Milk Board’s Decision On Hospital Supply Upheld

Press, Volume CI, Issue 29744, 10 February 1962, Page 13

Milk Board’s Decision On Hospital Supply Upheld

11 *h e Christchurch Metropolitan Milk Board not to allow Albany Dairy, Ltd., a wholesale milk company, to supply milk to 1 nncess Margaret Hospital has been upheld by Mr A. P. Blair, S.M., in a reserved decision.

t H Th* bearing was held on December 19 and 20, 1961. Mr W. R. Lascelles appeared for the Christchurch Metropolitan Milk Board, and Mr A. C. Perry represented the appellant company, Albany Dairy, Ltd.

At the hearing the Court was told that in Februarv, 1959, the milk board had 3 t reed that the milk supply for the future hospital, about 60 gallons daily, should be allocated to Albany Dairy, which had requested the board’s assistance in saving . wholesale trade from decline. The decision was later rescinded, and in April, 1959, the board granted the to Christchurch Milk Company, Ltd. Outlining the background to the case, the Magistrate described the “interlocking relationships’’ between the milk company and the milk board, which had been the foundations, he said, for “a submission of possible bias." The milk company, the largest of its kind in Christchurch, was jointly owned by a producers' co-operative and the Christchurch City Council, in equal parts. The city council was also strongly represented on the milk board, and “under the present system a vendor is almost entirely dependent on the board for business. He cannot acquire customers of his own but only through the

For several years Albany Dairy's wholesale business had shown a decline. It requested the board’s assistance, and in February, 1559 w ’ as given the right to supply the future Princess Margaret Hospital.

The Christchurch Milk Company then wrote to the board pointing out its qualifications for the supplv, and in April, 1959, the ’board rescinded its previous decision, though without yet making a final decision on the allocation.

At this stage, said the Magistrate, a third supplier the Christchurch Dairy Company, Ltd., “entered the fray by asking that it be considered for the allocation.” The North Canterbury Hosnital Board then made its application for a milk supnly to the new hospital, but without stating anv preference for a supplier. Soon afterwards f'n August, 1559> the m : lk board alloca’ed the hospital s'looly to the Christchurch Milk Company. “Delicate Task” Since Albany Dairy. Ltd. had appealed, the Magistrate said, ‘‘this Court is faced with the difficult and delicate task of reviewing such decision." He considered that the Court "should not lightly interfere with a decision come to by a statutory body such as the milk board,” since its task was obviously complex and specialised. At the same time, the Court "should not shrink from criticising such a board’s decision if it appears that a miscarriage of justice had occurred.”

The argument for the Albany Dairy, the Magistrate said, was that “as its business was linked to and dependent on the board, and as its decline in business was more marked than that of the Christchurch Milk Company,

it had a special claim on the board for assistance.” It was submitted the reasons given for preference were tenuous, and it was suggested the milk board could not help but be affected by bias.

In his decision the Magistrate said he held there was a real likelihood of unconscious bias. If the board were sitting judicially, he would declare their decision to be bad. However, they were sitting administratively, and the strict rule which applied to judicial decisions did not apply in the same way to administrative decisions. He did not consider it a case where the Court should interfere with the board’s decision. The procedure adopted and the decision come to was in no way contrary to the Milk Act. and the evidence indicated the board did rot act hastily or without obtaining information

“The fact that the board reversed its original decision should not weigh against it,” the Magistrate said. “Hie board made that decision before having had regard to the representations of the Milk Company, arid in my view jt is a sign of maturity rattier than weakness that the board had the resolution to change its earlier decision. . . .

“The board was clearly influenced by the argument that it was more efficient and economical to give the supply *o the Milk Company on what I may call geographical grounds. I am also impressed by this argument. “I give little weight to the argument that because the Milk Company had the previous contract for the North Canterbury Hospital Board it therefore had some form of vested interest in the Princess Margaret supply. . . . "With regard to the appellant’s suggestion that he was entitled to special treatment because his business was shrinking. I feel bound to say this does not impress me very strongly. Doubtless the board has some obligation to keep its dependents finan-

ciaHy healthy, but its paramount duty is to the general public and it must not act pbilantfhropically. “I do not think this is a case of two applicants having more or less equally balanced claims,’’ the Magistrate said. “Had this been euch a case the likelihood of bias would have to be seriiusly considered. Holding as I do, however, that the Milk Company’s claim considerably outweighed that of the appellant, the element of possible bias, unsatisfactory as this feature is, cannot be regarded as creating a miscarriage of justice.” In dismissing the appeal, the Magistrate said he wished to comment on “a matter that I think unfair”—namely, that the appellant had had to wait more than two years to have his case heard. To an extent the Court was at fault, he said, and in subsequent cases if special representations were made he had no doubt that an early fixture would be obtained.