Book: Judgments of the Court of Appeal of New Zealand on Proceedings to Review Aspects of the Report of the Royal Commission of Inquiry into the Mount Erebus Aircraft Disaster

S >> Sir Owen Woodhouse, R. B. Cooke, Ivor L. M. Richardson, Duncan >> Judgments of the Court of Appeal of New Zealand on Proceedings to Review Aspects of the Report of the Royal Commission of Inquiry into the Mount Erebus Aircraft Disaster




But we need not go further into the rather technical question of the
scope of certiorari in this kind of case. As has been said in the
_Environmental Defence Society_ case and _Ng_ v. _Minister of Immigration_
(C.A. 100/81, judgment 10th August 1981), a declaration may be granted
in the discretion of the Court whether or not certiorari would have
lain. That a declaration may be an appropriate remedy for both
jurisdictional errors and closely analogous defects such as unfairness
or breaches of natural justice is shown by such Privy Council and House
of Lords decisions as _De Verteuil_ v. _Knaggs_ (1918) A.C. 557, _Pyx
Granite Co. Ltd._ v. _Ministry of Housing_ (1960) A.C. 260, and _Ridge_
v. _Baldwin_ (1964) A.C. 40. The statement apparently to the contrary at
the end of the _Reynolds_ judgment at p. 40 is obsolete. And if a
declaration could have been granted that a decision made under a
statutory power is invalid the Court has power under the 1972 Act to set
the decision aside.


The Order for Costs

In argument in the present case it was common ground that if the order
for $150,000 costs is invalid the Court can set it aside. That is
clearly so. The order was made in reliance on s. 11 of the Commissions
of Inquiry Act 1908 which (notwithstanding an argument to the contrary
by Mr Harrison) is in our opinion undoubtedly the only source of any
authority for a Royal Commission or a Commission of Inquiry to award
costs. If valid it is enforceable by virtue of s. 12 of that Act as a
final judgment of the High Court in its civil jurisdiction. Plainly it
is the exercise of a statutory power of decision. The jurisdiction of
the New Zealand Courts to determine the validity of orders for costs by
Commissions is well established: _Hughes_ v. _Hanna_ (1909) 29 N.Z.L.R.
16; _Whangarei Co-operative Bacon-Curing Co._ v. _Whangarei
Meat-Supply Co._ (1912) 31 N.Z.L.R. 1223; _Pilkington_ v. _Plaits_
(1925) N.Z.L.R. 864.

What was in dispute in the argument in this connection was principally
whether the order is so linked with the challenged findings in the
Report that if those findings are invalid for excess of jurisdiction or
breach of natural justice the order will fall with them. There was a
subsidiary argument about whether the order was in any event invalid
because the amount may greatly exceed the maximum allowed by the long
out-of-date but still apparently extant scale prescribed in 1903 (1904
Gazette 491). We propose to consider the main argument, however, and in
doing so to confine attention to whether there is a sufficient link
between the order and the main findings complained of in the Report,
those in paragraph 377.

At the beginning of his reasons for ordering costs the Commissioner
expressed the opinion that the power should be exercised whenever the
conduct of a party at the hearing has materially and unnecessarily
extended the duration of the hearing. His following reasons include
criticisms of the management of the airline for prolonging the hearing,
and it was contended before us by Mr Baragwanath that they go no
further. We are unable to accept that contention. In reciting the
circumstances leading to the orders for costs the Commissioner expressly
includes the chief executive's order for documents to be destroyed and
says, "The cards were produced reluctantly, and at long intervals, and I
have little doubt that there are one or two which still lie hidden in
the pack". We think that such language would naturally be understood by
a reasonable reader to refer back to the matters more fully developed in
the section of the Report headed "The stance adopted by the airline
before the Commission of Inquiry", a section culminating in paragraph
377 with its references to "a pre-determined plan of deception ... an
attempt to conceal a series of disastrous administrative blunders ... an
orchestrated litany of lies". The impression almost inevitably created
is that, to adapt words used by Williams J. delivering the judgment of
this Court in _Cock_ v. _Attorney-General_ (1909) 28 N.Z.L.R. 405, 421,
the judgment for costs was in fact, though not in name, a punishment.
The reasons given for the costs orders have definite echoes of
paragraph 377 and the immediately preceding paragraphs. The airline was
being required to pay costs, and not for delaying tactics simply. A
significant part of the reasons was that in the view of the Commissioner
its chief witnesses had been organized to conceal the truth.

It is true that, on purely verbal grounds, refined distinctions can be
drawn between the sections of the Report dealing with the airline's
stance at the inquiry and with costs; but we have no doubt that their
overall effect is that most readers would understand them as closely
associated. It follows, we think, that if the findings in paragraph 377
are invalid for excess of jurisdiction or breach of natural justice they
should be seen as playing a material part in the order for $150,000
costs and as requiring the Court to set aside that order. Irrespective
of the order for costs, we think that there are strong arguments to
support the view that there is jurisdiction to review the findings in
challenged paragraphs on grounds relating to jurisdiction and natural
justice. There is a good deal of support in the authorities for
excluding or strictly limiting judicial review of Commission findings
and Mr Baragwanath carefully put the arguments forward. But, as we say,
there are reasons why the Court ought not to adopt the facile approach
of saying that the function of the Commission was merely to inquire and
report and that as the Commission's findings bind no-one they can be
disregarded entirely as having no legal effect.


Scope of Royal Commission

As has been the practice in New Zealand when a Commission of Inquiry
consists only of or is chaired by a High Court Judge, the Erebus
Commission was a Royal Commission in that the warrant was expressed to
be issued under the authority of the Letters Patent of 1917 constituting
the office of Governor-General. One of the powers delegated by the
Letters Patent to the Governor-General is to "constitute and appoint, in
Our name and on Our behalf, all such ... Commissioners ... as may be
lawfully constituted or appointed by Us". The warrant was also expressed
to be issued under the authority of and subject to the provisions of the
Commissions of Inquiry Act 1908, and s. 15 of that Act extends and
applies not only to inquiries under statutory Commissions appointed by
the Governor-General or Governor-General in Council but also to
inquiries under the Letters Patent. This means inter alia that
statutory-powers of summoning witnesses and requiring the production of
documents apply, that a Judge of the High Court acting as Commissioner
has the ordinary judicial immunity, and that interested persons have
statutory rights to be heard under s. 4A, inserted by an amendment made
in 1980 shortly before the inquiry now in question began. Section 2 of
the 1908 Act empowers the Governor-General by Order-in-Council to
appoint any person to be a Commission to inquire into and report upon
any question arising out of or concerning a range of matters. The
relevant one is "(e) Any disaster or accident (whether due to natural
causes or otherwise) in which members of the public were killed or
injured ..." In giving statutory power to appoint Commissions and
listing permissible subjects the Act differs from the Evidence Acts
considered in Australian cases. The Australian Acts presuppose the
existence of Commissions appointed under prerogative or inherent
executive powers and merely confer ancillary powers of compelling
evidence and the like. Under Acts of that type the validity of the
Commission depends on the common law and the division of powers in the
Australian Constitution. Under the New Zealand Act a Commission can be
given a statutory source for its basic authority even if it is a Royal
Commission and has a prerogative source as well.

The Erebus Commission was appointed to inquire into the causes and
circumstances of the crash. Among the particular questions referred to
it was:

(g) Whether the crash of the aircraft or the death of the
passengers and crew was caused or contributed to by any person
(whether or not that person was on board the aircraft) by an act or
omission in respect of any function in relation to the operation,
maintenance, servicing, flying, navigation, manoeuvring, or air
traffic control of the aircraft, being a function which that person
had a duty to perform or which good aviation practice required that
person to perform?

All the terms of reference fall well within s. 2 (e). The Commission was
not appointed to inquire into allegations of crime so we are not now
called upon to go into the question whether a Royal Commission can be
appointed for such a purpose, on which New Zealand and Australian
authorities diverge (see _In re The Royal Commission on Licensing_
(1945) N.Z.L.R. 665, 679; and D.R. Mummery "Due Process and
Inquisitions", 97 L.Q.R. 287). Nevertheless paragraph 377 of the Royal
Commission Report contains findings of organized perjury. The judgment
in the leading New Zealand case, _Cock_ v. _Attorney-General_, while
denying that the prerogative can authorize a Commission with the main
object of inquiring into alleged crimes, recognizes at p. 425 that a
Commissioner may investigate an alleged crime if to do so would be
"merely incidental to a legitimate inquiry and necessary for the purpose
of that inquiry". We think that the test must be what is reasonably
incidental to valid terms of reference. In relation to paragraph 377 the
allegation of excess of jurisdiction turns accordingly on whether the
findings are reasonably incidental to an inquiry into the causes and
circumstances of the crash.

It is difficult to find reasons why the Court should refuse to entertain
that question. While Commissions of mere inquiry and report are largely
free from judicial control, there is strong authority indicating that
the Courts have at least a duty to see that they keep within their terms
of reference. We agree with the opinion of Myers C.J. in the _Royal
Commission on Licensing_ case at p. 680 that it is implicit in all the
judgments in the Privy Council and the High Court in _Attorney-General
for the Commonwealth of Australia_ v. _Colonial Sugar Refining Co. Ltd_
(1914) A.C. 237, 15 C.L.R. 182, that if it can be said in advance that
proposed questions are clearly outside the scope of the inquiry they are
irrelevant and cannot be permitted. In the _Royal Commission on
Licensing_ case that very principle was applied in this Court, it being
held that certain matters were not within the ambit of the Commission's
inquiry. That decision was given on a case stated by the Royal
Commission under ss. 10 and 13 of the 1908 Act, but the _Sugar Company_
case was an action for declaration and injunctions and the procedure was
expressly approved in the judgment of their Lordships delivered by
Viscount Haldane L.C. ((1914) A.C. at 249-50). Similarly in _McGuinness_
v. _Attorney-General_ (1940) 63 C.L.R. 73 the High Court, on an appeal
from a conviction for refusing to answer a question touching the subject
matter of an inquiry by a Commissioner, accepted without any apparent
difficulty that the Court had authority to determine whether the
question was relevant.

We do not overlook that the cases just cited were concerned with the
scope of questions that might be put to witnesses under compulsory
powers given by statute. They were not directly concerned with the scope
of findings in reports. But if the Court has jurisdiction to determine
the true scope of a Commission's inquiry and require the Commission to
keep within that scope there are obvious arguments that it should have a
corresponding jurisdiction in the matter of findings. A vital part of
the constitutional role of the Courts is to ensure that all public
authorities, whether they derive their powers from statute or the
prerogative, act within the limits of those powers.

A different view was taken by Stephen J. sitting at first instance in
chambers in _R._ v. _Collins_ (1976) 8 A.L.R. 691, but we note the
opinion expressed in several Canadian cases that the Court will
intervene where a Commissioner has inquired or seeks to inquire into
matters outside his terms of reference: _Re Sedlmayr_ (1978) 82 D.L.R.
(3d.) 161; _Re Anderson_ (1978) 82 D.L.R. (3d.) 706; _Landreville_ v.
_The Queen_ (1973) 41 D.L.R. (3d.) 574; _Landreville_ v. _The Queen_
(No. 2) (1977) 75 D.L.R. (3d.) 380, 400-402.

In _Re Royal Commission on Thomas Case_ (1980) 1 N.Z.L.R. 602 a Full
Court (Molier, Holland and Thorp JJ.) held inter alia that the Court may
prohibit a Commission from acting in excess of its jurisdiction and that
the creation of a Commission pursuant to the Letters Patent does not
exempt it from the supervisory role of the Court. However part of the
Full Court's decision in that case is the subject of a pending appeal to
this Court and other proceedings relating to the Thomas Commission have
been moved into this Court. So we refrain from expressing any final view
upon it.

For the foregoing reasons we think that if the applicants make out their
claim that the findings of the Erebus Commission in paragraph 377 are
outside the commissioner's terms of reference, they could be granted a
declaration to that effect at common law. To obtain a setting aside of
the findings under s. 4 (2) of the Judicature Amendment Act 1977 they
have to show in addition that the findings were made in the exercise of
a statutory power of decision. We think this requirement should not
present final difficulty if regard is had to the evident intent and
spirit of the 1972 Act and particularly the amendments made by
Parliament in 1977.


Judicature Amendment Act 1972

Was the statutory power one of _decision_? The 1977 Amendment Act
brought statutory investigations or inquiries into rights or liabilities
within the definition of "statutory power". An inquiry into whether any
person caused or contributed to the crash by an act or omission in
respect of his duties is an inquiry into liabilities. But that is less
important for present purposes than the fact that the Amendment Act also
extended the concept of statutory powers of decision to those
"affecting" the rights of any person. The purpose was manifestly to make
the ambit of review under the Act at least as wide as at common law.
This point is dealt with in _Daemar_ v. _Gilliand_ (1981) 1 N.Z.L.R. 61.

We think it would be very difficult to justify an argument that findings
likely to affect individuals in their personal civil rights or to expose
them to prosecution under the criminal law are decision "affecting"
their rights within the meaning of the Act. In the present case, for
example, it was virtually certain that the findings of the Erebus
Commission would be published by the Government. The effect on the
reputation of persons found guilty of the misconduct described in the
Report was likely to be devastating, at common law every citizen has a
right not to be defamed without justification. Severe criticism by a
public officer made after a public inquiry and inevitably accompanied by
the widest publicity affects that right especially when the officer has
judicial status and none the less because he has judicial immunity.

The present case is in many ways unique and, if the findings in
paragraph 377 were made without jurisdiction or contrary to natural
justice, it affords a striking instance of how contrary to the public
interest it would be if the Courts were not prepared to protect the
right to reputation. The magnitude of the disaster, bringing tragedy to
many homes in New Zealand and overseas, and the fact that the national
airline was involved meant that the national attention was focused on
the inquiry. There are imputations of collective bad faith which had
started from a high place in the company and all this was likely to
receive the widest publicity, further, the findings in paragraph 377
amounted to public and official disclosures of alleged criminal conduct
and led to investigation by the police to determine whether charges
should be laid. In the event it was announced shortly before the hearing
of the present case that there would be no such charges, but clearly the
individuals concerned were in fact exposed to the hazard of prosecution
as a natural consequence of the Report.

In interpreting the 1977 legislation we think that a narrow conception
of rights and of what affects rights would not be in accord with the
general purposes of the Act. A broad, realistic and somewhat flexible
approach would enable the Act to work most effectively as an aid to
achieving justice in the modern community.


Natural Justice

This Court has had to examine and apply the principles concerning
natural justice and fairness quite often in recent years. In translating
the ideals of natural justice and fairness into current operation in New
Zealand we have been influenced as to general principles mainly by
decisions of the Privy Council and the House of Lords but, of course, we
have had New Zealand conditions and practicalities very much in mind.
The result has been a pragmatic approach.

Some overseas Courts have held that if all that occurs is inquiry and
report and the report is not in law a condition precedent to some
further step the rules of natural justice are automatically excluded.
That was the premise, for instance, of the High Court of Australia in
_Testro Bros. Pty. Ltd._ v. _Tait_ (1963) 109 C.L.R. 353. A contrary
approach is to be found in the judgement of Schroeder J.A. representing
the view of the majority of the Ontario Court of Appeal in _Re Ontario
Crime Commission_ (1962) 133 C.C.C. 116, although that case depends
partly on Ontario statute law. There is little attraction in the idea of
automatic exclusion. Commissions of Inquiry have compulsory statutory
powers of insisting on evidence and their findings can affect rights in
the ways already outlined. It seems to us highly unlikely that the New
Zealand Parliament intended them to be wholly free of the elementary
obligation to give persons whom they have in mind condemning a fair
opportunity for correcting or contradicting any relevant allegation.

Some reinforcement for the view that they are under that obligation is
to be found in some added considerations. Section 4A of the Commissions
of Inquiry Act, enacted in 1980 in place of briefer provisions and in
time for the Erebus inquiry, provides:

"4A. Persons entitled to be heard--(1) Any person shall, if he is
party to the inquiry or satisfies the Commission that he has an
interest in the inquiry apart from any interest in common with the
public, be entitled to appear and be heard at the inquiry.

(2) Any person who satisfies the Commission that any evidence given
before it may adversely affect his interests shall be given an
opportunity during the inquiry to be heard in respect of the matter
to which the evidence relates.

(3) Every person entitled, or given an opportunity, to be heard
under this section may appear in person or by his counsel or
agent."

The section may be seen as a recognition by Parliament that natural
justice should apply. It does not purport to enact a complete code of
procedure or to cover the whole field of natural justice, which would
not be easy in a statute of this general kind. The statute specifically
requires an opportunity to be heard to be given to any person who shows
that evidence may adversely affect his interests. In the parallel
situation of the statutory investigation which must be undertaken
following any aircraft accident considerations of fairness are carefully
spelled out in Regulation 15 (1) of the Civil Aviation (Accident
Investigation) Regulations 1978. There it is provided that "where it
appears to an Inspector that any degree of responsibility for an
accident may be attributable to any person, that person or, if he is
dead, his legal personal representatives, shall, if practicable, be
given notice that blame may be attributed to him, and that he or they
may make a statement or give evidence, and produce witnesses, and
examine any witnesses from whose evidence it appears that he may be
blameworthy". In the case of the earlier investigation by Mr.
Chippindale into the Erebus disaster that very step was taken.

In his judgment in the Court in _Re the Royal Commission on the State
Services_ (1962) N.Z.L.R. 96, 117, Cleary J. while stressing the wide
discretion of Commissions to regulate their own procedure said plainly
that the one limitation is that parties cited and persons interested
must be afforded a fair opportunity of presenting their representations,
adducing their evidence, and meeting prejudicial matter. That judgment
was given with reference to the old s. 4A, now replaced by the section
already quoted. What Cleary J. said, particularly about the general
absence of a right to be represented by counsel, must now be read
subject to the new provisions. But his expression "prejudicial matter"
was a general one. It ought not, we think, to be read down in some way
so as to exclude suggestions of conspiracy which may have evolved in the
mind of a Commission without being specifically raised in evidence or
submissions.

A suggestion of an organized conspiracy to perjure is different from the
possibility commonly faced by individual witnesses that their evidence
may be disbelieved. Grave findings of concerted misconduct in connection
with the inquiry ought not to be made without being specifically raised
at the inquiry. Once the thesis of such a conspiracy had emerged in the
Commissioner's thinking as something upon which he might report, he
would have had power, if that question were indeed reasonably incidental
to his terms of reference, to reconvene the hearing if necessary so that
the alleged conspirators could be fairly confronted with the allegation.
See the speech of Lord Russell of Killowen in _Fairmount Investments
Ltd._ v. _Secretary of State for the Environment_ (1976) 2 All E.R. 865,
and the judgement of Lord Parker C.J. in _Sheldon_ v. _Bromfield
Justices_ (1964) 2 Q.B. 573, 578. In fact in the present case but for a
far less significant reason the Commissioner himself actually considered
the possible need to reconvene the hearing after certain enquiries had
been made on his instructions following the taking of evidence in
public. The matter is mentioned in paragraph 358 of the Report.

_Landreville_ v. _The Queen_ (No. 2) (1977) 75 D.L.R. (3d.) 380,
402-405, was decided in the end on just such a ground. It was held that
a Commissioner, who happened to be a distinguished Judge, had failed to
put to the person whose conduct was expressly subjected to investigation
by the terms of reference of the Commission a very serious allegation
upon which a finding was made in the report; and that the Commission
should have been reconvened for that purpose. There the relevant rule of
natural justice was fully embodied in a statutory provision. We think
that the position is the same under the New Zealand Commissions of
Inquiry Act supplemented by the common law.

All these considerations suggest that the Commission was bound by the
broad requirements of natural justice. These included a reasonable
opportunity of meeting the unformulated allegation of organized
deception and concealment that was apparently passing through the
Commission's mind. Some of the reasons why experience has shown the
importance of this sort of opportunity were well put by Megarry J. in
_John_ v. _Rees_ (1970) 1 Ch. 345, 402.:

"It may be that there are some who would decry the importance which
the courts attach to the observance of the rules of natural
justice. 'When something is obvious,' they may say, 'why force
everybody to go through the tiresome waste of time involved in
framing charges and giving an opportunity to be heard? The result
is obvious from the start.' Those who take this view do not, I
think, do themselves justice. As everybody who has anything to do
with the law well knows, the path of the law is strewn with
examples of open and shut cases which, somehow, were not; of
unanswerable charges which, in the event, were completely answered;
of inexplicable conduct which was fully explained; of fixed and
unalterable determinations that, by discussion, suffered a change.
Nor are those with any knowledge of human nature who pause to think
for a moment likely to underestimate the feelings of resentment of
those who find that a decision against them has been made without
their being afforded any opportunity to influence the course of
events."

In this particular case something more should be said. The applicants
contend that this is not simply a case where the conspiracy suggestion
could not have been rebutted. They plead in their statement of claim
that the Commissioner's findings to that effect are not based on
evidence of probative value. Elsewhere in the present judgment we deal
with aspects of these arguments. Here, dealing with principles, we add
that fairness is not necessarily confined to procedural matters. It can
have wider range. Remedies in this field are discretionary and the law
not inflexible. If a party seeks to show not only that he did not have
an adequate hearing but also that the evidence on which he was condemned
was insubstantial, the Court is not compelled to shut its eyes to the
state of the evidence in deciding whether, looking at the whole case in
perspective, he has been treated fairly.

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