DANCE AOTEAROA NEW ZEALAND LIMITED v ARTS COUNCIL OF NEW ZEALAND TOI AOTEAROA [2021] NZHC 1980

DANCE AOTEAROA NEW ZEALAND LIMITED v ARTS COUNCIL OF NEW ZEALANDTOI AOTEAROA [2021] NZHC 1980 [2 August 2021]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2020-485-000755[2021] NZHC 1980BETWEEN DANCE AOTEAROA NEW ZEALANDLIMITEDApplicantAND ARTS COUNCIL OF NEW ZEALANDTOI AOTEAROARespondentHearing: 21 and 28 June 2021Appearances: R A Kirkness, J A Tocher and J B C Trezise for the ApplicantW L Aldred and E J Watt for the RespondentJudgment: 2 August 2021JUDGMENT OF GRICE JContentsParaIntroduction [1]Summary of claims [6]Grounds of review [15]Statutory framework [17]Strategic approach to funding [22]Request for Proposal for the 2019 investment funding round [33]Legal principles: review of funding processes [52]I. Failure to follow the Request for Proposal process [79]Feedback to external assessor [86]Provision of Sector Overviews to the peer panel [95]PowerPoints [99]Panel discussions [101]Summary "alignment tables" prepared for panel [103]Summary of points raised by Investment Assessors on each proposal [104]Panel meeting minutes [106]The Chief Executive's report to the Board [111]Claims based on breach of RFP process [122]Analysis of the claims concerning the RFP process (first ground of review) [128]The Chief Executive's recommendations to the Board: the fourth, and seventh grounds of review[160]The staff recommendation included false claims about DANZ (sixth ground of review) [168]Failure to consider Dance Aotearoa's position as the sole national service provider for dance:(fifth ground of review) [169]Conclusion [173]II. Legitimate expectation [176]Long-term funding and relationship (third ground of review) [176]III. The complaints process [189]Discretion to grant relief [206]Conclusion [208]Costs [210]Attachment 1 page 63Attachment 2 page 64Introduction[1] Dance Aotearoa New Zealand Ltd (Dance Aotearoa)1 has been largely, if notentirely, funded through the Arts Council2 to operate as a national service organisationfor the New Zealand dance community for the past 26 years. It has provided servicesto the dance industry since 1993 and is the only national provider organisation fordance in New Zealand.[2] The Funding Agreement for Dance Aotearoa, along with most otherArts Council funding arrangements, was to come to an end in December 2019. TheArts Council did not accept Dance Aotearoa's proposal for services, which would haveprovided it with operational and related funding beyond that.[3] The decision not to accept the proposal was made in July 2019. The resultmeant that Dance Aotearoa would not receive more than the $300,000 it hadpreviously received from the Arts Council annually for operational funding. However,it received funding of 75 per cent of its previous annual grant paid over six months asa transitional payment.[4] Dance Aotearoa has been unable to secure replacement funding since it wasadvised of the decision by the Arts Council in August 2019. It says it will have tocease operations in November 2021, unless the Arts Council reconsiders and providesfunding for the company or it is able to find other funding. The latter is unlikely.[5] After the Arts Council conveyed its decision not to accept Dance Aotearoa'sproposal on 9 August 2019, Dance Aotearoa made a complaint about theRequest for Proposal (RFP) and decision-making process.3 In the period since thedecision on the proposal Dance Aotearoa has obtained information concerning thedecision through the Official Information Act processes, and spoken to officials andto ministers, including the Prime Minister, in an attempt to have the funding decisionreconsidered. Dance Aotearoa says these steps explain the delay up to1 Also referred to as DANZ. It is a not for profit organisation and a registered charity.2 A statutory body established under the Arts Council of New Zealand Toi Aotearoa Act 2014(the Act).3 Request for Proposals: Toi Tōtara Haemata and Toi Uru Kahikatea investment programmes(Arts Council of New Zealand Toi Aotearoa, February 2019) ["Request for Proposals"].18 December 2020 when it filed these proceedings. In addition, it points to the effectsof the COVID-19 crisis. Many dance organisations were placed under considerablefinancial pressure. Dance Aotearoa says it was supporting the sector through thatcrisis, as well as managing its own problems.Summary of claims[6] Dance Aotearoa says that the Request for Proposals process (RFP) leading tothe Arts Council decision did not follow the process that had been set by the Counciland breached the Arts Council's obligations of fairness to Dance Aotearoa.[7] In particular it says:(a) staff of Creative NZ (which is the executive of the Arts Council)influenced the process and the funding decision to such an extent thatthe process was unlawful in the public law sense;(b) Dance Aotearoa had an expectation that the funding would continuebased on the length and circumstances of the existing fundingarrangements;(c) the Arts Council should have, as a matter of natural justice, consultedwith Dance Aotearoa before terminating its funding and should haveprovided it with an opportunity to comment before the final decisionnot to accept its proposal was made;(d) the decision was made without properly taking into account the fact thatDance Aotearoa is the peak dance body service provider inNew Zealand; and(e) that the Arts Council did not follow its own complaints process indealing with a complaint made by Dance Aotearoa about the processand the decision.[8] Dance Aotearoa seeks a declaration that the decision was unlawful and invalidand a direction that the Arts Council be required to reconsider the decision.[9] The Arts Council says its investment strategy, upon which funding decisionsfrom 2018 to 2023 were based,4 was developed in 2018 after widespread consultationwith the arts sector. This investment strategy (Investment Strategy) moved the focusof the Arts Council funding grants away from preferential status for organisationsholding defined "key roles" in the arts infrastructure to the alignment of fundingdecisions to a number of public service values and outcomes.[10] The 2019 funding round was the first under the Investment Strategy. Itfollowed an RFP process. Dance Aotearoa submitted a funding proposal along withabout 85 other arts organisations. The respondent says Dance Aotearoa's proposalwas considered and assessed in accordance with the RFP. The process involvedCreative NZ's Chief Executive making recommendations to the Arts Council Board.Following consideration of his report and recommendations, and other material,the Board had decided not to accept Dance Aotearoa's proposal.[11] The Council says the Investment Strategy was a change in focus for theCouncil, which had been clearly signalled to the sector. It had been the subject ofconsultation with the sector. The strategy represented a move away from the"key role" funding, which had been benefitted Dance Aotearoa in the past. Theapplicant had, until then, received long term funding under the Toi Tōtara Haemata(Tōtara) programme. The shorter-term investment funding provided by theArts Council was largely funded through the Toi Uru Kahikatea (Kahikatea) fundingprogramme.[12] The Arts Council said the RFP specifically set out:a. Proposals for funding under the Tōtara programme (which providedlonger term funding) needed to demonstrate how the organisationdelivered to all three features of the Investment Strategy;b. Proposals for Kahikatea funding (which was for a shorter term) wouldneed to deliver to at least one feature of the Investment Strategy;4 Investment Strategy: Te Ara Whakamua 2018–2023 (Arts Council of New Zealand Toi Aotearoa,April 2018) ["Investment Strategy"].c. The decisions regarding allocation of investment funding would bemade by the Arts Council; andd. The process could result in organisations receiving neither form ofinvestment funding. Those organisations whose proposals wereunsuccessful would have the benefit of a transition procedure. Underthat procedure, CNZ would pay an unsuccessful applicant 75% of theamount paid under their existing funding agreement for six monthsfollowing the end of that agreement.[13] The Arts Council says that it followed the process set out in the RFP. It saysDance Aotearoa had no basis to expect that funding would continue based on itslong-term funding relationship with the Arts Council. The Arts Council pointed outthat nothing in the RFP suggested that a history of prior funding from Creative NZ(the Arts Council) was relevant to the Arts Council's decision.[14] The Council says that it has not acted unfairly:(a) It followed the process that it had set out.(b) It gave adequate notice of the fact that funding might not beforthcoming to all existing proposers.(c) There was no basis for an expectation that the Arts Council fundingwould continue for Dance Aotearoa.(d) It was not obliged to consult Dance Aotearoa outside the RFP processover the intention not to accept its proposal, nor was it required to giveany further notice nor provide more transitional funding than it did.(e) It also says it dealt with Dance Aotearoa's complaint following itspublished complaints process.Grounds of review[15] The specific grounds of review set out in the statement of claim are:First ground of review – Failure to follow the assessment process set out inthe RFPSecond ground of review – Failure to follow the complaints process set outin the RFPThird ground of review – Failure to put DANZ on noticeFourth ground of review – Decision not supported by evidenceFifth ground of review – Failure to consider DANZ's position as the solenational service provider for danceSixth ground of review – the Staff Recommendation included false claimsabout DANZSeventh ground of review – Misinterpretation of the Panel's findings[16] Before I look at the grounds in more detail I review the statutory framework,the background, and the RFP process.Statutory framework[17] The Arts Council is a statutory body whose purpose is to "encourage, promote,and support the arts in New Zealand for the benefit of all New Zealanders".5 It is anautonomous Crown entity. It was established by the Arts Council of New Zealand ToiAotearoa Act 1994 (Act). Its principal statutory functions are set out in s 7:7 Functions of Arts Council(1) The principal functions of the Arts Council are to—(a) encourage, promote, and support the arts in New Zealand forthe benefit of all New Zealanders:(b) promote the development of a New Zealand identity in thearts:(c) allocate funding to projects for professional and communityarts, including funding for—(i) Māori arts; and(ii) the arts of the Pacific Island peoples of New Zealand;and(iii) the arts of the diverse cultures of New Zealand:(d) uphold and promote the rights of artists and the right ofpersons to freedom in the practice of the arts:5 Arts Council of New Zealand Toi Aotearoa Act 2014, s 3(1).(e) maintain relationships with other agencies and organisations:(f) give advice to the Minister on any matter relating to oraffecting the functions of the Arts Council:(g) perform any other functions conferred on it by this Act, anyother enactment, or the Minister.(2) In carrying out its functions, the Arts Council—(a) must set guidelines for the allocation of funding; and(b) may set guidelines for community arts councils andcommunity arts providers; and(c) must establish assessment processes for the allocation offunding including, if the Arts Council considers it appropriate,the use of peer assessment; and(d) may obtain any advice that it considers appropriate.[18] The Arts Council executive is referred to as Creative NZ (also known as CNZ).The Chief Executive of Creative NZ reports to the Board of the Council. It was theChief Executive and his staff who managed the RFP process.[19] Creative NZ has 63 staff based in Tāmaki Makaurau/Auckland andTe Whanganui-a-Tara/Wellington and operates in four divisions. Dance is only one ofa number of art forms funded by the Arts Council.[20] The legislation allows for the nomination of peer assessors for the purposes ofcarrying out the Arts Council's functions in s 7(2). However, only the Arts Councilhas the statutory power of decision-making regarding the allocation of funding. TheAct does not provide for it to delegate any decision-making power to peer assessorsor others.[21] The Arts Council comprises 13 board members and was chaired byMichael Moynahan at the times relevant to this application. The Arts Council governsCreative NZ and is responsible for setting its strategic direction for Creative NZ,monitoring its performance, and decision-making regarding the allocation of funding.Strategic approach to funding[22] There is little dispute about the background to the funding arrangements andthe relevant strategy of the Arts Council/Creative NZ.[23] The Council said that the Tōtara and Kahikatea funding, or investmentprogrammes, were first introduced in 2012. The Investment Programmes providedfunding under fixed-term contracts to arts organisations. Creative NZ said thoseProgrammes were revisited following the development of the Investment Strategy.[24] From 2012 to 2018, the Arts Council granted funding on the basis of factorsincluding the quality of art produced, the service provided to the sector and generalpublic, and quality and quantity of audience engagement where the organisationpresented art. Investment funding was granted to arts organisations identified as filling"key roles". Some key roles were filled by service organisations, including DANZ.Proposals for Tōtara funding had been invited from arts organisations to deliverspecified key roles in the arts infrastructure. Funding was provided for two tofive years.[25] In 2016, the Arts Council had decided to review its approach to investmentfunding. It said the review arose from:(a) growth in the number of arts organisations funded by Creative NZ;(b) the need to consider long-term historical funding of a number oforganisations from a values and outcomes perspective; and(c) awareness that the portfolio of arts organisations did not representAotearoa's diversity.[26] The Investment Strategy was published in 2018 following extensiveconsultation with the sector. Dance Aotearoa made submissions at both consultationphases for the strategy. The 2018 strategy outlined three investment features by whichthe Arts Council intended to align its investments (in bold):Diversity and reach – maintain and develop:• Investment in a range of arts practices reflectingNew Zealand's growing diversity• Investment that ensures communities across New Zealand canparticipate in and experience the arts, and investment thatengages with under-represented communities• Investment that engages with new audiences, in New Zealandand internationally• Investment in the delivery of art through digital channels inorder to increase arts participation and audience size• Investment aligned with international opportunities thatexpand arts practices and demand for New Zealand artsDynamic arts – maintain and develop:• Investment that supports innovation in New Zealand artspractice• Investment in the development of New Zealand arts inNew Zealand and internationallyResilient arts sector – maintain and develop:• Investment that supports capability and capacity building inorganisations and the arts sector for long-term benefit,including new ways of working and new models of valuecreation that drive resilience• Investment that demonstrates relevance to current andchanging communities.[27] The Arts Council says the terms of the Investment Strategy made the newprinciples underlying the Arts Council's funding decisions clear. It had informedorganisations in the sector, including Dance Aotearoa, that the Investment Strategywould, among other things:6(a) inform resource allocations from 2018/2019;6 Investment Strategy, above n 4, at 3.(b) provide clarity to the arts sector about Creative NZ's expectations andapproach to investment decisions;(c) shift Creative NZ to an impact and outcomes-based investment model;(d) lead to changes to:(i) the level of investment across investment programmes inresponse to the changing face of the arts sector;(ii) investment programme design; and(iii) how funding proposals are prioritised or assessed.[28] The Investment Strategy recorded that in 2018, the Arts Council wouldprioritise reviewing the Tōtara key roles to provide greater alignment with theInvestment Strategy.[29] The Arts Council says it reviewed all its programmes to align them to the newInvestment Strategy. To do this it says it undertook extensive consultation on theproposed changes to the Investment Programmes:(a) In May 2018, it released a discussion paper on the review of theInvestment Programmes.7 It explained there would be a two-stageconsultation process prior to any changes being made to theInvestment Programmes. The discussion paper noted that theArts Council was reviewing the key roles and sought feedback fromarts organisations and stakeholders on the review, including whetherany of the key roles should be changed, added, or dropped.(b) 93 per cent of Tōtara clients provided feedback. This includedDance Aotearoa, which submitted that the dance service's key roleshould be maintained.7 Review of investment categories: Toi Tōtara Haemata and Toi Uru Kahikatea investmentprogrammes (Arts Council of New Zealand Toi Aotearoa, Discussion Paper, May 2018).(c) In September 2018 it published a paper outlining the Proposed Changesto the Investment Programmes. That paper set out the proposedchanges to the criteria for Tōtara funding as follows:8The proposed new approach to the investment programmes will see afocus on arts sector outcomes, derived directly from the InvestmentStrategy's features. This approach will empower the arts sector topropose how it can contribute in the most effective way possible torealise outcomes identified in the Strategy. At present, the Tōtararoles prescribe the type of activities Creative New Zealand willsupport for a key role. We think this often leads to an overly largeemphasis on producing outputs without focussing on the intendedresults for New Zealanders.The changes we are proposing are intended to directly align the Tōtaraand Kahikatea programme funding with the diversity and reach,dynamic arts and resilient arts sector features of theInvestment Strategy.To achieve this the key changes we are proposing for the Investmentprogrammes are:• to require organisations in the programme to demonstratedelivery to the features of the Investment Strategy (all threefeatures for Tōtara and at least one feature for Kahikatea)• to replace the current Tōtara key roles with three categories(General New Zealand Arts, M[ā]ori-led Arts, Pasifika-ledArts) plus two opportunities to deliver to identifiedinfrastructure gaps (Arts by, with and for YoungNew Zealanders; National Touring)• to simplify the funding formulae guidelines for the Tōtaraprogramme and reduce the number of formulae from 15 tofive• to only open the 2019 Investment programmes funding roundto organisations that have a 2019 funding contract for eitherTōtara or Kahikatea. The Arts Council will then consider ifthere are gaps and whether to invite proposals from newentrants in 2020, for either or both the programmes.• to apply priorities to the investment portfolio to ensure thebalance of the overall portfolio is aligned to theInvestment Strategy.[30] Mr Moynahan, the Chair of the Board of the Arts Council, said in his affidavitthat historically the funding had not been considered from a values and outcomes8 Review of investment categories: Toi Tōtara Haemata and Toi Uru Kahikatea investmentprogrammes: Proposed Programme Changes (Arts Council of New Zealand Toi Aotearoa,September 2018).perspective and the bulk of the funding was supporting largely "Western heritage" artsorganisations. The new strategy was intended to provide a portfolio representative of"Aotearoa's diversity".[31] The Arts Council had suggested steps applicants might take to fit within theproposed criteria and thereby "strengthen their chances of being funded". Itconsidered feedback received in the consultation in respect of both investment papers.The Arts Council says a significant majority of organisations supported the proposalto replace the Tōtara key roles. Dance Aotearoa provided feedback on this. Itdisagreed with the Arts Council's proposal to replace the Tōtara "key roles", but itagreed with the proposal to require delivery to the features of the Investment Strategy.[32] In November 2018, the Arts Council published a Results Paper announcing thechanges to the Investment Programmes, which notified arts organisations that:(a) The previous key roles would be replaced with three broad categories(General New Zealand Arts; Māori-led Arts; Pasifika-led Arts).(b) The Tōtara and Kahikatea Investment Programmes would be changedas proposed to align with the Investment Strategy.(c) To succeed in a funding proposal:(i) For Tōtara funding, an organisation would need to deliver to atleast one outcome under each of the three investment featuresof the Investment Strategy (Diversity and Reach, Dynamic Arts,Resilient Arts Sector); and(ii) For Kahikatea funding, an organisation would be expected tocontribute to at least one feature of the Investment Strategy (butcould deliver to more).(iii) The 2019 funding round would only be open to organisationsthat had a current Tōtara or Kahikatea funding contract, toprovide those organisations an opportunity to adjust to theInvestment Strategy.Request for Proposal for the 2019 investment funding round[33] The 2018 funding round was structured so that Tōtara and Kahikateaorganisations could apply at the same time for funding and would commence in 2020.This was designed to implement the Investment Strategy.[34] Creative NZ published its "Request for Proposals Toi Tōtara Haemata andToi Uru Kahikatea Investment Programmes" (RFP) in February 2019.9 The featuresthat proposers would need to demonstrate for each investment programme were setout in the RFP:(a) An organisation seeking funding under the Tōtara programme needed"to demonstrate how they deliver to all three investment features andspecifically contribute to arts sector capability and development".(b) An organisation seeking funding under the Kahikatea programmeneeded "to deliver to at least one outcome under at least one feature ofthe Investment Strategy".[35] The assessment process was set out in a diagram to the RFP document. A copyof that assessment process is set out at Attachment 1.[36] The respondent noted that the RFP:a. Stated expressly that some organisations might not receive investmentprogramme funding as a result of the round.b. Included a "transition procedure" to assist organisations who wouldbe exiting the investment programmes at the end of their existingcontract.c. Noted that organisations who were unable to deliver to the investmentstrategy outcomes for the programme they were applying for "shouldconsider that they will not benefit from submitting a Proposal".9 Request for Proposals, above n 3.[37] In summary, the RFP process was designed to gather information on eachproposal through:(a) a "delivery outcome" assessment by two external assessors withartform expertise making comments, and providing scoring accordingto a numerical scale;(b) deliberations by a meeting of panel peer assessors, who had consideredeach of the proposals as well as the external assessments, to discusshow the applications deliver to the intended outcomes of the investmentprogrammes; and(c) moderation by Creative NZ staff involving a high level verification of,among other things, sector coverage; and(d) that information was then considered by the Chief Executive who maderecommendations to the Arts Council Board which made the finaldecision on each proposal.[38] The decision by the Arts Council would then be made on each proposal.[39] Creative NZ said it consulted extensively with arts organisations on the RFP.It held a series of briefing sessions for eligible organisations, around the country andonline. It said that to ensure fairness and transparency, questions and answerssubmitted at the briefing sessions were published online for the benefit of allparticipating organisations.[40] The RFP set a deadline for questions from proposers a week out from thedeadline for submitting proposals. No questions would be accepted after that date.Any uncertainty by a proposer was to be clarified with Creative NZ before the deadlinefor questions.[41] In response to Dance Aotearoa's suggestion that the Arts Council should haveworked with it to ensure its proposal satisfied the RFP criteria, it says it was up to theapplicants to prepare their proposals to meet the RFP criteria. Creative NZ said itwould not allow some participants a second chance to modify their proposals as thatwould be inconsistent and unfair. The respondent says the rationale for not engagingwith organisations after proposals were submitted was to ensure a fair and consistentprocess for all participants.[42] The respondent pointed out that it had published an answer to one of thequestions on the Creative NZ online client portal available to all the proposers, whichemphasised the nature of the engagement as follows:13. Is there a process for receiving feedback on our proposal once it's beenlodged?No, we are unable to provide you any feedback on your proposal priorto the Arts Council's decision in order to preserve transparency andfairness. We will be able to provide feedback once the notificationsof funding have been released.[43] The "Investment Feature Outcomes" for Kahikatea and Tōtara funding weretied to the "Investment Strategy features of diversity and reach; dynamic arts; andresilient arts sector". Each of those three then tied to "Investment Strategysub-features" and then the "Investment Feature Outcomes". For instance, under thefirst strategic outcome of "Greater Engagement with the Arts" for Kahikatea funding,the proposal needed to "deliver at least one feature of the Investment Strategy". Inorder to achieve the outcomes for the first strategic outcome a proposal needed todeliver as follows:10CNZSTRATEGICOUTCOMESINVESTMENTSTRATEGYFEATURESINVESTMENTSTRATEGYSUB-FEATURESINVESTMENT FEATUREOUTCOMESGreater publicengagementwith the artsDiversity andReachInvestment in a range ofarts practices reflectingNew Zealand's growingdiversity.Arts practices reflectNew Zealand's growingdiversity.Investment that ensurescommunities acrossNew Zealand canparticipate in andexperience the arts, andinvestment that engageswith under-representedcommunities.Communities acrossNew Zealand participate inand experience the arts.Under-representedcommunities engage withNew Zealand arts.10 Request for Proposals, above n 3, at 6.[44] Whereas for the Tōtara programme funding the proposal needed to "deliver toall [features] of the Investment Strategy" but if the proposer did not meet thatrequirement it would automatically be considered for Kahikatea funding. The Tōtaraoutcomes on the first strategic outcome were as follows:11CNZSTRATEGICOUTCOMESINVESTMENTSTRATEGYFEATURESINVESTMENTSTRATEGYSUB-FEATURESINVESTMENTFEATURE OUTCOMESGreater publicengagementwith the artsDiversity andReachInvestment in a range ofarts practices reflectingNew Zealand's growingdiversity.Arts practices reflectNew Zealand's growingdiversity.Investment that ensurescommunities acrossNew Zealand canparticipate in andexperience the arts, andinvestment that engageswith under-representedcommunities.Communities acrossNew Zealand participatein and experience the arts.Under-representedcommunities engage withNew Zealand arts.Investment that engageswith new audiences, inNew Zealand andinternationally.New audiences inNew Zealand andinternationally are engagewith New Zealand arts.Internationalopportunities expandNew Zealand artspractices and demand forNew Zealand art.Investment in thedelivery of art throughdigital channels in orderto increase artsparticipation andaudience size.Participation andaudiences are grownthrough digital channels.11 Request for Proposals, above n 3, at 7.[45] Assessment criteria were set out in the RFP documents and a scale wasindicated as follows:123.3 Assessment criteriaScaleExcellent – Exceeds all indicators 7Very good – Satisfied all indicators and exceeds in four or more 6Good – Satisfies all indicators and exceeds in two or more 5Acceptable – Satisfies all indicators 4Minor reservations – Does not satisfy more than two indicators 3Major reservations – Does not satisfy more than four indicators 2Unacceptable – Does not meet the indicators 1[46] There were a number of criteria against which proposals were to be assessed:quality; alignment to investment strategy; financial health (calculated by staff); andorganisational health (calculated by staff). Under each criterion were a number of"indicators" to consider. For instance, under "Quality" the indicators includedwhether the programme was well thought through and whether it was likely to be oneof the best examples of its type.[47] The RFP stated the following evaluation:133.4 Evaluation processYour application will be assessed by external peer assessors who are expertsin their field. We ensure that Pasifika or Māori artists and practitioners areinvolved in assessing applications that choose to be assessed as Pacific Artsor Māori Arts.All organisations going through the application process will be given a score(0-7) in each of the four criteria and assessors will be asked to flag risks in anyactivities as needed.12 Request for Proposals, above n 3, at 13.13 At 14.[48] The table below followed that section:14CRITERIA ASSESSEDBYEXTERNALEXPERTSCONSIDERED ATPANEL MEETINGCONSIDERED ATMODERATIONQuality Assessed by twoexternalassessors withartform expertiseOne panel of a group ofpeers meet to discusshow the applicationsdeliver to the intendedoutcomes of theinvestment programmes.For all funding decisions, amoderation process will beconducted by staff to verify:- whether potential Tōtaraorganisations adequatelycomplement infrastructurefunded by central and localgovernment and the privatesector- whether the potential mix ofTōtara/Kahikatea/'infrastructurefunded by others' achieves abalanced arts infrastructure thatdevelops the arts, which areexperienced by moreNew Zealanders- whether the initial priorities areadequately addressed by theranking of applications viaexternal assessment across thetwo programmes- whether critical gaps ininfrastructure, capacity orpractice have been identifiedthrough the process. This maylead to recommendations aboutfuture (2020) investmentprogramme priorities.Alignment toInvestmentStrategyAssessed by twoexternalassessors withartform expertise(the same two asQuality)FinancialHealthStaff to calculatePastPerformanceScoreOrganisationalHealthStaff toCalculate PastPerformanceScoreActivity riskflaggingNoted14 Request for Proposals, above n 3, at 15.[49] The RFP did not create a process contract nor did it create any legal relationshipbetween Creative NZ and any respondent except in respect of, among other things,"the Evaluation Approach to be used by Creative NZ to assess Proposals as set out inSection 3 and in the RFP-Terms".15[50] The proposals were open for acceptance by Creative NZ for a set period. Theterms and conditions set out in the RFP included the following:(a) Creative NZ may, at any time, request from any respondentclarification of its Proposal as well as additional information about anyaspect of its Proposal. Creative NZ "is not required to request the sameclarification or information from each Respondent".16(b) Creative NZ may negotiate with each respondent with a view tocontracting.17(c) Creative NZ would offer all respondents not shortlisted a debrief, if sorequired, which would:18- provide the reasons why the Proposal was or was not successful- explain how the Proposal performed against the preconditions(if applicable) and the evaluation criteria- indicate the Proposal's relative strengths and weaknesses- explain, in general terms, the relative advantage/s of thesuccessful Proposal- seek to address any concerns or questions from the Respondent- seek feedback from the Respondent on the RFP and the RFPprocess.15 Request for Proposals, above n 3, at 36.16 At 33.17 At 34.18 At 34.(d) Creative NZ was empowered to: "liaise or negotiate with anyRespondent without disclosing this to, or doing the same with, anyother Respondent".19(e) Creative NZ was entitled to accept or reject any proposal or part of aproposal, accept or reject any non-compliant, non-conforming oralternative proposal, and decide not to enter into a contract with anyrespondent.20[51] A further clause in the RFP relevant to these proceedings related to the"Active Engagement and On Notice" provision as follows:21Creative New Zealand may place an organisation on Active Engagement ifthere are concerns that the organisation may be facing systemic issues in theareas of quality, alignment to Creative New Zealand's strategy, financial healthor organisational health. An organisation may be placed On Notice if CreativeNew Zealand is planning to disinvest in the organisation due to a breach of theFunding Agreement or a failure of the organisation to meetActive Engagement requirements.Both of these statuses remain in existence. Organisations that are currently onActive Engagement will have the same requirements and opportunities toapply as any other organisation. Creative New Zealand may choose to placean organisation on, or remove an organisation from, Active Engagement aspart of its decision-making process.Legal principles: review of funding processes[52] Dance Aotearoa pointed to the underlying principle set out in theAttorney-General of Hong Kong v Ng Yuen Shiu.22 The Privy Council said that it wasin the interests of good administration that a public authority acts fairly andimplements its promises. In this case the appellant's concerns largely focus on analleged failure to follow the RFP process.19 Request for Proposals, above n 3, at 37.20 At 37.21 At 11.22 Attorney-General of Hong Kong v Ng Yuen Shiu [1983] 2 All ER (PC) at 351.[53] A detailed exposition of the principles of legitimate expectation in the contextof an RFP were set out in the High Court decision in Problem Gambling Foundationv Attorney-General (Problem Gambling Foundation) as follows:23Legitimate expectation[118] It has been widely recognised that two types of legitimate expectationcan arise. One is a substantive legitimate expectation: an expectation of aparticular outcome. The other is a procedural legitimate expectation: anexpectation that certain procedural steps will be taken before making adecision.[120] In Comptroller of Customs v Terminals (NZ) Ltd the Court of Appealdiscussed legitimate expectation as follows:[123] Establishing a legitimate expectation in administrative law isnot dependent on the existence of a legal right to the benefit or reliefsought. The expectation might be engendered by promises that aparticular authority will act in a certain way or by the adoption of asettled practice or policy which the claimant can reasonably expect tocontinue. A promise of the kind alleged may be express or implied.[124] Legitimate expectation is to be distinguished from a merehope that a cause of action will be pursued or a particular outcomegained. To amount to a legitimate expectation, it must, in thecircumstances (including the nature of the decision-making power andof the affected interest) be reasonable for the affected person to relyon the expectation.[121] The Court set out a three step test:[125] Where legitimate expectation is raised, the inquiry generallyhas three steps. The first is to establish the nature of the commitmentmade by the public authority whether by a promise or settled practiceor policy. This is a question of fact to be determined by reference toall the surrounding circumstances. A promise or practice that isambiguous in nature is unlikely to be treated as giving rise to alegitimate expectation in administrative law terms.[126] The second is to determine whether the plaintiff's reliance onthe promise or practice in question is legitimate. This involves aninquiry as to whether any such reliance was reasonable in the contextin which it was given.23 Problem Gambling Foundation v Attorney-General [2015] NZHC 1701 ["Problem GamblingFoundation (HC)"] at [118] and [120]–[121] (footnotes omitted). The High Court decision wasoverturned by the Court of Appeal in this case. However, there was no issue taken with thearticulation of the principles in the High Court. The High Court determination that the provisionsof the RFP had not been followed was overturned.[127] The third, and often most difficult part of the inquiry, is todecide what remedy, if any, should be provided if a legitimateexpectation is established.[54] A clear and unambiguous promise in an RFP may give rise to a legitimateexpectation at public law. No issue was taken by the Court of Appeal with theHigh Court's outline of the legal principles of "legitimate expectation", but theappellate court did not agree with the High Court's view that the Problem GamblingFoundation had a legitimate expectation as to process that had been breached.[55] The Court of Appeal in Problem Gambling,24 had before it an RFP for theprocurement of problem gambling services by the Ministry of Health. TheCourt of Appeal decision provides guidance in relation to the approach of the Court ina review of a procurement proposal process, which is akin to a funding proposalprocess in many respects.[56] The Court allowed the appeal. The High Court had quashed theMinistry of Health's decision on the Foundation's proposals for the provision ofproblem gambling services. The Foundation had been an incumbent provider for10 years. This was the first funding round since problem gambling services had beenestablished. The Foundation's proposals were not accepted by the Ministry, despiteits provision of significant services for the previous 10 years.[57] The Court of Appeal rejected the findings of the High Court that there had beenpublic law breaches by failure to follow the RFP, particularly by inserting a moderationprocess and failing to adhere to a scoring system set out in the RFP.[58] The Court of Appeal said that the assessment process was an "intensely humanprocess" and that different expertise and knowledge was required to evaluate theproposals.25 It noted the assessment was a qualitative not quantitative assessment.While the RFP contained a scoring process that had been severely criticised bythe Foundation's experts, the Court of Appeal said the expert evidence was unhelpful24 Attorney-General v Problem Gambling Foundation of New Zealand [2016] NZCA 609, [2017]2 NZLR 471 ["Problem Gambling Foundation (CA)"].25 At [98].and the criticisms had led to the Judge delving into the merits of the fundingapplication.[59] One of the grounds for judicial review pursued by the Foundation was thatthe Ministry had incorporated a "moderation" process, which the High Court hadfound was not part of the published RFP process and therefore breachedthe Foundation's legitimate expectation as to process. The High Court had also foundthat a breach by the Ministry of the mandatory rules for government procurement(promulgated by cabinet) provided a successful ground for review.[60] The Court of Appeal noted that the scope of review for a procurement contractwas narrow unless the context indicated otherwise. This included: the nature of thedecision; the nature of the body; statutory setting; or that the nature of the interestssought to be protected in the judicial review indicated the need for broader review onthe panoply of judicial review grounds. The Court said that the factors on which theHigh Court had sought to distinguish the RFP from the RFP process in an earlierdecision where the Court of Appeal had indicated that the scope for judicial review ofa commercial contract by a public body was narrow, did not stand up.26[61] In the Problem Gambling Foundation case, the Court of Appeal noted thatwhile problem gambling did have social overtones, the procurement process for publichealth and clinical services was nevertheless commercial. The Court noted theprocurement process there had not created contractual relations despite the fact thatthere was no requirement for the Ministry of Health to act in a commercial manner inthe relevant legislation under which the services were being procured.[62] The Court of Appeal also noted there were alternative avenues for complaintsabout the RFP process, such as to the Ombudsman, Auditor-General, and Parliament.It noted a broader review might handicap the Ministry's ability to meet its objectiveof providing public health services. In addition, the Court noted that while themandatory procurement rules bound the Ministry, there was no reason to imposeprocedural obligations in terms of those rules that were enforceable by disappointed26 Problem Gambling Foundation (CA), above n 24, at [44]; citing Lab Tests Auckland Ltd vAuckland District Health Board [2008] NZCA 385, (2009) 1 NZLR 776.potential contractors. The Ministry had not bound itself to a process contract to thateffect and while public interest undoubtedly existed in the quality and integrity ofprocurement processes, that requirement was dealt with in the particular case by theavailability of the other complaint mechanisms.[63] The Court of Appeal noted the reference in the High Court to Re ErebusRoyal Commission as follows:27[89] The Judge said the ground of review advanced was similar to thatdiscussed by the Privy Council in Re Erebus Royal Commission in thefollowing passage:28The first rule is that the person making a finding in the exercise ofsuch a jurisdiction must base his decision upon evidence that has someprobative value in the sense described below. ...The technical rules of evidence applicable to civil or criminallitigation form no part of the rules of natural justice. What is requiredby the first rule is that the decision to make the finding must be basedupon some material that tends logically to show the existence of factsconsistent with the finding and that the reasoning supportive of thefinding, if it be disclosed, is not logically self-contradictory.[64] The Court of Appeal found the Foundation was merely a disappointedcommercial party seeking public law remedies to address prejudice to its contractingprospects.[65] In this case Mr Kirkness submitted that the RFP process for funding or grantsfrom the Arts Council was not a commercial process. He said it was different in natureand therefore the Court of Appeal's comments in the Problem Gambling Foundationcase were not pertinent.[66] However, in at least some respects the RFP process in this case was similar tothe Problem Gambling Foundation RFP. The Court of Appeal there had rejected anargument that public health services, such as problem gambling, were addressingsocial issues therefore were not comparable to the Lab Tests case.27 Problem Gambling Foundation (CA), above n 24, at [89]; citing Air New Zealand Ltd v Mahon(Re Erebus Royal Commission) [1983] NZLR 662 (PC) ["Re Erebus Royal Commission"].28 Re Erebus Royal Commission, above n 27, at 671.[67] The Court of Appeal rejected the High Court reasoning that the fact there wasno statutory provisions requiring the Ministry in Problem Gambling Foundation to actcommercially, such as the legislation relevant to the decision in Lab Tests and in otherlegislation relevant to earlier cases, made a difference.29 The Court of Appeal said:30[41] We agree with the Crown that where the decision the subject of reviewis a procurement (contracting) decision made in a commercial context, that isthe starting point for consideration of the appropriate scope of review. Weunderstand the High Court Judge's analysis to be that the decisions were nottaken in a commercial context. However, that analysis gave no weight to thefact that these were procurement decisions. We agree with the Ministry thatwhere decisions are made by the Crown in the course of a procurementprocess, that will usually provide the commercial context. It follows theprima facie position will be that only narrow review is appropriate, subject toany relevant contextual matters indicating a need for the High Court to havebroader powers of review.[68] It concluded that the procurement process was subject to a scope ofjudicial review on limited grounds. The contextual matters pointed to bythe Foundation did not support its case. These included: the fact problem gamblingwas a social issue and one of public, not private health; the absence of statutoryprocedural protections; and the absence of contractual obligations created by the RFPprocess. The Court of Appeal said these factors did not support the High Court'sapproach to judicial review, which had involved scrutinising every stage of thedecision-making and insisting on a statistically valid outcome, merely because ascoring methodology was one of the processes involved in the assessment of theproposals. The Court said the Ministry of Health's RFP process was not prescriptivedespite mandatory procurement rules being promulgated by Cabinet applied.[69] The Foundation was also a charity but despite that and the fact that problemgambling is a social and public health issue, the Court of Appeal found thatthe Foundation was merely a disappointed commercial party seeking to take advantageof public remedies in a commercial context.31 The Court of Appeal acknowledgedthere was a public interest in the Ministry discharging its statutory duty to formulate aplan and provide problem gambling services, but the Judge was wrong to conflate thepublic interest in the Ministry discharging its duty to provide those services with the29 Problem Gambling Foundation (CA), above n 24, at [40](b).30 Footnotes omitted.31 Problem Gambling Foundation (CA), above n 24, at [42]–[43].need for a broad review by the Court. The appellate Court concluded that althoughthe development of the problem gambling strategy was a public act with publicconsequences, entering into individual contracts through a procurement process toimplement that strategy does not have public consequences which would attract thefull panoply of judicial review. It said to the extent there was a public interest in theprocurement process, the challenge by the Foundation did not engage that interest asits complaint "was the prejudice to the Foundation's contracting prospects".[70] The Court of Appeal contrasted the facts of that case to those before theSupreme Court in Ririnui v Landcorp Farming Ltd.32 In Ririnui, Landcorp had agreedto sell land contrary to an agreed protocol it had with the Crown in relation to land thatmight be subject to claims under the Waitangi Tribunal process. Landcorp hadreceived erroneous advice from the Office of Treaty Settlements about the land andrelied on that in its sale process. The review was brought by a representative of an iwiclaiming interest in the land. In addition, the Minister had intervened in the processrequesting that Landcorp consider an offer from another iwi. As well as the issue ofthe breach of the process agreed to in the protocol, the Supreme Court found that therehad also been the exercise of a statutory power.[71] In Ririnui the resolution of Treaty claims brought a broader public interest intoplay. That contrasted with the Foundation's claim, which was grounded firmly uponunfairness to it and disappointment of its own private interests. The Court of Appealnoted it had a complaint which could have been advanced through contract if theprocess had given rise to a process contract. It said that the only way in which itsallegations engaged with the public interest in the provision of public health serviceswas the Foundation's "attempted invocation of that contextual feature in favour ofbroad judicial review".[72] While the absence of a statutory direction to act commercially was a factor tobe considered, the Court of Appeal in the Problem Gambling Foundation found:[47] We also do not see the various absences the Judge identifies (see [40]above) as supporting the conclusion he reached as to the scope of review.32 Problem Gambling Foundation (CA), above n 24, at [46]; citing Ririnui v Landcorp Farming Ltd[2016] NZSC 62; [2016] 1 NZLR 1056.Although we agree the absence of a statutory direction to act commercially isa factor to be considered, as we have noted, the fact that this was aprocurement process is a powerful indicator that the context was commercial.So too was the direction in the Mandatory Rules that procurement decisionswere to be made on the basis of value for money of services to be supplied interms of the essential requirements and evaluation criteria.[73] In this case the Arts Council is an autonomous Crown entity under Part 2 ofthe Crown Entities Act 2004. It is subject to most of the obligations under theCrown Entities Act.33 The Crown Entities Act requires the Arts Council Board to actconsistently with its objectives, functions, statement of intent and performanceexpectations. The Board must ensure the Council acts efficiently and effectively.The Council must operate in a financially responsible manner including prudentlymanaging its assets and liabilities and endeavouring to ensure its long-term viability.It must act as a successful going concern.34[74] The Council receives substantial amounts in public funding to execute itsstatutory functions.35 There is no doubt therefore it must act in an efficient mannerand is responsible for the prudent management of the funds allocated to it bygovernment to undertake its statutory functions.36 The Council speaks of its"investment" in the Toi Tōtara Haemata and Toi Uru Kahitakea InvestmentProgrammes, as well as its grants programmes and creative communities scheme.[75] The Arts Council is responsible to the Ministry of Culture and Heritage, theresponsible Minister and to Parliament as to how it spends its funding.[76] The extent to which a public funding decision sits in a commercial context willalways be a question of degree. In this case the Arts Council is required to implementa strategy designed to more effectively meet its statutory objectives. To do that it hasdeveloped an investment/strategic plan, which it is now implementing in a33 Arts Council of New Zealand Toi Aotearoa Act 2014, s 6(2).34 Crown Entities Act 2004, ss 50(b) and 51.35 In 2016/17, publicly available information indicates the Arts Council is funded principally throughtwo avenues: Vote: Arts, Culture and Heritage (administered by the Ministry for Culture andHeritage) from which Creative New Zealand expected to receive $15.689 million, and theNew Zealand Lottery Grants Board, from which it expected to receive an estimated $28.665million based on Lotto New Zealand's forecast payment.36 The Board must also ensure that the Arts Council acts in a manner consistent with its objectives,functions, current Statement of Intent, and current Statement of Performance Expectations:Crown Entities Act 2004, s 49.business-like and commercial manner. It undertook that using a similar process to thatused by the Ministry in procurement of services to implement its strategic plan forproblem gambling services.[77] While it is involved in the arts and culture sector, not the health sector, theArts Council must act in a business-like manner and in relation to its processes bywhich it selects and contracts with organisations to provide the required investmentoutputs to meet the Council's strategic plan. The Arts Council Board must ensurethe Council acts in an efficient, effective manner and is financially responsible. It isresponsible for the spending of its public funding to further its statutory functions andmeet the requirements of its Statement of Intent and Statement of PerformanceExpectations. It is in a similar position to the Ministry of Health in theProblem Gambling Foundation case. It must act in a business-like manner in theassessment of proposals, despite the lack of specific reference to a commercialimperative in the relevant legislation. Although it is "investing" in proposals to furtherthe social and public functions it is charged to provide in the support and developmentof the arts. It must act in the "procurement" of the contracts following the proposalprocess, which at least on one level is a commercial process in a similar way to thatwhich the Court of Appeal found that the Ministry of Health in Problem GamblingFoundation was required to act.[78] I now turn to consider the specific grounds of review under the headings:"process and decision", "legitimate expectation" and "complaints process".I. Failure to follow the Request for Proposal process[79] As is apparent from the Assessment Process diagram (Attachment 1), there wasto be an external assessment of the proposals. That external assessment, in the case ofthe Dance Aotearoa proposal, was carried out by two assessors with artform expertise,in this case dance expertise. Their reports were checked by staff and then went to apanel of approximately six people. The panel members came from different artformbackgrounds and experience. Two had experience in dance.[80] The panel's function was to "meet to discuss how the applications deliver tothe intended outcomes of the investment programmes".37[81] Following the panel meeting minutes were prepared, including the panel'srecommendations on the proposals. A moderation process was then undertaken bystaff. The Chief Executive then finalised his recommendation, with the assistance ofstaff, which went in the form of a report to the Arts Council Board, which made thefinal decisions on the proposals.[82] Dance Aotearoa says that the RFP process was intended to be "externally led".It says this meant that the external dance assessments and the panel input were crucialparts of the process. In general terms it says the staff of Creative NZ interfered withthe external assessors' reports and "framed the thinking" of the panel to influencethe process and final decision to the extent that the process adopted was unlawful inthe public law sense. In addition, it says the staff ignored panel recommendations andmade recommendations to the Arts Council contrary to the recommendations of thepanel. Dance Aotearoa said it was the Creative NZ staff, not the Chief Executive, whomade the recommendation to the Arts Council. It says this was a breach of the processand contributed to the unlawfulness of the process as a whole.[83] Dance Aotearoa does not allege that the Creative NZ staff acted in bad faith,but that for whatever reason they influenced the external assessment process to suchan extent that the RFP process and the decision not to fund Dance Aotearoa wastainted.[84] The factual matters behind the allegations in the first ground of review are:(a) Creative NZ's Senior Advisor Assessment Services,Ms Lee Martelli-Wood, in email feedback, persuaded one of theexternal assessors to change his scores in the external assessmentreport.37 Request for Proposals, above n 3, at 15.(b) Ms Martelli-Wood unlawfully influenced the members of the peerpanel by providing them with sector overviews of each art form, whichwere prepared by Creative NZ Art Practice Directors (SectorOverviews).(c) Creative NZ staff prepared a PowerPoint and other material (summaryalignment tables and summary points) for the use of the panelfacilitator, Toby Behan, in the panel meeting. The PowerPoint includedcomments detrimental to Dance Aotearoa.(d) The staff attended the panel meeting and influenced discussions.(e) Creative NZ staff did not follow the recommendations of the panel inthe report and formulated the recommendations made by theChief Executive to the Board.[85] I deal with each of those factual matters in turn.Feedback to external assessor[86] Dance Aotearoa says that the Creative NZ staff were only entitled to have inputin the RFP process, according to the published Assessment Process, in the followingways:(a) Providing the assessments on:(i) financial health; and(ii) organisational health.(b) A moderation process to verify:38- whether potential Tōtara organisations adequately complementinfrastructure funded by central and local government and the privatesector;38 Request for Proposals, above n 3, at 14. These are also set out above at [48].- whether the potential mix of Tōtara/Kahikatea infrastructure fundedby others' achieves a balanced arts infrastructure that develops thearts, which are experienced by more New Zealanders;- whether the initial priorities are adequately addressed by the rankingof applications via external assessment across the two programmes;and- whether critical gaps in infrastructure, capacity or practice have beenidentified through the process. This may lead to recommendationsabout future (2020) investment programme priorities.[87] Dance Aotearoa says that other than that Creative NZ were to have noinvolvement at all in the process or the assessment.[88] Mr Kirkness, for Dance Aotearoa, conceded that Creative NZ needed tomanage the RFP process. Nevertheless, he said that "externally led" means that theexternal assessors should be left to their own devices and staff should have had nomoderation input other than on the limited verification matters set out in [86] above.[89] Dance Aotearoa pointed to emails from Ms Lee Martelli-Wood,Senior Advisor, Assessment Services at Creative NZ, to one of the external assessorsas evidence of influence. In an email to one of the two assessors dated 9 June 2019Ms Martelli-Wood noted that she was at the proofing stage of the assessor'sassessment and said:In terms of your scores for this assessment, I have read your commentaryand I am wondering if you have selected the best scores to match yourcommentary?For question 1, you say that the applicant has (I think you mean "met allindicators and exceeded in"?), met all indicators, and exceeded in one.According to our scale, this would produce a score of 4/7.Would you like me to alter the score for this question, to match yourcommentary?For question 2, you seem to be saying that the applicant is weak in one area,and meeting the others. This would be a score of 3/7; then you believe theydeliver to priority areas, so you could add a point to your score for this – thisprocess would produce a score of 4/7 for this question.Shall I change this score to match your commentary?[90] The assessor responded to the query by email saying "Yes" on the same date.The following day Ms Martelli-Wood responded to that assessor by email as follows:Great thanks [redacted name]Here is how your assessment appears in our system now FYI:[91] The email then attached the assessment with the relevant changes. It iscommon ground the amended assessment sent back to the assessor reflected theassessor's agreed changes. The assessment had been amended by changing thequestion 1 score from 5 to 4 and the question 2 score from 6 to 4, in terms ofMs Martelli-Wood's query and suggestion. The comments by the assessor were nototherwise altered.[92] On question 1, which related to "Quality", the assessor had been required toconsider the indicators concerning programme and budget. The assessor'scommentary had been to the effect that there was significant misalignment in both but,in particular, the budget. The assessor's comments on their face did not justify a scoreof 5 based on the assessment criteria scale.39 On the scale, 5 indicates "good – satisfiesall indicators and exceeds in two or more". The score of 4, which Ms Martelli-Woodhad noted reflected the assessor's comments, indicated: "acceptable – satisfies allindicators".[93] Question 2 of the External Assessor's report related to "Alignment toInvestment Strategy". The assessor's commentary notes some initiatives proposed byDance Aotearoa were positive but was critical of its proposed budget, including in itspartnership proposals and diversity and reach. The adjustment to the score suggestedby Ms Martelli-Wood also appears to reflect the comments of the assessor. Sheadjusted the score from 6 to 4. Again, the external assessor specifically approved thechange by email.[94] Dance Aotearoa submits that it does not quibble with Ms Martelli-Woodpointing out any inconsistency between the comments and the score but that she hadstepped over the line and unlawfully influenced the external assessor by suggesting a39 See above at [45].score and changing the numbers. This was despite the fact the material was referredback to the external assessor who confirmed she should make the changes.Provision of Sector Overviews to the peer panel[95] The allegation under this heading is that Ms Martelli-Wood, on 24 June 2019,emailed Mr Toby Behan, the facilitator of the external peer assessors, sending copiesof Sector Overviews of each art form which had been prepared by Creative NZ's arts'practice directors. Ms Martelli-Wood indicated in the email that she had been askedto send to Mr Behan three documents: the Sector Overviews, a full copy of all theassessments submitted in the 84 applications,40 and a PowerPoint. She said in theemail:Kia ora TobyBelinda asked me to send you three further documents:1. Sector overviews of each art form, created by our Arts PracticeDirectors. These have been sent to the panel members to help frametheir thinking. Note that panel members do NOT have to agree withthe APDs. We are externally-led in our organisational structure, sofrom that perspective, the sector overviews are not instructive – if yousee what I mean? This may be something that could be useful to stateat the start of the panel meeting also, as the APDs will be attending –so the panel members don't have to agree with what the APDs say atthe panel meeting. They can ask the APDs Qs, but they can thendiscuss on their own (amongst the panel members) and come to theirown conclusions, if they desire2. A copy of all the assessments that have been submitted on the 84applications. Note each applicant had 2 assessments, and some hadthree for sub-genre and cultural perspectives onprogrammes/proposed activities3. The PowerPoint that you had today. Arohamai [sic] that you hadtrouble with sound?!FYI – at the panel meeting I will have a copy of all the individual scores eachassessor submitted on each application; the COIs recorded againsteach applicant; and be available to write anything the panel may needon a whiteboard – in case visual representation is better!Just let me know if you have any questions. Thanks!Ngā mihi,40 The number of proposals were referred to variously as 84, 86 and 87. The discrepancy is notmaterial.[96] Mr Kirkness says that these Sector Overviews should not have been sent to thefacilitator to be distributed to the panel because the Sector Overviews operated onpanel members to "frame their thinking" using the words of Ms Martelli-Wood. Hesaid the process was "sector led" therefore the overviews were not helpful.Mr Kirkness explained by this he meant the Sector Overview for the dance sectorwould influence the panel members' considerations of the proposals to an unlawfulextent in public law terms.[97] Mr Kirkness emphasised that he did not say that the material was supplied byCreative NZ staff in bad faith. He said the documents were intended to be fair butcontained material which was detrimental to Dance Aotearoa.[98] The Sector Overview for dance was produced. It contains a SWOT (strengths,weaknesses, opportunities and threats) analysis for the dance sector. It sets out basicstatistical detail such as an estimate that more than 630,000 people from allbackgrounds, abilities and ages, dance regularly. It provides statistics about themarket, an overview of dance festivals and companies, as well as outliningopportunities and threats. It then goes on to provide, in bullet point form, "how welldo the proposals within this art form/area of arts practice deliver to the investmentstrategy features? What are the key differences from past proposal delivery?" Therefollows a bullet point analysis of new initiatives in general terms.PowerPoints[99] Included in the email from Ms Martelli-Wood to Mr Behan was a set ofPowerPoints and associated notes for his assistance in facilitating the panel meeting.The PowerPoints set out the background to the new strategy and the RFP process aswell as some questions for the panel. Dance Aotearoa says that one of the overheadscontained comments detrimental to Dance Aotearoa. It reads as follows:STAFF & ASSESSOR COMMENTARY – RISKS AND ISSUES41• Alignment with T[ō]tara programme eg [redacted three names oforganisation]41 Redactions have been made for the purposes of the judgment.• High scoring but issues raised in commentary eg [redacted], DANZ,[redacted four names of organisation]• Active engagement clients: [redacted five names of organisation]• Budget – risks: [redacted seven names of organisation][100] Dance Aotearoa says the reference to DANZ's proposal was detrimental to it.Panel discussions[101] Dance Aotearoa says that Creative NZ staff were present during the paneldiscussions and made themselves available to answer questions at the meeting. Thepresentation notes made by staff for the PowerPoint presentation included commentsthat the applicant says were indicative of inappropriate involvement of staff in themeeting. An example was:May move people along, balance everyone's input to ensure all panellists havefair input, may encourage panellists to speak up APDs can take Qs, mayspeak to applications provide additional background. Panellists can feel freeto disagree with their opinions/perspectives.[102] Dance Aotearoa also says that the Creative NZ arts practice directors musthave offered "opinions/perspectives" on individual proposals during the paneldiscussions and this was inconsistent with the moderating role that Creative NZ staffshould have taken. It says that despite the fact panellists could disagree with staff,nevertheless, no views should have been expressed by Creative NZ staff at all.Summary "alignment tables" prepared for panel[103] Dance Aotearoa further criticised the provision by staff to the panel of a tablethat summarised which investment features each proposal aligned with. It said thiswas further material which could influence the panel. It is a table that reproduces theRFP criteria and sets out a brief summary on each proposal under headings. The entryfor Dance Aotearoa (DANZ) in the table is reproduced in Attachment 2 below.Summary of points raised by Investment Assessors on each proposal[104] Further material Dance Aotearoa pointed to as detrimental to it was a summaryprepared by staff of the two external assessors' reports. Dance Aotearoa says this didnot, nor was it intended to, provide an accurate reflection of the external assessmentsof Dance Aotearoa. They had each been sent to panel members in full. The table hadonly two columns, the name of the Applicant and a column headed "Points of noteraised by the assessors". The information for other applicants is redacted. ForDance Aotearoa the following bullet point notes appeared:• Feel they should be supporting Māori contemporary dance practicemore• Feel they need an indigenous network• Assessors don't agree on the priorities being delivered to[105] The panel members had received all proposals and external assessors' reports.The panel had five weeks in which to read the proposals.Panel meeting minutes[106] The panel meeting minutes were compiled by staff in the form of a table whichincluded discussion points about each proposal, panel feedback/comments, alignmentand a recommendation on each proposal.[107] The comments recorded for the Dance Aotearoa proposal were as follows:The panel agreed that DANZ supports all forms of dance from professional tocommunity. The panel noted DANZ has the potential to bridge supportbetween graduates and early practitioners.The panel noted that a significant amount of DANZ's activity was aduplication of, or a crossover with, high-quality activities and servicesprovided by dance organisations.The panel questioned if the mission 'to make dance visible' is sufficient tobuild the sector. It was noted that professional dance companies don't use theirservices and they are not a key agent in developing international opportunities.It was acknowledged that when DANZ was created there was a real need forthem, but the sector has changed and relevancy is an issue.The proposal did not demonstrate strong focus on a resilient arts sector orauthentic delivery to diversity and lacked innovation in building collaborativepartnerships, new audiences and the sector.The panel discussed whether the proposal aligned to the Kahikateaprogramme and recommended that if it were offered Kahikatea funding, itshould be at a reduced amount.[108] The panel feedback/conditions said:The panel recommended DANZ focus on:• strategic planning to understand what their role is, who they areserving, and how to bring people together.• research, archiving and developing a digital strategy.[109] In relation to alignment the panel said:The proposal did not demonstrate strong alignment to all threeInvestment Strategy features for Tōtara.Alignment to Resilient Arts Sector, Dynamic Arts, and Diversity and Reachneed further development.[110] In the final column, headed "Recommendation", the minutes record:"Recommended for Kahikatea funding".The Chief Executive's report to the Board[111] The RFP said that the decisions on the proposals were to be made by the Boardon the recommendation of the Chief Executive. The external assessors provided inputas did the panel. Their summarised comments went into the recommendation to theBoard. Dance Aotearoa says it expected the external assessors and panel would makethe decisions, or at least they would make recommendations, which would be adoptedwithout demur by the Board.[112] Dance Aotearoa refers to articles and media commentary by Creative NZ tothe effect that the assessment was "sector led" or "led by peers" as supporting itssubmissions. These comments were made after the close of the RFP process so couldnot have been relied upon by Dance Aotearoa. In any event these comments areconsistent with the relevant art sector experts providing input into the assessment asthey did.[113] A question and answer table was published as part of the process in the RFP.This stated that the external peer assessors could be nominated by anyone and thosesuitable would be selected. It went on to say "[i]t's important to remember that theassessors don't make the decision on who gets funding – the Arts Council makes thefinal decision".[114] The report of the CEO was on the Agenda for the Arts Council meeting for24 July 2021 under the entry: "Tōtara and Kahikatea Funding Recommendations2020-2026. Responsible Manager: Cath Cardiff, Manager Arts Development". The"Action Required" was a decision. Annexed to the Executive Summary was a set ofdetailed recommendations set out in table format as an appendix. The report wasendorsed and signed by Stephen Wainwright, Chief Executive of Creative NZ.[115] The Chief Executive's report noted the recommendations were for the fundingof organisations under the Tōtara and the Kahikatea programmes "in terms ofalignment with the features of the Investment Strategy Te Ara Whakamua 2018–2023and with consideration of the Te Hā o Nga Toi Māori and the Pacific Arts Strategy".[116] While the report was compiled by staff, the report and the recommendationswere those of the Chief Executive. They had been considered amended and endorsedby Mr Wainwright, the Chief Executive, and the report is signed by him.[117] The report sets out the process undertaken. It explained that the panel hadreceived all applications and assessments as well as summary tables of the total scoresand alignment of the relevant proposal with features and priorities as based onassessments as well as sector overviews by its art practice directors. The report notesthat following the assessment process staff undertook a moderation process and itlisted the four areas of verification set out in the assessment process.42[118] Each proposal was the subject of recommendations and comments by theChief Executive. In relation to the Dance Aotearoa proposal the Chief Executive'sreport and recommendation noted that it delivered nationally and read as follows:Panel comments: The proposal did not demonstrate strong alignment to allthree Investment Strategy features for Tōtara. Alignment to Resilient ArtsSector, Dynamic Arts, and Diversity and Reach need further development.42 See below at Attachment 1.The panel noted that a significant amount of DANZ's activity was aduplication of, or a crossover with, high-quality activities and servicesprovided by dance organisations.The panel questioned if the mission 'to make dance visible' is sufficient tobuild the sector. It was noted that professional dance companies don't usetheir services and they are not a key agent in developing internationalopportunities.It was acknowledged that when DANZ was created there was a real need forthem, but the sector has changed and relevancy is an issue.The proposal did not demonstrate strong focus on a resilient arts sector orauthentic delivery to diversity and lacked innovation in building collaborativepartnerships, new audiences and the sector.Despite this lack of alignment, Panel still recommended it for Kahikateafunding.Staff recommendation: that this organisation exits the programme. Theorganisation did not make a compelling case in terms of alignment with anyfeatures of the investment strategy and organisations within the sector did notsupport the organisation or find it fit for purpose.[119] Dance Aotearoa says that the panel recommendation had been that it receivedKahikatea funding but that was not what the Chief Executive recommended to theArts Council. This, the applicant says, is further evidence of interference by staff.[120] The Arts Council submits that the recommendation for Kahikatea funding wasnot adopted by the Chief Executive in his recommendation to the Arts Council Boardbecause he considered there was no outcome in the investment strategy features whichDance Aotearoa's proposal satisfied. It says this was apparent from the comments andthe feedback from both the expert assessors and the panel. Therefore, the proposal didnot meet the requirements for Kahikatea funding. Those requirements or indicatorshad been set out in the RFP as follows:43Kahikatea Indicators:1. Delivers to one outcome under one feature (exceeded=delivery tomore than one outcome).2. Delivery to outcome/s is well thought through and constructed.3. Delivery to outcome/s is focussed on results desired.43 Request for Proposals, above n 3, at 13.4. Delivery to outcome/s is strongly aligned to Creative New Zealand'sstated outcome.[121] Dance Aotearoa argues that it did meet at least one indicator according to thepanel and therefore the Chief Executive's recommendation did not properly reflect thepanel's deliberations.Claims based on breach of RFP process[122] Dance Aotearoa pleads the influence exercised by the staff was a breach of itslegitimate expectation that the role of Creative NZ staff in the RFP process would belimited. It pleads that the staff's involvement unlawfully influenced the RFP process.It says the only role the staff was entitled to take in relation to "moderation" was setout in the RFP document. Therefore, any "modification" was limited to verificationof the four considerations set out in the RFP verification process.44[123] As I noted, Mr Kirkness conceded that the staff must have had someinvolvement in administering the process but said that should have been strictlyadministrative and that the staff here went beyond that.[124] Dance Aotearoa says in addition to being involved in moderation beyond thatset out in the RFP the staff acted inconsistently with the limited moderation role by:(a) Reducing the scores provided by the second external assessor: thesuggestions and alterations made by Ms Martelli-Wood.45(b) Forming their own view as to the alignment of particular activities withthe investment features: this was by providing the summaries and thepractice sector overviews to the panel.(c) Influencing the decision-making of the panel in relation to: providingthe summary of scores and comments of external assessors and the44 These are set out above at [48] and [86](b).45 See above at [89].sector overview of each arts sector; preparing "points of note raised bythe assessors"; providing a PowerPoint briefing to the facilitator of thepanel; being present at the meeting and "framing" the panel's thinkingby supplying the Sector Overviews and providing the PowerPoint to thepanel facilitator.[125] Dance Aotearoa also says that as a matter of substance the danceSector Overview had identified gaps in the sector that could be filled by a DANZ as anational service provider such as: support for dance producers or independentcompanies; collaboration, communication and co-ordinated action; funding dancecompanies in the South Island and lack of teachers with the necessary skills. Thatpleading goes to another ground of review based on a claim that the Arts Councilshould have been in touch with Dance Aotearoa when it identified such gaps asDance Aotearoa could have responded and "filled in" those gaps.[126] In summary, Dance Aotearoa says that Creative NZ misled it when it stated theassessment process would be "externally-led". The influence of Creative NZ on theprocess influenced the process to such an extent that the staff's interference amountedto unlawfulness at public law, albeit Mr Kirkness emphasised that influence may havebeen unintentional.[127] I now turn to analyse the claims in relation to the RFP process and theChief Executive's report and recommendation.Analysis of the claims concerning the RFP process (first ground of review)[128] It is not necessary for the purposes of this decision to reach a determination asto whether the judicial review grounds here should be as narrow as in Lab Tests andProblem Gambling Foundation.[129] The Court of Appeal acknowledged in the Problem Gambling Foundation, thatthere was a public interest in agencies showing integrity and competence in thedischarge of their public powers and duties.[130] However, in relation to commercial procurement processes, a court in ajudicial review must bear in mind the need for the agency to be able to act in a mannerthat enables them to carry out their statutory functions. While the RFP process mightbe not a true "commercial" procurement process it bears significant similarities to sucha process. The inputs of the external assessors and panel were to be taken into accountas part of the decision-making process.[131] I now turn to the present application.[132] In this case there is no definition of "moderation". The specific "moderation"process referred to in the RFP was a process undertaken by staff to "verify" that Tōtaraorganisations adequately complemented infrastructure funded elsewhere; that the mixachieved a balanced arts infrastructure; and that the initial priorities were adequatelyaddressed by the "ranking of applications via external assessment across thetwo programmes" and whether critical gaps in infrastructure, capacity or practice hadbeen identified through the process. That specific verification process was to occurbefore the Chief Executive formulated his recommendations to the Board and wasintended to feed into those recommendations.[133] That verification moderation provided the opportunity for the staff to reviewthe applications and make sure that the "initial priorities" were adequately addressedby the ranking of the applications via external assessment. This "verification" allowedstaff to assess the proposals and consider how they met the priorities. In addition,"moderation" in general terms refers to more than a "verification" process. It is usedin a general way to indicate facilitation of an RFP process. This is an essential andimplicit function of staff in managing any RFP process. This accords with theCourt of Appeal views in the Problem Gambling Foundation case.[134] In Problem Gambling Foundation, the High Court had focused on theevaluation criteria and, in particular, on the scores and weightings which were part ofthe RFP process. The Judge said what was indicated by the RFP was a structuredprocess which ranked proposals on the basis of numerical weightings using a scoringsystem.46 The Judge found that the intervening moderation process had subjected the46 Problem Gambling Foundation (HC), above n 23, at [199].proposals to an assessment using criteria not explicitly set out in the RFP. In that casethe "moderation" process involved a re-ranking of the proposals, not changing thescores but changing the rankings. This was said to ensure a consistency in approachand achieve "sound, robust recommendations that would work in practice".47[135] The Ministry had argued that moderation was implicitly contemplated by theRFP and that it was rational and reasonable per se. It built on the consensus scoringwhile ensuring there was flexibility to "reach the right decision".48 The High CourtJudge had described the moderation process as a final stage "along the lines of anoverall review" which was often "called in aid by the Ministry", but was disconnectedfrom the process indicated by the RFP in a material way.49[136] In Problem Gambling Foundation, the Court of Appeal rejected theHigh Court's findings that the "moderation" incorporated into the process by theMinistry, despite no reference to such a process in the RFP, was a breach of legitimateexpectation. The Judge in the High Court had said the moderation stage involved a"major deviation" from what was indicated by the RFP.50 This was despitethe Ministry's submission that as an abstract proposition in relation to evaluation ofproposals or tenders in general, a final stage along the lines that an overall review"drawing on the collective experience and expertise of a panel, could often be aprocess not open to challenge".51 The Court of Appeal found that a process of thatgeneral nature might be expected to be undertaken in such a process.[137] Elena Noyes, as the process manager of policy and performance atCreative NZ, oversaw the RFP process.52 The funding round was a procurementprocess. Mx Noyes, in their evidence, said that they had previous experience in othergovernment departments managing procurement processes. The process herefollowed the government sourcing rules, which emphasised that the procurementprocess must be fair, transparent, and reasonable.53 When handling a process47 Problem Gambling Foundation (HC), above n 23, at [191], referring to a quote from the evidence.48 At [193].49 At [195].50 At [96].51 At [197].52 Their preferred title is Mx Noyes.53 Mx Noyes said they had had significant experience in running procurement processes for MFAT.involving the number of applications or proposals received in the funding round, itwas necessary to apply an efficient procurement process to ensure that proposers weretreated fairly.[138] I now consider the specific matters raised in relation to the process.[139] The external assessors were provided with a "tip sheet" which is a Creative NZinternal document. It said "in particular, we are interested in your assessment of howeach applicant aligns with our new investment strategy". It also noted that theassessment services team at Creative NZ would review assessments before moving tothe next stage of the process and would "support the assessors in interpretation ofassessment criteria, funding guidelines and other questions". This was not part of thepublished RFP information but was not inconsistent with the RFP.[140] Mx Noyes said that when an external assessor's score appeared inconsistentwith their comments, the Creative NZ staff would check with the assessor as towhether the assigned score reflected the assessor's qualitative assessment of theproposals under the criteria. Mx Noyes said this was part of ensuring the RFPproposals were correctly assessed.[141] It was common ground that the staff would be expected to administer andmanage the process. In my view this must have included checking the externalassessments. I do not consider Ms Martelli-Wood acted beyond what could beexpected in the management of an RFP in checking the external assessments to ensurethe scoring reflected the comments. She pointed out the issues and suggested solutionsby email, but it was the external assessor who authorised the changes. The onlychanges made were to the scores. No alterations were made to the assessors'comments. That change was made with the express approval of the external assessor.All the full assessment reports as well as the proposals were sent to the panel.[142] The check carried out by the staff to see that the scores matched the commentsand the bringing of any inconsistency to the attention of the assessor as well as thesuggestion of a better match did not amount to unlawful interference. It was thedecision of the external assessor to adjust the scoring.[143] Dance Aotearoa next says that by preparing the PowerPoints and notes for thefacilitator of the panel meeting the staff further influenced the panel members.Dance Aotearoa points to one PowerPoint in particular which was headed: "staff andassessor commentary – risks and issues". It listed a number of points to be alert for inthe proposals and gave examples of proposals which might illustrate the point. Thepoint in contention read: high scoring but issues raised in commentary e.g. [redacted] DANZ,[redacted four names of organisations].[144] That point was in the middle of a list of points made about "risks and issues"for panel members to watch for in considering the proposals. Other points included:low scoring applications; variance in scoring; alignment with Tōtara programme; andbudget – risks. Each bullet point listed the names of specific organisations whoseproposals might illustrate the point.[145] Creative NZ staff have not stepped outside their proper role by pointing outthese matters as issues to watch out for. It would be expected the staff would give thepanel facilitator guidance for him to provide panel members with areas to watch for inproposals. The panel was made up of members taken from different arts practices withdifferent backgrounds and experience, including two from the dance sector.Assistance from the staff in the management of the information, which included atleast 84 applications from different arts sectors, would be expected in such a process.[146] The panel members, however, each had all the proposals for a considerableperiod, as well as all external assessments. They were requested to read and considerall of the documents and come to their own conclusions.[147] The PowerPoint facilitator notes included comments such as suggestions aboutmoving the panel through the process at certain stages. By way of example, a notereads: "may move people along, balance everyone's input to ensure all panellists havefair input, may encourage panellists to speak up". These were notes for the benefit ofthe facilitator. They were appropriate in the circumstances and would be expected tobe provided by staff. The facilitator and panellists were free to reject the suggestionsand disregard any information provided.[148] In relation to the Sector Overviews, these provided a SWOT (strengths,weaknesses, opportunities and threats to the sector) analysis for each of the variousarts practice areas. For instance, in relation to threats to the dance sector the Overviewincluded a quote from Dance Aotearoa in the New Zealand Dance Strategy 2008 thatthere was little local government support for dance performance and community dancecompared with sport, theatre and the visual arts.[149] The Sector Overview went on to outline questions and answers in bullet pointformat concerning how well the proposals within that art form delivered to theInvestment Strategy features and what were the key differences from past proposaldelivery. Risks were listed under the three investment strategy headings: "dynamicarts, resilient arts sector and diversity and reach".[150] Again, it was appropriate for the staff to put this material together for the paneland in any process such as this a background context and commentary on the proposalcoverage would usually be provided to panel members.[151] The summaries prepared by staff of the proposals and assessments were merelysummaries. They did not purport to cover all the comments in any proposal. Thepanel members had the full proposals and assessments to read. It was clear from thesummaries that they were only a high-level overview of the proposals. Again, I do notconsider that the provision of these summaries supports an argument that Creative NZinfluenced or unduly interfered, in a public law sense, with the process.[152] There were panellists who were familiar with the particular sector, but otherswho were not. The Sector Overviews provided a useful context. However, the panelhad all the relevant information including the investment strategy details and all of theproposals and assessment reports before it. Creative NZ was well within its properrole of administering and managing the RFP in the provision of the Overviews.[153] Mx Noyes was present during the panel meetings, as were two other membersof the staff including an administrator. They said the staff did not at any stage makeany suggestions at the panel meetings other than assisting to move the process on.[154] Mx Noyes said the panel had, during the first day, raised concerns aboutDance Aotearoa's proposal and could not determine which features of theInvestment Strategy it aligned to. It asked Mx Noyes to make a note as it wished topark the Dance Aotearoa proposal to be considered with the applications for Kahikateafunding on the second day. Mx Noyes' involvement in this at the request of the panelwas pointed to by Dance Aotearoa as evidence of further interference. Similarly, thepreparation of the minutes was criticised.[155] Mr Moynahan, the chairman of the Board, was present on day two of the panelmeeting. He cannot recall the discussions in relation to Dance Aotearoa but confirmsMx Noyes' recollection about the role of staff. His observations of the process werethat the panel's consideration of the proposals was robust and that the staff ensured thediscussion focused on how each proposal aligned with the Investment Strategy.[156] The RFP process, as published, was followed and the staff ensured it wascarried out in an efficient and effective manner and that the external participants, theexternal assessors and panel members, were given sufficient information to be able tomake informed comments and provide input into the process.[157] In my view, with over 84 proposals to assess in the two-day meeting therewould be little chance of the panel being able to effectively consider the proposalswithout the background papers and assistance at the meeting provided by staff.Looked at as a whole, the involvement of the Creative NZ staff in the process in themanner alleged does not amount to interventions in the process such as to influence orinterfere with the RFP process in a manner which is unlawful at public law.[158] The grounds under the first ground of review (failure to follow assessmentprocess) are not made out.[159] I now consider the allegations in relation to the Chief Executive'srecommendations to the Board.The Chief Executive's recommendations to the Board: the fourth, and seventh groundsof review54[160] Dance Aotearoa said the staff had further interfered with the RFP process bypreparing the report and recommendations to the Board.[161] It is common ground that the report and the recommendations to the Boardwere compiled by the staff but were endorsed and signed by the Chief Executive. AChief Executive is entitled to rely on the work of his staff in compiling informationand preparing reports. Mx Noyes and another staff member prepared the paper for theArts Council Board. Following Mr Wainwright's review, input, and approval, thereport and recommendations were finalised, signed by him and put to the Board of theArts Council.[162] The Chief Executive's paper said that the recommendation of the panel hadbeen that Dance Aotearoa receive Kahikatea funding. He gave reasons why hisrecommendation to the Board was that the proposal did not receive Kahikatea funding.[163] Mr Moynahan, the Chair of the Board, noted that when the time came for theArts Council to make decisions on the funding proposals on 24 July 2019 it consideredthe recommendations of both the panel and the Chief Executive's reportrecommendations but reached its own decisions. In some cases its decisions differedfrom the recommendations of the panel and/or the Chief Executive. He commentedthat due to the passing of time Mr Moynahan could not remember the precisediscussions by the Board about Dance Aotearoa's proposal but did recall that therecommendation of Creative NZ was to transition Dance Aotearoa out of theinvestment programmes as it did not meet the criteria for either Tōtara or Kahikateafunding. Mr Moynahan said because the panel had recommended the Kahikateafunding, which was not supported by the Chief Executive's recommendation, it was aproposal that would have generated more discussion than others.[164] Dance Aotearoa says it did meet some investment criteria which were listedbut that the Board recommendation spoke of failure to deliver to, or not strongly54 Those grounds of review are, respectively, that the decision was not supported by evidence andthat there was a misinterpretation of the panel's findings.delivering, the three investment features. However, the RFP stated that Kahikateafunding required a proposal to deliver at least one feature of the strategy.55 Theassessment was concerned with the quality and alignment of that delivery and thestrength of alignment. The panel comments had made it clear the alignment of theproposal to all three was not strong.56 That Dance Aotearoa met some investmentcriteria did not, without more, mean the proposal would be accepted. There wasevidence to support the Board's decision, as was apparent from the panel's commentsand those of the Chief Executive in his recommendations.57[165] The Court of Appeal in Problem Gambling Foundation criticised theHigh Court for delving into the merits and examining each stage of thedecision-making in detail. The appellate court said it was as not appropriate to delveinto the merits in the circumstances. That is what Dance Aotearoa invites here.[166] I am satisfied here there was evidence upon which the Board could reach itsdecision. That evidence was apparent from the Panel's comments and theChief Executive's recommendation. As noted in Re Erebus,58 there must be someevidence upon which to base the decision. The RFP process and decisions on theproposals, like the exercise in Problem Gambling Foundation,59 was a humanqualitative assessment. The final decision was for the Board of the Arts Council onthe recommendation of the Chief Executive.[167] The Chief Executive did not mislead the Board nor were there any mistakes orerrors in the public law sense in relation to the recommendations to the Board. Therewas sufficient evidence upon which the Board could rely in order to make its decisionnot to accept Dance Aotearoa's proposal.55 Request for Proposals, above n 3, at 3.56 See above at [118].57 See above at [107] and [118].58 See above at [63].59 Problem Gambling Foundation (CA), above n 24.The staff recommendation included false claims about DANZ (sixth ground of review)[168] This matter is dealt with under the first ground relating to the Chief Executive'srecommendations to the Board. The report recorded in summary the comments andrecommendations of the panel. This ground fails.Failure to consider Dance Aotearoa's position as the sole national service providerfor dance: (fifth ground of review)[169] A decision-maker must take into account relevant considerations. Failing totake into account a relevant mandatory consideration is a reviewable error of law.60The Court of Appeal has noted that there is no ready template by which to distinguishmandatory and merely permissible considerations.61 However, the considerations mayarise expressly by implication from a statutory scheme or from the context of thedecision-making.[170] The allegation in this case is that the mandatory consideration was the fact thatDance Aotearoa was the peak dance body. Mr Tocher submitted that "facts obviouslymaterial to the mandatory statutory considerations as were or ought to have beenknown" to the decision-maker.62 Mr Tocher submitted that the fact thatDance Aotearoa was the peak body for dance in New Zealand was material to amandatory consideration.[171] However, I am not persuaded that this was a mandatory relevant considerationfor the decision-maker. There is nothing in the RFP that would indicate this. In fact,given the investment strategy and investment criteria were designed to focus onoutputs, having a national reach might assist this but the fact that an organisation wasa "peak body" in and of itself would not be a mandatory consideration.[172] There is nothing to suggest this was a mandatory consideration in the publiclaw sense. This ground is an invitation to consider the merits. This ground fails.60 Philip A Joseph Joseph on Constitutional and Administrative Law (5th ed, Thompson ReutersWellington, 2021) at 1009.61 CREEDNZ Inc v Governor-General [1981] 1 NZLR 172 (CA) at 183.62 New Zealand Fishing Industry Association Inc v Minister of Agriculture and Fisheries (1988)1 NZLR 544 (CA) at 552 per Cooke P.Conclusion[173] As the Court of Appeal noted in Problem Gambling Foundation, anassessment process, such as in the present case, is intensely human. It is notappropriate for the court to focus on each stage of the process and substitute its ownviews for that of the decision-maker. In this case the RFP process was followed, andthe recommendation made by the Chief Executive, as contemplated by the process,with a final decision being made by the Board. I have not identified any step whichwas defective, and the allegations taken together do not affect that assessment.[174] In conclusion, in relation to the claims relating to the RFP process and thedecision-making, standing back and looking at the claims as a whole, I do not considerthere is any basis for the claims of improper interference by the staff such as toinfluence the outcome to the extent that the interference was unlawful at public law.[175] I now turn to the grounds based on the legitimate expectation byDance Aotearoa alleged to have come into existence due to the long-term fundingarrangements.II. Legitimate expectationLong-term funding and relationship (third ground of review)[176] Dance Aotearoa submits that because of its 26-year relationship with theArts Council and its funding during those years it should have received early notice ofits termination or more notice than it did receive.[177] Briefing sessions had been held both on the new investment strategy formationand on the RFP. These were attended by Dance Aotearoa. The evidence is thatDance Aotearoa understood that the funding was to effect a significant change infocus. Existing providers were told there was no guarantee that incumbent providerswould be awarded funding. This was specifically set out in the RFP.[178] Questions from individual proposers were invited for a two-month period fromthe issue of the RFP to 26 April 2016. Only one point of contact was in place for allproposers. The emphasis was on the fact that proposers were required to put their"best foot forward" and that an organisation would not be consulted about concernson the proposal before the application was submitted nor during the assessment anddecision-making process prior to the decision being made on the funding.[179] The RFP made it clear that each proposal would be considered on its merits.The question and answers also said there would be no feedback on proposals until afterthe notifications as to funding had been released. The question and answer table notedthat the assessments would be moderated internally by Creative NZ staff, but the finaldecision was made by the Arts Council.[180] Dance Aotearoa says that it should have been put on notice, or consulted beforethe decision was made, that its proposal would not be accepted and so its fundingwould cease. It points to provisions in the RFP document which would have allowedthe Arts Council to seek further information from it, given the Arts Council had queriesabout its proposal. For instance, in the "RFP process, terms and conditions", underthe heading "Creative New Zealand's clarification" is a clause which allowsCreative NZ at any time to request clarification of a proposal, as well as additionalinformation, without obliging it to request the same clarification or information fromeach respondent. Similarly, under section 10, Creative NZ may, despite any otherprovision in the RFP, "liaise or negotiate with any respondent without disclosing thisto or doing the same with any other respondent".63[181] These are permissive provisions. If Creative NZ had pointed out shortcomingsin one proposal, or suggested to an organisation how it might fill gaps in the proposalsmade or provide other material in support of its application, without allowing allproposers to do the same, it would be in breach of its obligations to be fair.[182] The fact that Creative NZ was permitted to do this, as a standard term of anRFP document, does not mean it had any obligation to do so. The fact thatDance Aotearoa had previously been funded by the Council would not justify such anapproach on its own. The fact that all funding was to be contestable had been madeclear by Creative NZ at the time the RFP was published. In addition, the RFP referred63 Request for Proposals, above n 3, at 37.to "transitional funding" for organisations required to "exit" the funding as a result ofthe proposals process.64[183] A hope by Dance Aotearoa that it might be contacted to amend its proposal tofill in the gaps staff had identified in the proposals could not amount to a legitimateexpectation in view of the clear messages during the consultation process and in theRFP itself that the proposals would be considered on their merit. Previous discussionsreferred to by Dance Aotearoa with Creative NZ staff gave rise to no basis for alegitimate expectation.[184] The mere fact of the length of time of funding does not give rise to a legitimateexpectation of consultation. In this case the explicit wording of the RFP and themessages from the Creative NZ staff doing the consultation on the RFP and in itsresponses to the questions on the accessible Q and A website forum reinforced those.The provision of transition funding was a recognition that an unsuccessful proposerneeded time to either find other funding or reorganise its business. In thosecircumstances no legitimate expectation could arise of further notice or consultation.[185] A related point taken by Dance Aotearoa was that there existed a protocol forCreative NZ to deal with organisations who were not meeting performanceexpectations under a funding agreement. This was called the "on notice policy". Ithad been developed between 1998 and 2000. The form of policy which applied from2016 onwards was before the court.65 A former chair of the Arts Council who hadbeen involved in the development of an earlier policy in similar terms to that presentlyin place provided an affidavit saying that he considered it would be unfair for theArts Council to cease funding an organisation that had been recurrently funded,without warning.[186] Nevertheless, the active engagement and on notice policy had no applicationin this particular case. There was no suggestion that Dance Aotearoa's performanceunder the previous funding agreement was such that it should have been put on noticein terms of that policy.64 Request for Proposals, above n 3, at 13.65 A copy of the earlier Policy was not produced.[187] The legitimate expectation ground (third ground of review) fails.[188] The next issue relates to a complaint lodged by Dance Aotearoa about thedecision-making process. It alleges it was not properly dealt with in terms of thecomplaints process.III. The complaints process[189] The Creative NZ complaints process was referred to in the RFP as follows:668. Issues and complaints• A Respondent may, in good faith, raise with Creative New Zealandany issue or complaint about the RFP, or the RFP process at any time.• Creative New Zealand will consider and respond promptly andimpartially to the Respondent's issue or complaint.• Both Creative New Zealand and Respondent agree to act in good faithand use their best endeavours to resolve any issue or complaint thatmay arise in relation to the RFP.• The fact that a Respondent has raised an issue or complaint is not tobe used by Creative New Zealand to unfairly prejudice theRespondent's ongoing participation in the RFP process or futurecontract opportunities.[190] A detailed complaints procedure is published on Creative NZ's website.Dance Aotearoa submitted that process was applicable to its complaint. The publishedprocess required that the complaint in the first instance be directed to the staff memberthat had been dealing with the matter. Following that, a formal complaint could besubmitted to the compliance officer.[191] Step three was an independent complaints review. This provided that if thecomplainant was not satisfied with Creative NZ's response the matter could bereferred to the Ombudsman. Details of how to contact the Ombudsman and make acomplaint were provided as part of the published complaints information.66 Request for Proposals, above n 3, at 35.[192] A section of the published complaints process was headed "Appeals AgainstFunding Decisions". It read as follows:Appeals against funding decisionsIf your complaint is an appeal against a funding decision we've made, we canprovide feedback about your application or proposal. We do not reconsiderdecisions where we have followed our decision-making process correctly.If your complaint is an appeal about a Creative Communities Scheme fundingdecision, contact the administrative contacts for the Creative CommunitiesSchemeOther complaintsIf your complaint is about:• a funding policy, email the Chief Executive Stephen Wainwright ataskthece@creativenz.govt.nz• a decision not to provide information or to charge for information, agovernment policy grievance, or an allegation of fraud, refer to theOffice of the Ombudsmen website.[193] Mr Tocher argued that the complaint made by Ms Lowe,67 on behalf ofDance Aotearoa, about the RFP process was not dealt with by Creative NZ in goodfaith nor did it use "best endeavours" to resolve it. He said these obligations werespecifically incorporated in the complaints process in the RFP. He said this was anagreement that the parties would act in good faith and "use their best endeavours toresolve" the complaint in relation to the RFP.[194] Mr Tocher said that the cases that had considered contractual obligationsrequiring parties to use "best endeavours to resolve" issues in "good faith" wereanalogous to those requirements in the complaints process.[195] Mr Tocher said those obligations required Creative NZ to do more than it haddone. The complaint raised on behalf of Dance Aotearoa outlined the concerns it hadwith the decision and in particular: the sudden and unexpected nature of the decisiongiven the longstanding co-operative relationship; the inappropriate involvement ofCreative NZ staff in the decision-making; the indication that Creative NZ would not67 The Chief Executive of Dance Aotearoa.review the decision; the inconsistency with Creative NZ's statutory mandate topromote the arts sector and the inadequacy of the transitional funding.[196] Dance Aotearoa lodged the complaint following a meeting with Mr Moynahan,Mr Wainwright, and a Creative NZ staff member on 5 August 2019.[197] The response from the Chief Executive to the complaint noted:68(a) The fact that the Arts Council had provided regular funding in the pastwas never a "lifelong guarantee". The possibility that the proposal byDance Aotearoa would not be successful was reflected in the RFP.(b) The process as outlined in the RFP ensured the end result was based onthe most robust understanding possible of the organisation and itsproposal. Ultimately the funding decisions were made by theArts Council and not Creative NZ staff.(c) As set out in the RFP, Creative NZ would respond promptly andimpartially but the matters raised by Dance Aotearoa in the complaintdid not highlight any "flaws" in the decision-making.(d) Dance Aotearoa was able to apply for other funding throughCreative NZ.(e) The offer of transitional funding had been an act of good faith. It wouldallow Dance Aotearoa the time and resources to consider differentoperating models.68 The complaint was dated 13 September 2019. The response by Creative NZ was dated27 September 2019.[198] A further detailed response was provided by Creative NZ following anadditional complaint made on 24 December 2019 concerning the staff involvement.The Creative NZ Chief Executive responded on 7 February 2020 concerning the roleof the staff in the external assessment. He said:(a) The staff were required to check for errors which were then brought tothe attention of the external assessor. Further, they were to ensure theassessor provided adequate commentary and the scores matched thecommentary.(b) In the meeting of the panel the information provided by staff did notinclude recommendations regarding specific organisations such asDance Aotearoa. It was not correct that "CNZ staff were contributingactively to the decision-making dynamics".(c) That the panel members consisted of arts sector peers, who wereexperienced and respected artists and practitioners, and whorepresented a range of artform, strategic, location, and other expertise.(d) That the recommendation was made concerning funding, but theultimate decision was made by the Arts Council after consideration ofthe proposal, the comments of the external assessors, external panel andCreative NZ's recommendation.(e) It was for an applicant for funding to ensure that its proposal wassupported by evidence.(f) Creative NZ considered it had responded as required in the terms of theRFP to the complaint.[199] Mr Tocher argues that these responses dismissed Dance Aotearoa's concernsout of hand. He pointed to comments in a paper to the Minister of Culture andHeritage, where the Ministry appeared to indicate it had received legal advice on somevulnerabilities in relation to the Arts Council's RFP process insofar as staffinvolvement was concerned.[200] Mr Tocher pointed to principles developed in contract law where the conceptof "best endeavours" had been examined.69 He said it had a well-established legalmeaning requiring the party to do all they reasonably could in the circumstances.Mr Tocher submitted that this was not what happened in this complaint. He said thatat the least the Board should have been advised of the complaint and Creative NZshould have met with Dance Aotearoa in an attempt to resolve the complaint. Thecomplaints process did not incorporate those steps.[201] However, a complaints process is quite a different process to a contractualconflict where the parties have agreed to negotiate in good faith using their bestendeavours to resolve a dispute. The aim there is to negotiate an agreed resolution. Inthis complaints process the reference to "good faith" means not in "bad faith". Noallegations of bad faith have been raised, at least of the nature that would providegrounds for judicial review. The use of the words "best endeavours" does not requirethat Creative NZ negotiate an agreed resolution in the sense that the words are used incontract law. What was required of Creative NZ here was it would properlyinvestigate the complaint in good faith. The complaint procedure is for handlingcomplaints and does not indicate that the intent is to negotiate an agreed outcome, asis the intent of a "best endeavours clause" in a contract. Creative NZ did what wasrequired to investigate and resolve the complaint in the circumstances.[202] Creative NZ responded in detail to the complaints made about the process. Theresponse indicates the Chief Executive had taken the time to investigate the complaintabout the role of the staff and provide information on that.[203] Dance Aotearoa refers to a paper obtained prepared by the Ministry of Cultureand Heritage for the Minister concerning the Creative NZ process afterDance Aotearoa's approach to the Minister following the Arts Council decision not toaccept its proposal. It commented that the process could be vulnerable because of thestaff involvement. It is not clear who was making the comments about the Creative NZ69 Referring to Centaur Investments Co Ltd v Joker's Wild Ltd (2004) NZCPR (HC).process, nor whether Creative NZ was aware of those comments. But even if it were,when a process is being critiqued for a Minister, any possible legal grounds are likelyto be highlighted whether those grounds are or are not of substance. The fact that theMinistry pointed out a possible vulnerability to the Minister does not lead to aconclusion that the complaint was not dealt with in good faith.[204] The complaint process said that if the complaint was about a funding decisionCreative NZ could provide feedback on the application but would not reconsiderdecisions where the decision-making process was followed correctly. The complaintwas investigated, and the outcome was that no error in the process was found.[205] If the complainant was not satisfied, it could seek an independent review withthe Ombudsman. That would have been the appropriate next step for any complainantwho was unsatisfied with the response of the complainant in this case.Discretion to grant relief[206] Mr Tocher also addressed me on the discretion to grant relief which he saidshould be exercised in favour of Dance Aotearoa if it established grounds. Ms Aldred,for the Arts Council, pointed out that the funding decisions were made by theArts Council on 24 July 2019 and the decision was conveyed to Dance Aotearoa at ameeting on 5 August 2019. On 9 August Creative NZ provided Dance Aotearoa witha document entitled "Decision-Making Comments for Dance Aotearoa New Zealand",which was the feedback on its application. From that date until it filed proceedingsMr Tocher said Dance Aotearoa was meeting with ministers, seekingOfficial Information Act documents and dealing with the effects of COVID-19 bothon it and the dance sector. It commenced these proceedings on 18 December 2020.Mr Tocher submitted that it had not been sitting on its hands so delay would not countagainst it.[207] In the circumstances, as the application fails on all grounds it is not necessaryfor me to consider the discretion to grant relief. Nevertheless, in this situation the factthat the funding round decisions were completed almost two years ago, means therehas been substantial delay in bringing this application. While other avenues werebeing pursued which might explain a short delay it does not explain two years of delay.That would have been a factor that weighed against the exercise of the discretion.Nevertheless, it is not necessary for me to finally determine that matter in thecircumstances.Conclusion[208] Dance Aotearoa is an unsatisfied applicant for funding. Much of the argumentrelated to the merits of the proposal. In the absence of any public law error, mistake,or other unlawfulness, the court will not enquire into the merits of a funding decision.[209] For the reasons set out above the judicial review application is dismissed. Inrelation to the grounds pleaded:(a) Ground 1: Failure to follow the process set out in the RFP: theArts Council followed the process as required, not all steps taken bystaff in the process needed to be explicitly laid out. It made no error.(b) Ground 2: Failure to follow the complaints process: Creative NZfulfilled its responsibilities in relation to responding to the complaint.It investigated appropriately and met the requirements of thecomplaints process.(c) Ground 3: Failure to put Dance Aotearoa on notice of possibletermination: Dance Aotearoa was expressly advised that it may not besuccessful in obtaining funding, despite the long-term nature of thefunding relationship with Creative NZ. There is no basis for anylegitimate expectation it would be consulted or notified other thanactually occurred.(d) Ground 4: The decision is not supported by the evidence: there wassufficient evidence upon which the Arts Council could make itsdecision.(e) Ground 5: Failure to consider the Arts Council as a peak body: this wasput forward as a mandatory consideration: it was not a mandatoryconsideration. No basis for it to be a mandatory consideration wasadvanced. Dance Aotearoa was one of 84 proposers whose proposalwas required to be assessed in terms of the RFP process.(f) Ground 6: This related to false claims alleged to be made byCreative NZ in the Chief Executive's Board recommendation inrelation to Dance Aotearoa not being fit for purpose and similarcomments: this was a general comment in the Board recommendationwhich was a summary for the Board. The comments of the panel werebefore the Board with an explanation as to why that comment wasmade.(g) Ground 7: Misinterpretation of the panel's findings which amounted toa mistake of fact: the panel's recommendation was before theArts Council: the Chief Executive's recommendation was based onevidence. There was no mistake in the public law sense.Costs[210] Counsel agreed that 2B was the appropriate categorisation for costs and thatcosts should follow the event. The Arts Council is the successful party. Costs on a2B basis are therefore awarded in favour of it, together with reasonable disbursementsaccordingly. I note that counsel for Dance Aotearoa indicated that the legal work inthis matter had been carried out pro bono.[211] If any matters arise in relation to the award of costs or otherwise, counsel havethree days to file a memorandum._____________________Grice JSolicitors:Russell McVeagh, Wellington for the applicant.Crown Law, Wellington for the respondent.Attachment 1Attachment 2See below for typed versionExtracts from Attachment 2 for Dance Aotearoa – typed versionProgramme: TOTOrganisation: DANZ Dance Aotearoa New ZealandTotal score /28: 18Assessment Risks/Issues: !Staff Analysis Risks/Issues: !Artform: DanceProgramme Description: towards a programme of support services, skills development and sector engagement for the dance sectorAlignment to Tōtara: 1Diversity + Reach (What area of practice?): DanceDiversity + Reach (Where?): NationalDiversity + Reach (For whom?): dancers, producers, writersDiversity + Reach (National/International/Both):Diversity + Reach:Dynamic Arts (Investment that supports innovation in NZ arts practice): Experimental Dance WeekDynamic Arts (Develop New Zealand arts in NZ & internationally (as applicable) National/International/Both):Resilient (Building sector capability): Provide professional development, NZ Dance Film ArchiveResilient (Building organisational capability): Partner organisations; new Māori staffResilient (New models for value creation): aligning to Living Standards FrameworkPriorities (Cultural Diversity):Priorities (Māori-led org):Priorities (Pasifika-led org):Priorities (Regions):Priorities (Youth):