale Consumer Legislation in New Zealand (Vernon Report),4 the CGA made significant changes to the law of post-sale warranties for consumer goods. It gave statutory guarantees to the supply of goods and services for domestic consumers to overcome privity issues with the aim of facilitating market pressure to ensure such goods and services met reasonable expectations of quality.5
[32] Before the CGA was amended in 2003, electricity was held not to be “goods” for the purposes of the CGA. The 2003 amendment expressly included electricity in the definition of goods and expressly included contracts for the supply of electricity in the definition of “services”. The Commerce Committee’s Report explained:6
We consider adding electricity and gas into the definition of goods in the principal Act will mean that the guarantees applying to goods will apply to electricity. In this instance, the most relevant guarantee is that the electricity is of acceptable quality. The principal Act contains general guidance on the meaning of acceptable quality in section 7. It is an objective test, based on the reasonable consumer. We were advised that, in the case of electricity, this is likely to be a consumer who understands that electricity is subject to momentary fluctuations, prone to interference by environmental factors and the actions of third parties, and may not be supplied at all due to planned shutdowns or emergencies.
5 See generally Gault on Commercial Law (online ed, Thomson Reuters) at [CGIntro.01].
We do not consider the guarantee of acceptable quality amounts to a guarantee of “gold plated” supply. We understand the intended effects of the inclusion of electricity as goods in the principal Act are that:
[33] This Court was then asked by a number of New Zealand’s major electricity generators and retailers, in Contact Energy Ltd v Jones (Contact v Jones), to make declarations as to the approach the Commissioner (then the Electricity and Gas Complaints Commissioner) ought to take in relation to liability for electricity failures.7 There were three issues before the Court:8
(a) whether retailers were liable under the CGA guarantee of acceptable quality for electricity fluctuations or outages attributable to the distribution system;
(b) if retailers were liable, what the guarantee meant; and
(c) whether the availability of surge protection equipment might affect damages payable by retailers.
[34] Miller J addressed retailers’ liability under the CGA guarantee of acceptable quality in respect of distribution faults. It was argued that a retailer could not be liable for faulty line function services. 9 Miller J decided the Legislature did not demarcate between the various functions in the supply of electricity, saying:10
7 Contact Energy Ltd v Jones [2009] NZHC 2631; [2009] 2 NZLR 830 (HC) [Contact v Jones].
8 At [6].
9 At [7].
10 At [72].
[73] Further support for this construction is found in the Vernon Report to the Minister of Justice, dated 1 July 1987, which preceded the Consumer Guarantees Act. The report ... concluded at p17 that as a matter of policy the retailer ought to be liable to the consumer for badly made goods, leaving the retailer to claim reimbursement from others in the supply chain, even where the retailer was ignorant of the defects. And in the context of electricity, the legislative history suggests strongly that Parliament wanted to ensure consumers do not labour under the onus of proving which firm – retailer or lines company – is responsible for a defect in the quality of electricity supplied; rather, the two firms should be encouraged to resolve liability between them, with the consumer free to claim against either.
[35] Contact had urged upon the Judge a similar argument to that made in this case, that is: the guarantee of acceptable quality is not a guarantee the product is free from all risk; the consumer accepts a product can involve inherent risk and has no claim under the CGA when that occurs; the reasonable consumer would expect reasonable steps to be taken to avoid those risks; and liability arises unless it can be shown that reasonable steps were taken.11
[36] Miller J held:
(a) The guarantee of acceptable quality extended to electrical outages and fluctuations of supply.12
(b) Acceptability is determined objectively by the reasonable consumer with no personal agenda (that is, no agenda which reflected a degree of hindsight bias following loss being suffered). The test is not necessarily easy for a Court, or the Commissioner, to apply.13
(c) The reasonable consumer is taken to be “fully acquainted with the ‘state and condition’ of the goods, including any hidden defects”.14 Acceptable quality is a composite and context-specific attribute “comprising elements of description, purpose, condition and price”,
11 At [77].
12 At [84].
13 At [85].
14 At [94].
and varies according to the nature of the goods and characteristics of the market.15
(d) Beyond the physical properties of electricity at the point of supply, the reasonable consumer’s knowledge includes the nature of electricity and the attributes of the transmission and distribution systems so far as they may determine its fitness for purpose, cause it to suffer defects or affect its safety.16 It includes the general characteristics of electricity distribution in New Zealand, such as: supply through overhead lines; the need for planned outages for maintenance; unplanned outages or voltage fluctuations from wear and tear, environmental hazards such as animals, vegetation, storms or excessive loads; instability after outages; and third party damage.17
(e) Quality at the consumer’s premises cannot be separated from the transmission and distribution systems. The consumer is presumed to have some knowledge of the “internal” characteristics of supply and the increased price to be paid if those faults were to be eliminated.18
(f) While undergrounding electricity lines reduces faults, s 7 of the CGA did not authorise the decision-maker to pursue quality improvements by imposing a higher quality standard than is justified by the nature, price and other relevant attributes of the goods actually supplied.19
(g) Whether a breach of the guarantee of acceptable quality has occurred is a question of fact and degree.20 A non-exhaustive list of considerations a reasonable consumer must be taken to consider includes:
16 At [98].
17 At [97].
18 At [100].
19 At [93].
20 At [102].
(i) The purposes to which electricity is commonly put, including computers and commonplace electronic consumer equipment.21
(ii) The nature and extent of risk posed by a given fault. Safety is important but goods are not unsafe merely because they involve some inherent risk.22
(iii) The extent, duration and frequency of outages or voltage fluctuations.23
(iv) Whether an event is unacceptable should be assessed having regard to the nature of the distribution system to which the consumer’s premises are connected and any quality standards.24
(v) The cause of a fault is relevant but not determinative. It cannot be said in the abstract that the reasonable consumer would accept all faults resulting from force majeure events or third party damage. It is possible that some assets are so exposed to third party damage, or the consequences of failure so severe, that the reasonable consumer would expect them to be better secured.25
(vi) The price of the service and the price the consumer would have to pay to eliminate faults. The consumer cannot expect a materially higher quality of supply without paying materially more.26
(vii) Acceptability is affected by the consumer’s knowledge, as informed by statements from the retailer, that consumer surge
21 At [102].
22 At [103].
23 At [104].
24 At [105].
25 At [106].
26 At [107].
protection equipment may protect against risks that the retailer cannot control.27
(h) Electricity retailing may be distinguished from supply of most other goods in that the retailer cannot prevent or manage defects. By contrast, the consumer may be able to manage defects by installing surge protection equipment.28
(i) In circumstances where the guarantee is breached and damage results, the consumer is likely to recover his or her reasonably foreseeable losses in full unless the retailer can point to evidence of another contributing cause.29
[37] Following Contact v Jones, and informed by it, Parliament made two substantive amendments to the Act effective from June 2014, by introducing ss 7A and 46A.
[38] Section 46A applies when there has been a failure of the s 7A acceptable quality guarantee and the failure was wholly or partly the result of an event, circumstance or condition associated with electricity lines or other equipment which was at the time the responsibility of a line function supplier.30 In those circumstances, a retailer who has incurred remedy costs is entitled to be indemnified for any remedy for which it is liable. The indemnity is limited to the proportion of the remedy costs attributable to the events, circumstances or conditions associated with the electricity lines, or other equipment for which the party was responsible at the time of the failure.
[39] The following material was referred to by the parties:
27 At [108].
28 At [136]–[137].
29 At [137].
30 Section 46A also applies to the gas industry.
(a) The views expressed by the Ministry of Consumer Affairs in a discussion paper in October 2010 as part of the Consumer Law Reform project that:31
The fact that electricity retailers have no control over the faults for which they are liable is not relevant to the application of the acceptable quality guarantee to retailers and other suppliers of goods generally.
(b) The Ministry of Consumer Affairs’ March 2012 briefing to the Commerce Committee when it was considering the Consumer Law Reform Bill, which noted the express limitations to the guarantee:32
Clauses 35 and 36 of the Bill provide for new sections 7A and 7B in the Consumer Guarantees Act that recognise electricity and gas are different to ordinary consumer products. A specific definition of acceptable quality is provided covering a number of specific considerations that are inherent to the industry including limitations to the guarantee. The limitations are:
(c) The Ministry of Business, Innovation and Employment (MBIE) response to specific concerns that retailers would be liable for force majeure or third party damage, saying in a report dated 14 August 2012:33
The reasonable consumer test is sufficiently flexible to account for true force majeure events. It would be unreasonable for a consumer to expect that the quality of their
power supply would be unaffected by any force majeure event that affected distribution infrastructure. True force majeure events will therefore not cause electricity retailers to breach the new guarantee.
Where events are the result of third parties and truly beyond the control of electricity suppliers, they will also be excluded by the reasonable consumer test.
Both force majeure and third party events are excluded from supplier liability by new section 7 A(3)(a).
[40] The courts have a discretion to admit and use Parliamentary material.34 However, even compelling opinions expressed in them cannot alter statutory words where the meaning is clear.35 As the author of Burrows and Carter Statute Law in New Zealand observes, the exact demarcation of what type of Parliamentary material the courts may legitimately consider is unclear.36 The author goes on to suggest the following “tentative criteria” for the admission of Parliamentary material:37
- (i) It must be relevant to the question in issue, and thus be material that is capable of tending to help the interpreter ascertain meaning.
(ii) It must be reliable, in that it is a considered statement by a minister or other proponent of the legislation.
(iii) It should be publicly accessible.
(iv) It should normally have been available before the passing of the legislation and known to those engaged in the lawmaking process. ...
[41] The Parliamentary material referred to by counsel was of limited use only, presented as it was without surrounding context. For example, the views expressed by the Ministry of Consumer Affairs in the October 2010 Discussion Paper is relied on by both Contact and the Commissioner. The Commissioner says it is consistent with her interpretation, whereas Contact argues Parliament expressly rejected those views.
[42] Other than being relevant as general background to the Parliamentary history, I place little weight on this material.
35 At 290.
36 At 296–297.
37 At 298–299 (citations omitted).
Submissions
[43] Contact’s case is that, as a matter of statutory interpretation, there is no failure of the s 7A guarantee of acceptable quality in circumstances where the quality, safety or reliability of the electricity supplied to a consumer has been affected by an event outside the control of the parties to the electricity supply chain and all reasonably practicable steps have been taken by those parties to protect against such an event.
[44] Contact says the Commissioner’s approach to s 7A was wrong. The key elements of the guarantee are set by reference to the expectations of the reasonable consumer, with those expectations being limited by the matters in s 7A(3). The reasonable consumer is expressly deemed to have considered that the supply of electricity may be affected by emergencies, or other events or circumstances outside the control of the retailer or any other person in the supply of electricity.
[45] Contact therefore contends that retailers should only be liable for losses caused by third parties or force majeure where there were steps Contact could take to avoid loss and the reasonable consumer would expect Contact to take those steps.
[46] Mr Bisley, appearing for Contact, stressed that, in contrast to absolute liability, s 7A provides for strict liability, which confers a defence of absence of fault.38 As Mr Bisley noted, strict liability torts have certain limited defences, including acts of God, acts of a stranger or third party, or default on the part of a plaintiff.39
[47] The Commissioner’s position is that s 7A does not (and was not intended to) rule out all liability where the adverse effects of a third party or force majeure event could not have been reasonably prevented. Instead, in Mr Holloway’s submission, the guarantee under s 7A is a dynamic standard which requires an assessment to be made in each case. A decision-maker must determine the safety and quality a reasonable consumer would expect while assuming the consumer has turned her or his mind to
38 Such a defence is also available in the Electricity (Safety) Regulations 2010, reg 11. The Electricity Regulations are, however, a separate matter, dealing as they do with the creation of offences and penalties. It is unsurprising that an electricity company could escape liability under the Electricity Regulations but still be liable under s 7A of the Consumer Guarantees Act 1993.
39 See for example Rylands v Fletcher (1866) LR 1 Ex 265.
the factors in s 7A(3)(a)–(e). This is a “living” standard which can take changes of circumstance over time into account.
[48] Mr Holloway submitted that, while fault is relevant, the composite nature of acceptable quality precludes any rule excluding liability in every case where it can be shown that someone in the supply chain could not reasonably have avoided the adverse event. He said, if an exclusion of liability were intended, s 7A(3)(a) would be expressed unambiguously and included as part of subsection (4). Mr Holloway referred to the policy of the CGA as described by Winkelmann J:40
The policy underlying the [CGA] is that suppliers of goods are liable not because of their own default, but because businesses and not consumers, should bear the risk where the goods and services they supply fail to comply with consumers’ reasonable expectations ...
[49] There was, in Mr Holloway’s submission, no policy basis for suggesting that electricity retailers should not be subject to a degree of no-fault liability as are the suppliers of goods under ss 6 and 7.41 He referred to the fact electricity retailers are protected by both the reasonable consumer test and the indemnification of electricity retailers under s 46A.
Analysis
[50] Section 7A sits within Part 1 of the CGA, which addresses guarantees in respect of the supply of goods. It grew out of the guarantee of acceptable quality established by ss 6 and 7, which had replaced the implied condition of merchantable quality in s 16(b) of the Sale of Goods Act 1908. The “reasonable consumer” test shifted the emphasis from the supplier to the consumer.42
[51] Part 2 of the CGA concerns consumers’ rights of redress against suppliers where goods fail to comply with any of the guarantees contained in Part 1. Section 18 sets out a consumer’s options against a supplier where goods do not comply with the guarantee. This includes, in s 18(4), damages for any loss or damage to the consumer
40 Acquired Holdings Ltd v Turvey [2007] NZHC 1251; (2008) 8 NZBLC 102,107 (HC) at [14].
42 Gault on Commercial Law, above n 5, at [CG7.01].
resulting from the failure of the guarantee “which was reasonably foreseeable as liable to result from the failure”.
[52] Section 7A provides that the arbiter of whether the acceptable quality of electricity guarantee has been breached is the reasonable consumer. I adopt Miller J’s analysis in this regard. The reasonable electricity consumer has knowledge of the nature of electricity and the attributes of the transmission system. The reasonable consumer is taken to know the general characteristics of electricity distribution in New Zealand, such as: supply through overhead lines; the need for planned outages for maintenance; unplanned outages or fluctuations from wear and tear, environmental hazards such as birds, possums, trees, storms, or excessive consumer loads; as well as instability after outages; and possible third party damage.43
[53] Under s 7A(3), the reasonable consumer is expressly assumed to have considered there will be interruptions or fluctuations to the supply by reason of emergencies or other events outside the control of the retailer or other persons involved in supply; interruptions for safety, maintenance or other technical reasons; fluctuations in quality within permitted tolerances; and variations in reliability and quality depending on the location and price. This reflects Miller J’s comments that the cause of a fault is relevant but not determinative, and some causes will be outside what the consumer can expect a retailer or lines company to manage.44
[54] The reasonable consumer’s expectations of safety, reliability or quality must be tempered by the broader circumstances of the relevant adverse event. The mere fact of an outage (even a prolonged outage) does not automatically involve a failure of acceptable quality. That will obviously be so in circumstances of a true force majeure event such as a natural disaster. No reasonable consumer could expect the continuous, or necessarily safe, supply of electricity in such circumstances. Where the supply of electricity has been restored appropriately (that is, in line with appropriate contingency plans), the reasonable consumer test will allow it. That approach reflects the expectations of a reasonable consumer fully acquainted with the state and condition of the electricity supply system.
43 Contact v Jones, above n 7, at [97].
44 At [106].
[55] This approach will not invariably exclude retailer liability for events caused by third parties or force majeure events. As Miller J made clear, in the end the question whether a given supply of electricity breached the acceptable quality guarantee is a question of fact and degree.45 There will be instances of force majeure where a provider could be liable; for example, the effects of a lightning strike which, although a force majeure event, are able to be mitigated by measures which can appropriately and reasonably be taken. Appropriate measures are taken in respect of some third party events, for example the potential for animals to cause faults in the system.46
[56] In other words, the fact that a reasonable consumer may forgive some safety, reliability and quality issues caused by force majeure or third parties in some (or even most) circumstances is merely part of the reasonable consumer test. This reflects Miller J’s observation that the reasonable consumer will not necessarily accept all faults arising from a force majeure or third party incident if the consequences of failure are so severe that the reasonable consumer would expect them to be better secured.47
[57] This interpretation is consistent with the overall policy of the CGA from the time of its inception. The focus has always been on consumer protection.48 This is made clear by the Vernon Report when it discussed the rationale for imposing liability on the retailer of goods as follows:49
Some retailers may object to shouldering the responsibility for defects. They may perceive their role simply as a conduit of a product manufactured and packaged by others in the distribution chain. Since these retailers play no role in creating the product, they may view themselves as blameless when the goods or services turn out to be badly designed or produced. In a very real sense, they are blameless unless they had reason to know of the defect prior to sale. Accepting as fact the retailers’ claim that they neither created the defect nor had any way of knowing prior to sale that it existed does not lead to the conclusion that they should be exempted from responsibility to consumers for the defect. It leads only to the conclusion that they should be reimbursed for their outlay by others in the distribution chain, or that it is merely another cost of doing business.
The retailer, who sells the goods or services in an effort to make a profit, should not be permitted to retain the profit while rejecting responsibility for
45 At [102].
47 At [106].
48 See the reference to defective and faulty goods in Vernon Report, above n 4.
49 At 17.
the very thing that produced it. Indeed, no entity in the chain should be permitted to shelter itself from its obligation to the ultimate user by pointing a finger at someone else in the chain. It is beyond argument that all in the chain are engaged in a single enterprise. Since the enterprise functionally is a single unit, the fault of one is functionally the fault of all.
[58] The Vernon Report emphasised that “the fault of one is functionally the fault of all”. The fact a retailer may have had no responsibility for a defect or knowledge of it does not preclude their liability under the CGA. The retailer should be able to recover from the manufacturer but, if not, liability is simply a cost of doing business.
[59] The interaction of ss 7A and 46A confirms this approach applies to electricity. Section 7A deals with the relationship between the electricity consumer and the retailer. Section 46A allows the industry to allocate loss between the various players but does not affect the scope of the s 7A liability.
[60] Section 46A limits retailers’ indemnity to the proportion of remedy costs attributable to the circumstances associated with the electricity equipment for which the party was responsible at the time of failure. On one argument, s 46A presupposes that any breach of the acceptable quality guarantee is attributable to one of those players. On another, the provision merely recognises that, in instances where fault is attributable to another party, the retailer ought to be able to seek reimbursement but, where fault cannot be ascertained, the retailer remains liable. The emphasis on reasonableness in respect of the acceptable quality of electricity guarantee demonstrates that it is not entirely a no-fault guarantee,50 but it does not necessarily mean fault is a precondition of liability.
[61] I am therefore not persuaded that an absence of fault would be fatal to a claim of breach of the guarantee. Section 7A carefully describes circumstances where retailers will not fail to comply with the guarantee, yet does not specify that liability is excluded in the absence of fault. However, that is not to say fault is irrelevant. The test for liability is the expectations of a reasonable consumer and fault is an aspect of what the reasonable consumer is taken to consider when setting their expectations.
50 The concept of reasonableness is pervasive throughout the Consumer Guarantees Act 1993: see for example ss 5A and 12 and, as far as damages is concerned, in the concept of reasonable foreseeability in s 18(4).
[62] A cross-check of the CGA’s purpose confirms that interpretation. Section 1A, which was enacted at the same time as ss 7A and 46A, provides that the purpose of the CGA is to contribute to a trading environment in which the interests of consumers are protected, businesses compete effectively and consumers and businesses participate confidently. The guarantees under the CGA are directed to achieving that purpose and the benchmark of the guarantees is reasonableness.51 I am satisfied my interpretation is consistent with the purpose of the CGA.
[63] Turning now to consider the declaration sought by Contact in connection with s 7A. As discussed above, a reasonable consumer is taken to understand there will be events, including third party or force majeure events, which are practically outside the control of the retailer or any other person in the electricity supply chain and which may substantially affect the reliability, safety or quality of electricity supplied. To that extent, I agree with the declaration sought. For the reasons given, however, I do not agree with the conclusion in part (b) of the draft declaration. The inquiry as to whether the guarantee has been breached is fact and degree specific. It includes the circumstances of the adverse event and the steps which might reasonably be expected to be taken to protect against and mitigate its effect.
[64] In respect of the issue identified at [29], I can say that the acceptable quality guarantee in s 7A of the CGA is unlikely to have been breached if the safety, reliability or quality of the electricity supply is affected by an adverse event over which neither the retailer, lines company nor any other person involved in the supply of electricity has any practical control. That is on the proviso that the retailer, lines company or other person involved in the supply of electricity has adopted such measures to secure the asset and mitigate the effects of any such event as the reasonable consumer would expect. The reasonable consumer is taken to consider the cost of any such measures and the resulting impact on the price of electricity to the consumer.52 The answer is not unequivocal however. It is fact and degree specific.
51 Consumer Guarantees Act 1993, s 1A.
52 See [36](f) and [36](g)(vi) above.
[65] I now return to the Complaint. The parties’ submissions focused on whether the acceptable quality guarantee could have been breached in circumstances where there was nothing an electricity company could reasonably have done to prevent the incident complained of.53
[66] What I am not satisfied of, however, is that there were no measures which could have been taken to avoid or mitigate the effect of what happened to Mr S’s property which would be expected by a reasonable consumer. This may well be because the case was not fully argued before me with the necessary expert evidence in this regard. The high voltage and low voltage lines were on the same power pole and it seems to me (on the face of it) entirely foreseeable that an accident could cause the high voltage lines to come into contact with the low voltage lines and therefore cause a higher voltage of electricity to enter a domestic property.
[67] Given the foreseeability of that event, evidence would be needed as to what measures, short of undergrounding the lines, could reasonably be taken to prevent or mitigate it. Although there was affidavit evidence from employees of both Contact and Vector to the effect that undergrounding lines would be economically unsound and there were no other reasonably practicable options for removing risk, no expert evidence was adduced in respect of reasonable options for reducing or mitigating risk. For example, would it be possible to install an industrial quality anti-surge device at the point an electricity line enters a domestic property, or would an appropriate design intervention prevent the cables from connecting in the event of a pole collapse?
[68] The Commissioner referred to Contact and Vector having “very limited control” over the event. Contact maintained they had no control. In the absence of further evidence on this question, particularly expert evidence, it is not in my assessment appropriate to make the declaration Contact seeks. I can, however, make some observations.
53 There is a possible argument as to whether what happened in Mr S’s case constituted “the supply of electricity by an electricity retailer”. It may be arguable that, because high voltage lines came into contact with low voltage lines which caused high voltage electricity to enter Mr S’s property, the high voltage electricity was not a supply which Contact made to Mr S. This approach was not, however, argued before me and I take it no further.
[69] The Commissioner appears to have assessed the safety, reliability and quality of the electricity on a standalone basis followed by a cross-check of what a reasonable consumer might expect. However, the analysis requires an assessment of the expectations of a reasonable consumer as to safety, reliability and quality taking into account all relevant circumstances of supply and the limitations outlined in s 7A(3). A simple conclusion the electricity was “unsafe” is not enough. I accept that the reasonable consumer would not have expected the events which occurred at Mr S’s property. That, however, is not the question.
[70] The question the Commissioner should have addressed is whether, assuming no party in the electricity supply chain had any practical control over the event, there were any measures which would have prevented or mitigated the effects of the event which a reasonable consumer would have expected those in the supply chain to have adopted and which they had not. The next question is whether, in those and all the other circumstances of the event, the supply of electricity was as safe, reliable and of the quality a reasonable consumer would expect it to be.
Rule 24 of the Scheme
The Energy Complaints Scheme
[71] The EIA, which came into force on 1 November 2010, provides for a “dispute resolution scheme” for complaints about Transpower, distributors and retailers (as those terms are defined in the EIA). Schedule 4 to the EIA sets out the requirements for a dispute resolution scheme.
[72] The Scheme was approved by the Minister on 27 September 2016. It has been operated by UDL since 1 November 2016. It is constituted by “The General and Scheme rules for the Energy Complaints Scheme operated by Utilities Disputes Ltd” (the Rules). The Rules are broken down into General Rules and Scheme Rules. General Rules cover all utility disputes. Scheme Rules are particular rules for specific utilities.
[73] A distributor or retailer becomes a member of the Scheme (referred to as a “provider” in the Rules) by entering into a provider agreement.54 Providers agree, among other things, that the terms and conditions of the provider agreement, together with the Rules, govern the legal relationship between UDL and the provider. Providers also agree to be bound by the terms of the Scheme (as set out in the Rules) and to observe and perform all of the obligations of a provider under the Scheme. Contact is a provider under the Scheme.
[74] Members cannot be expelled from the Scheme.55 However, members can withdraw from the Scheme by giving 12 months’ notice (or a shorter period of notice if UDL’s board agrees).56
[75] The Commissioner is appointed by UDL to deal with complaints. A customer of a member company with a complaint against that company, which has not been resolved through the company’s internal complaints process, can make a complaint to the Commissioner.57 The Commissioner may consider a complaint if, among other things, it is “about goods or services provided (or requested but not provided) by a provider”. A “complaint” is defined as “an expression of dissatisfaction made to or about a provider where a response or a resolution is explicitly or implicitly expected”.
[76] The Commissioner has the power to recommend a settlement of the complaint. Initially, the Commissioner issues a proposed recommendation. Parties have an opportunity to make further representations to the Commissioner.58 The Commissioner can then issue a final recommendation,59 which each party has 15 working days to accept or reject.60 If the final recommendation is accepted by the complainant in full and final settlement of the complaint but is not accepted by the member, the Commissioner can make a binding award against the member.61
54 Appendix to the General Rules.
55 Scheme Rules, r 3.
56 General Rules, r 55.
57 Rules 12–15.
58 Rule 32.
59 Rule 32.
60 Rules 35–36.
61 Rule 35.
[77] The Commissioner has jurisdiction to consider complaints regarding claims of up to $50,000 without the provider’s consent and up to $100,000 with the agreement of the provider.62
[78] In dealing with complaints, the Commissioner must:63
(a) do what he or she considers appropriate to resolve Complaints in a cooperative, fair, efficient, and timely way;
(b) proceed with minimum formality;
(c) be as transparent as possible, while also acting in accordance with his or her confidentiality and privacy obligations; and
(d) act in accordance with the founding principles of:
[79] Rule 24 of the General Rules provides:
UDL must deal with each Complaint on its merits and with the objective of reaching an outcome that, in its opinion, is fair and reasonable in all the circumstances having regard to:
(a) any legal rule or judicial authority that applies;
(b) rules of natural justice;
(c) general principles of good industry practice and any industry guidelines that apply;
(d) resolving Complaints in a cooperative, efficient and timely way; and
(e) assisting Complainants and Providers to reach informed and voluntary agreements to resolve Complaints where possible.
62 Scheme Rules, rr 7–8.
63 General Rules, r 3.
Declaration sought
[80] Contact seeks a declaration in respect of r 24 of the General Rules in the following terms:
A declaration that when discharging her functions under the Scheme:
(a) The Commissioner is required to deal with each complaint on its merits and with the objective of reaching an outcome that, in her opinion, is fair and reasonable in all the circumstances having regard to (among other things) any legal rule or judicial authority that applies.
(b) In doing so, the Commissioner may depart from applicable legal rules or judicial authority. However, in doing so she must:
(i) Identify, and correctly interpret and apply, any applicable legal rules or judicial authority.
(ii) State that she has chosen to depart from those applicable legal rules or judicial authority, and explain her reasons for doing so.
(iii) Not act in an arbitrary manner.
[81] Prior to the hearing, Contact revised its approach to this issue. Initially, it contended the Commissioner must comply with any applicable legal rule or judicial authority. It now accepts that the words “have regard to” in r 24 allow the Commissioner to depart from the law and that the EIA allows the Minister to approve a scheme with that effect.64 Contact’s position, however, is that the Commissioner may depart from the law only if she first identifies the relevant law, explains she intends to depart from it and gives her reasons for doing so.
[82] Mr Bisley said the Commissioner’s affidavit in these proceedings, wherein she outlined the difficulty in researching applicable law in the case of all complaints, demonstrated the issue. She did not state what the law was in her decision on the Complaint. In Mr Bisley’s submission, in order to have regard to the law, which the Commissioner is obliged to do, she must understand what the law is. If the Commissioner misinterprets the law, then she will have failed to take it into account.65
64 Electricity Industry Act 2010, sch 4, cl 8.
[83] In the Commissioner’s view, her obligation under the Rules is to determine each complaint on its merits and with the objective of reaching an outcome which, in her opinion, is fair and reasonable in all the circumstances, and in doing so, to have regard to the law. She objects to (a) and (b)(i) of the proposed declaration. It elevates, she says, matters to which she must have regard to a position where the law becomes the driver of the process. Compliance with the declaration would require a change of her approach from that required under r 24, to carrying out a legal analysis, with the fairness jurisdiction then “bolted on”. The Commissioner does not object to (b)(ii) of the proposed decision, that is to explaining why she has decided to depart from the law should she choose to do so. While the Commissioner does not object to (b)(iii) of the proposed declaration (that she must not act in an arbitrary manner), she contends it is not required.
[84] Overall, the Commissioner maintains Contact is challenging the institutional design of the Scheme which Parliament intended to resolve complaints in accordance with certain principles.66
[85] The uncontested evidence of the Commissioner was that r 24 resulted from:
(a) a deliberate decision to depart from an earlier rule which required the Commissioner to observe and apply any applicable law, rule of law or judicial authority;
(b) a deliberate decision to align the Scheme with the Australian Benchmarks for Industry-Based Customer Dispute Resolution; and
(c) the settled place of dispute resolution schemes in common law jurisdictions and their standards of “fair and reasonable in all the circumstances” and requirement to “have regard to” the law.
[86] The Commissioner points out that she deals with a wide spectrum of complaints – from customer service issues, to breaches of non-binding industry codes, to requests for compensation. Being fair and reasonable sometimes requires
66 Electricity Industry Act 2010, sch 4, cls 1(b) and 5(2).
compromise. As an example, the Commissioner may recommend allocating the costs of replacing an electricity line or pole to both parties. These sorts of compromises are possible only because of the Commissioner’s mandate to achieve outcomes which are fair and reasonable in all the circumstances.
[87] Mr Holloway emphasised that the Commissioner’s role cannot be equated with that of a judge. The role is inquisitorial and conciliatory. The majority of complaints settle. It is only if settlement is not reached that the Commissioner may formally recommend a settlement; and then (if that recommendation is accepted by the complainant but not the provider) make a binding determination. The Commissioner’s role is to resolve complaints in a way that is quick, fair and final.
[88] In Ms Aldred’s submission, for the Minister, there is no reason to make the declaration sought. More than that, however, she noted that, while the declaration sought relates to the Scheme, it is likely to have much wider effect. Similar wording to r 24 features in complaints resolution schemes in other New Zealand contexts. Any declaration would therefore have precedential effect on schemes relating to very different contexts.
Approach to interpretation
[89] The parties agree that the Scheme can be considered a statutory contract and the Rules should be interpreted in accordance with the principles of contractual interpretation.
[90] The majority of the Supreme Court in Firm PI 1 Ltd v Zurich Australian Insurance Ltd confirmed the following approach to contractual interpretation:67
(a) The aim is to ascertain the meaning the document would convey to a reasonable person having all the background knowledge reasonably available to the parties at the time they entered into the contract. This objective meaning is deemed to be what the parties intended.
(c) Contractual language must be interpreted within its overall context, broadly viewed.
(d) The approach is purposive or contextual, and ambiguity is not a prerequisite for such an approach.
(e) While context is important, the text remains “centrally important”. If the language used, construed in the context of the contract as a whole, has an ordinary and natural meaning, this will be a powerful, albeit not conclusive, indicator of what the parties meant. However, the wider context may point to some interpretation other than the most obvious one and may also assist in determining the meaning intended in cases of ambiguity or uncertainty.
[91] There is also a public dimension to the Rules. The public, such as consumers, may rely on or be affected by them from time to time. In addition, the Rules have their origins in statute and obtain their mandate from the Minister acting under the EIA. Parliament’s intention in enacting the enabling legislation therefore forms part of the necessary background to be taken into account when interpreting the Rules.68
[92] Numerous New Zealand decisions have considered what is required of a decision-maker in statutory contexts where decisions are to be made “having regard to” specified criteria. The settled approach is that the defined criteria must be considered but the weight to be given to any particular criterion is for the
decision-maker to decide. In New Zealand Fishing Industry Assoc Inc v Minister of Agriculture and Fisheries, the Court of Appeal held the words “have regard to”:69
... require an open and receptive mind which is none the less free to disregard the submissions made if other relevant considerations require it.
[93] This was affirmed in Te Runanga o Raukawa Inc v Treaty of Waitangi Fisheries Commission:70
... the words “have regard to” means simply that the [decision-maker] must consider the statutory criteria in making its decisions under that section. What, if any, weight the [decision-maker] gives to a particular criterion in the particular case is for the [decision-maker] to decide. All that is necessary is for the [decision-maker] to turn its mind to each criterion ...
[94] The Disputes Tribunal Act 1988 establishes the Disputes Tribunal, which has jurisdiction to settle most types of claim where the order sought does not exceed
$15,000 or, by agreement, $20,000.71
[95] Disputes Tribunal referees must determine disputes:72
... according to the substantial merits and justice of the case, and in doing so shall have regard to the law but shall not be bound to give effect to strict legal rights or obligations or to legal forms or technicalities.
[96] The Disputes Tribunal Act wording therefore goes further than the words of the Rules in allowing a Disputes Tribunal referee to depart from the law. How the provision has been applied is, however, informative when considering how r 24 should be interpreted.
[97] The leading decision remains NZI Insurance New Zealand Ltd v Auckland District Court:73
71 Disputes Tribunal Act 1988, s 10.
72 Section 18(6).
73 NZI Insurance New Zealand Ltd v Auckland District Court [1993] 3 NZLR 453 (HC) at 464.
... that obligation requires the referee to consider any legal principles of which he or she may be made aware in a fair and unbiased manner, and to apply the law as he or she understands it in an impartial manner to the facts as the referee finds them, save only when strict observance of those rules would, in the referee’s view, prevent determination of the dispute according to the substantial merits and justice of the case. Provided the referee does this, an error in his or her assessment of relevant legal principles will not open the decision up to review or correction on appeal.
[98] In Evans v Disputes Tribunal at New Plymouth, Anderson J qualified that position when he discussed an error of law in a Disputes Tribunal decision and materiality, saying:74
... materiality must be assessed with regard to the Tribunal’s broad power to do substantial justice. Accordingly an error of law may never be sufficiently material unless it has led to a result which is plainly unjust, such to be evaluated with regard to substantial merits notwithstanding strict legal rights or obligations or legal forms or technicalities. Even if an applicant for review were to meet that high threshold, the Court’s discretion to withhold relief may be a barrier having regard to the clear policy of the Act, including the appropriately limited grounds of appeal.
[99] Similar wording to r 24 is present in complaints resolution schemes in other New Zealand contexts75 and overseas jurisdictions. These schemes are used in various industries, including the financial and insurance sector, and have been the subject of judicial consideration in those jurisdictions, particularly in England and Wales, and Australia.
(i) England and Wales
[100] In England and Wales, the Financial Ombudsman Service conducts a complaint mechanism similar to the Scheme. In R (IFG Financial Services Ltd) v Financial Ombudsman Services,76 Stanley Burnton J (as he then was) upheld an ombudsman’s decision to require the claimant to pay compensation by reference to what was fair and
74 Evans v Disputes Tribunal at New Plymouth (2000) 14 PRNZ 183 (HC) at [23].
75 See for example the Financial Services Complaints Ltd Scheme Terms of Reference 2015, cl 3; the Insurance and Financial Services Ombudsman Scheme Terms of Reference 2015, cls 12.1 and 12.2; and the Banking Ombudsman Scheme Ltd Terms of Reference 2016, cl 9.
76 R (IFG Financial Services Ltd) v Financial Ombudsman Services Ltd [2005] EWHC 1153.
reasonable in the ombudsman’s opinion for losses arising from an unforeseeable fraud, even though such losses would not have been recoverable under English law.77
[101] Stanley Burnton LJ revisited this issue in the Court of Appeal.78 There, he said, while the ombudsman must take into account relevant law, rules, codes of practice and so on, he or she is free to depart from the relevant law but must explain why in the decision.79
[102] In a concurring judgment, Rix LJ observed that the ombudsman deals with complaints in a regulatory setting rather than legal causes of action and thus is obliged to take into account relevant law amongst other matters.80 He emphasised the aims of the scheme and the pragmatic balance between its efficiency and informality, being unstifled by legal doctrine, with the ability to develop new approaches appropriate to the circumstances; and adherence to principles of transparency, consistency and accessibility.81
[103] More recently, in R (Aviva Life & Pensions (UK) Ltd) v Financial Ombudsman Service, Jay J expressed personal concerns about the “uncertain space outside the common law and statute” the ombudsman’s powers occupies. He noted the “relationship between what is fair and reasonable, and what the law lays down, is not altogether clear”.82
(ii) Australia
[104] The Federal Court of Australia’s decision in Australian Communications Authority v Viper Communications Pty Ltd,83 concerned the validity of legislation requiring service providers to enter into the Telecommunications Industry Ombudsman scheme, which had similar provisions to the Scheme. Sackville J distinguished the Australian scheme from judicial bodies, stating the legislation did
77 At [13] and [74].
79 At [49].
80 At [80].
81 At [89].
82 R (Aviva Life & Pensions (UK) Ltd) v Financial Ombudsman Service [2017] EWHC 352 at [73].
not require a scheme to directly apply settled legal principles, rather it contemplated the scheme would create norms to investigate and resolve large volumes of disputes in an efficient and inexpensive manner.84
[105] The Australian Financial Ombudsman Service is also a dispute resolution mechanism similar to the Scheme and is the successor to various schemes including the Financial Industry Complaints Service Ltd.85 In Masu Financial Management Pty Ltd v Financial Industry Complaints Service Ltd, Shaw J distinguished the service from the courts because it is a complaints mechanism, and explained it is required to have regard to legal principles but is not bound to apply them.86
[106] In Wealthcare Financial Planning Pty Ltd v Financial Industry Complaints Service Ltd, Cavanagh J again distinguished the service from the courts and similarly described its role as a complaints mechanism.87 The Judge accepted the service may be required implicitly to properly interpret and take into account the law but its central task is a broad exercise of discretion rather than an application of the law to the facts.88
Analysis
[107] The purpose of a scheme is to ensure that:89
(a) any person (including consumers, potential consumers, and owners and occupiers of land, but excluding members of the scheme) who has a complaint about a member has access to a scheme for resolving the complaint; and
(aa) members have a mechanism for resolving indemnity disputes; and
(b) the scheme is accessible, independent, fair, accountable, efficient, and effective.
[108] The Minister’s ability to decline to approve changes to a scheme is restricted:90
84 At [84].
85 Financial Ombudsman Service Terms of Reference 2010, cl 8.2.
88 At [24]–[25].
89 Electricity Industry Act 2010, sch 4, cl 1.
(3) The Minister may decline approval for a rule change only on the grounds that, if the rules were changed as proposed, they would not comply with the principles listed in clause 5(2) or would not comply with clause 13.
[109] The principles listed in cl 5(2) are: accessibility, independence, fairness, accountability, efficiency and effectiveness.
[110] The rules of a scheme must provide for certain matters with respect to the scheme’s “function of dealing with complaints” under s 95 of the EIA, including:91
...
(e) that complaints about members must be investigated in a way that is consistent with the rules of natural justice:
(f) that any information may be considered in relation to a complaint, and any inquiry may be made, that is fair and reasonable in the circumstances:
(g) the kinds of remedial action that the scheme may require members to take in order to resolve complaints (for example, a requirement to compensate a complainant up to a certain amount stated in the rules, or to change a system):
(h) that the scheme will not charge a fee to any complainant to investigate or resolve a complaint:
(i) that a resolution of a complaint about a member of the scheme is binding on the member concerned:
(j) that a resolution of a complaint about a member of the scheme is binding on the complainant concerned if the complainant accepts the resolution or has agreed to be bound by a final decision and a final decision is made:
...
(l) that, if a complainant accepts a resolution or has agreed to be bound by a final decision and a final decision is made, the complainant may not seek or obtain any other resolution of the complaint through any court or tribunal:
[111] These provisions reflect that Parliament intended to provide a quick (efficient), inexpensive (accessible) and effective dispute resolution mechanism for complaints. They emphasise the importance of natural justice, fairness, reasonableness, cost effectiveness and finality. This approach is underlined by the District Court’s limited
91 Clause 13 of sch 4.
jurisdiction in respect of the Commissioner’s decisions, allowing the District Court to modify them only if manifestly unreasonable.92 The requirement to have regard to applicable legal rules or judicial authority must be considered in this light.
[112] The Rules emphasise these statutory features. The founding principles are described in r 3(d) as: accessibility; independence; fairness; accountability; efficiency; effectiveness; and the rules of natural justice.
[113] The functions of the Commissioner are similar to those who perform a similar role in the complaints resolution schemes in overseas jurisdictions discussed above. They involve investigating and determining complaints (not causes of action), defined as an “expression of dissatisfaction”,93 which may relate to anything “about goods or services provided (or requested but not provided) by a Provider”.94 Complaints may be made informally, such as by way of “a post on a social media page maintained by the Provider”.95
[114] The complaint resolution process is focused on procedural fairness. For example, rr 30 and 31 of the Rules provide:
(a) use reasonable efforts to resolve the Complaint in a timely manner;
(b) comply with the requirements of natural justice and procedural fairness; and
(c) regularly inform the Parties of progress towards resolving the Complaint.
(a) must investigate the Complaint to the extent it considers appropriate in the way set out in these General Rules and the relevant Scheme Rules and consistent with the rules of natural justice;
92 Section 97.
93 General Rules, definition of “complaint”.
94 Rule 14(a).
95 Definition of “complaint”.
(b) may consider any information in relation to a Complaint, and make any inquiry, that is fair and reasonable in the circumstances; and
(c) must aim to be consistent with the way other Complaints have been resolved by UDL, but is not bound by any legal rule of evidence. Decisions do not create precedents.
[115] The process is to be a relatively quick one,96 and there is no right of appeal of a determination.97
[116] Turning now to the terms of the declaration sought on r 24, paragraph (a) repeats in different form parts of the text of r 24 but not all of it. It recites that the Commissioner is to have regard (amongst other things) to any legal rule or judicial authority that applies. There are, however, a number of other matters to which the Commissioner must have regard pursuant to r 24. I agree with Ms Aldred’s submission that to refer to one matter only potentially elevates it in importance when compared to the other specified matters. There is, however, nothing in the rule itself which suggests that any one of the mandatory considerations has priority over the others. To remedy that would involve simply repeating the wording of r 24 and would be of no value.
[117] Worse than there being no utility in the declaration, paragraph (b) runs the risk of changing what the Legislature intended.
[118] Paragraph (b) of the draft declaration provides that the Commissioner must:
(i) Identify, and correctly interpret and apply, any applicable legal rules or judicial authority.
(ii) State that she has chosen to depart from those applicable legal rules or judicial authority, and explain her reasons for doing so.
(iii) Not act in an arbitrary manner.
96 The time limits in the General Rules are as follows. Rule 32 allows the Commissioner to make a recommendation after giving the parties 15 working days to make submissions. Rule 35 allows the Commissioner to make a determination if a complainant accepts a recommendation within 15 working days of its issue. The determination becomes binding under r 36 if accepted by the complainant within 15 working days of its issue.
97 Rule 40.
[119] This, to my mind, indicates a judicial standard which I do not consider compatible with the Scheme which is a consumer-oriented and relatively informal mechanism for the efficient resolution of disputes. It would effectively transform the Commissioner’s dispute resolution function into a judicial one. In my assessment, it is an attempt to confine the Commissioner’s function and hold her to a standard which was not intended.
[120] Rule 24 does not require the Commissioner to determine a complaint in accordance with the law. Her overriding obligation is to determine a complaint on the basis of what is fair and reasonable, having regard to a number of factors including any applicable legal rule or judicial authority. There are legitimate policy and public interest reasons which justify such clauses in a consumer complaints scheme. The authorities show that provisions similar to r 24 are widely used in industry-based complaints resolution schemes in comparable jurisdictions, including England and Wales, and Australia. The authorities emphasise that the decision-maker’s overriding obligation is to resolve complaints on their merits, according to what is fair and reasonable.
[121] It is possible to have regard to the law without the type of judicial approach the declaration seeks. Rule 24 is not a licence for the Commissioner to misinterpret or misapply the law. These types of errors may mean the Commissioner did not have proper regard to the law and may (if the errors are material to the decision) render her decision reviewable on the ground of error of law. It is not in dispute that failure to have proper regard to the law would be a procedural shortcoming or failure to have regard to a relevant consideration.98 The Commissioner may depart from the relevant law if it is fair and reasonable to do so but if she does, she should say so and provide reasons.
[122] The Commissioner’s decisions may be reviewable on the ground of unreasonableness. Arbitrariness on the part of the Commissioner would also be a
98 R (Norwich and Peterborough Building Society), above n 65, at [71].
ground for judicial review. However, the requirement of fairness and reasonableness does not necessarily give rise to an arbitrary exercise of power.99
[123] For these reasons, I do not agree with the terms of the declaration sought in respect of r 24.
Natural justice
[124] Contact seeks a declaration that, when discharging her functions under the Scheme, the Commissioner is obliged to follow the principles of natural justice by allowing each party full access to the evidence she takes into account and a reasonable opportunity to respond to that evidence.
[125] The Commissioner accepts that she must follow the principles of natural justice. However, she contends that what is required in each case will depend on the facts.
What does the Scheme require?
[126] Natural justice arises in the context of the Scheme by virtue of the Rules, its statutory underpinning in the EIA and under the New Zealand Bill of Rights Act 1990.100
[127] The Rules explicitly require the Commissioner to act in accordance with natural justice. They provide:
(a) In dealing with complaints the Commissioner must act in accordance with the founding principles of the Rules, including natural justice (r 3(d)).
(b) The Commissioner must deal with each complaint on its merits and with the objective of reaching an outcome that, in her opinion, is fair
99 As Dyson J remarked, “[r]easonableness lies at the heart of the common law”: Aurum Investments Ltd v Avonforce Ltd (in liq) (2001) 3 TCLR 21 (EWHC (TCC)) at [17], as cited in Andrews Property Services Ltd v Body Corporate 160361 [2016] NZCA 644, [2017] 2 NZLR 772 at [100].
100 New Zealand Bill of Rights Act 1990, s 27.
and reasonable in the circumstances having regard to, amongst other matters, the rules of natural justice (r 24).
(c) After accepting a complaint for consideration, the Commissioner must comply with the rules of natural justice and procedural fairness (r 30).
(d) In resolving a complaint, the Commissioner must investigate the complaint to the extent he or she considers appropriate in the way set out in the Rules and consistent with the rules of natural justice (r 31(a)).
What does natural justice require?
[128] Natural justice involves “a duty lying on everyone who decides anything” to “act in good faith and fairly listen to both sides”.101 As noted by the Privy Council, natural justice “is but fairness writ large and juridically ... fair play in action”.102
[129] What natural justice requires depends on the circumstances of the case.103 In Daganayasi v Minister of Immigration, Cooke J (as he then was) warned against “attempting to lay down in hard-and-fast terms what fairness would require in other cases”, as any such attempt “would be inconsistent with the broad and flexible concept of fairness”.104 In Bovaird v J the Court of Appeal said:105
Prescribing a set of rigid rules of universal application will not ensure that the principles of natural justice are always fulfilled. It is preferable to examine each case on its facts.
[130] As Elias J (as she then was) observed in Ali v Deportation Review Tribunal:106
Fundamental to the principles of natural justice is the requirement that where the circumstances of decision making require that someone affected by it be given an opportunity to be heard, that person must have reasonable opportunity to present his case and reasonable notice of the case he has to meet.
101 Board of Education v Rice [1911] AC 179 (HL) at 182 per Lord Loreburn.
102 Furnell v Whangarei High Schools Board [1973] 2 NZLR 705 (PC) at 718.
103 Auckland City Council v New Zealand Fire Service [1996] 1 NZLR 330 (HC) at 335.
104 Daganayasi v Minister of Immigration [1980] 2 NZLR 130 (CA) at 145.
105 Bovaird v J [2008] NZCA 325, [2008] NZAR 667 at [52].
106 Ali v Deportation Review Tribunal [1997] NZAR 208 (HC) at 220.
The Complaint
[131] The genesis for the declaration on natural justice was the approach taken by the Commissioner in dealing with the Complaint. Mr S had claimed $14,000 by way of compensation. In their responses to the Commissioner, both Contact and Vector disputed that sum. Contact submitted there was insufficient evidence to support it. Vector submitted there was an inadequate foundation for the claim and that any order had to be based on material able to be verified. Both Vector and Contact therefore put the Commissioner on notice that the amount of the claim was disputed and, in particular, that it needed to be verified.
[132] The Commissioner then raised these issues with Mr S, who provided further information. The Commissioner used that information to recalculate the quantum of damages in the Final Recommendation but did not make it available to Contact or Vector.
[133] I agree with Mr Gascoigne’s submission:107 natural justice required Contact and Vector to have been provided with full access to the new material and an opportunity to comment on it before the Commissioner took it into account in determining the quantum of damages. Contact and Vector were disadvantaged by that failure.
Should the declaration be made?
[134] Contact accepts that natural justice is contextual but submits its base requirements cannot be departed from. Where the Commissioner is making a determination affecting rights and obligations, a fair hearing requires the right to be heard and disclosure of relevant material, said Mr Bisley.
[135] The Commissioner’s position is that the Scheme’s rules do not require what Contact seeks. Mr Holloway submitted that the Commissioner’s obligation to act in accordance with the principles of natural justice cannot be codified and depends on the particular circumstances of the matter for decision. In particular, fairness does not
107 Mr Gascoigne presented Contact’s argument on this aspect.
demand that – in every case – the Commissioner be required to provide and invite submissions on all potentially relevant information she has received.
[136] The authorities discussed above confirm that the requirements of natural justice are context-specific. What natural justice demands will depend on both the decision- making framework and the particular circumstances of the matter for decision. The starting point is the Rules.
[137] The principles the Commissioner is required to balance include accessibility and efficiency.108 In resolving complaints, the Commissioner “must investigate the Complaint to the extent [she] considers appropriate” and “may consider any information in relation to a Complaint, and may make any inquiry, that is fair and reasonable in the circumstances”.109
[138] If the proposed declaration were made, it would mean that “allowing each party full access to the evidence [the Commissioner] takes into account, and a reasonable opportunity to respond to that evidence” is a minimum requirement to achieve fairness in every case.
[139] While the Complaint is merely illustrative, it shows that what amounts to “fair play in action” will depend very much on a close analysis of the parties’ actions and the circumstances of the case. While I have concluded that the Commissioner should have provided Mr S’s evidence to Contact and Vector and invited further submissions, that decision was made in the circumstances of the Complaint. Such a conclusion may not necessarily be reached in other cases with different circumstances.
[140] Contact’s proposal would deprive the Commissioner of the discretion afforded her by the Rules and require her to treat all cases alike by imposing a relatively high standard. The Supreme Court warned against this in Wyeth (NZ) Ltd v Ancare New Zealand Ltd:110
108 General Rules, r 3.
109 Rule 31.
Appropriate and fair proceedings for a statutory tribunal, such as the Authority, will not always equate to those of a court. Such bodies are often established for administrative reasons to provide a less formal decision- making mechanism with an emphasis on greater accessibility, less cost and greater speed in decision-making. Often, as with the Authority, they are structured to include members with expertise in relation to their special area of jurisdiction. Legislation establishing tribunals sometimes also recognises that in reaching administrative decisions they often must take into account conflicting interests in a pragmatic way. Parliament’s purpose in establishing a tribunal is often not necessarily to provide the highest standard of process but a standard that is consistent with efficient administration of matters over which they are given jurisdiction. These features of the statutory process are all relevant to the requirements for participants to enjoy an appropriate and fair hearing.
[141] For these reasons, I do not agree with the terms of the declaration sought in respect of natural justice.
Damages
[142] Contact then seeks a declaration as to the approach the Commissioner should take to her decisions regarding compensation under the Rules. Contact’s position is that compensatory damages are to be assessed in accordance, in effect, with the tort standard. Mr Bisley submitted this was plainly the intent of s 18(4) of the CGA, which engages with the common law principle of remoteness: the damage must be for “loss or damage”; it must “result” from the failure and it must be “reasonably foreseeable”. In Mr Bisley’s submission, the use of such words indicates an intention to replicate the common law principle of seeking to put the consumer in the position in which he or she was prior to the breach. Mr Bisley also relied on Contact v Jones.111
[143] Mr Bisley said the Commissioner’s final recommendations are, where accepted by the consumer, in the nature of an order and must be exercised judicially and in accordance with usual principle.112
[144] Contact therefore claims the Commissioner erred in awarding damages to Mr S under s 18(4) of the CGA despite him failing to prove his loss. Mr Bisley said Mr S should have been required to provide cogent evidence that established his property was, in fact, damaged as a result of the surge and to prove the quantum of his losses.
111 Contact v Jones, above n 7, at [133].
112 General Rules, r 36; and Electricity Industry Act 2010, sch 4, cl 13(1)(i)–(j).
Where he could not do so, it was inappropriate for the Commissioner to estimate Mr S’s losses for him and no remedy should follow.
[145] Mr Holloway’s submissions again stressed the context of the Commissioner’s role. He pointed out that the EIA gives the District Court a discretion to require compliance with a binding settlement (which is a determination under the Rules) and can modify a settlement if it considers it manifestly unreasonable.113 Mr Holloway emphasised the Rules do not refer to damages or tortious principles but involve a more nuanced approach designed to achieve settlement.
[146] There was a divergence of approach between counsel as to whether the Commissioner makes a determination of an appropriate remedy under s 18(4) of the CGA or under the Scheme. I agree with Mr Holloway that the Commissioner makes decisions under the Scheme, in the context of the legislation that gives rise to it.
[147] The Commissioner must deal with each complaint on its merits and with the objective of reaching an outcome that, in her opinion, is fair and reasonable in all the circumstances (having regard to the matters in r 24(a)–(e)). To achieve a fair and reasonable outcome, the Commissioner may recommend a “settlement”,114 which the Rules clearly contemplate will likely include the payment of a sum of money in relation to a complainant’s claim. The Commissioner’s role includes conciliation and it can be inquisitorial. She is not bound by any legal rules of evidence.115 She must conduct herself in accordance with the general principles in r 3 of the General Rules.
[148] I refer to my earlier analysis under r 24. Similar considerations apply. The Commissioner’s obligations are to be assessed in accordance with s 18(4) of the CGA, the EIA and the Rules. I agree with Miller J’s comments in Contact v Jones, where he noted that s 18 establishes a hierarchy of remedies but does not mandate a particular approach to calculating damages. He said the language of s 18(4) “evokes the common law, with its common sense approach to causation and remoteness”.116 Obviously, causation is a question of fact and degree, the ultimate question being “whether the
113 Electricity Industry Act 2010, s 97(2) and (3).
114 General Rules, r 32.
115 Rule 31(c).
116 Contact v Jones, above n 7, at [133].
particular damage claimed is sufficiently connected to the breach of the particular duty to merit recovery in all the circumstances”.117
[149] Decisions arising directly under the CGA, that is, not through a dispute resolution mechanism such as the Scheme, indicate approaches to evidential burdens and to damages similar to those applied in tort.118 However, in the context of the Scheme, those approaches must be tempered by relevant provisions of the EIA. The EIA provides for the establishment of a scheme for certain purposes, including that it be accessible, fair, efficient and effective.119 It requires a scheme to provide for complaints about those in the electricity supply chain, including:120
... the kinds of remedial action that the scheme may require members to take in order to resolve complaints (for example, a requirement to compensate a complainant up to a certain amount stated in the rules, or to change a system).
[150] The EIA therefore contemplates that a scheme will provide for remedial action including, but not limited to, compensatory damages. In addition, a strict application of principles similar to that in tort may not necessarily discharge the requirements for the Scheme to be accessible, fair, efficient and effective.
[151] In that statutory context – that is, the CGA as modified by the EIA – I do not accept that, before recommending payment in cases where the CGA applies, there is a burden of proof on the complainant or the need for the Commissioner to quantify any claim in accordance with the common law. Nor am I persuaded that the Commissioner is strictly limited to an assessment of damages based on the principles applied in tort.
[152] For these reasons, I do not agree with the terms of the declaration sought in respect of damages.
117 At [133].
118 See generally Gault on Commercial Law, above n 5, at [CG18].
120 Schedule 4, cl 13(g).
Declarations
[153] Any person may apply to the High Court for a declaration determining any question as to the construction of any statute or agreement when interested in its construction.121 The High Court has both an equitable and inherent jurisdiction to declare rights and obligations between the parties.122
[154] There are, however, limits to the High Court’s jurisdiction:123
A declaration should not be issued where:
(1) a declaration will serve no useful purpose;124
(2) the defendant would abide the decision of the court without the need for formal orders;125
(3) the facts are in dispute;126
(4) the decision involves an abstract or hypothetical question;127 and
(5) the dispute may be more appropriately determined in the High Court’s ordinary jurisdiction.128
[155] For the reasons discussed, the declarations in respect of r 24, natural justice and damages will not be made as they do not accurately reflect the obligations on the Commissioner when discharging her functions under the Scheme. The proposed declaration that the Commissioner must interpret the CGA in light of its purpose will not be made as it will serve no useful purpose, merely being a declaration of what the law already provides. As far as the Complaint is concerned, as discussed above, I consider the Commissioner did not comply with natural justice in making the Final
121 Declaratory Judgments Act 1908, s 3.
123 Jackson v Minister of Immigration [2014] NZHC 1920 at [36].
124 Banks v Grey District Council [2003] NZCA 308; [2004] 2 NZLR 19 (CA) at [19]–[20].
126 Mandic v Cornwall Park Trust Board (Inc) [2011] NZSC 135, [2012] 2 NZLR 194 at [5]; New Zealand Insurance Co Ltd v Prudential Assurance Co Ltd [1976] 1 NZLR 84 (CA); and Electoral Commission v Tate [1999] 3 NZLR 174 (CA) at [38] and [42].
127 Attorney-General v Refugee Council of New Zealand Inc [2003] NZCA 335; [2003] 2 NZLR 577 (CA) at [45]; and Wool Board Disestablishment Co Ltd v Saxmere Co Ltd [2010] NZCA 513, [2011] 2 NZLR 442 at [141].
128 Collins v Lower Hutt City Corporation [1961] NZLR 250 (SC).
Recommendation. I am not prepared to make a declaration in respect of the Complaint, given the issue as to evidence raised above.
[156] Finally, I have set out my view of the correct interpretation of s 7A of the CGA. While I agree with the first part of the proposed declaration, (a), I do not, as explained, agree with the way in which the position is articulated in the second part of the proposed declaration, (b).
[157] For these reasons, I propose to adopt the approach taken by Miller J in Right to Life New Zealand Inc v Abortion Supervisory Committee.129 In that case, even though Miller J found various acts of the Abortion Supervisory Committee to have been non-compliant with the legislation, and that the Court had an important role in clarifying the law, as he noted, “the judgment speaks for itself”.130 He also noted the Committee was a public body which needed to give effect to his judgment and that there was no reason to suppose the Committee would refuse to act now that its functions had been clarified.131 I consider the same may be said of the Commissioner in the present proceedings.
Result
[158] For these reasons, I decline to make the declarations sought.
Thomas J
Buddle Findlay, Wellington for Plaintiff DLA Piper, Wellington for First Defendant
Crown Law, Wellington for Second Defendant
129 Right to Life New Zealand Inc, above n 125.
130 At [11].
131 At [12].
NZLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.nzlii.org/nz/cases/NZHC/2018/2884.html