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Judging in context stresses that legal phenomena need to be assessed in their relevant setting. This approach is in tune with reality-based judging, in the interests of achieving substantial merits and justice in the individual case. This approach is the antithesis of one which looks at legal issues in isolation or in the abstract, which focuses on technical considerations, and which gives rise to artificial outcomes.
Judging in context was one of the hallmarks of the judicial approach of Richard Wilberforce. He was a lord of appeal from 1964 until 1982, during which time he played a central role in the Appellate Committee of the House of Lords and in the Privy Council. Many of his speeches and judgments exercised considerable influence on New Zealand law.
This article focuses on one aspect of Lord Wilberforce’s contribution to New Zealand law, namely, his contextual approach to judging. The article begins by outlining the main features of his approach to judging, and then analyses how this approach influenced New Zealand law.
Lord Wilberforce’s contextual approach related to the importance he attached to realities, common sense and individual justice in decision-making, and to his view of the courts in formulating case-law.
Underlying Lord Wilberforce’s approach to judging was a keen sense that his decisions and the consequences thereof should square with reality as he saw it.[1] He viewed the court’s task in terms of grappling individually with each case that arose,[2] and trying to provide just and sufficient responses after taking all factors into account.[3] He would for example speak of “real facts which cannot be changed”.[4] He believed that it was necessary, under a system of judge-made law, that judicial formulations should have “the benefit of hard testing in concrete applications”.[5] In the context of a torts case, he observed that “human conduct can rarely be squeezed into a predetermined slot; and if this is what courts are told to do, they will find ways, according to their views of the merits, of crossing the lines”.[6]
Lord Wilberforce also spoke of the need for decision-making to be in tune with common sense.[7] He believed that the common law was strongly influenced by practical considerations, and he noted that it “always leaves a residue to be completed by common sense”.[8] He once cited a passage from a case for its common sense as between landlord and tenant, and observed that “you cannot overrule common sense”.[9]
For Lord Wilberforce, considerations of justice corresponded with “good sense”, and were more likely where the court addressed the realities of the parties instead of being bound by rigid and artificial considerations.[10] On one occasion he referred to a previous case as showing “how easy it is to reach a just and sensible conclusion once one escapes from a narcotic preoccupation with the occupier/trespasser relationship”.[11]
Lord Wilberforce saw the common law as a developing entity, adjusted and expanded by the judges from case to case by the use of analogy.[12] He was well aware that the common law did not reveal pure logic and clarity.[13] He remarked that the common law often “thrived on ambiguity”,[14] and that “logic in excess has never been the vice of English law”.[15] In a torts case he remarked that “[w]e do not live in a world governed by the pure common law and its logical rules”, and cautioned against compensating “on the basis of selected rules without regard to the whole”.[16] He reflected that the common law often worked by description rather than by definition,[17] and he suggested that “sweeping, unscientific and unpractical” doctrines were “unlikely to appeal to the common law mind”.[18]
The potential misuse and rigidity of legal classifications and distinctions were evident to Lord Wilberforce.[19] For example, he noted in the context of administrative law that there was “the risk of a compartmental approach which, although convenient as a solvent, may lead to narrower distinctions than are appropriate to the broader issues”.[20] Lord Wilberforce also warned against the “formula trap”.[21] He was averse to legal rules and concepts being treated as “universal solvents” or formulae which would provide solutions to every situation.[22] Indeed, he pointed out that a formula (such as acting “bona fide in the interests of the company”) could become “little more than an alibi for a refusal to consider the merits of the case”.[23]
Lord Wilberforce was aware of his difficulty as a judge in going beyond the resolution of an individual problem and stating general principles which could be guides in the future.[24] He noted that facts might differ so greatly that it was impossible to lay down any precise or mechanical general rule.[25] In a case where he could give no clear definition of a dwelling-house entitled to protection, he remarked that the untidy situation reflected “the reality of life”.[26] On another occasion he remarked that “many difficult questions arise and will continue to arise in the infinitely varied situations in which contracts come to be breached”, and that to “plead for complete uniformity may be to cry for the moon”.[27] Instead, Lord Wilberforce believed that all judicially evolved doctrines ought to be “flexible and capable of new applications”, allowing for a decision as to what was most appropriate to the particular matter under consideration.[28] He once observed that the process of ascertaining the meaning of the rule in question “must vary according to the subject matter”.[29]
The conflicting pressures in favour of certainty in the law and those in favour of flexibility in the interest of individual justice were apparent to Lord Wilberforce.[30] He believed that it was “often simpler to produce an unjust rule than a just one”, and that “[t]he question is whether, in order to produce a just, or juster, rule, too high a price has to be paid in terms of certainty”.[31] Nevertheless, where it was possible and appropriate, Lord Wilberforce would favour the judicial formulation which accorded with the contextual realities of the case before him. He once commented:
If I am faced with the alternative of forcing commercial circles to fall in with a legal doctrine which has nothing but precedent to commend it or altering the doctrine so as to conform with what commercial experience has worked out, I know where my choice lies. The law should be responsive as well as, at times enunciatory, and good doctrine can seldom be divorced from sound practice.[32]
Lord Wilberforce’s contextual approach was influential in two key areas of New Zealand law, namely, the interpretation of legal transactions and the formulation and application of legal principles.
Lord Wilberforce’s contextual approach was evident in the interpretation of contracts. The general rule of contract was that, where an agreement was reduced to writing, it was not permissible to present extrinsic evidence to show the parties’ intention or to contradict, vary or add to the terms of the contractual document.[33] However, this rule became subject to a number of exceptions.[34] Particularly as a result of Lord Wilberforce’s speeches in two major cases, a fundamental change took place in contract law, away from a legalistic approach in favour of the contextual interpretation of contractual documents. This change was later seen to “assimilate the way in which [contractual] documents are interpreted by Judges to the common sense principles by which any serious utterance would be interpreted in ordinary life”.[35]
The first key case was the Prenn case.[36] Here, in terms of an agreement, Simmonds was entitled to acquire from Prenn an interest in the ordinary capital of a company controlled by Prenn called Radio & Television Trust Ltd (“RTT”). A necessary condition set by the agreement was that £300,000 profits had to be earned on the ordinary stock of RTT over the relevant period. A dispute arose over the definition of “profits of RTT”. If these words meant the separate profits of RTT alone, as contended by Prenn, the amount over the period fell just short of the target. If the words meant the consolidated profits of the group consisting of RTT and subsidiaries, as contended by Simmonds, the amount was largely exceeded.
In the course of his speech, Lord Wilberforce referred with approval to the “intelligent realism” of a judgment of Cardozo J, that surrounding circumstances may “stamp upon a contract a popular or looser meaning”.[37] Lord Wilberforce stressed that “the time has long passed when agreements, even those under seal, were isolated from the matrix of facts in which they were set and interpreted purely on internal linguistic considerations”.[38] In the case at hand, Lord Wilberforce noted that the scheme of the Companies Act, accepted business practice, the relevant accounts, and the purpose of the agreement pointed to the profits being the consolidated profits of RTT and its subsidiaries. Lord Wilberforce concluded that Prenn’s construction did not “fit in any way the aim of the agreement, or correspond with commercial good sense, nor is it, even linguistically, acceptable”. He therefore found in favour of Simmonds.[39]
The second key case was the Reardon case.[40] Here, a Japanese steamship company (“Sanko”) organised a programme for the construction of tankers in Japanese shipyards. One of the agreements concluded was that Sanko would deliver to Reardon Smith, an English company, a motor tank vessel to be built by Osaka Shipbuilding Co Ltd (“Osaka”) and numbered 354. Osaka was unable to build the vessel in its own yard and subcontracted the work to a company newly created for that purpose (“Oshima”), although Osaka provided a large part of Oshima’s work force and managerial staff. The vessel to be constructed was numbered 004 in Oshima’s books, but 354 in Osaka’s books and in export documents. Although the vessel when built complied fully with the physical specifications in the charters and was fit for the contemplated service, Reardon Smith refused to take delivery of it. This was on the ground that the vessel did not correspond with the contractual description, since it had not been built personally by Osaka and did not bear its yard number.
Lord Wilberforce’s speech began by noting that the underlying reason why Reardon Smith had refused to take delivery was that by the time the tanker was ready for delivery the market had collapsed, owing to the oil crisis of 1974, so that the charterers’ interest was to escape from their contracts. Lord Wilberforce stressed that one did not have to be “confined within the four corners of the document”. He noted the importance of the surrounding circumstances in aiding construction:
No contracts are made in a vacuum: there is always a setting in which they have to be placed. ... In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating. ... what the court must do must be to place itself in thought in the same factual matrix as that in which the parties were.[41]
Lord Wilberforce then proceeded to examine the objective setting of the contract. He noted that “regard may be had to the actual arrangements for building the vessel and numbering it before named”. He pointed out that, so long as the charterers could identify the nominated vessel, they had no interest in whatever contracting or sub-contracting arrangements were made in the course of the building; and that if the market had risen instead of falling it would have been quite impossible for Osaka or Sanko to refuse to tender the vehicle in accordance with the charters. Lord Wilberforce concluded that this was a “simple and clear case” for dismissing the appeals of the charterers.[42]
From the mid-1970s onwards, Lord Wilberforce’s contextual approach to contractual interpretation was regularly cited and applied in New Zealand courts where parties were in dispute as to the terms of their contract. The approach was adopted in interpreting contracts for the sale of land, the payment of royalties on a licensing agreement, and the sale of a fishing licence.[43] The seal of approval for the use of the approach in New Zealand was given by the Privy Council in a case concerning the terms of the sale of shares in a public company.[44] The Wilberforce approach was seen to be in line with commercial reality rather than rigid artificiality.[45]
On one occasion, where a contract for the sale of a business did not contain an expressed restraint of trade clause, the High Court granted an interim injunction that the former owners cease their new business. This was on the basis that it was open to rational argument that the parties must have intended that the former owners would not compete against the purchaser of the business within the original area of operation. In support, Baragwanath J referred to Lord Wilberforce’s “factual matrix” approach, and remarked:
I am of the view that in the case of a layman’s transaction entered into by persons contracting on equal terms, the law should generally strive to give effect to the whole of their common intention, not simply as expressed but also as it may be deduced from their language considered within its factual matrix. A purposive construction is therefore to be preferred, as giving better effect to such policy. To apply a lawyer’s standard of precision to a deal done by two businessmen is likely to defeat their common intention and give an undeserved windfall to one of them.[46]
The use of the Wilberforce approach was not without certain difficulties. On occasions the New Zealand Court of Appeal found that High Court judges allowed context to create uncertainty of meaning, and then used the context to resolve that uncertainty in a manner which was contrary to the plain meaning of the contractual words.[47] For example, in the Pyne Gould case, the court had to decide whether a fax had imposed an obligation on the principal contractor merely to co-ordinate the secondary consultant’s work, or a more extensive obligation as to the quality of the secondary consultant’s work. The fax in question stated that the secondary consultant’s input would be “completely controlled and overseen” by the principal contractor. The High Court judge found, by placing “decisive contextual importance” on surrounding circumstances and evidence, that the primary consultant’s role was one of co-ordination. However, the Court of Appeal found, as a matter of plain and ordinary language, that the fax carried a clear assumption of consistent responsibility for technical aspects of the secondary consultant’s work. The Court, on turning to “Lord Wilberforce’s famous ‘matrix’” test, that the non-textual surrounding circumstances did not much assist interpretation.[48]
Nevertheless, Lord Wilberforce’s contextual approach remained entrenched in New Zealand law. Indeed, it was given new vitality in 1998, when the majority of the House of Lords affirmed and extended Lord Wilberforce’s approach.[49] Lord Hoffmann’s landmark statement on that occasion was later adopted by the New Zealand Court of Appeal.[50] The Yoshimoto case, decided by this Court nearly three decades after the Prenn case, showed the continuing importance of the contextual approach. Here, Canterbury Golf International Ltd agreed to buy Yoshimoto’s shares in a company in order to acquire land owned by that company for development. There was doubt whether resource consents could be obtained to enable profitable development, in particular, as to access over an unformed paper road. The parties’ contract therefore provided that Yoshimoto had to obtain all necessary resource consents within 12 months to qualify for payment of a second instalment of the price. Consent under the Christchurch City Council’s district plan for access via the paper road was eventually obtained shortly before the expiry of the time limit in the contract. However, Yoshimoto then required consent under another (proposed) district plan of the Council, and this consent was not obtained until after the deadline. Canterbury Golf refused to pay Yoshimoto the second instalment of the price on the basis that consent under the proposed plan was obtained outside the time limit in the contract. The Court of Appeal held that a literal construction of the word “necessary” was untenable. The Court found that “necessary” consents meant only those consents required to enable the project “in essence” to proceed, not more technical authorities or consents relating to detail. Consent under the proposed plan was seen to be a technical requirement and not “necessary” under the contract, since it was unrealistic to think that consent to this plan would not follow endorsement already obtained. Thomas J referred to the “shift away from the black-letter approach in the interpretation of contracts” as a result of the Wilberforce speeches in Prenn and Reardon; and affirmed that the meaning of the contract had been identified by “examination of the contract, the commercial objective of the contract and the matrix to the contract”.[51]
Akin to Lord Wilberforce’s emphasis on the contextual interpretation of contracts was his approach to the legal nature of transactions to which tax was potentially attached. In the Ramsay case, the question arose whether tax avoidance schemes consisting of a number of separate transactions, none of which was a sham, but which were self-cancelling, had the effect of producing a loss which was allowable as a deduction for the purpose of assessing capital gains tax. In each case the scheme included a transaction designed to produce a loss to be offset against a gain previously made by the taxpayer which would otherwise be taxable, while another transaction produced a matching gain which was not liable to tax. The House of Lords held that for fiscal purposes the matter should be approached in a broad way, explained as follows in the leading speech of Lord Wilberforce:
Given that a document or transaction is genuine, the Court cannot go behind it to some supposed underlying substance. ... This is a cardinal principle but it must not be overstated or overextended. While obliging the Court to accept documents or transactions, found to be genuine, as such, it does not compel the Court to look at a document or a transaction in blinkers, isolated from any context to which it properly belongs. If it can be seen that a document or transaction was intended to have effect as part of a nexus or series of transactions, or as an ingredient of a wider transaction intended as a whole, there is nothing in the doctrine to prevent it being so regarded: to do so is not to prefer form to substance, or substance to form. It is the task of the Court to ascertain the legal nature of any transaction to which it is sought to attach a tax or a tax consequence and if that emerges from a series or combination of transactions, intended to operate as such, it is that series or combination which may be regarded.[52]
The Ramsay approach came to be applied by New Zealand judges, even in non-tax situations, where the Court believed that if “documents were meant to operate as a series or combination, their effect may be looked at as a whole”.[53] The best-known case in which the Ramsay approach was adopted was the Peters case. Here the plaintiff member of Parliament alleged that the Commissioner of Inland Revenue and the Director of the Serious Fraud Office had acted unlawfully and incompetently in not prosecuting a group of companies for tax evasion. This evasion allegedly related to transactions in which a taxpayer company claimed credits against New Zealand tax for tax paid in the Cook Islands without disclosing that the Cook Islands government had simultaneously repaid almost all of the tax to another company in the same group of companies as the taxpayer. A commission of inquiry was appointed to look into the conduct of the Inland Revenue Department and the Serious Fraud Office. The commission found no tax avoidance or fraud, and no incompetence by the Inland Revenue Department or the Serious Fraud Office. The plaintiff sought judicial review.
The High Court pointed out that, under the Income Tax Act 1976, a taxpayer had to disclose all information necessary to determine the amount of a tax credit, including information to determine whether the taxpayer was entitled to any relief or repayment of foreign tax. The Court said, with reference to Lord Wilberforce’s judgment, that the Inland Revenue Department would have been entitled to look at the effect as a whole of the series of transactions and would undoubtedly have invoked the Income Tax Act if it had been informed of the combination of features of the transactions. The commission was found therefore to have erred in law in concluding that the taxpayer was not required to disclose the tax repayment.[54]
| 2. | Formulation and Application of Legal Principles |
Reflecting his reality-based approach to judging, Lord Wilberforce repeatedly held that legal principles needed to be formulated and applied with due regard to practical contexts. In the Esso Petroleum case, Lord Wilberforce was at pains to emphasise that the “[t]he doctrine of restraint of trade is one to be applied to factual situations with a broad and flexible rule of reason”, and that there was “probably no precise, non-exhaustive test” for deciding when contracts did not enter into the field of restraint of trade.[55] Lord Wilberforce’s emphasis on the practical working of restraint irrespective of legal form, and in the light of the circumstances of each case, was used by New Zealand judges.[56] Again, in the Kuys case, Lord Wilberforce delivered the advice of the Board on an appeal based on an alleged breach of a fiduciary position. He remarked that the obligation not to profit from a position of trust had “different applications in different contexts”, and that “the precise scope of it must be moulded according to the nature of the relationship”.[57] In a series of subsequent cases in which New Zealand judges found breach of fiduciary duty, they quoted Lord Wilberforce’s judgment, variously referring to it as a “broad principle ... stated by our highest authority” and a set of “important directives” to be kept in mind.[58]
One of Lord Wilberforce’s most influential speeches was given in the Boardman case. Here a headmaster was charged with offences involving two pupils at his school. The judge directed the jurors that it was open to them to find the evidence of each boy as corroboration of the evidence of the other. The issue before the House of Lords was whether this evidence was admissible even though it tended to show that the accused had been guilty of a criminal act other than that charged. Lord Wilberforce said that “[q]uestions of this kind arise in a number of different contexts and have, correspondingly, to be resolved in different ways”. He also said that “much depends in the first place upon the experience and common sense of the judge”, and that “whether the judge has properly used and stated the ingredients of experience and common sense may be reviewed by the Court of Appeal”.[59]
The Boardman principles provided judges with a helpful framework while allowing them the discretion to do justice to the particular facts of each case. The flexibility of the speech also meant that it could be used in fact situations remote from the Boardman case, for example in a case of alleged importing of cannabis.[60] The Boardman speech was sometimes used by New Zealand judges to support their rejection of similar fact evidence. In a case where the Court of Appeal held that the trial judge had not warned the jury of the limited and specific purpose for which similar fact evidence could be used, Richardson J quoted in support “the leading modern authority in this notoriously difficult field”.[61] In a case involving five witnesses, the speech was quoted in support of rendering some of the evidence admissible but the rest inadmissible.[62] In other cases, the speech was used (as it was in the Boardman case itself) to support the admission of similar fact evidence.[63] In the Hsi En Feng case, an acupuncturist was charged with counts of indecency on five women patients. The similar fact evidence showed that the accused had conducted his practice in such a way as to create and take advantage of opportunities of sexual contact, not necessary for treatment purposes, with women patients. The Court of Appeal held that it “would be contrary to the requirements of justice to deny the jury the advantage of the full picture”, and the order for separate trials was vacated. Cooke J quoted the landmark judgment of Lord Wilberforce in Boardman, and said that ‘[w]e take the same approach again in this case”.[64]
Lord Wilberforce returned to the theme of the contextual application of legal concepts in two highly significant cases decided in 1981, towards the end of his judicial tenure in the House of Lords. One of these cases, the Playa Larga case, raised questions as to the scope of the “restrictive” theory of sovereign immunity.[65] Sovereign immunity is a doctrine of international law which applies to sovereign states. This doctrine provides that, in general, a sovereign state will not be brought before the courts of another country against the state’s will and without its consent. The exercise of outside jurisdiction is seen to be incompatible with the dignity and independence of a sovereign state. However, the late 20th century saw the rise of state-controlled enterprises, with ability to trade and to enter into contracts of private law. In response, a line of cases, decided in England in the mid-1970s, adopted a “restrictive theory” of sovereign immunity.[66] This theory meant that the commercial activities of states were no longer protected by sovereign immunity.
In the Playa Larga case, pursuant to a contract for the sale of sugar by a Cuban state enterprise to the plantiff (a Chilean company), cargoes of sugar were dispatched to Chile on the vessels “Playa Larga” and “Marble Islands”. In September 1973, following a revolution in Chile, the government of Cuba decided to have no further commercial dealings with Chile. At that time the “Playa Larga”, having discharged part of her cargo, was lying in a Chilean harbour and the “Marble Islands” was still at sea. The remaining cargo from the “Playa Larga” was returned to Cuba and the cargo from the “Marble Islands” was discharged in Vietnam. The plaintiff commenced proceedings against the owners of the “Congreso”, a trading vessel registered in the name of the Cuban government and which was arrested in England. The plaintiff’s actions were in respect of the cargo on the “Playa Larga” and the “Marble Islands”. The High Court granted relief to the Cuban government on the basis of sovereign immunity.
In his speech, Lord Wilberforce conceded that in some situations it might not be easy to decide whether the act complained of was within the area of non-immune activity or was an act of sovereignty wholly outside it. This he said was because the activities of states “cannot always be compartmentalised into trading or governmental activities”. It was against this background that Lord Wilberforce outlined his approach to sovereign immunity:
[I]n considering, under the ‘restrictive’ theory whether state immunity should be granted or not, the court must consider the whole context in which the claim against the state is made, with a view to deciding whether the relevant act(s) upon which the claim is based, should, in that context, be considered as fairly within an area of activity, trading or commercial, or otherwise of a private law character, in which the state has chosen to engage, or whether the relevant act(s) should be considered as having been done outside that area, and within the sphere of governmental or sovereign activity.[67]
In relation to “Playa Larga”, Lord Wilberforce noted that the question had to be answered on a “broad view of the facts as a whole” and not upon narrow issues as to Cuba’s possible contractual liability. He concluded from the evidence that everything done by the Cuban government in relation to “Playa Larga” was done as owners of the ship, and that the government exercised no sovereign powers and invoked no governmental authority. He noted that to hold otherwise would make trading relations as to state-owned ships impossible, and that the restrictive theory was meant to protect private traders against politically inspired breaches or wrongs. However, in relation to “Marble Islands”, Lord Wilberforce found that the acts of the Cuban government remained in their nature purely governmental. Thus, whereas Lord Wilberforce would have allowed the “Playa Larga” appeal, he would have dismissed the “Marble Islands” appeal.[68]
Within a year after Lord Wilberforce’s speech, a New Zealand court applied his contextualised test and its underlying rationale. This was in the Buckingham case, where a United States military transport ship carried private cargo, and a warrant of arrest was issued against the cargo preventing the ship from leaving port with the cargo on board. Hardie Boys J quoted Lord Wilberforce’s speech and, on “[a]pplying that test to this case”, decided on the evidence that the ship had at all relevant times been operating within the sphere of governmental or sovereign activity.[69] Over five years later, in the Reef Shipping case, the Wilberforce approach and supporting policy were applied where a ship owned by the Tongan government and engaged in commercial trading was arrested in New Zealand. Smellie J held that the restrictive doctrine of sovereign immunity as outlined by Lord Wilberforce applied in New Zealand, and that on the facts of the case immunity was not available.[70] The Wilberforce approach came to be affirmed by the New Zealand Court of Appeal, where Cooke P remarked that the “leading exposition of the modern principles” of the doctrine of sovereign immunity “was generally taken to be the speech of Lord Wilberforce in Playa Larga”.[71]
A significant application of the Wilberforce approach to sovereign immunity occurred in the Winebox Inquiry case. This case arose out of the litigation relating to the use of the Cook Islands as a tax haven and which later prompted the Peters case noted above. The commissioner who had been appointed to investigate the matter sought production of documents held in New Zealand by the Audit Office of New Zealand, in its capacity as auditors of the Cook Islands government account. In response, the Audit Office sought judicial review of the commissioner’s action, one of the grounds being that it infringed the sovereign immunity of the Cook Islands.
The Court of Appeal unanimously dismissed the application. All the judges of the Court who delivered judgment quoted the contextual approach of Lord Wilberforce in Playa Larga, and the majority of the Court held that sovereign immunity did not apply in terms of this approach. Cooke P remarked that, seen in isolation, the issuing of a tax credit was an act which could only be performed by a state, and that, at least on the surface, this act would by itself attract sovereign immunity. However, he said that the commercial aspect of the Cook Islands Government dealings was so significant that there could be no doubt that the doctrine of sovereign immunity had to be excluded in relation to the whole inquiry. Henry J, in support, made the following observations, echoing the Wilberforce line:
The context in which the act of the Cook Islands Government in issuing the tax credit is to be considered must include the directly associated promissory note dealing involving the state corporation. That dealing cannot be divorced from the associated collection of “revenue”, and in my opinion lends the transaction as a whole a commercial character, with the element of tax collection becoming largely illusory. To use the words of Lord Wilberforce, when put in context the acts in question can properly be considered as falling within a commercial area of activity of a private law character.[72]
The second leading speech that Lord Wilberforce delivered in 1981 (alongside that in Playa Larga) was in the National Federation case. Here the issue was whether an applicant for judicial review had a “sufficient interest” in the matter reviewed. In 1977, English law had adopted a simplified set of remedies for judicial review of administrative actions by statutory bodies. In terms of this system, a court could not grant leave to bring an application for judicial review unless the court considered that the applicant had a “sufficient interest” in the matter to which the application related.[73]
In the National Federation case, a federation of self-employed and small businesses, representing a body of taxpayers, claimed a declaration that the Inland Revenue had acted unlawfully. The alleged unlawful action related to the so-called “Fleet Street casuals”. These were workers in the printing industry who had for some years been engaged in a process of depriving the Inland Revenue of tax due in respect of their casual earnings. The Inland Revenue, having become aware of this, made an arrangement under which future tax could be collected in the normal way, certain arrears of tax were to be paid, but investigations as to tax lost in earlier years were not to be made. The federation wished to attack this arrangement, and asserted that the Revenue had acted unlawfully in not pursuing the claim for the full amount of tax due. A Divisional Court held that the federation as mere taxpayers did not have a “sufficient interest” to make the application and refused the declaration sought by the federation. The Court of Appeal, by a majority decision, allowed the federation's appeal, and the Inland Revenue appealed.
Lord Wilberforce declared that “the question of sufficient interest can not, in such cases, be considered in the abstract, or as an isolated point: it must be taken together with the legal and factual context”.[74] He pointed out that, not only was there no provision in the relevant legislation on which the appellant’s right could be claimed, but to allow it would undermine the whole taxation system. He decided, on “the evidence as a whole”, that a court had to conclude that the Inland Revenue had acted in this matter genuinely in the care and management of the taxes under the powers entrusted to it. He said that the court should not intervene in this matter at the instance of a taxpayer.[75]
Within a short time, the National Federation approach was adopted by the New Zealand Court of Appeal and became an established part of New Zealand law. In the Wall case there was a challenge to the authorisation of an abortion, and the challenger was not one of the statutory participants in the authorisation procedure. The Court referred to the “important recent decision of the House of Lords”, where Lord Wilberforce had remarked that the “vitally important decision of standing is a mixed question of fact and law”, with emphasis on the relevant statutory scheme. The Court decided that no legal statutory right in the unborn child could be spelled out of the Act under consideration, so as to allow standing.[76] A different result was reached in the Budget Rent a Car case, where two exclusive licences were granted by Auckland Airport Authority for rental car concessions, and judicial review of the Authority’s decision was sought by a third rental car operator wishing to apply for a similar concession. Cooke J referred to the National Federation approach with its emphasis “on the totality of the facts”, and said that “[a]ny tendency to consider the issue of standing in isolation from the nature of the complaint is resisted”. He concluded that, in the present case, the applicant had a “real and obvious interest in the effect of the existing licences”.[77]
The telling impact of the National Federation approach was revealed in the Consumers Co-operative case. A Consumers Co-operative, which carried on a business in foodstuffs and related lines, operated two substantial supermarkets in a business centre. The City Council owned a substantial block of land adjacent to land owned by the Co-operative, and proposed to sell this land to Foodtown Supermarkets. The Co-operative claimed that the Council had not complied with the Public Works Act, and applied for an injunction restraining the Council from proceeding with the sale. In the High Court the judge refused the application for an interim injunction on the ground that the Co-operative did not have locus standi. The Co-operative appealed. The Court of Appeal allowed the appeal and granted an interlocutory injunction. McMullin J stated that “[t]echnical restrictions on locus standi in the interim stages of proceedings should not as a rule be allowed to prevent litigants bringing such matters to the attention of the Courts and, where a case is made out, having them stopped”. In support, he quoted at length the contextual approach of Lord Wilberforce in the National Federation case.[78]
The valuable message of Lord Wilberforce, heeded by New Zealand judges, is that legal issues need to be adjudicated upon in the light of the individual contextual realities of the case at hand. Over the past three decades, the judgments of Lord Wilberforce have been used by New Zealand judges in a range of cases. These have involved, inter alia, the assessment of contracts and taxable transactions, and the application of principles of evidence, private international law and judicial review. The effect of the Wilberforce influence has been to focus judicial attention, in reaching decisions and applying legal principles, on achieving substantial merits and justice in specific contexts, at the expense of artificial, technical or abstract considerations. Repeatedly, New Zealand judges have relied upon Lord Wilberforce’s speeches to give decisions in tune with the parties’ intentions, practical realities and the facts as a whole.
The criticism often made of a contextual approach is that this undermines legal certainty and predictability. It is true that the use of the Wilberforce approach in New Zealand has produced a variety of outcomes in individual cases. As has been seen above, the factual matrix test was sometimes used to supplant clear contractual rights. But the hope of legal certainty in the sense of predictable outcomes in every case is an illusory one and carries the potential for injustice. Lord Wilberforce’s legacy to New Zealand law lay in flexible principles which took account of relevant circumstances and were designed to achieve appropriate and just results. He once observed:
To say that this [approach] produces a measure of uncertainty may be true, but this is an uncertainty which arises in the nature of things from the variety of human experience. To resolve it is part of the normal process of adjudication. To attempt to confine this within a rigid formula would be likely to produce injustices which the courts and arbitrators would have to put themselves to much trouble to avoid.[79]
[*] Professor of Law, University of Waikato.
[1] National Provincial Bank Ltd v Ainsworth [1965] UKHL 1; [1965] AC 1175, 1248 (HL).
[2] Parry v Cleaver [1970] AC 1, 39 (HL).
[3] Jobling v Associated Dairies Ltd [1981] UKHL 3; [1982] AC 794, 804 (HL).
[4] Chancery Lane Safe Deposit and Offices Co Ltd v Inland Revenue Commissioners [1966] AC 85, 136 (HL).
[5] Chaplin v Boys [1971] AC 356, 391 (HL). See also Ratten v Regina [1971] UKPC 23; [1972] AC 378, 390 (PC), and Allen v Gulf Oil Refining Ltd [1980] UKHL 9; [1981] AC 1001, 1011 (HL).
[6] British Railways Board v Herrington [1972] UKHL 1; [1972] AC 877, 912-913 (HL).
[7] Mulholland v Mitchel [1971] AC 666, 680 (HL), and McLoughlin v O'Brian [1982] UKHL 3; [1983] AC 410, 423 (HL).
[8] British Railways Board v Herrington [1972] UKHL 1; [1972] AC 877, 919 (HL).
[9] Liverpool City Council v Irwin [1976] UKHL 1; [1977] AC 239, 255 (HL).
[10] Indyka v Indyka [1969] 1 AC 33, 100 (HL).
[11] British Railways Board v Herrington [1972] UKHL 1; [1972] AC 877, 914 (HL).
[12] British Railways Board v Herrington [1972] UKHL 1; [1972] AC 877, 921 (HL), and Southern Centre of Theosophy Inc v State of South Australia [1982] AC 706, 719 (PC).
[13] Pickett v British Rail Engineering Ltd [1980] AC 136, 148-149.
[14] Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1967] UKHL 1; [1968] A C 269, 331 (HL).
[15] Cassell & Co Ltd v Broome [1972] UKHL 3; [1972] AC 1027, 1114 (HL).
[16] Jobling v Associated Dairies Ltd [1981] UKHL 3; [1982] AC 794, 803 (HL).
[17] Warner v Metropolitan Police Commissioner [1969] 2 AC 256, 309 (HL).
[18] Commissioner for Railways v Valuer-General [1974] AC 328, 351-352 (PC).
[19] Secretary of State for Employment and Productivity v C Maurice & Co Ltd [1969] 2 AC 346, 360 (HL), and Spelthorne Borough Council v Davy [1983] UKHL 3; [1984] AC 262, 276 (HL).
[20] Malloch v Aberdeen Corporation [1971] 2 All ER 1278, 1294 (HL).
[21] Tucker (Inspector of Taxes) v Granada Motorway Services Ltd [1979] 2 All ER 801, 805 (HL).
[22] Secretary of State for Education and Science v Metropolitan Borough of Tameside [1976] UKHL 6; [1977] AC 1014, 1047 (HL), Nova (Jersey) Knit Ltd v Kammgarn Spinnerei Gmb [1977] 2 All ER 463, 467 (HL), and Calvin v Carr [1979] UKPC 1; [1980] AC 574, 594 (PC).
[23] Ebrahimi v Westbourne Galleries Ltd [1973] AC 360, 381 (HL).
[24] Ashfield Municipal Council v Joyce [1978] AC 122, 133 (PC).
[25] Chaplin v Boys [1971] AC 356, 391 (HL) and Ratten v Regina [1971] UKPC 23; [1972] AC 378, 391 (PC).
[26] Maunsell v Olins [1975] AC 373, 389 (HL).
[27] Photo Production Ltd v Securicor Transport Ltd [1980] UKHL 2; [1980] AC 827, 843-844 (HL).
[28] National Carriers Ltd v Panalpina (Northern) Ltd [1980] UKHL 8; [1981] AC 675, 693-694 (HL).
[29] Fothergill v Monarch Airlines Ltd [1980] UKHL 6; [1981] AC 251, 273 (HL).
[30] Chaplin v Boys [1971] AC 356, 389 (HL).
[31] Owners of mv Eleftherotria v Owners of mv Despina R [1979] AC 685, 698 (HL).
[32] Miliangos v George Frank (Textiles) Ltd [1976] AC 443, 464 (HL).
[33] See eg Edwards v O’Connor [1991] 2 NZLR 542, 548.
[34] See eg River Wear Commissioners v Adamson (1877) 2 App Cas 743, 763.
[35] Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28; [1998] 1 All ER 98, 114 (HL), per Lord Hoffmann.
[36] Prenn v Simmonds (1971) 3 All ER 237 (HL).
[37] (1971) 3 All ER 237, 240, reference to Unica City National Bank v Gunn (1918) 118 NE 607.
[38] (1971) 3 All ER 237, 239.
[39] At 241-244.
[40] Reardon Smith Line Ltd v Hansen-Tangen [1976] 3 All ER 570 (HL).
[41] At 574-575.
[42] At 578.
[43] Herriott v Crofton Holdings Ltd [1974] 2 NZLR 383, 387 (SC), Volk v Hirstlens (NZ) Ltd [1987] 1 NZLR 385, 391 (HC), and Edwards v O’Connor [1991] 2 NZLR 542, 548 (CA).
[44] Chase Securities Ltd v GSH Finance Pty Ltd [1989] 1 NZLR 481, 486-487 (PC).
[45] Henderson v Ross [1981] 1 NZLR 417, 429 (CA).
[46] United Pukekohe Ltd v Grantley [1996] 3 NZLR 762, 765 (HC).
[47] Benjamin Developments Ltd v Robt Jones (Pacific) Ltd [1994] 3 NZLR 189, 203 (CA).
[48] Pyne Gould Guinness Ltd v Montgomery Watson (NZ) Ltd [2002] NZEmpC 79; [2001] NZAR 789, 800-806 (CA).
[49] Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28; [1998] 1 All ER 98, 114. Lord Hoffmann said that the background of the contract was famously referred to by Lord Wilberforce as the “matrix of fact”, and that subject to certain exceptions included “absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man”.
[50] Board Park Ltd v Hutchinson [1999] 2 NZLR 74, 81 (CA).
[51] Yoshimoto v Canterbury Golf International Ltd [2000] NZCA 350; [2001] 1 NZLR 523, 531-532 (CA).
[52] W T Ramsay Ltd v Inland Revenue Commissioners [1981] UKHL 1; [1982] AC 300, 323-4 (HL).
[53] Mills v Dowdall (1983) 2 NZFLR 210 (a family transaction).
[54] Peters v Davison [1999] 3 NZLR 744, 756-757 (HC).
[55] Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1967] UKHL 1; [1968] AC 269, 331-332 (HL).
[56] Prudential Assurance Co Ltd v Rodrigues [1982] 2 NZLR 54, 62 (CA).
[57] New Zealand Netherlands Society 'Oranje' Incorporated v Kuys [1973] 2 NZLR 163, 166 (PC).
[58] Coleman v Myers [1976] NZHC 5; [1977] 2 NZLR 225, 333 (CA), and Official Assignee of Collier v Creighton [1993] NZCA 587; [1993] 2 NZLR 534, 537 (CA).
[59] Boardman v Director of Public Prosecutions [1975] AC 421, 442-443, 444-445.
[60] R v Te One [1976] 2 NZLR 510, 513 (CA).
[61] R v Paunovic [1982] 1 NZLR 593, 597 (CA).
[62] R v Geiringer [1976] 2 NZLR 398, 402 (SC).
[63] R v Katavich [1977] 1 NZLR 436, 438 (SC).
[64] R v Hsi En Feng [1985] 1 NZLR 222, 225, (CA).
[65] Playa Larga v I Congreso Del Partido [1983] 1 AC 244 (HL).
[66] The Philippine Admiral [1977] AC 373 and Trendtex Trading Corporation Ltd v Central Bank of Nigeria [1977] QB 529.
[67] At 262, 264, 267.
[68] At 268-272.
[69] Buckingham v Hughes Helicopter [1982] 2 NZLR 738, 740 (HC).
[70] Reef Shipping Co Ltd v The ship “Fua Kavenga” [1987] 1 NZLR 550, 569-573 (HC).
[71] Governor of Pitcairn and Associated Islands v Sutton [1994] NZCA 277; [1995] 1 NZLR 426, 428 (CA).
[72] Re Winebox Inquiry: Controller and Auditor-General v Davison, KPMG Peat Marwick v Davison, Brannigan v Davison [1996] 2 NZLR 278, 289, 308-309 (CA).
[73] RSC Ord 53, r 3(5).
[74] Inland Revenue Commissioners v National Federation of Self-Employed and Small Businesses Ltd [1981] UKHL 2; [1982] AC 617, 630 (HL).
[75] At 630, 633, 635.
[76] Wall v Livingston [1982] 1 NZLR 734, 739-740 (CA).
[77] Budget Rent A Car Ltd v Auckland Regional Authority [1985] 2 NZLR 414, 419 (CA).
[78] Consumers Co-operative Society (Manawatu) Ltd v Palmerston North City Council [1984] 1 NZLR 1, 5, 6 (CA). For a more recent example of the influence of Lord Wilberforce’s speech in National Federation, see Quarantine Waste (NZ) Ltd v Waste Resources Ltd [1994] NZRMA 529.
[79] Owners of mv Eleftherotria v Owners of mv Despina R [1979] AC 685, 698-699 (HL).
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