Chapter 6
Civil proceedings

Public interest immunity in civil proceedings – issues with the current law

6.4The use of national security information in civil proceedings is currently governed by a mixture of the common law doctrine of public interest immunity, section 27 of the Crown Proceedings Act 1950,83 the judicial discretion found in section 70 of the Evidence Act 2006 to exclude evidence pertaining to matters of state84 and the power of judges under section 52 of the Evidence Act to make other orders necessary to protect information that is the subject of an order under section 70. The operation of these provisions was discussed in our Issues Papers85 and earlier in Chapter 5 of this Report.
6.5The courts have also relied on their inherent powers and the consent of the parties to modify court procedure on a case-by-case basis in an attempt to balance the right to natural justice, the principles of open justice and the need to protect national security information from disclosure. Examples are the procedure adopted by consent in the Dotcom proceedings86 and the procedure contemplated by the Employment Court in Zhou.87
6.6The leading New Zealand authority on public interest immunity is Choudry v Attorney-General.88 In Choudry, the majority of the Court of Appeal decided, among other things, not to go behind the Minister’s assertion that disclosing further information would pose a risk to national security on the facts of that case. The court also found that it was unnecessary to view the information that was the subject of the public interest immunity certificate.89

6.7In our view, there is some doubt that the Court of Appeal’s view (expressed in 1999) of the proper role of judges in assessing claims for national security in court proceedings would necessarily preclude the courts from asking to view material to check whether it might properly fall within the bounds of the asserted privilege on a future occasion. This lack of clarity presents a real risk that, unless a procedure like the one we have suggested is adopted, New Zealand courts will be faced with the unpalatable position of either accepting an assertion of privilege without looking at the underlying material (and hence leaving the possibility of injustice to the non-Crown party); or looking at the underlying material and potentially disclosing it to avoid injustice, but without the protections of the closed procedures that we have suggested.

6.8In the United Kingdom, it appears that judges will be given access to and consider information that is withheld on the grounds of national security when it is necessary to do so.90 The Justice and Security Act 2013 (UK) reflects this position: judges look at the relevant information and make decisions about how it should be used in the proceedings.

6.9In New Zealand, this trend is reflected in section 70 of the Evidence Act; the approach adopted by consent in the Dotcom litigation; and the approach contemplated in the Employment Court case of Zhou. There does, however, remain some uncertainty as to whether a judge has the ability to examine the information and decide if the reasons given by the government for issuing a certificate under section 27 of the Crown Proceedings Act are valid.

Disadvantage to non-Crown parties under section 27 of the Crown Proceedings Act and common law public interest immunity

6.10As explained in the Issues Paper A New Crown Civil Proceedings Act for New Zealand (IP 35), public interest immunity is a Crown privilege at common law that authorises the Crown to withhold documents that would otherwise be discoverable if it is of the view that discovery would be against the public interest. The privilege has received partial statutory recognition in section 27(3) of the Crown Proceedings Act.91

6.11The existence of public interest immunity provides the government with the assurance that, ultimately, it can prevent the disclosure of information it considers will threaten an important national interest if disclosed. It is a mechanism designed to avoid harm to important interests but can result in unfairness to non-Crown parties. If it is relied on by the Crown, it prevents non-Crown parties from accessing information that might potentially be relevant to their case. This arguably causes disadvantage to them due to the lack of judicial oversight into the decision to exclude information and the inability of the non-Crown party to argue or have someone argue on their behalf that the information should, in fact, be disclosed.

6.12We have been careful to ensure that any proposed approach provides the necessary assurance to the government that information can still be protected while using a procedure that adheres to the principles of open justice and natural justice and maintains public confidence in the judicial system.

Relationship between section 27 of the Crown Proceedings Act, section 70 of the Evidence Act and common law public interest immunityTop

6.13As outlined in the Issues Paper,92 it is unclear whether common law public interest immunity co-exists with public interest immunity as expressed in section 27. Public interest immunity as expressed in section 27 also appears to be in conflict with section 70 of the Evidence Act with respect to how determinative the government’s claim for non-disclosure is. It is also unclear how section 27 and section 70 relate to each other, in particular, whether or not the use of one provision precludes the use of the other.

Lack of clear statutory authority for closed proceduresTop

6.14Leaving aside special regimes enacted in the Immigration Act 2009, Passports Act 1992, Telecommunications (Interception Capability and Security) Act 2013, Terrorism Suppression Act 2002 or Health and Safety at Work Act 2015, there is no statutory authority covering civil proceedings that permits national security information to be used as evidence without it also being disclosed to the other party. Nor do sections 70 or 52(4) of the Evidence Act93 or section 27 of the Crown Proceedings Act specifically provide for a closed procedure whereby national security information is taken into account at the substantive hearing.

6.15In the absence of legislative guidance, New Zealand courts have fashioned procedures on a case-by-case basis by relying on the consent of the parties and on the inherent or general case management powers of the court. The procedure adopted by the High Court in Dotcom is one such example.

6.16In our Issues Paper National Security Information in Proceedings (IP 38), we raised the issue of whether significant variations should be made to ordinary procedure, where they have implications for natural and open justice, without express statutory authority (even with the consent of the parties).94

6.17This kind of case-by-case approach has the potential to compromise predictability, fairness and public confidence in the court system. Members of the public and people embarking on legal challenges against the government should know in advance what kind of process will be followed where national security information is relevant to their case. Our concern is compounded by the rarity of such cases in New Zealand courts and the scope for the evolution of the common law in between cases.

83Section 27(3) enables the Prime Minister, in the case of national security, or the Attorney-General, in the case of the administration of justice, to issue a certificate that essentially prevents discovery being granted for particular documents. Excluded information cannot then be disclosed to the other party or put before the court as evidence. The doctrine of public interest immunity applies in both civil proceedings and judicial review. See [5.6]-[5.8] for a more detailed discussion.
84Section 70 allows national security information to be withheld in civil proceedings stating that “a judge may direct that a communication or information that relates to matters of state must not be disclosed in a proceeding if the judge considers that the public interest in the communication or information being disclosed in the proceeding is outweighed by the public interest in withholding the communication or information”. Pursuant to section 70, it is the judge who is required to balance the interests in question and determine whether national security information can be withheld or whether the balance lies in favour of disclosure.
85Law Commission, above n 81, at ch 7; and Law Commission National Security Information in Proceedings (NZLC IP38, 2015) at chs 3–5.
86Dotcom v Attorney-General [2012] NZHC 3286. The details of this case, which is still before the court, are discussed in our Issues Paper National Security Information in Proceedings at [5.7]–[5.10]. The High Court has used its general case management powers and inherent jurisdiction to establish a procedure whereby the judge has been provided with access to the relevant information and a special advocate has been appointed to assist at the discovery and disclosure stage. At the time of writing this Report, we understand that the Crown has decided to make an application under s 70 of the Evidence Act to withhold certain information on the grounds of national security and to continue the special advocate regime.
87Zhou v Chief Executive of the Department of Labour [2010] NZEmpC 162, [2010] ERNZ 400. The details of this case are discussed in our Issues Paper National Security Information in Proceedings at [5.11]–[5.15]. Mr Zhou was engaged in an employment dispute with the Department of Labour that was triggered by the withdrawal of his security clearance. The Crown sought to withhold the information received from the New Zealand Security Intelligence Service on the grounds that to disclose the information would prejudice national security. The Employment Court ruled that, under its general power to use a procedure “as the Court considers will best promote the object of the Act and the interests of justice”, it had the power to appoint special advocates. Ultimately, the issue was not finally resolved, as the parties settled the dispute.
88Choudry v Attorney-General (No 1) [1999] 2 NZLR 582 (CA) and Choudry v Attorney-General (No 2) [1999] 3 NZLR 399 (CA).
89Choudry (No 2) at [12].
90The recorded judgments do not appear to reveal any reluctance on the part of the Crown to allow the courts to view documents, nor do they suggest that the courts would tolerate this. The speech of Lord Clarke in Al Rawi v Security Service [2011] UKSC 34, [2012] 1 AC 531 at [145] and [148] is illustrative of what appears to be common acceptance in the United Kingdom of the role of judges when considering public interest immunity claims:
145. I would accept the submission made by Ms Rose that the following principles correctly state the approach to PII as it has stood until now:

ii) Disclosure of documents which ought otherwise to be disclosed under CPR Part 31 may only be refused if the court concludes that the public interest which demands that the evidence be withheld outweighs the public interest in the administration of justice. iii) In making that decision, the court may inspect the documents: Science Research Council v Nassé at pp 1089-1090. This must necessarily be done in an ex parte process from which the party seeking disclosure may properly be excluded. Otherwise the very purpose of the application for PII would be defeated: see the Court of Appeal judgment at para 40.
149. [Repeating Crown counsel’s description of the certification process] After the minister has signed a PII certificate, the balance between the relevant public interests must be made by the judge. In a simple case he will hear argument on both sides and reach a conclusion, often having looked at the documents. There will be no need for special advocates. The position may be very different in a case of complexity, especially a case of great complexity such as this was or would have been but for the settlement. The judge may need assistance in order [to] carry out the balance. Such assistance will not of course be available from counsel for the non-state parties because they will not have seen the documents.
91Law Commission, above n 81, at ch 7.
92Law Commission, above n 81, at ch 7.
93While s 52(4) of the Evidence Act 2006 grants the judge a broad discretion to give any direction necessary to protect the confidentiality or limit the use of information that is subject to a direction under s 70, it does not appear to have been used in relation to “matters of state”, and it remains to be seen how the courts will interpret the combined effect of these two sections.
94Law Commission, above n 85, at [5.18]–[5.20].