Contents

Chapter 4
Draft Crown Civil Proceedings Bill and commentary

Part 2 – Procedure and execution

Clause 18 – Same procedural rules to apply

18 Same procedural rules apply to the Crown as to any other person

Subject to this Part, the same rules of civil procedure apply to the Crown as apply to any other person.

Commentary

Clause 18 confirms that the Crown will be subject to the same rules of civil procedure as an ordinary person unless Part 3 of the new Act provides otherwise. The rules of civil procedure that apply in any particular case are provided for in legislation governing that particular type of proceeding. For example, the rules of procedure for proceedings in the High Court are contained in the High Court Rules, while those governing proceedings in specialist tribunals are contained in the rules of procedure for those judicial bodies. Such rules are to apply to the Crown as well as other parties to litigation.

Clause 19 – Attorney-General correct party in civil proceedings against and by the CrownTop

19 Attorney-General correct party in civil proceedings against and by the Crown

(1) Subject to any other enactment, civil proceedings against the Crown must—
(a) name the Attorney-General as the defendant on behalf of the Crown (whether or not other defendants are also named); and
(b) be served on the Attorney-General at the Crown Law Office.
(2) Subject to any other Act, civil proceedings by the Crown must be in the name of the Attorney-General as the plaintiff on behalf of the Crown.

Commentary

In civil proceedings against the Crown, the Attorney-General should be named as the defendant and be served with proceedings at the Crown Law Office unless another statute provides otherwise. This does not preclude other defendants being named as well. Our view is that it is simpler to make the Attorney-General the nominal defendant in all cases.

Civil proceedings commenced on behalf of the Crown must be in the name of the Attorney-General as the plaintiff or applicant unless another statute provides for another person to be named as the plaintiff or applicant.

Clause 20 – Rules about the Crown’s participation in civil proceedingsTop

20 Rules about the Crown’s participation in civil proceedings, etc

A provision in another Act that empowers the making of rules about civil proceedings also empowers the making of rules for 1 or more of the following purposes:
(a) providing for the Crown’s participation in civil proceedings:
(b) in civil proceedings by the Crown for the recovery of taxes, duties, or penalties, providing that the defendant is not entitled to a set-off or counterclaim:
(c) in other civil proceedings by the Crown, providing that the defendant is not entitled to a set-off or counterclaim arising out of a right or claim to repayment in respect of any taxes, duties, or penalties:
(d) in proceedings by or against the Crown, providing that the defendant is not entitled, without the court’s leave, to a set-off or counterclaim if the subject matter of the set-off or counterclaim does not relate to the subject matter of the proceedings:
(e) providing that the Crown is not entitled to a set-off or counterclaim without the court’s leave.

Commentary

This clause carries over the existing provision for rules set out in section 30(2) of the Crown Proceedings Act, with modernised and simplified language. It continues the power to create court rules that restrict the operation of set-off and counterclaim in civil proceedings involving the Crown.

It is unnecessary to specifically include sub-sections 30(1)(a)–(d) of the Crown Proceedings Act because sub-clause 20(1)(a) of the Bill, which provides for the Crown’s participation in civil proceedings, is sufficiently broad to encompass these procedural matters. Section 30(1)(e) of the Act, covering set-off or counterclaim in proceedings involving taxes, duties or penalties, is divided in clause 20 into sub-clauses (b) and (c) to improve clarity. Sub-section 30(1)(f), which restricts set-off and counterclaim where the subject matter is unrelated, is reflected in sub-clause (d) of the new provision. Sub-sections (g) and (h), covering the Crown’s entitlement to set-off or counterclaim, are simplified in new sub-clause (e).

The intention is that rules made under section 30(2) of the Crown Proceedings Act would be carried over and preserved under the new legislation.

Clause 21 – Attorney-General’s ability to interveneTop

21 Intervention by the Crown

The Attorney-General, on behalf of the Crown, may seek a court’s leave to intervene in any civil proceedings that affect the public interest.

Commentary

Clause 21 gives a court the discretion to permit the Crown to intervene in any civil proceeding that affects the public interest. The procedure by which the Crown is joined in any case would be governed by the procedural rules that apply to those proceedings.

Clause 22 – Crown’s obligation to give discoveryTop

22 Discovery and interrogatories by the Crown

Unless disclosure of a communication or information is restricted under another enactment (for example, under section 70 of the Evidence Act 2006), the Crown must discover and produce documents and answer interrogatories in the same way as any other person.

Commentary

Clause 22 carries forward the statutory requirement in section 27(1) of the Crown Proceedings Act for the Crown to discover and produce documents and answer interrogatories in the same way as any other person.

Unlike section 27(3), clause 22 does not grant the Prime Minister or Attorney-General the power to issue a certificate preventing the disclosure of information if they are of the opinion that disclosure would not be in the public interest. Instead, the Crown’s disclosure obligation may only be modified if an enactment provides authority to do so. An example is an order of the court under section 70 of the Evidence Act 2006. In Part 2 of this Report, we recommend a new approach to the way that information that would have previously been subject to an application under section 27(3) should be managed in court proceedings.

Clause 23 – Security for costsTop

23 The Crown not required to give security for costs

The Crown is not required to give security for the costs of any other party in civil proceedings.

Commentary

Clause 23 re-enacts the prohibition in section 18 of the Crown Proceedings Act against ordering the Crown to provide security for costs.

This provision is designed solely to prevent the expense of any application being made against the Crown. The Crown will not satisfy the current preconditions (residency or impecuniosity) for an order for security for costs, and there is no realistic expectation such an order would be needed given that the Crown is unlikely not to be in a position that it will not pay any costs awarded against it.

Clause 24 – Judgment against the CrownTop

24 Judgment against the Crown

A judgment against the Crown must be satisfied by the department that, with the authority of the Prime Minister, is responsible for the administration of government in relation to the subject matter of the civil proceedings.

Commentary

Section 24 of the Crown Proceedings Act provides a complicated regime for the satisfaction of judgments against the Crown. The process requires the court to issue a certificate setting out the amount payable, which is provided to the Governor-General. The Governor-General may then pay the certified amount from the consolidated fund pursuant to a permanent legislative authority. By contrast, claims that are settled prior to a judgment are paid by the relevant department from their annual appropriation. However, we understand that the procedure for paying judgments is not used and that payments are sourced from the consolidated fund and accounted for by departments in a variety of alternative ways.

Clause 24 of our Bill provides a simplified process where judgments must be satisfied by the department connected with the proceedings. The payment of judgments is mandatory, and the Governor-General is not involved. Further, no money is paid out of the consolidated fund. This procedure is more in line with modern government accounting processes and ensures that financial accountability rests with the department regardless of whether or not the claim is settled prior to judgment.

Legal liability remains with the Crown as the defendant. Clause 24 does not therefore include a provision for the court to apportion the damages between multiple departments if one or more departments are involved. In these circumstances, the decision as to how to apportion the damages should be made by the Crown, almost certainly through negotiation.

In our Issues Paper, we acknowledged the constitutional principle that the Crown should not be forced to spend public money without parliamentary authority. We have concluded that our new procedure together with the additional reporting requirements in clause 25 will provide a heightened degree of transparency and parliamentary accountability for the expenditure of public funds to meet court judgments.

Clause 25 – Payments by the Crown in relation to civil proceedingsTop

25 Payments by the Crown in relation to civil proceedings

(1) Each department must include a statement in its annual financial statements itemising all amounts paid by it in that financial year—
(a) to indemnify a Minister under section 14:
(b) to pursue civil proceedings on behalf of the Crown:
(c) to settle existing or prospective civil proceedings by or against the Crown or against any Crown employee:
(d) to satisfy judgments against the Crown.
(2) The statement—
(a) must disclose personal information only in accordance with the Privacy Act 1993:
(b) must not disclose information that is subject to an obligation of confidentiality:
(c) must not disclose information that is subject to any other rule of law or enactment prohibiting disclosure.

Commentary

Clause 25 provides increased transparency with respect to payments by the Crown relating to civil proceedings. While the payments identified in sub-clauses (a)–(d) would be included in a department’s annual financial statements, it is difficult for people who are unfamiliar with government finance to identify which funds represent settlements, judgments and other payments arising from civil proceedings.

Clause 26 – Repeal of the Crown Proceedings Act 1950Top

26 Crown Proceedings Act 1950 repealed

The Crown Proceedings Act 1950 (1950 No 54) is repealed.

Clause 27 – Amendments consequential on repeal of section 5(2) of the Crown Proceedings Act 1950Top

27 Amendments consequential on repeal of section 5(2) of Crown Proceedings Act 1950

Amend the enactments specified in Schedule 3 as set out in that schedule.

Commentary

Section 5(2) of the Crown Proceedings Act provides that the enactments listed in Schedule 1 of the Crown Proceedings Act would bind the Crown. As section 27 of the Interpretation Act provides that legislation will not bind the Crown unless it expressly states that the Crown is bound, clause 27 and the consequential amendments in Schedule 3 insert into each Act a provision that states that it binds the Crown.

Clause 28 – Consequential amendments to other enactmentsTop

28 Consequential amendments to other enactments

Amend the enactments specified in Schedule 4 as set out in that schedule.

Commentary

As a consequence of the repeal of the Crown Proceedings Act and the enactment of this Bill in its place, a number of references in other legislation need to be updated and amended to reflect this change.