Financial Services Complaints Ltd v The Chief Parliamentary Ombudsman

• Jurisdiction: New Zealand
• Judge: Grice J
• Judgment Date: 26 February 2021
• Neutral Citation: [2021] NZHC 307
• Court: High Court
• Docket Number: CIV-2019-485-527
• Date: 26 February 2021

IN THE MATTER of an application for judicial review under the Judicial Review Procedure Act 2016

Between

Financial Services Complaints Limited

Plaintiff

and

The Chief Parliamentary Ombudsman

Defendant

[2021] NZHC 307

Grice J

CIV-2019-485-527

IN THE HIGH COURT OF NEW ZEALAND

WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE WHANGANUI-A-TARA ROHE

Judicial Review — application for a judicial review of a decision of the defendant refusing to grant plaintiff consent to use the “Ombudsman” name — the plaintiff was an approved dispute resolution service provider — predetermination — predisposition — bad faith — delay

Counsel:

K Murray and N F Flaws for Plaintiff

M T Scholtens QC and D W Ballinger for Defendant

JUDGMENT OF Grice J

Table of contents

Introduction	[1]
Parliamentary Ombudsmen	[21]
FSCL's first application: Chief Ombudsman Wakem	[29]
Reconsideration — by Chief Ombudsman Boshier	[35]
Parliamentary privilege	[38]
Evidence in judicial review cases	[56]
Grounds of review	[64]
Legal principles — Judicial review	[67]
Predetermination/predisposition	[73]
Legislation and guidelines	[89]
The decision-making process following the Court of Appeal decision (from 28 February 2018)	[93]
First provisional decision (24 July 2018)	[101]
Second Provisional decision (23 October 2018)	[112]
Third Provisional decision (3 May 2019)	[120]
Final decision (20 June 2019)	[124]
Analysis of three provisional decisions and final decisions	[126]
Delay and process	[148]
Other actions by the Chief Ombudsman	[151]
Evidence of the Chief Ombudsman	[179]
Analysis: Pre-determination	[191]
The evidence in the round	[198]
Conclusion	[214]
Relief	[215]
Costs	[223]
Attachment 1 — plaintiff's detailed grounds for review (particulars)

Introduction

1 This is an application for judicial review of a decision of the Chief Ombudsman. Under s28A of the Ombudsman Act 1975 Financial Services Complaints Limited (FSCL) made an application to the Chief Ombudsman to use the name “Ombudsman” in connection with its financial dispute resolution scheme services. He refused to give consent. FSCL claims that the Chief Ombudsman's decision to refuse was unlawful, unreasonable, unfair and invalid in a public law sense. It seeks an order quashing the decision.

2 FSCL is one of four scheme providers approved by the Minister to provide registration and dispute resolution services for financial service providers under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSP Act). Financial service providers include banks, finance companies, insurers and other providers who offer financial services.

3 The FSP Act makes it mandatory for a financial service provider to subscribe to a scheme. The schemes compete among themselves for financial service provider members who select their own scheme provider. Customers who wish to complain about their financial service provider must go to the scheme their provider has chosen for dispute resolution services. If a customer contacts the wrong scheme that scheme will refer them to the scheme to which their financial service provider belongs.

4 FSCL was the first scheme approved under the FSP Act and now has more than 7,000 scheme members.

5 The other schemes approved under the FSP Act are:

• (a) The Banking Ombudsman Scheme (BOS);

• (b) The Insurance and Financial Services Ombudsman Scheme (IFSO); 1 and

• (c) Financial Dispute Resolution Service Ltd (FDRS).

6 BOS and IFSO operated before the FSP Act came into force. They were established in the 1990s by the banking and insurance industries respectively who opted to make voluntary provision for dispute resolution services for customers with complaints about their services. Around the time they were established the Chief Ombudsman allowed those voluntary schemes to use the name “Ombudsman” in their titles.

7 FSCL applied to the Chief Ombudsman for approval to use the name in order to describe itself as “A Financial Ombudsman Service”. In addition, it sought approval for its Chief Executive (at present Ms Susan Taylor) to be described as “Financial Ombudsman”. FSCL subsequently amended its application to seek approval for the description “FSCL — a Financial Ombudsman Service” and its CEO be described as “Financial Ombudsman and CEO”.

8 FSCL, which was established in 2010, has made three unsuccessful applications to the Chief Ombudsman for consent to use the name “Ombudsman”. This review relates to the second refusal by the present Chief Ombudsman. 2 His first decision of 15 July 2016 was set aside by the Court of Appeal and remitted to him for reconsideration with directions. The second decision now under review was delivered on 20 June 2019 (the 2019 decision). 3

9 FSCL says the Chief Ombudsman's 2019 decision to decline approval should be set aside and this Court should make an order directing the Chief Ombudsman to consent to FSCL's application.

10 While there are various heads of claim in the application for judicial review of the 2019 decision, the crux of FSCL's case is that the Chief Ombudsman did not act in good faith and in particular he predetermined that he would refuse to grant approval for the use of the name “Ombudsman”.

11 FSCL says this is evident from an examination of the reconsideration process he undertook, the delay in making the final decision, and an analysis of the contents of the 2019 decision itself. In addition, FSCL points to evidence in the form of emails that the Chief Ombudsman exchanged with the Speaker of the House which indicated he had made up his mind to refuse the application. In essence, FSCL says that the investigation and the decision by the Chief Ombudsman was just “going through the motions”.

12 FSCL also says the delay by the Chief Ombudsman in making the decision of some 15 months verges on contempt of court. In addition, instead of embarking on a timely reconsideration as directed by the Court of Appeal, without the knowledge of

FSCL, the Chief Ombudsman had approached the Speaker of the House to seek a legislative change which would restrict or prohibit the use of the name Ombudsman

13 The Chief Ombudsman denies that he predetermined FSCL's application or that he made any errors of law. He says he acted in good faith with an open mind throughout and that the process he followed was fair. Mr Boshier says the 15 months it took from commencing the reconsideration to his final decision is explained by the work required to investigate and consider matters relevant to the application, as well as his other obligations (including international commitments) and his workload as Chief Ombudsman. He says he allowed ample opportunity for FSCL to make submissions at appropriate times. Mr Boshier says he took into account the directions of the Court of Appeal in his reconsideration, 4 but the weighting of the relevant factors in reaching his decision was a matter for him, as was the final decision.

14 The Chief Ombudsman says his approach to the Speaker was not sinister. He explained in his affidavit that he had been concerned about the time and cost of disputes over applications for use of the name. He wanted to avoid future disputes. The issue of legislative change had come up at the time of a March 2018 Parliamentary Officers Committee following a discussion about the Court of Appeal decision. He said he followed this discussion up by writing to the Speaker on 3 April 2018 to enquire about the possibility of future restrictions on the use of the name and to provide some options to the Speaker for an approach.

15 Furthermore, the Chief Ombudsman explained that his approach and emails to the Speaker were quite separate from, and did not affect, his reconsideration of FSCL's application. Once he had raised the matter the parliamentary or ministerial process took over and he had little opportunity for intervention. The Chief Ombudsman said that there had been no reason to notify FSCL as he had always anticipated there would be a savings provision in any resulting legislation which would give FSCL the benefit of any approval to use the name if that was the result of his reconsideration of the FSCL application. A savings provision was proposed in a paper he had sent the Speaker.

16 Two years after the Chief Ombudsman's approach to the Speaker the Ombudsmen (Protection of Name) Amendment Act 2020 was passed and came into force. 5 It effectively excludes any private industry body from obtaining approval to use the name in the future. The amended s 28A allows for only listed departments and public bodies to apply to the Minister for permission to use the name “Ombudsman”. Savings provisions allow the continued use of the name by the Insurance and Financial Services Ombudsman Scheme (IFSO), the Banking Ombudsman Scheme (BOS) and for FSCL to use the name in terms of any approval granted as a result of the Chief Ombudsman's reconsideration of the FSCL application following the 2018 Court of Appeal decision. 6

17 Numerous documents were produced and referred to in the course of submissions. The Chief Ombudsman's decision-making spanned 15 months. The reasons are contained in the three provisional and final decisions produced in that period. Also included were FSCL's responses to the provisional decisions and the evidence relied upon by the Chief Ombudsman.

18 On its face the final decision might have been unassailable. The process was fair, the delay justified in light of the iterative process adopted as well as the Chief Ombudsman's other commitments and there was sufficient evidence for the refusal. The reasons were adequate and the Chief Ombudsman took into account the directions of the Court of Appeal. It was for him to weigh the evidence...