SECRETARY FOR JUSTICE AS RELEVANT SUCCESSOR TO THE LEGAL SERVICES AGENCY V CHERYL YVONNE SIMES COA CA414/2011

SECRETARY FOR JUSTICE AS RELEVANT SUCCESSOR TO THE LEGAL SERVICES AGENCY V CHERYL YVONNE SIMES COA CA414/2011 [5 October 2012]IN THE COURT OF APPEAL OF NEW ZEALANDCA414/2011[2012] NZCA 459BETWEEN SECRETARY FOR JUSTICE ASRELEVANT SUCCESSOR TO THELEGAL SERVICES AGENCYAppellantAND CHERYL YVONNE SIMESRespondentHearing: 5 and 6 September 2012Court: Randerson, Stevens and French JJCounsel: G D S Taylor and C J Mundy-Smith for AppellantP F Gorringe for RespondentJudgment: 5 October 2012 at 12.30 p.m.JUDGMENT OF THE COURTA The appeal is dismissed.B The cross-appeal is allowed.C The decisions of the Cancellation Consideration Panel and the Cancellation Review Panel are quashed.D The order made in the High Court for reconsideration by the Cancellation Review Panel is set aside.E The appellant must pay costs to the respondent on both the appeal and cross-appeal. The costs are to be fixed as for a standard appeal on a band A basis with usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Randerson J)Table of ContentsPara NoIntroduction [1]The High Court judgment [11]The issues [14]Audit report [17]The Consideration Panel [23]The Review Panel [32]First issue: Was the audit report a mandatory consideration and was it considered by the Consideration Panel and the Review Panel?The Judge's findings [43]The LSA's submissions on this point [47]Principles [48]Discussion [51]Second issue: Did natural justice require the disclosure of the previous decisions referred to by the Review Panel?Factual background [68]The Judge's reasons [75]The LSA's submissions on appeal [76]Discussion [79]Third issue: Was there a breach of natural justice in relation to thenotations made on Ms Simes' submissions to the ConsiderationPanel?Factual background [83]The Judge's reasons [87]Ms Simes' submissions [89]The submissions for the LSA [98]Discussion [99]Was any breach of natural justice cured by the subsequent hearing beforethe Review Panel?[109]Fourth issue: Was the Judge correct to refer the matter back to the Review Panel for reconsideration or should the decisions of each Panel have been quashed without any direction for reconsideration?[112]Disposition [119]Introduction[1] This appeal is concerned with decisions made by the Legal Services Agency under the Legal Services Act 2000 to cancel the listing approvals of the respondent,Ms Simes. The appellant, the Secretary for Justice, is the successor to the Legal Services Agency under the Legal Services Act 2011.[2] Ms Simes developed a legal practice specialising in family law, including domestic violence cases. In 2001 she was approved by the Legal Services Agency (the LSA) as a lead provider listed for family law and civil/general law. She practised as a barrister but employed, at relevant times, up to 12 staff including both lawyers and non-lawyers. Some of her staff were employed part-time. The great majority of her work was funded by the LSA.[3] Under the 2000 Act, Ms Simes as the lead provider had overall responsibility for the management and conduct of cases funded by legal aid. Services could be provided to the legally-aided person by persons other than the lead provider, but those persons also required approval as listed providers. Legally qualified providers were described in the 2000 Act as secondary providers and persons who were notlegally qualified were described as "non-lawyer providers". Ms Simes as the leadprovider was responsible for supervision of secondary and non-lawyer providers, and was also responsible for the rendering of all accounts to the LSA.[4] Under the 2000 Act, the lead provider was required to enter into a provider contract with the LSA and Ms Simes did so in March 2003. It was subsequently renewed in February 2008. In July of that year, an LSA regional manager raisedconcerns with the LSA's head office in Wellington about challenges made to LSAdecisions by Ms Simes before the Legal Aid Review Panel. Ms A Edmonds was an adviser employed by the LSA and began to make inquiries.[5] In October 2008, Ms Edmonds wrote to Ms Simes raising issues about an advertisement for a junior lawyer Ms Simes had placed in a Law Society newsletter. The complaint was that the advertisement publicly criticised aspects of the LSA'scommunications, remuneration rates and policies. It is clear from this and other evidence that the relationship between Ms Simes and the LSA was deteriorating. As well the LSA had other concerns about billing practices, the quality and value ofservices provided to clients and the adequacy of Ms Simes' supervision of theproviders employed by her.[6] This led Ms Edmonds to recommend to the Manager Service Contracts under the LSA (Ms M Pearson) that the LSA undertake a special audit of Ms Simes' legal aid work for the last financial year. Ms Pearson approved Ms Edmonds'recommendation and the latter wrote to Ms Simes on 26 November 2008 informing her of the decision.[7] The audit was undertaken by an independent party who prepared a report in March 2009. The audit was generally favourable to Ms Simes but concerns were raised about three missed court appearances, the level of supervision provided by Ms Simes in relation to her staff and about the working relationship between Ms Simes and the LSA.[8] In the meantime, Ms Edmonds had received a number of complaints from clients about the services provided by Ms Simes. Despite correspondence between the two over the period March to September 2009, the issues were not resolved to the satisfaction of the LSA. This led to Ms Edmonds recommending to Ms Pearson that a panel, described under the 2000 Act as a Cancellation Consideration Panel (the Consideration Panel), be appointed under s 73(1)(d) of the 2000 Act. Under thatprovision, the LSA may cancel one or more of the approvals in a provider's listingon the grounds that:(d) the person is not providing, or has not provided, the service for which he or she is approved to a standard that is acceptable to the Agency.[9] Ms Pearson approved Ms Edmonds' recommendation. After receiving andconsidering written and oral submissions from Ms Simes, the LSA notified her on 5 January 2010 that the Consideration Panel had decided to cancel her listing approvals in the civil/general and family areas of law with immediate effect. This decision was subsequently upheld by a Cancellation Review Panel (the Review Panel) acting under s 73(6) of the 2000 Act. The decision of the Review Panel was notified to Ms Simes' legal adviser on 8 April 2010.[10] The LSA then cancelled its provider contract with Ms Simes and also made a complaint to a Standards Committee of the New Zealand Law Society. Disciplinarycharges brought against Ms Simes were later dismissed by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal.The High Court judgment[11] After the decision of the Review Panel, Ms Simes brought judicial review proceedings against the LSA. In a judgment delivered on 13 June 2011, Andrews Jgranted Ms Simes' application and remitted the matter to the Review Panel for reconsideration in the light of her judgment.1[12] In her judgment, Andrews J found:(a) Both the Consideration Panel and the Review Panel had failed to take the audit report into account as a relevant factor.(b) The Review Panel was in breach of natural justice by failing to provide Ms Simes with references to other decisions to which it referred when deciding to uphold the cancellation of her listing approvals.(c) There was no breach of natural justice arising from the failure to disclose to Ms Simes at the Consideration Panel hearing that MsEdmonds had made observations and notes on a copy of Ms Simes'written submissions and that these notations had been passed on to one of the members of the Panel.[13] The Judge dismissed four further grounds for judicial review:(d) An alleged error of law as to the correct interpretation of s 24 of the Lawyers and Conveyancers Act 2006 and Part 13 of the Provider Manual published by the LSA.(e) An allegation that the LSA had breached Ms Simes' legitimateexpectation that the differences between herself and the LSA would be pursued under a disputes clause in her provider contract.(f) An allegation that the Consideration Panel had breached natural justice by not giving Ms Simes an adequate opportunity to make1 Simes v Legal Services Agency HC Hamilton CIV-2010-419-6, 13 June 2011.submissions as to supervision.(g) An allegation that the decisions of the two Panels were unreasonable or disproportionate.The issues[14] The Secretary for Justice now appeals against the High Court's judgment.Ms Simes cross-appeals against aspects of that judgment. Although a number of issues were identified, those necessary to dispose of the appeal and cross-appeal may be stated as follows:(a) Was the Judge correct to find that:(i) The audit report was a mandatory consideration and was not considered by the Consideration Panel or the Review Panel;(ii) Natural justice required the disclosure of the previous decisions referred to by the Review Panel; and(iii) There was no breach of natural justice in relation to thenotations made on Ms Simes' submissions to the Consideration Panel?(b) If the Judge's finding of reviewable error is upheld on any or all ofthe issues, was the Judge correct to refer the matter back to the Review Panel for reconsideration or should the decisions of each of the Panels have been quashed without any direction for reconsideration?[15] We record that, although the notice of cross-appeal included grounds that theJudge had erred in law or had breached Ms Simes' legitimate expectations,2 these grounds were either abandoned or not pursued.[16] Before turning to the issues, we set out the facts in more detail.2 As identified in [13] (d) and (e) above.Audit report[17] Ms Simes ordinarily had about 130 active files at any one time. Ten files selected at random were considered by the auditor. Four were active files and six closed. The auditor prepared a written report dated 24 March 2009. Her conclusions from an examination of the files were generally very favourable to Ms Simes: communication with clients was found to be excellent; she had responded in a timelymanner to client's instructions; the files were maintained to a reasonable standard; legal aid had been applied for in a timely manner; the requirements of s 21 of the 2000 Act had been met; in all cases the legal aid expenditure was justified; the bills sent by Ms Simes to the LSA represented value for service; and they were correctly calculated according to the appropriate rates for the work undertaken.[18] On the other hand, there were some negative comments. In three cases there had been missed court appearances. In two of these cases, Ms Simes advised that no notice of fixture had been received and in the third, an appearance at a formal proof hearing was inadvertently missed. This had resulted in the client complaining.[19] The auditor also reported some discrepancies of a minor nature in relation to record-keeping. More seriously, the auditor expressed concern about the level of supervision being provided to the number of fee authors for whom Ms Simes was responsible. The auditor also concluded that the working relationship between Ms Simes and the local branch of the LSA had been damaged.[20] In comments from Ms Simes recorded in the auditor's report, Ms Simesacknowledged that the relationship between herself and the local LSA branch had been strained. That was due in part to her concerns about the LSA system which she considered to lack flexibility. There had also been staff changes in her practice at the end of 2008 that had caused difficulties.[21] Ms Simes commented that her relationship with the LSA had improved with better communications and some changes to LSA systems. She offered a number of suggestions about how their relationship could be further improved.[22] The auditor made a number of relatively minor recommendations to do with record-keeping, but identified Ms Simes' working relationship with the local LSAbranch as "the biggest issue". Consideration needed to be given as to how to addressthis. Ms Simes needed to accept her role in this breakdown and seek to improve the working relationship.The Consideration Panel[23] After receipt of the audit report, there was ongoing correspondence between Ms Simes and Ms Edmonds whose position in the LSA was described as Adviser Service Contracts. On 4 June 2009, Ms Edmonds wrote to Ms Simes notifying her of eight complaints by clients of her practice and two areas of concern relating to excessive hours for the work undertaken. Concern was again expressed about Ms Simes' ability to supervise her staff and the deterioration of the contractualrelationship between Ms Simes and the LSA.[24] We note that Ms Edmonds advised in this letter that:The Agency accepts some responsibility for this as it has failed to raise long- held concerns with you regarding the quality and value of the services you provide to legal aid clients.[25] Despite further correspondence, the issues were not resolved. On 14 September 2009 Ms Edmonds sent a memorandum to Ms Pearson recommending that the Consideration Panel be appointed. The memorandum focused on the quality of legal services being provided; the specific complaints from clients; the supervision of staff; and an allegation that Ms Simes had not adhered to s 69 of the 2000 Act by allowing secondary providers, non-lawyers and unlisted providers to act for clients when they were not approved to do so. Ms Edmonds stated that, in herview, all ten of the complaints or concerns were justified, as were the auditor'sconcerns about the three missed court appearances.[26] Ms Pearson accepted the recommendation and, on 16 September 2009, Ms Edmonds wrote to Ms Simes informing her that the LSA had decided to consider the cancellation of her listing approvals under s 73(1)(d) of the 2000 Act. Ms Simes was also advised that the LSA had completed investigations and had upheld the tencomplaints and agency concerns as well as those relating to the three missed courtappearances. The other issues raised in Ms Edmonds' earlier memorandum toMs Pearson were also identified. Ms Simes was invited to make written submissions and she did so.[27] The Consideration Panel met on 14 December 2009. It comprised Ms Pearson as Chair and Ms R Nicholas, whose position was described as Manager Grants. The Consideration Panel was assisted by an external lawyer. Ms Simes appeared, made oral submissions and answered questions from the Panel. Ms Edmonds was also present, her role being described as "Note taker".[28] On 5 January 2010, Ms Simes was advised that the Consideration Panel had decided to cancel her listing approvals for civil, general and family law. The cancellation was to take effect from 17 February 2010 and would remain in place"indefinitely". Ms Simes was also notified that her service provider contract withthe LSA was terminated with effect from 17 March 2010.[29] The Consideration Panel gave detailed reasons for its decision. In summary these were:(a) With the exception of two of the complaints about missed court appearances, all the other complaints were upheld.(b) The supervision of staff was inadequate.(c) Ms Simes had admitted to misleading the LSA in relation to a court appearance by a secondary provider and knowingly submitting a misleading invoice to the LSA in relation to that issue.(d) There had been a breach of s 69 of the 2000 Act, and of provider contract and LSA policy in allowing secondary providers and non- lawyers to provide services to clients when they were not listed as approved to do so.(e) There had been a breach of professional obligation in the release of a confidential report.(f) There were serious issues regarding Ms Simes' health and her ability tomanage stress.[30] Overall, the Consideration Panel concluded that Ms Simes had not provided an appropriate level of client services. The LSA could not have any confidence thatconditions on Ms Simes' listing approvals would be effective. The reasons for thisconclusion were: the frequency and severity of the concerns raised; the refusal of Ms Simes to engage with the LSA to address them; Ms Simes' disagreements as to the legitimacy and lawfulness of the LSA's policies, processes and investigationsinto the concerns raised; and her inability to understand the seriousness of them.[31] The Consideration Panel set out in its decision the matters it considered should be taken into account in reaching its decision. The list of items mentioned referred to the special audit earlier undertaken but made no further reference to it. It is common ground that the notations made by Ms Edmonds on Ms Simes' writtensubmission were given to Ms Pearson but not disclosed to Ms Simes. We discuss the detail of this below.The Review Panel[32] After the decision of the Consideration Panel was received, Ms Simes applied for a review of the decision under s 73(5) of the 2000 Act. Ms Simes made written submissions to the Review Panel which convened a hearing on 19 February 2010. The Review Panel comprised Mr R Turner (Manager Corporate) as Chair and Mr G Metcalfe (Northern Regional Manager Grants). The Review Panel was assisted by a different external lawyer. Ms Simes was represented by her counsel, Mr Gorringe. Ms Edmonds was again present as note taker.[33] Prior to the hearing, the Review Panel advised that it would not beconsidering the Consideration Panel's decision on a de novo basis. During the hearing, Mr Gorringe made submissions and Ms Simes answered questions from the Review Panel and the external lawyer.[34] After the hearing but before the Review Panel delivered its decision, Mr Gorringe informed the Panel that Ms Simes would accept a condition that herstaff be limited to three secondary providers and two non-lawyer providers, all full- time equivalent. Mr Gorringe advised that those numbers equated with Ms Simes'staff in December 2009. He suggested that a condition to that effect could be inplace for six months from the date of the Review Panel's decision. Mr Gorringeadded that the LSA would, in any event, retain its ability to audit and oversee Ms Simes' practice.[35] On 8 April 2010, the Review Panel issued its decision upholding theConsideration Panel's determinations. In its decision, the Review Panel examinedeach of the specific complaints that had been dealt with by the Consideration Panel and upheld them. In doing so, the Review Panel took into account the written and oral submissions made to them and the answers given by Ms Simes to the questions asked of her.[36] The Review Panel also considered the issue of supervision and the issue of secondary providers and non-lawyers providing substantive services to clients. The Review Panel found:65 (g) In summary, the submissions appear to minimise the importance of, and the impact of, the lack of supervision on legal aid clients. The Panel considers, as Counsel has suggested in the submissions, that it is possible tohave a "hands off" approach to supervision with highly skilled andexperienced staff using sound case management systems. However, this is not the situation when the specific complaints and concerns raised in this review are analysed. The matters raised in this review have clearly occurred as a result of the inexperience of the staff concerned, in some cases a lack of appropriate qualifications to undertake the work, and an overall inadequate level of supervision – which has resulted in an inability to identify whether client service delivery met the desired standards in terms of response, timeliness and quality.(h) In addition, based upon the submissions provided by Ms Simes, it is not clear whether Ms Simes understands or accepts the requirements of her contractual and legislative obligations in relation to secondary providers and non lawyers providing substantive services to clients.[37] On the specific issue relating to the invoicing of work undertaken by a non- lawyer at the lead provider rate, the Review Panel noted that the relationship between providers and the LSA was based on trust and concluded that Ms Simes hadacted in breach of the conditions of listing, legislative requirements and her professional obligations.[38] The Review Panel went on to consider submissions by Ms Simes that the difficulties stemmed from a particular period of time that was now in the past; improved administrative and supervisory practices were in place; she was willing to work constructively with the LSA; and she recognised that a return of her listings for legal aid purposes might come with conditions such as a special audit at a suitable point in time after her listings were reinstated.[39] The Review Panel then summarised its findings on the issues discussed and went on to consider the consequences of cancellation of the listing approvals and the practicality of imposing conditions if the listing approvals were reinstated. The Review Panel noted that a decision to continue the cancellation of listing approvals was not to be taken lightly and had the potential to deprive Ms Simes of the ability to continue to operate her practice, given that the great majority of her work was funded by legal aid. This needed to be balanced with the need to ensure that obligations to clients were met from a contractual perspective with the LSA and that she met her professional obligations. The Review Panel considered that a confirmation of the cancellation should only be considered as a last resort when other options or remedies were not considered practicable.[40] It was noted that options for conditions on the listing approvals had been discussed. These included a reduction in the number of lawyers being managed to say three or four full time employees; a limitation on the number of legal aid files managed at any time; a reduction in the hours worked to achieve an improvedwork/life balance; and the monitoring of Ms Simes' work practices through special audits after an agreed period of time, say six months.[41] The Review Panel considered none of these options were practical for various reasons: Ms Simes considered that less than six full time staff would not allow her business model to work; a limitation on the number of legal aid files would interfere with the running of her practice; a reduction in hours of work that had been placed upon her for medical reasons was unlikely to continue for the future; and she was notwilling to contribute to the extra costs to be incurred in auditing or reviewing her practice.[42] The Review Panel concluded:76 the Panel considers that it has given due regard to the issue under consideration, the points raised in Counsel's written and oralsubmissions presented on behalf of Ms Simes in response to the CCP decision, and Ms Simes own submissions. In particular, the Panel is aware of the implications that a continuation of cancellation of listing approvals has both at an access to justice and at a personal level. However, the Panel considers that a continuation of the cancellation of listing approvals would be consistent in terms of proportionality with other decisions in relation to other providers –particularly given the nature of the complaints and concerns raised about the standard of service provided to clients.77 Ms Simes has submitted that the issues under consideration related to a specific period of time in her practice and were the result of a particular set of circumstances. Ms Simes submits that she has since made changes to her practice to address these issues and has provided the Panel with examples of the systemic changes being made. However, the Panel remains concerned, as did the CCP, that on balance and after taking into account the submissions made on behalf of and by Ms Simes, it is not confident that Ms Simes would work with the Agency to ensure that an appropriate standard of services are provided to clients within the requirements of the legislation and the Contract for Services. Ms Simes appears to still disagree with the legitimacy and legality of the Agencies policies and procedures established to administer the legal aid schemes, and the responsibility of the Agency to investigate complaints and concerns raised with it.78 The Panel also concluded it would be difficult to achieve proportionality by assigning conditions to the listing approval, ie special audits, which are likely to carry a greater cost than the benefit to be derived from improved assurance over the conduct of services to clients.[Emphasis added]First issue: Was the audit report a mandatory consideration and was it considered by the Consideration Panel and the Review Panel?The Judge's findings[43] The Judge recorded counsel's agreement that judicial review on the ground offailure to consider relevant matters was available only if the considerations weremandatory in the sense that the decision maker was expressly or impliedly required to take them into account as a matter of legal obligation.[44] Although Andrews J did not say so expressly, she appears to have accepted that the audit report was a mandatory consideration to be taken into account both by the Consideration Panel and the Review Panel. She reasoned that the audit report resulted from the LSA identifying specific concerns regarding Ms Simes' practice;those concerns were identical to the issues traversed by both Panels; the report wasan independent and objective assessment of Ms Simes' practice; it was importantbecause it made findings favourable to Ms Simes and because it had made no recommendation as to the quality of the service provided. Andrews J did not acceptthat matters had "moved on" as counsel for the LSA had submitted.[45] As to whether the audit report had been considered and taken into account by the Panels, the Judge concluded there was no indication in either decision that the Panels gave any consideration to the findings in the audit report other than the three missed court appearances identified by the auditor. Given the importance of the audit report, the Consideration Panel should have given it careful and thoroughconsideration. If it had concluded that the auditor's findings were not as favourableas had been submitted or if it concluded that the audit report was no longer relevant, the Consideration Panel should have set out its reasons. It could not isolate one aspect of the report without taking into account the other aspects.[46] Andrews J concluded that the audit report might have materially affected the decisions made by the Panels.The LSA's submissions on this point[47] Mr Taylor submitted on behalf of the LSA that consideration of the content of the audit report was not an express or implied mandatory requirement under the 2000 Act; matters had moved on since the report (in particular by the receipt of a number of further complaints); the audit report was not material because it was overwhelmed by consideration of the additional complaints; and that, in any event, there was evidence that the audit report had been taken into account.Principles[48] It is not in dispute that, if the statute conferring the relevant discretion expressly or by implication identifies considerations required to be taken into account by the decision maker as a matter of legal obligation, then regard must be had to those matters.3[49] In CREEDNZ Inc v Governor-General,4 Cooke J described the limits of judicial review on this ground:What has to be emphasised is that it is only when the statute expressly or impliedly identifies considerations required to be taken into account by the authority as a matter of legal obligation that the Court holds a decision invalid on the ground now invoked. It is not enough that a consideration is one that may properly be taken into account, nor even that it is one which many people, including the Court itself, would have taken into account ifthey had to make the decision. Questions of degree here can arise and it would be dangerous to dogmatise. But it is safe to say that the more general and the more obviously important the consideration, the readier the Court must be to hold that Parliament must have meant it to be taken into account.[50] In cases where the criteria stipulated are not exhaustive, or where none is specified, the considerations governing the exercise of discretion must be ascertained from the subject matter as well as the scope and objects of the relevant legislation:Keam v Minister of Works and Development.5 Decision makers must approach mandatory relevant considerations with due deliberation and an open mind. Mandatory considerations may not be "rebuffed ... by a closed mind so as to make the statutory process some idle exercise".6 However, the weight to be given to mandatory considerations is a matter for the decision maker.73 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 (CA) at 228, [1947] 2 All ER 680 at 682 per Lord Greene MR.4 CREEDNZ Inc v Governor-General [1981] 1 NZLR 172 (CA) at 182–183.5 Keam v Minister of Works and Development [1982] 1 NZLR 319 (CA) at 327.6 New Zealand Fishing Industry Association Inc v Minister of Agriculture and Fisheries [1988] 1 NZLR 544 at 551 (CA); Attorney-General v Refugee Council of New Zealand Inc [2003] 2 NZLR 577 at 608.7 See the useful discussion in: Philip A Joseph Constitutional & Administrative Law in New Zealand (3rd ed, Brookers, Wellington, 2007) at 897.Discussion[51] It is accepted that there are no express mandatory considerations to be takeninto account when the cancellation of a service provider's listing is beingundertaken. However, we are satisfied that the audit report was an implied mandatory consideration in the context of the present case. Part 4 of the 2000 Act contains a series of provisions relating to listed providers. It sets out certain obligations on the part of listed providers;8 it provides that a person may not deliver legal services under the Act without approval to provide those services;9 it requires the LSA to establish and maintain a legal service list;10 it authorises the LSA to develop and adopt listing criteria and provide for listing applications;11 the LSA isauthorised to temporarily suspend a provider's listing;12 and it authorises the LSA tocancel one or more approvals in a provider's listing on stated grounds.13[52] The authority to examine claims made by a listed provider and to undertake audits is also included in Part 4. Of most relevance here is s 78 which provides:78 Agency may audit listed providers(1) The Agency may audit any listed provider at any time.(2) Every audit must be conducted by an auditor.(3) The purpose of the audit is to enable the Agency to assess the quality and value of the services provided by the listed provider that have been, or may be, paid for by the Agency.[53] The importance of the audit process is underlined by the listed provider'sduty under s 79 to co-operate with the auditor in providing documents and answering questions. Continuing failure to do so may be an offence under s 112.14[54] Of particular note is that the purpose of the audit under s 78(3) is to enable the LSA to assess the quality and value of the services provided by the listed provider. That was the very issue before the Consideration Panel and ultimately8 Legal Services Act 2000, ss 65–68.9 Legal Services Act, s 69(1).10 Legal Services Act, s 70.11 Legal Services Act, ss 71 and 72.12 Section 72A inserted on 1 March 2007 by s 35 of the Legal Services Amendment Act 2006.13 Legal Services Act, s 73.14 Legal Services Act, s 79(5).before the Review Panel. The LSA instigated the audit report because of concerns it held about the quality and value of the services being provided by Ms Simes. Theauditor's concerns about supervision and Ms Simes' relationship with the LSA formed part of the ongoing investigations undertaken by the LSA that led ultimately to the recommendation that consideration be given to cancelling Ms Simes' listingfor legal aid purposes. In short, there was an obvious link between the audit report and the Panel hearings that followed.[55] Given the identity of issues considered in the audit report and the matters before the Panels, the clear statutory relationship between the two processes, and the importance of the favourable parts of the audit report to the cancellation issue, we are satisfied that both Panels were obliged to consider the audit report as a mandatory consideration.[56] While we accept that a number of further complaints came to light after the audit report, most of the complaints related to services given by Ms Simes in the period covered by the audit report. We agree with the Judge that the Consideration Panel could not reasonably have taken into account the negative aspects of the audit report (such as the three missed court appearances) while failing to acknowledge, and give genuine consideration to, the very favourable aspects of the audit report inrelation to the ten files randomly selected from Ms Simes' practice.[57] Mr Taylor submitted there was evidence that both Panels had taken the audit report into account. He pointed to the affidavit evidence of Ms Nicholas that the Consideration Panel had considered the outcome of the special audit. However, the special audit was mentioned in the formal decision only in a list of matters that were taken into account and Ms Nicholas did not elaborate on this bare statement. While it is clear that the Consideration Panel had the audit report available to it in the materials assembled for the purposes of the hearing, there is no indication on the face of the decision that it was considered. Any reasoning as to the weight to be attached to the various parts of the audit report is absent.[58] Mr Taylor submitted that it ought to be presumed that all aspects of the audit report were considered citing two decisions in support.15 We do not accept that submission. It is well established that a court or tribunal is not bound to refer in a judgment or decision to every fact or submission made to it regardless of their significance. However, where a fact or consideration is of such importance that the decision maker is obliged (expressly or impliedly) to consider it, then it will ordinarily be necessary for the court or tribunal to refer to it specifically and discuss its significance in the decision.[59] This proposition was recently confirmed by a Full Court of the Federal Court of Australia in LVR (WA) Pty Ltd v Administrative Appeals Tribunal.16 At issue was a decision by the Administrative Appeals Tribunal to dismiss a number of applications for failure to comply with a direction of the Tribunal. It was alleged that the Tribunal had failed to take into account a relevant mandatory consideration, namely an affidavit explaining why the appellants had failed to comply with theTribunal's direction. On appeal, the Full Court allowed the appeal, set aside theTribunal's decision and referred it back for further consideration.[60] It was accepted that the affidavit was a mandatory relevant consideration for the purposes of the Administrative Appeals Tribunal Act 1975.17 The affidavit wasnot mentioned in the Tribunal's decision dismissing the applications but an issuearose as to whether it could be assumed that the affidavit had been considered because it had been mentioned by counsel in submissions before the Tribunal.[61] The Full Court rejected the proposition that it could be assumed that the Tribunal had considered the affidavit on that basis. The absence of any suchreference was treated as a "strong indication" that the Tribunal did not itself engagein any evaluation of the affidavit.18 Merely to list the document in written15 Hayes v Fighter Trainers Ltd CA218/99, 20 July 2000 at [15]; and Mohamud v Minister of Immigration [1997] NZAR 223 at 228. Neither of these cases supports Mr Taylor's proposition.The first was a brief comment in a costs appeal and, in the second the High Court found there was nothing in the decision to show the relevant factor had been considered.16 LVR (WA) Pty Ltd v Administrative Appeals Tribunal [2012] FCAFC 90, 289 ALR 244.17 At [122].18 At [128].submissions copied verbatim into the Tribunal's decision was not sufficient to showthat the Tribunal had taken into account the substance of the material.19[62] We agree with these observations and would add that in the present case the LSA could not demonstrate that genuine consideration had been given by the Consideration Panel to the content of the audit report unless the content was specifically discussed and evaluated in the decision.[63] We accept it was a matter for the Consideration Panel to determine what weight to give to the favourable aspects of the audit report but they could not beignored. If they were to be discounted in the Consideration Panel's reasoning, thenthe reasons for that should have been given.[64] As to whether the failure to consider the favourable aspects of the audit report was material to the outcome, we are satisfied that it was an important consideration for the reasons the Judge gave. It is not necessary for Ms Simes to demonstrate that proper consideration of the audit report would have led to a different conclusion. It is enough if there is a realistic prospect it might have done so. In that respect, there were two principal issues for the Consideration Panel to consider. The first was whether there had been a failure by Ms Simes to provide quality legal services. The second was whether any such failure warranted the cancellation of her listings or whether her listings could continue with conditions designed to ensure that, in future, Ms Simes provided legal services at a standard acceptable to the LSA.[65] The fact that the audit report was very favourable to Ms Simes in terms of her performance on the ten randomly selected files was particularly relevant to the second stage of the inquiry. It was a factor which was material in deciding whether, with the reduced staff level she offered, she could have provided reasonable assurance to the LSA that she could deliver services to an appropriate standard in the future.[66] We have come to the same conclusion with regard to the Review Panel'sdecision. It too referred to the three missed court appearances identified in the audit19 At [131].report but did not, on the face of the decision, refer to the favourable aspects of the audit report or give that report any consideration despite the fact that it was available to the Review Panel and had been mentioned in submissions.[67] We agree with the Judge that the failure to consider and fully evaluate the audit report constituted a reviewable error on the part of both Panels.Second issue: Did natural justice require the disclosure of the previous decisions referred to by the Review Panel?Factual background[68] It will be recalled that, in the last sentence of [76] of the Review Panel'sdecision20 the Review Panel expressed its view that a continuation of the cancellation of listing approvals would be consistent in terms of proportionality with other decisions in relation to other providers – particularly given the nature of the complaints and concerns raised about the standard of service provided to clients. It is common ground that the decisions referred to were not disclosed to Ms Simes or to her counsel.[69] Mr Taylor provided a summary of five cases where the LSA had cancelled the listings of legal aid providers or had considered doing so. The summaries referred to the providers by the letters A to E. We summarise these cases briefly:Provider A[70] After some eight judicial complaints and one client complaint, the LSAconducted a special audit of A's practice. No further action was taken after A agreed to accept the recommendations made by the auditor. But after a ninth judicial complaint and another client complaint in 2009, the LSA commenced the process forcancellation of A's listings. However, that process was not completed because A withdrew as a provider of legal aid services. It is common ground that this case would not have provided any assistance.20 Quoted at [42] above.Provider B[71] The LSA cancelled B's listing approvals in 2007 for repeated submission ofinaccurate invoices resulting in overpayment of funds to B, inadequate record andfile management systems, and failure to respond to the LSA's request for information. Several months later, the LSA reinstated B's listing approvals onconditions. A special audit was then conducted which found that some of the conditions had not been fulfilled. The matter was referred for cancellation consideration and a hearing conducted in February 2009. It was decided thatcancellation was not justified. Conditions on B's listing approvals were to be continued for another six months with monitoring by the LSA. Despite further breaches, the conditions were extended for a further six month period but, after further non-compliance, the cancellation process was continued. The ConsiderationPanel concluded that B's listing approvals should be cancelled having regard to thetotality of the breaches. This decision was upheld by the Review Panel.Provider C[72] C's practice was audited after the LSA became concerned about overchargingon 31 occasions. Three audits, each covering six months, were made of C's practice.Issues arising on 75 occasions were considered to be a matter of concern over this period. In relation to the first audit period, a Suspension Consideration Panelsuspended C's duty solicitor listing for three months. This was confirmed by a Suspension Review Panel in 2008. However, in respect of the third audit period, thecancellation process was commenced. The focus was on C's failure to sign off asduty solicitor on 15 occasions. Given that C had been on notice about her practice as a result of the earlier audits, the Consideration Panel cancelled her listings.Provider D[73] This case related to a practitioner charged with criminal offending. A Suspension Consideration Panel suspended the practitioner. That decision was upheld by a Suspension Review Panel. By that stage, the practitioner had been convicted of criminal offending. The suspension was to continue indefinitely. The Suspension Review Panel also concluded that the practitioner's provider contractshould be terminated. The practitioner voluntarily returned his practising certificate to the District Law Society. Later, the practitioner successfully appealed against his criminal conviction and issues arose as to whether he should have his listings reinstated. What happened thereafter is not relevant for present purposes.Provider E[74] This case was concerned with allegations of excessive billing by charging for time in excess of that spent by the practitioner and her staff. A special audit was conducted as a result of which the LSA made a complaint to the police. Charges were subsequently laid against the practitioner by the Serious Fraud Office. A Suspension Consideration Panel decided to suspend all the practitioner's listings.The practitioner sought a review of that decision and refused to postpone the Suspension Review Panel hearing pending the disposition of the criminal charges. The practitioner took judicial review proceedings and obtained an interim order restraining the LSA from taking any further steps towards suspension as a listed provider.The Judge's reasons[75] The Judge did not accept Mr Taylor's submission (repeated before us) that the identified passage in [76] of the Review Panel's decision was not material to thePanel's decision. It was not clear to the Judge whether it could be assumed that threecancellation cases Mr Taylor had referred to in oral submissions were the cases the Review Panel had in mind. She concluded that the reference to the other decisionswas an important factor in the Review Panel's decision to uphold cancellation ofMs Simes' listings. She was satisfied that natural justice required the Review Panel to disclose the other decisions it was measuring Ms Simes' case against and that she be given the opportunity to make submissions as to whether her circumstances were less serious and did not therefore require cancellation. There was, in the circumstances, a breach of natural justice.The LSA's submissions on appeal[76] Mr Taylor accepted that the principles of natural justice applied to the decision making by both Panels. He also accepted, recognising that the Panels weredealing with issues relating to Ms Simes' livelihood, that a "reasonably high"standard of natural justice was required, although not to the standard required of a court.[77] However, Mr Taylor's principal submission on this point was that by the timethe Review Panel referred to other decisions, it had effectively reached its conclusions and the reference to other decisions was not material to the outcome.[78] In this connection, he submitted that the Panels' reference to "proportionality" was not a reference to some form of tariff. All that was meant wasthat remedies short of cancellation could not be considered practicable. Finally, Mr Taylor submitted that the factual circumstances of the other cases were so different that they could not provide any guidance to the Panels.Discussion[79] We are unable to accept the submissions made on behalf of the LSA. It is abundantly clear that the Review Panel's reference to other decisions in relation to other providers was a relevant and material consideration in the Review Panel'sdecision. It was, at the very least, a matter the Review Panel considered supported its decision to cancel Ms Simes' listings. The submission that the cases did notprovide relevant or helpful guidance is not sustainable. The Review Panel itself plainly considered the other decisions were relevant and helpful.[80] It does not matter whether the circumstances of the other cases might beviewed more seriously or less seriously than Ms Simes' case. Natural justice requiresthe disclosure of material the decision maker intends to take into account so that the party or parties affected have the opportunity of rebutting material that may be considered adverse and taking advantage of matters that may be considered favourable to that party.[81] Here, as the Judge said, Ms Simes and her counsel ought to have had the decisions disclosed to them so they had this opportunity. We note, for example, that Provider B appears to have been a persistent offender whose listings were initially cancelled for a few months but who was then given several further opportunities to continue to undertake legal aid work subject to conditions before finally having the listings cancelled for ongoing breaches. And, in the case of Provider C, there had been three special audits. The action taken in the first instance was only to suspendC's listing for three months and it was not until there had been further shortcomings that the listings were cancelled.[82] The outcomes in those cases were particularly material to the second issue before the Panels, namely, whether a remedy short of cancellation was appropriate. We conclude that this ground of appeal must fail.Third issue: Was there a breach of natural justice in relation to the notationsmade on Ms Simes' submissions to the Consideration Panel?Factual background[83] Ms Edmonds gave evidence before the High Court that, in her capacity as Adviser Service Contracts, she was responsible for putting together the material held by the LSA and providing it to the Panel members. In her first affidavit, she said she was well aware from legal advice that it was crucial the Panel should come to its meeting only with the information already disclosed to Ms Simes plus the information Ms Simes placed before the Panel. She confirmed this was all the Panel had before it at the beginning of the meeting.[84] As an exhibit to her first affidavit, Ms Edmonds produced a copy of the lengthy written submissions Ms Simes had made for the purpose of the hearing by the Consideration Panel. The exhibited copy of the submission had numerous handwritten marginal annotations on it. Ms Simes deposed it was not until receipt of Ms Edmonds' affidavit in the High Court proceedings that she first became awarethat a notated copy of her submissions existed.[85] In response, Ms Edmonds filed a further affidavit in which she identified that, with a few exceptions, the notations were all made by her. The exceptions were general notes made by Ms Pearson. Ms Edmonds explained that after she had provided relevant documents to the members of the Cancellation Consideration Panel, but before it met, Ms Pearson had asked her (as the Adviser who had conducted the investigation) to note on Ms Simes' submissions where the positiontaken by Ms Simes differed from the information the LSA had provided to the Panel.[86] Ms Edmonds said she noted these differences on her copy of Ms Simes'submissions and then provided the notated submissions to Ms Pearson. She said shewas not asked for her view on Ms Simes' submissions and that she was not involvedat any time in the deliberations of the Panel, other than to assist with the location of documents. The notations she made on Ms Simes' submissions were not provided tothe other Panel member, Ms Nicholas.The Judge's reasons[87] The Judge accepted that a party should normally be given the opportunity to respond to an allegation that, with adequate notice, might be effectively refuted. However, she agreed with authorities cited to her that the key elements were whether the affected party was surprised by the material once disclosed and whether any potential prejudice was suffered as a result.21[88] On the facts, Andrews J concluded there was no evidence to suggest that the notes and observations were disclosed to anyone other than one member of the Panel or that they influenced either member of the Panel. Secondly, the Judge accepted there was nothing in the notes and observations which would have been a matter ofsurprise to Ms Simes. The Judge considered the LSA's views were well known toher as a result of her extensive correspondence and other communications with the LSA.21 Citing Ali v Deportation Review Tribunal [1997] NZAR 208 (HC); and Khalon v Attorney- General [1996] 1 NZLR 458 (HC) at 466.Ms Simes' submissions[89] Counsel referred to Ms Simes' evidence that there were more than 100 notes by Ms Edmonds on the submissions and that 32 of these contained factual errors. It was plain that the notations went well beyond the task Ms Edmonds said she had been asked to do. Many of the notes contained expressions of opinion on matters at issue before the Consideration Panel. Many were negative in tone.[90] Mr Gorringe cited the following passage from the Khalon case:22There is a single underlying principle which I believe emerges from both the decisions and policy which underlies them: a party should normally be given the opportunity to respond to an allegation which, with adequate notice, might be effectively refuted. The converse will generally be true if the risk of an adverse finding was always foreseeable, particularly if the challenge to the finding relates to the way in which the tribunal had exercised a value judgment rather than the completeness of the material which had been placed before the tribunal. The key elements are surprise and potential prejudice. If an adverse finding is foreseeable there is no surprise. Even where there is surprise, there could be no prejudice unless better notice might have allowed the affected party to do something about it. Those principles seem applicable whether the hearing is adversarial or inquisitorial.[91] As the Judge noted, the views expressed by Fisher J Khalon were endorsed by Elias J (as she then was) in the Ali case:23I agree also with [Fisher J's] view that "the key elements are surprise andpotential prejudice." If, therefore, there is no surprise in an allegation or if,even if there is surprise, there could be no prejudice because further notice would not have assisted the person affected to meet the allegation, then there is no unfairness in process. It perhaps goes without saying that where surprise is established and especially where the decision is of great significance for the person affected, it will not be right to infer absence of prejudice easily.[92] Mr Gorringe further submitted that a judge or a decision making body must not hear evidence or receive representations from one side in the absence of the other. Counsel cited Kanda v Federation of Malaya24 in which a report that was highly critical of the appellant police officer was disclosed to an adjudicating officer22 At 466.23 At 220.24 Kanda v Government of the Federation of Malaya [1962] AC 322 (PC).inquiring into the disciplinary charges against the appellant but not to the appellant himself. Lord Denning, speaking for the Privy Council, said:25If the right to be heard is to be a real right which is worth anything, it must carry with it a right in the accused man to know the case which is made against him. He must know what evidence has been given and what statements have been made affecting him: and then he must be given a fair opportunity to correct or contradict them. This appears in all the cases from the celebrated judgment of Lord Loreburn L.C. in Board of Education v Ricedown to the decision of their Lordships' Board in Ceylon University v Fernando. It follows, of course, that the judge or whoever has to adjudicate must not hear evidence or receive representations from one side behind the back of the other. The court will not inquire whether the evidence or representations did work to his prejudice. Sufficient that they might do so. The court will not go into the likelihood of prejudice. The risk of it is enough. No one who has lost a case will believe he has been fairly treated if the other side has had access to the judge without his knowing.[93] Counsel also cited the decision of the Supreme Court of Canada in Kane v Board of Governors of UBC.26 In that case, a university professor was suspended for three months without pay for using the university computer improperly for personal purposes. Mr Kane appealed to the Board of Governors. The university president, who had participated in the initial hearing, sat in with and provided the Board withinformation (content unknown) during the Board's deliberation. The Supreme Courtallowed the appeal by a majority of six to one for breach of natural justice. The Supreme Court set out six principles27 summarised in the headnote of the case as follows:(i) A large measure of autonomy is to be allowed by a court to a tribunal sitting on an appeal.(ii) The tribunal must observe natural justice.(iii) A high standard of justice is required where one's profession is atstake.(iv) The tribunal is to listen fairly to both sides with a fair opportunity for correction or contradiction of any relevant prejudicial statement.(v) The tribunal is not to receive representations or hear evidence in the absence of the other party.25 At 337–338 (Emphasis added and footnotes omitted).26 Kane v Board of Governors of UBC [1980] 1 SCR 1105.27 At 1112–1116.(vi) The court will not inquire whether evidence did work to the prejudiceof a party: it is sufficient "if it might have done so".[94] The Supreme Court found that the Board should have made Mr Kane aware of the additional facts and given him a real and effective opportunity to correct or meet any adverse statement made. The failure to do so was a fundamental error.[95] Counsel submitted that Ms Edmonds' involvement on behalf of the LSA withMs Simes over the 2008 to 2010 period was extensive: Ms Edmonds hadrecommended that consideration be given to cancelling Ms Simes' listing approvals;she had been responsible for the investigation of the complaints made against Ms Simes; she had expressed the view in her 14 September 2009 memorandum that these complaints were justified; she was closely involved with the consideration process of the Panel, putting together the LSA material for the Panel and providingMs Simes' material; she authored the annotations on the respondent's submissions; and, ultimately, she drafted the decision of the Consideration Panel.[96] Mr Gorringe submitted that the Judge had been correct to observe that Ms Edmonds was intimately connected with the LSA's earlier dealings withMs Simes. It was, counsel submitted, a fair inference that the notations influenced Ms Pearson as the Chair of the two-member Panel. Significantly, Ms Pearson did not file an affidavit as to what part the annotations may have had in the decision. The only explanation given for this was that Ms Pearson had left the LSA by the time the issue arose.[97] It was submitted that the overall cumulative effect of the notations, theirnumber and their negative tone, tended to diminish and undermine Ms Simes'submissions. Ms Simes had no opportunity to rebut the impression conveyed since she was not aware of the annotations until long after both Panels had made their decisions.The submissions for the LSA[98] The essence of Mr Taylor's submission in response on this issue was that thecase for Ms Simes has now been put on a different basis to that pleaded; the casescited by Mr Gorringe could be distinguished on the facts; there was no evidence that the notations influenced the Consideration Panel; there was no element of surprise or prejudice since the issues covered were all known by Ms Simes; the notations made were not placed before the Review Panel which was untainted by the claimed error.Discussion[99] We deal with the pleading issue first. The fourth amended statement of claim pleaded at [97] that:The Plaintiff did not have an opportunity to make any submissions on or otherwise respond to the subject matter or the comments and observationswritten by the Adviser on the Plaintiff's submissions to the ConsiderationPanel.[100] We accept that the case before us has been argued a little differently from the way it was presented to the High Court. In particular, the submissions made on Ms Simes' behalf have tended to go beyond the opportunity to comment on theparticular comments and observations and have highlighted the proposition that the decision maker must not hear evidence or receive representations from one side in the absence of the other.[101] However, we consider the pleading sufficiently covers this altered emphasis. The essence of the pleading is that Ms Edmonds made a series of comments and observations that were not disclosed to Ms Simes or her counsel and that this deprived Ms Simes of the opportunity to make submissions on them. Any such submissions could embrace not only the accuracy of the comments but also theidentity of the person by whom the comments were made. Given Ms Edmonds'intimate involvement with the events leading to the Consideration Panel being established, this was a highly material consideration as we shortly discuss.[102] We conclude that the points raised by Mr Gorringe on this issue are substantially within the pleadings and that, in any event, the LSA has not been prejudiced by the altered approach on appeal.[103] To enable Mr Taylor to address further his submission that Ms Simes should not have been surprised by the annotations or prejudiced by them, we sought moredetailed submissions on this point at the conclusion of the hearing. We identified a number of specific comments upon which we required assistance in this respect. We have now received those submissions along with a response on behalf of Ms Simes.[104] We have reviewed this material and accept that some of the topics commented upon were before the Consideration Panel and were canvassed at the hearing. For example, the complaints and concerns over supervision would not have been a surprise to Ms Simes and she covered these topics in her submissions. Weaccept too that Ms Simes' written submissions dealt extensively with her relationshipwith the LSA. But a troubling feature of the notations was their volume and negative tone. Just to take a few examples of the gist of these comments asinterpreted by LSA's counsel:Simes being stubborn, wilful. Simes posturing.Who is to ensure relationship good. Simes expects Agency to change to accommodate her.Simes ultimatums to Agency contrary to submission.Simes suggesting Agency to blame for intemperate correspondence.Simes minimising impact of her own negative communications.Simes bears some blame for communications breakdown.Simes improperly attributing malicious intent, and irrelevant.Simes personalising issues and not recognised policy-making different.Is Simes prepared to change herself, or expects only Agency to do so?Simes hasn't bothered to check yet is claiming there is no problem.Simes has been unwilling to engage with Agency to deal with concerns.[105] Mr Taylor submitted that Ms Simes was not prejudiced because the substance of the allegations about supervision and complaints was put to Ms Simes and she had full opportunity to respond to them, as the Judge found. As to the relationship issues, Mr Taylor submitted it was self-evident there was a dysfunctional relationship between Ms Simes and the LSA and the bundle of materials before the Consideration Panel made it apparent there was "no love lost" between Ms Simes andMs Edmonds. He also submitted that the Consideration Panel had not regarded the relationship issue as relevant.[106] None of this deals with Mr Gorringe's point that Ms Edmonds had provided asubstantial volume of negative written comment to the Consideration Panel withoutMs Simes' knowledge. Ms Edmonds was deeply involved in the prior dealings withMs Simes; she was responsible for the investigation into the complaints made against Ms Simes; prior to the Consideration Panel, she had formed the view that the complaints were justified; she recommended the Consideration Panel be established;and she drafted the Consideration Panel's decision. The annotations she made onMs Simes' submissions and passed on to Ms Pearson (as Chair of the Panel) went well beyond the task she had been given of identifying factual differences betweenMs Simes' submissions and other information held by the LSA.[107] We agree with Mr Gorringe that it is a reasonable inference that Ms Pearson was influenced by the notations or that, at the least, there was a real risk she would be influenced by them. It does not matter that the notations were given only to one of the two members of the Panel. The risk of inappropriate influence on one member was enough. We are satisfied that the comments made by Ms Edmonds went beyond the type of consultation with officials this Court considered might be permissible inDaganayasi v Minister of Immigration.28[108] The Panels were considering issues that plainly had the potential to affect Ms Simes' ability to practise in future. A high standard of natural justice wasrequired to ensure fairness and the integrity of the process. We conclude that the failure to disclose the notations was a serious breach of natural justice. In essence, the Chair of the Consideration Panel was receiving undisclosed comment adverse to Ms Simes from a person who had an interest in the outcome of the proceeding. The latter ought to have had the opportunity not only to respond to that comment but,more importantly, to object to Ms Edmonds having any part in the Panel's processes.Any such objection, we consider, would have been well justified. As Mr Taylorfrankly conceded, it was "most unwise" for Ms Edmonds to have participated in the way that she did. Our conclusion is that Ms Edmonds should not have been involved28 Daganayasi v Minister of Immigration [1980] 2 NZLR 130 at 143 (CA).in the process at all. Alternatively, she could have prepared a report for the Panel'sconsideration and disclosed it to Ms Simes for comment.Was any breach of natural justice cured by the subsequent hearing before the Review Panel?[109] It is well-established that irregularities and unfairness in a hearing processmay be "cured" if there is a further process of appeal or review that involves acomplete rehearing. If the effect of the rehearing is to remove any prejudice suffered in an earlier hearing, then the Court on review or appeal may decline to grant the plaintiff relief as a matter of discretion.29 The difficulty for the Secretary in the present case is that the Review Panel deliberately decided not to proceed de novo. Mr Turner confirmed this in his affidavit:The Panel did not consider the matter de novo. What it did do was make a decision on what it thought was the correct or preferable decision based on all the material presented to it by the Legal Services Agency and by the Plaintiff together with the record of the meeting with the Plaintiff, and only on that material.[110] While it is accepted that the members of the Review Panel were not aware of the notations made by Ms Edmonds on Ms Simes' submissions presented to theConsideration Panel, they did not start afresh and accord Ms Simes a rehearing. Rather, the starting point was the decision of the Consideration Panel under review. The question for the Review Panel was whether this decision was correct.[111] We conclude that the unfairness that tainted the decision of the Consideration Panel was not remedied or cured by the subsequent decision of the Review Panel. The simple point is that Ms Simes did not at any stage have the opportunity to respond to the notations made by Ms Edmonds and to her involvement in the hearing. And, in any event, we have found that the Review Panel itself was guilty of two separate reviewable errors.29 Reid v Rowley [1977] 2 NZLR 472 (CA); Calvin v Carr [1980] AC 574 (PC) at 595–596;Nicholls v Registrar of the Court of Appeal [1998] 2 NZLR 385 (CA) at 435 and 437; Drew v Attorney-General [2002] 1 NZLR 58 (CA) at [72].Fourth issue: Was the Judge correct to refer the matter back to the Review Panel for reconsideration or should the decisions of each Panel have been quashed without any direction for reconsideration?[112] The Judge directed that the matter be referred back to the Review Panel for reconsideration in the light of her judgment. She did not quash the decisions made by either Panel. In fairness to her, counsel accepted there was little, if any, discussion about the appropriate remedy during submissions in the High Court.[113] After the judgment was delivered, Ms Simes' counsel applied to recall thejudgment submitting that the Judge consider quashing or setting aside the decision of both Panels. That application was dismissed by the Judge who noted that, by that stage, an appeal had been filed.30[114] Both counsel accepted it was not appropriate to refer the matter back to the Review Panel. We agree that supervening events effectively prevent such a course. The 2011 Act has a substantially different regime in relation to the cancellation of aprovider's approvals. The Consideration and Review Panels no longer exist. A performance review committee is established to advise the Secretary on any matter referred to it relating to the performance of a provider.31 The Secretary has discretionary power to impose sanctions as well as an obligation to cancel approvals in specified circumstances.32 A right of review by a newly-established Review Authority is available.33[115] More importantly, as from 31 December 2011, all legal aid providers have been obliged to apply again for appointment. We were informed that Ms Simes has applied for reappointment but the outcome of her application is not yet known.[116] Mr Taylor submitted that the decisions of both Panels should be left undisturbed. To the contrary, Mr Gorringe submitted that the decisions should be quashed.30 Simes v Legal Services Agency HC Hamilton CIV-2010-419-6, Minute of 21 July 2011.31 Legal Services Act 2011, s 79.32 Legal Services Act, ss 102 and 103.33 Legal Services Act, s 82.[117] We are satisfied that the proper course is to quash both decisions. It is common ground that the Court has a discretion in judicial review proceedings as to whether to grant relief. This Court said in Air Nelson Ltd v Minister of Transport34that where grounds of review are established, strong reasons are required to decline to grant relief to the successful party. In Rees v Firth,35 this Court observed that theAir Nelson case was directed towards situations where the claimant had suffered substantial prejudice and that a more nuanced approach might be necessary in the generality of cases. This has been endorsed very recently by this Court in Tauber v Commissioner of Inland Revenue.36[118] Mr Taylor acknowledged it would be unusual not to quash a decision where reviewable material error has been found. Ms Simes has been materially prejudiced by these errors and we are satisfied that the proper course is to quash the decisions of both the Panels without any direction for reconsideration.Disposition[119] For the reasons given, the appeal is dismissed and the cross-appeal allowed.[120] The decisions of the Cancellation Consideration Panel and the Cancellation Review Panel are quashed.[121] The order made in the High Court for reconsideration by the Cancellation Review Panel is set aside.[122] The appellant must pay costs to the respondent on both the appeal and cross- appeal. The costs are to be fixed as for a standard appeal on a band A basis with usual disbursements.Solicitors:Bartlett Law, Wellington for AppellantPurnell Creighton, Christchurch for Respondent34 Air Nelson Ltd v Minister of Transport [2008] NZCA 26, [2008] NZAR 139 at [59]–[61].35 Rees v Firth [2011] NZCA 668, [2012] 1 NZLR 408 at [48].36 Tauber v Commissioner of Inland Revenue [2012] NZCA 411 at [89]–[91].