Part 2: Application of Administrative Law
Principles of Administrative Law
201
As with any decision of a local authority, a decision to consult or not to
consult, and any decision made after consultation, must be made in
accordance with the principles of administrative law. These principles form
the grounds for judicial review of decisions. Put simply, they require that
local authorities act:
- in accordance with law;
- reasonably; and
- fairly.
202
Decisions not made in accordance with these requirements may be challenged
on procedural grounds. Of the three broad grounds of review, the
requirement that decisions be made fairly impacts most directly on the
consultative process. However, a decision to consult or not to consult, and
a decision as to what to consult on, could be challenged on the basis that the
decision is unreasonable or illegal.
“In Accordance with Law”
203
All decisions of a local authority must be made in accordance with law.
A decision will not be in accordance with law if:
- it is not made in accordance with any procedural requirements to be followed; or
- the decision is ultra vires the council in that it did not have authority to make the decision; or
- the decision is made for a purpose other than that for which the power to make the decision was conferred.
“Reasonably”
204
The question of reasonableness is relevant at a number of different levels
throughout a consultative process. Most obviously, the decision ultimately
made after consultation, or upon which representations or submissions were
invited, must not be “unreasonable”. However, any decision made as part of
a decision-making process may also be challenged as being unreasonable.
205
For example, if there is no express requirement to consult, a decision either to
consult or not to consult may be challenged as unreasonable. If a council
decides or is required to consult, the decision as to the matter to be
consulted on, and the form of consultation, may be unreasonable if it is too
wide or too specific, such that it does not result in meaningful consultation.
206
Where there are no express criteria which a council has to take into
account when determining the kind of issue upon which it will consult, it is
for the council to determine that issue. Unless the decision to consult upon a
particular issue is so unreasonable as to be absurd or beyond contemplation
by a reasonable council properly considering relevant issues, then the
decision will not be unreasonable (South Taranaki (10)).
207
The approach of New Zealand courts to the question of unreasonableness is
more or less settled, particularly as regards local authorities, following the
decision of the Court of Appeal in the Wellington City Council v Woolworths case (13). That case involved a review of the Council’s differential rating
system. Richardson P, delivering the judgment of the Court, stated:
For the ultimate decisions to be invalidated as “unreasonable”, to repeat expressions used in the cases, they must be so “perverse”, “absurd” or “outrageous” in [their] defiance of “logic” that Parliament could not have contemplated such decisions being made by an elected council.
“Fairly”
208
The final broad ground of review is the requirement that decision makers act
fairly in coming to any decision. This ground requires decision makers to act
in accordance with the principles of procedural fairness and natural justice.
This requires that:
- parties be given adequate notice and an opportunity to be heard; and
- decisions be made free from bias and predetermination.
209
A local authority’s decision to consult, or the consultation process, or a
decision made after consultation, could be challenged on the ground of lack
of “fairness” if these requirements are not met.
Procedural Fairness – Obligations
210
Where a council is obliged to undertake some form of consultation, the first
requirement is that interested parties must be notified so as to enable them to
take part in the consultation process. Open consultation cannot occur if
interested parties are not aware of their right to be involved in the process.
211
Generally, public notice will be sufficient notification, although some
situations may require notice to be given to a party that may be particularly
affected by the outcome of the consultation. This special interest may arise
either by statutory provision or from a legitimate expectation held by that party
that they will be consulted.
212
Procedural fairness requires that, once notified, the interested parties must
receive a “fair hearing”. What amounts to a fair hearing will depend largely
on the statutory context.
213
A “fair hearing” does not necessarily mean that there must be an opportunity
to make oral submissions. Where the legislation simply imposes a duty to
consult, or where such a duty arises from the existence of a legitimate
expectation, it is generally sufficient that the public or interested parties are
given an opportunity to make written submissions or comments on the
proposal in question. Similarly, if the legislation simply gives a right to
make submission or representations, there may not be an obligation to hear
oral submissions.7
214
Where the legislation allows for a “hearing” or “an opportunity to be heard”,
it usually imposes an obligation on the consulting party to conduct a hearing
at which oral submissions may be made.8 Where there is a right to make oral
submissions, or oral submissions are allowed to be made, this right should be
extended to all parties. Such an opportunity must also be a real opportunity
that is not unreasonably constrained by time limitations or any other
restrictions.
Rule Against Bias
215
As part of the right to a fair hearing, procedural fairness requires that the
decision maker should not be biased or prejudiced in such a way that
prevents him or her from giving fair and genuine consideration to the
submissions received.
216
There are at least three elements of public policy underlying the rule against
bias:
- accuracy in public decision-making;
- ensuring impartiality on the part of the decision maker; and
- public confidence in the decision-making process.
Justice should not only be done, but should manifestly and undoubtedly be seen to be done.
217
The rule against bias is primarily concerned with preventing the appearance
of bias (apparent bias) rather than “bias in fact” (actual bias). While bias in
fact will invalidate a decision, it is often difficult to determine whether a
decision maker was actually biased so as to be prejudicial against, or in
favour of, one outcome.
Actual Bias
218
Actual bias arises if the decision maker has a pecuniary or proprietary
interest in the outcome of the proceedings or the decision. It does not matter
that the decision maker was not in fact biased, or could not reasonably
have been suspected of having allowed himself or herself to have been
influenced by the pecuniary interest.
What is a Pecuniary Interest?
219
A pecuniary interest or proprietary interest can be considered to exist in
situations where the decision maker personally stands to benefit or suffer
from, or has a personal financial interest in, a particular outcome of the
hearing. Examples include where the decision maker owns shares in a
company that is a party to the proceedings, or owns property which is the
subject of the proceedings.
Local Authorities (Members’ Interests) Act 1968
220
Section 6(1) of the Local Authorities (Members’ Interests) Act 1968 prohibits
members of local authorities from discussing or voting on matters in which
they have a direct or indirect pecuniary interest, other than an interest in
common with the public. The Act sets out a number of situations that are
deemed to be pecuniary interests – thereby disqualifying the member from
voting on or discussing the matter under consideration.
221
Judgments in cases under this Act have taken a strict approach and have ruled
that a pecuniary interest is a disqualifying interest “however remote” it may
be. Further assistance on this topic can be obtained from our publication
A Guide to the Local Authorities (Members’ Interests) Act 1968.9
Apparent Bias
222
Apparent bias may emerge from conflicts of interest of various kinds. A
decision maker may appear to be biased if he or she:
- participates in an appeal against a decision which he or she made;
- has any relationship to a relevant party;
- has any personal prejudice towards a party or a party’s case; or
- has predetermined the issue (by making his or her mind up before hearing all the relevant information).
223
The line between what is a permissible interest and what is not is flexible and
depends on the particular factual and legal circumstances of each case. The
test for apparent bias is whether, in all the circumstances of the case, there
exists “a real likelihood or danger of bias” on the decision maker’s part
(Auckland Casino(1)).
Predetermination
224
A decision in the consultative process could be challenged if a decision
maker has predetermined the question on which comment was sought. The
rule against predetermination requires decision makers to remain open to
persuasion and to not commit themselves to a decision until after having
heard all the evidence. Predetermination on the part of one councillor
alone may be enough to invalidate a decision.
225
The law recognises that in matters of policy and politics it is to be expected
that decision makers, and democratically elected members in particular,
will have particular views on a matter, and may have made those views
public.
226
Even strong expressions of views do not necessarily disqualify a person
from hearing the matter. This was recognised by the Court of Appeal in the
Devonport Borough Council case (3). There, Cooke P said:
They may have provisional views and policies, but they must keep open minds in the sense that at the time or period of decision they must genuinely consider the issues, applying any prescribed criteria, and not merely go through the motions. In other words ... they must remain amenable to argument. Fairness obviously requires as much.
227
The very nature of consultation contains an inherent element of “predetermination”. Before a council or a decision maker is able to consult,
they must first formulate a proposal or an issue that is to be the subject of
the consultation. Even if the proposal is phrased in neutral language and is
not predicated towards a particular option, it is unreasonable to expect that
the council as a whole, and the individual councillors, have not formed
some view about the proposal.
228
Provided decision makers consider the issues with open minds and remain
amenable to persuasion, the fact that they hold existing views on a matter
will not disqualify them. In this sense, the Courts draw a distinction
between a “blank mind” and an “open mind”.
229
The cases clearly establish that the section 716A special consultative
procedure is a situation in which a council will naturally have some form of
pre-existing view (South Taranaki (10) and Auckland City Council (14)).
230
However, in taking any preliminary steps or making any provisional
decisions, a council must be careful not to get itself into a position from
which it cannot move. This situation occurred in the case of Lower Hutt
City Council v Bank,10 where it was held that the Council effectively
predetermined the matter by entering into a contract binding it to a particular
outcome.
231
The fact that a council has resolved to undertake certain action if a proposal
is confirmed following a special consultative procedure does not amount to
predetermination. It is open to a council to refuse to confirm the proposal,
if the consultative process indicates that it should not be confirmed, and
begin the procedure afresh with a new proposal.
Bias/Predetermination by Officers
232
Although it is the decision maker who is required to retain an open mind, a
decision may be challenged if an officer who is involved in the decisionmaking
process – although not making the decision – improperly influences
the minds of those considering the matter.
233
In the Gough case (6) it was alleged that there was bias on the part of a
magistrates’ clerk. After setting out the test for apparent bias, Goff LJ stated:
Though in a case concerned with bias on the part of a magistrates’ clerk, the court should go on to consider whether the clerk has been invited to give the magistrates advice, and, if so, whether it should infer that there was a real danger of the clerk’s bias having infected the views of the magistrates adversely to the applicant.
234
On this basis, it is arguable that a decision by a council could be challenged
if an officer who is biased or has predetermined the matter “infects” the
minds of the decision makers.
235
Clearly, a line must be drawn between a decision maker being influenced by
an officer’s bias, and genuine recommendations and reports given by the
officer as part of his or her functions. However, it will not always be evident
to a decision maker that the recommendations of an officer are motivated
by bias rather than based on evidence.
7: Ealing B.C. v Minister of Housing and Local Government [1952] Ch 856.
8: Local Government Board v Arlidge [1915] AC120.
9: Revised edition, October 1998, ISBN 0 477 02856 X.
10: [1974] 1 NZLR 545.
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