1.4 Natural justice

You need to understand the principles of natural justice because they underpin the operation of DLCs. Natural justice is about fair process and ensuring that decision making is fair and reasonable. This section explains what natural justice is, and how it is applied in the context of the alcohol licensing process.

Snapshot of this section

All public decision-making bodies, including DLCs, must be independent and impartial and their procedures must be fair and transparent

The purpose behind natural justice is to ensure that decision making is fair and reasonable.

As a statutory officer you must act without bias, or the appearance of bias.

Your position must be based on evidence, which must be disclosed to the other parties.

People must be allowed an opportunity to present their case where their interests and rights may be affected by a decision maker. 

Decision makers must be unbiased when holding a hearing or making the decision. 

Decisions must be based on logical proof or evidence. 

Natural justice can be enforced by the courts, administrative tribunals or Ombudsmen.

 

This section covers:

  1. Natural justice is about fair process
  2. Natural justice is a legal requirement
  3. Natural justice is about the process, not the decision
  4. The three ‘rules’ of natural justice
  5. DLC decisions are subject to judicial review
  6. DLC decisions are subject to appeal

 

1.4.1       Natural justice is about fair process

Natural justice is part of New Zealand law. New Zealand has inherited many of the principles of the English legal system. Some of these go back to Roman law, which is where natural justice principles came from. They were regarded as principles that were 'natural’ or self-evident and originally related to two main maxims:

  • ‘the right to be heard’
  • ‘no person may judge their own case’.

Today, this means that any public decision-making body, including a district licensing committee (DLC) is required to be independent and impartial and its procedures are required to be fair and transparent.

 

1.4.2       Natural justice is a legal requirement

Natural justice is a legal requirement that applies to people in government (including local government and DLC members) who have the power to make decisions that affect the rights, interests and expectations of New Zealanders. Natural justice can be enforced by the courts, administrative tribunals or Ombudsmen.

Under the New Zealand Bill of Rights Act 1990, an aggrieved person can apply for a judicial review in a higher court if they believe the principles of natural justice have been breached.

 

1.4.3       Natural justice is about the process, not the decision

The purpose behind natural justice is to ensure that decision making is fair and reasonable. It is important not to confuse those objectives with what is legally required. Determining whether a decision complies with natural justice will generally depend on whether a fair and proper procedure was followed in making it.

A common outcome of judicial review is that the review body sends the decision back to the decision maker to make again using due process. That is, successful judicial review will not typically result in the review body substituting its own decision (though it can do so).

 

1.4.4       The three ‘rules’ of natural justice

Three common law rules are generally referred to in relation to natural justice or procedural fairness. 
 

The Hearing Rule 

This rule requires that people must be allowed an opportunity to present their case where their interests and rights may be affected by a decision maker. 

To ensure that these rights are respected, the decision maker must give people the opportunity to prepare and present evidence, and to respond to arguments presented by the opposing side. 

When conducting an investigation in relation to a complaint, the person being complained against must be advised of the allegations in as much detail as possible and must be given the opportunity to reply to the allegations. 

 

The Bias Rule

This second rule states that no one should judge his or her own case. This requires the decision maker to be unbiased when holding a hearing or making the decision. 

Additionally, investigators (regulatory agencies) and decision makers must act without bias in all procedures connected with the making of a decision. 

A decision maker must be impartial and must make a decision based on a balanced and considered assessment of the information and evidence before them without favouring one party over another. 

Even where no actual bias exists, investigators and decision makers should be careful to avoid the appearance of bias. Investigators should ensure that there is no conflict of interest which would make it inappropriate for them to conduct the investigation. 

 

The Evidence Rule 

The third rule is that an administrative decision must be based on logical proof or evidence. 

Investigators and decision makers should not base their decisions on speculation or suspicion, or on assurances of what might be done at a future date. Rather, an investigator or decision maker should be able to clearly point to the evidence on which the inference or determination is based. 

Evidence (arguments, allegations, documents, photos, etc) presented by one party must be disclosed to the other party, who may then subject it to scrutiny.

 

1.4.5       DLC decisions are subject to judicial review

Judicial review is a process by which a court reviews a decision made by a public body. Judicial reviews are different from appeals, in that an appeal is usually brought to challenge the outcome of a particular case. The judicial review process, on the other hand, analyses the process by which public bodies made their decision in order to decide whether or not that decision was lawful.

The judge usually won’t look at whether the decision maker made the ‘right’ decision, but will look instead at the way the decision was made, for example, whether the parties were given the chance to put their case, and whether the decision maker considered all the relevant factors. The court’s role isn’t to substitute its own decision for that of the public body. Rather it is to make sure the decision maker acted within their legal powers – in particular, that they followed the process that the law requires.

The right to apply for judicial review through the High Court is a central part of the ‘rule of law’. A core role of the courts is to enforce legal rights and obligations. Judicial review is a way of making sure that government bodies and officials, like private citizens, act within the law and not arbitrarily.

The grounds on which a High Court Judge can overturn the decision of a government decision maker include, among others, that:

  • the decision maker was mistaken about the facts or about the law
  • the decision maker took into account irrelevant factors, or ignored relevant factors
  • the decision was made for an improper purpose
  • the decision maker didn’t follow the rules of natural justice. For example, they were biased against a party, or they didn’t give a party a chance to put their side of the story.

1.4.6       DLC decisions are subject to appeal

Any of the parties who take part in a DLC hearing have the right to appeal to the Alcohol Regulatory and Licensing Authority (ARLA) if they are dissatisfied with the decision or any part of the decision.

If the application was first considered by a DLC, the only appeal right is to ARLA. ARLA decisions can be appealed to the High Court, and then, if leave is granted, to the Court of Appeal. In an appeal a judge will review the merits of the earlier decision, and determine whether it was the ‘right decision’. 

ARLA can:

  • confirm the decision of the DLC
  • modify the decision of the DLC
  • reverse the decision of the DLC
  • refer the matter back to the DLC to consider it again (usually with guidance on particular issues).