THE ATTORNEY-GENERAL ON BEHALF OF THE MINISTRY OF HEALTH V IDEA SERVICES LIMITED (IN STATUTORY MANAGEMENT) HC WN CIV 2011-485-1562

THE ATTORNEY-GENERAL ON BEHALF OF THE MINISTRY OF HEALTH V IDEA SERVICES LIMITED (IN STATUTORY MANAGEMENT) HC WN CIV 2011-485-1562 [3 December 2012]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV 2011-485-1562CIV 2011-485-2052[2012] NZHC 3229UNDER The Human Rights Act 1993BETWEEN THE ATTORNEY-GENERAL ONBEHALF OF THE MINISTRY OFHEALTHAppellantAND IDEA SERVICES LIMITED (INSTATUTORY MANAGEMENT)RespondentHearing: 30 April 2012-4 May 2012Additional submissions on 31 May and 18 June 2012Memorandum of counsel of 26 November 2012Counsel: M Coleman and G J Robins for the AppellantA S Butler, O C Gascoigne and P Barnett for the RespondentJudgment: 3 December 2012JUDGMENT OF MALLON J, MS J GRANT MNZM AND MS S INESON QSMContentsOverview ............................................................................................................................................ [1]The facts ............................................................................................................................................. [8]What is a disability? ....................................................................................................................... [8]An intellectual disability ................................................................................................................. [9]Disability Support Services .......................................................................................................... [10]Day services ................................................................................................................................. [11]Funding for disability services ..................................................................................................... [13]Appropriations .............................................................................................................................. [19]Present funding responsibilities as between government bodies .................................................. [22]The MOH funder/provider arrangements ..................................................................................... [24]The contract with IDEA Services .................................................................................................. [29]The contract with NASC ............................................................................................................... [33]Back on budget ............................................................................................................................. [34]The MOH's decision ..................................................................................................................... [36]Explanation for the SMT decision ................................................................................................ [38]Financial effect of SMT decision .................................................................................................. [42]Preliminary issue no 1: Breach of contract ................................................................................... [44]The issue ....................................................................................................................................... [44]The Tribunal's decision ................................................................................................................. [45]MOH submissions......................................................................................................................... [50]IDEA Services submissions .......................................................................................................... [53]Our assessment ............................................................................................................................. [55]Preliminary issue no 2: Who is the claim made against ............................................................... [58]The issue ....................................................................................................................................... [58]The Tribunal's decision ................................................................................................................. [59]The submissions ............................................................................................................................ [61]Our assessment ............................................................................................................................. [65]The pleading ................................................................................................................................. [70]Preliminary issue no 3: did the MOH have funding responsibility? ........................................... [75]The issue ....................................................................................................................................... [75]The Tribunal's decision ................................................................................................................. [76]Submissions .................................................................................................................................. [77]Consideration given to who should have funding responsibility – pre the NZPHD Act ............... [78]Funding responsibilities post the NZPHD Act .............................................................................. [91]Summary ..................................................................................................................................... [121]Discrimination ............................................................................................................................... [124]The statutory test for discrimination .......................................................................................... [124]The relevant comparison ............................................................................................................ [126]A) The Tribunal's decision .......................................................................................................... [128]B) The submissions ..................................................................................................................... [129]Our assessment ........................................................................................................................... [134]Differential treatment on the basis of age ................................................................................... [141]A) The Tribunal's decision .......................................................................................................... [142]B) Submissions ........................................................................................................................... [143]C) Our assessment ...................................................................................................................... [146]Material disadvantage ................................................................................................................ [160]A) The legal test .......................................................................................................................... [160]B) The Tribunal's decision .......................................................................................................... [162]C) Submissions ........................................................................................................................... [163]D) Our assessment...................................................................................................................... [164]Justification.................................................................................................................................... [165]The statutory test ........................................................................................................................ [165]Was the SMT decision "prescribed by law"? ............................................................................. [167]A) The issue ................................................................................................................................ [167]B) The Tribunal's decision .......................................................................................................... [168]C) The submissions ..................................................................................................................... [171]D) Our assessment...................................................................................................................... [174]Reasonable and justified............................................................................................................. [194]A) Deference ............................................................................................................................... [196]Did the SMT decision serve a purpose sufficiently important to justify curtailment of the right to be free from discrimination? ........................................................................................................... [206]Was the SMT decision rationally connected to its purpose?....................................................... [218]Did the SMT decision impair the right to be free from age-related discrimination no more than reasonably necessary for its purpose? ....................................................................................... [222]Was the SMT decision in due proportion to the importance of its objective? ............................. [232]Result on Part 1A claim ................................................................................................................ [236]Costs appeal ................................................................................................................................... [237]Introduction ................................................................................................................................ [237]Discretion to award costs ........................................................................................................... [239]The Tribunal's decision ............................................................................................................... [242]Consistency ................................................................................................................................. [256]Were actual costs reasonable...................................................................................................... [261]High Court scale costs ............................................................................................................... [266]Increased costs ........................................................................................................................... [269]Conclusion .................................................................................................................................. [271]Costs on this appeal ....................................................................................................................... [273]Overview[1] Around 31,000 people in New Zealand suffer from an intellectual disability.1Their disability means that they require support to do everyday tasks. This includes support to do activities in the community, such as to take a trip to the library or the local swimming pool. This case is concerned with the decision of the Ministry ofHealth ("the MOH") not to fund the support needed for community activities (called "day services") for people with an intellectual disability who are over the age of 65 years.2[2] The respondent ("IDEA Services") is a provider of those day services. It says that the MOH's decision discriminated against those affected by the decision on thegrounds of age in breach of Part 1A of the Human Rights Act 1993 ("the HRA").The case is before us by way of appeal from the Human Rights Review Tribunal. The Tribunal found that the decision breached Part 1A. It held that the decision discriminated on the grounds of age, was not prescribed by law and was not justified. The Attorney-General appeals against that decision.[3] The MOH's decision arose in the context of split responsibility for thefunding of services to people with an intellectual disability. One of the funders is the Ministry of Social Development ("the MSD"). The MSD is responsible for fundingvocational services, which is funding intended to assist people with disabilities to engage in work or work training. As part of that funding, the MSD provides funding to support people with an intellectual disability to engage in community activities.The community activities funding is available from the MSD even if a person'sdisability means that they have no prospect of ever engaging in work. The MSD funding ceases, however, when a person turns 65 years (at which point, as with the rest of the New Zealand population who turn 65, they are eligible for government superannuation).1 Ministry of Health Health Indicators for New Zealand with Intellectual Disability (Ministry ofHealth, September 2011). This may slightly understate the number because the study does notappear to include the entire New Zealand population.2 And who do not fall within one of the specific groups for which the MOH had committed toprovide funding for. This is discussed further below at [22].[4] For some time, once a person with an intellectual disability turned 65, at least some of them would continue to receive funding for community services. Sometimes this funding continued to be provided by the MSD even though under theMSD's criteria they were no longer eligible. However in other cases this fundingcame from the MOH. An issue in this case is the extent to which the MOH (or its predecessors) ever had responsibility to provide this funding and the extent to which it actually provided this funding. The MOH says that it was not given that responsibility by its Minister or Cabinet and the extent to which it provided that funding was ad hoc and inconsistent. IDEA Services says that the MOH has responsibility and that its consistent practice and policy was to provide the funding.[5] In any case, in March 2005 a decision (the "SMT decision") was made by ateam of senior managers within the MOH ("the SMT") that no further funding forday services was to be provided to any person with an intellectual disability who wasexiting MSD funding because they had turned 65 (the "affected group").3 The decision was made in response to MOH disability support services overspending by $15.7 million in the 2003/2004 financial year and a projected budget overspend for disability support services of $30 million for the 2004/2005 financial year. The MOH says it was made because the senior managers believed that the MOH did not have the funding responsibility for these services. Following that decision, the funding for day services for the affected group ceased.4[6] The principal issues in this case are:(a) some preliminary issues: whether the SMT decision breached the contract between the MOH and IDEA Services; whether it is only the actions and responsibilities of the MOH (rather than other government agencies or the executive) that are relevant to the claim that Part 1A of the HRA is breached; and whether the MOH had funding responsibility for day services for the affected group;3 The minutes of the SMT decision referred to IHC's clients, but the SMT decision was intendedto and was acted upon as a decision in respect of all people with intellectual disabilities whohave exited MSD funding for vocational services because they have turned 65.4 IDEA Services has, however, continued to fund these services from its own resources, and isclaiming damages as one of its remedies.(b) whether the SMT decision was discriminatory: is the appropriate comparator group only other groups which MOH has responsibility to fund or is it those funded by MSD who are under the age of 65; is there discrimination on the basis of age if the MOH made the decision because it understood that it did not have responsibility to fund day services for those who were no longer receiving MSD funding because they had turned 65; and is there material disadvantage to the affected group if the funding is stopped;(c) whether the SMT decision was justified: whether the decision was"prescribed by law" because it was made under the New ZealandPublic Health and Disability Act 2000 ("the NZPHD Act"); if budgetconstraints was the reason for the decision should the Court defer to whether the decision was a reasonable and justified limit on the right to be free from discrimination on the ground of age; and is the process by which the decision was made relevant to the level of deference appropriate.[7] The appeal is against the Tribunal's finding of breach, the declaration it madethat there was a breach, and its decision to award costs of $165,000 in favour of IDEA Services. Other remedies are sought by IDEA Services. These have been referred to the High Court for determination in the event that the appeal is dismissed.The factsWhat is a disability?[8] Disabilities may be physical, sensory, psychiatric, intellectual or age-related.5A person may be considered to have a disability if they have one or more of these disabilities, which is likely to continue for a minimum of six months,6 and which5 That is, a physical, intellectual or psychiatric condition related to the on-set of age.6 There are varying definitions in MOH documents over the years about the period over which thedisability is to extend: e.g. the 1992 "New Deal" Government Statement refers to a disabilitywhich extends "indefinitely".results in reduced independent functioning to the extent that ongoing support is required.7An intellectual disability[9] Intellectual disability is one kind of disability.8 There is a spectrum of disability within those who meet eligibility for government funded support because of their intellectual disability. However, as discussed in evidence before the Tribunal, in general terms a person with an intellectual disability is less able to self- motivate and is therefore dependent on others to organise their lives for them, is less likely to be financially independent, is restricted in mobility (being largely dependent on others to provide transport for them or to help them with public transport), and have difficulty in carrying out everyday activities, such as reading, writing, toileting and socialising, without support.9Disability support services[10] Disability support services are services which are provided to people with disabilities, for their care, or to support or promote their inclusion or participation in society and their independence.10 Examples include personal care services (e.g. washing and dressing), domestic services (e.g. cooking and cleaning), rehabilitation services (e.g. speech therapy), behavioural support services (e.g. crisis intervention) and day services (the services which are at issue in this case).7 The New Zealand Public Health and Disability Act 2000 does not define "disability". Thedescription set out in the judgment is the definition in the Government's service specification forNASCs (discussed elsewhere in this judgment).8 There are various definitions of what qualifies as an intellectual disability. See for example thedefinition in s 7 of the Intellectual Disability (Compulsory Care and Rehabilitation) Act 2003which is similar, but not identical, to that set out in the Diagnostic and Statistical Manual ofMental Disorders, 4th Ed, (DSM-IV). The criteria for an intellectual disability as set out in theDiagnostic and Statistical Manual of Mental Disorders, 4th Ed, (DSM-IV) is: (a) the person musthave an IQ of 70 (+/-5) or below, placing them at or below the 2nd percentile of the population(i.e. 98 percent or more of the general population are more able than them, as assessed onculturally and age-appropriate standardised intelligence tests); (b) The person's disability musthave first occurred before the age of 18 years; and (c) The person must have deficits in two ormore adaptive functioning domains listed as communication, self-care, home living, social skills,community use, self direction, health and safety, functional academics and work.9 There was evidence before the Tribunal about this from Dr Olive Webb.10 New Zealand Public Health and Disability Act 2000, s 6.Day services[11] Day services, sometimes referred to as day activity programmes or services, or community participation services,11 are a subset of disability support services. They are activities which may provide assistance to the person in recreation and leisure, socialisation, daily living skills, education and learning, exercise and fitness and vocational and work experience.12 They may teach skills or provide stimulating activity which is seen as contributing to the quality of life, wellbeing, dignity, and life purpose of those with an intellectual disability.13[12] The day services that are usually funded tend to be group activities. They are typically provided in two sessions a day, morning and afternoon. There are some specific programmes and outings for those who are unable or do not want to take part in all ten sessions per week.Funding for disability services[13] The current "umbrella"14 legislation under which disability support services are provided is the NZPHD Act. The purposes of that Act include providing fundingfor "disability support services" in order to pursue various objectives.15 Disability support services, as defined by the Act, includes the day services at issue here.1611 The services are referred to as community participation services where they are available as partof the MSD (or predecessors) vocational services.12 This description is the one provided in the service specification for IDEA Services in theSouthern region, for example.13 IDEA Services says that those with intellectual disabilities who are seeking day services willprimarily be in the category of persons who are either receiving residential support (living in aGroup Home or Contract Board [where the person boards with a family, friend or others andIHC makes boarding arrangements and provide ongoing support]) or supported independentliving.14 Ministry of Health v Atkinson [2012] NZCA 184, [2012] 3 NZLR 456 at [6].15 Section 3(1).16 Section 6 defines "disability support services" as follows:"disability support services includes goods, services, and facilities—(a) provided to people with disabilities for their care or support or to promote their inclusion andparticipation in society, and independence; or(b) provided for purposes related or incidental to the care or support of people with disabilities or to the promotion of the inclusion and participation in society, and independence of such people."[14] Under the NZPHD Act, the objectives to be pursued from the public funding include achieving for New Zealanders:17(i) the improvement, promotion, and protection of their health;(ii) the promotion of the inclusion and participation in society and independence of people with disabilities;(iii) the best care or support for those in need of services;[15] These and the other objectives "are to be pursued to the extent that they are reasonably achievable within the funding provided".18 Funding is provided to persons who arrange or provide services pursuant to Crown funding agreements.19[16] The Act provides that the Minister of the Crown who is responsible for disability issues must determine a strategy for disability support services. This iscalled "the New Zealand Disability Strategy". This strategy is to provide the framework for "the Government's overall direction of the disability sector in improving disability support services".20 It can be amended and replaced at any time. The Minister is required to make the strategy publicly available and to present it to the House of Representatives. The Minister is also required to report each year on progress in implementing the strategy.21[17] The New Zealand Disability Strategy was formulated in April 2001. Theforeword from the Minister for Disability Issues said that "The Government [was]committed to the New Zealand Disability Strategy". The Strategy included thefollowing:Summary...Underpinning the New Zealand Disability Strategy is a vision of a fully inclusive society. New Zealand will be inclusive when people with impairments can say they live in:17 Section 3(1)(a).18 Section 3(2).19 Section 10. IDEA Services' contract is a Crown funding agreement which is described in moredetail below.20 Section 8(2).21 Section 8(4).'A society that highly values our lives and continually enhances our full participation.'Achieving this vision will involve ensuring that disabled people have a meaningful partnership with Government, communities and support agencies, based on respect and equality. Disabled people will be integrated into community life on their own terms, their abilities will be valued, their diversity and interdependence will be recognised, and their human rights will be protected. Achieving this vision will also involve recognising the principles of the Treaty of Waitangi....Vision of a non-disabling society...Disabled people are treated equitably, regardless of gender, age, cultural background, type of impairment or when and how the impairment was acquired....[18] The "Government Objectives" included the following:...Objective 8:Support quality of living in the community for disabled peopleProvide opportunities for disabled people to have their own homes and lives in the community.Objective 9:Support lifestyle choices, recreation and culture for disabled peopleCreate and support lifestyle choices for disabled people within the community and promote access to recreation and cultural opportunities....Appropriations[19] Appropriation of public money occurs each year via Appropriation Acts. Atthe time the SMT decision was made "Vote Health" had an appropriation for "Disability Support Services – National" of $666,844,000 for the 2004/05 year withsupplementary funding of $46,072,000 later obtained. The appropriations werederived from a document "The estimates of Appropriations for the Government ofNew Zealand for the year ending 30 June 2005". That document described the scope of the appropriation as being for the "[f]unding of disability support services fromDistrict Health Boards and other Disability Support Service Providers." It did nototherwise breakdown how that funding was intended to be applied.22[20] The estimates document included a "Statement of Objectives and Trends". Under that heading "Key Government Goals" were set out as follows:Strengthen national identity and uphold the principles of the Treaty of Waitangi – the Ministry and District Health Boards (DHBs) will recognise the principles of the Treaty of Waitangi in its policies and activities.Restore trust in Government and provide strong social services –the Ministry and DHBs will work to ensure the public has confidence in the health and disability system through efficient, effective and safe services, which improve health and participation outcomes.Reduce inequalities in health, education, employment and housing – the Ministry will maintain and strengthen its focus on reducing inequalities in health status across population groups.Improve New Zealanders' skills – the Ministry and wider sector will work to further develop the health and disability support workforce, its capability and skills.[21] It also stated the ultimate outcome Vote Health aimed to achieve was"Healthy New Zealanders". It then set out "Contributing Outcomes" which included"Equity and Access" with the explanation that:New Zealanders in similar need of services have an equitable opportunity to access equivalent services and resources are allocated in a manner that reduces inequity of outcomes.Present funding responsibilities as between government bodies[22] The funding of day services for those with disabilities is split between different government bodies as follows:22 This contrasts with the appropriations for MSD where allocations were made for particularprogrammes such as vocational services.(a) The Accident Compensation Corporation (the ACC) is the responsible funder for those with disabilities arising from a personal injury covered by the accident compensation legislation who need day services.(b) District Health Boards23 are responsible for funding day services for:(i) those whose need is due to aging (they are generally, but not entirely, over 65 because the eligibility is on the basis of need due to aging not on the basis of any specific age); and(ii) those with psychiatric illnesses or addiction issues.(c) The MSD24 is responsible for funding "community participation services" (which are similar to day services) as part of its funding of"vocational services" for those with disabilities who are aged between16 and 65. (This is discussed further below).(d) The MOH is (and accepts that it is) responsible for funding day services for people with intellectual disabilities:(i) who were deinstitutionalised as part of a formal deinstitutionalisation plan;25(ii) who are subject to the Intellectual Disability (CompulsoryCare and Rehabilitation) Act 2003 ("the IDCCR Act");26 and23 Since October 2003. Before that date, the responsibility was with the MOH (following thedisestablishment of the HFA and the RHAs).24 Previously the Department of Work and Income (or DWI or WINZ) and, before that, theDepartment of Social Welfare (DSW).25 As explained in the evidence before the Tribunal, during the last 40 years the Government hasmoved intellectually disabled people from institutional care to community based care. Whenthese people were in institutional care, the Health sector was responsible for the provision of dayservices. In 1993 the Government decided that the Health sector would have responsibility forfunding day services for intellectually disabled people who were "deinstitutionalised".26 The IDCCR Act provides a system for compulsory care and rehabilitation of persons who havebeen charged with, or convicted of, an offence.(iii) who have very high and complex needs similar to those under the IDCCR Act, but who are not subject to that Act (whom theMOH refers to as "civil clients").[23] In addition the MOH has funded day services for others with disabilities, including those with intellectual disabilities who are not in the above categories. As the claim relates to funding for day services for people with intellectual disabilities, there is limited information before us about the extent to which this has occurred and the reasons for that in relation to disabilities other than intellectual disabilities.27 The extent to which this has occurred in relation to people with intellectual disabilities and the reasons for this are in dispute in this case. It is discussed further below.The MOH funder/provider arrangements[24] In accordance with the NZPHD Act, disability services are provided to people by providers who are funded by the MOH pursuant to contracts entered into by the MOH and each provider. There are approximately 800 providers of disability services to people with disabilities funded by the MOH and 93 providers28 for the provision of day services to disabled people.[25] IDEA Services is one such provider. It is a subsidiary of IHC New Zealand Incorporated (IHC). IHC is the largest provider in New Zealand of services to people who have an intellectual disability.29 It is a not for profit organisation with a history stretching back sixty years. IHC provides services in its own name and with its own funding, such as its advocacy and volunteer services, and it provided a range27 A "stocktake" in 2000 which is discussed later in this judgment showed that the MOH wasfunding day services for some people receiving age-related services and for some people withphysical or sensory disabilities but the much larger category of recipients for MOH funded dayservices were people with intellectual disabilities. Counsel for the MOH says that this is notsurprising because the general nature of an intellectual disability is such that people with anintellectual disability are more likely to need assistance to participate in community activities.28 As at December 2011.29 Although it is accepted that IDEA Services is a large provider, we do not have accurateinformation about IDEA Services' share of the market for the provision of services to peoplewith intellectual disabilities. However there is information that at some point IDEA Servicesprovided 58 per cent of MSD funded community participation services for people withintellectual disabilities and that, of 244 people over the age of 65 years receiving MOH fundedday services, IDEA Services was the provider for 161 of them. But the scope and accuracy ofthese figures is not clear.of government funded disability support services through its subsidiary companies, one of which is IDEA Services.[26] In order to receive funding, a person with an intellectual disability is assessed by a Needs Assessment Service Co-ordination Organisation (referred to as a"NASC"). There are 15 NASCs.30 They are independent organisations which assessa disabled person's needs and prioritises those needs, and identify and co-ordinate available resources to meet the prioritised needs. If the person meets the eligibility criteria for a MOH funded service they are referred to a provider for that service.[27] This is represented diagrammatically as follows:[28] A provider with a contract with the MOH will not necessarily receive any funding. The funding depends on whether the provider has actually provided disability support services. For example, of the 113 contracts the MOH has in place with the 93 providers of day services,31 15 of these are "zero volume".The contract with IDEA Services[29] IDEA Services provides day services under a contract with the MOH. The contract is made up of a Heads of Agreement (between IDEA Services and Her Majesty the Queen in right of her Government in New Zealand acting by the MOH),30 Seven are non-government organisations, one is a private company and seven are DHB owned.31 Some providers have more than one contract.Refer for MOH-funded serviceNeedsAssessment/ServiceCo-ordinationService ProviderMOH/ProviderContractMinistry of Health(Funder)MOH/NASCContractfour service schedules covering different regions throughout New Zealand32 and variations to the agreement (extending the expiry date of the agreement and setting price components for the services).[30] Under the Heads of Agreement:(a) "[MOH] agree to purchase and [IDEA Services] agree to provideServices on the terms and conditions set out in the Agreement ..."(b) IDEA Services agrees to claim payments in respect of "Services" provided to "Eligible Persons".(c) Services are defined as meaning the services in the service specification schedules.33(d) An Eligible Person is defined as meaning any individual who "is inneed of the Services as determined by a DHB or DHB/MOH authorised Needs Assessment Co-ordination Service" (i.e. a NASC)and who meets the essential eligibility criteria and other criteria.[31] At the time of the MOH's decision at issue here, the service specificationunder the IDEA Services contract for each region provided under the heading"Community Day Activity Programmes":DSD PhilosophyThe aim of the Disability Services Directorate is to build on the vision contained in the New Zealand Disability Strategy (NZDS) of a fully inclusive society. New Zealand will be inclusive when people with impairment can say they live in:'A society that highly values our lives and continually enhances our fullparticipation.'With this vision in mind, disability support services aim to promote aperson's quality of life and enable community participation and maximum independence. Services should create linkages that allow a person's needs to32 Largely reflecting the regions covered by the former Regional Health Authorities ("the RHAs").33 These schedules include "community residential services" . There is a difference in viewbetween the Ministry and IDEA Services as to the scope of these services as compared with thescope of day services. We are not required to decide that issue.be addressed holistically, in an environment most appropriate to the person with a disability.Disability support services should ensure that people with impairments have control over their own lives. Support options must be flexible, responsive and needs based. They must focus on the person and where relevant, their family and whanau, and enable people to make real decisions about their own lives.1. Definition And PrinciplesThe MOH wishes to purchase community day activity services for people with an intellectual disability.The following service principles will be incorporated in the provision of support services by the Provider under this service specification:Service users are individuals who have the inherent right to respect for their human worth and dignityService users have the right to live in and be part of the communityService users have the right to realise their individual capabilities for physical, social, emotional and intellectual developmentService users have the same rights as other members of society to services, which support their attaining a reasonable quality of lifeService users have the right to make choices affecting their lives and to have access to information and services in a manner appropriate to their ability and cultureService users have the same rights as other members of society to participate in decisions which affect their livesService users have the same rights as other members of society to receive services in a manner which results in the least restriction of their rights and opportunitiesService users have the right to pursue any grievance in relation to services without fear of the services being discontinued or any form of recrimination2. Service Objectives2.1 GeneralDay activity programmes will assist integration of service users into the community, enable service users to have regular meaningful social contact and improve their personal skills through provision of stimulating activities....3. Service UsersDay activity services as described in this specification are for people with intellectual disabilities who have been referred to the Provider for service by a Needs Assessment Service Co-ordination Service (NASC) provider contracted by the MOH.4. Access4.1 InclusionsAccess to the day services described is by referral from the NASC Service following a formal individual needs assessment process. This specification relates particularly to the purchase of Day Activity programme services for people living in community settings.4.2 ExclusionsExcluded from services under this Specification will be any individual whose primary need for support is not as a result of an intellectual disability or an individual who has a claim accepted by ACC or funded by Department of Work and Income NZ for vocational services.4.3 Service Access4.3.1 EntryThe NASC provider will make referral of a person requiring Day Activity programme services to the Provider. The referral will:Be for a specific number of half days of Day Activity programmes services per weekBe in the format to be agreed between the NASC provider and the MOHProvide all the information required for the Provider to commence delivery of the Day Activity Programme ServiceIt is expected that the Provider will be able to exercise a degree of flexibility within the scope of the approved level of half days as service user's needsfluctuate week by week. However any permanent revision to the half days of Day Activity service delivered by the Provider must be authorised by the NASC Provider.4.3.2 ExitPeople may be discharged from the service if the service no longer meets their needs, or they reach retirement age and wish to retire, or move into other forms of day activity services. Any possible discharge will be managed by the NASC provider. It is expected that subject to the Health Information Privacy Code, appropriate information will be made available to the alternative service provider so that a smooth transition will be made into alternative services.4.4 Prioritisation criteriaIn order to equitably manage available resources the MOH may from time to time advise NASC Providers (and Providers of Day Activity services), of guidelines for maximum hours per week of Day Programmes available for people with intellectual disability, and protocols for prioritisation and organisation of any "waiting list" which may be required.[32] The service specification goes on to set out "service components". Thisincludes setting out the types of activities that may be part of day services. Thisincludes "Recreation and Leisure", "Socialisation", "Daily Living Skills", "Education and Learning", "Exercise and Fitness" and "Vocational and Work experience". Under that last heading, the service specification states:Vocational and Work experienceFor service users who would clearly benefit from such opportunities provided that:all avenues for accessing vocational and work related services through Department of Work and Income NZ funding have been thoroughly researched and have proved to be unavailablethe Provider does not receive funding from both Community Funding Agency and the MOH for the same programme componentsThe contract with NASC[33] The MOH also has in place contracts with NASCs. The MOH issues guidelines to NASCs in respect of those contracts. At the time of the MOH decision that is challenged in this proceeding, the contracts provided that the NASC should"work within the funding and policy boundaries of the funder when allocating public resources".Back on budget[34] The evidence is that by mid-2004 it had become clear that the MOH had"overspent" in respect of disability support services. For the 2003/2004 financialyear, total expenditure exceeded funding by $15.7 million. Also, a $30 million overspend was projected for the coming year. Between July 2004 and March 2005, the MOH put in place a work programme called "Back on Budget" to addressoverspending and projected expenditure growth. The initiatives taken to address this included:(a) closer monitoring of NASC allocation of services;(b) more rigorous analysis of services and the clients to whom they were provided, so the MOH could better understand demand growth issues;(c) closer working relationships with the newer NASCs to stress their accountability to the MOH; and(d) analysis of growing discretionary funding expenditure by NASCs and correction of trends to use it for purposes unintended by the funder.[35] The Back on Budget programme seems to have been effective. As matters transpired Disability Support Services finished the financial year 30 June 2005 under budget by $1.077 million.The MOH's decision[36] In the context of the Back on Budget programme, and in response to clarification sought by IHC (discussed below) the SMT considered the funding of day services for people aged over 65 at a teleconference on 21 March 2005. The minutes of that telephone conference call record the following:Vocational Services for People in IHC over 65 yearsNote: Further work needed to be carried out about this issue as DSD [Disability Support Directorate] does not have an up-to-date policy on this matter.Agreed: No new referrals to be accepted. Only services already in place to continue until our position is confirmed.[37] The "agreement" of the SMT was that NASCs were not to make new referrals for day services for people in IHC's care who were over 65 years. This was applied to all people with intellectual disabilities over 65 years regardless of whether IHC/IDEA Services was the provider. This meant that providers (including IDEAServices) no longer received funding for day activities for people with intellectual disabilities, once they were no longer eligible for funding from MSD for vocationalservices because they had turned 65. The MOH "grandparented" those who prior toMarch 2005 received MOH funded day services on exit from MSD funded community participation services. It regarded these as "over referrals". It continuedthe funding of those who had been over-referred because this was "standard Government practice".Explanation for the SMT decision[38] There is no evidence of any briefing to the SMT before the decision was made on 21 March 2005. However an internal MOH briefing to a member of the SMT dated 5 April 2005 sets out a view from within the MOH as to the historic position for funding these services. It was as follows:BackgroundVocational services are not routinely purchased by the Ministry of Health (MOH) but are purchased alongside day services of a non-vocational nature on an individual and highly variable basis. The primary responsibility for purchasing services that enable people to progress towards workforce participation has been considered to rest with the Ministry for Social Development (MSD).However, this has not been the practice for people who have previously lived in long-stay residential institutions. In September 2003 a snapshot of day services indicated that 457 users of day services had been resettled following deinstitutionalisation. The approval of such funding was necessary to ensure that people received at least comparable levels of support when they moved from residential institutions to community-based services.People who have not previously lived in one of the 14 residential institutionsthat have been closed since the late 1980's have also been funded, often on ahighly variable basis, by the Ministry of Health. Such practices have emerged in acknowledgement of the fact that MSD funded services are not always available, and when available, are not always able to provide adequate support to people with higher levels of need.Custom and PracticeWhile the official position of DSD is that the MOH only routinely purchases day services for people who have relocated from long-stay residential facilities to the community, it is clear that the MOH and NASCs have established numerous precedents by funding a variety of day services for people who have not previously lived in residential institutions. Around1550 users of MOH funded day services accessed 127 funded services in September 2003.The September 2003 snapshot found that approximately 70% of users of day services funded by MOH had not been resettled as a result of deinstitutionalisation. Intellectual disability was also identified in thesnapshot report as the population group that represented the "vast majority of the clients" using MOH funded day services.A common justification for MOH funding of day services is that gaps in the delivery of vocational services have created a supply shortage that places pressure on the residential service provider when residents are unable to gain access to a specialist vocational service. In such cases, MOH service managers may have encouraged NASCs to seek alternative solutions and in some instances apparently directed, NASCs to fund day service solutions from their discretionary budgets....Access...In the absence of operational policy, service providers have interpreted the official position of MOH from informal communications received from Ministry of Health employees. Although operational policy has not been defined, it is reasonable to assume that the sector will insist that future access should be based on historical precedents that have been set.A current claim by IHC that the funding responsibility for day service for people over 65 years of age rests with the MOH could be considered a liberal interpretation of a historical practice. Such an interpretation has originated because of a MOH practice of funding a variety of alternative day services for some people over 65 years of age who are no longer able to use MSD funded services.[39] There was also evidence before the Tribunal from Ms Woods,34 who was partof the SMT that made the decision. She said that "[b]udget pressures informed that decision" of the SMT because the MOH needed to focus on its core responsibilities "as determined by Government." The SMT did not view the decision as representing a change in policy or responsibilities within the MOH. She expanded on this in cross-examination as follows:[I]t was our understanding that we were not responsible for this group and, therefore, we needed to actually limit within the bounds of what we had already accepted and were doing, we said no more while the policy and responsibilities were resolved.34 The Director of National Services Purchasing in the National Health Board....[40] And later:Q: And the Ministry of Health understood that [constraining the community participation opportunities available to this group] would be a consequence of its decision to chop that funding?A: Well, it wasn't chopping the funding, we just were more concernedthat actually the quality of our 24/7 services, the residential services, and more particularly at that time the home and community services, some ofwhich are provided to people with an intellectual disability and some aren't, that's people's physical and sensory [disabilities]. They were actually inserious financial strife and under massive stress, and we actually needed to ensure that those services were operating well and so there was a compromise....From my perspective the core things I needed to make sure happened is that those [residential] services were properly shored up and they were the core services I had responsibility for, and the Day Services were not the core services, but in the meantime I was concerned that we needed to get some policy work done on that so the agency [responsible] would pick that up and then start to try to address that through the policy process and through the Government budget process.But I couldn't, in my own conscience, continue investing money in services that I didn't have a core responsibility for and see other services fail and riskthe quality of care and support to those individuals.[41] There was also evidence before the Tribunal from Mr Powell.35 He was the manager of the team within the MOH with responsibility for contracting withNASCs. He said that the decision to stop funding the affected group "was not drivenby age". He said the rationale was that Health should not fund something for which it was not responsible. He said the "over 65" wording was a convenient way todescribe the group that had retired from MSD funded vocational services.35 A manager of the Service Access Team for the Disability Support Services Group in the NationalHealth Board.Financial effect of SMT decision[42] The Tribunal summarised the financial effect of the SMT decision as follows:36In fact the number of service users whose eligibility to be considered for funding for community participation activities has been affected by the SMT decision is relatively small. At the time of the hearing37 in the Tribunal there had been 105 people who, but for the SMT decision, would have been funded by the MOH notwithstanding having 'retired' from the MSD (although we note that of these 15 had 'exited' the group, so that the number of people affected by the SMT decision at the date of the Tribunal hearing was presumably 90)....For present purposes, however, it is enough to note:[a] It will take some years before the financial situation'matures'; in other words, before a long run pattern of demand for the services settles out. In the short term the analysis is influenced by (for example) attrition from the group of those whose funding has been protected by the MOH's commitment to de-institutionalised service users, and those for whom the funding has been grand-parented;[b] On any view, however, over the next 20 years the number of people in the group will almost certainly increase;[c] Looking at the anticipated picture in 20 years' time (and againfocussing on people with intellectual disabilities) the MOH evidence suggests that the per annum cost of funding the community participation services at issue in this case will be in the region of $8 to $15 million, and most likely around $12.5 million. The same analysis by Idea Service's expert (butusing the different inputs he regarded as appropriate) yielded a range between $7.4 and $8.8 million, although he went on to say that as much as $4.3 million of that will be faced in any event, so that he would have put the additional cost to the MOH at something closer to $4 million in all.We do not find it necessary to resolve the detail of the issues between the experts. For our purposes it is enough to know that in the medium to long run (particularly when the de-institutionalised and grand-parented service users are no longer a factor) the annual cost of providing the community participation activities that we are concerned with in this case is likely to fall somewhere between about $4 million to maybe as much as $15 million (but36 Idea Services Ltd v Attorney-General [2011] NZHRRT 11 at [40]-[44].37 That is, for the period between 2005 and 2011.more likely less than $12.5 million). We agree with the succinct conclusion of the expert who was called for the MOH, who said that:" ... I think there's so many imponderables, ... what is important hereis to get a sense of the order of magnitude, so we're not talking about hundreds of millions of dollars, were talking somewhere in this region, I've put it at $12 million, perhaps it's 8, perhaps its 15, who knows, it's in that region, not hundreds of millions of dollars; I thinkthat's the useful part of this."In order to put these figures into perspective:[a] In the 2009/2010 financial year the total budget available to the MOH for purchase of disability support services from District Health Boards and all third party providers was $970 million;[b] The evidence was that in that financial year the MOH in fact spent $38.9 million funding community participation activities;[c] 2,167 service users accessed the services thus funded (although not all of them were Idea Services-related referrals);[d] Of the total $38.9 million, $4.3 million was spent on:[i] Services users who either had high and complex needs or were subject to a compulsory care order under the Intellectual Disability (Compulsory Care and Rehabilitation Act 2003);[ii] De-institutionalised service users;[iii] Service users referred by a Needs Assessment and Service Co-ordination agency " ... in keeping with historic practice in some regions ..."[iv] Service users who retired from MSD-funded community participation activities at age 65 before the SMT decision;[e] We were given several different figures for the average cost of providing community participation activities per service user per annum, ranging from $16,170.00 to $17,150.00 (although because the system is needs based and individually assessed, the actual cost of providing the funds to individual users will vary user by user).[43] The MOH accepts this summary but makes two additional points:(a) the above does not refer to the Ministry's projected overspend of its budget by $30 million. The MOH needed to cut its expenditure byover three per cent to get back on budget and if those cuts were to be spread evenly across all services, this would mean cutting $700,000 from its day services budget; and(b) the above costs are only part of the picture because they deal only with those who have an intellectual disability, when there is no principled basis to distinguish them from persons with otherdisabilities. The MOH's expert at the Tribunal hearing gave evidenceestimating the cost of providing services to all persons with a disability to be more than twice that for providing day services to only persons with an intellectual disability. After one year this would mean costs of $1,958,040 (compared with $864,801) and after twenty years $28,552,253 (compared with $12,610,578) according to the MOHexpert's calculations.Preliminary issue no 1: Breach of contractThe issue[44] The Tribunal found that, by the SMT decision, the MOH breached its contract with IDEA Services. The MOH says that the Tribunal's finding was wrong. IDEA Services supports the Tribunal's decision on this point. Although this is not a claimfor breach of contract, the parties consider the issue needs to be addressed because it is relevant to some of the issues that do need to be determined in a claim of this kind.The Tribunal's decision[45] The Tribunal saw the issue as providing relevant context. It considered the issue to have relevance to whether the conduct complained of was or was not"prescribed by law" as referred to in s 5 of the NZBORA. It saw it as potentially relevant to the issue of "deference" under the justified limb. It also saw it as relevantin relation to relief.3838 Referring here to the relief claimed by IDEA Services under ss 92I(a),(b),(c) and (e) of the[46] The Tribunal's decision was that:39... By entering into the contract the MOH undertook to fund Idea Services to provide day services, subject only to the exclusions identified. Service users over the age of 65 who, by virtue of turning 65, are no longer eligible for vocational services paid under the MSD are not excluded. They must therefore be included.[47] This conclusion was on the basis that the contract provides what was included (cl 4.1 of the contract) and what was excluded (cl 4.2) and nowhere in the contract is there any suggestion that persons over 65 years are to be treated any differently. The Tribunal considered that the reference to the philosophy and the principles in the service schedule demanded that cl 4 of the contract be interpreted as including eligible people who would not otherwise be funded at all. The philosophywas viewed as governing the MOH's commitment to funding these services.[48] The Tribunal rejected the submission for the MOH that service users who are in residential care will have their essential needs met by community residential support services funding. It noted that there are different payment schedules under the contract for community participation services and residential support services. It considered that the specification for day services was about getting service users out into the community during the day and does not include home-based daytime activities for service users. By contrast it considered that the residential services specification was about providing support to allow service users to live in homes in the community.[49] The Tribunal concluded this topic by saying "it is our conclusion that theMOH was (and still is) obliged by the contract to fund day services for ex-MSDservice users under the care of Idea Services" and that "the SMT decision was a breach of that contract".40Human Rights Act 1993.39 Idea Services Ltd v Attorney-General, above n 36, at [74].40 At [106].MOH submissions[50] The MOH submits that the contract creates a relationship between IDEA Services and the MOH for the potential purchase of day services only. It submits that the contract merely establishes that IDEA Services may seek payment forservices delivered according to the contract service specification once the NASCprocess of assessment and service co-ordination has occurred, including a properNASC referral. It submits that the contract does not stipulate the volume of servicesto be provided to service users.[51] It submits that it is the role of government policy, which NASCs are requiredto abide by, rather than the contract which determines whether or not the MOH isresponsible for funding day services for any particular person. An obligation to fundservice provision under the contract, and IDEA Services' entitlement to claimpayment for providing services, only arise following a NASC assessment andreferral to the MOH for day services. This requirement is contained in the clausedescribing who day services are for, as well as in the clause dealing with access today services.[52] It submits its interpretation is supported by the exclusion provision: that is those who have a claim accepted by ACC or who are funded by WINZ (MSD) are excluded. It submits that if the contract conferred a right to funded services, then anyone who was not receiving MSD funded services, for whatever reason, would be entitled to be provided with funded services on the same basis that IDEA Services now claims for those over 65. It submits that the provision is aimed to prevent double funding not to confer entitlements.IDEA Services submissions[53] IDEA Services submits that under the contracts those who are over 65 were"eligible" to be considered for day services. It submits that effectively a neweligibility criterion has been introduced. The specification was not limited to thedeinstitutionalised group and it did not exclude people from consideration becausethey were 65 or older. Via the direction to NASCs, that has now been changed. This is said to be a breach of contract.[54] The MOH response is that the NASC/MOH contract enables the MOH to adjust referrals based on changes to policies of funding boundaries, so that when changes occur it is not necessary to renegotiate 800 provider contracts. The terms of the NASC contract are publicly available and known to IDEA Services. The MOHsubmits that it is implausible for IDEA Services to expect that the MOH cannot alterthe volume of services it funds via a direction to the NASCs about who can bereferred for funding.Our assessment[55] We agree with the MOH's submission. The contract does not commit theMOH to continuing to provide funding for day services to those who are not funded by (now) MSD or ACC. Although it is within the Disability Services Directoratephilosophy to fund these services where there are "funding gaps", that philosophy isnot converted to a contractual obligation because the philosophy is set out in the contract. The philosophy serves as an explanation to the services that are to be funded under the contract.[56] The principles set out in the contract also do not bear upon whether the MOH is contractually obliged to fund the day services. Those are principles that are said to apply to IDEA Services, as provider. They are about IDEA Services' responsibilities, not the MOH's commitment to funding.[57] The contractual commitment is that if the person meets the eligibility criteria, is not funded by MSD or ACC, and is referred to IDEA Services by a NASC for one of the services in the service specification, then IDEA Services is to provide the service and the government is to pay for it. It would be a breach of contract if the MOH refused to pay for day services provided by IDEA Services to such a person. But it has always been the case that NASCs have been subject to priorities and guidelines as advised to them from time to time. That is stated in the contract and known to IDEA Services. If NASCs are advised that people over 65 years are not tobe referred for day services to providers, the contract between IDEA Services and the MOH is not breached. For these reasons, we conclude that the SMT decision did not breach the contract between IDEA Services and the MOH.Preliminary issue no 2: Who is the claim made againstThe issue[58] This issue arises because the MOH says that the Court's determination of whether there was a breach of Part 1A must focus on the MOH's actions and not the Government's actions. It says that it is not discriminatory for the MOH to stopfunding services that the Government has not made it responsible to fund. It says that if there is a gap in the funding for day services for people aged 65 years or older, Part 1A does not require the MOH to fill that gap.The Tribunal's decision[59] The Tribunal said that when the SMT made its decision it was acting as a body exercising a public function and Part 1A applied for that reason. It said that although the delivery of government funding will always be through specificministries and departments "when all is said and done the anti-discrimination standard set by NZBORA and Part 1A of the HRA applies to the executive branch of'the Government of New Zealand'". It concluded:41We return to the matter below, but we will say at the outset that there must be a limit on the extent to which ' the executive branch of the Government of New Zealand ' can escape responsibility for an act or omission that is in contravention of Part 1A of the HRA just because one of its agencies considers that another of its agencies should be meeting the obligation in question.[60] The Tribunal went on to reach the view that the MOH was "the default funder" of day services for those who exited MSD funded vocational servicesbecause they were 65.42 This meant that the Tribunal's decision on a breach of Part41 Idea Services Ltd v Attorney-General, above n 36, at [25].42 At one point in the decision this was said to be "because of the contract if nothing else" (at fn67) but elsewhere the Tribunal refers to the MOH being the "conduit through which Government1A proceeded to focus on the MOH's actions or omissions rather than the MSD's orthe actions of the executive.The submissions[61] IDEA Services' principal submission is that the MOH had formalresponsibility to fund day services and that its decision was discriminatory because its decision created a funding gap for those aged 65 or over (this is discussed under the next heading: Preliminary Issue no 3). However IDEA Services goes on to submit that, regardless of whether the MOH/Department had formal responsibility to fund day services for those aged 65 or over, the party to this proceeding is the Attorney-General. It submits that it is the executive branch of government that is ultimately responsible for compliance with the HRA. It submits that the Attorney-General cannot seek to justify the MOH's decision by reference to a more systemicfailure by the executive.[62] Idea Services submits that Ministry of Health v Atkinson supports this submission.43 In that case the MOH's policy to exclude family members from payment for the provision of disability support services to their adult children was at issue. IDEA Services submits that the MOH, as the agency which gave effect to the policy, was found to breach Part 1A even though it was not the sole lead agency involved in examining the appropriateness of the policy and there had been Cabinet and other ministerial involvement.[63] The MOH submits that Atkinson was quite different to the present case. It says that in that case the MOH was assigned clear funding responsibility for the particular disability support services in issue by Ministers and Cabinet. Further the MOH acknowledged that it had adopted the policy.[64] In this case the MOH submits that the Attorney-General was not facing a claim that the executive had breached the HRA. Nor was the claim made against the Attorney-General, on behalf of the MOH and the MSD. The MOH submits that, infunding has flowed" and it fell within the philosophy of the Disability Services Directorate andthe MOH's wider obligations (at [129] to [131]).43 Ministry of Health v Atkinson, above n 14.bringing the claim against the Attorney-General on behalf of the MOH, the pleading limited the claim to actions or omissions of the MOH. The MOH further says that if this had been framed as a claim against the Government as a whole, the claim would be that there was a positive obligation on the Government to fund day services if youcan "search around" and find "another government agency that will in othercircumstances fund them" and "anti-discrimination law has never stretched that far".Our assessment[65] We agree with the MOH that Atkinson does not raise the same point as that raised here: namely, whether our assessment of the claim must focus on MOH's responsibilities only rather than the Government's responsibilities. In Atkinson there was no suggestion that any other agency had funding responsibility for the affected group and, consistent with that, the only named defendant was the MOH. The Court therefore did not consider a situation where the responsibility for government funding of a particular service was split between government agencies.[66] However we agree with IDEA Services that a claim for breach of Part 1A of the HRA does not depend only on the funding responsibilities of the MOH. It is an"act or omission of a person or body referred to in section 3 of the New Zealand Bill of Rights Act 1990" to which Part 1A of the HRA applies.44 That is, an act or omission of "the legislative, executive, or judicial branches of the government of New Zealand" is in breach if the act or omission is inconsistent with s 19 of the NZBORA.[67] Neither party referred us to s 92B(1)(b) of the HRA. That provides that civil proceedings for breach of Part 1A that is "an enactment, or an act or omission authorised or required by an enactment or otherwise by law" is to be brought againstthe Attorney-General. In our view, this section is consistent with our view that it is the actions of the executive (through its departments and ministries) that are relevant to whether a breach of Part 1A is established.4544 Section 20I and 20J.45 Because we did not have submissions on this section, and the matter was not an issue inAtkinson, it is unclear why in that case the named defendant was the MOH (rather than theAttorney-General on behalf of the MOH).[68] In this case, the MOH made a decision the effect of which is that those aged 65 years or older (outside the historic categories) will not receive funding. The MOH may have considered it needed to make that decision because it had not been allocated funding responsibility for the services. But if the effect of that decision is that the Government treats those aged 65 years or older differently from those under65 years, then the MOH's decision is an act or omission of the executive which maybe discriminatory in breach of the HRA unless it is justified (under s 5 of the NZBORA).46[69] The question that then arises is whether the claim as pleaded was limited to a claim in respect of the acts and omissions of the MOH. As was said in Atkinson "the nature of the case the government agency is facing has to be clear" given the "potential outcome of Part 1A cases for the government."47 It is therefore necessary to consider what was pleaded.The pleading[70] The claim was brought before the Human Rights Review Tribunal by way of a statement of claim. The claim48 named as the defendant "the Attorney-General, sued on behalf of the Ministry of Health, a Ministry of the Crown established undersection 27 of the State Sector Act 1988." The claim repeated this in the pleading. Itfurther pleaded that:(a) The MOH purchased day services from IDEA Services, including for service users aged 65 years and over from at least 1998.(b) In 2002 IDEA Services and the MOH entered into an agreement under which the MOH purchased disability support services, including day services. The terms of this agreement were repeated and replaced with a contract in April 2004.46 Section 20L.47 Ministry of Health v Atkinson, above n 14, at [63].48 As per the Amended Statement of Claim dated 11 May 2010 which is the relevant pleading.(c) The MOH agreed under the contract to purchase day services. From July 2002 until May 2005 the MOH complied with the terms of the contract and purchased day services irrespective of age on the basis of need.(d) In March 2005, the MOH determined that it would not pay for day services for someone who was aged 65 years or over unless that person was already in receipt of day services from the MOH prior to this decision.(e) This decision was made "notwithstanding that no other government agency" would pay for day services for them.(f) The MOH's decision created a funding gap for service users aged 65years and over and the MOH has not devolved funding responsibility to another government agency nor finalised an alternative funding source.(g) The MOH's decision not to pay for day services for those aged 65 years and over distinguishes persons on the basis of age. This distinction is a prohibited ground of discrimination pursuant to s 21(1)(i)(ii) of the HRA, which is not prescribed by law, is not"expressed as an exclusion criterion in the Contract", and is notjustified in terms of s 5 of the NZBORA.[71] Two causes of action are pleaded:(a) The first cause of action: "... the Ministry has refused to pay for DayServices provided by IDEA Services, on the prohibited ground of age, by reason of a discriminatory interpretation and application of theContract";(b) The second cause of action: "[t]he Ministry has refused to pay for, andhas omitted to resolve the funding gap caused by its refusal to pay for,Day Services provided by IDEA Services on the prohibited ground ofage in breach of 21(1)(i)(ii) of the HRA".[72] The relief sought in respect of both causes of action is declarations and ordersin respect of the MOH. For example, a declaration "that the Ministry's refusal to payfor IDEA Services to provide day services to service users aged 65 years and over (unless they were existing clients of the Ministry) is unlawful under the HRA in thatit amounts to unjustified age discrimination"; and an order "restraining the Ministryfrom continuing or repeating the breach ... or causing, or permitting others to engagein, conduct of the same kind as that constituting the breach ...".[73] It can be seen that, although the named party was the Attorney-General, theclaim was focussed on the MOH's acts or omissions. The claim does not, for example, plead that the executive breached the HRA through the actions or omissions of the MOH or the acts or omissions of the executive following theMOH's decision to cease to make referrals. The claim does not challenge the MSD'sdecision to fund vocational services only up to the age of 65 years[74] We therefore consider that the question is whether, given that the MSD doesnot fund day services after the age of 65 years, the SMT decision (being the MOH'sacts or omissions) was a breach by the Government of its obligations under Part 1Aof the HRA. We return to this issue when consider the "comparator group" issue andthe question of justificationPreliminary issue no 3: did the MOH have funding responsibility?The issue[75] This issue arises because the MOH says it is not discriminatory for the MOH to stop funding services that the Government has not given it responsibility to fund. It says that if those aged 65 years or older had no right to day services funded by the MOH, then it cannot be discriminatory to stop that funding. IDEA Services submits that the MOH did have that responsibility.The Tribunal's decision[76] The Tribunal's view was that:(a) The MOH had and continues to have an obligation under the contract to provide funding for day services for those who are over 65 years.(b) More importantly the contract reflected the historical pattern of government funding for day services.(c) "Whether the MOH likes it or not, it has been the conduit throughwhich Government funding for the affected group has flowed".49(d) The MOH decision to grandparent those already receiving funding for day services who were over 65 years was really only explained by the MOH recognising that the history of day services funding imposed some obligations on it.(e) Even if the MOH did not have an explicit statutory or regulatory obligation to fund day services for those over 65, that funding was squarely within the philosophy of the Disability Services Directorateand the MOH's "wider obligations in respect of disability issues".50(f) "[A]s a matter of past practice and the MOH's wider obligations in respect of the delivery of disability services" the MOH "did haveresponsibility as the conduit for Government funding for day service users after they turned 65."51Submissions[77] IDEA Services submits that since the dissolution of the HFA, the MOH has been the government agency responsible for funding day services. It says that this49 Idea Services Ltd v Attorney-General, above n 36, at [129].50 At [131].51 At [133].follows from what it says is the MOH's "longstanding policy and practice", thenature and extent of the MOH's responsibilities for funding disability supportservices and the MOH's contract with IDEA Services. The MOH submits that the correspondence illustrates that that there was no formal policy and that the default position was that the formal obligations of the MOH would prevail. It says that these formal obligations did not include day services funding for people exiting the MSD funding when they turned 65. We turn to consider the evidence.Consideration given to who should have funding responsibility – pre the NZPHD Act[78] In 1992 the Government established the Regional Health Authorities (RHAs) which would purchase health services from a range of providers. At Cabinet meetings in July 1992 the Government decided that in principle the RHAs would be allocated responsibility for purchasing disability support services. This did notinclude vocational rehabilitation services. At that time "vocational services" forpersons with disabilities were provided by what was then the Department of SocialWelfare (DSW) (now MSD). Vocational services included "community participation services", which are similar to and are sometimes referred to as day services(discussed in more detail below). The Government set up a working group to report on the preferred agency to purchase vocational services.[79] These Cabinet decisions were set out in an August 1992 Government statement, issued by the Minister of Health and the Minister of Social Welfare, on"Support for Independence for People with Disabilities: A New Deal". The workinggroup reported to Government. Its report was considered by Cabinet in December 1992. Cabinet directed the working group to consult about the options and to report back by March 1993. This occurred and a number of options were put forward for consideration.[80] In April 1993 Cabinet decided that the assessment process for vocational services for people with disabilities would be integrated into the assessment process for other disability support services, but otherwise the current purchasing arrangements were to remain. Under those arrangements the DSW purchased vocational services (described as being made up of day activities, socialrehabilitation, life skills training, education and training for sheltered, supported and unsupported employment). It was also recognised that RHAs currently purchased"vocational services" (the Cabinet papers do not specify who these were purchasedfor). Officials were directed to report on "the management of the interface" betweenvocational services and disability support services, it being recognised that thepurchasing overlap "could result in service gaps and/or double funding".[81] Following that further work, in 1996 Cabinet agreed in relation to vocational services for people with disabilities that, subject to fiscal implications, RHAs wouldbe the sole purchaser of "day activities", the New Zealand Employment Service(under the Department of Labour) would be the sole purchaser of employment support and the Education and Training Support Agency would be the sole purchaser of the remainder of education and training.[82] Further reforms in the health sector took place. The RHAs became the Transitional Health Authority which was renamed the Health Funding Authority("the HFA") from 1 January 1998. On 20 March 1998 a MOH paper was provided to the Minister of Health, providing an updated summary of issues relating to the proposed transfer of vocational services and day activities. The paper:(a) noted that a decision regarding the transfer of daily activities had been delayed as a result of joint Ministers not having an agreed position regarding the transfer;(b) noted the potential for fiscal risks of transferring these activities to the MOH and to the Department of Labour; and(c) set out the daily activity services which were funded by the HFA (community-based day programmes for clients who were part of a deinstitutionalisation plan), by the DSW (day programmes provided by a residential care provider for their residents only and community- based day services not attached to a residential service) and where there was both HFA and DSW funding (community-based day services for people with psychiatric disability).[83] In December 1998 it seems that an agreement was entered into by HFA and IHC to replace the RHA contracts.52 Under this agreement the HFA agreed to purchase the services set out in the schedule and IHC agreed to provide theseservices. The services set out in the schedule included "day programmes" with the note that the HFA did not "currently have the resources or mandate to purchase therange of vocational and employment services".[84] The decision to transfer responsibility for the day services aspect of vocational services to the RHAs, and subsequently the HFA, did not proceed. Instead, on 1 July 1999, funding responsibility for vocational services transferredfrom the DSW to the Department of Work and Income ("DWI") (also referred to as Work and Income New Zealand ("WINZ"). Daily activities that were purchased bythe DSW were viewed as part of the continuum of employment-related activities which were consistent with the core business of WINZ. The transfer of day servicesto WINZ was seen by officials as consistent with the Government's mainstreamingpolicy and acceptable to the disability services sector which had expressed supportfor the concept of a "one-stop shop" for vocational services. The relevantappropriations would transfer from DSW to WINZ. Officials noted that if the criteria for accessing daily activities services became more tightly linked to future entry into employment, then clients with higher levels of need might not easily beable to access services under this programme. Officials noted that this "may result insome fiscal risk to HFA, which may then be required to provide for high-need clientswho are excluded."[85] The focus of all the above Cabinet documents was on "vocational services"which were purchased by DSW and later (WINZ). They do not discuss whether these services were available for people who had reached the age where theyqualified for government superannuation. IHC's view, as set out in a letter dated30 March 1999 to the HFA, was that this was the HFA's responsibility. We do notknow what the HFA's response to the letter was. However in response to anotherletter from IHC about the funding for people aged over 65 years, a letter from an HFA employee dated 23 August 1999 said this:52 The copy in the bundle is not signed on behalf of the HFA.As [DSW] is not responsible for the funding of day programmes when people turn 65, the HFA will increase your current contract from 15 day/vocational service placements to 22.Please note that this does not set a precedent for future clients turning 65. We will need to review available funding before making decisions for these people.[86] Consistent with this position, the contract between the DWI and IHC described the client group as someone with a significant disability who is aged between 16 and Guaranteed Retirement Income payments eligibility.[87] Around this time, the HFA sought policy clarification "on the issue offunding responsibility for day programmes for people aged 65 (and older)". The MOH's response (from the Portfolio Manager of Disability Support Services, policybranch) was provided in December 1999. The response advised that:(a) In November 1997 the Government confirmed that the purpose ofDSW's funding for daily activities was to assist people withdisabilities into work wherever possible. This focus meant that funding for people aged 65 and older would not be a funding priority for WINZ and historically, DSW was not funded for vocational services for people with disabilities aged 65 and older.(b) Neither the HFA nor WINZ are "explicitly funded" for dayprogrammes for people aged 65 and older.(c) The MOH's view was that people receiving residential care subsidies(funded by the HFA) in most circumstances would receive some form of day activity from this care. For people aged 65 and older, whowere not receiving a residential care subsidy, "funding for dayactivities ... should be considered within relative HFA fundingpriorities".(d) The HFA and WINZ should agree on a mechanism to ensure that transition arrangements for people with disabilities aged 65 and older were clarified.[88] On 25 January 2000 a MOH paper was provided to the Minister and the Associate Ministers of Health. The purpose of the report was to brief the Ministers on the differences between day/vocational services for people with disabilities who were part of a planned deinstitutionalisation process and those who were not. The paper advised the Ministers that the HFA purchased a limited range of day services for those covered by a planned deinstitutionalisation process and for some people with psychiatric illness. Differences between these services and those provided by WINZ included that the HFA services funded full five day per week activity programmes whereas WINZ provided a contribution only, which was often as little as 30 per cent of the cost. The paper noted that there was no overarching policy framework linking HFA and WINZ day/vocational services for people with disabilities.[89] In April 2000 a Cabinet paper recommended that Cabinet agree that the eligibility criteria for WINZ vocational services be retained. This criteria was said to include that an individual be aged between 16 and 65 years. Cabinet so agreed in May 2000.[90] After this, IHC again raised with the HFA funding for day services for those over 65. In a letter dated 22 September 2000, IHC:(a) referred to its contract with WINZ which excluded people over the age of 65 from accessing their funding and said that the clause wasnot new but that WINZ had become "more stringent in enforcing it";(b) said that WINZ insisted it was a Disability Support Services responsibility;(c) noted that the HFA already purchased day services for people over the age of 65 but there was no agreement on "how IHC, on behalf of individuals, access this funding when people reach [65]";(d) said that this was a "gap" between government department policiesand one that the HFA needed to discuss internally and with WINZ; and(e) said that "given Localities have already accepted responsibility tofund these people, we may only need to add them to the contract".Funding responsibilities post the NZPHD Act[91] Further health sector reforms took place. On 14 December 2000 the NZPHD Act was enacted. The HFA was dissolved and its functions, including the funding of disability support services, were transferred to the MOH. The DHBs were also established.[92] In April 2001 the Minister of Health published the New Zealand Disability Strategy as required by the NZPHD Act. As discussed above, it set out a vision for a fully inclusive society. It also set out a number of objectives. One of these was to"create and support lifestyle choices for disabled people within the community andpromote access to recreation and cultural opportunities."[93] In May 2001 the Hawke's Bay DHB inquired of a MOH official (Ms Barry) in "the disability support area", as to MOH funding of service users aged above 65 retiring from the WINZ funded day programmes:Another query for you. I received a note from our local IHC, asking for funding to provide daycare activities for 2 of their residents who turned 65 recently. The Head Office of IHC advised the local branch that when people reach 65, WINZ funding stops and Health are expected to take over. I argued that resthomes need to provide day programmes from their fees, but IHC claim their residential fees do not cover daytime care as the daycare funding is provided to cover this care.Could you please look into and advise thank you[94] The MOH official responded as follows:In IHC there are people over 65 who are identified in the current contract with individual day programme packages - most of these are over 65.The expectation is that as clients turn 65 MOH will have to pick up responsibility for day programme, and likewise there will be some dropping off the list as they die. I would expect that NASC would look after this as part of the reassessment / service coordination process.[95] On 12 June 2001 IHC (Ms Win) met with MOH officials to discuss the service specifications for the 2001-2 contract. Included in the items raised was a query about the specification for community day activity programmes. IHC wantedto know if this was only for those who were over 65 years or were "ex institutional".It thought that the current drafting created a tension with the contract IHC had with DWI for day services. The MOH was to consider this further. A further meeting between IHC and MOH officials was held on 3 July 2001 to discuss the proposed terms of the contract. The notes of that further meeting record in respect ofcommunity day activities that "[t]he issue of services and funding for over 65 year old clients will have to be resolved prior to the roll out of the transparent pricing".[96] After this meeting, IHC's view in respect of vocational services (as set out in an internal communication) was that "[t]he contract with MOH allows for thefunding of people leaving institutions under a deinstitutionalisation plan and people over the age of 65 years but this needs to be negotiated at the Regional level". It wassaid that the Regional General Manager would either undertake this or delegate it to the Area Manager via the NASC agencies.[97] In September 2001 the Government released its Strategy for Vocational Services, called Pathways to Inclusion.53 This noted that there had been an ad hocdevelopment of these services which, amongst other things, had resulted in a "lack ofclarity about the boundaries between services funded by different governmentagencies". It said that the Government had decided that the objectives of vocational services funded by DWI were to increase the participation of people with disabilities in employment and in their communities. It said that services which did not have either employment or community participation aims were not included in the new direction and further work would be carried out to manage boundary issues with other government agencies. It said that the 16-65 age eligibility criteria would be continued for DWI funded vocational services, but that DWI would continue to53 This was published by the Department of Labour with a foreword from the Minister of DisabilityIssues/Associate Minister of Social Services and Employment.support people who were older than 65 who were employed and continued to need support.[98] In November 2001 Cabinet directed officials to undertake further work on boundaries between the MSD and the MOH, including determining whether the MOH was funding any vocationally focussed services that did not fit within its funding responsibilities. The work did not proceed at this time, however, due to other priorities.[99] Prompted by an inquiry from IHC (Ms Win), in March 2002 a MOH official (Mr Brown, who was the Senior Locality Manager for the Midland locality of the Disability Services Directorate and the contract relationship manager within the MOH for IHC contracts for the four regions) sent an email to three MOH officials, and requested that they forward it to NASC managers. He copied the email to a fourth MOH official and three people at IHC. The email read:I have been contacted by IHC who have found some difficulty in arranging funding for day programme for a number of clients in IHC care when they turn age 65. Three particular cases are in Horowhenua/Kapiti however as the question may come up anywhere here is situation as we have discussed in meetings in each Locality between myself, Jeff Sanders, Locality Managers, and NASC staff. (Auckland June 2001, Central November 2001, Southern March 2002.)Prices with IHC for Residential Group Homes under the current SNC A, B, C etc and under the new Transparent Prices when introduced, do not include care during the day. The assumption is that the person will attend a day programme for 10 half days a week either funded by DWI in most cases or by MOH. (IHC does provide care during statutory holidays and if the client has to stay home sick)In the case of a client in IHC care who turns age 65 and has been funded by DWI in a day programme - the DWI funding ceases at age 65, and it is therefore necessary for MOH to pick up funding for these clients at that point. If we do not do so there will be a gap in their services for the day time hours Monday to Friday. As no rate is specified in the current contract with IHC, it is suggested that the rate recently agreed on with IHC for introduction with the new Transparent Prices should be used for any new arrangements - $26.72 plus GST per half day session. (Clients who are currently on different day programme rates will remain grand-parented on those rates.)Could you please forward this to your NASC managers, and let me know if you have any queries.[Emphasis added.][100] In October/November 2002 the MOH entered into the Head Agreementreferred to above. The service specifications at this time included "community day activity programmes". The specification for that service was as per the laterspecifications set out above. It therefore expressly excluded those who had claims accepted by ACC or WINZ. It otherwise contemplated that the services would be provided to those referred by a NASC, but subject to guidelines and protocols asadvised to the NASCs by the MOH from time to time "[i]n order to equitablymanage available resources".[101] On 28 April 2003 an internal MOH email (from Ms Merrilees, an analyst in the Disability Services Directorate, to Ms Rydz) was as follows:Val has forwarded your e-mail to me asking what is our directorate's policy / approach in terms of funding of vocational support for disabled people?The Ministry fully funds day services/programmes for people with intellectual disabilities of any age who have been resettled into the community, and day activities for people over 65. There also seem to be a smaller no. of people with physical/sensory disabilities who are fully-funded by the Ministry. The decision for the Ministry to fund these services for individuals is made as part of the assessment process through the NASC.Often these services for people under 65 are referred to as "vocational services".There have been on-going concerns by people with disabilities and providers at the lack of opportunities to participate in employment and community activities, and lack of clear policy and funding direction. The roles of the different government agencies have also been unclear. To address these issues, in September 2001, the Associate Minister of Social Services and Employment released "Pathways to Inclusion", the vocational strategy for people with disabilities. Under this strategy, MSD's Work and Income NZ is responsible for providing better quality outcome-focused employment and training opportunities, and community participation activities, for people with disabilities from 16-65 years of age.Obviously, this strategy has implications for DSD-funded 'vocational' services. Currently we are asking localities to provide information on the type of day/vocational services/programmes being funded through DSD so we can try to determine how these services sit in relation to the vocational strategy.Hope this information helps. Happy to discuss.[Emphasis added.][102] In May 2003 there was a "Day Programme Providers Meeting". It is unclearwho attended this meeting. However the notes of that meeting refer to a distinctionin funding services for "community and DI clients" [DI clients presumably referring to deinstitutionalised clients]: the MOH funded DI clients but not "non DI people".The distinction was said to be because DI clients had less opportunity to develop the sort of skills they would learn from the community. Access to services is based on NASC but funding lies with the MSD.[103] In June 2003 there was a meeting between IHC and MOH officials which discussed vocational services for people over 65 and in frail health. An IHC filenote of that meeting recorded:MOH agreed that NASCs should assess and provide funding for people who can no longer access DWI funding due tobeing over 65having poor health which means they cannot attend vocational servicesAction:Erica [Heeley, of the MOH] will inform NASCs and then IHC to refer peopleSuzanne [of IHC] to provide lists of those over 65 not being fundedWhere a person is living at home or with another provider, the NASC will need to look at how to fund.[104] Meantime, work was being carried out in accordance with the direction from Cabinet in November 2001. The MOH had difficulty in obtaining detailed information. To remedy the information gap, in September 2003 the MOH sent out questionnaires to the NASCs to take a "snap shot" of day services funded by theMOH. This was intended to exclude information on those over 65 because it was anticipated that those over 65 would be devolved to DHBs shortly.[105] In October 2003 Government devolved the responsibility for the funding forolder peoples' support services from the MOH to DHBs. This did not extend tothose with long-term impairments who were already receiving MOH funded support services unless they were assessed as needing aged residential care. The table ofservices to be devolved from the MOH to DHBs included "Day/vocational Programmes and Day Care Services".[106] On 1 April 2004 the MOH and IDEA Services agreed to further schedules to replace the 2002 schedules that were due to expire on 30 June 2005.54 These new schedules were due to expire on 30 June 2008. The service specification is set out in detail above. However, in short it excluded day services if a person was receiving them from ACC or WINZ. Otherwise day services were available pursuant to a referral from a NASC, with NASCs potentially subject to prioritisation criteria from the MOH.[107] Queries continued to arise about funding responsibility for day services for people with intellectual disabilities aged over 65. In September 2004 the Nelson Marlborough DHB (Ms McCorkindale) sent an email to the MOH (Mr Powell) saying:There seems to be some confusion occurring when ID clients come into the service on Individual Contracts as to who pays for their Day Services, MOH dollars via Nasc approval or Winz...Heather Williams [of a Nelson NASC] has advised that over 65's & DI clients the Ministry pay for, all others are via WINZ...Can you please clarify for me when the MOH via Nasc pay for Day Services ...[108] The MOH (Mr Powell) confirmed to the Nelson Marlborough DHB (MsMcCorkindale) that "Yes, Heather [Williams] is correct that over 65's & DI clients the MOH pay for, all others are via WINZ." Mr Powell copied his reply to others atthe Nelson Marlborough DHB (Ms Fenwick) and the MOH (Ms Smith, a senior advisor (disability policy) at the Disability Services Directorate of the MOH). Those copied apparently did not reply saying that Mr Powell was wrong about this.[109] On 18 November 2004 there was a meeting between IDEA Services and MOH representatives. The notes of the meeting record that:Over 65 years day service vocational funding54 The common bundle includes only the 2002 Northern Schedule, so this expiry date may possiblyhave been different for other regions.IHC raised issues that many NASC are not aware of their funding obligations for over 65 year vocational programmes which needs to be followed up with them. Recommended this be included in communication letter to all NASC.[110] A similar note was made in the record of a meeting between IDEA Services and MOH representatives on 15 December 2004. The "Action" item from this was that the MOH was to "clarify the policy and notify NASC of their obligations andinform IHC."[111] In December 2004 the MOH produced a draft report on the September 2003 snap shot. The draft report stated that of the 1550 people in receipt of MOH funded day services, only 457 were subject to a deinstitutionalisation plan.55 This came as asurprise to the report writers as they understood the MOH's mandate to be only inrelation to deinstitutionalised people. The MOH understood that this had occurred because NASCs were responding to the needs of those who might otherwise have not had access to day services. That was usually because they had high support needs. The MOH also considered there to be regional variations. It seems that historically the old Midland RHA would routinely refer disabled persons to RHA funded day services if MSD day services were not available or unable to support theperson's needs. Northland RHA would also refer people for RHA funded dayservices where MSD services were not available. The NASCs in those areas continued those historic practices. Further work was proposed on the "interface"between MSD and MOH funding.[112] The issue of funding for day services for those over 65 was again raised at a meeting of IDEA Services and MOH representatives on 9 February 2005. At this meeting it was said that NASCs remained confused as to their responsibilities, andIHC was to "provide information to MOH verifying that Vote Health is responsible for over 65 year olds' day programme funding". IHC was to send MOH a "copy ofMSD vocational service specification and any other correspondence confirming VoteHealth responsibility for over 65s or those retired".55 Note that these numbers do not relate to people over 65 years, because the snapshot had beenintended to exclude those over 65 years because of devolution.[113] The MOH was also making its own enquiries. An internal MOH email dated14 February 2005 said that IHC had provided Mr Brown's email of March 2002 toshow that "a formal MOH position was conveyed" then and asked whether there was "anything that resembles a formal policy that could be used as the basis for a statement to NASC managers and IHC?"[114] This MOH enquiry was forwarded to a Senior Advisor, Disability Policy withthe MOH. The advisor said she was "hesitant" to confirm the decision of Mr Brownthat automatically people with an intellectual disability (and presumably other disabilities) should transfer from the MSD to the MOH at aged 65. She referred to the Pathways to Inclusion and that the intended "flow on boundary work" had nothappened at the aged 65 and over end. She said that the issue had been clouded by devolution decisions whereby there was not a straight aged 65 cut for transfer to DHB funding (the assessment instead being made on when a person was in need of"aged residential care") and that people with an intellectual disability are likely to bein IHC care and to remain there even when they age.[115] Following that, the response from the MOH recipients of the MOH internal enquiry was provided on 15 March 2005 as follows:... Unfortunately the short answer to your question is that there is not a formal policy position that you can convey to NASC managers and IHC. There are some outstanding issues that need to be addressed – for examplewhether Mark Brown's decision was associated with a decision made bySMT at the time, where funding went at devolution, and we need to clarify a Human Rights opinion that the Department of Labour sought around this question of what happens when people reach the age of 65. ...[116] On 21 March 2005 the SMT teleconference took place at which it was agreed that there were to be no new referrals for vocational services for those aged over 65 year with an intellectual disability until the MOH's decision was confirmed (refer[36] above). On 5 April 2005 there was the internal MOH briefing to a member of the MOH SMT referred to above which, amongst other things, referred to the"numerous precedents" for funding day services for those who were not part ofdeinstitutionalised plans but also suggesting that IHC's claim "that the funding responsibility for day service for people over 65 years of age rests with the MOH could be considered a liberal interpretation of a historical practice."[117] On 20 April 2005 there was a meeting between MOH and IDEA Services representatives which discussed day services. The notes of the meeting record that the MOH was reluctant to fund day services for people that will turn 65 and that there was a general discussion about whether the MSD was in breach of the HRA by excluding people on the basis of age.[118] Meanwhile, the "interface" work proposed after the draft December 2004report on the snap shot had not proceeded at that time. Eventually, however, the work resumed. In September 2008 the MOH provided advice to the Minister of Health on a Cabinet paper which proposed transferring the responsibility for funding all day services to MSD, except those provided to people under the IDCCR Act. In that advice the MOH said:There is an existing risk that MSD will be unable to address current gaps in community participation services, such as:a. a lack of services in some locations;b. inadequate funding and service levels for some people with high support needs; andc. the exclusion of people from MSD funded services when they turn 65 (when, we assume, they are no longer considered to be of working age).To date, the MOH has used some of its funding to address some of these service gaps even though the main group it has an obligation to fund day services for is people who were de-institutionalised under formal de- institutionalisation plans. After the transfer, however, the MOH will no longer have funding available that it can use for this purpose. ...[119] The Cabinet paper from the Minister of Health and the Minister for SocialDevelopment and Employment similarly noted that the MOH "funds people under arange of local and individual arrangements, including some services for people not able to be accommodated in a community participation service". Cabinet agreedwith the proposal that the MSD should be responsible for funding vocational services for people with physical, sensory and intellectual disabilities, except those under the IDCCR Act at a meeting on 29 September 2009. The rationale for the transfer was for there to be a consistent approach to the delivery of all community participation services based on the 2001 Pathways to Inclusion strategy.[120] This decision, however, was put on hold in January 2009. This followed concerns about the different funding models (the MSD provided partial funding whereas the MOH provided full funding) and that the MSD stopped funding at age65. As noted in advice to the Minister of Health, a "substantial budget bid" would berequired to address MSD current funding and service gaps. Work on the proposed transfer was to continue. As at the date of the hearing no formal Government decision to transfer had been made.Summary[121] From the material above we conclude that:(a) Government allocated responsibility for purchasing disability support services to Health (the RHAs, the HFA and the MOH/DHB).(b) Vocational services, which included community participation services, was an exception to the general position that Health was responsible for purchasing disability services.(c) Over the years vocational services remained with Social Welfare/Work and Income (DSW, WINZ, MSD) although from time to time the possibility of this changing was raised.(d) The MSD vocational services funding had an age limit (linked to eligibility for government superannuation) which Cabinet was aware of and had endorsed,56 the funding model differed from MOH funded day services, and the MSD was not able to provide services for people with high needs and income locations services were not available.(e) The Government was aware of the potential for funding gaps for day services where a person exited MSD funding because they were over 65 years and intended that work would be carried out on boundary56 Refer April 2000 Cabinet agreement referred to at [89] above; and September 2001 Pathways toInclusion referred to at [97] above.issues with the MOH57 and DHBs.58 However the policy work was not completed by the time of the SMT decision and at no stage did the Government specifically direct whether and, if so, how the gap was to be addressed. Nor did the MOH have a formal policy in place addressing this.(f) Over the years, in practice the funding gaps were met by the MOH, sometimes because the RHAs/local NASCs assumed that there was that responsibility and were responding to an unmet need59 and sometimes because HFA or MOH employees confirmed that this was to happen60 although sometimes explicitly noting that it was subject to"funding priorities".61(g) It is unclear how widespread this practice was but IHC was aware of the potential funding gap and took steps intended to ensure that it would receive funding from the MOH, and there is no evidence that the MOH ever declined funding for day services where there was an unmet need (whether because there were no appropriate MSD day services or because the person had turned 65).(h) Day activities/community participation services were within theGovernment's philosophy/vision for disability services and properlycould be paid from the Vote Health appropriations for disability support services where such services were not being met by the MSD, DHBs or ACC.(i) The contracts in place with IHC/IDEA Services at the time of the SMT decision did not expressly exclude funding for day services to people who did not have that funding from elsewhere, and provided57 Refer April 2003 at [101] above; and November 2001 at [98] above.58 Refer internal MOH enquiry in February 2005 at [113] above.59 Refer the December 2004 draft report after snap shot at [111] above.60 Refer HFA letter of 23 August 1999 at [85] above; refer MOH response dated December 1999 at[87] above; MOH 2001 response at [94] above; MOH email in March 2002 at [99] above;meeting with MOH in June at [103] above; MOH email in September 2004 at [108] above.61 Refer HFA letter of 23 August 1999 at [85] above; refer MOH response dated December 1999 at[87] above.that payment would be made for day services to people who met the eligibility criteria as assessed by NASCs and referred to IDEA Services.[122] In short, we agree with the Tribunal's conclusion on this topic, except in onerespect – that is whether there was a contractual obligation to continue to fund day services. There was no such contractual obligation. While there was no specific decision from Cabinet that the MOH was to fund day services for those exiting MSD funding because they were over 65 years, nor was there any decision from Cabinet that these services were not to be funded. Similarly, although there was no formal policy within the MOH that it would fund day services for those exiting MSD funding because they were over 65 years, nor was there a formal policy that they were not to be funded. A practice of MOH funding for the affected group developed and this was consistent with the New Zealand Disability Strategy. Such funding was properly payable from Vote Health disability support services funding and, prior to the SMT decision, the contracts with IDEA Services required the MOH to fund day services where they were provided to an eligible person referred by a NASC to IDEA Services for such services.[123] Returning to the MOH's submission that it did not have "formal responsibility" to fund day services for the affected group, we agree that at no time did Cabinet say that day services were to be funded to all those in need of those services and that the MOH was to provide that funding. But for reasons that we willcome to, we consider that this does not alter the choice of "the comparator group"(discussed below at [126] to [140]) for the purposes of considering whether the SMT decision was prima facie discriminatory, although it is potentially relevant to whether the SMT decision was justified (discussed below at [165] to [235]).DiscriminationThe statutory test for discrimination[124] An act or omission breaches Part 1A of the HRA if it is inconsistent with s 19 of the NZBORA.62 An act or omission is inconsistent with s 19 of the NZBORA if the act or omission:(a) limits the right to freedom from discrimination on various grounds, including age;63 and(b) is not a justified limitation on that right under s 5 of NZBORA.64[125] The first requirement for a breach of Part 1A therefore is that there be discrimination on a prohibited ground (here, age). This is the issue we consider under this heading. In Atkinson it was said that there are two steps to determining whether there has been discrimination under s 19:65(a) First, there must be differential treatment or effects as between persons or groups in analogous or comparable situations on the basis of a prohibited ground of discrimination.(b) Secondly, there must be a discriminatory impact (meaning that the differential treatment imposes a material disadvantage on the person or group differentiated against).The relevant comparison[126] The first step is sometimes approached by identifying the group affected bythe decision at issue ("the affected group") and comparing them with those "whosetreatment is logically relevant to the person or group alleging discrimination" (the62 Section 20L(1).63 Section 19 of the NZBORA refers back to the grounds of discrimination in the HRA underwhich age is a prohibited ground of discrimination.64 Human Rights Act 1993, s 20L(2).65 Ministry of Health v Atkinson, above n 14, at [55] and [109]."comparator group").66 That is because "[t]he essence of discrimination lies indifference of treatment in comparable circumstances".67 Identifying the affected group and the relevant comparator group assists in making an assessment of whether there has been a difference in treatment of people in comparable circumstances.[127] The Tribunal in this case approached the question of differential treatment in this way. The parties do not take issue with that approach.68 However the MOH does take issue with the comparator group identified by the Tribunal. It says that the chosen comparator group was not in comparable circumstances to the group affected by the SMT decision because the source of funding derived from a different government agency. It says that this meant that the situations of the two groups were insufficiently analogous for discrimination to arise. We therefore consider whether the Tribunal erred in its assessment of the relevant comparator group.A) The Tribunal's decision[128] On the question of comparison between the affected group and the comparator group, the Tribunal said this:69As a matter of past practice and the MOH's wider obligations in respect ofthe delivery of disability services, we think the MOH did have responsibility as the conduit for Government funding for day service users after they turned 65. To invite a comparison based on the proposition that no day service users were eligible to be considered for MOH funding for day services is to suggest a comparison that is, in our view, at best theoretical. We do not accept that it reflects the realities of the situation.We therefore agree with the comparison proposed by Mr Butler for Idea Services. Putting aside day service users for whom funding comes from another Government agency, and those who the MOH will continue to fund anyway, the affected group are day service users over 65 years of age. The comparator group are day service users who are under 65 years of age.The groups are treated differently:[a] Since March 2005 the affected group has had no Government funding for day services;66 Quilter v Attorney-General [1998] 1 NZLR 523 (CA) at 573 per Tipping J.67 At 573.68 In Atkinson v Ministry of Health, above n 14, the Court of Appeal referred to a recent retreatfrom this approach by the Supreme Court of Canada: refer fn 82 below.69 Idea Services Ltd v Attorney-General, above n 36, at [133]-[136].[b] In the same period the comparator group has had Government funding for day services (albeit that the funding comes via the MSD).We conclude this section of our decision by observing that the outcome is consistent with the approach for which Mr Linkhorn argued – in the sense that, once the question of eligibility is removed from the equation, then the two groups that we have compared do share all of the same characteristics save only for their age, which is the ground upon which discrimination is alleged.B) The submissions[129] IDEA Services submits that the affected group and the comparator group are as follows:CharacteristicAffected group Comparator groupOver 65 years of age Under 65 years of ageHave an intellectualdisabilityHave an intellectualdisabilityNeed day services Need day servicesLive in a Residential GroupHome, Contract Board orSupported IndependentLivingLive in a Residential GroupHome, Contract Board orSupported IndependentLivingDo not fall within one ofthe exceptions*Do not fall within one ofthe exceptions*Result of SMT decision Ineligible to access Crownfunded day servicesEligible to access Crownfunded day services*Exceptions: IDCCR care recipients, subject to a formal deinstitutionalisation plan, high needs (i.e. 1:1), grand-parented, eligible for ACC funded day services, or eligible for DHB funded day services IDEA Services.[130] The MOH disagrees with IDEA Services' submissions. Fundamental to theMOH's position on the question of discrimination is that the claim has been broughtagainst it (not the Government as a whole) and it is not responsible for funding day services for people exiting MSD funded community participation services because they have turned 65 years. It says that to find discrimination on its part amounts to a finding that one government agency has acted unlawfully because of the operation of the policies and rules of another. It submits that it must be wrong to hold one government agency responsible for failing to respond to the policies of another government agency about which it might have no control, let alone knowledge.From here the MOH submits that it does not treat people differently based on their age. It submits that it does not fund the affected group under the age of 65 and it does not fund them over that age. They are therefore treated the same. It submits that where it has funding responsibility it continues to fund day services to that group past the age of 65, so again it treats them the same.[131] The MOH submits that this is one of those cases where the choice of comparator may be assisted by focussing on the reason why the SMT decision was made, namely that it did not have funding responsibility. The MOH refers to a number of cases from Canada which it submits focus on what the government scheme in those cases was seeking to achieve. For example:(a) Hodge v Minister of Human Resources:70 Binnie J said that, "in agovernment benefits case, the initial focus is on what the legislature isattempting to accomplish" and that it was "not open to the court torewrite the terms of the legislative program except to the extent thebenefit is being made available ... on a discriminatory basis."(b) Lovelace v Ontario:71 The Court held that, for legitimate public policy reasons, the government was targeting aboriginal communities, not aboriginal individuals.70 Hodge v Canada (Minister of Human Resources) 2004 SCC 65, [2004] 3 SCR 357 at 370. Thiscase concerned a claim for a "survivor's pension" under the Canada Pension Plan. Therespondent had been in a common law relationship with the deceased for a long period but therelationship had ended a few months before his death. On his death, the respondent applied for a"survivor's pension". Her application was declined on the grounds that she did not fall withinthe definition of "spouse", which was defined by reference to co-habitation, and if that did notapply, by marriage. She claimed that the policy discriminated against her on the basis of maritalstatus, because if she had been married but no longer living with the deceased (a "separatedmarried spouse") she would have received the pension. Therefore she claimed "separatedcommon law spouses" were treated differently from "separated married spouses". The SupremeCourt of Canada disagreed. It found that the proper comparator for a "former common lawspouse" was a "former married spouse" (i.e. a divorced spouse), neither of which qualified for asurvivor's pension.71 Lovelace v Ontario 2000 SCC 37, [2000] 1 SCR 950. In this case, the Ontario Governmententered into an agreement with First Nations' bands who were registered under the Indian Act("status Indians"), that they would benefit from the profits of a casino. Other First Nations'groups and Métis (i.e. "non-status Indians") did not have access to these profits. They claimeddiscrimination because they were non-status Indians. The Court disagreed finding that theclaimants' exclusion from access to the profits was not discriminatory. It considered that thecasino project was targeted at First Nations bands' needs. It was designed to ameliorate specificsocial, health, cultural and other disadvantages experienced by First Nations bands to enablethem to proceed towards self-governance, within the framework of the Indian Act.(c) Harris v Canada (Minister of Human Resources and Skills Development):72 Evans J considered that the claimant's argument was in effect that "the Constitution prevents Parliament from designing aprogram for the benefit of the parents of pre-school age children, without also extending it to those whose children, regardless of age, are unable to attend school by virtue of a disability ...".73[132] The MOH submits that the only possible comparator groups are those for which it has funding responsibility which are as follows:(a) The deinstitutionalised group: Responsibility for this group arose out of an agreement at the time the institutions were closed.(b) The IDCCR Act group: This Act provides a compulsory care and rehabilitation regime for people with high and complex needs who fallwithin that Act's jurisdiction.(c) Other high and complex needs: The MOH has assumed responsibility for others who have high and complex needs similar to those underthe IDCCR Act but who are not within that Act's regime.72 Harris v Canada (Minister of Human Resources and Skills Development) 2009 FCA 22, (2009)305 DLR (4th) 498 at [81]. This case concerned a claim for a disability pension under theCanada Pension Plan. To qualify for the pension the claimant needed to have madecontributions to the Plan in at least four of the preceding six years. This requirement wasrelaxed for parents who temporarily left the workforce due to child-rearing responsibilities, sothat the years in which the claimant was out of the workforce caring for children under the ageof seven were not considered as part of the six years. The applicant cared for her disabled childfor a time when he was over the age of seven years which meant that she did not qualify for apension. She claimed that the plan discriminated against parents with disabled children who hadto remain at home to care for them after they turned seven years of age. The majority of theCourt of Appeal held that the provisions were not discriminatory. It noted that the relaxationwas defined by reference to the age at which children at Canada can attend public school.Viewed in that light, the provisions applied equally to all. Thus parents of children under the ageof seven, regardless of whether or not they have a disability, are eligible for the relaxationprovisions of the payment, while parents of children over the age of seven are not.73 At [85].(d) Over referrals: In this group the MOH includes those who have funding for day services due to the historic practices of the NASCs in the Midland region74 and the Northern region.75[133] The MOH submits that the affected group are IDEA Services clients who have exited MSD funded vocational services.76 It submits that when consideration is given to each of the groups in respect of which it does have funding responsibilities,it can be seen that the affected group are not within the "schemes" of each of thosegroups.Our assessment[134] We consider that the MOH's starting point is wrong. The MOH is asking thisCourt to consider only whether there was differential treatment of anyone which it accepts responsibility to fund. We consider that takes too narrow an approach. The relevant comparison is not with other groups within MOH which have funding for day services when day services are funded through the combined efforts of various government entities. It is the executive branch of government that must not discriminate. If the executive branch of government, through the combined efforts of the government entities, leaves funding gaps for people in comparable positions then there is differential treatment. The Court must then go on to determine whether this differential treatment is by reason of a prohibited ground (here, age).[135] The MOH submits that it was only facing a claim in respect of the MOH'sactions. In our view, however, the pleading against the MOH does not require the narrower approach which the MOH advocates. As set out above, IDEA Servicesalleges that the SMT's decision created a funding gap. It alleges that from at least1998 the MOH had been purchasing day services for service users aged 65 years and over from IDEA Services and others, and then it determined in March 2005 that it74 The MOH submits that this is made up of people who have high and complex needs and, in theview of the NASCs in that region, were not able to access MSD day services.75 The MOH submits that this was as a result of a whole series of individual ad hoc practices.76 It submits that this may include those exiting MSD funded services because they are notavailable in the particular locality or those that are available in that locality may not be suitablefor the person. For example, some localities do not have day services that are appropriate foryoung people.would not do so. It alleges that the MOH made the decision even though no other government agency would pay for those services and without devolving funding responsibility to another government agency. The allegation is therefore concernedwith alleged discrimination brought about by the MOH's decision.[136] The MOH submits that because there is no universal entitlement to day services it is necessary to consider the purpose of each scheme under which day services are funded. We agree that in some contexts this may be relevant in assessing whether there has been discrimination, but whether it should be taken into account in identifying the comparator group or at a later stage is less clear. A potential problem with incorporating it at the comparator group stage is that it can deprive part of the statutory scheme of its operation.77 It does this if it builds in contested assumptions which neutralise the prohibited ground and thereby lead to the result desired by, in this case, the MOH.78[137] Here the MOH says that the comparator analysis must take into account that it was not responsible for funding day services for the affected group. The Tribunal rejected that starting point because it considered that the MOH was in reality responsible for funding those services because of its past practice and its wider obligations in respect of the delivery of disability services. We agree that was the reality. But we consider that this is not material in identifying the comparator group. The source of the Crown funding might be relevant in determining the purpose of the funding, which in turn might assist with determining whether the differential treatment is on the basis of a prohibited ground and/or whether (at the second stage of the Part 1A determination) any differential treatment is justified. But if it isincluded when determining the comparator, in our view that "artificially rules outdiscrimination at an early stage of the inquiry."79[138] We consider there is a further problem with the approach the MOH advocates. That is, we do not know that the Government intended there to be any77 Air New Zealand Ltd v McAlister [2009] NZSC 78, [2010] 1 NZLR 153 at [34], cited in Ministryof Health v Atkinson, above n 14, at [70].78 This was the reason why the MOH's comparator group was rejected by the High Court andCourt of Appeal in Ministry of Health v Atkinson at [67].79 Air New Zealand Ltd v McAlister, above n 77, at [51].funding gaps for day services. Universal entitlement to day services (subject to there being funds available to meet these services) may have been intended. That is supported by the Cabinet papers identifying that there could be service gaps because of the different agencies involved in funding disability services. There is no indication in those papers that the Government understood that the MOH would allow any such gaps to go unfilled. To the extent there are any indications at all, it was that DWI funding would be aimed at the 16-65 eligibility criteria but "furtherwork would be carried out to manage boundary issues with other governmentagencies". That work was not completed by the time of the SMT decision, but the NZPHD Act's objectives for funding included "the promotion of the inclusion andparticipation in society and independence of people with disabilities" and "the best care or support for those in need of services", and the New Zealand DisabilityStrategy vision and objectives were for a fully inclusive society with disabled people having access to recreation and cultural opportunities. The practice the MOH adopted, of funding day services where gaps were identified (e.g. in the Midland and Northern regions and when approached by IDEA Services), was consistent with those Government objectives and its vision.[139] We consider that if the comparator group is to be used to assist in determiningwhether there is discrimination, the selection of the comparator group "must beconducive to a determination of the potential impact of the impugned policy withouta negation of its relevance."80 From the perspective of those with intellectual disabilities who need day services the source of government funding is irrelevant. What is relevant to them is that they are able to participate in government funded day services up until the age of 65 but when they turn 65 they cannot. The only difference in their circumstances is their age. The comparator group selected should be one that enables a determination of whether this difference is on the basis of age or on some other (non-discriminatory) basis.81[140] We therefore consider that the proper comparator group in this case is one where the group differs in their circumstances from the affected group only on the80 Hutchinson v B.C. (Ministry of Health) (2004) BCHRT 58 at [100], affirmed in R v Hutchinson2004 BCSC 1536, (2004) 261 DLR (4th) 171.81 Discrimination is a failure to treat like cases alike: R (Carson & Reynolds) v Secretary of Statefor Work and Pensions [2005] UKHL 37, [2006] 1 AC 173 at [14].basis of the alleged ground of discrimination (here, age). That enables a comparison to be made of like with like.82 The question can then be asked whether that differenttreatment is "on the basis of" age or not. For these reasons we consider that IDEA Services' comparator group is appropriate. Apart from age, the characteristics of each group and their circumstances are the same. Those in the comparator group areable to access government funding for day services (through the MSD's vocationalservices funding). Those that are over 65 years cannot. We consider that the different source of government funding potentially can be considered at the next stage (that is whether the difference is on a prohibited ground) and/or when considering whether the differential treatment is justified.Differential treatment on the basis of age[141] Having identified the comparator group, the next step is for the claimant to show that the differential treatment between the affected group and the comparator group is on the basis of age (being the relevant prohibited ground of discrimination in this case). IDEA Services submits that this is the basis of the difference in treatment. The MOH submits that the basis for the differential treatment is not age but funding responsibility.A) The Tribunal's decision[142] As set out above,83 the Tribunal rejected the submission that the MOH did not have funding responsibility. It held that the differential treatment between the relevant groups was on the basis of age. It said this:84The reality, however, is that the SMT decided that day service users reaching 65 years of age after 21 March 2005 were no longer to be considered for referral for day services. That was the expressly stated intention of the SMT;82 We note that in Atkinson v Ministry of Health, above n 14, at [60] the Court of Appeal referred tothe Supreme Court of Canada, in Withler v Canada 2011 SCC 12, [2011] 1 SCR 396, havingrecently retreated from the concept that the comparator should be the mirror of the complainantgroup, that is, the comparison should put the comparator in exactly the same circumstances asthe claimant group save only for the discriminatory factor. However this is not the place toconsider whether any retreat is appropriate in the New Zealand context, when the comparatorgroup we are using is the logical and natural one as the starting point in the analysis of whetherthere is discrimination.83 Refer [128] above.84 Idea Services Ltd v Attorney-General, above n 36, at [138]-[140].it is exactly what the minute of its 21 March 2005 decision said it was going to do. Putting aside some aberrations, it is also the rule that has been applied ever since. Furthermore, as Mr Butler observed in his submissions, when the SMT decision was later communicated to NASCs it was in terms that there were to be no new referrals for day services "... for people in IHC over 65 years."We do not accept the submission [for the MOH] that this was just an unfortunate way of expressing the idea that people over 65 had never been eligible for MOH funding for day services, and that the eligibility point was going to be implemented in future. There is no satisfactory basis to concludethat the SMT's decision was not recorded in a way that was faithful to whatwas discussed and resolved by the SMT when it met.The SMT decided to stop future Government funding for day services for people in the care of the IHC/Idea Services who were over 65. We have no doubt that age is the ground on which service users who can access Government funding for day services, and those who cannot, are treated differently by the SMT's decision.B) Submissions[143] IDEA Services says that the difference in treatment is by reason of age because:(a) This conclusion is inescapable given that age is the only difference between the affected group and the comparator group.(b) The SMT decision was phrased in terms of no new referrals for "over 65 years" and the MOH's instructions to NASCs were phrased in thesame way.(c) The differentiation is a direct result of the SMT decision - before the SMT decision the affected group could access funding for day services and after they could not.(d) Irrespective of the MOH's view of its funding responsibilities, that reason was inextricably linked to age because (in the MOH's view)responsibility turned on age.[144] The MOH submits that this part of the test is a factual question. That is, thequestion is "what were the facts that the alleged discriminator considered to bedeterminative when making the relevant decision?"85 As applied to the present situation, it submits that the question is whether the SMT advised NASCs to cease new referrals because it was not responsible for funding day services to the affected group or because the group had turned 65 years. It submits that it was the former. It submits that it cannot be discriminatory to uphold that funding boundary even if those affected are over the age of 65. The MOH submits that even if the MOH was wrong about its funding responsibilities, it would not be making its decision on a prohibited ground provided that the MOH reasonably believed that it was not responsible for funding day services for this group (i.e. those exiting MSD funding).[145] The MOH says that it does not matter that the MOH was in fact funding day services for some people who had exited MSD funding at age 65. It says that otherwise, a government department or agency which has provided a benefit to someone or some group not actually entitled to it could not stop providing the benefit when it discovers the error. It submits that IDEA Services clients only obtained MOH funding for day services due to some practices that developed. It says that IDEA Services clients exiting MSD funded vocational services after the SMT decision are not being discriminated against on the grounds of age, they are being discriminated against on the basis that there is a different eligibility that applies. Looking at those it funded pursuant to those practices prior to 2005, they are over 65. The group after 2005 are also over 65. The MOH submits that both groups are the same age so the difference in treatment is a point in time, not age at all. The MOH accepts that there is a funding gap for those who currently receiveMSD funding but that does not mean there is discrimination on the MOH's part. Itsays that the situation might be different if access to MOH funded day services was universal, but it is not.C) Our assessment[146] The question is whether the difference in treatment is because of age or for some other reason. This is a factual question.86 We begin that factual assessment by85 R (E) v Governing Body of JES [2009] UKSC 15, [2010] 2 AC 728 at [16].86 Air New Zealand Ltd v McAlister, above n 77, at [40].looking at the facts that the MOH determined were relevant in making the SMT decision. The evidence that relates to this issue is:(a) the record of the SMT decision;(b) the evidence of Ms Woods before the Tribunal;(c) the briefing to a member of the SMT; and(d) the evidence of Mr Powell before the Tribunal.[147] The SMT decision itself is brief. It is a decision about "Vocational Services for People in IHC over 65 years". It is noted that there is a need for further workbecause the Disability Support Directorate (being the relevant division of MOH) does not have an up to date policy on this. It says that there are to be no new referrals until our position is confirmed. We accept that the record of the SMT decision indicates that the SMT was at least uncertain about whether it should be funding these services in the absence of an up to date policy. It seems that the SMT viewed the existence of a policy as determining its responsibilities.[148] Ms Woods' evidence confirms that the decision was made because of the SMT's understanding of the MOH's responsibilities. Budget pressures meant thatthere was a need to focus on the MOH's "core" responsibilities. The MOH acceptedresponsibility to fund day services to some groups. Ms Woods said that they believed they should limit funding to those groups only "while the policy and responsibilities were resolved" after further work. This evidence is consistent withthe internal briefing provided shortly after the SMT decision (that the MOH had no official position that it would fund these services but some precedents had beenestablished) and also with Mr Powell's evidence that the decision was made because of the MOH's understanding that it was not responsible for funding these services.[149] We therefore can accept that the MOH's motive for its decision was that it had not accepted that it was responsible for funding these services. It accepted it was responsible for some groups (e.g. those under deinstitutionalisation plans andthose under the ICCDR Act) and, in light of the budget constraints, it should not continue to fund others until further policy work was carried out. However we donot accept the next part of the MOH's submission, i.e., that this means thedifferential treatment between the groups is not on the basis of age. We consider that the MOH's motive is not determinative of whether the affected group has in factbeen treated differently from the comparator group because of their age.[150] In the first place we consider that it is wrong to consider the reason for the differential treatment only from the MOH's perspective. As we have said, it is theexecutive branch of government which has the obligation under Part 1A. Although we do not have evidence from the MSD as to why the vocational services funding ended at 65, we do know that it was linked to the age at which the person would then be eligible for government superannuation. An available inference, which finds support in the Pathways to Inclusion is that, as community participation services was seen as part of vocational services funding, and the focus of that funding was intended to be about potential employment, the funding would end at an age when the person might no longer be seeking employment. Age may have been a proxy for when employment opportunities were less likely to be sought by disabled people. Government funded superannuation may have been seen as replacing vocational services funding. Possibly it was envisaged that any need for day services after vocational services funding ended would fall for consideration by the MOH.[151] However we cannot be sure about what, if anything, was envisaged after age 65 (e.g. if they still wished to seek employment beyond 65) because our information about this is limited. This point was raised with counsel for the MOH at the hearing. The extract below summarises the MOH's view about this aspect of the case:THE COURT:... does that point also apply to the scheme as carried out by the MSDs and if so, how would you define the purpose of that benefit or the intended targeted audience for that.MS COLEMAN:But I don't have any instructions from MSD on that point because the claimhas never been taken against them so, I mean, that's the first point and I think that's an extremely important point. If the claim was that somehowGovernment, the Minister of Social Development and the Minister of Healthhad, between them, failed this group then that's the claim that should have been brought so it hasn't been brought like that, it's a claim that's simplybeen brought against the –THE COURT:I understand that –MS COLEMAN:Yes.THE COURT:– but your answer is "I've got no instructions on that part of it"?MS COLEMAN:I have no instructions on that part of it and clearly there will be a, a lot of information that would be available because there was a, there was a considerable piece of work done with pathways to inclusion, that actually set that out so to that extent, I think that, that document is before the Court and it is something that the Court might wish to refer to. There are other statements in the documents, of course, that do talk about it but if there hadbeen a claim that the MSDs scheme was discriminatory because it's age 65cut-off, then clearly we would have been bringing evidence from ministers or Government officials who are involved in determining what the scope of that eligibility was.[152] In any event, whatever the Government's rationale for the 16 to 65 eligibilitycriteria for MSD funded day services, if there is government funding (through MSD) for day services up to age 65 but no government funding (through any agency) after age 65 this means that when an intellectually disabled person has their 65th birthday they can no longer receive government funding for day services. The only thing from their perspective that has changed is that they have turned 65. We consider that, if government is to apply an age criterion when determining funding, it should have to justify that.[153] This leads us to the other reason why we do not accept the MOH'ssubmission on this aspect of the case. In our view it is wrong to focus solely on adecision maker's motive. The decision maker may be acting on erroneousassumptions. Here the MOH doubted that it had funding responsibility for theaffected group. Should the MOH's decision be immune from challenge under Part 1A if it was wrong about that? In our view it should not be. If the effect of itsdecision is to differentiate on the basis of age, the MOH should be required to justify that.[154] We consider that the basis on which the decision is made is an inquiry directed to the criteria that the MOH used to make its decision, rather than the underlying rationale for that decision. The MOH submits that this is not the correct approach. It refers to two United Kingdom decisions in the context of the Race Relations Act 1976.87 Those cases were concerned with the treatment of persons lessfavourably "by reason that" the person has done various specified things. In that context the view is taken that this does not involve a "strict causation" test. Ratherthe question is what consciously or unconsciously was the decision maker's reasonfor the treatment about which there is complaint.88 As has been said in a number of New Zealand decisions, overseas decisions in this area are of limited assistance unless there are distinct similarities in the statutory schemes and the type of discrimination alleged. We consider that in the New Zealand context of alleged discrimination on the basis of age in breach of Part 1A, the subjective intentions of the decision maker should not be determinative.[155] Both parties referred to Air New Zealand v McAlister in support of their positions.89 In that case a personal grievance claim was brought by Mr McAlister alleging, under the Employment Relations Act 2000, that he had been discriminated against by reason of age. Mr McAlister was a senior pilot employed by Air New Zealand. He flew as a pilot-in-command of Boeing 747-400 aircraft. The United States adopted a rule prohibiting persons over the age of 60 from being pilots-in- command. This affected all Air New Zealand 747 flights as they either went to the United States or required a United States territory as a diversion destination. In response, Air New Zealand adopted a policy that persons over the age of 60 could not be pilots-in-command of 747s while these restrictions were in place. As a result of this policy, Mr McAlister was demoted to First Officer.87 Chief Constable of the West Yorkshire Police v Khan [2001] UKHL 48, [2001] 1 WLR 1947;Nagarajan v London Regional Transport [2000] 1 AC 501 (HL).88 Chief Constable of the West Yorkshire Police v Khan at [29]; Nagarajan v London RegionalTransport at 511.89 Air New Zealand v McAlister, above n 77.[156] Judgment was given in favour of Mr McAlister in the Employment Court. On appeal to the Court of Appeal, the Employment Court judgment was overturned. Mr McAlister then appealed to the Supreme Court. To succeed in his claim for discrimination under the relevant legislation Mr McAlister needed to show that thedecision was made "by reason of" his age. The submission for Air New Zealand wasthat he had been demoted only because of the United States' rule. The majority of the Supreme Court considered that age was "a material ingredient in the making of the decision"90 or "directly causative of the demotion" even though Air New Zealandwould not have acted if the United States' rule had not applied to Mr McAlister.91[157] IDEA Services submits, on the basis of McAlister, that it does not matter that the SMT made its decision because of its view of its funding responsibilities. It says that funding responsibility, in the MOH's view, turned on age just as the Air NewZealand policy did. The MOH seeks to distinguish McAlister on the basis that there was a clear correlation between age and the United States rule but that is not the case here. It says that there are all sorts of reasons why funding responsibility might not exist.[158] We consider that McAlister shows that the motive of the decision maker is not the relevant test. If it was, Air New Zealand would have been able to say that it had treated Mr McAlister differently because of the United States rule. That rule meant that it could not have pilots over 60 in command of 747s. Air New Zealandwas therefore motivated by something other than Mr McAlister's age but the effectof its decision was to discriminate against Mr McAlister because of his age. Although this decision was in the context of the Employment Relations Act we do not see any reason to take a different approach here.[159] Here the MOH's reason for its decision was its belief that it did not haveresponsibility to fund day services once the MSD's funding ended. That decisionmeant that those exiting MSD funding because they were 65 would be treated differently than those who were under 65 years. The only difference in whether they would receive government funding for day services was their age. That is90 At [49] per Tipping J.91 At [40] per Elias CJ, Blanchard J and Wilson J.differential treatment on the basis of age which ought to be subject to inquiry under the second part of the Part 1A test (that is, whether the different treatment is a justified limitation on the right to be free from discrimination). Funding responsibility can be considered as part of that inquiry.Material disadvantageA) The legal test[160] For there to be discrimination, the claimant must show that there is a discriminatory impact on the affected group. What this involves has been an issue in other cases. In Atkinson, for example, the MOH submitted that to be discriminatory for the purposes of Part 1A, the differential treatment on the prohibited ground must be based on prejudice or stereotyping or must perpetuate the disadvantage of subordinated groups in New Zealand society.92 The Court of Appeal in that case rejected that approach.93 It held that this step required the claimant to show a"material disadvantage" to the person or group who were subject to the differential treatment.94 It preferred "material" as the descriptor rather than "real" or "more than trivial" but considered there to be no substantive difference in these terms.95[161] The Court of Appeal decision in Atkinson was delivered after this hearing.However the MOH's position at the hearing before us was that it was prepared toproceed on the basis of the test adopted in Child Poverty Action Group Inc v Attorney-General of "real" disadvantage.96 IDEA Services submitted at the hearing that it was enough to show disadvantage, providing the disadvantage was not de minimis. The Court of Appeal saw each of those descriptions as equivalent to its"material disadvantage" test. We proceed on that basis.92 Ministry of Health v Atkinson, above n 14.93 At [108] to [110].94 At [110].95 At [136].96 Child Poverty Action Group Inc v Attorney-General HC Wellington CIV-2009-404-273,25 October 2011 at [124].B) The Tribunal's decision[162] The Tribunal considered that IDEA Services had established that the SMT decision gave rise to real disadvantage for the affected group.97 Its reasons were as follows:98... our conclusion is that the disadvantages for day service users over 65 years of age which flow from the SMT's decision are real and obvious.Before the SMT decision they would have expected to be able to continue to take part in day services after turning 65. Although Government funding via the MSD would end on turning 65, Government funding would continue to flow via the MOH. But after the SMT decision no Government funding for day services has been available for them. Were it not for the fact that Idea Services has carried the costs in the interim, they would be left at home, without any opportunities to engage in and with their communities. That is the impact of the SMT decision. It cannot sensibly be suggested that it does not leave the affected group in a disadvantaged position vis-à-vis the comparator group, who are still able to engage in community participation activities as a result of Government funding which flows through the MSD.C) Submissions[163] The MOH's submissions again come from the perspective that it does nothave funding responsibility for the affected group. It submits that the affected group should not have been referred by NASCs for funding for day services because theywere outside the MOH's funding responsibilities. It submits that if they were notentitled to the funding, there is no real disadvantage if the funding is stopped. IDEA Services submits that the affected group have a need which is not being met as a result of the SMT decision. As compared with the comparator group whose needs are met, there is a disadvantage which is not de minimis.D) Our assessment[164] We have rejected the MOH's submissions on whether there is differentialtreatment on a prohibited ground. We consider that to focus on funding responsibilities is the wrong approach to the issue of discrimination. It follows that97 It considered that it was not necessary to establish a form of disadvantage in the form ofprejudice, or the perpetuation of a legal, social or political disadvantage, or stereotyping before afinding of prima facie discrimination can be made under Part 1A.98 Idea Services Ltd v Attorney-General, above n 36, at [150].we reject the MOH's submission that the affected group are not materially disadvantaged. The affected group do not have funding for day services and therefore do not have the same opportunities as the comparator group to participate in the community. That is contrary to what is envisaged by the objectives in NZPHD Act (which include promoting the inclusion and participation in society and independence of people with disabilities) and the New Zealand Disability Strategy (the objectives of which include supporting lifestyle choices for disabled people within the community, and promoting access to recreation and cultural opportunities).99 These legislative and policy objectives show that it is important that people with intellectual disabilities are able to participate in the community and that therefore those over 65 years are materially disadvantaged if they do not have access to government funding to assist that participation, as those under 65 do.JustificationThe statutory test[165] Section 5 of NZBORA provides that the rights and freedoms in that Act "maybe subject only to such reasonable limits prescribed by law as can be demonstrablyjustified in a free and democratic society". The idea here is that once a claimant hasshown that their right to be free from discrimination on the grounds of age has been limited by the actions of government, the government must show that the limit has legal authorisation and that the limit is a reasonable one.100 To show the latter, the limit must be demonstrably justified in a free and democratic society.[166] The statutory test can therefore be approached in two parts:(a) whether the SMT decision (being the limit) was "prescribed by law";and99 Refer [14] and [17]-[18] above.100 Paul Rishworth and others The New Zealand Bill of Rights (OUP, Melbourne, 2003) at 174;Andrew Butler and Petra Butler The New Zealand Bill of Rights Act: A Commentary(LexisNexis, Wellington, 2005) at [6.13.1].(b) whether the SMT decision was a "reasonable limit" which can be "demonstrably justified in a free and democratic society."Was the SMT decision "prescribed by law"?A) The issue[167] The parties differ on what is required in order for a decision to be prescribed by law. The MOH submits that limits that derive from the exercise of a statutorydiscretion are still "prescribed by law". If the decision is within the discretionconferred, that is sufficient. The MOH submits that its decision was within the discretion conferred by the NZPHD Act and was therefore prescribed by law. IDEA Services submits that the MOH must show that the law relied upon contemplates that discrimination may occur and that the (discriminatory) decision discriminates in the contemplated manner. It says that the NZPHD Act does not contemplate that decisions will be made on discriminatory grounds and that therefore the SMT decision was not prescribed by law.B) The Tribunal's decision[168] The Tribunal had "considerable sympathy" for the MOH's view on thequestion of whether it was enough that a decision be within a broad statutory power. This was because it accepted that it could create significant practical difficulties for the business of government if government had to enshrine all initiatives in legislation or regulation in some way. However it also had reservations about this for two reasons:(a) First, it considered that the SMT decision was inconsistent with theMOH's contractual obligations to IDEA Services. It considered that the NZPHD Act did not provide the MOH with a statutory power "toignore or dishonour the very funding arrangements that s 10 permits".It considered that this could not be reconciled with the purpose of the NZPHD Act when there remained an ongoing need for the servicesand an acknowledgment that the Government should still be funding such services.(b) Secondly, it could not "find anything in the NZPHD Act that might permit the MOH to discriminate against those who need disabilitysupport services."[169] The Tribunal went on to consider whether, if the limit was prescribed by law,it was "neither ad hoc nor arbitrary" and its nature and consequences clear. It took these words from R v Hansen.101 It said that the "nature and consequences of the SMT's decision were clear enough".102 As to whether it was ad hoc or arbitrary, the Tribunal said:103We leave aside the question of whether or not the SMT decision ought to bedescribed as 'arbitrary'. We do so because it seems to us to be clear that itwas an ad hoc decision. ... it was made as a cost cutting measure withoutany underlying policy work; it was at odds with the MOH's contractualobligations; and there is no evidence that the possibility that there might be human rights issues involved was even recognised. Nor is there any evidence that the SMT took any steps before the decision was made to check that its decision, would be an appropriate exercise of its statutory powers under, for example, the NZPHD Act.[170] The Tribunal therefore concluded that the SMT decision did not meet the test in R v Hansen and so was not prescribed by law. This meant that it did not matter whether the SMT decision could be demonstrably justified because it had failed the first part of the s 5 NZBORA test.C) The submissions[171] The MOH submits that:(a) The Tribunal was wrong because the SMT decision did not breach theMinistry's contract with IDEA Services.101 R v Hansen [2007] NZSC 7, [2007] 3 NZLR 1.102 Idea Services Ltd v Attorney-General, above n 36, at [175].103 At [176].(b) The Tribunal was wrong to find the decision was ad hoc and therefore not prescribed by law. The inquiry as to what is prescribed by law is not about the decision making process (which is a judicial review question). A decision will be arbitrary or ad hoc only if it is not authorised by law.(c) New Zealand and Canadian cases show that if a limit derives from the exercise of a statutory discretion it is prescribed by law. In this case, the SMT decision is authorised not only by the general contracting power in s 10 of the NZPHD Act but also by the express instruction to the MOH in s 3(2) to pursue its objectives to the extent it can within the allocated funding.[172] IDEA Services submits that:(a) To be prescribed by law, the legislative context must contemplate discrimination (legitimately) occurring. It submits that this is not the case with the NZPHD Act because the s 3 objectives are about providing services on the basis of need, and there is nothing in the NZPHD Act purposes or objectives that suggests that funding allocations can be made on the basis of a prohibited ground. It says that the SMT decision was not authorised by the NZPHD Act because age has no bearing on whether an intellectually disabled person needs day services. It further says that s 10 does not permit the MOH to impose a new exclusionary criterion and to alter the status quo.(b) To be prescribed by law, the SMT decision must be a limit which is expressed with sufficient precision, and it is not because it is couchedas an interim measure until the MOH's position is confirmed following further work. The SMT decision must also be adequately accessible to the public, and it was not because it was made during a teleconference which was not the subject of legislation or executive approval by Cabinet, and it was not made known to IDEA Services until it made enquiries following a series of referral refusals. As theSMT decision making process was arbitrary and ad hoc (because it was made without policy work, proper financial analysis, consideration of the impact on intellectually disabled people etc), the SMT decision is not prescribed by law.[173] These submissions raise two main points of difference. The first is whether the legislation must contemplate discrimination occurring or whether it is enough that the decision is within the statutory discretion granted. The second is whether the form that the decision takes and the way in which the decision was made isrelevant to whether it is a limit "prescribed by law" rather than whether it is a "reasonable" limit.D) Our assessment[174] As set out above,104 when allocating public funding for disability support services, various objectives are to be pursued. Day services are within those objectives. This is subject to s 3(2) of the NZPHD Act which provides that the objectives are "to be pursued to the extent that they are reasonably achievable within the funding required". Funding is provided to people who arrange or providedisability support services via Crown funding arrangements. In relation to such agreements, s 10 provides:10 Crown funding agreements(1) In this Act, Crown funding agreement means an agreement that the Crown enters into with any person, under which the Crown agrees to provide money in return for the person providing, or arranging for the provision of, services specified in the agreement.(2) The Minister may, on behalf of the Crown,—(a) negotiate and enter into a Crown funding agreement containing any terms and conditions that may be agreed; and(b) negotiate and enter into an agreement that amends a Crown funding agreement; and(c) monitor performance under a Crown funding agreement....104 Refer [14] and [17]-[18] above.(3) Except to the extent that the Minister determines by written notice to the Ministry of Health, the Ministry of Health may exercise the Minister's powers under subsection (2) on the Minister's behalf.[175] In our view the SMT decision was within the statutory discretion conferred under s 10. The effect of the SMT decision was to amend what funding was provided under the IDEA Services contract by altering the eligibility criteria (through the instructions to NASCs). The negotiated terms of the funding agreement permitted an amendment to be made in this way. The amendment to the eligibility criteria reduced the funding available for services to people with intellectual disabilities. To the extent that the SMT decision limited the pursuit of the objectives of the NZPHD Act, it was made because of perceived budgetary constraints. It was therefore a limit contemplated by the NZPHD Act because the objectives are to be pursued to the extent they are reasonably achievable within the funding required.[176] Is that sufficient to be prescribed by law? Starting first with principle, we find the discussion by Professor Peter Hogg,105 on the same wording in s 1 of the Canadian Charter of Rights and Freedoms (the Canadian Charter), helpful. As he explains, the requirement is to ensure that if an action is not legally authorised it can never be justified, even if the action appears to be reasonable or justified.106 For example, a police officer may consider he or she is justified in denying an accused the right to counsel, but no law authorises this so the limit on the rights in the Charter can never be justified.[177] As Professor Hogg says:107The requirement that any limit on rights be prescribed by law reflects two values that are basic to constitutionalism or the rule of law. First, in order to preclude arbitrary and discriminatory action by government officials, all official action in derogation of rights must be authorised by law. Secondly, citizens must have a reasonable opportunity to know what is prohibited so105 Peter Hogg Constitutional Law of Canada (5th ed supplemented, Thomson Reuters Canada,Ontario, 2007) vol 2. Hogg says that government policies which are of the nature of bindingrules of general application will qualify if they are accessible to the public. In contrast,administrative policies intended for internal use within government as aids in the interpretationof regulatory powers would not count as law if they were informal and inaccessible outsidegovernment. We do not discuss this further because it is not government policy in this casewhich is relied on as the law prescribing the limit.106 At [38.7(a)] and [38.11].107 At [38.7(a)]. Hogg refers to European Court of Human Rights and Canadian Charter decisionsin Canada which have viewed the "prescribed by law" requirement in this way.that they can act accordingly. Both these values are satisfied by a law that fulfils two requirements: (1) the law must be adequately accessible to the public, and (2) the law must be formulated with sufficient precision to enable people to regulate their conduct by it, and to provide guidance to those who apply the law.[178] There is limited case law in New Zealand on what "prescribed by law" entailsin the s 5 NZBORA context. In R v Hansen McGrath J suggested that:108To be prescribed by law, limits must be identifiable and expressed with sufficient precision in an Act of Parliament, subordinate legislation or the common law. The limits must be neither ad hoc nor arbitrary and their nature and consequences must be clear, although the consequences need not be foreseeable with absolute certainty.[179] The requirements of accessibility and precision are reflected in the first sentence in this passage. The second sentence, in referring to a limit which is clear as to its nature and consequences, reflects the need for people to be able to regulate their conduct and the need to provide guidance to those who apply the law. Thepassage is therefore consistent with Professor Hogg's commentary.109 The passage isdirected at limits in "an Act of Parliament, subordinate legislation or the common law". It does not refer to decisions made under statutory discretions and so does notaddress the requirements of accessibility and precision and that the limit must not be ad hoc or arbitrary in that context.[180] In Atkinson the issue of whether the Ministry's decision (a policy) wasprescribed by law was not the subject of submissions because the respondent accepted that the policy was prescribed by law.110 The issue was, however, raised during the Court of Appeal hearing and the Court of Appeal judgment included an"addendum" briefly discussing the topic.111 The Court noted that the discussion wasabout "whether the authorisation for the policy was sufficiently specific and publicly accessible to meet the requirement in s 5 ... that the limit is one 'prescribed by law'". It said that the issue "potentially arises" because s 10 of the NZPHD Act was ageneral provision as to funding arrangements, with the decision at issue in the case being made under a policy, the specifics of which were found in various service108 R v Hansen, above n 101, at [180].109 Hogg, above n 105.110 Ministry of Health v Atkinson, above n 14, at [181]-[184].111 At [181]-[184].specifications and in contractual arrangements. The Court of Appeal referred to McGrath J in R v Hansen (set out above) and said:112The need to be able to identify the limit with precision reflects the nature of the analysis required under s 5 to determine whether the limit is indeed reasonable and demonstrably justified. It would be open to argument therefore that an administrative policy not prescribed in that manner did not meet the requirement.[181] However the Court of Appeal did not decide the issue because it had not been the subject of full argument and the High Court decision did not consider the issue. In these comments, the Court of Appeal appears to be raising for consideration the point that IDEA Services raises here, namely whether the authorising statute must contemplate the discrimination. The discussion is brief and the issue not finally determined.[182] On this issue, we consider that the comments of Lamer J in Slaight Communications Inc v Davidson, discussed by Professor Hogg and relied on by the MOH in the present case, are helpful.113 That case was concerned with orders made by an adjudicator on a claim by a dismissed employee that he was unjustly dismissed. The legislation under which the adjudicator was acting, empowered anadjudicator to make any order "to remedy or counteract any consequence of the dismissal" if the adjudicator decided that the employee was unjustly dismissed. Theadjudicator in Slaight Communications Inc made orders as to the content of theemployer's recommendation, and prohibiting the employer from responding to arequest for information about the former employer except by sending the prescribed letter of recommendation. The orders were challenged as infringing the employer'sfreedom of expression guaranteed by the Canadian Charter.[183] Lamer J distinguished between two kinds of situations:114(a) One situation was where the legislation under which the decision was made confers, either expressly or by implication, the power to infringe a right protected by the Canadian Charter. In that situation, it was the112 At [183].113 Slaight Communications Inc v Davidson [1989] 1 SCR 1038 in respect of which the other judgesagreed.114 At 1080.legislation that was subject to the test of whether it was a reasonable limit that could be justified in a free and democratic society;(b) The second situation was where the legislation pursuant to which the decision was made confers an imprecise discretion, and does not confer, either expressly or by implication, the power to limit the rights guaranteed by the Canadian Charter. In that situation it is the decision, and not the legislation, which is subject to the test of whether it is a reasonable limit that can be demonstrably justified in a free and democratic society.[184] Lamer J considered that the orders in that case were examples of the secondsituation. He acknowledged that the orders limited the employer's freedom ofexpression. He said:115However, this limitation is prescribed by law and can therefore be justified under s. 1. The adjudicator derives all his powers from statute and can only do what he is allowed by statute to do. It is the legislative provision conferring discretion which limits the right or freedom, since it is what authorises the holder of such discretion to make an order the effect of which is to place limits on the rights and freedoms mentioned in the Charter. The order made by the adjudicator is only an exercise of the discretion conferred on him by statute.[185] On the question of whether the limit was justified, Lamer J's approach was asfollows:116To determine whether this limitation is reasonable and can be demonstrably justified in a free and democratic society, therefore, one must examine whether the use made of the discretion has the effect of keeping the limitation within reasonable limits that can be demonstrably justified in a free and democratic society.[186] So, on this approach in this case, the MOH's decision was a limit prescribedby law (because it was within the discretion conferred under the NZPHD Act), and it is the decision (not the statute) which is subject to the test of whether it is reasonable and can be demonstratively justified in a free and democratic society. We consider115 At 1080-1081.116 At 1081. This approach was again taken in Multani v CSMB 2006 SCC 6, [2006] 1 SCR 256 at[22]-[23].that the New Zealand cases referred to in the MOH's submissions on what constitutes a limit "prescribed by law" align with this view. The MOH refers to:(a) Federated Farmers of New Zealand Inc v New Zealand Post Ltd:117In this case postal increases imposed by New Zealand Post for rural deliveries were challenged as a breach of the right to freedom of expression. New Zealand Post operated under the State-OwnedEnterprises Act which required it to carry on a "successful business".Inherent in this was that commercially necessary charges would beimposed. The charges therefore had a "foundation in law" and wereviewed as meeting the "prescribed by law" test.(b) Christchurch International Airport Ltd v Christchurch City Council:118 In this case the Court was concerned with an application to the City Council by certain landowners for resource consents to permit dwellings to be built on their land, which was in the vicinity of the airport. The airport company sought conditions including that the consent holders could not complain about airport noise. The landowners were willing to accept the condition but the Council considered it would breach the right to freedom of expression. Tipping J (then in the High Court) held that the Resource Management Act (the law) allowed consent authorities to issue resource consents on such conditions as they considered appropriate. His Honour said that if the condition qualified as appropriate "thelimitation on freedom of expression which may be inherent is in my judgment, a limitation prescribed by law which can be demonstrablyjustified."119[187] The approach also aligns with the practicalities of government decision- making. This point is discussed in Wynberg v Ontario which the MOH has also referred us to.120 In that case the statute conferred on the responsible Minister a wide117 Federated Farmers of New Zealand Inc v New Zealand Post Ltd [1992] 3 NZBORR 339 (HC).118 Christchurch International Airport Ltd v Christchurch City Council [1997] 1 NZLR 573 (HC).119 At 586.120 Wynberg v Ontario (2006) 269 DLR (4th) 435 (ONCA).and imprecise discretion to provide services and to make agreements for the provision of services. Under this discretion the Ministry announced a programme that provided or funded intensive behavioural intervention for children with autism between the ages of 2 and 5. The trial Judge concluded that the programme was"prescribed by law" as being within the statutory discretion, and the Governmentwas therefore entitled to an opportunity to justify the age limit contained in the programme as a reasonable limit. The Ontario Court of Appeal agreed, stating that the:121... requirement that a limit be "prescribed by law" does not mean that thelimit must be found in a statute or regulation. Rather, it means that the limit must be authorised by statute or regulation. This is evident from the reasoning in Slaight Communications Inc ...[188] The Ontario Court of Appeal went on to note that much governmental action is undertaken by means other than statute or regulation. It agreed with the trial Judge that difficulties would arise if the choice of instrument by which the government enacts such a programme were to determine whether the governmentalaction can be justified under the Canadian Charter. It agreed with the trial Judge'sreasoning that:122... it would have the effect of forcing government to enshrine in legislation or regulation all programs where there might be an even remote prospect of aCharter violation in order to ensure access to a s.1 justification. That would impede the ability of governments to respond to government priorities and would be inconsistent with a purposive approach.[189] Under the NZPHD Act the MOH is authorised to make decisions that some people will get funding for some services and some will not. Some of those decisions may exclude people on grounds that are, or may be challenged as being, prima facie discriminatory.123 The approach the New Zealand cases have taken to the question of whether there is prima facie discrimination could be said to be narrow in that it does not incorporate any issues which can be considered at the stage121 At [151].122 At [157].123 We disagree with IDEA Services that age (or some other ground of discrimination) cannot be arelevant criteria for those decisions as, for example, in cases where age targets the persons mostlikely to be in need for those services. See for example, Wynberg v Ontario, above n 120;Gosselin v Quebec 2002 SCC 84, [2002] 4 SCR 429.of whether the discrimination is justified.124 That reflects the point that where a criterion is applied that differentiates on the basis of age (or some other prohibited ground), it is proper that it be subject to scrutiny as to whether it is reasonable and justified. But the fact that a decision is made under a wide statutory discretion which does not necessarily involve discrimination on the prohibited grounds, should not preclude consideration as to whether it is reasonable or justified. If it does, Parliament would need to enshrine in legislation any programmes which might have some prospect of breaching Part 1A of the HRA and that is likely to be unworkable and impractical.[190] The next question is whether, when a decision is authorised under a statutory discretion (as here), the form in which it takes is relevant to whether it is a limitwhich is "prescribed by law". IDEA Services complains that the SMT decision was expressed as an "interim one" and so was not "precise", and that it took the form of acommunication to NASCs and so it was not "accessible". In our view, the SMT decision's intended interim status does not take it outside the authority of the law.For so long as the decision was operative, it was a decision made under the discretion provided by the NZPHD Act. In our view it was also sufficiently accessible. Those potentially affected by the decision had access to that decision and the statute under which it is made. Precision and accessibility are not required inabsolute terms (they underlie the "prescribed by law" test) and the particular context will be relevant to the degree to which precision and accessibility are required.[191] Sections 3 and 10 of the NZPHD Act are accessible. As Professor Hogg says, the clearest example of accessibility is statute law.125 As to precision:(a) Sections 3 and 10 give fair notice to the public that the services to be funded will be those provided for in the negotiated funding agreements. The public also have notice of the objectives to be pursued and that they are to be pursued to the extent they are reasonably achievable within the funding provided. The public also124 For example we do not adopt the Canadian approach of considering at the discrimination stagewhether the legislation or policy in issue perpetuates prejudice or disadvantage or is based onstereotype: Ministry of Health v Atkinson, above n 14, at [110].125 Hogg, above n 105, at [38.7(a)].have notice that the Government's strategy for disability services will provide the Government's framework, and that this strategy ispublicly available. Therefore the public know that not all health needs will be met and that decisions will have to be made as between competing priorities but in accordance with the objectives and under the framework of the strategy. The public know that the negotiated funding agreements will set out the services that will be funded.(b) Sections 3 and 10 also provide guidance to the MOH, because the discretion conferred on the MOH is constrained by the objectives in s 3 (and the Government's strategy) and the negotiations contemplatedby s 10 which will culminate in a funding agreement. The statutory discretion is broad but, if the decision made under that discretion is a reasonable limit that can be demonstrably justified in a free and democratic society, then it is a limit which Parliament has authorised the MOH to make.[192] Turning then to whether the "prescribed by law" test involves the question of whether a decision is "ad hoc or arbitrary", all the factors IDEA Services rely on arefactors that are relevant to whether the decision is a reasonable limit (rather thanwhether it has the "authority of law"). We consider these matters (such as the failureto postpone the decision pending the intended policy work or to consider impacts on those affected) are better considered under the second part to the s 5 test.126[193] We conclude that the "prescribed by law" requirement is met. The decisionmade was authorised by the NZPHD Act and was sufficiently precise and accessible. The matters which IDEA Services says render the decision ad hoc and arbitrary will be considered when determining whether the limit is reasonable and demonstrably justified.126 We are not sure that "ad hoc and arbitrary", as referred to by McGrath J, is about these kinds ofdeficiencies. But, in any event, provided they are considered at some point in the s 5 analysis itshould not matter at which stage they are.Reasonable and justified[194] The parties agree that the approach to determining whether a limit is reasonable and justified is to ask:127(a) does the limiting measure serve a purpose sufficiently important to justify curtailment of the right or freedom?(b) (i) is the limiting measure rationally connected with its purpose?(ii) does the limiting measure impair the right or freedom no more than is reasonably necessary for sufficient achievement of its purpose?(iii) is the limit in due proportion to the importance of the objective?[195] The onus of proof lies on the MOH. 128 The standard of proof is the balance of probabilities, but guided by the context and the level of deference properly accorded to the SMT decision.129A) Deference[196] The idea of deference is that in the area of human rights, "difficult choicesmay have to be made by the executive or the legislature between the rights of the individual and the needs of society."130 The courts recognise that there is a need togive some weight to the decision maker's judgment as to whether the choice made isreasonable and justified.131 The deference appropriately given to Parliament may be greater or lesser according to the circumstances.132127 R v Hansen, above n 101, at [104] per Tipping J, citing R v Oakes [1986] 1 SCR 103; alsoapplied by the Court of Appeal in Ministry of Health v Atkinson, above n 14, at [143].128 Human Rights Act 1993, s 92F(1).129 Ministry of Health v Atkinson, above n 14, at [166], citing RJR-MacDonald Inc v Canada [1995]3 SCR 199.130 R v Director of Public Prosecutions; ex parte Kebilene [2000] 2 AC 326 at 381.131 This is expressed in various ways. See, for example, R v Hansen, above n 101, at [104] cited inChild Poverty Action Group Inc v Attorney-General, above n 96, at [133] referring to "latitude";Ministry of Health v Atkinson, above n 14, at [172] referring to "space"; and the discussion inBeatson and others Human Rights: Judicial Protection in the United Kingdom (Sweet &Maxwell, London, 2008) at 267-268.132 R v Hansen at [108] and [111] cited in Child Poverty Action Group Inc v Attorney-General at[133].[197] In considering what circumstances will indicate that a greater or lesser degree of weight to the decision maker is appropriate it is helpful to consider the reasons underlying the deference principle. Reasons sometimes given by the courts are discussed by Beatson.133 On the one hand, it is to be remembered that Parliament has made it the task of the court to determine whether a limit is reasonable and demonstrably justified. But on the other hand, where the legislation concerns, for example, broad social policy it has been said that "on democratic grounds" the judiciary should defer "to the considered opinion of the elected body or person whose act or decision" is incompatible with the NZBORA.134 It is also said that deference is appropriate where the "nature, scope and implications of the policydecision rest on judgments requiring particular expertise or knowledge that thecourts lack".135 This in turn "provides justification for affording weight to the viewsof representative institutions that represent a cross-section of society, in particular where a judgment is required on controversial ethical issues, social policy, publicopinion or public confidence."136[198] The MOH submits that considerable deference ought to be accorded to the SMT decision. It submits that subject matter is an indicator of the level of deference that should be accorded. It submits that decisions involving highly complex social and economic issues are usually more appropriately dealt with by the executive or legislature because of their sources of knowledge and expertise.137 It says that in this area, the government is institutionally better qualified to decide the matter.138 The MOH submits that the SMT decision was one of a range of measures intended to bring its spending on disability support services back within its budget, while at the same time ensuring that it met its core responsibilities as directed by Ministers and Cabinet. It submits that how that was best done, is a matter on which the MOH is better placed to assess than this Court.133 Beatson and others, above n 131, at 276-290.134 R v Director of Public Prosecutions; ex parte Kebilene, above n 130, at 381 referring to theEuropean Convention for the Protection of Human Rights and Fundamental Freedoms (theConvention) rather that the NZBORA.135 Beatson and others, above n 131, at 288. This issue is discussed in Beatson at 284-288.136 At 286.137 Referring to Wynberg v Ontario, above n 120, at [184].138 Referring to Lord Steyn "Deference: A Tangled Story" [2005] PL 346 at 350.[199] IDEA Services agrees that subject matter may be one of the objective circumstances that determine whether there is a need for deference in a particular case. The parties differ, however, on whether the quality of the decision making process is relevant to the degree of deference appropriate. The MOH submits thatprocess is not relevant, and that the Court's assessment of the proportionality of thelimit must be based on the evidence before it, regardless of the evidence before the decision maker or the decision maker's reasoning.139 IDEA Services submits that the process by which the decision was reached will be relevant, not in determining whether the decision maker reached his or her decision in the right way as in judicial review, but rather in determining whether there is a need for deference in a particular case. It submits that the authorities are to the effect that deference cannot be asserted, but must be deserved.140[200] Taking the approach that process is relevant to deference, IDEA Services submits that little or no deference is appropriate to the SMT decision because:(a) The decision was not reasoned, considered, or refined, and was not expressed as firm and final. It was made without consideration of past practice and policy, the New Zealand disability strategy, the impact on service users and other considerations.(b) The decision was not endorsed by Parliament or Cabinet. The experience and expertise of the decision makers was not the subject of much evidence. Subsequently a Ministry official observed that little progress had been made on the policy work that was to accompany the decision and that it was becoming quite embarrassing.(c) This Court is as institutionally competent as the SMT to determine whether the denial of eligibility for day services on the basis of age139 Referring to Wilson v First County Trust Ltd (No 2) [2003] UKHL 40, [2004] 1 AC 816 at 843-844; R (Begum) v Governors of Denbigh High School [2006] UKHL 15, [2007] 1 AC 100 at [68]per Lord Hoffmann; Belfast City Council v Miss Behavin' Ltd [2007] UKHL 19, [2007] 1 WLR1420 at [13] per Lord Hoffmann, at [24], [26]-[27] per Lord Roger, at [31] per Baroness Hale, at[44] per Lord Mance and at [90] per Lord Neuberger.140 Referring to Ministry of Health v Atkinson (2010) 9 HRNZ 47 (HC) at [147];R (SB) v Governors of Denbigh High School at [31] and [34] per Lord Bingham.was a justified limitation on the right of those people to freedom from discrimination.[201] The Tribunal's view was that any deference the Tribunal owed to the SMT decision was "at the lower end of the spectrum". It considered that this was appropriate because the decision makers did not appear to have recognised that there were potential human rights issues involved. The Tribunal also took into account that the SMT decision was made without having made policy inquiries and without considering whether the contract between the MOH and IDEA Services permitted the decision to be made. The Tribunal also noted that the SMT decision did not disclose any concern by the MOH as to what might happen to ex-MSD service users without government funding to append day services.[202] We consider that the factors the Tribunal referred to are relevant to the degree of deference that is appropriate. We disagree with the MOH that process is not relevant to the level of deference that is appropriate. We consider the correctapproach "when assessing proportionality" is whether "a measure strikes a fairbalance and not whether the process by which the primary decision maker reachedhis [or her] or its decision was adequate" (which is a judicial review question).141However the process can nevertheless be relevant to the weight to be given to the decision maker because:142As a rule of thumb ... the greater the efforts that a decision maker has made to investigate and identify the potential implications of a decision, and the greater care with which it has sought to reach a decision, the less likely the courts will be to find that the decision that it has struck was disproportionate or otherwise unlawful.The process of investigation, which may include consultation with experts and affected individuals, will provide the authority with an insight and capacity that the court is unlikely to possess....[203] The idea is partly that the process may show the court that the decision maker has addressed the competing considerations and determined where the balance is to141 Beatson and others, above n 131, at 289, referring to R (Begum) v Governors of Denbigh HighSchool, above n 139.142 Beatson and others at 289.be struck. If this has not been done the court is "deprived of the assistance and reassurance" that the decision maker has made a considered opinion on the NZBORA issues and the court has "no alternative but to strike the balance foritself".143 The other idea is that a thorough process may provide expertise to the decision maker that the court cannot hope to replicate. It can be seen, therefore, thatprocess may be relevant both to the "democratic" and the experience and expertise reasons for deference.[204] The same applies in relation to whether the decision maker has given reasons for its decision. This is explained as follows:144There are two reasons why it would be appropriate to give weight to a decision because of the thoroughness with which it has been reasoned. The first relates to a situation where a decision maker is better placed than the court to make a particular decision or assessment ...The important point to recognise, however, is that the reasons supplied for a decision, and the structure of the reasoning process, do not themselves provide a reason to give weight to the decision. Weight is given to the reasoning because there is some other reason why the decision maker is better placed to make the decision. The second reason for deferring to a well-reasoned decision is that it provides evidence that the decision maker has, through the process of making the decision, acquired an insight and knowledge not possessed by the court.[205] In light of these considerations, we consider that the Tribunal was correct in its assessment that the weight to be given to the SMT decision was low. We agree with the MOH, that on democratic and experience/expertise grounds, the MOH is better placed to determine the priorities of competing health needs from the limited budget. However the process by which the SMT made its decision about those priorities does not provide us with comfort that the SMT obtained the relevant available information which would thereby provide it with the experience/expertise that this court could not replicate, nor (importantly) that it understood that there was a balance to be struck between fiscal objectives and human rights and that it made a considered assessment of where that balance was to be struck. With that in mind we proceed to consider whether the SMT decision was a reasonable and justified limit on the right to be free from discrimination on the grounds of age.143 At 291 referring to Belfast City Council v Miss Behavin' Ltd, above n 139.144 At 291-292.Did the SMT decision serve a purpose sufficiently important to justify curtailment of the right to be free from discrimination?[206] It is necessary to consider the objective of the decision in order to consider whether that is a sufficiently important objective to justify the curtailment of the right to be free from discrimination (in this case on the basis of age).[207] The MOH describes its objective in this way:In this case, the Ministry's objective is better described as to ensurecompliance with s 3(2) of the NZPHDA, which had two facets: theimperative to "get back on budget" as well as to ensure the Ministry wasable to continue to meet its funding obligations in respect of its core responsibilities. Working to ensure nationally consistent NASC referral behaviour as part of improving fiscal management is also an important and legitimate task.[208] The Tribunal considered that the MOH's objective was "cost cutting" and "tostimulate or accelerate debate about what the source of funding for day services should be generally, specifically with a view to the possibility that responsibilitywould be transferred to the MSD".145 The Tribunal found:146[183] We do not accept that either of those objectives served purposes sufficiently important to justify curtailment of the right to be free from discrimination:[a] In this case, the MOH was not looking to cut a cost on the basis that the Government should not be meeting the cost at all. What it was looking to do was to shift the cost burden to some other agency of Government (most likely, the MSD);[b] In financial terms, the immediate impact of the SMT'sdecision cannot have been material to the MOH. ...;[c] ... instead of simply cutting off the funding as it did, the SMT could have continued to fund the service users concerned whilst signalling and promoting the need for a policy change and decision-making within Government;[d] .... There is no reason we can see why the policy work and discussion needs to have been taken what is now six years, with the issue still effectively unresolved;[e] The point is that the MOH could have accelerated the policy discussion if it had wanted to, and the debate could have145 Idea Services Ltd v Attorney-General, above n 36, at [182].146 At [183].been completed, within a time frame during which the actual additional cost to the MOH of continuing to fund ex-MSD service users was negligible;[f] Of course, if the outcome of that debate were to leave funding responsibility with the MOH, then our conclusion(i.e., that the MOH's decision to summarily stop paying forday services for ex-MSD service users does not justify curtailment of the right of those service users to be free from age-related discrimination) would be all the more obvious. On the other hand, if the result of the policy work were to see responsibility transferred to the MSD, then that could have been done without having to leave any service users without funding in the interim.[209] The MOH criticises the Tribunal's view that the decision was aimed atmoving funding responsibility from the MOH to another government agency. We agree that the evidence does not show that the SMT decision was made with a view to move funding responsibility to another government agency. The focus of the SMT was on whether it should be funding these services in the absence of an up to date policy on the matter (which would presumably clarify its responsibility) and when the MOH was undertaking a "back on budget" programme to addressoverspending and projected expenditure growth.[210] As to the budgetary objective, we consider that the Tribunal's reasoning strayed into the weighing of the competing objectives and effects rather than making an abstract inquiry about the objective. The Tribunal's approach is less about what the MOH's objective was and more about whether it was an objective justified on theevidence and in light of the outcome of work yet to be carried out.[211] The Tribunal's approach was influenced by a decision of the Supreme Court of Canada in Nova Scotia (Workers' Compensation Board) v Martin, on which IDEA Services relies.147 That case concerned legislative provisions excluding chronic painfrom the regular workers' compensation system. These provisions were challenged on the basis that they discriminated against those with the disability of chronic pain attributable to a work-related injury. The Government identified four objectives147 Nova Scotia (Workers' Compensation Board) v Martin 2003 SCC 54, [2003] 2 SCR 504.including "to maintain the viability of the accident fund". As to this, the Courtstated:148The first concern, maintaining the financial viability of the Accident Fund, may be dealt with swiftly. Budgetary considerations in and of themselves cannot normally be invoked as a free-standing pressing and substantial objective for the purposes of s 1 of the Charter ... It has been suggested, however, that in certain circumstances, controlling expenditures may constitute a pressing and substantial objective ... I find it unnecessary to decide this point for the purposes of the case at bar. Nothing in the evidence establishes that the chronic pain claims in and of themselves placed sufficient strain upon the Accident Fund to threaten its viability, or that such claims significantly contributed to its present unfunded liability . ...[212] We are not so sure that this decision supports the approach the Tribunal took. In this passage the Supreme Court of Canada rejected that budgetary considerations"in and of themselves" can be invoked as a sufficiently important objective but alsocontemplated the possibility that "in certain circumstances" controlling expendituremight be a sufficiently pressing and substantial objective. This objective, however, failed in that case through lack of evidence. We agree that it is not a sufficient basis on which to discriminate for a government agency to say that it will cost us too muchif we do not discriminate. On the other hand, "the Supreme Court of Canada hasrecognised that the proper allocation of limited resources is an important governmentobjective that requires the government to make difficult policy choices."149[213] In Atkinson the High Court said this:150We consider that the analysis at this first stage enquiry concerning the importance of the policy is rather abstract. There is no weighing at this first point of the four-stage inquiry of competing objectives and effects. We do not consider counter-veiling arguments, or carry out a balancing exercise. The importance is considered on a stand-alone basis. Are the identified objectives in themselves genuine concerns and sufficiently important in themselves to warrant a curtailment of the right to be free from discrimination?[214] We prefer this approach to the approach taken by the Tribunal. We consider that issues such as whether the decision could and should have been delayed pending148 At [109].149 Wynberg v Ontario, above n 120 at [171]; Cameron v Nova Scotia, 177 DLR (4th) 611 (NSCA)at 664 characterising the objective of the policy as being "to provide the best possible healthcoverage to Nova Scotians in the context of limited financial resources."150 Ministry of Health v Atkinson, above n 140, at [216].further policy work can be addressed at a later stage of the inquiry (i.e., whether the decision impairs the right to be free from age-related discrimination no more than reasonably necessary for its purpose). Otherwise the factors to be considered under the four steps of the legal test become unnecessarily duplicative.[215] In Atkinson the MOH submitted that there were nine objectives of its decisionincluding "to be fiscally sustainable". The High Court rejected the first of the nine objectives. In relation to the others it concluded:151It is certainly arguable that individually each reason, if it stood alone, would not be sufficient, with the possible exception of fiscal sustainability, but if they are taken collectively, the limiting measure can be seen as serving purposes of sufficient importance to justify curtailment of the right to freedom from discrimination.[216] We accept that budgetary constraints which required the MOH to make decisions about competing priorities for disability services funding is an objective which is sufficiently important to justify a curtailment of the right to be free from discrimination. In our view, given that health funds are limited, and the MOH is to pursue the objectives of the NZPHD Act "to the extent that they are reasonably achievable within the funding provided", we agree that a limiting measure takenbecause expenditure had to be controlled and prioritised is a sufficiently important objective which can justify curtailment of the right to be free from discrimination.[217] There must of course be evidence that the need to control expenditure and to choose between priorities was the objective. In this case the evidence of Ms Woods provides evidence that it was. Ms Woods saw the decision as warranted because of the budget pressures and the risk to core services if the day services funding was continued. We make no comment on whether the objective of a nationally consistent NASC referral behaviour is a sufficiently important objective because the evidence does not show that this was one of the objectives. The evidence shows only that the decision was made for fiscal reasons and, given the fiscal issues, the uncertainty about whether it should be funding day services in the absence of a formal up to date policy on the matter.151 At [219]. This was not in issue on the appeal.Was the SMT decision rationally connected to its purpose?[218] The Tribunal found:152The SMT's purpose in making its decision was to cut costs. There was alsoa related purpose of moving funding responsibility out from the MOH to another Government agency, most likely the MSD. As a matter of logic, we accept that the decision was rationally connected to those purposes.[219] As discussed the MOH takes issue with the Tribunal's view that it had apurpose of moving funding responsibility from the MOH to another governmentagency. The MOH does, however, support the Tribunal's decision that the SMTdecision was rationally connected to its purpose of getting back on budget and ensuring its ability to continue to meet its funding obligations in respect of its core responsibilities.[220] IDEA Services submits that, in order for a limit to qualify as being rationally connected to the objective, there has to be a minimum level of rational inquiry made as to whether that limit assists in achieving the objective. It submits that there was no such rational inquiry. It says that there was no financial or cost benefit analysis, there were no documents to show that the MOH wished to safeguard services to its core responsibilities and the MOH simply saw cutting funding for day services over 65 as an easy option. The MOH submits that the rational connection test, like the sufficiently important objective inquiry, is a threshold issue, largely considered on an abstract basis without any qualitative analysis of the argument, and is usually readily satisfied by government. That is the view expressed in R v Hansen153 andAtkinson154 and we agree with it.[221] In this case it was reasonable for the SMT to suppose that no new referrals for day services for people in IHC over 65 years would assist Disability SupportServices in getting "back on budget". That view is supported by the evidence of Ms Woods before the Tribunal that its services were in "serious financial strife and undermassive stress" and that there was a need to compromise on the services being152 Idea Services Ltd v Attorney-General, above n 36, at [187].153 R v Hansen, above n 101, at [121].154 Ministry of Health v Atkinson, above n 140, at [222].funded to ensure the quality of care and support in respect of the MOH's coreresponsibilities was not at risk. We therefore agree with the Tribunal that the SMT decision was rationally connected to the objective of getting back on budget and ensuring that the MOH was able to continue to meet its funding obligations in respect of its core responsibilities.Did the SMT decision impair the right to be free from age-related discrimination no more than reasonably necessary for its purpose?[222] The next question is whether the SMT decision impaired the right to be free from age-related discrimination no more than reasonably necessary for its purpose(referred to as "the minimal impairment" question). Here the Court is considering whether any less rights-intrusive means of addressing the objective would have a similar level of effectiveness.155 A decision will meet the minimal impairment standard if it falls within a range of reasonable alternatives. A decision is notdisproportionate merely because the Court "can conceive of an alternative which might better tailor objective to infringement."156[223] The Tribunal found:157In our view the SMT decision impaired the right of ex-MSD service users to be free from age-related discrimination very much more than was reasonably necessary for its purpose. Our reasons are effectively set out at [183] and [184] above. There was no demonstrable need for the MOH to cut the funding, and then try to have the discussion about where responsibility for providing it should lie within Government. The cost to the MOH of seeing that the policy decision was addressed before any funding was cut would have been insignificant in the overall context of things.There was no need that we can see for the MOH to act in the peremptory way that it did.[224] In referring back to [183] and [184] of its decision the Tribunal's mainconcerns were that:155 R v Hansen above n 101, at [42] per Elias CJ, at [79] per Blanchard J, at [104] and [126] perTipping J, at [269] per Anderson J.156 RJR-MacDonald Inc v Canada, above n 129, at [160], cited in Ministry of Health v Atkinson,above n 14, at [153].157 Idea Services Ltd v Attorney-General, above n 36, at [190]-[191].(a) the MOH was not cutting costs because the services were of a kind that should not be met by government;(b) the immediate fiscal impact was small; and(c) although the fiscal impact would increase over time, the policy work could have been done within the timeframe when the additional cost was negligible.[225] The MOH submits that the fiscal situation confronting it was that there needed to be immediate reductions in the funded services. It submits that neither the Tribunal nor this Court is better placed than the MOH to determine how best to get back on budget. It submits that considerable deference to the SMT is required. Itsubmits that it is relevant that age is not a "suspect" ground of discrimination and that the service provider's obligations under the residential care contract involve providing meaningful activities for those under the provider's care.[226] IDEA Services submits that the SMT decision was a fundamentally flawed decision which did not enable the MOH to assess whether there were reasonable alternatives. We agree with that submission. We note that:(a) there is no evidence that the SMT considered whether the Government intended that day services provided for intellectually disabled people over 65 would be funded;(b) there is no evidence that the MOH considered the disconnect between their decision and the Government strategy for an inclusive society;(c) there is no evidence that the MOH considered the scope of the service specification under the residential care contracts to determine the extent to which there would still be funding for any activities outside of the home;(d) there is no evidence of any financial analysis as to the likely impact of continuing to fund day services for the affected group over the short,medium or long-term (when, for example, day services for the deinstitutionalised group would presumably decline over time);(e) there is no evidence that the MOH considered the impact of their decision on human rights issues; and(f) there is no evidence that the SMT considered whether any non- discriminatory options were available.[227] As discussed above, the MOH approached the Part 1A claim brought by IDEA Services as concerning only its responsibilities rather than the responsibilities of the Government. That was also how the SMT decision approached the matter. In circumstances where the SMT knew that the MOH had been funding day services to those exiting MSD vocational services funding, and that MSD funding stopped at age 65, we consider it was incumbent on the MOH to clarify with the Minister whether the MOH should be funding these services. In a meeting between the MOH and IDEA Services shortly after the SMT decision was made there was a query about whether the MSD was in breach of the HRA. But itdoes not seem that the MOH requested the MSD's advice on this (or, if it did, wewere not shown this). If the human rights implications of this were considered byMSD, that may have been relevant to the MOH's decision. Nor did the MOH seekto produce evidence from MSD in this claim. We therefore do not know that the Government intended that there be government funding for day services only up to the age of eligibility for government superannuation, with day activity needs then to be met in some other way.[228] We therefore cannot give any weight to the SMT decision as reflecting a considered assessment of an appropriately informed and expert decision maker, of where the balance appropriately lay between the need to get back on budget, the health services that should have priority, and the rights of intellectually disabled people aged over 65 years to be free from discrimination. As in Atkinson theMOH's submission really suggests that in the face of fiscal unsustainability a courtshould accept (because it should simply defer to the government agency) that the decision made is justified.158 As in Atkinson we do not accept that submission.[229] In Moore v British Columbia (Education) the Supreme Court of Canada considered a claim for discrimination where a school for special needs educationfor a boy with severe dyslexia was closed because of a "budgetary crisis".159 The Supreme Court of Canada noted that the decision was made with:160... no assessment, financial or otherwise, of what alternatives were or could be reasonably available to accommodate special needs students if the Diagnostic Centre were closed ... The failure to consider financial alternatives completely undermines what is, in essence, the District'sargument, namely that it was justified in providing no meaningful access to an education for Jeffrey because it has no economic choice. In order to decide that it had no other choice, it had at least to consider what those other choices were.[230] We consider that there were likely to be reasonable alternatives available to the MOH which were non-discriminatory. For example, reasonable alternatives may have been to:(a) defer a decision pending an urgent review of whether the MOH was the appropriate funder of the services and the financial impact of funding these services was assessed, and to seek a supplementary appropriation if necessary to continue to fund these services (noting, for example, that there was a human rights issue at stake);(b) reduce the funding of day services for intellectually disabled people over 65 years on a pro rata basis (e.g. by reducing the number of funded hours) or by requiring the NASCs to prioritise on the basis of need.[231] Like Moore the failure to consider any alternatives undermines the MOH'sposition that the decision was a minimal impairment to the right to be free from discrimination on the ground of age. The MOH had the burden of proving that its158 Ministry of Health v Atkinson, above n 140, at [280].159 Moore v British Columbia (Education) 2012 SCC 61.160 At [52].decision impaired the right no more than reasonably necessary for its purpose. We are not persuaded that it has discharged that burden.Was the SMT decision in due proportion to the importance of its objective?[232] The last step in determining whether a limit is reasonable and justified requires the Court to "stand back and make a broad assessment" as to whether the discrimination is in due proportion to the MOH's objective.161[233] The Tribunal found:162Our answer to this question is also in the negative. Once again, we cannot see that there was any reason for the MOH to cut funding to ex-MSD service users in the peremptory way that it did. Not only was that a step that was inconsistent with its contractual obligations, but the amounts involved in the short run were for all intents and purposes immaterial to the MOH. The decision to cut the funding did not need to be made before the internal debate between the MOH and the MSD had been concluded.[234] The submissions by both parties are brief on this part of the case. In essence, the MOH submits that it was not disproportionate for the MOH to stop funding services for which it was not responsible, in order for it to have sufficient funds for the services for which it was responsible. IDEA Services submits that the process by which the SMT decision was reached meant that the MOH was not able to make the relevant inquiry and that the effect of the decision seriously impacts on the quality of life of vulnerable members of society.[235] The SMT's response to the need to get back on budget was a blanketprohibition on day services for intellectually disabled persons exiting MSD funding (and not within other groups for which it accepted funding). The MOH has not persuaded us that this was a proportionate response at the time it was made, in the absence of any consideration of other alternatives.161 Ministry of Health v Atkinson, above n 140, at [284]; Child Poverty Action Group Inc vAttorney-General, above n 96, at [224]; R v Hansen, above n 101, at [134].162 Idea Services Ltd v Attorney-General, above n 36, at [192].Result on Part 1A claim[236] For these reasons we agree that the SMT decision breached Part 1A of the HRA. The appeal is dismissed.Costs appealIntroduction[237] The Tribunal awarded costs of $165,000 in favour of IDEA Services. The MOH appeals against this award. It says that the Tribunal erred because:(a) the Tribunal's award bears no resemblance to prior costs awards andtherefore failed to conform to the principle of consistency;(b) in determining a reasonable contribution to actual costs, the Tribunal failed to assess whether the actual costs incurred were reasonable;(c) the Tribunal wrongly applied the High Court Rules costs scale for category 3C proceedings;(d) the Tribunal failed to assess whether increased costs were justified.[238] IDEA Services contends that there was no error in the exercise of theTribunal's discretion.Discretion to award costs[239] The Tribunal's power to award costs is set out in s 92L of the HRA which provides as follows:(1) In any proceedings under section 92B or section 92E or section 97, the Tribunal may make any award as to costs that it thinks fit, whether or not it grants any other remedy.(2) Without limiting the matters that the Tribunal may consider in determining whether to make an award of costs under this section, the Tribunal may take into account whether, and to what extent, any party to the proceedings—(a) has participated in good faith in the process of information gathering by the Commission:(b) has facilitated or obstructed that information-gathering process:(c) has acted in a manner that facilitated the resolution of the issues that were the subject of the proceedings.[240] The parties are agreed that the principles relevant to the exercise of this discretion are as summarised in Herron v Speirs Group Ltd as follows:163(a) The discretion to award costs is largely unfettered, but must be exercised judicially;(b) Costs in the tribunal will usually be awarded to follow the event, and quantum will usually be fixed so as to reflect a reasonable contribution (rather than full recovery) of the costs actually incurred by the successful party;(c) The Tribunal's approach to costs is not much different from thatwhich applies in the Courts although, as there is no formal scale of costs for proceedings in the Tribunal (as there is in the Courts), caution needs to be exercised before applying an analysis of what might have been calculated under either the High Court or District Court scales of costs. Such an analysis can be no more than a guide.(d) An award of costs that might otherwise have been made can be reduced if the result has been a part-success, only;(e) Assessment of costs must take account of the relevant features of each case, but there must be some consistency in the way costs in the Tribunal are approached and assessed;(f) Offers of settlement "without prejudice except as to costs" are arelevant consideration.[241] The parties are also agreed that, because this is an appeal against the exercise of a discretion, the MOH must show that the Tribunal acted on a wrong principle, took into account irrelevant factors or failed to take into account relevant factors, or was plainly wrong.163 Herron v Speirs Group Ltd (2008) 8 HRNZ 669 (HC) at [14].The Court also noted at [15] theobservation of the Tribunal at first instance that Parliament's conferral of its jurisdiction was inpart to protect access to justice for litigants who might otherwise be deterred by the costs andcomplexities of proceeding in the courts.The Tribunal's decision[242] The Tribunal began by noting that IDEA Services was seeking an award of costs on a reasonable contribution basis. IDEA Services submitted that an award of $235,000 would be an appropriate contribution given that its actual costs were more than $385,000. The Tribunal noted that the MOH accepted that an award of costs would be made against it, but submitted that the proper range was somewhere between $36,500 to $43,000. The question for the Tribunal was therefore one of quantum.[243] The Tribunal referred to s 92L and the approach to costs as set out in Herron v Speirs Group Ltd and other cases.[244] As to the conduct of the litigation, the Tribunal said:164Idea Services won; neither side can sensibly be criticised for the way their respective cases were presented; there is no suggestion that the hearing was lengthened unnecessarily because of any default on either side; this was an important case involving factual and legal complexities; as noted significant time was required to prepare the matter; and we do not see that either side took any points the argument of which should now count against them in the costs assessment. We also agree that costs should be assessed on the basis that Idea Services was wholly successful in its claim.[245] On the topic of consistency with previous awards the Tribunal said this:165The Tribunal has never before made a costs award at or anywhere near the level sought by Idea Services. As the MOH observes, the pattern of previous awards made from a reasonable contribution starting point have often worked out at about $3,750.00 per day of hearing time. In this case that would yield a figure of around $26,500. The MOH accepts however that the award in this case needs to reflect the necessity of second counsel, and that it was a complex matter. It is on that basis that the MOH suggests a range of between say 36,500 to $43,000 (we understand that $43,000 is also roughly what might have been expected if the District Court scale had been applied).[246] The Tribunal's view about why the costs being sought were so much higherthat other awards was as follows:166164 Idea Services Ltd v Attorney-General (No 3) [2011] NZHRRT 21 at [66].165 At [67].166 At [71].The reason why the amount of costs sought here is very much greater than any previous award is quite simply that Idea Services has had to spend an unprecedented sum of money to bring its claim. We emphasise again that there is no suggestion that the amount spent was unreasonable; it is just that this really was a complex case that raised significant issues of fact and law, all of which required careful preparation.[247] The Tribunal agreed that awards in previous cases can be used to calculate a rough average of costs awarded per day of hearing, although said that this was no more than a factor to be used at most as a guide. It said that another approach to the same data is to look at how the costs awards that have been made on a reasonable contribution basis compare with the actual costs reported as having been incurred in those cases. Recognising that the calculation was not precise, the Tribunal said that on this approach the upshot was that historically the Tribunal had awarded an average of around 30 per cent of actual costs incurred. Applying the approximate 30 per cent of actual costs guideline, the Tribunal said that the starting point for its assessment of a reasonable contribution award would be in the order of $115,500. It said that the figure should be uplifted because it would not really have been possible to run the claim without two counsel. It considered that any uplift should be above the $10,000 that the MOH accepted under this heading because it viewed that amount as manifestly inadequate.[248] The Tribunal recognised that there may be some who viewed historic awards as generally too low, but there were access to justice issues involved and it was important that the risk of an adverse costs award did not have too much of a chilling effect on cases that are brought to the Tribunal.[249] The Tribunal rejected the MOH's submission that, if the case was socomplex, then the matter would have been removed to the High Court at the outset. The Tribunal noted that it had the first instance jurisdiction and that it had dealt with other complex cases without there being any suggestion in those cases that they ought to have been remitted to the High Court for a first instance decision.[250] The Tribunal recognised that an award for costs at the level claimed by IDEA Services would be for an amount that exceeded its power to award damages. It agreed with the MOH that it should be slow to do that. It expressed no view onwhether and when it could do that because its award was well under the damages maximum in any event.[251] The Tribunal said that the application of court scales was "at best a guide".167It agreed with IDEA Services that, if it was to look at court scale costs, it was the High Court scale rather than the District Court scale that was most relevant. This was because of the complexity of the case, the significance of the issues, and the effort and skill that were expended on the matter. On a 3C basis the MOH calculatedthat an award of costs would be about $135,000 whereas IDEA Services' calculationwas that it would have been about $165,000. On this point the Tribunal concluded that:168... we think that it is relevant to our assessment to know that if the case had been heard in the High Court costs would not likely have exceeded $165,000– notwithstanding that actual costs were over $385,000. We think we would need good reason to award a figure above the highest figure that the High Court would have been likely to have awarded;[252] The Tribunal noted the MOH's submission that a high costs award mightimpact upon the work of the Director of Human Rights Proceedings. The Tribunal understood that concern but considered that the costs award should not be tailored"to provide the Director with a protection that the legislation does not confer".169 It also considered that it did not necessarily follow that an unsuccessful plaintiff in HRA litigation would face awards at the same kind of level as an award of costs against a government agency.[253] The Tribunal referred to a submission from the MOH that IDEA Services was a commercial entity that brought its claim for commercial reasons. The Tribunal noted that IDEA Services was a not for profit organisation and that, in any event, even if costs should be restricted because the plaintiff was a commercial entity thatwas more than taken care of in this case by the Tribunal's award representing less than half of the actual costs incurred.167 At [76(c)].168 At [76(c)].169 At [76(d)].[254] Lastly the Tribunal referred to the matters set out in s 92L(2) of the HRA.The Tribunal described IDEA Services' submission about this as "a bit of an afterthought".170 Having reviewed the affidavits relating to these matters, the Tribunal considered that only s 92L(2)(c) was engaged. It said:171... neither of the parties [h]as criticised the other for its conduct during theHuman Rights Commission's information gathering process (such as thatwas). But we do regard the MOH's reluctance to really try to resolve theconcerns raised by Idea Services as a matter that should be taken into account as an upward pressure in the assessment of costs to be awarded to Idea Services.[255] The Tribunal concluded:172In the circumstances, pursuant to s.92L of the Act we award costs to Idea Services in the sum of $165,000.00.Consistency[256] The MOH submits that the Tribunal's award was not consistent with otherawards because it represented an amount of $25,000 a day, which was well in excess of previous awards. It submits that the complexity and significance of the case did not justify such a departure. It says that although discrimination is a complex area oflaw, this is not novel in the context of the Tribunal's jurisdiction. It makes a comparison with Smith v Air New Zealand which was acknowledged by the Tribunal at that time as at the complex end of the spectrum, and which was widely regarded as a test case, and where the award of costs was $16,500.173 It also makes a comparison with a case which had the longest hearing time (eight days) and where the award of costs was $22,000.[257] The Tribunal expressly took into account its awards in other cases. The principle of consistency does not require the Tribunal to make awards similar in quantum to previous cases without regard to the circumstances of this case. Nor does it require the Tribunal to make an award that equates to a similar rate per day of hearing. The cases the Tribunal hears vary widely in their complexity and170 At [78].171 At [81].172 At [82].173 Smith v Air New Zealand Ltd HRRT 37/02, 4 April 2006.significance. Complexity and significance are not accurately measured by the number of hearing days before the Tribunal.[258] This was without doubt at the high end of the complexity and significance spectrum. As our judgment shows, the claim raised a number of difficult issues andthe issues are of considerable significance to IDEA Services' clients. The issues wehad to grapple with were all issues before the Tribunal as well. The comparison with the award in Smith is not apt for the reason that the Tribunal gave – the actual costs of the defendant in that case were $60,000, whereas here they were over $385,000.[259] The Tribunal's approach was to look at what previous cases indicated was areasonable contribution to actual costs. This gave it a figure of 30 per cent of actual costs which in this case would give an award of $115,000. We consider that this approach was more likely to give an accurate comparison with other cases (providing actual costs were reasonable). We consider therefore that there was no error in this approach.[260] The Tribunal considered that this amount should be increased because of the need for two counsel. We are not sure whether the other cases involved two counsel. It appears that Smith did and that this was included in the 30 per cent average calculation which the Tribunal calculated. In any event, if the approach is to take a percentage of actual costs, the need for two counsel will be accounted for in the actual costs. We consider that in adding something for second counsel, the Tribunal was effectively double counting this factor. In this respect we consider the Tribunal erred.Were actual costs reasonable[261] The MOH submits that the Tribunal wrongly understood that thereasonableness of IDEA Services' actual costs was not challenged. It submitted to the Tribunal, and it submits to us, that costs should not be set by reference to the actual costs of a large commercial law firm. It says that if a party chooses to instruct counsel from a large commercial law firm, it cannot expect the other party to pay for the additional cost in so doing. It also submits that a reasonable contribution shouldbe assessed by reference to deemed reasonable costs (as the High Court scale does) and not by reference to actual costs.[262] We agree with IDEA Services that the Tribunal had express regard to the reasonableness of actual costs. In a footnote it compared the actual costs with theMOH's total costs of defending the matter, which were $220,000 calculated atCrown rates. We also agree with IDEA Services that the complexity and significance of the claim justified experienced counsel with special skill in human rights claims. Whether that counsel came from a large commercial law firm or the independent bar or elsewhere is beside the point providing the costs are reasonable for experienced counsel with special skill in human rights claims.[263] We also agree with IDEA Services that the 30 per cent of actual costs was one factor that the Tribunal took into account. Guidance was also provided by considering category 3C High Court costs. As calculated by the parties, the 3C scale gave a higher figure than the 30 per cent of actual costs calculation. This indicates that actual costs were reasonable.[264] The MOH also submits that awards of costs calculated with reference to a reasonable contribution of the actual costs charged by a large commercial law firm will put HRA claims out of reach of the citizen of ordinary means. It also submitsthat such awards are likely to have a chilling effect on the Director's decision to represent complainants and potentially to affect the budget of the Office of Human Rights Proceedings.[265] The Tribunal expressly considered this issue. In the end it considered that cost awards should not be tailored to provide the Director with a protection that the legislation did not confer. It also considered that awards of costs against a government agency would not necessarily be the same as awards of costs againstunsuccessful plaintiffs. We see no error of principle in the Tribunal's approach on this topic. Its view was not plainly wrong. We agree that costs in a particular casewill depend on its particular circumstances. The Tribunal's approach to costs in thiscase was appropriate.High Court scale costs[266] The MOH submits that the Tribunal was wrong to conclude that the High Court scale was a more appropriate guide than the District Court scale. It bases this submission on s 92Q of the HRA which limits the Tribunal's jurisdiction to awarddamages or any other remedy to awards or remedies that are within the District Court. We do not accept that the jurisdiction on awards or remedies dictates the level of costs that are appropriate in any given case before the Tribunal. It is the complexity and significance of the case which provides the better guidance.[267] The MOH submits that if High Court scale costs are to guide the Tribunal and if category 3C costs are appropriate that begs the question of why the matter is heard in the Tribunal in the first place. The MOH submits that costs awards made at thislevel by the Tribunal may inappropriately become a factor in a party's decision as towhether they seek to have the claim transferred to the High Court. We do not accept these submissions. The Tribunal is a specialist jurisdiction. It is well able to adjudicate on complex proceedings in its specialist area of expertise as is illustrated by such cases as Atkinson174 and Child Poverty Action Group Inc.175 Again it is the complexity and significance of the claim which makes category 3C the appropriate comparator.[268] The MOH submits that if category 3C costs are properly calculated, the amount should have been $135,975 and not $165,000. The difference is that IDEAServices' calculation included a step which only applies if a "trial does noteventuate". IDEA Services does not challenge this. We agree with the MOH that the Tribunal's award has apparently adopted IDEA Services' calculation withoutresolving the discrepancy in the two calculations. The Tribunal appears to have justified the use of the higher calculation because of the view it took of the MOH'sreluctance to resolve the concerns raised by IDEA Services. Given the error in IDEAServices' calculation we consider the Tribunal was in error in adopting the higherfigure.174 Atkinson v Ministry of Health (2010) 8 HRNZ 902 (HRRT).175 Child Poverty Action Group Inc v Attorney-General HRRT 41/05, 16 December 2008.Increased costs[269] The MOH submits that the Tribunal was wrong to increase costs for theMOH's approach to resolution of the matter. The MOH says that it did invite IDEA Services to meet to discuss its concerns. It also says that once IDEA Services filed its claim, IDEA Services refused to mediate. IDEA Services refers to the MOH's decision to decline IDEA Services' invitation to mediate prior to commencing the claim.[270] We do not consider it necessary to decide whether parties should or should not have sought to resolve matters prior to the claim being commenced. Ordinarily increased costs are appropriate for post proceeding conduct rather than events prior to the proceeding being commenced. In this case the Tribunal accepted that neitherparty's conduct could be criticised in relation to the conduct of the proceeding. We also note that s 92L(2)(c) is put in positive terms. That is, if a party has acted in a manner that facilitated the resolution of the issues then the Tribunal may take that into account. It does not say that if a party has acted in a manner that has not facilitated the resolution of the issues then that should be taken into account. Wetherefore conclude that the Tribunal was in error in finding that the MOH's conduct "should be taken into account as an upward pressure in the assessment of costs".176Conclusion[271] We consider that the Tribunal's award was too high because:(a) the Tribunal took into account second counsel when that was already accounted for in its 30 per cent of actual costs calculation;(b) the Tribunal took the upper boundary of High Court 3C costs as $165,000 when it was not;(c) we do not agree with the Tribunal's view that increased costs werewarranted for MOH's conduct.176 Idea Services v Attorney-General (No 3), above n 164, at [81].[272] We consider that the 30 per cent of actual (which the Tribunal accepted were reasonable) costs calculation was an appropriate one. It is slightly less than category 3C costs, but they are no more than a guide. We therefore quash the Tribunal'saward and substitute it with an award of $115,000.Costs on this appeal[273] IDEA Services has succeeded on the appeal to this court. We can indicate our preliminary view that it should have an award of costs on a category 3C basis. If the parties are unable to agree costs, they may submit brief memoranda (limited to no more than 3 pages) on the issues in dispute, within two months of this judgment (to allow for the Christmas break).Mallon J Ms J Grant MNZM Ms S Ineson QSMSolicitors:Crown Law, Wellington for the AppellantRussell McVeagh, Wellington for the Respondent