Waikato Law Review
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The separation of powers is a cornerstone of democratic society, requiring that the executive, legislative, and judicial branches of government occupy distinct roles. The executive decides upon policies to be implemented by the legislature, which drafts law to be applied and interpreted by the judiciary. In undertaking their role as interpreters of the law, New Zealand judges have moved from the formal legalism which has been a hallmark of colonial legal systems towards a policy-based approach. I argue that this approach has brought with it the danger of courts usurping the role of the legislature by making “judicial legislation” rather than applying existing law to the facts before them. This danger was highlighted by Lord Reid in Myers v DPP:
A policy of make do and mend is no longer adequate. The most powerful argument of those who support the strict doctrine of precedent is that if it is relaxed judges will be tempted to encroach on the proper field of the legislature ...[1]
Recent decisions of the New Zealand Court of Appeal and appeals to the Judicial Committee of the Privy Council illustrate difficulty the Court of Appeal has had in remaining within its powers. These decisions affirm the crucial checking role of the Privy Council in ensuring that the policy approach remains just that, interpretation of the law with policy considerations, rather than the consideration of how policy would best be implemented (which is the legislature’s role).
This case arose when the New Zealand Apple and Pear Marketing Board sought to raise differential levies on producers of apples and pears, according to the use that they had made of the Board. One producer claimed that this was an anti-competitive practice prohibited by section 27 of the Commerce Act 1986.[3]
The Board sought to rely upon a proviso to section 27 which allows anti-competitive practices when they are permitted by specific statutory authority.[4] While this argument was rejected by the Court of Appeal, it was held that on policy grounds the anti-competitive provisions of the Commerce Act should not apply to producer boards at all. In a policy-based decision Cooke P stated:
... it is right in my view to have regard to the major and special position that producer boards have occupied in the New Zealand economy. The Commerce Act represents a new philosophy of promoting unrestricted market-forces. Its provisions are very general. The special statutory provisions about the raising of capital by the Apple and Pear Marketing Board antedate the new statutory philosophy. It is impossible to be confident that in 1986 Parliament meant to override them. [emphasis added][5]
Casey J reiterated these views:
I incline to the view that the relationship between [the Board] and the growers is so close to a producer marketing co-operative and differs so much from an ordinary marketing situation, that it may be questionable whether the Commerce Act was ever intended to apply to that relationship. [emphasis added][6]
The Court used its interpretation of Parliament’s intention to allow producer boards to escape the reaches of the Commerce Act. Not only did the Court consider the major and special position of the boards, it held that Parliament had meant to exclude them from the ambit of the Act but that the legislature had somehow failed to do so.
As their Lordships noted in the appeal judgment, if Parliament had intended Producer Boards to escape the ambit of the Commerce Act a provision to that effect would be found in the New Zealand Act, as in the equivalent Australian legislation.[7] The Privy Council found that, because there was no “specific authority” for the Board to contravene section 27, its levy was unlawful.[8]
With respect, it is apparent that, in attempting to produce a just result, the Court of Appeal overstepped its role and supplanted that of the legislature. As Lord Bridge pointed out, “when an issue is wholly governed by statute, its resolution must be purely a matter of interpretation”.[9]
This case has been cited as “another example of the growing divergence between the Privy Council and the New Zealand Court of Appeal”.[10] However, it is perhaps more aptly described as another example of the growing divergence between the words of the statute and the law applied by the New Zealand Court of Appeal.
This case provides a very recent demonstration of the need for an external and objective tribunal to clarify the law of New Zealand The action arose when police seeking a drug offender obtained a search warrant for what was believed to be his address but was in fact that of a Mrs Baigent, an unrelated party. When the police arrived and presented the warrant, Mrs Baigent and her son protested that the police had the wrong address, and produced evidence of their identity. When Baigent’s daughter, a lawyer, spoke with one of the police officers, he said: “We often get it wrong, but while we are here we will look around anyway”. Mrs Baigent pleaded various causes of action, including negligence, trespass, misfeasance in public office and violation of section 21 of the Bill of Rights Act 1990 (“Bill of Rights”).[12]
The most significant aspect of the Court of Appeal decision was its finding on the Bill of Rights issue. The Court recognised (or, from some perspectives, created) a cause of action under the Bill of Rights despite the absence of any provision in the Act for such remedies. In doing so, the Court sought to circumvent the statutory immunity afforded to the Crown by section 6(5) of the Crown Proceedings Act 1950 which provides that:
No proceedings shall lie against the Crown by virtue of this section in respect of anything done or omitted to be done by any person while discharging or purporting to discharge any responsibilities of a judicial nature vested in him, or any responsibilities which he has in connection with the execution of judicial process.
The Court of Appeal held that the lack of an express provision granting remedies, if the rights guaranteed were abused, was surmountable, and that the remedy of public law compensation or damages is available under the Bill of Rights.[13]
The reasoning underlying the majority decision of the Court of Appeal was the view that the 1990 Act could not be considered credible without a meaningful corresponding remedy. Cooke P noted that “we would fail in our duty if we did not give an effective remedy to a person whose legislatively affirmed rights have been infringed”.[14]
Concern has been voiced at high levels at the absence of express provision for remedies in the New Zealand Bill of Rights.[15] It would appear that this is a matter which the legislature may need to address. However, I argue that this did not justify the Court in creating access to remedies by taking a policy approach unwarranted by the legislation. As Dr James Allan points out,[16] the New Zealand Bill of Rights is not entrenched, and so it does not charge the judiciary as sole protectors of people’s rights. The ordinary status of the statute in fact leaves the role of delineating and protecting rights to the legislature. The contentious aspect of the judgment was summarised when Allan said:
In my view it is just not credible to assert that Parliament intended the Bill of Rights to take on a de facto entrenched status when the entrenched version itself was clearly rejected.[17]
The decision of the Court of Appeal to impose, without mandate, a public law remedy seriously undermines the clear intention of the legislature to create an unentrenched Bill of Rights. As Allan concluded:
No one, not even the Judges of our Court of appeal, speaks with the tongues of angels. Let us hope the appeal to the Privy Council is successful and New Zealand’s experiment with an unentrenched Bill of Rights put back on a proper course.[18]
Unfortunately this prophecy has not come true because the Government has not appealed this decision to the Privy Council. The more cynical observer may argue that this is motivated by the New Zealand Government’s current drive to abolish links with the Privy Council[19] - the very body which could revert the Bill of Rights to its correct status of an ordinary statute.
In this case the Court of Appeal was required to consider whether the receiver of a company, appointed by a first debenture holder, owed a duty of care in tort to a second debenture holder. The Court of Appeal found that the receiver did owe such a duty.[21] Richardson J found that there was sufficient proximity between the parties concerned and that policy reasons supported such a duty.[22]
The Privy Council took issue with the Court of Appeal’s finding. So concerned were their Lordships at this “opening of the floodgates” by the New Zealand Court that they took the unusual step of allowing the respondents leave to argue new issues, and urged both parties to reconsider the “foundation and extent” of the duties owed.[23] Their Lordships held that the duty owed by receivers conducting the general business of a company was, not a tortious duty, but an equitable duty to act “in good faith and for proper purposes”.[24] Lord Templeman stated pointedly:
The House of Lords has warned against the danger of extending the ambit of negligence so as to supplant or supplement other torts, contractual obligations, statutory duties or equitable rules in relation to every kind of damage including economic loss; ... If the defined equitable duties attaching to mortgagees and to receivers and managers appointed by debenture holders are replaced or supplemented by a liability in negligence the result will be confusion and injustice.[25]
Again, in a branch of law with distinctly English origins, the Privy Council had reason to disagree with, and redirect, the New Zealand judiciary.
Although a policy-based approach by courts arguably allows for law to develop with flexibility and in context, the overriding need for certainty in the legal system is clearly threatened by the Court of Appeal’s approach. It is imperative that the law not become subjective and whimsical by being contained solely in the minds of judges. This point was emphasised by Lord Scarman in Duport Steel Ltd v Sirs:
For, if people and Parliament come to think that the judicial power is to be confined by nothing other than the judge’s sense of what is right ... confidence in the judicial system will be replaced by fear of it becoming uncertain and arbitrary in its application.[26]
As Roger Kerr noted recently: “by comparison with some overseas jurisdictions judicial accountability in New Zealand is weak”.[27]
It is my argument that, in permitting a policy-based approach by the courts, New Zealand has introduced, and experienced, the danger of judicial legislation and the uncertainty it tends to import to a legal system. As the three cases discussed illustrate, the Privy Council provides an essential check on this usurpation of the legislature’s role, and, until some other equally adequate check within New Zealand is formulated, the Privy Council should remain New Zealand’s ultimate appellate tribunal.
[*] Final year LLB student, University of Waikato.
[1] [1965] AC 1001, 1022.
[2] [1989] NZCA 169; [1989] 3 NZLR 158 and [1991] 1 NZLR 257.
[3] Section 27(1) states that “[n]o person shall enter into a contract or arrangement, or arrive at an understanding, containing a provision that has the purpose, or is likely to have the effect, of substantially lessening competition in a market”.
[4] The specific authority cited was section 31 of the Apple and Pear Marketing Act 1971 which allowed the board to impose levies upon producers. Section 43(1) of the Commerce Act 1986 provides that nothing in the relevant part of the Act applied in respect of matters specifically authorised by any Act.
[5] [1989] NZCA 169; [1989] 3 NZLR 158, 165.
[6] At 176.
[7] [1991] 1 NZLR 257, 262-3 (s 172(2) of the Commerce Act (Aust) excludes the application of the Act to Producer Boards).
[8] At 266.
[9] At 262.
[10] Culley, “A Case Note” (1991) Auckland University Law Review 618.
[11] [1994] NZCA 287; [1994] 3 NZLR 667.
[12] [1994] NZCA 287; [1994] 3 NZLR 667, 672-5. Section 21 provides that “[e]veryone has the right to be secure against unreasonable search or seizure, whether of the person, property, or correspondence or otherwise”.
[13] See headnote at 669 (per Cooke P, McKay J, Casey J and Hardie Boys J, Gault J dissenting).
[14] At 676.
[15] Human Rights in New Zealand, MFAT Information Bulletin, No 54, June 1995.
[16] Allan “Speaking with the Tongues of Angels: The Bill of Rights, Simpson and the Court of Appeal” [1994] Bill of Rights Bulletin 6.
[17] Idem.
[18] Ibid, 7.
[19] Hodder 28 (1994) The Capital Letter 10.
[20] [1990] NZCA 21; [1990] 3 NZLR 265, and [1993] 1 NZLR 513; [1993] AC 295.
[21] [1990] NZCA 21; [1990] 3 NZLR 265.
[22] At 275-278.
[23] [1993] 1 NZLR 513, 514.
[24] At 524.
[25] At 525.
[26] [1980] 1 All ER 529, 551.
[27] Executive Director, New Zealand Business Round Table, quoted in Sunday Star Times, 23 July 1995.
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URL: http://www.nzlii.org/nz/journals/WkoLawRw/1995/3.html