A cautionary tale of the dangers of 'informal' conversations to external parties during a formal decision-making process - Financial Service Complaints Limited v The Chief Parliamentary Ombudsman [2021] NZHC 307 (FSCL v CPO)

Dentons
Contact

Dentons

Introduction

The recent High Court’s judgment in FSCL v CPO should be essential reading for decision makers in any organisation or agency which holds statutory powers of decision. The High Court set aside a decision of the Chief Ombudsman, Peter Boshier, on the basis of predetermination, notwithstanding that he:

  1. Undertook a thorough investigation;
  2. Ensured he turned his mind to of all the mandatory considerations;
  3. Tightly followed his organisation’s systems and processes to reach his official decision; and
  4. Gave detailed and robust reasons for the decision.

What established predetermination, however, was a short series of informally worded emails exchanged between the Chief Ombudsman and Parliament’s Speaker.

The judgment provides a useful primer on how not to fall into the same trap.

Key Points

Several helpful points can be extracted from this case:

  • A decision-maker’s predisposition on a topic is not, in isolation, evidence of predetermination, but it can contribute as evidence of predetermination.
  • Any conversation between the decision-maker and an external party about the decision under consideration can be used as evidence of predetermination.
  • Long delays in the decision-maker’s process can be inferential evidence of a decision-maker’s predetermination.
  • A flawless formal decision-making process will not be enough to safeguard a decision-maker's decision from being set aside due to predetermination if the evidence of surrounding circumstances suggest that, regardless of the process, the decision-maker's mind was closed.

Background

FSCL v CPO is a judicial review of the Chief Ombudsman‘s decision to refuse Financial Service Complaints Limited’s (FSCL) application to use the name ‘Ombudsman’ in connection with its financial dispute resolution scheme. This is a long running sore; FSCL has been trying since at least 2016 to use the name ‘Ombudsman’. This judicial review relates to the second time the current Ombudsman has refused to give permission.

His first refusal was set aside by the Court of Appeal and remitted back for reconsideration. FSCL v CPO is a review of Judge Boshier’s reconsideration.

FSCL claimed that the Chief Ombudsman was merely ‘going through the motions’ and that he had predetermined the outcome. FSCL’s claim was based on, among other things, ‘informal’ email exchanges between Judge Boshier and Parliament’s Speaker in August 2018 at the time the Chief Ombudsman was discussing the ongoing investigation of whether FSCL’s application could be appropriately granted. These emails concerned the progress of legislation which would amend the Ombudsman Act 1975 to remove the ability for any organisation to apply to use the name ‘Ombudsman’ and how this could help the Chief Ombudsman in the matter with FSCL. Judge Boshier said these emails were quite separate from, and did not affect, his reconsideration.

Decision

The High Court found that if the Court only looked at the process and the on-the-record reasons for the Chief Ombudsman’s refusal of FSCL’s application, no fault could be found even though the Court accepted the Chief Ombudsman had a personal predisposition in favour of protecting the name of ‘Ombudsman’. In itself that would not have been enough for the judicial review to succeed – the Chief Ombudsman was not required to approach his decision with ‘perfect detachment’. But in the informal ‘unguarded’ emails to the Speaker the Court found Judge Boshier went further. They ‘provide evidence which weighs heavily toward the fact that the Chief Ombudsman had closed his mind and was not amenable to persuasion’ irrespective of the proper decision-making process carried out by his office. The Court did not criticize the Chief Ombudsman for communicating with the Speaker about an intended amendment to the Ombudsman Act nor about his objective of trying to protect the ‘Ombudsman’ name in general terms. But the ‘unguarded’ emails provided the Court with an insight into his predetermination.

His decision was determined unlawful and set aside.

Our advice

No decision-making process and/or investigation can be a box-ticking exercise. Firstly, you must conduct a meticulous process, taking into account all relevant matters with an open mind. If as the decision-maker your mind is closed then delegate to an alternate decision-maker to avoid the risk of predetermination. Remember, even if your process is fair, what you say to others about the subject and the process is relevant and can be used as evidence of your motivations.

Always front foot these issues and seek legal advice early during the process to avoid the risk of judicial review.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dentons | Attorney Advertising

Written by:

Dentons
Contact
more
less

Dentons on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.