Chapter 4
Relationship to public law

Damages for administrative failures

4.3There is no private law cause of action for the failure to meet an administrative law standard in and of itself. Our proposed Crown Civil Proceedings Bill would not change this, either by expressly enabling such a cause of action, or by expressly prohibiting one.

4.4In New Zealand, courts have not generally permitted negligence or the breach of statutory duty tort as means by which administrative errors, that are not other torts, are compensated. For example, in Minister of Fisheries v Pranfield Holdings Ltd, the Court of Appeal overturned McKenzie J’s award of damages to the affected fishermen on the grounds that they had not been able to establish what would otherwise have been considered to be a common law tort.36 The Court of Appeal rejected the contention that some statutory obligations might give rise to an entitlement, the frustration of which might sound in damages.37 In the context of NZBORA, the Court of Appeal has recognised that the failure to observe natural justice might give rise to a compensable interest under relatively rare circumstances.38 It is not clear how such a compensable interest would equate to a common law award of damages, but it might be conceptualised as “vindication”: an appropriate amount to recognise the breach of natural justice that has occurred.
4.5The Law Commission for England and Wales suggested in a Discussion Paper issued in 2006 that there should be a remedy for administrative failing based on a concept of “serious fault”.39 In its final Report the Commission recorded that its proposals had failed to garner significant support, and indeed had received much opposition in England.40
4.6Our view is that setting out the circumstances in which administrative law breaches might result in compensation lies outside the scope of this project, which is focused on procedural reforms. Considerable wisdom remains in the views of the 1980 Public Law Committee:41

We recommend that whenever a new statute confers powers that, if exercised unlawfully will cause economic loss, consideration should be given to the inclusion of a provision relating to compensation for losses flowing from any unlawful decisions given by the donee(s) of the power. We recommend that the Government should, by Cabinet minute, impose the responsibility for this consideration on the Government Department initiating such legislation, on the office of Parliamentary Counsel, and on our Committee. If we decided to recommend the inclusion of a compensation provision, we would transmit our recommendation both to the department responsible for the legislation and to the Minister of Justice. The compensation would not necessarily be recoverable as damages in a tort action. The principles on which liability should be determined could be tailor-made to the nature of the power exercised.

36Minister of Fisheries v Pranfield Holdings Ltd [2008] NZCA 216, [2008] 3 NZLR 649.
37Goodship and Pranfield Holdings Ltd v Minister of Fisheries HC Wellington CIV-1997-485-13, 30 June 2006 at [65]–[75].
38Combined Beneficiaries Union Inc v Auckland City COGS Committee [2008] NZCA 423, [2009] 2 NZLR 56.
39The Law Commission for England and Wales Administrative Redress: Public Bodies and the Citizen (Consultation Paper No 187, 2006) at pt 4.
40The Law Commission for England and Wales Administrative Redress: Public Bodies and the Citizen (Report No 322, 2010) at pt 3.
41Public and Administrative Law Reform Committee Damages in Administrative Law (Report 14, May 1980) at [23].