XY v THE ATTORNEY-GENERAL [2016] NZHC 1196

XY v THE ATTORNEY-GENERAL [2016] NZHC 1196 [3 June 2016]ORDER PROHIBITING PUBLICATION OF NAMES OR IDENTIFYINGPARTICULARS OF THE CLAIMANTSIN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV-2015-485-000758[2016] NZHC 1196BETWEEN XY AND OTHERSApplicantsAND THE ATTORNEY-GENERAL ASREPRESENTATIVE OF THE MINISTRYOF SOCIAL DEVELOPMENTRespondentHearing: 9 May 2016Appearances: S M Cooper and K Ross for ApplicantsJ C Holden, T Bromwich and L Jackson for RespondentJudgment: 3 June 2016JUDGMENT OF GENDALL JTable of ContentsPara NoIntroduction [1]The Two Path Approach [9]Engagement between the Ministry and Cooper Legal [13]First meeting [13]Second meeting [14]Third meeting [16]Fourth meeting [18]Subsequent communication [20]Judicial review application [28]Are the challenged decisions to implement the Two Path Approachjusticiable?[31]Breach of natural justice [41]Breach of legitimate expectation [47]Error of law [57]Mistake of fact [64]Should declaratory relief be granted? [70]Result [73]Costs [74]Introduction[1] Over the past decade, the Ministry of Social Development ("the Ministry")has received more than 1,750 claims from people who allege they were abused as children while in State care. By December 2015, 513 of these historic abuse claims had been filed in the High Court. In 2007, the Ministry set up an internal process to attempt to resolve these claims out of court. This process involved meeting with a claimant, carrying out a detailed assessment of the claim (including reviewing theclaimant's files) and, where appropriate, making an offer of settlement including a personal apology and a monetary payment.[2] The Ministry's claim resolution process it seems worked reasonably wellinitially but complaints were made that it was very time intensive and slow. Onaverage, it took 27 months to resolve a claim. As more claims were received, a backlog of unresolved claims developed. By August 2013, the backlog, as I understand it, had grown to 774 claims. It is said that one third of these claims had been unresolved for more than three years. In accordance with the general Crown Litigation Strategy for the resolution of historic claims alleging abuse, the Ministry decided then to devise a new policy approach called the "Two Path Approach" to aidin resolving claims in a timely manner.[3] The Two Path Approach was intended to offer a choice as to resolution of claims out of court. Under the new arrangement, claimants could accept an expedited settlement offer based on a categorisation of their claim in accordance with a new policy framework. Alternatively, claimants could opt to have their claim fully assessed under the existing more detailed resolution process which had operated for some time. The Ministry was responsible for developing and implementing the Two Path Approach. The details of the policy, and its implementation, it is said were operational matters of the Ministry.[4] The applicants in this proceeding ("the applicants") comprise approximately 615 claimants who are making allegations of historic abuse. All the applicants are represented by Cooper Legal, a firm of Wellington based solicitors who have been extensively involved in seeking redress for those who suffered historic child abuse while in State care. Cooper Legal had previously had some involvement in implementing a similar settlement scheme for persons who had suffered alleged abuse while in State psychiatric institutions. As such, the Ministry engaged with Cooper Legal (under some form of process involving consultation and negotiation) to inform its decision when developing the Two Path Approach.[5] Initially, it appears the discussions related to the Two Path Approach were constructive. Cooper Legal provided feedback on the draft policy and the Ministry, where it agreed with the feedback, amended the scheme to reflect it. However, it is clear Cooper Legal did not support all aspects of the draft policy. The Ministry made several changes to the Two Path Approach to which Cooper Legal was opposed. Similarly, the Ministry did not accept all of Cooper Legal's suggested changes.[6] In August 2014, Cooper Legal advised of significant objections to core elements of the Two Path Approach policy. Cooper Legal said it was not prepared tobe involved with the proposed scheme, stating that "if [the Ministry] has no room for movement, then it must be clear that our discussions about the [Two Path Approach] are at an end."[7] The disagreement on how the Two Path Approach was to be implemented has led Cooper Legal, on behalf of all the applicants, to judicially review theMinistry's role in devising the process. The applicants seek a declaration that the process is invalid and orders the process be set aside and to require the Ministry to adequately consult again with Cooper Legal.[8] Before the substantive grounds of judicial review, including a preliminary issue relating to justiciability, can be considered, it is useful to consider two further matters. First, an outline of the content of the approved Two Path Approach is instructive, and, secondly, in providing some further context it is useful to provide some additional background facts relating to the consultations between the Ministry and Cooper Legal here.The Two Path Approach[9] On 1 December 2014, Cabinet endorsed the Two Path Approach and approved its appropriation (specifically, as I understand it, bringing forward $26 million of funding).[10] The Minister for Social Development announced the implementation of the Two Path Approach on 7 May 2015. At that time, the content of the Two Path Approach was as follows:(a) Claims would be separated into two tranches. Tranche one comprises eligible claimants who were not legally represented. Tranche two comprises eligible claimants who were legally represented.(b) To be eligible to receive an expedited offer, a claimant would need to meet nine eligibility criteria. Every eligible claimant would receive an offer.(c) There would be six categories of claims, ranging from least severe (category six) to most severe (category one).(d) Each category had a corresponding quantum of offer, ranging from $5000 for category six to $50,000 for category one. There was to be no category in which a claimant received a $Nil offer.(e) For the purposes of making expedited offers, the Ministry would treat the allegations made by the claimants to be true without fully investigating those allegations. However, the Ministry would check the basic factual elements of the claim to ensure these were consistentwith the Ministry's records.(f) The Ministry would assess each claim and determine which of the six categories the claim best corresponded with.(g) Once all claims had been initially categorised, the Ministry would carry out a moderation process to ensure that the expedited offers were consistent with past settlements.(h) There was to be no penalty for a claimant choosing either avenue for resolution; the full assessment option would remain available. The Ministry envisaged that, once the Two Path Approach has been implemented and the number of backlogged claims reduced, it would be able to process claims more quickly.[11] The Ministry commenced making offers under the new policy to tranche one (those not legally represented) claimants in May 2015. The Ministry intended to make offers to tranche two claimants from November 2015.[12] On 9 November 2015, the present application was filed. The Ministry says it has necessarily put implementation of the entire policy on hold, pending the outcome of these proceedings.Engagement between the Ministry and Cooper LegalFirst meeting[13] In October 2013, a meeting between the Ministry and Cooper Legal was held to discuss the establishment of this new Two Path Approach policy. As discussed above, the policy was intended to expedite settlement offers to certain people who had allegedly suffered abuse while in State care as children. The proposal was intended to be consistent with the Crown Litigation Strategy whereby the value of any offer made to a claimant was to be based on one of six categories. As I have noted above, for the purpose of making expedited offers, the Ministry would treat theallegations in a claimant's claim as true without fully investigating the allegations. However, the Ministry would check the basic factual elements of the claim to ensure these were consistent with the Ministry's own records. Cooper Legal at first agreed to cooperate with the Ministry to consider the proposed Two Path Approach and to provide feedback on it.Second meeting[14] On 25 November 2013, a second meeting between Cooper Legal and the Ministry took place. The purpose of this meeting was to discuss how the claims would be categorised, who would do the categorising, and the basis for the payment. It was decided that Cooper Legal would assess the claim by each of their client claimants and determine the category into which each fell within the approved fiscal envelope. This was subject to a basic-fact check by the Ministry to confirm the relevant details of each claim.[15] On 3 December 2013, Mr David Shanks, Deputy Chief Executive of the Ministry, wrote to Cooper Legal confirming that the Two Path Approach would be an opt-in process in which claimants could decide whether or not to participate.Third meeting[16] On 12 December 2013, representatives from both Cooper Legal and the Ministry met for a third meeting. Discussion included whether "practice failures", which were errors made by social workers responsible for a child's care at home orin the community, would be included in the Two Path Approach categories.[17] On 16 December 2013, Mr Shanks wrote to Cooper Legal. He noted that Cooper Legal had undertaken to review 150 claims for which there were outstanding settlement offers, and to assess how many might be able to be dealt with through the Two Path Approach. He noted that a specified category of claimants would be dealt with separately, and proposed that it might be worth a joint workshop in the New Year to further define the categories.Fourth meeting[18] On 16 February 2014, representatives from both Cooper Legal and the Ministry attended a fourth meeting. Again, this discussed a number of issues relating to the Two Path Approach, namely: consistency; the data that informed the fiscal envelope; and the claimants who would be eligible for the process.[19] Mr Rupert Ablett-Hampson, Acting Deputy Chief Executive of the Ministry, attended the meeting. He stated the possibility that, in implementing the Two Path Approach, the Ministry would simply make offers to every client. This effectively changed the original proposal from an opt-in process in which claimants needed to specifically request to proceed under the process, to an opt-out process in which every claimant was subject to the process unless they chose not to be. Cooper Legal said that this would put impecunious claimants in a position where they would feel compelled to take whatever they were offered.Subsequent communication[20] On 17 January 2014, the Ministry had advised Cooper Legal that, based onthe Ministry's assessment with regard to previous claim settlements, few claimantswould receive a top-end payment, most claimants would receive lower level payments, and a number of claimants would not be eligible for any payment at all.[21] A fifth meeting took place on 28 February 2014 and then, in reply to theMinistry's comments, Cooper Legal advised the Ministry that their assessment produced significantly different results. Cooper Legal argued that the current categorisation descriptors were inadequate, meaning it was difficult to apply the alleged facts to them in current form. The Ministry considered this argument andaccepted Cooper Legal's position.[22] In July 2014, the Ministry advised Cooper Legal that the consultation process was completed, and implementation would be as follows:(a) The Two Path Approach would include all clients for whom Privacy Act requests for records had been made up to and including 28 February 2014 (with the exception of the specified category);(b) Persons to whom an offer was made would choose whether to accept it or whether to go through the original process;(c) There would be a fast check;(d) Categorisation would be subject to the boundaries of the specified fiscal envelope which was $9,039,000;(e) The Ministry would continue to meet the Legal Aid debt; and(f) The categories would be moderated.[23] On 5 August 2014, the Ministry sent Cooper Legal a draft agreement for the proposed Two Path Approach. Cooper Legal responded with a list of concerns,namely that the process was presented as "opt out" rather than "opt in"; that the fiscal envelope was inadequate; that the Ministry's proposed fast check was arbitrary; and that claimants with claims under the New Zealand Bill of Rights Act 1990 (NZBORA) appeared to be covered with no allowance being made for theirNZBORA component. Cooper Legal alleged that the Ministry's consultation hadbeen no more than a "tick in a box" process.[24] On 1 December 2014 Cabinet endorsed the Two Path Approach and approved its appropriation. On 7 May 2015, the Ministry announced the implementation of the Two Path Approach.[25] On 31 August 2015, Cooper Legal requested further information from the Ministry about the Two Path Approach. It asked the Ministry what information would the Ministry review in assessing the claim and who would be categorising the claimants. Cooper Legal inquired into their concerns about how claimants with NZBORA claims would be treated under the Two Path approach and whether any other changes proposed by Cooper Legal would be adopted. It also requested information on how the moderation would affect settlement offers under the original historic claim process.[26] In reply, the Ministry said that it would be the Ministry and not Cooper Legal undertaking the assessment, that NZBORA considerations would not be taken into account, and that the moderation effort would be used to fit within the fiscal envelope.[27] On 9 October 2015 the present application was filed. In essence, as I understand the position, so far as the Two Path Approach process is concerned, the major differences between Cooper Legal's position and the Ministry position include the amount of funding the Ministry proposed, the categorisation description, and the fact that NZBORA components would not be taken into account.Judicial review application[28] The applicants seek judicial review of the decision to implement what they describe as the "accelerated process" for resolving applicants' claims, effectively the Two Path Approach. The applicants claim that the decision to implement the Two Path Approach was one made without adequate consultation or transparency, and without appropriate consideration being given to significant flaws in the process. The applicants seek judicial review on four grounds:(a) Breach of natural justice: that the Ministry had an obligation to act in accordance with the principle of natural justice and to adequatelyconsult with the applicants' solicitors before implementing the Two Path Approach;(b) Breach of legitimate expectation: that the applicants had a legitimate expectation, through their solicitors, to be fully involved in any decision to implement the Two Path Approach;(c) Error of Law: that the Ministry failed to take into account relevant considerations or took into account irrelevant considerations; and(d) Mistake of fact: that in devising the process, the Ministry had made a mistake of fact which made the process an error.[29] For present purposes I leave on one side here the Ministry's contention thatsubmissions advanced by the applicants seek to impugn the decision relating to the Two Path Approach on materially different grounds to those pleaded. In particular assertions that might be seen as somewhat confused to the effect that the decision complained of was one made by the Minister for Social Development rather than the Ministry, or relating to the sufficiency of advice that was provided to the Minister, need not be addressed here.[30] But, as I have already noted above, before I do address the particular grounds of judicial review advanced by the applicants and noted at [28] above, I must be satisfied that the challenged process and the decisions involved in implementing the process are justiciable.Are the challenged decisions to implement the Two Path Approach justiciable?[31] The Ministry's decision, with approval of Cabinet, to compensate the victimsof historic abuse could be said to involve an exercise of the Crown's prerogative power. In New Zealand, the exercise of a prerogative power is prima faciereviewable.1 However, whether a particular exercise of the prerogative power will be reviewed turns on the justiciability of the issue and the need for review in the area.2 As Tipping J in Curtis v Ministry of Defence observed:3A non-justiciable issue is one in respect of which there is no satisfactory legal yardstick by which the issue can be resolved. That situation will often arise in cases into which it is also constitutionally inappropriate for the Court to embark.[32] In the recent past this Court has found against two applications for review of Crown decisions concerning ex gratia offers on the basis of non-justiciability. In the first of these, Akatere v Attorney-General, the applicants sought judicial review of offers made to them under a Cabinet scheme for ex gratia compensation to persons who were wrongfully imprisoned.4 Keane J found that "Cabinet's decisions, in thecircumstances of this case, are not susceptible to review" and that "if they are to be measured at all", the applicable standard "can only be Wednesburyunreasonableness".[33] In reaching that conclusion, the Judge emphasised both the Court'sconstitutional and institutional limits, including the absence of a yardstick, the fact that criteria for ex gratia compensation rest finally on a policy calculus, and that the Cabinet criteria are an expression of policy allocating finite public money against many contending claims and therefore they are beyond the province and competence of the Courts.[34] And, the second, a recent 2015 decision, McLellan v Attorney General,concerned Cabinet's decision to cease and not resume negotiations for ex gratia compensation payments for losses arising from scampi quota mismanagement.5 In that case, Kos J found the claim non-justiciable in the absence of an articulated legal framework for review. His Honour considered the case was a stronger example of a non-justiciable decision than Akatere as there were no guidelines, statutory background or coherent policy statement, amounting to a legal framework, which1 Burt v Attorney General [1992] 3 NZLR 672 (CA); McLellan v Attorney General [2015] NZHC 3218 at [57].2 Burt v Attorney General [1992] 3 NZLR 454 at 463.3 Curtis v Ministry of Defence [2002] 2 NZLR 744 (CA) at [27].4 Akatere v Attorney General (HC) [2006] 3 NZLR 705.5 McLellan v Attorney General [2015] NZHC 3218.might render the exercise of prerogative power to compensate or withhold compensation justiciable. Accordingly, Kos J considered that there was no basis on which he could say meaningfully that the decisions were lawful, in the sense of being in accordance with law, let alone unlawful.[35] I find the reasoning in both McLellan v Attorney General and Akatere v Attorney-General directly engaged here. The factual background in these cases also has many similarities to that existing in the present context. As an exercise of theCrown's prerogative powers, in my view the Two Path Approach has nothing that could be said to be a legal framework against which it can be assessed.[36] What I also find persuasive, in the submissions advanced by Crown here, are the ramifications of allowing the processes of alternative dispute resolution in a situation like the present to be subject to judicial review. Alternative dispute resolution means exactly what it says. In my view, claimants cannot properly agree to take part in an alternative dispute resolution process, such as negotiating a settlement for compensation, and then (arguably it might be said) to attempt to influence the Crown into settling on more favourable terms by seeking the Court'sintervention. This would be at odds with the very nature of settlement discussions. Permitting Court supervision of an alternative dispute resolution process such as this could, as I see it, procure a potentially chilling effect in which the Crown might become reluctant to engage in settlement discussions for fear that any decisions made would also be subject to the Court's supervision.[37] Parties to a dispute are under no obligation to make settlement offers. Conversely, parties can make settlement offers with which opposing parties can disagree. Where a party makes a settlement offer, it is for the opposing party to assess the offer on their own terms and respond accordingly. In the current circumstance, the response to a non-favourable settlement offer or a non-favourable settlement process is to reject the offer or to opt out of the process. Here the avenues of litigation in Court or being subject to the ordinary historic abuse settlement process which remains available, are still open to the applicants.[38] I therefore hold that while prerogative powers in general are prima facie reviewable, in this instance the substance of the current proceeding is not reviewable. The applicant is asking this Court to review the merits of the Ministry'spolicy adopted in the Two Path Approach, including the quantum of proposed settlement offers under it. If the policy were reviewable, it would only be on the grounds of Wednesbury unreasonableness, which is not pleaded in this case, and in my view in any event the standard required for intervention would not have been met here.[39] To summarise, in the particular circumstances prevailing in the present case, I find that the decisions made by the Executive about the Two Path Approach are non- justiciable on the grounds pleaded by the applicants. Those Executive decisions relating to management of the legal claims brought by the applicants here and resource allocation to resolve those claims, fall outside the judicial domain. Further, and in any event, there are practical limits on their adjudication. In the absence of some statutory or policy underpinning, the decisions in question are not susceptible to assessment in terms of legality or otherwise and are therefore non-justiciable.[40] Given these findings, the present application therefore must fail. The remainder of this decision will therefore be largely moot as I find that the substance of this application is non-justiciable. However, for completeness and in case my decision on this first issue may be incorrect, I will now turn to consider briefly the review grounds relied upon by the applicants noted at [28] above – breach of natural justice, breach of legitimate expectation, error of law and mistake of fact.Breach of Natural Justice[41] The applicant submits that in making the decision to implement the Two Path Approach, the Ministry had an obligation to act in accordance with the principles of natural justice and to adequately consult with the applicants' solicitors. Cooper Legal for the applicants contends that the Ministry was required to so act and consult because the settlement affected the rights of the applicants, and accordingly affected the ability of their solicitors, to properly negotiate an appropriate settlement forthem. Cooper Legal say they felt ambushed by receiving a non-negotiable offer based upon what they maintain is an inadequate categorisation process.[42] In light of the evidence before the Court agreed to by both parties, however, I struggle to recognise the basis on which the applicants complain about a breach of natural justice here. From the beginning, as I see it, there had been ample consultation between the Ministry and Cooper Legal. The Ministry had taken up many of the recommendations advanced for the applicants. For example, the Ministry had accepted Cooper Legal's recommendations to add an additional sixth category; to increase the level of payment for the top category to $50,000; to amend the definition of abuse for each category; to guarantee that all claims assessed as eligible would receive a minimum payment of $5,000; to extend the eligibility for the process to all claims received by 28 February 2014, and to include people who had made Privacy Act requests by that date even if no actual claim had been made.[43] The Ministry's duty to observe obligations of natural justice extends only to a requirement to consult and communicate with affected parties. As long as the consultation is made in good faith, which I am satisfied happened here, the Ministry is under no obligation to adopt all recommendations received in that consultation process. The Ministry is entitled to make changes to the draft policy and reject suggested changes from the applicants' legal representatives.[44] Contextually, I am satisfied that natural justice obligations do not arise here, but even if they had, they have been met by the Ministry. The Ministry decision to implement the Two Path Approach could not be said to adversely affect the rights or interests of the applicants. The expedited offers under the policy were additional to the other avenues open to the applicants to resolve their claims and, despite theapplicants' claims to the contrary, in reality the expedited offers could be rejected without consequence.[45] And in any event as noted above, the pleaded obligations would be at odds with the very nature of settlement discussions. I repeat, parties are under no obligation to make settlement offers and, conversely, such offers can be made before a full and detailed assessment is undertaken, even though the opposing party'scounsel may disagree with such a process. In addition, if the Ministry did owe natural justice obligations to the applicants in the present situation, those same obligations would be owed to claimants who were not represented by counsel and, further, these would apply in relation to all processes contemplated by the Crown to resolve claims. Such wide obligations are simply not tenable here.[46] For these reasons the first ground for relief relating to a breach of natural justice must fail.Breach of legitimate expectation[47] The principles of legitimate expectation in judicial review are reasonably well-established. Briefly, they follow this path as outlined in the Crown'ssubmissions before me:(a) A legitimate expectation may arise from a promise given on behalf of a public authority, or from the existence of a regular, settled practice that the claimant can reasonable expect to continue.6(b) In order for a representation to establish an expectation, it must be"clear, unambiguous and unqualified".7 Where the expectation is in the form of a practice or policy, its existence and content must equally be established to the level of a commitment or undertaking. The existence and content of such a practice or policy must be both unambiguous, and settled in the sense that it is regular and well established.8(c) A legitimate expectation cannot be founded on a hope or unsubstantiated belief. To amount to a legitimate expectation, it must, in the circumstances (including the nature of the decision making power and of the affected interest) be reasonable for the affected person to rely on the expectation.9(d) In order for a person to hold a legitimate expectation, he or she must know the facts giving rise to the claimed expectation.10(e) While detrimental reliance on a representation may not be an essential ingredient of a legitimate expectation claim, its absence may count against the plaintiff. It is difficult to see how a party6 Comptroller of Customs v Terminals (NZ) Ltd [2012] NZCA 598; [2014] 2 NZLR 137 (CA), at [123].7 Talleys Fisheries Ltd v Cullen HC Wellington CP2878/00, 31 January 2002, at 48 per Ronald Young J; Attorney General v Ririnui [2015] NZCA 160 at [102].8 Green v Racing Integrity Unit Ltd [2014] NZCA 133 at [14].9 Comptroller of Customs v Terminal (NZ), above n 6, at [124]10 Lalli v Attorney General [2009] NZAR 720 (HC) at [23]-[29], [42].could have a legitimate expectation without relying on the undertaking whether by a promise or otherwise.11(f) Legitimate expectation can expire, either naturally or because they are expressly revoked or legislatively overridden.12(g) A satisfactory reason not to honour an undertaking or uphold an established practice will defeat a claim based on legitimate expectation.13(h) Where a legitimate expectation is established, it is often difficult to decide what remedy, if any, should be provided. Relief in the form of a substantive outcome is rarely, if ever, granted. To do so would to usurp the function of the person or body carrying out the relevant public function.14(i) Context is relevant. The more the decision is in the policy/ politicalfield, the less intrusive the court's supervision is likely to be.15[48] The essence of the applicants' claim in legitimate expectation derived from the breakdown in communication between the parties around July 2014 or thereabouts. At the outset of the policy's development, counsel for the applicantscarried out a review of 150 claims against the draft categories the Ministry had proposed. This review it is said demonstrated that, if the Ministry treated all claims at face value, there would be a disproportionate number of claims attracting high settlement offers as compared with previously settled claims. This was inconsistent with the spread of payments the Ministry had projected, which was based on claims that had been examined in detail in the full assessment process.[49] The Ministry accepted that its projection of the spread of claims between the categories was not correct and identified that, as a result, the Ministry needed to reassess the draft policy. In short, under the 'fiscal envelope' offered by theMinistry, it could not compensate all claims at face value. However, instead of introducing more funds to compensate the shortfall, which is what the applicants desired, the Ministry introduced a moderation process to address this issue.11 Green v Racing Integrity Unit Ltd, above n 8, at [15].12 Te Tai Tokerau Mapo Trust v Chief Executive of Ministry of Health HC Whangarei CIV-2010- 488-307, 5 August 2011 at [145]. Unitec Institute of Technology v Attorney-General [2006] 1 NZLR 65 (HC) at [138].13 New Zealand Maori Council v Attorney General [1994] 1 NZLR 513 (PC) at 525.14 Comptroller of Customs v Terminal (NZ), above n 6 at [125] and [127].15 See Talleys Fisheries v Cullen above n 7 at 48.[50] The applicants are alleging that the Ministry "unilaterally withdrew" from the consultation process once Cooper Legal identified the flaws in the Ministry'sprojections. The applicants refer to the Ministry's motto as one whereby it promotesitself as acting in "integrity, courage and transparency." From the inception of theTwo Path Approach, it was noted that Cooper Legal had been consulted by the Ministry to implement a process which might best achieve resolution for claimants. The applicants argued that this past practice had established a legitimate expectation for continuous consultation and re-consultation.[51] Counsel for the applicants also submit that a legitimate expectation arose from past Crown practice for group settlements of claims against the Government which invoked the Crown Litigation Strategy. In 2011, Cooper Legal settled some 336 claims of former psychiatric hospital patients with the Crown Health Financing Agency (CHFA). The process involved regular meetings and implementing a settlement process in which claimants were placed in categories according to the severity of their claims. Cooper Legal argues that in that process, a moderation programme was not involved and CHFA did not undertake any fast-checking work.[52] In my view, however, the approach taken earlier by the CHFA and CooperLegal's experience during that time is a completely different matter to the current circumstance. There is no merit as I see it in the assertion that Cooper Legal had a legitimate expectation that consultation here would be consistent with the CHFA process. As the process was implemented by completely different government ministries, it is doubtful that the CHFA process could establish any expectation in relation to the Ministry. The Two Path Approach was also significantly different tothe CHFA's process at all stages of its development.[53] Furthermore, it was open to the Ministry, upon recognising their error in their projections, to consider what solution was best to correct the error. It is entirely proper in my judgment for the Ministry to decide to amend its draft policy, to introduce a moderation process and not to allocate more funds for the implementation of the Two Path Approach. The applicants' legitimate expectation tobe informed and consulted, if it did exist, could not be infringed because the Ministry did not respond in a manner that the applicants desired.[54] But, in any event, it is also doubtful whether the contended expectation existed in the first place. The applicants had not identified any promise or well- established practice that could give rise to a legitimate expectation. Nor have the applicants identified any detrimental reliance on the Ministry's communications. From the beginning, the Ministry had made it clear that engagement with Cooper Legal did not require agreement to all aspects of the policy. By way of example, the letter from Mr Ablett-Hampson to Cooper Legal on 10 March 2014, stated:I did want to repeat the point I made at the meeting that we do not have to agree to everything about the accelerated settlement process. The discussions, however, are important because they allow us to understand your concerns and you to understand our approach. In the end the greater understanding will make for a better settlement process and enhance your ability to advise your client.[55] I am satisfied here that the Ministry did not 'unilaterally withdraw' fromconsultation as counsel for the applicants before me allege. In fact, when the Ministry proposed its resolution to the projection error which was to introduce a moderation process instead of allocating further funds, it was Cooper Legal who stated that it did not wish to take part in any further consultation. In a letter written by Ms Sonja Cooper, principal of Cooper Legal to Mr Ablett-Hampson on 11 August 2014, she stated:If [the Ministry] has no room for movement, then it must be clear that our discussion about the [Two Path Approach] are at an end. We will then have to consider more formal remedies for our clients.[56] As a matter of policy, a legitimate expectation, especially in substance, is at odds with the nature of settlement negotiations. Parties must be able to make offers to settle or resolve claims through their counsel without restriction. It would be unreasonable for applicants to expect that any offers that the Crown wished to make, or the policy under which the Crown intended to make offers, was required first to be approved by counsel for those applicants. The contended expectation amounts to aveto power over the Ministry's policy. It turns counsel for the applicants into a decision-maker in respect of the Crown's approach to claims it is facing. That cannot be right. For all these reasons the applicants' second ground, too, does notsucceed.Error of Law[57] The difficulty in finding whether there is an error of law for judicial review of prerogative powers without statutory guidance is that, the Court is unable to assess what factors are relevant and what factors are irrelevant to the Executive's discretion. However, Cooper Legal, on behalf of the applicants, submits that the Ministry failed to take into account six relevant factors when implementing the Two Path Approach. I now turn to address each submission. In doing so, as will become apparent, I will endeavour to outline briefly why I reach the conclusion that in each case the Ministry did not err in law.[58] First, is the contention that the Ministry failed to take into account the NZBORA component of some claimants. In fact, on the basis of all the material before the Court I am satisfied here the Ministry did consider the NZBORA but decided that it was not a sufficiently principled basis for compensating claimants. It is within the Ministry discretion to decide what criteria is best suited for calculating compensation for the claimants. The fact that it considered the applicants'suggestion but decided not to adopt that factor is not an error in law.[59] The second and third factors are essentially the same. As to these, the applicants submit that the Ministry failed to carry out an in-depth review of theclaimants' histories. As I see it, however, the entire premise of the expedited settlement offer regime was to accept the victims' claims at face value and not to review the records in detail. By requiring the Ministry to include such a detailed and presumably time-consuming step defeats the entire purpose of setting up a fast track settlement process. The applicants cannot have their cake and eat it too. They cannot demand that the Ministry carry out an in-depth review while requesting at the same time that the process be shortened and sped up.[60] Fourthly, the applicants submit that the Ministry failed to take into account that there is not sufficient funds to implement the Two Path process. However, on this aspect, while there are exceptional circumstances in which judicial review will be appropriate, it is the general rule that the Court will not interfere with anallocation of public finance.16 As this Court held in Akatere v Attorney General,"allocating public money against many contending claims [lies] beyond theprovince and competence of the Court".17[61] Fifthly, the applicants contend that the Ministry did not take into consideration New Zealand's obligations under the Universal Declaration of Human Rights. As to this, Article 8 states that:Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or by law.[62] Furthermore, the applicants also make reference to Article 2(3) of the International Covenant on Civil and Political Rights which states:Each State Party to the present Covenant undertakes:(a) To ensure that any person whose rights or freedoms as herein recognised are violated shall have an effective remedy, notwithstanding the violation has been committed by persons acting in an official capacity;(b) To ensure that any person claiming such a remedy shall have the right thereto determined by competent judicial, administrative or legislative authorities, or by any other competent authority provided for by the legal system of the State, and to develop the possibilities of judicial remedy;(c) To ensure that the competent authorities shall enforce such remedies when granted.It follows that the applicants submit here that the Ministry has an obligation to effectively remedy any breaches of their human rights.[63] However, I am satisfied that overall, the implementation of the Two Path process does not breach any of the applicants' rights. The applicants' retain the right to either opt out of the process and return to the original settlement processes or to reject the offer and continue their civil suit against the State.16 Whare-Ora Hospital Inc v Wanganui Area Health Board HC Wanganui CP 73/89, 21 December 1989; R v Home Secretary, ex parte Rofathulla [1989] QB 219 (QBD; Blyth District Hospital Inc v South Australian Health Commission (1988) 49 SASR 501.17 Akatere v Attorney General, above n 4, at [31].Mistake of fact[64] This fourth ground seems to be a repetition of the third. It alleges that theMinistry decided to implement the Two Path Approach on the basis of a "mistake of fact" as to the budget required to implement the policy. According to the applicants, this makes the decision at issue here an error of law.[65] In particular the applicants allege that:(a) The Ministry's projected spread of claims was wrong and hence "thefiscal envelope was therefore not sufficient to implement the Two Path Approach appropriately"; and(b) Instead of returning to the Minister for funds which would have made the process workable the Ministry decided to implement it anyway and to moderate the categories.[66] It is clear however on the face of the pleadings that this mistake, which the Ministry acknowledged, was corrected before the decision to implement the policy was made. Essentially here there is no unremedied mistake of fact. In any event, as I have noted above, this fourth ground would appear to be a repetition of theallegation included as part of the third ground that the Ministry "has failed to takeinto account that there is not sufficient money to implement the process properly".[67] The reality, as I see the position, is that the applicants simply disagreed with the way the Ministry has responded, once the error was recognised. The applicants'preference would have been for the Ministry to make offers on the face of all claims advanced without moderation. The Crown's position however was simply that, to comply with principles of consistency, the fiscal envelope in which it operated was determined by the spread of past payments (being those claims previously investigated and settled) and this determined the parameters of the necessary moderation process.[68] After all, the Two Path Approach in giving priority to the timely resolution of claims, still gave claimants, who did not share that priority or were dissatisfied withtheir expedited offer, recourse to return for a remedy either to the full historic assessment process or to litigation before the Courts.[69] This does not provide a basis to impugn the process at law. The mistake of fact was corrected before a final decision was made and the applicants' position issimply one of disagreement with the way the Ministry responded once that error was recognised. This ground is also without merit.Should declaratory relief be granted?[70] In their statement of claim the applicants seek a declaration that the decision relating to the Two Path Approach is invalid and an order quashing or setting aside that decision. In addition, they seek an order in the nature of prohibition preventing the Ministry from taking steps to implement the decision and a further order that the Ministry is to consult with Cooper Legal in order to implement a process that all parties agree upon.[71] Given my findings on the preceding issues noted above, obviously there is no basis for either the declaration or the orders to be made. And ultimately as I see it, declaratory relief would have been of doubtful use to the applicants here in any event. This is because in the end it must be for the Cabinet and the Ministry to decide on what terms they will negotiate and make ex gratia compensatory payments. These payments and negotiations are of a kind which the Crown may have no duty to undertake and to which the applicants may have no enforceable right without litigation taking its full course.[72] And finally here, in any event, there was no need for the Court to intervene on the basis sought by the applicants:(a) The decision to make expedited offers to the applicants and others here gave those who received offers an additional option in resolving their claims. But, other options still remained available. Where an applicant or other claimant rejected an expedited offer, her/his claim would be fully assessed by the Ministry under its pre-existingresolution process and, in any event, claimants still had the right to pursue their claims through the Courts.(b) Accordingly, it could not be said that the impugned decision adversely affected the rights or interests of applicants here. Indeed it was the applicants themselves who could remedy any perceived wrongwithout the Court's intervention.(c) And, lastly, it is rare, if ever, that it is in the public interest for Courts to review the process or policies under which a party such as the Crown intends to seek to settle legal claims. As a matter of policy, litigating parties must be free to make offers to settle claims through counsel or otherwise, without restriction.Result[73] For all the reasons outlined above none of the grounds of review are established here and the applicants' claim to judicial review is dismissed.Costs[74] As to costs, I did not hear specific submissions from counsel addressed to this issue. In the normal course, costs would follow the event here. I am mindful however that the applicants in this case may be legally aided and/or in any event in many cases impecunious. This may well have a bearing upon whether the Ministry may wish to seek costs in this case.[75] In the event that costs are sought and counsel are unable to agree, they may file memoranda on costs (sequentially) which are to be referred to me and, in the absence of either counsel indicating they wish to be heard on the matter, I will decide the question of costs based on the memoranda and the material then before the Court....................................................Gendall JSolicitors:Cooper Legal, WellingtonCrown Law Office, Wellington