Ombudsman finds significant flaws in State Services Commissioner’s inquiry into leaked MFAT documents

Monday 27 June 2016

Authors: Rachael Brown and Kate Wevers

​​Ombudsman Ron Paterson has published the findings of his investigation into the State Services Commission’s (SSC’s) inquiry into leaked Ministry of Foreign Affairs and Trade (MFAT) documents. The Ombudsman identified numerous flaws in the SSC inquiry, and concluded that the SSC had acted unreasonably during the inquiry and in the findings and publication of its final report. In the course of his report, the Ombudsman made a number of comments about the scope and purpose of an Ombudsman’s investigation, and about the conduct of the SSC inquiry, that will be of interest for future inquiries.

Background

Prompted by an apparent leak of three cabinet papers concerning a major change programme at MFAT, the SSC appointed Dame Paula Rebstock to conduct an inquiry under section 8 of the State Sector Act 1988.

The actions of Derek Leask, a senior MFAT employee at the time, became one of the focal points of the inquiry. Mr Leask was interviewed and given the opportunity to comment on the inquiry’s concerns regarding his actions. The inquiry’s final report included significant criticisms of Mr Leask.

Mr Leask complained to the Ombudsman that he had been treated unfairly by the SSC inquiry. The Ombudsman investigated the matter pursuant to section 13(1) of the Ombudsmen Act 1975.

A number of Mr Leask’s complaints were upheld. The Ombudsman recommended various forms of redress, including compensation and a public apology, and recommended that the SSC review its guidance for future inquiries under the State Sector Act.

Points of interest for future inquiries

Ombudsman able to review matters of substance 

The SSC argued that it was not appropriate for the Ombudsman to review the substantive findings of the SSC investigator, and that the Ombudsman’s review ought to be limited to procedural issues. The Ombudsman rejected this argument. He noted that the Ombudsmen Act empowered him to review the reasonableness of administrative action, including whether a decision was “wrong” in substance. The Ombudsman also commented that the term “unreasonable” in the context of an Ombudsman’s jurisdiction is broader than the concept of Wednesbury unreasonableness applied by courts in the context of judicial review. The Ombudsman concluded that a number of the SSC’s conclusions were not supported by the evidence.

The Ombudsman has a broad jurisdiction to investigate decisions, recommendations, and acts of government departments and other public sector organisations that affect any person. This confirmation that the Ombudsman may review the reasonableness and correctness of a state sector decision highlights a potential avenue of redress for those disgruntled by government action, and accordingly a risk that state sector bodies should be aware of.  

Requirements of natural justice not affected by qualifications of investigator 

The Ombudsman found that the SSC had breached natural justice in a number of ways with respect to Mr Leask. Having reviewed the Ombudsman’s draft report, the SSC submitted that, as the inquiry was led by a non-lawyer who was “not sitting in a quasi-judicial capacity”, the standards of natural justice applied by the Ombudsman were inappropriate and too “legalistic”. This submission was rejected by the Ombudsman, perhaps unsurprisingly: the natural justice rights and expectations of a person subject to an inquiry cannot vary depending on the qualifications of the appointed inquirer. It will be important therefore to ensure that non-legally trained inquirers are given adequate legal support.

Importance of terms of reference

The Ombudsman’s report is a useful reminder of the critical importance of drafting clear terms of reference at the outset of an inquiry that accurately capture its scope. One of the failings of the SSC inquiry, as found by the Ombudsman, was that the inquiry’s findings with respect to Mr Leask exceeded the terms of reference. The SSC report made a number of adverse conduct findings against Mr Leask that were not directly connected to the leaks. Whilst the Ombudsman accepted that the SSC could have investigated broader conduct matters, the plain meaning of the terms of reference did not empower the inquiry to do so.

The Ombudsman remarked that it is important that the ambit of an inquiry is clearly spelt out and that the inquirer stays within the terms of reference. An interviewee should not be taken by surprise. Of particular interest is that Mr Leask had had the opportunity to comment on some of the adverse conduct findings before they became final, but that was not capable of remedying the inquiry’s failure to stay within the terms of reference. In other words, if an inquiry discovers that its terms of reference are too narrowly drafted, giving inquiry subjects notice of additional areas of inquiry is not a solution.  

What inquiry subjects need to be told and when 

The Ombudsman’s findings regarding what information the inquiry ought to have made available to Mr Leask, and when, will be useful guidance for those conducting future inquiries.  

Some of Mr Leask’s complaints were not upheld, in particular:

  • The Ombudsman accepted that it was not possible for the inquiry to know who would be central to the inquiry prior to the interview phase. Accordingly, the inquiry did not need to give Mr Leask notice that he would be identified in the final report prior to the interview. The appropriate time to do so was when seeking submissions on the draft report.
  • The Ombudsman also commented that it was not practicable for the inquiry to give Mr Leask forewarning of the specific questions that would be addressed in his interview. 

However, in other respects the Ombudsman considered that the inquiry had failed to provide the necessary information to Mr Leask at the appropriate time. For example, the Ombudsman considered that the inquiry had breached natural justice by failing to: 

  • make sufficiently clear to Mr Leask prior to the interview stage that the inquiry would be assessing whether he had adhered to the relevant codes of conduct, notwithstanding that he was later given an opportunity to comment on those matters, 
  • notify Mr Leask of the specific standards against which his behaviour was being measured. Neither Mr Leask’s general knowledge of the codes of conduct, nor the fact that the codes were “principles based”, could obviate the need to fully disclose to Mr Leask the specific standards and principles that were seen as potentially relevant, and the way in which those principles were engaged, and
  • give Mr Leask advance notice and an opportunity to comment on one of the adverse findings in the report prior to it being published.

​Decision to publish the report

The Ombudsman concluded that, given the procedural flaws in the inquiry, the SSC’s decision to publish the report in a manner that identified Mr Leask was itself unjust. The Ombudsman did not question the need for the SSC to report publicly on the inquiry’s findings. However, it was critical that the published findings about Mr Leask were accurate, proportionate, and not procedurally flawed.  

This is a point that those responsible for the decision to publish inquiry reports, whether under the State Sector Act or otherwise, would do well to specifically consider. For example, under the Inquiries Act 2013, the final report is presented to either the Governor General or the appointing Minister, depending on the type of inquiry. Although the Inquiries Act does not require reports to be publicly released there is likely to be a strong expectation in favour of publication. In light of the Ombudsman’s comments, the person responsible for the decision whether to publish the report will want to be satisfied regarding the conduct of the inquiry to ensure that the decision to publish the report is itself reasonable.

SSC guidance for future inquiries

One of the Ombudsman’s recommendations was that the SSC review its guidance for future inquiries under the State Sector Act in light of the report. This will be an interesting space to watch, particularly since the SSC has said publicly that it does not agree with all of the comments in the Ombudsman’s report. The SSC guidance may be perceived as relevant not only for SSC inquiries but also for other types of public inquiry. ​


Disclaimer

This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For more information
  • Rachael Brown

    Partner Wellington
  • Jenny Stevens

    Partner Wellington
  • Kate Wevers

    Senior Associate Wellington
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