Contents

Chapter 19
Crown and State sector defendants

Legislative drafting

Legislative presumptions

19.16The common law approach was that the Crown is only bound by statute if expressly named, unless the necessary implication of the statute was that the Crown is bound by it:556

If it can be affirmed that, at the time when the statute was passed and received the royal sanction, it was apparent from its terms that its beneficent purpose must be wholly frustrated unless the Crown were bound, then it may be inferred that the Crown has agreed to be bound.

19.17This rule of construction, as subsequently codified in interpretation statutes, has been strictly construed to require an express legislative statement:557

No enactment binds the Crown unless the enactment expressly provides that the Crown is bound by the enactment.

19.18The common law response has been to develop a presumption against Crown liability unless it is “abundantly clear” from the statute that the legislature intended Crown liability:558

There is, I think, the strongest presumption against attaching to a statutory provision a meaning which would amount to an attempt to impose upon the Crown a liability of a criminal nature. It is opposed to all our conceptions, constitutional, legal and historical. Conceptions of this nature are, of course, not immutable and we should beware of giving effect to the strong presumption in their favour in the face of some clear expression of a valid intention to infringe upon them. But we should at least look for quite certain indications that the legislature had adverted to the matter and had advisedly resolved upon so important and serious a course.

19.19The New Zealand authority is Southland Acclimatisation Society v Anderson and the Mines Department:559

The increasing trend of government participation in what may be generally described as areas of social welfare legislation would suggest that the inclusion of the Crown within the scope of general criminal liability must be increasingly accepted. I do not as yet, however, see any tendency to recede from the proposition that the Crown is only to become liable, either criminally or civilly, where it is abundantly clear that the legislature has intended such a result.

19.20In contrast, the High Court of Australia decision in Bropho v State of Western Australia established a purposive approach to the interpretation exercise, enabling the question of parliamentary intention to be considered in the round, and not rigidly or exclusively from the express provisions of the statute.560 A more recent Australian case suggests that the presumption may not be as strict in relation to the imposition of liability for pecuniary penalties, in finding that the presumption informs rather than controls the assessment of whether the Crown has liability under a particular enactment.561

19.21However, Southland Acclimatisation Society remains the current authority in New Zealand. This suggests the desirability of an express statutory statement, either positive or negative, on the issue of Crown liability under a pecuniary penalty regime, to put the matter of parliamentary intent beyond doubt.

Crown and agents of the CrownTop

19.22Of the current pecuniary penalty statutes, the Commerce Act 1986 arguably meets the “abundantly clear” standard that would make the Crown potentially liable to pecuniary penalties (to the extent that any Crown agent engages in trade), although even this statute could go further and include a positive statement that the Crown is liable to pay pecuniary penalties other than under section 80, to balance the statement that the Crown is not liable to pay a pecuniary penalty under section 80.

19.23The Unsolicited Electronic Messages Act 2005 also contains statutory indicators of Crown liability: a “person” is defined to include an individual and an organisation; “organisation” expressly includes a government body; “government body” includes a department as listed in Schedule 1 of the Ombudsmen Act and a Crown entity under the Crown Entities Act 2004. Under section 45, if the perpetrator of a civil liability event is an “organisation”, the court may apply the higher maximum penalty level ($500,000). Nevertheless, there is potential for argument as to whether this is “abundantly clear”. Express legislative statement may be desirable if the intent was to impose liability on the Crown for a civil liability event.

19.24Other statutes, such as the Biosecurity Act 1993 and the Hazardous Substances and New Organisms Act 1996, purport to bind the Crown and include the Crown in the definition of a “person”, suggesting that the Crown is covered by the pecuniary penalty provisions. However, given the strength of the statutory presumption, even this interpretation may be insufficiently clear. Therefore, when reviewing existing pecuniary penalty statutes, the opportunity should be taken to assess whether there is sufficient clarity and certainty about the liability of Crown organisations, and whether any statutory clarification may be desirable.

19.25The closer the relationship between a public body and the Crown, the more likely that express statutory advertence would be needed to impose liability for breach of a pecuniary penalty statute. The application of the Interpretation Act presumption to Crown agents was considered in a case before the Supreme Court of Canada. The governing statutes of the defendants were found by the majority to confer Crown agent status such that each had the benefit of Crown immunity from cartel legislation that did not specifically bind the Crown:562

At common law the question whether a person is an agent or servant of the Crown depends on the degree of control which the Crown, through its ministers, can exercise over the performance of his or its duties. The greater the control, the more likely it is that the person will be recognized as a Crown agent. Where a person, human or corporate, exercises substantial discretion, independent of ministerial control, the common law denies Crown agency status. The question is not how much independence the person has in fact, but how much he can assert by reason of the terms of appointment and nature of the office.

19.26However, it is unlikely in New Zealand that Crown agents established as Crown entities would be found to be subject to the level of ministerial control that might confer the presumptive benefit of section 24 of the Interpretation Act (NZ). Although obliged to give effect to government policy as directed by the responsible Minister, these Crown agents have a measure of discretion as to how they carry out their statutory functions.563

Public bodies at a remove from the CrownTop

19.27The general wording of pecuniary penalty statutes will extend to public entities that are incorporated or established by statutory instrument, and are at some degree of remove from the Crown (for example, Crown entities, local authorities and tertiary education institutions), without express advertence to coverage or liability in the specific statute.564

19.28One example of express advertence is section 6 of the Commerce Act:

(1) This Act applies to every body corporate that is an instrument of the Crown in respect of the Government of New Zealand engaged in trade.
(2) Notwithstanding any enactment or rule of law, proceedings [including pecuniary penalty proceedings] under Part 6 may be brought against a body corporate referred to in subsection (1).
19.29In the interests of certainty, clarity and transparency, pecuniary statutes should be as explicit as possible about whether public entities are included in, or excluded from, the regime, such as the approach taken in the Commerce Act.565

Conclusion

19.30It is desirable for pecuniary penalty statutes to be as specific as possible about their application to the Crown and the resulting consequences: simply stating “this Act binds the Crown” is not sufficient.

19.31Each pecuniary penalty statute should state clearly and expressly:

19.32In relation to coverage, it may be desirable or appropriate to expressly target the application of the pecuniary penalty regime to certain agencies by reference to the nature of their activities. For example, the Commerce Act applies to the Crown and instruments of the Crown where the particular entity is engaged in trade.567

19.33In relation to setting maximum penalty levels, the “percentage of turnover” formulation will not be appropriate in relation to the Crown and State sector defendants.

556Province of Bombay v Municipal Corporation of Bombay [1947] AC 58 (PC) at 63. See Steven Price “Crown Immunity on Trial – the Desirability and Practicability of enforcing statute law against the Crown” (1990) 20 VUWLR 213 at 214 and 217.
557Interpretation Act 1999, s 27.
558Cain v Doyle (1946) 72 CLR 409 (HCA) at 424.
559Southland Acclimatisation Society v Anderson and the Mines Department [1978] 1 NZLR 838 (SC) at 842.
560Bropho v State of Western Australia, above n 536, finding the provisions of the Aboriginal Heritage Act 1972 (WA) to apply to Crown land, and s 17 (prohibiting any person from damaging or destroying an Aboriginal site or object) to apply to employees and agents of the Crown. See also Andrew Beatty “Prosecuting The Crown For Environmental Offences” (paper presented to Conference on Environmental Crime, Hobart 1–3 September 1993) at 2: “In order for the Crown to be bound it is not necessary that the intention should be ‘manifest’ from the terms of the statute or that its purpose would be wholly frustrated if the Crown were not bound”. Also see Steinwall, above n 555.
561Construction, Forestry, Mining and Energy Union v Victoria (No 2), above n 547, considering the liability of the Crown under the Fair Work
Act 2009 (Vic).
562R v Eldorado Nuclear Ltd; R v Uranium Canada (1983) 4 DLR (4th) 193 (SCC) at [42]. See also Construction, Forestry, Mining and Energy Union v Victoria (No 2), above n 547, at [85]; and Steinwall, above n 555, at 322–324.
563On the issue of control, see Bank Voor Handel en Scheerpvaart NV v Administrator of Hungarian Property [1954] AC 584 (HL); Tamlin v Hannaford (1950) 1 KB 18 (CA); and NT Power Generation Pty Ltd v Power & Water Authority (2001) ATPR 41-814.
564See Interpretation Act 1999 definition of a “person” as including a corporation sole as well as any body of persons whether incorporated or unincorporated. See also s 7(a) of the Crown Entities Act 2004 noting that Crown entities are bodies corporate established under statute.
565See Unsolicited Electronic Messages Act 2007.
566For example, see definition of the “Crown” in Public Finance Act 1989 as including all Ministers of the Crown and all departments (including Police, the Defence Force, the Security Intelligence Service, Parliamentary Counsel Office, Office of the Clerk and the Parliamentary Service) but not a Crown Entity, a state-owned enterprise, an Office of Parliament, or a body corporate or other legal entity with the power to contract.
567Commerce Act 1986, ss 5 and 6(1).