Contents

Chapter 19
Crown and State sector defendants

Procedure

Relationship with Crown Proceedings Act 1950

19.52A further question to consider is the potential application of the Crown Proceedings Act 1950 to pecuniary penalty proceedings against the Crown.

19.53“Civil proceedings” are defined in the Crown Proceedings Act as “any proceedings in any court other than criminal proceedings” except for certain proceedings including judicial review, habeas corpus and mandamus. Section 3 provides for the types of claim that may be brought by or against the Crown under the Act. Section 3(2)(c) is of closest application to pecuniary penalty proceedings:

any cause of action, in respect of which a claim or demand may be made against the Crown under this Act or under any other Act which is binding on the Crown, and for which there is not another equally convenient remedy against the Crown.

19.54The Commission is assessing the coverage provision in its current review of the Crown Proceedings Act.583 Ideally, there would be legislative clarification of whether pecuniary penalty proceedings are “civil proceedings” for purposes of the Crown Proceedings Act.

19.55It may also be useful for penalty proceedings to expressly apply certain aspects of the Crown Proceedings Act relating to procedure, especially if it is modernised following the separate current Commission review of that Act. These could be aspects such as:

(a) section 12 – manner of proceedings;
(b) section 14 – method of making the Crown a party to proceedings;
(c) section 16 – service of documents and time for filing defence;
(d) section 17 – nature of relief;
(e) section 18 – appeals;
(f) section 24 – satisfaction of orders against the Crown;
(g) section 27 – discovery; and
(h) section 30 – rules of court.

19.56It would be desirable to develop model clauses for pecuniary penalty statutes to declare penalty proceedings to be subject to the Crown Proceedings Act, or aspects of it. Using such clauses would help to overcome any current ambiguities in the Crown Proceedings Act relating to pecuniary penalties.

Relationship with Crown Organisations (Criminal Liability) Act 2002Top

19.57The other potential source of procedural provisions that might be relevant to pecuniary penalty proceedings against the Crown is the Crown Organisations (Criminal Liability) Act 2002. Again, it would be desirable to develop model clauses to adopt or modify procedural aspects of that Act that might usefully be applied to penalty proceedings by analogy, such as:

(a) section 7 – legal status of certain Crown organisations;
(b) section 8 – conduct of proceedings;
(c) section 9 – rights and privileges of Crown organisations;
(d) section 10 – restrictions on the privilege of self-incrimination (penalty privilege);
(e) section 11 – derivative Crown immunity;584 and
(f) section 12 – appropriation.

19.58The Crown Organisations (Criminal Liability) Act also provides a useful model of a procedural statute dealing with aspects of Crown liability. The following features may be useful in a pecuniary penalty context:

(a) definition of “Crown organisation”;
(b) confirming which statutes give rise to liability; and
(c) confirming procedural matters.

19.59Should the number of pecuniary penalty statutes continue to increase in future, it may be desirable to consider enacting legislation to confirm the pecuniary penalty statutes under which Crown organisations are liable to pecuniary penalties, and the applicable procedures. This could be done either as an amendment to the Crown Organisations (Criminal Liability) Act 2002 or as a stand-alone statute along similar lines. A procedural statute could provide a useful clarification of Crown liability, and provide a vehicle for confirming or negating Crown liability under any future pecuniary penalty regime.

Public sector immunitiesTop

19.60A consideration in any pecuniary penalty statute will be whether:

In Chapter 14, we discuss issues relating to attributing liability between a body corporate and its officers under a pecuniary penalty regime. Where that regime extends to the Crown and State sector defendants, similar consideration will need to be given to liability attribution and the circumstances in which an agency and individuals may each be liable as principals.

19.61Individuals employed by public bodies are not generally immunised against criminal liability except in specific circumstances.585 However, statutory immunities from civil proceedings for individuals employed by public bodies could extend to pecuniary penalties, unless the pecuniary penalty statute provides otherwise. Any proceedings against a member or employee of a public body would need to take account of:
(a) section 86 of the State Sector Act 1988 (public service chief executives and employees are immune from liability in civil proceedings for good faith actions or omissions in pursuance or intended pursuance of their duties, functions or powers);
(b) section 121 of the Crown Entities Act 2004 (no civil liability for a member’s or employee’s act or omission in good faith in the performance or intended performance of the entity’s functions);
(c) section 43 of the Local Government Act 2002 (members indemnified for any civil liability if acting in good faith and in pursuance or intended pursuance of the responsibilities or powers of the local authority); and/or
(d) specific immunities under any statute.586

19.62It is unclear whether these provisions were drafted in contemplation of liability to a pecuniary penalty. An initial question is whether these provisions would extend to such liability. It can be fairly strongly argued that section 86 of the State Sector Act, in dealing with immunity from liability in “civil proceedings”, would cover pecuniary penalty liability. Other formulations based on “civil liability” may be less certain. It is therefore desirable for a pecuniary penalty statute to confirm whether the statute is subject to or overrides the public sector indemnities and immunities in any respect.

19.63The accountability of the Crown and its employees, including the immunity under section 86 of the State Sector Act and whether it is the most appropriate way of protecting Crown employees, is being considered in the Commission’s review of the Crown Proceedings Act.587 The underlying principles include protecting Crown employees from personal liability where they have acted in good faith in the course of their employment, the interest in allowing employees to carry out their roles objectively and not defensively, and not deterring people from entering the public service by incurring potential personal liability. These provisions reflect the public policy tradition that public servants are, in some respects, in a different position to private sector employees.

19.64In Chapter 15, we discuss the role of indemnification and insurance of pecuniary penalty liability in the private sector. It might be argued that statutory immunities perform a similar role in the public sector, although private sector insurance imposes its own market discipline on the insured that may not be present for public sector immunities and indemnities.

19.65However, we expect that in most cases the public sector immunities and indemnities, primarily designed to neutralise the tort liability of individuals (but not their public sector employers), would not unduly interfere with the regulatory objectives of a pecuniary penalty regime. Consideration should be given to confirming the limits of the coverage of the public sector immunities and indemnities; for example, whether to expressly clarify that coverage does not extend to intentional breaches.

583Law Commission A New Crown Civil Proceedings Act for New Zealand, above n 537.
584ACCC v Baxter Healthcare (2007) 232 CLR 1 (HCA); R Wright “The future of Derivative Crown Immunity – with a Competition Law Perspective” (2007) 14 Competition and Consumer Law Journal 240.
585For example, Crimes Act 1961, s 216N: immunising certain persons from liability in relation to intimate visual recordings when carrying out law enforcement or judicial process functions. Compare with Crown Organisations (Criminal Liability) Act 2002, s 11: Crown immunity not to apply in relation to offences; and Health and Safety in Employment Act 1992, s 56(2):
If a Crown organisation fails to comply with a provision of this Act, any of its officers, directors, agents, or employees concerned in the management of the organisation who directed, authorised, assented to, acquiesced in, or participated in the failure is a party to, and guilty of, the failure and is liable on conviction to the punishment provided for the offence, whether or not the Crown organisation has been prosecuted or convicted.
586For example, see Law Commission Crown Liability and Judicial Immunity – a response to Baigent’s case and Harvey v Derrick, above n 537, Table 4, at 98–170.
587See Law Commission A New Crown Civil Proceedings Act for New Zealand, above n 537, at ch 6.