Q19: Do you understand the legal position?

Do you understand the legal framework you are operating under?  Are there any legal questions that you should seek advice on?

Decisions can be invalidated if decision-makers misunderstand or misdirect themselves about the legal position under which they are operating. 

This issue may arise because the decision-maker or advisors apply the wrong legal test, or ask the wrong question.  One obvious example is when ‘glossing’ or imprecise language is used to describe statutory requirements or considerations, with the effect that the Court can be persuaded that the decision-maker failed to properly consider the whole statutory provision.

A decision-maker might also misconstrue the common law (judge-made law), for example by misunderstanding rules around admissibility of evidence in an inquiry context.

New Zealand Steel Ltd (the applicant) had asked MBIE to investigate whether or not the Chinese government was subsidising the manufacture of galvanised steel coil and, if so, whether the subsidisation was causing material injury to the applicant (as the sole domestic manufacturer).  At international law, subsidisation occurs where a government or public body provides a financial contribution that is specific to a particular industry. 
On the basis of MBIE’s advice, the Minister of Commerce and Consumer Affairs determined that galvanised steel coil from China was subsidised only to de minimis levels, and therefore was not causing material injury to the domestic steel industry.  As a consequence, countervailing duties were not imposed on Chinese imports of galvanised steel coil. The applicant challenged the Minister’s decision.
On review, the High Court held that there were two material errors in MBIE’s advice to the Minister which meant that the Minister’s decision was unlawful. The first error was MBIE’s advice on whether an entity was a “public body” (relevant to whether subject goods receive subsidies in China). The High Court held that MBIE did not apply the right test. The second error was MBIE’s treatment of various investigations by regulators in other countries. The High Court found that MBIE’s advice differed from the findings of the other overseas regulators and that MBIE did not properly inform the Minister about the reliability of conclusions reached by overseas investigations. 
New Zealand Steel Ltd v Minister of Commerce and Consumer Affairs [2018] NZHC 2454
The Court of Appeal held that the Chief Ombudsman made an error of law in equating “likely” in section 27(1)(a) of the Official Information Act 1982 with ‘more likely than not’ – seen as a higher bar and one that was unacceptable to impose on departments considering information release.
Pearce v Thompson [1988] 1 NZLR 385
The Court of Appeal held that a participant in a Royal Commission (the ‘Winebox Inquiry’) could apply for judicial review of a finding, even though its recommendations had no direct legal force, where there was an alleged error of law which affected his reputation.
Peters v Davison [1999] 2 NZLR 164