Why is the Crown fighting a court case it knows it is very unlikely to win? Because doing so stops it from having to face cases it really would prefer not to deal with.

[Update: see important revisory note at post's end!]

Back in September I wrote this post about a Supreme Court decision that found quite a number of prisoners have been unlawfully detained because The Department of Corrections incorrectly had calculated their release dates. In it I gloomily speculated on the chances of the Government stepping in and legislating to validate such detentions in order to avoid any liability to pay damages to the prisoners involved.

Well, that may yet happen. But before it does, the Government has found another way to kick this particular can down the road by fighting its basic liability to pay damages through the court system. Not, I think, because it believes it has any real chance of being successful in its legal arguments, but rather because the delay and cost involved in doing so will have the effect of burning off a number of prisoners who otherwise might be minded to seek damages from it.

Here's what the Government (or, rather, "the Crown") is arguing. It is saying that when the Department of Corrections calculated the relevant prisoner release dates, it did so in line with an earlier Court of Appeal ruling. So at the time of its calculations, Corrections was just doing what the judiciary had told it was lawful.

Then the Supreme Court came along and decided that the Court of Appeal was wrong in its earlier interpretation of the law. So Corrections also, it turns out, was wrong in terms of what the law says about release dates (even though it was doing what the Court of Appeal told it to do). And if you imprison someone without the law saying you are allowed to, then you are liable to pay damages as a result.

Corrections is now effectively complaining that this outcome simply isn't fair. It shouldn't be liable when it in good faith did what the courts said it ought to do, even if a higher court later says that this was wrong. In other words, the Supreme Court's ruling should have prospective effect only - it should work to change the release dates of future prisoners, but not give rise to any liability for past wrongful imprisonment actions.

That argument is somewhat adventurous, to put it mildly. It has been unanimously rejected by the UK's House of Lords in a case that exactly mirrors New Zealand's situation. And any unfairness in the result isn't peculiar to the Department of Corrections alone, as I noted in my previous post:

If that seems unreasonably harsh for the Department of Corrections, note that it's how things work for everyone. Let's imagine you're in a legal dispute with someone over, say, a contract. You ask your lawyer what you ought to do, and she tells you that the courts clearly have said that you are entitled to cancel the contract without paying damages. So you do so, get sued and win your case at first instance ... only for a higher court to then turn around and overrule those past interpretations of the law. The fact you acted on what your lawyer (correctly) told you the courts had said was the law at the time you acted doesn't release you from liability for breaching the contract based on what the higher court now says the law is - you'll have to pay damages for doing so. 

That's simply how our legal process works ... when a higher court overrules a lower court's past interpretation of the law, it changes not only what that law will be in future, but what that law always was in the past. Because the law both is and was what the higher court in the juridical hierarchy now says it is.

So unsurprisingly, we today get the news that the High Court has rejected the Crown's claim that the Supreme Court's judgment should only be taken to have prospective effect. Which means that any prisoners affected by the Supreme Court's decision - any prisoners who were kept in jail for longer than we now know they ought to have been - can commence proceedings to obtain damages through the courts.

Unless, of course, the Crown now decides to appeal the High Court's ruling. Not because it thinks it could actually win the case - like I say, both extremely persuasive overseas precedent and our entire understanding of how court judgments work tell against this. Rather, because a Court of Appeal hearing and judgment will eat up another few months of time - after which there's always the Supreme Court itself to try.

And only then will any ex-prisoners still within the statute of limitations be able to seek compensation through the court system ... by which time this particular can is a long, long way down the road.

[Update: Someone who knows a bit more about this than I obviously do has suggested the following to me, which I think important to share:

I will note that, as yet, the Crown has not engaged in any poor conduct in the case. Spending a couple of hours opposing an application for summary judgment is pretty low on the lawfare scale. The quantum of compensation sought is also being pursued on the basis that Manga v Attorney General was was incorrectly decided, so their decision not to settle is understandable.

So I'll (partially) withdraw and apologise for now, while retaining my right to vent again if the Crown appeals this decision.]

Comments (9)

by Dennis Frank on December 15, 2016
Dennis Frank

Re "when a higher court overrules a lower court's past interpretation of the law, it changes not only what that law will be in future, but what that law always was in the past. Because the law both is and was what the higher court in the juridical hierarchy now says it is."

This ability of a higher court to change the law both prospectively and retrospectively is rather impressive, eh?  Like magic, our collective reality is thus transformed in an instant from the world people thought they knew into one totally different.  You can see why the judiciary assumed these god-like powers several centuries ago (when rulers relinquished them to parliaments).  Yet, to possess these powers of wizardry and rarely use them suggests the judiciary are models of restraint, doesn't it?

Your citation of the instance of a contract dispute hinging on legal advice & interpretation boils down to the law being a matter of opinion, and only as real as the prevailing opinion at the time.  Okay as long as everyone knows that, but they don't, do they?  Most people believe the law is reliable.  Yeah, I know, it usually is.  Just like in modern physics, things aren't absolutely true or real, just relatively so.

by Felix Geiringer on December 15, 2016
Felix Geiringer

This strategem takes advantage of a major flaw in our human rights jurisprudence.

The Crown has succeeding in convincing the courts that damages in HR cases should be given out sparingly - very sparingly.  So sparingly in fact that someone subjected to an unlawful search where the Police seized and then lost some of his property was told by our Court of Appeal that a declaration was enought and that the High Court was wrong to give out any damages (the HC had awarded a grand sum of $10,000).

Some of the reasoning has been lifted from UK jurisprudence.  From the UK's quite miserly starting point the NZ Courts have been persuaded to be even more miserly still.  But in the UK, a successful litigant can expect to have all of their costs paid on an indemnity basis.  In New Zealand, the starting point is 2/3 of what is considered the reasonable costs when what was reasonable was estimated several years earlier. 

Some decisions have suggested that indemnity costs should be more freely available in HR cases.  There have been some indemnity costs awards.  But only some, and most commonly it seems to be coupled with a decision not to award any damages at all. 

You can go back and look at every succuessfull HR damages action ever in NZ and ask, how well off would a successful litigant be if their lawyer had charged a reasonable fee?  The answer seems to be that every successful litigant would have ended up poorer or at best have broken even.  For daring to challenge the Crown for breaching your rights, you can expect to lose money even if you win your case.  

And you night not win.  If you lose you could end up paying your lawyers costs, the court fees, and even the Crown's costs.  In my experience the Crown has been getting increasingly vicious about seeking costs from unsucessful litigants.  This is justified as detering meritless claims, but also deters many meritful ones.

There are a small handful of litigants who have fought cases and received a small sum.  But this is only because they have had a lawyer willing to take the case for less than a reasonable fee. And when I say small I mean small.  Given how much effort the litigant will put into taking such a case, they would be much better off spending the time doing a minimum wage job. This is not sustainable as a means of affirming or protecting rights - the stated purpose of the New Zealand Bill of Rights Act.

Increasingly, I see my colleagues advising every potential HR claimant that unless they have a lot of money and are looking to make a point, the Courts do not provide a means of affirming or protecting their rights.

by Rich on December 16, 2016

My understanding is that it would be more accurate to say that an appeal decision changes the correct interpretation of the law - the law was always the same, but it was being misinterpreted up until the decision (and may still be being misinterpreted up to a future decision).

I don't see how any workable appeal system could operate differently.

by Nick Gibbs on December 16, 2016
Nick Gibbs

I can't see Bill's first day in the job starting with remunerating prisoners. Especially those who have been convicted on multiple accounts and held in for slightly more than the 1/2 of the sentence they were actually given. I also can't understand why the courts took so long and so many wrong turns on this. Was the legislation opaque and confused? Are the courts incompetent? Why should taxpayers fork out for this? If the legislation was clear then some judicial heads should land in some round buckets over this (metaphorically speaking of course). 

by Dennis Frank on December 16, 2016
Dennis Frank

Hey Nick, I share your concerns but the problem lies in the structure of democracy (stuck in the 19th century).  Lately I've been arguing for removal of the privileged caste status of the judiciary, and lawyers defending the status quo have been responding by pointing out that making judges accountable (for poor performance) to the public threatens our constitutional democracy.

These lawyers aren't retards, they are intelligent well-intentioned people.  They genuinely believe people cannot be trusted to govern themselves.

And, re cost of justice, tradition requires justice to take as long as possible.  The idea that taxpayer money be spent efficiently is way too radical for the judiciary to take seriously, which is why their slackness persists ad nauseum.  I mean, the old saying that `justice delayed is justice denied' rolls off judges like water off a duck's back. They couldn't care less.  That's why legal cases take years to even get into court.

I was fishing for reasons why the judiciary can't be held accountable like any other profession - the constitutional reason was the only one flagged.  But it is also true that the same protection has traditionally been extended to the public service.  If you kill lots of kiwi citizens, the state will protect you from any legal consequences if you are a public servant (Cave Creek) or a corporate manager (Erebus, Pike River).

Almost forty years I've known the NZ judiciary is a morally-corrupt institution (as proven by the facts of these cases) and noticed the political left and right colluding to preserve this disgusting situation.  Perhaps the emperor's new clothes syndrome keeps preventing anyone else here telling the truth about it - but I'm confident that cowardice will not prevail forever.



by Ross on December 17, 2016

And only then will any ex-prisoners still within the statute of limitations be able to seek compensation through the court system ... by which time this particular can is a long, long way down the road.

But even if and when ex-prisoners are compensated, won't they have to hand it over to their victims?

by Andrew Geddis on December 17, 2016
Andrew Geddis

But even if and when ex-prisoners are compensated, won't they have to hand it over to their victims?

Short answer is, it's complicated and not clear.

by Douglas Ewen on February 27, 2017
Douglas Ewen

It is not often that I comment on a case of mine, when it's ongoing, but I think a few points of clarification are warranted.  Andrew Geddis whoever told you the Crown's opposition to summary judgment was worth "a couple of hours" missed the mark by an order of magnitude. Whilst I give my opponent full credit for tenacity, the argument was flawed on every available basis.

The Supreme Court judgment does not even advert to prospective effect. The Crown had to argue that by silence the highest court had left to the lower courts to determine whether the judgment was prospective: prospective prospectivity! As no New Zealand court has ever given such a ruling to date, tracking the argument through, this meant the SC had left the task of determining, not only was the ruling meant to be prospective, but if there is such a thing as a prospective ruling in our legal system. (The Australians for example have answered that in a characteristicly blunt fashion: no there isn't - Ha v NSW).

Whilst proceedings were issued in nthe High Court, they could equally have gone to the District Court. Is it remotely likley that the SC would have given the task of determining a questionn of constitutional moment to a District Court judge? Without saying so?

It is correct that the Manga analysis will require scrutiny, but that is because it is unclear on what basis damages were awarded, given the rolled up award Hammond J ordered (and then discounted). The issue of appropriate inflation adjustment looms large. That is not as simple as it sounds as the Reserve Bank has six different methods of adjusting for inflation.

However, even accepting that quantum is disputed, that does not justify the Crown disputing liability, when surely the basis for doing so is threadbare to say the least.

The Crown could have admitted liability and disputed the amount of the award (as in did on my reading of Wright v Bhosale) and saved a good deal of time and money.

We are now off to the Court of Appeal. Of course.


by Douglas Ewen on February 27, 2017
Douglas Ewen

And next time I post I will use both the spell checker and my glasses...

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