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Significant decision-making powers

Some decision-making powers can have a significant impact on a person's rights and interests. The more significant a decision in terms of its potential impact on a person's rights and obligations the more important it is that safeguards are provided in terms of matters such as the independence of the decision-maker, the procedure to be followed, the specificity of the criteria for the decision, and the rights of appeal and review available.

Question 4.6

4.6.  Does this Bill create or amend a decision-making power to make a determination about a person's rights, obligations, or interests protected or recognised by law, and that could have a significant impact on those rights, obligations, or interests? [YES/NO]

What matters are covered by the question?

Three requirements must be satisfied before a decision-making power will be one to which Question 4.6 applies. The decision-making power must be (1) “a power to make a determination about”, (2) about “a person's rights, obligations, or interests protected or recognised by law” and (3) the determination must be one that could have “a significant impact” on that person's rights, obligations, or interests protected or recognised by law.

(1) The decision-making power must be “a power to make a determination about” a person's rights, obligations, or interests protected or recognised by law

Question 4.6 only concerns decision-making powers that can make a determination about a person. There are many decision-making powers in Acts that only indirectly affect persons or affect a class of person and these types of decision-making are not covered by Question 4.6. For a decision to be about a person, the decision must directly affect the person and the person must be the subject of the decision, not just someone who is affected by the decision. The following decisions are examples of determinations about a person:

  • a decision by the Commerce Commission to grant clearance to persons wishing to enter into restrictive trade practices (s 58 of the Commerce Act 1986);
  • a decision by a refugee and protection officer whether a person is a refugee (ss 134-138 of the Immigration Act 2009);
  • appeal decisions by the Social Security Appeal Authority against decisions under the Social Security Act and certain other pieces of legislation about a person's entitlements to certain benefits (s 121 of the Social Security Act 1964);
  • a decision by a consent authority about a resource consent that permits the owner to undertake certain activities on their land (s 104 of the Resource Management Act 1991); or
  • a determination of tax liability through a tax assessment.[47]

The following decisions would not be determinations about a person's rights, obligations, or interests protected or recognised by law:

  • decision-making powers concerning the setting of standards, policies, and the approval of codes of practice or rules, the setting of rates;
  • policy decisions by Ministers, which are not individuated assessments and are not determinations about a person even where the outcome of that decision has a bearing on the interests of individuals;[48]
  • a decision by a territorial authority about a district plan, which may affect a person's property rights but the decision itself is about the plan, not about a person (s 73 of the Resource Management Act 1991);
  • a declaration by a biosecurity officer that certain areas are “restricted places” or “controlled areas”, which is about the status of certain areas, not about a person (ss 130-131 of the Biosecurity Act 1993);
  • a decision by a grants body introducing a time limit for the provision of further information, which is not a determination about a particular applicant;[49]
  • a Council decision to dump septic tank waste on a golf course, which is not a determination about a neighbour's rights or interests;[50]
  • a report by a health assessor for a sentencing court, which is a report for the sentencing court to make a determination and the report itself does not determine any rights, obligations or interests of the offender;[51] or
  • a suspension of a licence as a result of a mandatory statutory sanction, which arose automatically and not as a result of a determination.[52]

(2) The determination must be about “a person's rights, obligations, or interests protected or recognised by law”

The term “rights, obligations, or interests protected or recognised by law” also appears in s 27(1) and (2) of the New Zealand Bill of Rights Act 1990. They are broad terms and cover a range of legally recognised interests including status, rights in property, personal liberty or privilege, rights in one's livelihood or reputation, and legitimate or reasonable expectations of retaining or obtaining benefits.

(3) The determination must be one that could have a “significant impact” on that person's rights, obligations, or interests protected or recognised by law

The decision-making power must be more than a minor or merely administrative power and must be a significant decision-making power in terms of its potential impact on a person's rights, obligations, or interests protected or recognised by law.

What is the nature of the further information sought?

If the answer is YES, please:

  • identify the provision(s) that create or amend the significant decision-making power; and
  • explain the nature of any safeguards that will apply to the significant decision-making power to ensure it is properly constrained and used appropriately (you will need to first describe the nature and extent of the significant decision-making power and then explain the safeguards that will apply to that power).

There are a range of safeguards that should be applied to decision-making powers. Some of these apply at common law, unless they are excluded, and others must be expressly provided for. The common safeguards for decision-making powers are:

  • procedures for decision-making and application of the principles of natural justice;
  • criteria for exercise of decision-making power;
  • expertise and independence of decision-maker; and
  • appeal and review procedures.

The more significant a decision-making power the more important it is that more of these safeguards apply and the harder it will be to justify limitations on how the safeguards apply.

Procedures for decision-making and application of the principles of natural justice

It is important to clearly establish some sort of procedure or guidelines to be followed for exercising a decision-making power. In general, the greater the potential impact of a decision on a person and the more important the right or interest in question, the more extensive the procedural protections that will be required. Applicable procedures will provide a right to a hearing, indicate to the individual affected what the issues are, disclose the information relevant to the exercise of the power, give the individual the opportunity to have legal representation, to call witnesses and cross-examine witnesses, and to present their case and to rebut material put forward to their detriment.

A decision-maker is required to disclose the principles and policies they apply and to give reasons for their decisions, if asked to do so by those affected. These rights are contained in the Official Information Act 1982 and the Local Government Official Information and Meetings Act 1987 and it will be very difficult to justify any restrictions or limitations on these rights.

Particular standards have been developed for the procedural requirements for professional disciplinary matters and these standards should be followed in any legislation dealing with professional disciplinary matters.[53]

Criteria for exercise of decision-making power

The decision-making power should clearly state:

  • the powers that can be exercised by the decision-maker;
  • the circumstances when the power can be exercised;
  • the matters that can be considered;
  • the purpose of the power;
  • whether the power includes a qualification or condition or a test that has to be satisfied for the exercise of the power;
  • the matters or factors to be considered (or not to be considered) by the decision-maker;
  • whether the decision-maker is obliged or permitted to consider (or not to consider) certain purposes of the power or legislation; and
  • whether the power is discretionary or mandatory once the criteria for its exercise are established.

Expertise and independence of decision-maker

The expertise and independence of a decision-maker can provide an important safeguard for a decision-making power. Specialist expertise for a decision maker will generally be appropriate where the subject matter of the decision involves a specialist or technical area. The greater the potential impact of a decision on an individual, particularly where matters of personal liberty or livelihood are involved the more important it will be that the decision is made by a person with some level of independence from the government of the day.

If a government department may from time to time be required to appear as a party before a tribunal, then that same department should not provide administrative services for the tribunal.[54] Similarly, where a tribunal is hearing appeals from decisions of a government department the same rule should apply.

Appeal and review procedures

Appeals scrutinise and correct specific decisions of first instance decision-makers, and also help to maintain a high standard of public administration and public confidence in the legal system. The greater the potential impact of a decision on an individual the more likely an appeal will be required. Appeals are generally preferable to judicial review as they can be quicker, cheaper, use specialist experts to hear the appeal, and consider the merits of the decision by reconsidering the facts. However, the emphasis should always be on ensuring the first decision is right. An appeal should only be a safety mechanism, and not a second round of decision-making designed to compensate for the poor quality of the first instance decisions.

Rights of appeal must be created by statute and the appeal body generally operates in the place of the original decision-maker, making their own findings of fact or law or both. In contrast, the right to judicial review exists independently and the court examines the process by which a decision has been made and determines whether it has been made according to law.

Appeal bodies should generally be comprised of experts in the relevant subject area. The more specialised or technical the subject area the more important it will be for the appeal body to include the relevant subject or technical experts. The more likely it is the appeal will involve legal issues the greater will be the need to have at least one person on the appeal body with some legal expertise. There are a range of choices as to the nature of the appeal and whether it is limited in some way, and the applicable appeal procedure (usually a choice of a rehearing of some matters vs an entirely new hearing of the matter).

Where an appeal is provided for, the need for a second appeal should be carefully considered. A second appeal can be an appropriate way to ensure judicial oversight of decision-making. It is generally appropriate to limit the second appeal to matters of law or to particular issues. While an appeal will generally be of right, it may be appropriate to limit the availability of the second appeal by requiring leave to appeal.

Example: (for a YES answer, concerning Aquaculture Legislation Amendment Bill (No 3) 2010

Clause 35 substitutes new sections 186D to 186GA into the Fisheries Act 1996 containing a power for the Chief Executive to make a decision whether the aquaculture activities authorised by a coastal permit will have an undue adverse affect on fishing.

The procedure for making a decision is set out in the proposed sections and provides for the Chief Executive to consult certain persons before making a decision, make a decision within a specified time, requires the Chief Executive to have regard to certain information, sets out the order in which decisions are to be made where more than one decision is required, specifies certain coastal areas for which no aquaculture decision may be made, the matters the Chief Executive must have regard to when making a decision, requires a decision to be in writing and provide reasons, be notified, and specifies the types of condition that may be included in a decision.

A person may apply for judicial review of the Chief Executive's decision within 15 days of that decision.

If the answer is NO, no further information is required.

Further sources:

Notes

  • [47]Amaltal Fishing Company Ltd v Commissioner of Inland Revenue HC Wellington CIV-2007-485-1370, 03 February 2009; (2009) 24 NZTC 23,313.
  • [48]Manukau City Council v Ports of Auckland Ltd [2000] 1 NZLR 1 (PC), Lumber Specialties Ltd v Hodgson [2000] 2 NZLR 347.
  • [49]Combined Beneficiaries Union Inc v Auckland City COGS Committee [2008] NZCZ 423.
  • [50]See Chisholm v Auckland City Council (Unreported, Court of Appeal, CA 32/02, 29 November 2002, Tipping J)
  • [51]McDonnell v Chief Executive of the Department of Corrections [2009] NZCA 352; (2009) 8 HRNZ 770.
  • [52]Henderson v Director of Land Transport Safety New Zealand [2006] NZAR 216.
  • [53]Public and Administrative Law Reform Committee, Ninth Report (1976); Public and Administrative Law Reform Committee, Tenth Report (1977); Legislation Advisory Committee, Guidelines on Process and Content of Legislation at [8.3.2] available at: http://www2.justice.govt.nz/lac/.
  • [54]Public and Administrative Law Reform Committee, First Report (1968).
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