NineToNoon: Peters and the Privileges Committee / MMP and Electoral Reform

> NineToNoon: "Law with Dean Knight" Peters and the Privilege Committee There a couple of things in the report of the Privileges Committee which, from a legal or constitutional perspective, are interesting. Others have commented on the political issues, my interest is the constitutional issues.

The Committee's findings We know the Committee ruled that the Glenn donation was a "gift" and was required to be disclosed as part of his return under the Register of Pecuniary Interests (Copeland's complaint). But they ruled that the payment was not the discharge of a debt because none existed (Hide's complaint). The Committee ruled that Peters breached the standing orders and was in contempt for ("knowingly provide false or misleading information in a return of pecuniary interests") (SO 400(h)).

I don't quibble with the Committee preferring Glenn's evidence over Peters and finding that Peters was aware of Glenn's intention to make a donation. Findings based on circumstantial evidence and credibility are the standard stuff for tribunals. I wasn't surprised by that factual finding but also wasn't surprised by the dissent.

The Committee's independence There's been some concerns expressed about the lack of independence and natural justice, for example, from the Prime Minister and Peters. I think those concerns have some legs – but we shouldn't take them too far.

Yes, the members have some interest in the outcome. And Committee doesn't live up to the same standards of process and independence as we expect of juries and other adjudicative tribunals. But it's the nature of the beast. "Natural justice" at law recognises the different contexts in which tribunals operate within. Necessity requires people who have some interest in the outcome participate in the inquiry – otherwise it's not a judgement by one's peers. It's difficult to think of a different, more independent mechanism for these hearings; I'm not sure that abandoning the political expression of standards by one's peers in favour of a neutral, "objective", external process is desirable.

The Committee's "honest attempt" test But I have some sympathy for the minority concerns about the Committee's treatment of the knowledge standard required.

The majority found that Peters did not make an “honest attempt” to ascertain whether any donations had been received before making his return – and this is the important thing – "despite his knowledge of his arrangement with Mr Henry and the likelihood of donations being received towards his costs".

The Labour-NZF minority expressed some concern about the retrospective application of the "honest attempt" test. (Strictly speaking, it's not a retrospective law-change but has a similar retrospective effect, as is the case when laws are interpreted differently to what everyone previously understood, like with the pledge card. It's normally undesirable because it offends the Rule of Law if people aren't able to plan their lives in the light of the legal consequences that follow.)

My concern, though, is that the Committee seems to have adopted an interpretation inconsistent with the meaning of "knowingly" as we ordinarily understand it at law, particularly criminal law where it operates as the mens rea or culpability threshold for liability. Yes, the Committee was entitled to conclude that Peters had knowledge of Glenn's intention to make a donation. However, they didn't rule he actually knew about the donation itself or that his return was actually false. They basically said he should have taken steps to find out. He was sort of "wilfully blind" or "reckless" to the accuracy of his return. But, in my view, that's not "knowingly" making a false statement.

Peters' position now that he's been censured Peters has been censured for contempt of Parliament and has also now been found to have breached the Cabinet Manual provisions governing the conduct of ministers – because the Manual reiterates the need to comply with the Register of Pecuniary Interests. So people are continuing to call for his resignation or dismissal.

I've previously discussed the constitutional position about the tenure of ministers we. While some might argue about the nature of the convention that applies, I think the best statement of the constitutional position is this: "A Minister must resign when he or she loses the confidence of the Cabinet as expressed by the Prime Minister." Or similarly, they will be dismissed when they lose that confidence.

What that says is – as a matter of constitutional law – there's no list of behaviour that automatically triggers resignation. The considerations are political and pragmatic. And that might mean that different standards apply to different ministers too. That said, it does look like – politically – Peters is toast! People seem to be bored with his obfuscation. The Court of Public Opinion may be the more powerful adjudicative tribunal.

MMP and electoral reform Questions about our electoral system have recently been under the spot-light:

• The Nat's have promised a referendum on MMP if elected.
• The NZHerald seems to have been questioning the merits of MMP.
• The Peter's saga, more generally, has lead to some people querying the effect of coalition politics.
• And we're about to have our 5th election under MMP – one that looks likely to present new, complicated outcomes and arrangements (eg, Māori party overhang, possibility that highest polling political party might not garner a coalition).

But my interest has been triggered by a symposium held at Victoria University of Wellington recently, hosted by the NZ Centre for Public Law, in conjunction with the Institute of Policy Studies and Birkbeck University's Centre for New Zealand Studies. Local and international experts together (some via video-link) to reflect on the effect of MMP on our constitution. Some of the main themes and tid-bits from the discussion are interesting, as the conversation was a useful stock-take of the impact of MMP over the past 12 years. It also a helpful shopping list of some of the future challenges for MMP.

The papers available at www.victoria.ac.nz/nzcpl/events/e1010.aspx. And some summaries of the sessions available on NoRightTurn (norightturn.blogspot.co (1); (2)) and KiwiBlog (kiwiblog.co.nz (1); (2)).

Government formation If we first look at the government formation process, the need for coalition arrangements has fundamentally changed this part of our constitutional culture and conventions. We now have what some describe as the "indirect election" of governments. Professor Philip Joseph argues that people elect their Parliaments, but not their governments. Although technically the case under FPP, it's become more striking under MMP. The prerogative of government formation is now vested in the political parties who have been elected to Parliament.

Coalition – or multi-party governance – arrangements The novel nature of the coalition arrangements was the subject of much discussion. Or as it was suggested we should call them: multi-party governance arrangements.

• Formal executive coalitions. Confidence and supply agreements. Cooperation agreements. Hybrids between the two.
• Some with ministerial posts. Most with "agree to disagree" provisions.

Real efforts have been made in NZ to try and conquer what's been described as the "unity-distinctiveness" dilemma. That's meant we've had to move past our traditional Westminster language and understanding. Terms such as "government" and "opposition" are much more complex and arguably less relevant labels.

What's interesting is the unique, unorthodox nature of these arrangements around the world. There are few direct parallels in other multi-party democracies. Kiwi pragmatism, experimentation, and incrementalism has been striking.

Cabinet collective responsibility But those changes haven't been without some controversy. A particular casualty in the MMP environment has been the constitutional principle of Cabinet collective responsibility, with the agreements to disagree allowing coalition and confidence and supply partners to speak out in opposition to the government position with impunity.

I won't bore you with the details but there was nice little bit of academic fisticuffs about the nature of the constitutional principle of unanimity (that requires government speak with one voice). While most agree, at least, that MMP as weakened this principle, there's a question about whether the remains a need for the principle. Some argue it is only a principle of pragmatic politics, not constitutional imperative. Others think it is heresy to suggest so, partly the Brits.

The law-making process If we look back at the time before MMP, our legislature was regarded as "one of the fastest law-makers in the West". We had an "elected dictatorship", with majority government and Cabinet collective responsibility allowing a few to control the policy and legislative process through domination of Cabinet and legislative.

Dr Ryan Malone's work on law-making under MMP – his PhD at Vic and now published as a book (Rebalancing the Constitution: The Challenge of Government Law-making under MMP) – demonstrates that our intuition about the effect of MMP is sound.

MMP means Parliament is no longer a mere rubber-stamp for executive proposals and governments now have less control over the legislative process. Increased role of select committees. An active need to garner support for Bills. Less urgency. And so forth. Overall there's been less legislation, and it's passed more slowly and subject to greater scrutiny. That's consistent with the experience of some other jurisdictions operating under MMP, such as the Scottish Parliament and the Welsh Assembly. Although Malone tentatively ponders whether it might have done too far – with government now not being able to effectively control its legislative agenda.

The public's reaction to MMP and coalition government Professor Raymond Miller presented some data from the New Zealand Elections Studies, since 1993. For the political junkies, his slides and graphs are worth looking at.

A couple of themes that emerge:

• The strongest support for MMP lies amongst younger voters. That's not a surprise. By 2011, about 35% of the electorate will have first voted under an MMP system.
• And support for MMP is stronger amongst the centre left and Labour ranks, rather than centre right and National ranks.

But the differing views perhaps reflect deeper differences about the very nature of government. FPP is more strongly supported by folk who prefer a government who can "make tough decisions" (a traditional authoritarian position). Those who support MMP favour a government that keeps its promises and does what people want (a modern, democratic, participatory one).

Areas for reform Well, the universal view of the "technicians" and "experts" was overwhelmingly in favour of MMP. There was no appetite to return to FPP or even to move to another proportional system. That's consistent with the Select Committee's conclusion in 2001 when it reviewed the system. Fundamentally, MMP is fairer, delivers a better democracy, and provides more checks-and-balances. It's instructive to go back to the Royal Commission's 10 criteria for judging electoral systems to assess the success or failure of MMP:

(a) Fairness between political parties. When they vote at elections, voters are primarily choosing between alternative party Governments. In the interests of fairness and equality, therefore, the number of seats gained by a political party should be proportional to the number of voters who support that party. (b) Effective representation of minority and special interest groups. The voting system should ensure that parties, candidates and MPs are responsive to significant groups and interests. To facilitate this, membership of the House should not only be proportional to the level of party support but should also reflect other significant characteristics of the electorate, such as gender, ethnicity, socio-economic class, locality and age. (c) Effective Maori representation. In view of their particular historical, Treaty and socio-economic status, Maori and the Maori point of view should be fairly and effectively represented in Parliament. (d) Political integration. While the electoral system should ensure that the opinions of diverse groups and interests are represented it should at the same time encourage all groups to respect other points of view and to take into account the good of the community as a whole. (e) Effective representation of constituents. An important function of individual MPs is to act on behalf of constituents who need help in their dealings with the Government or its agencies. The voting system should therefore encourage close links and accountability between individual MPs and their constituents. (f) Effective voter participation. If individual citizens are to play a full and active part in the electoral process, the voting system should provide them with mechanisms and procedures which they can readily understand. At the same time, the power to make and unmake governments should be in the hands of the people at an election and the votes of all electors should be of equal weight in influencing election results. (g) Effective government. The electoral system should allow Governments in New Zealand to meet their responsibilities. Governments should have the ability to act decisively when that is appropriate and there should be reasonable continuity and stability both within and between Governments. (h) Effective Parliament. As well as providing a Government, members of the House have a number of other important parliamentary functions. These include providing a forum for the promotion of alternative Governments and policies, enacting legislation, authorising the raising of taxes and the expenditure of public money, scrutinising the actions and policies of the executive, and supplying a focus for individual and group aspirations and grievances. The voting system should provide a House which is capable of exercising these functions as effectively as possible. (i) Effective parties. The voting system should recognise and facilitate the essential role political parties play in modern representative democracies in, for example, formulating and articulating policies and providing representatives for the people. (j) Legitimacy. Members of the community should be able to endorse the voting system and its procedures as fair and reasonable and to accept its decisions, even when they themselves prefer other alternatives.

On most counts, MMP marks itself out successfully. Notably, it was never really about the behaviour of MPs – which seems to be one of the main things fuelling some growing calls for change.

But many suggested some tweaks to the system, rather than throwing the baby out with the bathwater. Some of the common aspects people thought could do with some attention:

• one-seat threshold or "coat-tails" distortion of proportionality: eg, Hide and Dunne bringing other MPs with them, even though there were under the 5% threshold. Most people agreed this should go.
• "backdoor" or "zombie" MPs, that is, those that lose electorate contests, but still make it in on the list. There were mixed views on whether this is really a problem or whether changing it might lead to greater differentiation between types of MPs. Interestingly, the Scottish Parliament and Welsh Assembly both reviewed this issue; in Wales, candidates now have to choose to be on the list or a contest an electorate, not both, although our own Select Committee's review in 2001 suggested that dual candidacy should be retained.
• the related question of "open party lists"; one solution suggested by Professor Nigel Roberts is the Swedish system, where voters are entitled to nominate one candidate on the list for promotion and they go to the top of the list if they receive more than 8% support.
• the Māori seats; a number of people reminded us that the original recommendation of the Royal Commission was their abolition – but with the complementary recommendation that the usual 4% (now 5%) threshold not apply to Māori parties.
• the "overhang", like we've got now where parties get more electorate seats then their popular vote – and might get even more in the new Parliament.
• the present 3-year term, a number of people thought the system of politics would work better with a longer term, particularly given the time taken nowadays for government formation.
• and, generally, a systemic update of the old Electoral Act 1993 – which now looks largely out-of-date.

The important thing to take from this list is the fact that many of these changes could be made legislatively, without a need for a full blown referendum (although cross party support would be desirable for these reforms).

Peters, Privileges Committee, and "knowingly"

> NZParliament: "Question of privilege relating to compliance with a member’s obligations under the Standing Orders dealing with pecuniary interests (I.17D)" The report is out. And there's a lot in it. No doubt lots of folk will have different things to say about the report. What interested me was the Committee adopted a rather unsympathetic approach to the meaning of "knowingly", in the context of the contempt provision in SO 400(h) ("knowingly provide false or misleading information in a return of pecuniary interests"):

Members must make honest attempt to return all pecuniary interests. It is appropriate to expect members to make an honest attempt to return all of the pecuniary interests that they hold. In order to make such an honest attempt, members are obliged to turn their minds to the interests that they have. The onus is on members to recognise and declare relevant interests.Initially, the rules for the register were to be set out in statute, which would have left open the possibility of the courts ruling on their application. This proposal was not pursued, and the House instead established its own rules to deal with pecuniary interests, within the Standing Orders.If legislation had been employed, a legalistic approach to registering interests would have been appropriate. However, the House chose to keep the matter within its own confines. This places a stronger moral imperative on members to comply with the requirements, and to do so in the spirit of the House’s own rules. If a member genuinely missed something, having turned his or her mind to the interests they hold, that would not be a contempt. However, if a member knew of an interest and decided not to declare it, the member would have “knowingly” failed to declare an interest if it were subsequently established definitively to be a pecuniary interest. Members should follow the approach used in relation to the Standing Orders relating to the declaration of financial interests under Standing Orders 165 to 176 — if in doubt, declare it.

This is carried through into the finding of contempt:

Finding of contempt We have been asked to consider whether Mr Peters knowingly provided false or misleading information in a return of pecuniary interests. To make such a finding, there are two matters to be established. The first is whether false or misleading information was provided in a return. If that is established, it must also be shown that the member provided the false or misleading information knowingly. We found that the payment of $100,000 by Owen Glenn to Brian Henry constituted a gift to Mr Peters. Mr Peters benefited from the payment, as it reduced the amount he was morally obliged to contribute to meeting Mr Henry’s fees. We have also found no evidence that Mr Peters made an “honest attempt” to ascertain whether any donations had been received before making his return in February 2006, despite his knowledge of his arrangement with Mr Henry and the likelihood of donations being received towards his costs. The majority of us find that Mr Peters had some knowledge of the $100,000 donation. Further, we find that Mr Peters, having an understanding of the arrangement by which funds were raised by Mr Henry, needed to make an honest attempt to file a correct return. For both these reasons, the majority of us find that a contempt occurred. The minority of us do not agree that the evidence is sufficient to conclude that Mr Peters had knowledge of the $100,000 donation and are uncomfortable in applying the test of an “honest attempt” retrospectively, as this test has emerged as a result of this committee’s deliberations. The minority of us note that, had Mr Peters asked the registrar for advice, it is likely that he would have been advised to seek his own legal advice. Mr Peters’ lawyer, Mr Henry, submitted to the committee that, in his view, donations of this kind did not require a return under the pecuniary interests register, which would lead to the conclusion that this is the legal advice Mr Peters would have received in any case. This inquiry has revealed a lack of clarity in the definition of a pecuniary interest. We believe all members must make an honest attempt to declare all matters that may amount to a pecuniary interest. It is regrettable that Mr Peters did not make a return covering the donations received in support of his legal costs but, in the face of this uncertainty, the minority of us do not believe it appropriate to find that his actions amount to a contempt.

Certainly, the meaning ascribed to the term "knowingly" differs from the orthodox standard at criminal law. Adams on Criminal Law, para CA20.20 says:

Where the legislation expressly requires only “knowledge” of existing circumstances it appears that, at least as a general rule, it will not suffice that an accused was “suspicious”, and thought that there was a real risk that they existed. In R v Crooks [1981] 2 NZLR 53 (CA), the Court of Appeal gave extensive consideration to the meaning of “knowing that thing to have been dishonestly obtained” in the definition of receiving, in what was then s 258. The Court held that “knowing” in this context meant “knowing or believing” and the effect of the rather involved, and at times circular, judgment seems to be that mere suspicion is not enough, even if accompanied by a decision not to inquire about the facts, and that what is needed is that the accused is sure about the relevant matter, or has no real doubt. “Knowing” was said to involve “a certainty that the point of his inquiry is free from doubt”, and a “belief” is an “acceptance of a proposition”, based on information not mere intuition. Mere “suspicion” or “doubt” is not enough, and a failure to inquire may support an inference of knowledge or belief only if the accused was confronted by circumstances which were “so compelling” that it can be inferred that the accused failed to inquire “because he knew what the answer was going to be”. ...

(Although the proceedings for contempt aren't themselves "criminal", the principles seem analogous; the Committee notes the allegations were serious and applied a high standard of proof.)

It seems to me the Committee effectively applied a "recklessly" (deliberate risk-taking), not "knowingly", standard by adopting the "honest attempt" language. I'm not convinced that was proper.

Tit for tat - the SFO and the privileges committee

> DomPost: "NZ First lays police complaint over SFO" New Zealand First has laid a complaint with police about the SFO giving evidence to the privileges committee, purported for breaching secrecy provisions. Reports seems to suggest it is based on section 39 of the Serious Fraud Act:

39 Secrecy of information protected under other Acts (1) Every member of the Serious Fraud Office shall observe the strictest secrecy in relation to any information which is protected under any Act other than the Tax Administration Act 1994. (2) Notwithstanding subsection (1 of this section or anything in the Act that protects the information,— (a) Any member of the Serious Fraud Office may disclose any such information to any other member of the Serious Fraud Office for the purpose of investigating or prosecuting any offence involving serious or complex fraud; and (b) The Director may disclose any such information, or authorise any other member of the Serious Fraud Office to disclose any such information,— (i) With the consent of the person who disclosed the information to the Serious Fraud Office, to any other person: (ii) To any Judge for the purpose of obtaining a search warrant under this Act: (iii) To any person commencing or conducting any proceedings relating to any suspected offence involving serious or complex fraud: (iv) To any Court hearing any proceedings relating to any suspected offence involving serious or complex fraud. (3) Every member of the Serious Fraud Office commits an offence, and is liable on summary conviction to a fine not exceeding $5,000, who knowingly contravenes this section.

However, that seems inapplicable because it does not, in itself, provide a cloak of secrecy. The information has to already be "protected under any other Act". (It links to the SFO's coercive power to require information protected under other legislation.) I can't think of any other Act that protects the information.

The better foundation might be section 36:

36 Secrecy of certain information relating to Serious Fraud Office business (1) Every member of the Serious Fraud Office shall observe the strictest secrecy in relation to— (a) Information supplied to or obtained by the Director under or in connection with the exercise of any power conferred by section 5 or section 9 of this Act or in the course of executing any search warrant issued under this Act: (b) Information derived from or based upon any such information: (c) Information relating to the exercise or possible exercise of any power conferred by Part 2 of this Act,— and, except as provided in subsection (2) of this section, shall not disclose any such information in any way whatever to any person who is not a member of the Serious Fraud Office. (2) Notwithstanding subsection (1) of this section, the Director may disclose such information, or authorise any other member of the Serious Fraud Office to disclose such information,— (a) If the person who disclosed the information to the Serious Fraud Office consents to that disclosure; or (b) To the extent that the information is available to the public under any Act; or (c) For the purposes of this Act or in connection with the exercise of powers under this Act; or (d) For the purposes of any prosecution anywhere; or (e) To any person who the Director is satisfied has a proper interest in receiving such information. (3) This section is subject to section 37 and section 39 of this Act. (4) Every member of the Serious Fraud Office commits an offence, and is liable on summary conviction to a fine not exceeding $5,000, who knowingly contravenes this section.

But there's also problems with this. A committee of Parliament would seem to be a "person ... [with] a proper interest in receiving such information".

In any event, section 1, article 9 of the Bill of Rights 1688 might cause a problem:

Freedom of speech—That the freedome of speech and debates or proceedings in Parlyament ought not to be impeached or questioned in any court or place out of Parlyament.

Committee hearings are part of the proceedings of Parliament and are protected by Parliamentary privilege. See further Prebble v Television New Zealand Ltd [1994] 3 NZLR 1. Only the House as a whole can waive such privilege - and it would be unlikely to do so. Any attempt to prosecute the SFO under any secrecy provision is doomed because it can't rely on what was said to the parliamentary committee.

There's a further fish-hook too. Arguably, any attempts to take action against the SFO might, in themselves, amount to contempt of Parliament.

Under standing order 400, the House may treat the following as contempt:

(w) assaulting, threatening or disadvantaging a person on account of evidence given by that person to the House or committee;

Now, it's this provision that caused TVNZ grief and led to it being fined by the House after it took action against Ian Fraser in relation to evidence he gave to a select committee:

> NZ Parliament: "Question of privilege referred on 16 February on the action taken by Television New Zealand in relation to its chief executive, following evidence he gave to the Finance and Expenditure Committee"

Whether a complaint to the police or action by the police might trigger this provision, I'm not sure. But it's something that seems to present a rather awkward hurdle for NZ First's attempt to get back at the SFO for their evidence before the committee.

The Scope of Judicial Review: Who and What may be Reviewed?

Some more reading for people who have trouble sleeping at night. Below is a paper that Jenny Cassie and I prepared for and presented at the NZLS CLE's "Administrative Law Intensive" in August 2008.

> Jenny Cassie and Dean Knight, "The Scope of Judicial Review: Who and What may be Reviewed?" in Administrative Law (NZLS CLE, Wellington, August 2007) 63

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The Scope of Judicial Review: Who and What may be Reviewed? Jenny Cassie (Barrister, Thorndon Chambers, Wellington) and Dean Knight (Lecturer, Faculty of Law and Associate Director, New Zealand Centre for Public Law, Victoria University of Wellington)

Introduction

This area is notorious for its terminological multiplicity and confusion. When discussing the concept of justiciability in the Australian context, Finn alludes to the confusion that exists about terms such as "jurisdiction", "justiciability", and the "limits of public law":

There is a complex relationship between questions of jurisdiction, justiciability and the limits of public law. At common law, these concepts are particularly difficult to separate. However, they remain analytically distinct. First, the outer limits of public law and its attendant remedies have traditionally been set by the public/private divide. Judicial review has been held to be available to remedy abuse of statutory and prerogative powers, but not abuse of contractual or other common law powers by the Crown. The latter powers are not unique to the Crown and any remedy for their abuse is said to lie in private rather than public law. In this sense, exercises of contractual power and other private law powers are sometimes said to be 'non-justiciable' at public law. But this is misleading for two reasons. First, misuse of such powers remains justiciable at private law. Private law remedies are potentially available. Second, 'non-justiciability' is a narrower concept than 'public power'. The mere fact that a power is classified as 'public' rather than 'private' does not entail its justiciability. Many prerogative, and arguably even some statutory, powers are still viewed by the courts as non-justiciable. The jurisdiction of the courts is also a separate concept. This is most evident when that jurisdiction is conferred by statute, such as the Federal Court's jurisdiction conferred by the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act). ... Where jurisdiction is conferred by common law, it is likely to be coterminous with the limits of public power described above.

These three concepts combine to set a preliminary question in any judicial review application: is the decision capable of being reviewed by judicial review? It is important though to remember that that question has two quite distinct sub-questions:

• first, does the Court have jurisdiction to review the particular decision?
• secondly, assuming the decision is reviewable, is the decision justiciable?

As will be seen, the courts have sometimes fudged the distinction between these enquires or not made it clear whether their rational for non-intervention is a jurisdictional concern or non-justiciability concern. Consistent with the adopted elsewhere, this paper addresses the net effect of those questions by organising the types of decision-makers into matrix combining both institutional and functional perspectives: Questions of jurisdiction and justiciability have traditionally been explored through this perspective. The demarcation between public and private has tended to be addressed by marshalling the cases into their respective categories according to the outcome of the judicial enquiry, with the implicit corollary that the categories will serve as analogues for later cases. To a certain degree, we continue that tradition by later discussing the cases organised in a similar fashion. Before doing so, however, we think it important to discuss some of the difficulties with the public–private demarcation and to record some caveats about the nature of the enquiry. Also, as others have noted, questions such as this raise the full gamut of contextual factors; the outcome will depend on "a careful analysis of the nature of the decision-maker and of the subject matter (nature) and surrounding circumstances of the decision". The outcome tends to depend on an overall evaluative judgement or assessment of these factors, not formalistic application of precedent. [continues...]