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Ombudsman (Protection of Name) Amendment Bill (Consistent) (Section 14) [2019] NZBORARp 17 (29 March 2019)
Last Updated: 1 June 2019
29 March 2019
Attorney-General
Ombudsman (Protection of Name) Amendment Bill v 4.0 – Consistency with the
New Zealand Bill of Rights Act 1990
Our Ref: ATT395 / 289
- We
have considered whether the Ombudsman (Protection of Name) Amendment Bill
(‘the Bill’) appears to be consistent with
the rights and freedoms
affirmed in the New Zealand Bill of Rights Act 1990 (‘the Bill of Rights
Act’).
- We
have concluded that the Bill appears to be consistent with the rights and
freedoms affirmed in the Bill of Rights Act. In reaching
that conclusion, we
considered the Bill’s consistency with s 14 (freedom of expression), the
freedom most obviously affected.
The intended effect of the Bill
- Clause
5 of the Bill if enacted will replace s 28A of the Ombudsman Act 1975 (the
Act).
- The
existing s 28A says that no person may use the name ‘Ombudsman’ in
connection with any business, trade, occupation
or services unless the Chief
Ombudsman consents in writing to them doing so. There is no restriction on the
type or class of persons
(natural or legal) to whom the Chief Ombudsman may
grant consent.
- Successive
chief ombudsmen developed criteria to guide their decisions on requests to use
the name. Those criteria included, as a
“first-hurdle criterion” for
applicants wishing to use the name ‘Ombudsman’, determining whether
the public
interest in there being a new non-Parliamentary ombudsman exceeded
the public interest in non-proliferation of the name.1
A recent Court of Appeal case held it was unlawful for the Chief
Ombudsman to apply the first hurdle criterion given that the Act
contemplates
the giving of approvals in appropriate cases, and the criterion amounted to a
fetter on the Ombudsman’s intended
discretion in considering those
approvals.
- The
Bill if enacted would introduce a more restrictive regime to limit use of the
name ‘Ombudsman’. Under the new s 28A
proposed by the Bill, only
three classes of entities/persons may use the name ‘Ombudsman’:
persons appointed under s
3 of the Act (that is the Chief Ombudsman and any
other Ombudsman); someone
1 Financial Services Complaints Limited
v Chief Ombudsman [2018] NZCA 27.
appointed by the Chief Ombudsman under section 11 of the Act as an officer or
employee holding a position with a title that includes
the word
‘Ombudsman’; and certain government departments and organisations
broadly related to government (named in Parts
1 and 2 of Schedule 1 of the Act),
if they are given permission to do so by the Minister responsible for the
administration of the
Act.
- If
the Bill is enacted, it will no longer be possible for persons or entities to
apply to use the name Ombudsman. In that sense there
is to be a complete ban on
the use of the name by anyone but the ‘Parliamentary’ Ombudsmen, and
assistant or deputy Ombudsmen
appointed by the Chief Ombudsmen under the Act,
and such use as is permitted by the Minister (which is possible only for
governmental
departments and public entities listed in Parts 1 and 2 of Schedule
1 of the Act). There will be no possibility for private sector
use of the
name.
- The
Bill would, however, preserve the ability of two non-governmental entities who
already have permission to use the name ‘Ombudsman’
to continue
doing so.2 The Bill also includes a savings provision
in respect of Financial Services Complaints Ltd, the victor in the litigation
mentioned
above, whose application is to be reconsidered by the Chief Ombudsman
in light of the Court’s judgment (and is still pending).
The effect of
that savings provision is that if the Chief Ombudsman permits Financial Services
Complaints Ltd to use the name Ombudsman
it will be able to do so.
Consistency of the Bill with s 14 of the Bill of Rights Act
- Section
14 of the Bill of Rights Act affirms that everyone has the right to freedom of
expression, including the freedom to seek,
receive, and impart information and
opinions of any kind in any form.
- Clause
5 of the Bill engages s 14 because the proposed new s 28A limits the ability of
entities to use the name ‘Ombudsman’,
and makes it an offence for an
entity to use that name without being duly permitted to.
- We
note in passing that the Court of Appeal in Financial Services Complaints
Limited v Chief Ombudsman observed that a complete ban on the use of the
name would be “contrary to the New Zealand Bill of Rights Act 1990 (the
right
to freedom of expression)”3 –
although in the context of that case it was not necessary for the Court to
determine whether a complete ban, if legislated
for, might be justified as a
reasonable limit under s 5 of the Bill of Rights Act.
Is the limitation justified and proportionate under s 5 of the Bill of Rights
Act?
- Limitations
on rights and freedoms may still be consistent with the Bill of Rights Act if
they can be considered reasonable limits
that are demonstrably justified under s
5 of that Act. The s 5 inquiry has been summarised
thus:4
- does
the objective serve a purpose sufficiently important to justify some limitation
of the right or freedom?
- if
so, then:
- The
‘Banking Ombudsman’ and ‘Insurance and Financial Services
Ombudsman’. Both entities are approved dispute
resolution schemes under
the Financial Service Providers (Registration and Dispute Resolution) Act
2008.
3 Financial Services Complaints
Limited v Chief Ombudsman [2018] NZCA 27 at [51].
4 Hansen v R [2007] NZSC 7 at [123].
- is
the limit rationally connected with the objective?
- does
the limit impair the right or freedom no more than is reasonably necessary for
sufficient achievement of the objective?
- is
the limit in due proportion to the importance of the objective?
Importance of the purpose served by this Bill
- The
Ombudsman is an important constitutional actor.5 The
Explanatory Note records that the objective of the Bill is upholding public
confidence in, and understanding of, the role of the
Parliamentary Ombudsmen. We
consider that is a legitimate objective and sufficiently important to justify
some restriction on the
s 14 right. There is, of course, already a restriction
under the current law (in that the Ombudsman’s consent must be obtained
to
use the name). The Bill imposes a greater restriction, by precluding any private
sector use of the name.
- It
is said that under s 28A as it stands (and as interpreted by the Court of
Appeal), it would be difficult to apply any principled
approach to preventing
proliferation of the name given that applicants who are first movers (in
applying for approval to use the
name in their industry) would be unfairly
advantaged compared to others in that industry if those others were not
similarly allowed
to use the name.6 In this state of
affairs it is said that proliferation is a likely consequence of the current
law. The purpose of the Bill is to ‘uphold
public confidence in, and
understanding of, the role of the Parliamentary Ombudsmen’ by precluding
such proliferation.
Rational Connection
- Restricting
the use of the name ‘Ombudsman’ to governmental organisations such
as those listed in Parts 1 and 2 of Schedule
1 would remove the possibility of
applications by non-governmental persons and bodies. This could conceivably
reduce the reported
confusion in the public by ensuring that those entities who
may be permitted to use the name are all entities of a ‘public’
nature, or are all associated with government more broadly.
- That
said, some of the entities listed in Part 2 of Schedule 1 to the Act could not
be said to be clearly associated with central
government or Parliament in the
public mind (Airways Corporation of New Zealand Limited, Tāmaki
Redevelopment Company Limited).
Preserving the possibility that any or all such
entities could be granted permission to use the name Ombudsman might be thought
to
cut across the general aim of the Bill which is avoidance of proliferation
and confusion. However, on balance, we have concluded
that there is a rational
connection between the limit and the objective.
- We
considered whether the objectives of the Bill could be achieved with lesser
restrictions than those imposed. This is best considered
under the next section
– whether the proposed restriction is proportionate to the legislative
purpose.
5 As noted by the Court of Appeal at
[44].
6 A point made in the Regulatory Impact Statement
associated with this Bill, at Section 5.
Proportionality of the measures the Bill adopts to the importance of the
purpose sought to be attained
- As
to the importance of the purpose, there is no empirical evidence of need to
amend the Act to achieve the goal of upholding public
confidence in, and
understanding of, the role of the Parliamentary Ombudsmen. To the extent there
is confusion about the role of
the Parliamentary Ombudsman, as the Chief
Ombudsman reports, it is not clear that this is attributable to the existence of
two private
sector ombudsmen.7 However, the lack of
evidence is not itself telling against the cogency of the reasons for the
proposed restrictions: There are
limits on the ability of government to garner
empirical evidence in making law, especially when the aim of a Bill is
intangible in
nature, as in this instance.
- The
concern underlying the proposed restriction is said to be that, if non-
proliferation of the name is no longer able to be taken
into account as a
“first hurdle consideration”, then there is unlikely to be any
principled reason for restricting use
of the name within a particular sector
(for doing so would distort the market by favouring “first
movers”).8
- The
impact of the restriction is upon private sector entities that might otherwise
have applied for use of the name.
- A
plausible alternative may have been to legislate into effect what we described
above as the ‘first hurdle criterion’.
The Court of Appeal held that
to be an impermissible fetter on discretion but that was because the Act, as
currently worded, contemplated
consents in appropriate cases and the first
hurdle appeared to preclude consideration of the merits of applications.
Legislating
that approach may have met the concern of balancing the public
interests in (on one hand) avoiding proliferation of the name and
possible
confusion and (on the other) there being a new non- Parliamentary ombudsman in
some sphere of commercial activity.
- The
difficulty of that approach is the one identified in paragraph 19 – that
if avoiding proliferation is made a statutory objective
then it entails an
unprincipled “first mover” advantage and could distort the operation
of the market.
- The
proposed new s 28A does not take that path and is in essence a legislative
determination that any use of the name Ombudsman beyond
the current appointees
(and such as the Minister may allow to certain bodies in the First Schedule)
must be prohibited to maintain
confidence and avoid proliferation and confusion.
The question, in terms of s 7 of the Bill of Rights, is whether that can be said
to be a disproportionate limit on the right to freedom of expression (for those
who would otherwise wish to use the name).
- We
do not think it can be said to be clearly disproportionate. Unlike other terms
associated with the administration or dispensing
of justice (court, judge etc.)
the noun ‘Ombudsman’ has not passed into common parlance. It must
also be borne in mind
that the actual speech restricted is the adoption of the
name by a person engaged in “business, trade, occupation or the provision
of services”. That is, the use of the name (that which the Bill would
restrict) would be speech adopted for the purpose of
securing, in a
person’s business, trade, occupation or provision of services, the
benefits associated with the name Ombudsman.
In that sense the
7 A point made in the Regulatory Impact
Statement associated with this Bill, at section 5.
8 A term used by the Court of Appeal: Financial
Services Complaints Limited v Chief Ombudsman [2018] NZCA 27 at [54].
proposed use would trade on the public’s confidence in the
Parliamentary Ombudsman (and the existing grand-parented users).
The purpose of
the restriction is to maintain the confidence associated with the name, which
might be lost if use of the name proliferated
amongst non-governmental bodies.
The restricted expression is therefore akin to commercial expression, as opposed
to the expression
of ideas, and that is salient to the assessment of
proportionality. 9
- Also,
importantly, the Bill saves the ability of the entities who presently use the
name
‘ombudsman’, and saves Financial Services
Complaints Ltd’s extant application.
- For those reasons, the proposed restrictions are not considered to be
disproportionate to the purpose sought to be achieved by the
Bill.
Conclusion
- We
have concluded that the Bill appears to be consistent with the rights and
freedoms affirmed in the Bill of Rights Act.
- This
advice has been reviewed in accordance with Crown Law protocol by Vicki
McCall, Crown Counsel.
Peter Gunn Crown Counsel
|
Noted
Hon David Parker Attorney-General / /2019
|
- See
the discussion in Andrew Butler and Petra Butler The New Zealand Bill of
Rights Act: A Commentary (2nd ed, Lexis Nexis, Wellington 2015) at page
537.
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