Contents

Chapter 6
Civil proceedings

Recommended approach for civil proceedings

6.18We think that legislation is needed in order to achieve a procedure that is applied consistently and that ensures national security information is protected whilst also respecting the right to natural justice and the principle of open justice. This legislation should clearly define the respective roles and powers of the judiciary, the executive, the non-Crown parties and special advocates. Our recommended approach for managing the disclosure and use of national security information in civil proceedings is intended to achieve these objectives.

6.19For information that falls within our definition of “national security information”, our approach replaces common law public interest immunity, the certificate regime found in section 27(3) of the Crown Proceedings Act and the procedure relating to matters of state in section 70 of the Evidence Act.

6.20Our recommended approach should operate within the case management process that would normally apply to the proceedings, with some necessary modifications to protect the national security information and to ensure judges can make decisions regarding the use of the information on a fully informed basis. The initial discovery processes should remain the same. There will be an obligation to identify and list otherwise discoverable national security information that is being withheld. Discoverable information and documents that are believed to be national security information should be identified and listed in a neutral way, and it should be clear to the non-Crown party that it is being withheld on the basis that it is national security information. There would be parallels in this regard with how information that is subject to legal professional privilege is managed at the discovery stage.

6.21Under our approach, the Crown’s decision to withhold national security information at the discovery stage can be challenged. If challenged, a preliminary hearing will be held, and the judge can decide, among other things, whether or not the case can fairly continue if relevant national security information is excluded. The ability to withhold information from discovery means that the claim for exclusion of relevant national security information will be first made by the Crown, which may ultimately be called on to justify its decision.

6.22Having held a preliminary hearing, one option available to the judge is to order that the court adopt a closed hearing process for the substantive portion of the case where the national security information is dealt with.

6.23Our approach shares some important common features with the United Kingdom’s Justice and Security Act 2013.95 Most relevant for the purposes of this chapter is that it establishes judges as the arbiter of whether a claim for non-disclosure has been properly made and empowers them to look at the national security information in order to decide how it should be managed in civil proceedings. In the New Zealand context, the government will make the claim that information should not be disclosed, and it would then be the role of the court to decide if the claim meets the legal test. In deciding if the claim meets the legal test, we would expect the courts to be circumspect and mindful of the distinct roles of the executive and the judiciary in our system of government and give significant weight to the expertise of the executive in assessing risks to national security.

6.24Judges’ decisions will be informed by submissions from special advocates, who are trained to deal with national security information and represent the interests of the non-Crown party, and submissions from the Crown. Decisions will also be subject to appeal to a higher court.

Initial claim for withholding national security information and challenges to that claim

6.25At the discovery and disclosure stage, the court should use the case management process that would normally apply to the proceedings. The normal case management process should only be departed from where it is necessary to ensure that the relevant information is protected while issues around discovery and disclosure are addressed.

6.26Our approach requires the Crown to assert that information it holds that would otherwise be discoverable should be withheld because it is national security information.96 The Crown’s claim of non-disclosure will most often arise in two circumstances: first, as a result of the standard discovery exercise where the Crown has identified the information as being relevant but non-disclosable because of security interests; and second, when information is not identified by the Crown but is requested by the non-Crown party.

6.27All that is required at this stage is for the Crown to present an arguable claim that the information meets the definition of national security information and should not be disclosed. The assertion is not conclusive, because if the other party disagrees with the Crown, they can ask the court to evaluate if the claim is fairly made.

6.28If another party challenges the Crown’s claim, a preliminary hearing should take place. As much of this hearing should be held in open court as possible, with the non-Crown party and their lawyer present and able to make submissions. However, in most cases, it will be necessary for a portion of the hearing to be held under closed conditions so that the national security information can be put before the court.

6.29As discussed in chapter 5 at [5.39], our view is that holding a closed procedure at this preliminary stage is justified in order to protect the information while issues around discovery and disclosure are resolved.

6.30The court could refuse to hold a closed preliminary hearing in circumstances where it decides that there is no possible way that disclosing the information would be likely to prejudice national security or any of the other interests specified in the definition. Additionally, as in all cases that involve a contest as to discovery, the court can always refuse to hold a closed preliminary hearing where it is satisfied that the non-Crown party is conducting a fishing exercise or information requested by it could in no possible way be relevant to the case.

Preliminary hearings on disclosure of national security informationTop

6.31At the preliminary hearing, the court will need to consider two things:

(a) Is the information relevant?97

(b) Is the information national security information?

6.32If the answer to both (a) and (b) is yes, the court must decide how to deal with the information in the particular case, for example, it could be excluded from proceedings, disclosed to the non-Crown party (possibly with protective measures such as closing the court and supressing details) or disclosed in a closed procedure.

6.33In order to ensure that the information is protected while these matters are determined at the preliminary hearing, the judge should have the following powers:

(a) The power to close the court to the public and to exclude non-Crown parties, their lawyers, the media and any other person who does not have security clearance to access the national security information.

(b) The power to appoint a special advocate to represent the interests of the excluded non-Crown party.98

(c) The power to review the national security information and to hear argument about it from representatives on behalf of all parties to the case.

(d) The power to direct that a summary of the national security information be produced and provided to the non-Crown party and their chosen counsel, as far as is possible without revealing the content of the national security information, in order to enable them to instruct the special advocate.

6.34We acknowledge the inherent difficulties that can arise when assessing the potential relevance of a particular piece of information at a preliminary hearing. We note that assessing the relevance of information in cases involving national security information may also be more difficult than in conventional litigation. Information held by security and intelligence agencies is often fragmented, and the way in which the information is received, collected and analysed is driven by those agencies’ respective functions, priorities and capabilities and, in some cases, the functions and capabilities of other entities that first provided the information. Information that emerges as the case progresses, whether through the provision of summaries of information or otherwise, can lead to a case being reframed or refined. In some cases, a lengthy and iterative process may be required to resolve these issues. As a result, we expect that judges may have to case manage the discovery process more intensively than they might in other litigation.

6.35In our view, despite the additional issues that might arise as a result of the potential relevance of national security information, the court should continue to approach the assessment of relevance at the preliminary stage in the same way it would with other information. However, one additional issue that the court will have to take into account is the fact that, although represented by a special advocate, the non-Crown party and their lawyer would not have had the opportunity to see the information and might not have been able to present a full argument on the issue of relevance.

Should the information be excluded?Top

6.36If the court is satisfied that the case can be fairly, or more fairly, determined without reference to the national security information, it should be excluded from the proceedings, and the case should proceed.

6.37A hypothetical example where the court may well conclude that exclusion would not result in unfairness is where the national security information could only support the Crown’s case but the Crown does not seek its inclusion. Another example might be where, although the information could help the Crown if presented in closed procedures, the non-Crown party would be unduly prejudiced by the use of a closed procedure. In another situation, the court might conclude that exclusion may not be fair where the national security information would assist the non-Crown party in bringing or defending a claim. These cases will require increased scrutiny to assess if it is in the interests of justice for the case to continue if the national security information is excluded.

Alternative to exclusionTop

6.38If the court is not satisfied that the case can fairly be determined if the national security information is excluded, it should consider whether or not any other existing powers or mechanisms might be available to protect the national security information and enable the proceedings to be fairly determined. Such mechanisms could include suppression orders, allowing the concealment of witnesses’ identities or closing the court to the public and media.99 This kind of approach might be appropriate where, for example, the non-Crown party already possesses the national security information or knows the identity of the witness. In such cases, excluding the non-Crown party may not contribute to the protection of the national security information, but it might still be necessary to take steps to protect the national security information, such as by excluding the media.

6.39If the court decides that no alternative mechanism or combination of mechanisms can adequately protect the information and enable the proceedings to be fairly determined, the court will have to decide whether or not a closed procedure should be used. A closed procedure would enable the national security information to be used as evidence in the substantive determination of the case while preventing disclosure to the non-Crown party and the public.

Closed procedure for use of national security informationTop

6.40In some cases, after having regard to all of the circumstances of the particular case, the court may decide that national security information must be considered in determining the substantive case and cannot be protected through existing mechanisms outlined above. In these instances, the court should have the power to order that a closed procedure be used for the part of the substantive determination of the case that involves the information.

6.41The judge would have the power to order a closed hearing where the national security information is to be used as evidence. The court should exclude the non-Crown party, their lawyer, the public and media, and it should appoint a special advocate to represent the interests of the non-Crown party. It should also order the production of a summary of the national security information unless it is not possible to do so without revealing the national security information.

6.42The majority of the case should still be held in open court. The modified process should only be available for those limited parts of the proceedings that discuss or refer to the national security information. In practice, therefore, a court may go into closed sessions more than once during the course of a case.

6.43Using a closed procedure for the substantive determination of a civil case represents a significant departure from the standards of natural justice and open justice that are traditionally found in New Zealand law. As such, the closed substantive procedure should be kept as a last resort. In this context, we are mindful of the comments of Baroness Berridge during the passage of the Justice and Security Bill (UK):100

It should be a competition of interests, a battle even for the Government to show that national security outweighs fair and open justice and that the nature of these proceedings is so unusual and so contrary to our principles of a fair trial that it should be only when nothing else is possible.

6.44Whether or not a closed procedure should be used must be decided by the court on the facts of the case and having considered the views of the Crown and non-Crown parties. A closed procedure should only be ordered where the court is satisfied that the national security information is sufficiently relevant to the proceedings that it is in the interests of justice to use a closed procedure rather than to exclude the information and allow the case to proceed. As part of this assessment, the court will need to decide if the restrictions on the principle of open justice and the right to natural justice that would result from using a closed procedure are justified by the factors that are in favour of the case being determined using the national security information.

6.45In deciding whether to use a closed procedure, the court should have regard to the degree to which the national security information is likely to be of assistance to the non-Crown party or is determinative of the Crown’s case. In our view, using a closed procedure is more likely to be in the interests of justice when the national security information supports a claim or defence of a non-Crown party but the only alternative method of protecting the information would be exclusion, which would be unfair.

6.46It should only be in rare cases that a closed procedure is used to enable the Crown to rely on national security information that supports its case but prevents the information being disclosed to the non-Crown party and their counsel. The court would need to pay careful regard to potential prejudice the non-Crown party will suffer as a result of not having direct access to the information that may support the Crown’s case.

Does this approach provide sufficient protection for the Crown’s interests?Top

6.47The availability of a closed procedure and the powers available to the court to tailor a procedure to the particular case should be sufficient to protect national security information. Our recommended approach limits the circumstances where national security information is used to the bare minimum. Where national security information is before the court, it will either be in the context of a closed procedure involving special advocates, or it will be subject to other protective mechanisms available to the court (if they are capable of providing the necessary level of protection).

6.48Under our recommended approach, judges control the proceedings and therefore make the final decision about the disclosure and use of national security information in civil proceedings. This is consistent with the responses received from most of our submitters as well as those individuals and organisations that we consulted outside of government. However, as we have described above, our approach ensures that, in making those decisions, judges are fully informed by arguments from the Crown and security-cleared special advocates.

6.49While some submitters suggested that allowing the executive to override the courts’ decisions in some circumstances might be acceptable, we think that it would have undesirable implications for the constitutional relationship between the courts and the Crown. It is inconsistent with the principles of open justice and natural justice and is ultimately unnecessary under our model. However, for completeness, we discuss the executive override model and the reasons why we do not recommend its adoption in more detail in [6.60]–[6.92] below.

6.50The Crown will retain the power to decide not to bring a case, withdraw a civil claim or attempt to settle if it would be required to disclose national security information. Any concerns that the court may err in part of its assessment or that a procedure adopted by the court does not adequately protect national security information can be sufficiently addressed by the ability of either party to appeal the decision of the court in the usual way.

Proceedings in which the Crown is not a partyTop

6.51Under the recommended reforms discussed in Part 1 of this Report, the Crown will be subject to the same discovery and disclosure obligations as an ordinary person unless legislation provides otherwise.101 A consequence of this is that, in some cases, it may be required to disclose information pursuant to a non-party discovery order. We therefore need to consider how national security information should be handled in such situations.
6.52For the purposes of our discussion, a non-party discovery order is an order sought by a party to a civil proceeding against someone who is not a party to the proceedings on the grounds that the non-party holds or is believed to hold information that may assist the development or resolution of the claim. An order of this nature might arise, for example, from an application under Rule 8.20102 or 8.21103 of the High Court Rules or (more rarely in New Zealand) pursuant to a Norwich Pharmacal Order.104

6.53It would probably only be in a rare case that the Crown was not a primary party or at the very least an intervenor in any case where national security information was relevant. However, when a non-party discovery order is sought against the Crown and relates to information that the Crown considers is national security information, a departure from the ordinary discovery process is required to ensure that the information is properly protected whilst the application is determined.

6.54Under our recommended approach, the court would have the power to hold a closed hearing to determine whether or not the information met the definition of national security information (and was therefore deserving of additional protection) and whether it met the applicable test for ordering non-party discovery in the particular case. The non-Crown party making the application would be represented by a special advocate, and a summary of the information should be provided to the non-Crown party to the extent it is possible to do so without revealing national security information.

6.55As we explain in Chapter 9, the Crown must meet the actual and reasonable costs of the special advocate. However, the court has power to make a costs order against another party if the circumstances of the case justify such an order. In the case of a non-party discovery application the costs of appointing the special advocate should ordinarily be paid by the Crown. However, the court would retain discretion to award costs against any other party if the circumstances of the case justified it.

6.56Where the court finds that the test for ordering discovery is not met, the application will fail. However, if the court is satisfied that the test for ordering discovery is met and that the information is national security information, it should have all the same powers to order a closed substantive hearing that it would have in cases where the Crown is a party to the proceedings.

6.57As with proceedings in which the Crown is a party, the court should decide whether the interests protected by refusing the application for non-party discovery are outweighed by other considerations that make it desirable in the interests of justice to disclose the information or allow it to be used in a closed procedure.

6.58It is crucial that national security information remains subject to control by New Zealand law and that any court process in which it is used is subject to the control of the New Zealand judiciary. The jurisdictional limits of New Zealand law mean that our recommended closed hearing model can only be used for proceedings in New Zealand. This means that a non-party discovery order could not be made if the information was being requested for the purpose of proceedings in a foreign jurisdiction.

6.59We considered whether or not non-party discovery orders for national security information should be subject to a blanket exclusion or a ministerial certificate regime similar to sections 17 and 18 of the Justice and Security Act 2013 (UK). In our view, while these mechanisms provide a great deal of certainty, they do so at the expense of proper judicial scrutiny of the Crown’s claims for non-disclosure and involve no balancing of the respective interests engaged both for and against disclosure.

RECOMMENDATIONS

R12Section 27(3) of the Crown Proceedings Act 1950 should be repealed and replaced by new legislative provisions that provide for the disclosure and management of national security information in civil proceedings.

R13Section 70 of the Evidence Act 2006 should be amended to:
  • include information that would currently be covered by common law public interest immunity; but
  • exclude national security information, which will be dealt with under the new legislative provisions.
R14National security information should be defined as information that, if disclosed, would be likely to prejudice:
(a) the security or defence of New Zealand; or
(b) the international relations of the Government of New Zealand; or
(c) the entrusting of information to the Government of New Zealand on a basis of confidence by the government of any other country or any agency of such a government or any international organisation.
R15The court should hold a closed preliminary hearing to assess how national security information should be used (if at all) in the proceedings.

R16A closed hearing should have the following features to ensure that national security information is protected while before the court:
  • The judge must close the court to the public and exclude non-Crown parties, their lawyers, the media and any other person who does not have security clearance to access the national security information.
  • The judge must appoint a special advocate to represent the interests of the excluded non-Crown party.
  • The judge will be able to review the national security information and hear arguments about its use from representatives on behalf of all parties to the case.
  • The judge must direct that a summary of the national security information be provided to the non-Crown party and their chosen counsel. If the court is satisfied that it is not possible to produce a meaningful summary without disclosing national security information, the judge may waive this requirement.
  • The judge has a supervisory role over the final content of summary.
R17The judge should determine whether to exclude the national security information, make the national security information available to the non-Crown party (including with protective measures) or direct that the national security information be heard under closed procedures. The matters that must be taken into account are:
  • whether the information in question falls within the definition of national security information;
  • whether national security interests can be adequately protected if the national security information is provided to the non-Crown party;
  • whether, having regard to the degree to which the national security information is likely to be of assistance to the non-Crown party or determinative of the Crown’s case, the proceedings can be fairly determined without it being put before the court;
  • the degree of potential prejudice to the non-Crown party if the national security information is heard under a closed procedure; and
  • whether the interests protected by the withholding of that information are outweighed by other considerations that make it desirable, in the interests of justice, to disclose the information or allow it to be used in a closed procedure.
R18Where an application is made for non-party discovery against the Crown in respect of information the Crown claims is national security information, the judge should have the power to hold a closed hearing.
95See Justice and Security Act 2013 (UK), pt 2.
96As discussed in chapter 5, we saw considerable benefit adopting a broad definition of national security information. This would allow information such as the identity of confidential sources, surveillance techniques and other technological capabilities to fall within the definition of national security information in most cases. For further discussion and analysis of submitter comments on this point, see Appendix 3 at [4]-[12].
97Or, to put it another way, does it meet the requirements for discovery or disclosure under the rules that apply to those proceedings?
98We discuss the role of the special advocate and how they will contribute to the production of a summary of the information in more detail in ch 9 of this Report.
99The High Court possesses an inherent power to regulate its own procedure and has used this power to, for example, hold in camera hearings, suppress evidence and suppress the identities of people involved in the proceedings. Additionally, the High Court Rules authorise the restriction of access to court files (Rule 3.12) and acknowledge the power of the court to make directions (for example) as to whether evidence on disputed matters of fact should be given in open or closed court (Rule 9.51).
100Baroness Berridge (26 March 2013) 744 GBPD HL 1035.
101See ch 3 and the commentary to cls 18 and 22 of our draft Bill in ch 4 of this Report.
102Rule 8.20 relates to orders for particular discovery before proceedings are commenced. The court can order that a person (who does not necessarily have to be a party) make documents available for discovery if it is satisfied that an intended plaintiff may have a claim against an intended defendant but that it is impossible or impractical to formulate the claim without reference to certain documents and that there are grounds to believe that the person has or had control or possession of the documents.
103Rule 8.21 relates to orders for particular discovery that are made against a non-party once proceedings have been commenced. The court can order that a person make documents available for discovery if it appears to the judge that a non-party is in control or possession of documents that the person would have to discover if they were a party to the proceeding.
104Norwich Pharmacal Orders are rarely used in New Zealand. They are common law disclosure orders made against a third-party defendant who is not involved in the litigation but somehow ‘mixed up in it’. Usually, the defendant in an NPO claim (C) has in their possession documents or material that will be useful to the plaintiff (A) in their claim against (B). Sometimes those documents will enable (A) to properly claim or plead against (B). (C) will not be a party to the litigation between (A) and (B) and thus will not normally be considered a third party by the rules of court: Norwich Pharmacal Co v Customs and Excise Commissioners [1973] UKHL 6. Further discussion of Norwich Pharmacal Orders in the New Zealand context can be found in John Katz “Norwich Pharmacal Orders: 35 years on” (2010) 5 NZIPJ 610.