Compensation for the aggrieved

Press, 21 October 1980, Page 21

Compensation for the aggrieved

Should damages be payable to citizens who suffer loss through unlawful administrative action? This question was considered over a period of two years by the Public and Administrative Law Reform Committee, under the chairmanship of Professor J. F. Northey, dean of the faculty of law, Auckland University.

DOUGLAS McKENZIE has been looking at the report of the committee’s findings made to 1 the Minister of Justice.

The committee carried out its study in the context of the huge increase, since the nineteenth century, of the powers of the State. •' /

In important ways, the courts and the; legislature have taken account of thisgrowth by broadening and strengthening the grounds for correcting adminis-. trative decisions. Those responses are not,-; however,’ concerned with monetary compensation for aggrieved citizens; and the committee declares that it has no doubt there is a need for.. compensation of this kind : inmany cases. . ■ Referring to .the provi-.. sions the ; law already makes, the committee said that these. needed to be developed. It rejected the idea, of general legislation creating a right to damages for

loss. resulting from unlawful administrative action; and instead concluded that the : courts.' should be left to expand the scope of common law remedies, while in specific contexts a statutory right to dam,ages or compensation should be created. The • committee ; recommends tha't the Crown should be.made subject to . the; same liabilities in tort as apply to a private per-son.-except as to judicial decisions. The report, has minority dissent: “Some of us consider the report to be too

emphatic in rejecting a statutorily based remedy in damages for losses suf-* fered as a result of unlawful administrative acts or decisions. “They regard the traditional tort concepts as inappropriate to deal with loss, frequently fortuitous and heavy, which results from governmental activities. They believe that it is equally inappropriate — as well as optimistic — to expect that a satisfactory principle of public liability will evolve from the common law based as it is on

concepts of private liability. “In their view what is required is a system which will achieve a more equitable distribution of the loss. Exceptional losses should not be borne by the individual on whom they have been inflicted by the Government or governmental agency in pursuit of the public good. “If the assumption is that the community benefits from this activity, then the conclusion must be that the community should bear the cost of it. Unlawful governmental ac-

tion is to be perceived within this framework. • “Given the limitations of time and resources as well as human frailty, unlawful administrative acts and decisions are inevitable. The cost of these mistakes should not be borne by the individual who suffers them but by the community in whose name they are made. •

“Consequently, the committee members concerned would favour the enactment of a provision empowering the court to award damages for loss suffered as a result of an unlawful administrative action for which no remedy is now available.”

A list which catalogues

the variety of jurisdiction-) al errors goes as follows: A lack of jurisdiction to enter on the inquiry

in question; Giving the decision in bad

faith; A failure to comply with the requirements of natural justice before

reaching the decision

in question; Making a formal order which there was no power to make; In good faith misconstruing the provisions giving the deci-sion-maker power to act so that he or it failed to deal with the question remitted to it, and decided some other question which

was not remitted, to

Refusing to take into account something which a tribunal or official was required to take into account by the statute confer* ring the power; Basing a decision on some matter which, under the provisions conferring the power, the decision-maker had no right to take into account — in short relying upon “irrelevant considerations.”

The committee defines “administrative action” as meaning any action or decision taken by any tribunal or person (but not a

court) empowered by statute.

A special problem was seen with statutory tribunals. “It may be asked whether it is sound policy to impose a liability in damages on tribunals which have no funds of their own, and for which the Crown is not vicariously responsible.”

The following is an example of a situation where a citizen suffers loss but the person excercising a statutory power has done so in good faith and has made an innocent mistake: A customs officer exercises his power under section 275 of the Customs Act, 1966, to “seize any forfeited goods or any

goods which he has reasonable and probable cause for suspecting to be forfeited.” He does in fact suspect, but is later held by a court not to have had reasonable and probable cause for suspecting, that a motor-vehicle has been "unlawfully imported”

(which would bring it into the category of “forfeited goods” under another section of the act). The importer loses die use of motor-vehicle but is vindicated in the later condemnation proceedings. He is entitled to damages for conversion: indeed the right to bring such an action is expressly envisaged by section 281 of the act. The Crown, sued in the name of the Attorney-Gen eral would be vicariously liable for the customs officer’s tort.