Recent Judgments ADMINISTRATIVE LAW: DENIAL OF JUSTICE

Press, Volume XCVIII, Issue 29024, 13 October 1959, Page 14

Recent Judgments ADMINISTRATIVE LAW: DENIAL OF JUSTICE

Refusal To Insured Claimants LOW v. EARTHQUAKE AND WAR DAMAGE COMMISSION [By a Legal Correspondent] Before Mr Justice T. A. Gresson, at Hamilton. This case is an example of how people can “become submerged in the rising tide of administrative law,” to quote the judge’s words. The departmental commission, which deals with claims in respect of disastei’ damage under the earthquake and war damage legislation, refused to hear insured claimants in support of their claim against the disaster fund. The foundations of their home had become damaged, and the house had been rendered unfit for occupation, after exceptionally heavy rain and flood conditions. The commission rejected the claim, and its decision was final. The Supreme Court held that the commission’s decision, made without giving the claimants a full and fair hearing, was a denial of natural justice.

The plaintiffs, Mr and Mrs Low, owned a house property at Te Kuiti. The house stood on a hillside overlooking the town. As everyone must do, they had insured against extraordinary damage as defined in the regulation under the Act, and had regularly paid their premiums. In February of last year the town of Te Kuiti was invaded by extraordinary flood water and in some streets the water was flowing waist high after exceptionally heavy and steady rain. Till then the hillside on which the Lows’ house stood had given every appearance of stability. Mr Low, who was Mayor of Te Kuiti, had to direct emergency measures and organise assistance. On returning to his home, he found that the foundations had given way so that the house was unsafe for occupation. (It is problematical whether the house can ever be rendered habitable). Two neighbours’ houses were in similar plight. Claim On Fund

On March 24 Mr and Mrs Low lodged their formal claim against the disaster fund with the Earthquake and War Damage Commission. It was accompanied by a detailed submission, supporting photographs, newspaper cuttings, and an engineer’s report. He also wrote to the Minister in charge of the commission, and said he wished to attend and present his claim before the commission.

The Minister replied to the effect that the commission’s functions were administrative, and it had no judicial powers. For those reasons it did not receive claimants or their solicitors to make representations in person, and it was unlikely that it would agree to Mr Low’s appearing before it. On April 29 Mr Low again wrote to the Minister. Among other things, he drew the Minister’s attention to the fact that the commission’s functions were at least quasi-judicial. and representation would be in order. He also detailed the special circumstances of his claim, and added that anything he might say could be checked against technical reports in the hands of the commission. No reply was received. Claim Rejected

On July 29 the commission’s secretary wrote to Mr Low and said that, at a meeting held on the previous day, the commission had decided that the damage to his property was “landslip damage,” and not extraordinary disaster damage, as defined in the Act. It had rejected his claim. In an action against the commission Mr and Mrs Low alleged a denial of natural justice in that they were denied a reasonable hearing or representation and the opportunity to call evidence. They complained that expert reports obtained by the commission itself were not disclosed to them, and no opportunity was given them to rebut such reports or cross-examine the experts upon them. This was admitted by the commission.

In the Supreme Court argument was presented on two preliminary questions of law. The principal one was this: Whether the decision of the commission in rejecting the plaintiffs’ claim constituted a denial of natural justice by a tribunal bound to observe the rules of natural justice? Questions Of Law

Mr Justice T. A. Gresson. who heard the argument, said, in the course of a lengthy judgment, that it was clear from the evidence before him that the commission allowed Mr Low to make written submissions and to file expert reports in support of his claim. The commission itself had also obtained reports from qualified sources. The reports that Mr Low had obtained from his consulting engineers and his own submissions were placed before the commis-

sion’s advisory experts; but no reciprocal opportunity of inspecting the reports obtained by the commission itself was offered to Mr Low or his advisers. No specific request, however, was ever made to that effect.

The deputy chairman of the commission had conceded in cross-examination that the commission had refused to allow Mr Low the opportunity of being heard before it, and he said that, in doing so, the commission had followed its usual practice. Mr Justice Gresson examined the legislation, and held, that the regulations made under it were valid. He passed on to consider the question whether, in rejecting the plaintiffs’ claim, the commission had contravened the principles of natural justice; whether they had observed the necessity to act justly by just means. Commission At Fault His Honour said that the regulations placed the fate of any claim arising from the compulsory insurance involving damage by extraordinary disaster or landslip in the hands of the commission, save that, if a claim was admitted by the commission, any question of amount might be referred to arbitration. If the commission rejected a claim by an insured person, its decision was final and conclusive. The regulation intended that the commission’s decision should admit of no further disputation on the matters set forth in it. The learned judge went on to say that the commission, in rejecting the plaintiffs’ claim in a matter which had arisen between the commission itself and the insured, .was determining a question affecting the rights of subjects—namely, the extent of the plaintiffs’ insurance cover under the compulsory statutory policy. In this case the commission, though primarily an administrative body, was entrusted with the heavy responsibility of acting in a sense as a final judge in its own cause. In such circumstances, his Honour said, the commission’s obligation to observe the principles of natural justice could surely be no less than if it were deciding a question between two independent parties. It was bound to act in good faith and to listen i fairly to both sides, for that ’>As a duty lying on everyone who decided anything. Justice Denied ! His Honour held that, in arrivj ing at its decision, the commisj sion had been bound to act in a judicial or quasi-judicial manner j and observe the principles of natural justice. In his opinion, the commission had contravened those principles in refusing the plaintiffs a full and fair hearing and by acting upon uncommunicated evidence in its own possession. In conclusion, Mr Justice T. A. Gresson said that the task of doing justice between the subject and the administrative branches of Government was just as important as the task of doing justice I between man and man. | He answered the question before the Court as follows: I “The decision of the Earthquake and War Damage Commission in rejecting the plaintiffs’ claim constituted a denial of natural justice.” The proceedings before the commission were ordered to be removed into the Supreme Court for review, and the Court said it would hear counsel further as to the form of the order which should be made. The plaintiffs were given £35 costs against the commission, as upon an argument on a point of law; an allowance for two extra days at 12 guineas a day, plus junior counsel at 10 guineas a day; and disbursements and witnesses’ expenses. Counsel for the plaintiffs, Tomkins, Q.C., and J. E. Chapman;

for the commission, the SolicitorGeneral, Wild, Q.C. and Wood. Solicitors for the plaintiffs, J. E. Chapman (Te Kuiti); for the commission, Crown Law Office (Wellington).