XY v The Attorney-General

• Jurisdiction: New Zealand
• Judge: GENDALL J
• Judgment Date: 03 June 2016
• Neutral Citation: [2016] NZHC 1196
• Docket Number: CIV-2015-485-000758
• Court: High Court
• Date: 03 June 2016

BETWEEN

XY And Others

Applicants

and

The Attorney-General As Representative Of The Ministry Of Social Development

Respondent

[2016] NZHC 1196

CIV-2015-485-000758

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

Application for judicial review of the Ministry of Social Development's alternative dispute resolution process for dealing with claims of historic abuse (the Two Path Approach) — the applicants comprised approximately 615 claimants who are making allegations of historic abuse while in State care — the applicants were all represented by the same law firm —the Two Path Approach was intended to offer a choice as to resolution of claims out of court — initially the Ministry had consulted with the lawy firm and had adopted some of its suggestions for the way the process should work — disputes arose as to how claims would be classified and the amount available to meet claims the applicants sought a declaration that the process was invalid together with orders the process be set aside and the Ministry be required to adequately consult again with the law firm — whether the challenged decisions to implement the Two Path Approach were justiciable — whether there had been a breach of natural justice because the Ministry had not adequately consult with the applicants' solicitors — whether the applicants had a legitimate expectation, through their solicitors, to be fully involved in any decision to implement the approach — whether relief should be granted.

Appearances:

S M Cooper and K Ross for Applicants

J C Holden, T Bromwich and L Jackson for Respondent

JUDGMENT OF GENDALL J

Table of Contents

	Para No
Introduction	[1]
The Two Path Approach	[9]
Engagement between the Ministry and Cooper Legal	[13]
First meeting	[13]
Second meeting	[14]
Third meeting	[16]
Fourth meeting	[18]
Subsequent communication	[20]
Judicial review application	[28]
Are the challenged decisions to implement the Two Path Approach justiciable?	[31]
Breach of natural justice	[41]
Breach of legitimate expectation	[47]
Error of law	[57]
Mistake of fact	[64]
Should declaratory relief be granted?	[70]
Result	[73]
Costs	[74]

Introduction

1 Over the past decade, the Ministry of Social Development (“the Ministry”) has received more than 1,750 claims from people who allege they were abused as children while in State care. By December 2015, 513 of these historic abuse claims had been filed in the High Court. In 2007, the Ministry set up an internal process to attempt to resolve these claims out of court. This process involved meeting with a claimant, carrying out a detailed assessment of the claim (including reviewing the claimant's files) and, where appropriate, making an offer of settlement including a personal apology and a monetary payment.

2 The Ministry's claim resolution process it seems worked reasonably well initially but complaints were made that it was very time intensive and slow. On average, it took 27 months to resolve a claim. As more claims were received, a backlog of unresolved claims developed. By August 2013, the backlog, as I understand it, had grown to 774 claims. It is said that one third of these claims had been unresolved for more than three years. In accordance with the general Crown Litigation Strategy for the resolution of historic claims alleging abuse, the Ministry decided then to devise a new policy approach called the “Two Path Approach” to aid in resolving claims in a timely manner.

3 The Two Path Approach was intended to offer a choice as to resolution of claims out of court. Under the new arrangement, claimants could accept an expedited settlement offer based on a categorisation of their claim in accordance with a new policy framework. Alternatively, claimants could opt to have their claim fully assessed under the existing more detailed resolution process which had operated for some time. The Ministry was responsible for developing and implementing the Two Path Approach. The details of the policy, and its implementation, it is said were operational matters of the Ministry.

4 The applicants in this proceeding (“the applicants”) comprise approximately 615 claimants who are making allegations of historic abuse. All the applicants are represented by Cooper Legal, a firm of Wellington based solicitors who have been extensively involved in seeking redress for those who suffered historic child abuse while in State care. Cooper Legal had previously had some involvement in implementing a similar settlement scheme for persons who had suffered alleged abuse while in State psychiatric institutions. As such, the Ministry engaged with Cooper Legal (under some form of process involving consultation and negotiation) to inform its decision when developing the Two Path Approach.

5 Initially, it appears the discussions related to the Two Path Approach were constructive. Cooper Legal provided feedback on the draft policy and the Ministry, where it agreed with the feedback, amended the scheme to reflect it. However, it is clear Cooper Legal did not support all aspects of the draft policy. The Ministry made several changes to the Two Path Approach to which Cooper Legal was opposed. Similarly, the Ministry did not accept all of Cooper Legal's suggested changes.

6 In August 2014, Cooper Legal advised of significant objections to core elements of the Two Path Approach policy. Cooper Legal said it was not prepared to be involved with the proposed scheme, stating that “if [the Ministry] has no room for movement, then it must be clear that our discussions about the [Two Path Approach] are at an end.”

7 The disagreement on how the Two Path Approach was to be implemented has led Cooper Legal, on behalf of all the applicants, to judicially review the Ministry's role in devising the process. The applicants seek a declaration that the process is invalid and orders the process be set aside and to require the Ministry to adequately consult again with Cooper Legal.

8 Before the substantive grounds of judicial review, including a preliminary issue relating to justiciability, can be considered, it is useful to consider two further matters. First, an outline of the content of the approved Two Path Approach is instructive, and, secondly, in providing some further context it is useful to provide some additional background facts relating to the consultations between the Ministry and Cooper Legal here.

The Two Path Approach

9 On 1 December 2014, Cabinet endorsed the Two Path Approach and approved its appropriation (specifically, as I understand it, bringing forward $26 million of funding).

10 The Minister for Social Development announced the implementation of the Two Path Approach on 7 May 2015. At that time, the content of the Two Path Approach was as follows:

• (a) Claims would be separated into two tranches. Tranche one comprises eligible claimants who were not legally represented. Tranche two comprises eligible claimants who were legally represented.

• (b) To be eligible to receive an expedited offer, a claimant would need to meet nine eligibility criteria. Every eligible claimant would receive an offer.

• (c) There would be six categories of claims, ranging from least severe (category six) to most severe (category one).

• (d)Each category had a corresponding quantum of offer, ranging from $5000 for category six to $50,000 for category one. There was to be no category in which a claimant received a $Nil offer.

• (e)For the purposes of making expedited offers, the Ministry would treat the allegations made by the claimants to be true without fully investigating those allegations. However, the Ministry would check the basic factual elements of the claim to ensure these were consistent with the Ministry's records.

• (f)The Ministry would assess each claim and determine which of the six categories the claim best corresponded with.

• (g)Once all claims had been initially categorised, the Ministry would carry out a moderation process to ensure that the expedited offers were consistent with past settlements.

• (h)There was to be no penalty for a claimant choosing either avenue for resolution; the full assessment option would remain available. The Ministry envisaged that, once the Two Path Approach has been implemented and the number of backlogged claims reduced, it would be able to process claims more quickly.

11 The Ministry commenced making offers under the new policy to tranche one (those not legally represented) claimants in May 2015. The Ministry intended to make offers to tranche two claimants from November 2015.

12 On 9 November 2015, the present application was filed. The Ministry says it has necessarily put implementation of the entire policy on hold, pending the outcome of these proceedings.

Engagement between the Ministry and Cooper Legal

First meeting

13 In October 2013, a meeting between the Ministry and Cooper Legal was held to discuss the establishment of this new Two Path Approach policy. As discussed above, the policy was intended to expedite settlement offers to certain people who had allegedly suffered abuse while in State care as children. The proposal was intended to be consistent with the Crown Litigation Strategy whereby the value of any offer made to a claimant was to be based on one of six categories. As I have noted above, for the purpose of making expedited offers, the Ministry would treat the allegations in a claimant's claim as true without fully investigating the allegations. However, the Ministry would check the basic factual elements of the claim to ensure these were consistent with the Ministry's own records. Cooper Legal at first agreed to cooperate with the Ministry to consider the proposed Two Path Approach and to...