SMITH V AIR NEW ZEALAND LTD HC WN CIV-2005-485-2198

SMITH V AIR NEW ZEALAND LTD HC WN CIV-2005-485-2198 15 December 2008IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-2005-485-2198UNDER the Human Rights Act 1993 IN THE MATTER OF of an appeal against a decision of the Human Rights Review Tribunal pursuant to section 123(2) of the Human Rights Act 1993 BETWEEN VALERIE JOAN SMITH Appellant AND AIR NEW ZEALAND LIMITED Respondent Hearing: 28 August 2008 Appearances: R Hesketh, the Director of Human Rights Proceedings, for the appellant H Waalkens QC for the respondent Judgment: 15 December 2008 at 1.30pmRESERVED JUDGMENT OF THE COURTSolicitors: The Director of Human Rights Proceedings, P O Box 6751, Wellesley St, Auckland for the appellant (RHesketh@ohrp.org.nz). G Norton, Air New Zealand, Auckland, respondent (Counsel: A H Waalkens - waalkens@ quaychambers.co.nz) S A Bell, P O Box 6751, Wellesley Street, Auckland for the Human Rights Commission.CONTENTS Introduction......................................................................................................... [1]Background• Ms Smith's disability................................................................................. [6]• The supply of supplementary oxygen – a safety issue............................... [13]• How Air New Zealand supplies supplementary oxygen............................ [16]Ms Smith's claims ............................................................................................... [22]The statutory context.......................................................................................... [31]The Tribunal's decision• Central issue ............................................................................................. [36]• The training issue...................................................................................... [39]• Less favourable treatment – s 44(1).......................................................... [41]• Reasonable accommodation .................................................................... [44]• Costs.......................................................................................................... [50]Nature of this appeal .......................................................................................... [51]Overview of issues on appeal• Introduction............................................................................................... [55]• The McAlister decision.............................................................................. [59]• Application of McAlister to this appeal ................................................... [73]• Discrimination and disability more generally .......................................... [78]Section 44 – Did Air New Zealand discriminate unlawfully against Ms Smith in the way it responded to her need for supplementary oxygen?• What is relevant service? .......................................................................... [85]• The comparator group analysis ................................................................ [92]Section 52 ............................................................................................................. [116]The Director's appeal against the Tribunal's costs decision .......................... [124]Introduction[1] Ms Smith, the appellant, requires supplementary oxygen for health reasons when she flies. [2] In a decision given in September 2005, the Human Rights Tribunal held that Air New Zealand Ltd, the respondent, had – on the face of things – discriminated against Ms Smith in breach of s 44 of the Human Rights Act 1993 ("the HRA") as regards the supply of supplementary oxygen to her on domestic and international flights. The Tribunal then found that such prima facie unlawful discrimination was excepted by s 52 of the HRA. The Tribunal ordered the Director of Human Rights Proceedings to pay costs to Air New Zealand of $15,000. [3] Ms Smith now appeals against the Tribunal's finding that s 52 protected Air New Zealand's actions that would otherwise have breached s 44, and against the Tribunal's costs order. Air New Zealand cross-appeals against the Tribunal's decision that, on the face of things, it had discriminated against Ms Smith in breach of s 44. [4] Although Ms Smith is the appellant in these proceedings, with the agreement of both counsel, the hearing before us was conducted on the basis that we first heard Air New Zealand's challenge to the Tribunal's s 44 decision, followed by Ms Smith's challenge to the Tribunal's s 52 decision. In this judgment we consider those issues in that order. We then consider the appeal against the Tribunal's costs order. [5] Acting pursuant to s 92H of the HRA, the Human Rights Commission intervened and lodged written submissions for our consideration. The Commission was not, however, represented at the hearing of the appeal. The Commission accepted that the Tribunal had taken the right approach and reached the right decision as regards the question of unlawful discrimination under s 44. The Commission's submissions primarily addressed the issues that arose under s 52.BackgroundMs Smith's disability[6] Ms Smith suffers from a disability, as that term is defined in s 21(1)(a) of the HRA. Disability, as so defined, is a prohibited ground of discrimination. [7] Ms Smith was born with an incurable genetic condition known as Ehlers Danlos Syndrome ("EDS"), affecting tissues and muscles throughout the body. In Ms Smith's case, EDS led to her suffering from severe spinal and rib cage curvature from a young age. In turn, Ms Smith has had restricted physical mobility and lung capacity, and associated lung problems, all of her life. Her disability is therefore a serious one and this Court does not underestimate the difficult reality of the circumstances Ms Smith faces on a daily basis. [8] Up until 1997, however, Ms Smith was not aware she had oxygen problems. In 1997, Ms Smith, who works as a senior adviser with the Disability Services Directorate of the Ministry of Health, flew on United Airlines to a conference in Chicago on behalf of her employer. Ms Smith needed supplementary oxygen on each leg of those flights, for which she was required to pay US$75. Ms Smith became very unwell during that trip, and was hospitalised on her return to New Zealand. She was suffering from high CO2 levels. Those CO2 levels would appear to have been caused by the large volumes of oxygen she breathed in flight. [9] Following her discharge from hospital, Ms Smith required significant supplementary oxygen during the day and at night. As we understand matters, Ms Smith continues to use supplementary oxygen at night, in conjunction with a BiPap machine to assist her breathing. Ms Smith uses a concentrator machine as her oxygen source 1 .1 The Tribunal described these arrangements as involving Ms Smith: having a mask over her face, to which two machines are attached. One is about the size of a household dehumidifier. It takes air in and concentrates the oxygen that the air contains. The oxygen is then delivered to the face mask by a plastic tube. The second machine is much smaller. It is called a 'Bi-Pap' machine. The machine regulates the flow of oxygen to the plaintiff. Importantly, it also helps to deflate her lungs after each breath so that carbon dioxide does not build up. [contd. next page][10] The Tribunal recorded that when Ms Smith travelled away from home overnight she usually contacted the local district health board in the area to which she was travelling, in advance of her travels. She did so in order to arrange for the use of an oxygen concentrator owned by the district health board in the place she was going to. The Tribunal noted further that enquiries made by counsel for Air New Zealand suggested that practice amongst district health boards varied: some charged for the supply of equipment needed by travellers who require extra oxygen, others did not. [11] Before flying, Ms Smith also contacts her doctor to obtain a medical certificate which says that, in the doctor's assessment, she is safe to undertake the proposed flight. The certificate also states that Ms Smith will either be able to take care of her own meals, transfers, administration of medication and other needs in flight, or that she will be accompanied by someone who can assist her with those needs. The certificate in question is known as a MEDA (Medical Fitness for Air Travel) form. [12] Ms Smith continues to need supplementary oxygen when she flies. Ms Smith can also be seen as being disabled because of her reliance on the "remedial means" represented by that supply of supplementary oxygen to her (see s 21(1)(h) vi) HRA).The supply of supplementary oxygen – a safety issue[13] The Tribunal found that the provision of extra oxygen for use in flight gave rise to a number of significant safety concerns. Oxygen is volatile and highly combustible. In the presence of hydrocarbons, such as oils or grease, oxygen can ignite with just a small ignition source. Air New Zealand's evidence was that thereAll of this equipment is geared up to deliver oxygen to the plaintiff at the particular rate at which she requires it, namely 1 litre per minute. The evidence made it clear that her required rate for extra oxygen is low when compared to others who have need of oxygen support. The Bi-Pap machine is small enough for the plaintiff to be able to take it with her when she travels, although she does not need to use it on flights if she is going to be awake throughout the journey. The concentrator, however, is too big to be carried easily. It would certainly be impracticable to carry it in an aircraft cabin, much less use it there. ([15]-[17])was a significant presence of hydrocarbons in the form of lubricants on its planes, and that the risk of a pressurised oxygen cylinder being ruptured and exploding, or of a fire fuelled by leaking oxygen, was taken very seriously. The problems were not limited to compressed oxygen from cylinders. A discussion document and draft rule circulated in July 2004 by the Federal Aviation Administration ("the FAA") in the United States established risks associated with concentrators. [14] The Tribunal recorded that compressed oxygen was therefore treated as a dangerous good in flight. To allow a person to have access to supplementary oxygen Air New Zealand was required to comply with a number of national and international regulations. These included the Civil Aviation Act 1990 (NZ), New Zealand Civil Aviation Rules, the International Air Transport Association Resolution 700, and Dangerous Good Regulations, US Federal Aviation Regulations, and International Civil Aviation Organisation ("ICAO") Technical Instructions. [15] No detail as to the substantive content of those various regulations was mentioned by the Tribunal but Ms Smith did not contest Air New Zealand's assertion that these provisions constituted a restrictive set of rules. Those rules mean that, at least for international travel, extra oxygen in flight could only be provided from a source controlled by the airline and which meets the relevant management, supply and maintenance protocols. Nor was it suggested that those rules were in themselves a source of any human rights issues.How Air New Zealand supplies supplementary oxygen[16] Air New Zealand deals differently with the provision of supplementary oxygen on international and domestic flights. [17] On international flights, Air New Zealand itself supplies supplementary oxygen to meet passengers' pre-identified medical needs (i.e. not emergency oxygen). It does so because of the terms of international regulations, and the amount of oxygen that can be involved. Prior to around 1998, for long haul flights a large cylinder of about 3,000 litre capacity was used. The cylinder occupied the space ofabout two seats on a 767 aircraft and three seats on a 747 aircraft. Air New Zealand charged extra for the seats taken up by the oxygen cylinder. In 1998 Air New Zealand introduced much more compact oxygen concentrators, powered by aircraft electricity. A cost of US$75 per sector is charged by Air New Zealand. [18] The imposition of such a charge is common internationally. The Tribunal concluded, on the basis of evidence provided by Air New Zealand of international practices, that most (but not all) airlines offer extra oxygen for those who need it and many (like Air New Zealand) include an extra charge for doing so. Although the charges varied from airline to airline, the rate of US$75 was one recommended by the ICAO. [19] As discussed more fully at [28] and following, up until 2002 Air New Zealand had met passengers' medical needs for oxygen on domestic flights in a similar way. After that, Air New Zealand did not itself supply that oxygen; rather a passenger must obtain and pay for the oxygen and associated equipment from BOC Gas Limited ("BOC"). Those costs varied with the type of equipment required and time involved. Ms Smith said that the extra costs she incurred in late 2002 included, as described by the Tribunal: a) A delivery fee for transport of the equipment to and from the plaintiff's home, if she or her partner are unable to go to the BOC depot to pick it up or drop it off – around $20.00 each way; b) A cost of $21.81 per gas bottle ('size A'); c) An additional cost of $28.69 for the regulator/flow meter travel pack; d) (Possibly) a cost of $6.12 per bottle for filling the bottle – it was not clear to the Tribunal whether filling the bottle was charged for separately by BOC. In any event, the cost of filling would vary depending on bottle size and (perhaps) the number of bottles required; ande) An $18.00 annual BOC administration fee. [20] Notwithstanding its general policy as regards the provision of supplementary oxygen on flights within New Zealand, Air New Zealand does itself provide such oxygen to international passengers connecting from overseas flights with flights in New Zealand. Air New Zealand appears to accept that it is not practicable for such persons to themselves organise a supply of supplementary oxygen from BOC prior to flying. [21] In the context of the Tribunal's acknowledgement that the case was not only about Ms Smith's experience, but about all passengers who required additional in- flight oxygen when flying with Air New Zealand, the Tribunal expressed – based on Air New Zealand's evidence – an assessment of the extent of that requirement. Internationally, it noted Air New Zealand's evidence in respect of 2003 that showed around 170 passengers asked for extra oxygen on international journeys. That would have equated to somewhere between 250 and 300 international "sectors" every year where oxygen was requested. Domestically, in 2003 65 passengers used the BOC system for domestic flights. The Tribunal concluded that that was likely to equate to approximately 165 domestic sectors for which oxygen was required. These figures could be compared to Air New Zealand's evidence of an overall number of some 450 flights per day.Ms Smith's claims[22] These proceedings have their origins in Ms Smith's experiences following her 1997 trip to the USA. In December 1999, Ms Smith flew with Air New Zealand from Wellington to Melbourne using air points earned on her United Airlines flights. Subsequent to booking that trip, Ms Smith was charged an additional US$150 (US$75 per sector), or NZ$298, for the supply of supplementary oxygen. [23] Ms Smith complained to the Human Rights Commission about that charge before she flew to Australia in December 1999. Further, and as a result of her experience on her flight to Australia, Ms Smith had concerns about the way in whichher oxygen needs were met, both as regards the equipment used and the support she received from Air New Zealand staff. [24] In part because of Ms Smith's complaint to the Human Rights Commission, and in part because of other concerns about the delivery of extra oxygen in flight, in 2000 Air New Zealand initiated a project to address a number of the needs relating to the carriage of "medical passengers". That project was wide-ranging but included the question of the provision of extra oxygen in flight. Ms Smith was invited to join the working party for that project, and did so. [25] Following significant amendments to the HRA on 1 January 2002, at which time Ms Smith's complaint was still being considered by the Commission, the Director agreed to provide Ms Smith with representation pursuant to s 90 HRA. [26] A notice of proceedings and accompanying statement of facts were filed on her behalf with the Tribunal in August 2002. [27] By way of relief, the Director sought declarations that Air New Zealand had breached s 44(1)(b) by charging Ms Smith for the supply of oxygen she required in flying with Air New Zealand because of her disability, and by failing to provide appropriately trained staff to assist her with the equipment that was necessary on such flights. Further, restraining orders were sought in very general terms to prevent Air New Zealand "from repeating a breach of the Act, by engaging in any similar conduct". Damages in the sum of $3,298 were sought: $298 to reimburse the costs charged to Ms Smith on the Melbourne flight, and $3,000 for humiliation, loss of dignity and injury to feelings. Finally, an order was sought requiring Air New Zealand to undertake training of staff. [28] In October 2002, after the commencement of these proceedings and as a result of the project referred to at [24], Air New Zealand introduced a new system for the delivery of in-flight oxygen support for domestic flights. In broad terms, Air New Zealand stopped supplying either the equipment or the oxygen itself. Instead, an exclusive supply arrangement with BOC was established. Passengers flying within New Zealand are required to contact BOC and ensure that the equipment isavailable and that what is provided is capable of delivering oxygen at the particular rate required by the passenger in question. The passenger must also uplift the equipment from BOC and return it to BOC after travel. The passenger pays all the associated costs. [29] One consequence of the changes in October 2002 was that cabin crew for domestic flights were instructed that, although they could help passengers to stow the oxygen equipment on board, they were not to assist in managing the extra supply of oxygen in-flight or adjusting the flow of oxygen. Since October 2002 it has explicitly been the passenger's responsibility to administer the amount of oxygen needed for themselves or, if they were not capable of doing that, to arrange for someone to accompany them to do so. It was not made clear to us whether Air New Zealand took the same approach to connecting international travellers who require supplementary oxygen. [30] Although Ms Smith participated in Air New Zealand's working group, she did not agree with the outcome of that process. Notwithstanding her concerns, in October 2002 (and therefore following the commencement of these proceedings) Ms Smith agreed to do a trial run of the new domestic system on a trip she had to take from Wellington to Invercargill via Christchurch. She found that experience traumatic. This, no doubt, confirmed her commitment to these proceedings, particularly as regards Air New Zealand's policy.The statutory context[31] It is helpful to set out the provisions of ss 44 and 52 of the HRA in full. Section 44 reads:44 Provision of goods and services(1) It shall be unlawful for any person who supplies goods, facilities, or services to the public or to any section of the public— (a) To refuse or fail on demand to provide any other person with those goods, facilities, or services; or (b) To treat any other person less favourably in connection with the provision of those goods, facilities, or services than would otherwise be the case,—by reason of any of the prohibited grounds of discrimination. (2) For the purposes of subsection (1) of this section, but without limiting the meaning of the terms "goods", "facilities", and "services" in that subsection, the term facilities includes facilities by way of banking or insurance or for grants, loans, credit, or finance. (3) Where any club, or any branch or affiliate of any club, that grants privileges to members of any other club, branch, or affiliate refuses or fails on demand to provide those privileges to any of those members, or treats any of those members less favourably in connection with the provision of those privileges than would otherwise be the case, by reason of any of the prohibited grounds of discrimination, that club, branch, or affiliate shall be deemed to have committed a breach of this section. (4) Subject to subsection (3) of this section, nothing in this section shall apply to access to membership of a club or to the provision of services or facilities to members of a club.[32] Section 52 reads:52 Exception in relation to disabilityIt shall not be a breach of section 44 of this Act for a person who supplies facilities or services— (a) To refuse to provide those facilities or services to any person if— (i) That person's disability requires those facilities or services to be provided in a special manner; and (ii) The person who supplies the facilities or services cannot reasonably be expected to provide them in that special manner; or (b) To provide those facilities or services to any person on terms that are more onerous than those on which they are made available to other persons, if— (i) That person's disability requires those facilities or services to be provided in a special manner; and (ii) The person who supplies the facilities or services cannot reasonably be expected to provide them without requiring more onerous terms[33] Section 44 – as relevant here – makes it unlawful for a person who supplies services to the public, or to any section of the public, to treat any person less favourably in connection with the provisions of those services than would otherwise be the case by reason of any of the prohibited grounds of discrimination. To find an infringement of s 44 would therefore appear to require the identification of three matters: a) That a service is being supplied to the public, and what that service is;b) That a person has been treated less favourably in connection with the provision of that service than would otherwise be the case; and c) That such less favourable treatment occurred by reason of a prohibited ground of discrimination. [34] Section 52 provides that it is not a breach of s 44 for a supplier of services: a) To refuse to provide services to any person if that person's disability requires those services to be provided in a special manner, and the supplier "cannot reasonably be expected to provide them in that special manner" (s 52(a)); or b) To provide those services to any person on more onerous terms than apply to other persons if that person's disability requires those services to be provided in a special manner and the supplier "cannot reasonably be expected to provide them without requiring more onerous terms" (s 52(b)). [35] Section 52 therefore provides a defence to what would otherwise be a breach of s 44. The parties referred to this as the "reasonable accommodation" defence. That is, the establishment of the defence involves an assessment of whether action to accommodate a person's disability can "reasonably be expected", either at all, or only on more onerous terms.The Tribunal's decisionCentral issue[36] In the opening paragraphs of its decision, the Tribunal identified the central issue in the following terms:When Air New Zealand requires the plaintiff to organise and pay for her own oxygen support for any given flight or when it asks her to contribute to the costs of providing oxygen support when supplied by it, does it thereby discriminate against her in an unlawful way because of her disability? (at [3])[37] That issue reflects the fact that, notwithstanding the breadth of the orders that had been sought on behalf of Ms Smith, Mr Hesketh had identified the issues before the Tribunal in the following terms: a) Whether, when flying domestically, Ms Smith should be required by Air New Zealand to organise the supply of extra oxygen equipment from a third party; b) Whether, when flying domestically or internationally, Ms Smith should be required by Air New Zealand to pay for the use of extra oxygen equipment on board an aircraft; and c) The extent to which Air New Zealand aircrew should be trained in the use of equipment needed to supply extra oxygen. [38] It was on that basis that the Tribunal considered Ms Smith's case.The training issue[39] The Tribunal dealt with the "training issue" first. It found that it had not been provided with any satisfactory evidence to demonstrate that there was any shortcoming in the training programmes run by Air New Zealand for its cabin crews. It concluded there was no sufficient foundation in the evidence it had heard to justify any generalised conclusions about, much less criticism of, the way in which Air New Zealand trained its cabin crew. The Tribunal therefore declined Ms Smith's application as regards the issue. [40] There is no appeal as regards that part of the Tribunal's decision. We do not refer to that issue again.Less favourable treatment – s 44(1)[41] The Tribunal then dealt with the "less favourable treatment" issue. Very much in summary, the Tribunal analysed that issue in the following terms:a) Difference was an essential element of unlawful discrimination. That involved a comparison. The Tribunal had to compare the way in which Ms Smith was treated by Air New Zealand with the way in which people without her disability were treated. b) For Ms Smith, the argument was that Ms Smith, a disabled person, should be able to travel for a particular fare charged by Air New Zealand to the public on terms that were no less favourable than would apply if she were not disabled. Everyone else who bought the fare was supplied by Air New Zealand with the oxygen they needed during flight. They did not have to pay a supplement or arrange for their own supply of oxygen. Not so for Ms Smith. She was therefore treated less favourably, because of her disability, than others who did not require extra oxygen. c) For Air New Zealand, the argument was that no one expected an airline to provide medication for illnesses or disabilities of passengers, much less to administer that medication. Ms Smith's supplementary oxygen was in the nature of a medication. Therefore, by charging Ms Smith an additional amount for the supply of oxygen, Air New Zealand is treating her just like everyone else. Moreover, supplementary oxygen is not integral to the air travel service that Air New Zealand ordinarily provides. It is simply a facility which Air New Zealand chooses, but cannot be compelled, to make available. d) The Tribunal came to the conclusion that the Director was right to say that an integral part of the air travel service Air New Zealand supplied to the public was the oxygen that its passengers needed when at altitude to maintain life and health. If that were not so, people would not be able to travel by aeroplane, certainly not at high altitude. Given that other services such as check-in, baggage handling and the like were all integral parts of the service of air travel, it was difficult to see how or why the provision of oxygen that was essential for flying could be seen as a separate "facility" and not an essential partof the service. The Tribunal was, therefore, persuaded that passengers who must either pay a supplement, or go to the trouble of supplying some part of their own oxygen requirements, were treated less favourably by Air New Zealand than those who did not have those needs. [42] In what we conclude was a consideration that carried some weight with the Tribunal, the Tribunal noted (at [106]) that to approach the matter in the way Air New Zealand argued for would be "to accept the legal consequence that a flat refusal to carry passengers such as [Ms Smith] would be legitimate." The Tribunal was not prepared to accept that the effect of the HRA was that, because of her condition, Air New Zealand was free to refuse to carry Ms Smith. [43] The Tribunal went on to reason as follows:Nor do we think that it can ever be a sufficient answer to a claim under s44 of the Act to say that there is no less favourable treatment because, although there are differences in the treatment of a disabled person, the only reason for the difference is the disability. To accept such an argument would be to undermine the legislation in a potentially significant way. The obvious purpose of these provisions in the Act is to see that, despite differences of treatment that are necessitated by the disability, the service provided to all should be the same irrespective of disability – unless and only to the extent the service provider cannot reasonably be expected to provide the service in the special way demanded by the disability without imposing more onerous terms. For these reasons, we are persuaded that in providing air travel services to the public, Air New Zealand treats those who need extra oxygen in flight – i.e., in addition to that which is needed by passengers who do not have the plaintiff's kind of disability – "less favourably" (within the meaning of those words in s 44(1)(b) of the Act) than others who do not have the plaintiff's kind of disability. (at 107 and 108)Reasonable accommodation[44] The Tribunal went on to consider the question, raised by s 52, as to whether Air New Zealand could reasonably be expected to supply its services without requiring more onerous terms. At [115] the Tribunal put that issue in the following way:In the present case we are concerned with the provision of oxygen to people who travel by air. The plaintiff's disability requires that part of the service supplied by Air New Zealand must be provided to her in a special manner (either from a gas bottle or a concentrator). The real question is whether it is unreasonable to expect Air New Zealand to provide either of those facilities without requiring more onerous terms.[45] The Tribunal answered that question in favour of Air New Zealand. As regards domestic air travel it recorded the following reasons (in summary): a) The individual needs of each passenger who requires extra oxygen in flight are peculiar. That was not a question of cost, but of passengers' safety. The Tribunal did not think Air New Zealand could reasonably be expected to provide a service which responded to, and ultimately took responsibility for, the individual needs of each passenger who required extra oxygen in flight. b) The Tribunal did not see the position as being different from the passenger whose disability demanded they be accompanied by someone to support them or where there was a need to stretch over more than one seat. It was difficult to accept that the airline "must provide the facilities required in those cases without charging for them in an appropriate way". c) Further, the Tribunal accepted the substantial body of evidence given by Air New Zealand concerning the way in which the BOC solution had been arrived at. Whilst not to Ms Smith's liking, the Tribunal was satisfied that there had been a process of thoughtful consultation and that the solution represented a responsible (and reasonable) reaction to the many different influences and factors that had to be taken into account. The Tribunal saw the BOC arrangements as "empowering" the disabled. d) Air New Zealand's responsibility for ensuring safety meant that it seemed to the Tribunal not only reasonable, but absolutely inevitable, that Air New Zealand had to control what kind of equipment could beused and how it was to be packaged and made available. The solution arrived at by Air New Zealand made good sense. [46] As regards international travel, the Tribunal referred to the evidence provided by Air New Zealand in relation to the costs involved. Although it had some difficulties with the evidence (an issue which was discussed on appeal and to which we return), the Tribunal concluded that the supply of extra oxygen for international flights required Air New Zealand to incur significant extra costs it would not suffer if the oxygen were not supplied. Further, there was no sufficient basis on the evidence it had heard to find that the US$75 charge recovered anything more than the real cost of providing extra oxygen and, on the contrary, the high probability was that the charge recovered only a small fraction of the real cost of providing the extra oxygen. Air New Zealand could not reasonably be expected to provide extra oxygen for passengers who needed it on international flights without charging the US$75 supplement. [47] The Tribunal concluded that the test in New Zealand was not the "undue hardship" test argued for by Mr Hesketh, based on the Canadian decision of British Columbia (Superintendent of Motor Vehicles) v British Columbia (Council of Human Rights) [1999] 3 SCR 868 (the "Grismer" case). The Tribunal did record, however, that if the test in New Zealand were that of "undue hardship" then it would have agreed that the evidence for Air New Zealand did not cross that threshold (at [125]). [48] The Tribunal concluded that this situation was exactly the type of situation that ss 44 and 52 of the Act were intended to cover. It did so in the following terms (at [140]):In order for the plaintiff to be able to use its air travel services, Air New Zealand has to supply the oxygen that she needs in a special manner. But it cannot do so without incurring extra costs. In another case, the special manner in which a service has to be provided may not involve extra cost, or the extra cost may not be so great as to justify more onerous terms such as an additional charge. But in this case the extra cost is one that, in our assessment, Air New Zealand cannot reasonably be expected to suffer without looking to the passenger for some contribution. And, despite the lack of precision in the evidence, we are satisfied that the extra US$75 that is charged is highly unlikely to be an over-recovery by Air New Zealand – tothe contrary, the charge is almost certainly a significant under-recovery of the extra costs.[49] Accordingly, Ms Smith's claim was dismissed.Costs[50] Air New Zealand subsequently applied for an award of costs in its favour. The Tribunal concluded that Air New Zealand was, in general terms, to be regarded as the party which had succeeded. At the same time, the finding of prima facie discrimination by it under s 44(1) justified a one-third reduction in the costs that would otherwise have been awarded in its favour. The Director's argument that the costs to be awarded to Air New Zealand should be further adjusted to take account of the fact that this was a test case did not persuade the Tribunal. The Tribunal awarded costs in favour of the defendant in the sum of $15,000, being two-thirds of the $22,500 that the Tribunal would otherwise have awarded.Nature of this appeal[51] Section 123(5) of the Act provides that, in determining any appeal under s 123, the High Court may confirm, modify or reverse the order or decision appealed against, or any part of that order or decision, and exercise any of the powers that could have been exercised by the Tribunal in the proceedings to which the appeal relates. As accepted by both counsel, this is – in effect – an appeal by way of re- hearing. [52] Section 105(1) requires the Tribunal, and therefore the High Court, to act according to the substantial merits of the case, without regard to technicalities. Pursuant to s 105(2), in exercising its powers and functions the Tribunal, and therefore the High Court, must act: a) in accordance with the principles of natural justice; b) in a manner that is fair and reasonable; andc) according to equity and good conscience. [53] This appeal is to be conducted on the basis of the record of the proceedings before the Tribunal. Mr Waalkens, for Air New Zealand, and Mr Hesketh, for Ms Smith, generally accepted the Tribunal's factual findings. It was largely on the basis of the Tribunal's decision as regards those matters of fact that this appeal was conducted. We were not referred, to any great extent, to the evidence placed before the Tribunal nor to the transcript of its four day hearing. [54] We are therefore, in this appeal, very much concerned with the question of whether the Tribunal was right as a matter of law to reach the conclusions it did as regards the parties' claims under each of ss 44 and 52.Overview of issues on appealIntroduction[55] The parties argued the appeal, in terms of basic legal issues, as it had been argued before the Tribunal. That is, the fundamental issues were, first, whether Air New Zealand had discriminated unlawfully against Ms Smith under s 44(1)(b) by treating her "less favourably" by reason of her disability. Further, and on the basis that Air New Zealand had treated Ms Smith less favourably, had the Tribunal been correct in finding that Air New Zealand could not reasonably be expected to have provided services to Ms Smith other than on the basis of that less favourable basis (s 44(1)(b)), or, in other words, "more onerous" terms (s 52(b)). [56] Since the Tribunal released its decision on Ms Smith's claim, the Court of Appeal has, in Air New Zealand Ltd v McAlister [2008] NZCA 264, considered a claim asserting unlawful discrimination on the grounds of age in the employment context, as prohibited by s 104 of the Employment Relations Act 2000 ("the ERA").McAlister had a considerable impact on the way the appeal was argued before us, in particular as regards what is known as the "comparator group" analysis – that is, the analysis of whether Ms Smith had, by reason of her disability, been treated "less favourably than would otherwise be the case".[57] Very much in reliance on McAlister, Mr Waalkens, who acted for Air New Zealand in that case also, argued that the Tribunal had failed to recognise the correct comparator group and had therefore wrongly concluded that Air New Zealand had discriminated against Ms Smith in breach of s 44. Mr Hesketh, whilst acknowledging McAlister's obvious authority, submitted that some care needed to be taken in applying McAlister to cases involving discrimination on the grounds of disability. In disability discrimination cases, he said, rigid emphasis on a comparator group may not be appropriate. [58] We accept Mr Waalken's basic proposition that the issues raised by this appeal do need to be considered in light of McAlister. We will, therefore, refer toMcAlister in some detail, before considering a number of more general issues Mr Hesketh raised as regards discrimination on the grounds of disability.The McAlister decision[59] Mr McAlister was a senior Air New Zealand pilot. Once he turned 60, he became subject to an international aviation rule called the "Rule of 60". The Rule of 60 is that commercial pilots cannot operate as pilots-in-command ("PIC") on many international flights – in Air New Zealand's case, particularly when flying through air-space controlled by the USA. Since Mr McAlister could not operate as a PIC, neither could he retain his position as a flight instructor. As a result, he was effectively demoted by Air New Zealand from his position as a 747-400 flight instructor. [60] Mr McAlister brought a personal grievance under s 103(1)(c) of the ERA alleging discrimination on the ground of age contrary to s 104(1) of that Act. Section 104(1)(a) of the ERA provides that an employee is discriminated against for the purposes of s 103(1)(c) if his or her employer: by reason directly or indirectly of any of the prohibited grounds of discrimination specified in section 105, (a) refuses or omits to offer or afford to that employee the same terms of employment, conditions of work, fringe benefits, or opportunities for training, promotion and transfer as are made available for other employees of the same or substantially similarqualifications, experience, or skills employed in the same or substantially similar circumstances; or (b) dismisses that employee or subjects that employee to any detriment, in circumstances in which other employees employed by that employer on work of that description are not or would not be dismissed or subjected to such detriment; (c) retires that employee, or requires or causes that employee to retire or resign.[61] Section 104 is expressed to be subject to s 106 (s 104(3)). Section 106 provides a number of exceptions to s 104, the most important of which, for present purposes, concerns s 30 of the HRA. Section 30 deals with exceptions in relation to age. Section 30(1) creates an exception to the prohibition on discrimination in employment in s 22(1)(a) and (d) of the HRA where age is a "genuine occupational qualification" for the relevant position or employment. [62] As can be seen, discrimination is identified in subsections (a) and (b) of s 104(1) by reference to a comparison between the way the employer treats the complainant employee and the way the employer treats "other employees". By contrast, s 104(1)(c) does not. The need to make such a comparison gave rise to the main issue in McAlister, namely, the correct approach to the identification of those "other employees". This is termed the "comparator group" issue. [63] The Court of Appeal considered the comparator group issue at some length inMcAlister. We think the following propositions can be drawn from McAlister on this issue: a) In considering issues of discrimination it is necessary to pay close attention to the relevant statutory framework. b) A comparator group analysis is not always necessary to determine whether an aggrieved person has been discriminated against. Whether such an approach is required may be determined by reference to the relevant statutory provisions. Close attention must be paid to the statutory language when identifying the comparator group.c) The usual approach to identifying the comparator group is to do so by reference to the circumstances of the aggrieved person at the time of the alleged discrimination absent the prohibited ground of discrimination. The material difference between the comparator group and aggrieved individual will be that the latter will have the characteristic (of age or gender, for example) that constitutes the prohibited ground of discrimination. d) There may be circumstances, however, where the comparator group needs to be constructed from persons who reflect the alleged prohibited ground of discriminate. In McAlister, the Court gave the example of the situation, in a case under s 104 of the ERA, where age was a genuine occupational qualification. e) The choice of comparator group (or the attribution to it of relevant characteristics or circumstances) will often be critical, and determine the question not only of differential treatment but also of causation. [64] In reaching those conclusions, the Court placed some emphasis on the similar approach taken by the House of Lords in Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] 2 All ER 26, and by the High Court of Australia inPurvis v New South Wales (2003) 217 CLR 92. Since McAlister was decided, the House of Lords has taken a similar approach to that of the Court of Appeal both on the question of the comparator group analysis and on the question of causation:Mayor & Burgesses of the London Borough of Lewisham v Malcolm [2008] UK HL 43. [65] More generally, the Court identified at [31] the issues that arose in theMcAlister appeal as being (in each case by reference to the relevant sections of the ERA and the HRA): a) Identification of a comparator group for the purposes of s 104(1)(a) and (b);b) Application of the "by reason directly or indirectly of a prohibited ground of discrimination" requirement in s 104(1); and c) Application of the "genuine occupational qualification" exception in s 30. [66] The Court acknowledged that there was some artificiality in considering those issues individually as there was overlap between them. It considered that approach necessary, however, not only to do justice to the detailed submissions it had heard, but as it was in any event the "orthodox approach in such cases". [67] On the question of the particular comparator group in McAlister, the Court of Appeal concluded that the group with which Mr McAlister was to be compared should comprise senior B747 pilots holding flight instructor positions who were less than 60 years of age and who were employed on individual contracts. The critical question, however, was "whether the inability to act as a PIC on a majority of B747 flights (for reasons other than age) should be attributed to the pilots in the comparator group". [68] Having regard to Shamoon and Purvis, the Court held that this feature of inability to act as a PIC was part of the relevant circumstances under s 104:[T]o reach a true comparison of whether the appellant has discriminated against the respondent in terms of s 104(1)(b) it is necessary to place the comparator in the same circumstances as the aggrieved person, except for the allegedly discriminatory factor. This permits a focus on the true role of that factor. In this case there are two suggested reasons for the detriment suffered by the respondent – age (the prohibited ground of discrimination) and the flight restrictions that prevent pilots from acting as PICs in certain jurisdictions. The existence of flight restrictions (although not on account of age) must be reflected in the comparative analysis, through the identification of the comparator group. If this factor were to be omitted, the comparator group would consist of pilots who suffered from no operational restrictions, and they would be compared to a pilot who did suffer from an operational restriction. By ignoring a crucial operational difference, the comparison would not be a meaningful one. (at [90])[69] The Court went on to note that it was not "strained" to attribute to the comparator group an inability to fly in US airspace for reasons other than age.[70] Given that the existence of such flight restrictions would have resulted in any pilot being demoted, the Court concluded that Mr McAlister had not been discriminated against on the grounds of age. [71] We note that the Supreme Court has granted Mr McAlister leave to appeal the Court of Appeal's decision (McAlister v Air New Zealand SC [2008] NZSC 76). The approved ground of appeal is: a) Did the demotion of the appellant from his position as a B747-000 Flight Instructor to one of First Officer occur by reason of a prohibited ground of discrimination, namely his age, in terms of s 104(1)(a) or (b) of the Employment Relations Act? [72] As at the date of this judgment, that appeal has not been heard. Whilst therefore we proceed on the basis of the Court of Appeal's decision in McAlister, it would appear that the Supreme Court will be reconsidering the key issues discussed in that case. Application of McAlister to this appeal[73] In our view, taking the approach suggested by McAlister to the question of whether there has been unlawful, less favourable treatment by Air New Zealand in Ms Smith's case gives rise, by reference to the combined effect of ss 44 and 52, to the following three issues: a) Identification of the comparator group (if required) for the purpose of s 44(1)(b) and the assessment of the presence, or otherwise, of "less favourable" treatment. b) Application of the "by reason of any of the prohibited grounds of discrimination" requirement in s 44(1).c) Application of the "service required to be provided in a special manner and supplier cannot reasonably be expected to provide without requiring more onerous terms" exception in s 52(b) (ii). [74] In addition, and not an issue in McAlister, is the question of the service offered to Ms Smith by reference to which this analysis is to be undertaken. [75] We will first consider the issues of the correct categorisation of the "service" involved. We will then consider issues relating to the comparator group, and to questions of causation – that is, the "by reason of" analysis. Those matters go to whether, in terms of s 44, Air New Zealand discriminated unlawfully against Ms Smith. We then consider the s 52 defence. [76] As the Court of Appeal recognised in McAlister, there is a degree of artificiality involved in this type of sequential analysis. As will become apparent, for example, the question of the definition of the service involved could, by itself, decide the discrimination question. In light of McAlister, however, we think it is necessary to analyse the issues separately. [77] Before doing so, however, it is appropriate to consider a number of issues relating to discrimination and disability more generally.Discrimination and disability more generally[78] It was accepted by both Mr Hesketh and Mr Waalkens that this appeal gave rise to difficult issues, particularly relating to the way in which the HRA deals with discrimination on the grounds of disability. Those difficulties are well illustrated in a trio of cases from the Commonwealth's highest Courts dealing with these issues. Those decisions (in chronological order) are the decision of the Canadian Supreme Court in Eaton v Brant Country Board of Education [1997] 1 SCR 241, the decision of the High Court of Australia in Purvis, and the very recent decision of the House of Lords in Borough of Lewisham v Malcolm.[79] In this context, Mr Hesketh referred the Court to the special status of human rights in anti-discrimination jurisprudence and the need, particularly where discrimination by reference to disability is being considered, to take a non-technical and less rigid approach than that proposed by the appellant in reliance on McAlister. He referred us to the following propositions which appear in Eaton v Bryant in the judgment of Pinker J, who spoke for the Court (at [67]):The principal object of certain of the prohibited grounds is the elimination of discrimination by the attribution of untrue characteristics based on stereotypical attitudes relating to immutable conditions such as race or sex. In the case of disability, this is one of the objectives. The other equally important objective seeks to take into account the true characteristics of this group which act as headwinds to the enjoyment of society's benefits and to accommodate them. Exclusion from the mainstream of society results from the construction of a society based solely on "mainstream" attributes to which disabled persons will never be able to gain access. Whether it is the impossibility of success at a written test for a blind person, or the need for ramp access to a library, the discrimination does not lie in the attribution of untrue characteristics to the disabled individual. The blind person cannot see and the person in a wheelchair needs a ramp. Rather, it is the failure to make reasonable accommodation, to fine-tune society so that its structures and assumptions do not result in the relegation and banishment of disabled persons from participation, which results in discrimination against them. The discrimination inquiry which uses "the attribution of stereotypical characteristics" reasoning as commonly understood is simply inappropriate here. It may be seen rather as a case of reverse stereotyping which, by not allowing for the condition of a disabled individual, ignores his or her disability and forces the individual to sink or swim within the mainstream environment. It is recognition of the actual characteristics, and reasonable accommodation of these characteristics which is the central purpose of s 15(1) in relation to disability.[80] Similar comments are, we acknowledge, to be found elsewhere: a) In Purvis, McHugh and Kirby JJ (dissenting) said at paragraph 86:Disability discrimination is different from other types of discrimination, such as sex or race discrimination, in that its elimination is more likely to require affirmative action than is the case with sex and race discrimination. Disability discrimination is also different from sex and race discrimination in that the forms of disability are various and personal to the individual people while sex and race are attributes that do not vary. The elimination of discrimination against people with disabilities is not furthered by "equal" treatment that ignores their individual disabilities.b) Similarly, Baroness Hale (also dissenting) recently commented along similar lines in Borough of Lewisham (at [74]):if the object of the disability discrimination legislation is to "level the playing field", to enable disabled people to do things that they otherwise would not be able to do, then simply ignoring their disability and asking that they be treated in exactly the same way as non-disabled people will not do.[81] In McAlister, the Court had, albeit in a different context, acknowledged the potentially discriminatory effect of apparently equal treatment. It did so in commenting on the proper interpretation of s 104(1):There is a question as to the reason for the inclusion of the word "indirectly" in the phrase "by reason directly or indirectly". Mr Harrison QC for the respondent said that it is included simply to focus the inquiry on causation and to render inappropriate any subjective approach. In our view, it was intended to refer to the concept of indirect discrimination. Indirect discrimination occurs where apparently neutral requirements or standards operate in a disproportionately negative way in respect of particular groups (such as women or persons of particular ethnic or racial backgrounds). Height restrictions are often given as an example (see Mize "Indirect Discrimination Reconsidered" [2007] NZ Law Review 27 at 28). (at [17](b))[82] Reflecting, in our view, the approach taken in Eaton and argued for by the minorities in Purvis and Borough of Lewisham, Mr Hesketh argued that the combined effect of s 44 and s 52 was to require service providers (who provide services to the public) to provide such services in a special manner to accommodate disabled persons, unless it was unreasonable for them to do so. Moreover, we think it is fair to say that the Director saw the focus of this case as being very much on s 52, and whether Air New Zealand could establish that it could not reasonably be expected to accommodate Ms Smith's need for supplementary oxygen at its own cost. [83] In our judgment, however, the approach in McAlister first requires consideration of whether the prohibition against less favourable treatment is breached prior to a consideration of whether any differential treatment constitutes reasonable accommodation. We do not think that the Court can, without undertaking the comparator group exercise in a manner consistent with McAlister, move directlyto the question of reasonable accommodation. With reference to the statutory context, s 52 is expressed to create an exception for conduct that would otherwise be unlawful under s 44. We do not think, therefore, that s 52 can be regarded as imposing, in and of itself, a duty to reasonably accommodate. [84] This may be distinguished from approaches taken in other jurisdictions. For example, s 21 of the Disability Discrimination Act 1955 (UK) imposes a positive duty on a service provider to make adjustments to practices, policies or procedures that make it impossible or unreasonably difficult for disabled persons to make use of services. The duty is to "take such steps as it is reasonable" "in order to change that practice, policy or procedure so that it no longer has that effect". Further, s 19(1)(b), which makes it unlawful for a provider of services to discriminate against a disabled person, specifically provides that failure to comply with the duty imposed by s 21(1) is, in and of itself, unlawful discrimination. We do not think that the relationship between ss 44 and 52 can be considered to be of equivalent effect. As we comment below, we think the presence of s 65 of the HRA, which deals explicitly with indirect discrimination, is significant for these issues.Section 44 – Did Air New Zealand discriminate unlawfully against Ms Smith in the way it responded to her need for supplementary oxygen?What is the relevant service?[85] In our judgment, and notwithstanding the Tribunal's reference at one point to a service of the provision of supplementary oxygen, we think the basis upon which the Tribunal reached its decision was that the relevant service was the provision of flight services, or the service of air travel. That it did so is reflected in the Tribunal's more general conclusion on differential treatment in para [108] as set out above (at [43]). We think that is the correct categorisation. [86] We reach that conclusion as a matter of common sense, and also in reliance on the guides to interpretation provided by s 106 of the HRA. Put very simply, the question for Ms Smith was whether Air New Zealand discriminated unlawfully against her in the way it responded to her need for supplementary oxygen to enableher to fly with Air New Zealand. The service in question is therefore the provision to members of the public of the general service of air travel. [87] In his written submissions, Mr Waalkens argued that the Tribunal had been wrong to conclude that Air New Zealand provided the service of additional oxygen. Rather, it was his argument that it provided air transport services generally. At the hearing of the appeal, however, Mr Waalkens appeared to accept the Tribunal's finding that, in its international and long haul flights, as well as on domestic flights for connecting international travellers, Air New Zealand did provide that service. In that context, it was his argument that – as regards the provision of that service – Air New Zealand treated all persons who needed that service the same. There was, therefore, no discrimination. [88] As regards Air New Zealand's domestic flights, Mr Waalkens argued that no service was in fact provided by Air New Zealand and, therefore, by definition s 44(1) could not apply. [89] We acknowledge that Mr Waalkens made these arguments very much to supplement his central proposition, on the correct construction of the comparator group. In our judgment, however, in a case under s 44 also involving – as here – a potential issue of reasonable accommodation under s 52, it does not seem appropriate to define the service involved by reference to the arrangements which, quite properly, are identified as constituting the accommodation. As the accommodation is offered to the party allegedly discriminated against and not others, by definition the service would also have only been so offered. We therefore agree with Mr Hesketh that to define Air New Zealand's international service in the way suggested by Mr Waalkens would run the risk of defining the potential issue of discrimination out of existence. [90] Similarly, we think it artificial to analyse the issue – in the domestic context – on the basis that, as Air New Zealand does not provide oxygen except as noted for connecting international travellers, no service is involved.[91] As noted, we therefore conclude that the service at issue here is the provision of the service of air travel by Air New Zealand.The comparator group analysis[92] Section 44(1)(b) of the HRA makes it "unlawful" to "treat any other person less favourably in connection with the provision of services than would otherwise be the case by reason of any of the prohibited grounds of discrimination". [93] The words "than would otherwise be the case by reason of any of the prohibited grounds of discrimination" suggest – in light of McAlister and as was accepted by the Tribunal – the need for some form of comparative analysis to identify whether "less favourable" treatment occurred. That analysis may also answer the causation question – that is, whether that treatment occurred by reason of "a prohibited ground of discrimination". [94] With reference to the general propositions we draw from McAlister, as set out at [63], we note s 44 does not say much, if anything, about the identity of the comparator group. Certainly s 44 of the HRA is far less specific on the question than is s 104 of the ERA. However, the phrase "than would otherwise be the case" establishes the need for comparison in our judgment. The implication, furthermore, is that the phrase is notionally to be completed by words such as "if the person was not disabled". [95] That is, indeed, the basis upon which the Tribunal approached the matter. [96] Having said that, it is difficult to avoid the conclusion that Mr Waalkens' criticism – by reference to McAlister – of the Tribunal's construction of the comparator group is well made. That is, although the Tribunal identified a comparator group who did not suffer from Ms Smith's disability, it did not take the further step and propose a comparator group the members of which would – in some way – also be exposed to the application of Air New Zealand's policies as regards the supply of supplementary oxygen in flight.[97] Such a group would comprise passengers who, whilst not being disabled, nevertheless required the airline to provide them with supplementary oxygen. As Air New Zealand would apply the same policies to such persons as regards supplementary oxygen as it applied to Ms Smith, undertaking that comparator group analysis leads to the conclusion that Ms Smith was not treated differently by reason of her disability. Rather, the reason for the treatment was the fact that safety issues gave rise to the restriction on the ability of passengers to bring their own source of supplementary oxygen on to the plane. [98] We do accept, in contrast to the conclusion the Court of Appeal was able to reach in McAlister, that this basis of comparison seems a little strained. It is difficult to conceptualise a group of persons who, whilst not being disabled, nevertheless wished to have a personal source of supplementary oxygen. Having said that, it was acknowledged in McAlister that the comparator group analysis may have to be undertaken on a hypothetical basis. That may be the case here. We think, nevertheless, that what we consider to be the "strained" nature of that analysis suggests that some different basis of comparison may be helpful. [99] Here, the Tribunal concluded that different treatment was involved because Air New Zealand supplied all passengers' needs for oxygen at altitude and therefore treated Ms Smith differently by not providing for her needs for oxygen. We consider that it is somewhat artificial to say that Air New Zealand, as part of the service of air travel, provides passengers with all their oxygen needs for no specific cost and, therefore, only to provide Ms Smith with her supplementary oxygen on the basis of an additional cost was to treat her differently. In our view this overlooks the basic reality that, by reason of her disability, Ms Smith has a medical need for supplementary oxygen. In our judgment, that position, which appears to have been confirmed by Ms Smith in her evidence before the Tribunal (see the transcript of the Tribunal's hearing at page 3), needs to be acknowledged in the comparator group analysis. To do otherwise would, in our view, be to conduct that analysis on an unrealistic basis and one which is therefore undesirable. [100] Taking account of that consideration, the following analysis seems more realistic.[101] The purpose of the comparator group analysis is to answer the issue of whether or not the less favourable treatment was unlawful because of the causative relationship between a prohibited ground of discrimination and that treatment. [102] As regards Air New Zealand's treatment of Ms Smith, the following considerations apply. The fundamental reason for the "controls" imposed by Air New Zealand on the use of oxygen in cabins are safety considerations. Moreover, we do not think the very serious nature of the risk associated with oxygen sources on an aeroplane can be doubted. By reference to that consideration, a perhaps more realistic way of constructing the comparator group is to consider the position of passengers who wish to bring onto flights with Air New Zealand objects that give rise to equivalent safety issues. There seems little doubt that those persons would also face restrictions imposed by Air New Zealand, namely that they cannot bring such objects onto the plane, or may only do so in a controlled manner. On that basis, a comparison with those persons would suggest that Air New Zealand was not discriminating against Ms Smith. [103] We note that, in some circumstances, it has been suggested that in cases of discrimination allegedly on the prohibited ground of disability, it is suggested that inclusion of disabled people within the comparator group may help the analysis. On that basis and accepting, as we think is the position, that the additional oxygen Ms Smith needs is a medical requirement, another way of approaching the comparator group construction would be to consider disabled persons who require medicine during flight where that requirement does not give rise to those safety issues. At least as we understand it, there was no suggestion that Air New Zealand imposed additional restrictions on such persons – for example, a person who requires heart medication. That person simply brings their medication with them onto the flight, and administers it to themselves. Again, therefore, the conclusion is that Ms Smith has not been treated differently by reason of her disability, but by reason of the safety implications of the medical support she requires to fly. [104] By reference to the comparator groups we suggest, it can therefore be seen that the different treatment arises not because of disability, but because of the safety implications of responding to the needs of the disabled person.[105] The identification of those comparator groups also answers the 'causation' question. Air New Zealand does not permit passengers to bring their own sources of oxygen into the cabin for very obvious safety reasons. By the same token, passengers wishing to bring objects which raise safety concerns on to Air New Zealand would also face restrictions imposed on them by Air New Zealand. In our view, those safety concerns are the reasons for the restrictions, and those safety concerns are applied equally and without any different treatment by reason of a prohibited ground of discrimination. [106] On that basis, we conclude that Air New Zealand did not treat Ms Smith less favourably by reason of her disability, and therefore did not discriminate against her unlawfully as prohibited by s 44(1)(b). [107] We share the Tribunal's concern with one possible implication of that conclusion. That is, as a matter of logic it could be argued that Air New Zealand could also decline to allow Ms Smith, and other disabled persons in her position, to use supplementary oxygen at all because of the associated safety concerns. Some airlines apparently adopt that approach. On the basis that that action did not constitute discrimination, there would therefore be no basis upon which the reasonableness of that action could be assessed in terms of s 52. [108] In our view, however, a finding that Air New Zealand's action did not constitute discrimination under s 44(1)(b) would not necessarily, in these circumstances, be the end of the analysis. In our view, it is possible – and perhaps in many ways a more satisfactory approach to the issues involved here – to consider Ms Smith's position as one possibly involving indirect discrimination. [109] Indirect discrimination is expressly defined in the HRA. Section 65 provides:65 Indirect discriminationWhere any conduct, practice, requirement, or condition that is not apparently in contravention of any provision of this Part of this Act has the effect of treating a person or group of persons differently on one of the prohibited grounds of discrimination in a situation where such treatment would be unlawful under any provision of this Part of this Act other than this section, that conduct, practice, condition, or requirement shall be unlawful under thatprovision unless the person whose conduct or practice is in issue, or who imposes the condition or requirement, establishes good reason for it.The wording of that section is difficult. However it appears that the effect of the section is clear. Brookers Human Rights Law (2008) provides:HR65.05 Evidence of indirect discriminationIndirect discrimination is said to occur when an apparently neutral practice or policy disproportionately disadvantages one of the groups against whom it is unlawful to discriminate. Although everyone is treated the same, the condition or requirement affects members of a prohibited group differently. Indirect discrimination is therefore directed at ensuring substantive (as opposed to formal) equality. The concept was developed in the US and first articulated in Griggs v Duke Power Co 401 US 424 (1971). In New Zealand it is found in s 65 Human Rights Act 1993. It consists of four parts: (1) There must be a practice or requirement; (2) That does not appear to contravene any other part of the Act, ie it appears neutral, but; (3) Has the effect of treating an individual or group differently on one of the prohibited grounds of discrimination; (4) The defendant may escape liability by establishing a good reason exists for imposing the practice or requirement.[110] Indirect discrimination has been discussed at length in an article by S Mize "Indirect Discrimination Reconsidered" [2007] NZ Law Review 27. Mize compares direct discrimination to indirect discrimination, and defines the latter concept as being (at 28):the application of some practice or requirement that is neutral on its face – which does not expressly make any distinction by reference to a prohibited ground – but which has the effect of treating an individual or group differently on one or more of those prohibited grounds.[111] The "neutral policy" but "disproportionate effect" formulation of indirect discrimination has been approved on several occasions in the New Zealand Courts. In Claymore Management Ltd v Anderson [2003] 2 NZLR 537 (HC), Priestley J discussed the meaning of s 65 in the context of employment-related discrimination proceedings. He said:[97] The reach of indirect discrimination, as the wording of s 65 makes clear, is to prohibit or discourage behaviour which although not overtly discriminatory or which may be neutral on its face nonetheless has a discriminatory effect on people or groups because of a prohibited ground. The focus must be on the effect of conduct, practices, requirements orconditions, and whether that effect results in a person or group being differently treated.[112] Similarly, albeit in the context of discrimination under s 19(1) of the Bill of Rights Act, Gendall J said in An Jian v Residence Review Board HC WN CIV-2005- 485-1600 3 August 2006 (at [24]):Indirect discrimination occurs where a rule or requirement is neutral on its face but has a disproportionate effect on a group because of a particular characteristic of that group.[113] In support of that proposition Gendall J referred to the earlier case ofNorthern Regional Health Authority v Human Rights Commission [1998] 2 NZLR 218, in which Cartwright J made similar observations (at 236 and 238). [114] At the centre of this issue is the fact that, in some circumstances, merely looking at the application of a policy, practice, requirement or condition and concluding that it is of neutral application to all may well fail to recognise that theeffect of that policy, practice, requirement or condition is discriminatory on one of the prohibited grounds. [115] The enforcement of a blanket policy on all passengers that no one may bring compressed oxygen onto flights could be argued to have a disproportionate effect on people with disabilities like Ms Smith. The effect on them, unlike on non-disabled persons, is that the disabled person would not be able to fly at all. Similarly, the imposition of an extra cost on persons with a disability could, again, be said to result in a disabled person being unable to fly, compared with a non-disabled person being able to choose not to incur that extra cost and put up with some inconvenience in not being able to bring their extra oxygen with them. In other words, although we have found that Air New Zealand's actions did not constitute direct discrimination under s 44, it would still be open for Ms Smith to argue that such actions constituted indirect discrimination under s 65 and require Air New Zealand to establish good reason for those actions accordingly. Therefore, although we share the Tribunal's concern, we think the role of s 65 in the scheme of the HRA addresses that concern.Section 52[116] The Director based his appeal against the Tribunal's finding that the "reasonable accommodation" defence provided by s 52 was available to Air New Zealand on the proposition that Air New Zealand was, in effect, required to establish that to provide Ms Smith with her supplementary oxygen without charging for it would impose "undue hardship" on Air New Zealand. [117] In support of the Director, the Human Rights Commission intervened under s 92H of the HRA, providing written submissions. The Commission argued that: a) determination of whether the defence in s 52(b) is satisfied is a factual exercise; b) the test for deciding when it is reasonable to impose an onerous burden on a person seeking accommodation will involve a proportionate balance between the effect of providing the necessary accommodation and what that involves and the effect on the disabled person; and c) the threshold for deciding whether the level has been reached is only reached when it places an undue burden on the provider. [118] The conclusion we have reached, namely that Air New Zealand did not discriminate against Ms Smith in breach of s 44, means that we are not required to consider the reasonableness of its actions under s 52. Whilst we did hear argument on this point, we nevertheless think that it is preferable that the consideration of that issue be left to a case where it is a "live" issue. Moreover, we think it is fair to say that before us the parties principally concentrated on the arguments as regards s 44. The s 52 argument relied, as made clear to us at the hearing of the appeal, very much on the authority of Grismer. As Mr Hesketh acknowledged, however, the New Zealand statutory language is different. At the same time, the Commission, pointing to the very recent signature by New Zealand of the United Nations Convention on the Rights of Persons with Disabilities, and the terms of the then Disability (UnitedNations Convention on the Rights of Persons with Disabilities) Bill, suggested that the "undue burden" approach is the correct one. Whilst we had the benefit of the Commission's written submissions, we did not have the benefit of any oral submissions. That is a further reason, in our view, to leave this important question to a case in which it is argued more extensively. [119] Having said that, and having considered carefully the Tribunal's decision and the transcript of evidence as relevant, we concur with the Tribunal's factual assessment that Air New Zealand acted reasonably. [120] As regards the supply of oxygen on international flights, we note that the charge of US$75 per sector is a generally applied international charge. Moreover, it is quite clearly a recovery in part only – and, moreover, in a small part – of Air New Zealand's costs. We do not think, therefore, that the imposition of that part recovery could be said to be unreasonable. [121] The approach taken domestically is quite different. Here, however, Mr Hesketh did not challenge what we consider to be the basic conclusion the Tribunal reached regarding the reasonableness of that approach. That is, that the approach generated by Air New Zealand represented: a responsible (and reasonable) reaction to the many different influences and factors that had to be taken into account [T]he system empowers the person who has the need for extra oxygen in flight to see that the equipment that they bring to the aircraft is set up in the configuration that they require, and that it will deliver the particular flow of oxygen that meets their needs. (at [118](c))[122] On the way this appeal was argued before us, there was no basis upon which we could disagree with the conclusions the Tribunal reached on those essentially factual matters. We leave unanswered the question as to whether that finding as to the reasonableness of Air New Zealand's approach would satisfy the requirements of s 52 if the "undue burden" test is the correct one. We note also that the approach taken internationally may be regarded as being more helpful to the oxygen- dependent travelling disabled person. To that extent, Air New Zealand could be regarded as treating such disabled people flying domestically less favourably than when flying internationally, and perhaps also in comparison to internationaltravellers connecting to domestic flights. The Director did not, however, assert any ground of appeal based on that consideration. [123] We concur in the Tribunal's comment that their decision relates to practices at a point in time, and that Air New Zealand may need to reconsider those practices from time to time, and as technology changes. We add that Air New Zealand may also need to consider whether, by reference to its policies with regard to the supply of supplementary oxygen to (a) disabled international travellers, (b) disabled international travellers connecting to domestic flights in New Zealand, and (c) other disabled domestic travellers in New Zealand, it is treating oxygen-dependent disabled domestic travellers less favourably.The Director's appeal against the Tribunal's cost decision[124] We accept that, from the Director's point of view, this was a test case. At the same time, Air New Zealand did not want a test case. It did not have a principle it wished to establish. Rather, the position is that the Director wished to bring the test case and had principles of a general nature which he considered were important and could be clarified by these proceedings. [125] In McGechan on Procedure at HR46Intro.16(1), the rationale for the approach taken to costs in a number of cases referred to in the test case context is that the "test case" judgment has ramifications, and thus importance for the "tester", extending beyond the immediate proceeding. Thus "the tester" should substantially bear the cost of obtaining the judgment, irrespective of the outcome. Fundamental to a test case is the need to test some novel point or principle of law. That principle supports the Tribunal's approach particularly as the "tester", Ms Smith and the Director, lost overall. [126] The question of public interest challenges is considered separately inMcGechan on Procedure, where it is noted that, where appropriate, Courts have declined to award costs, or awarded only reduced costs, against an unsuccessfulparty with a genuine and legitimate public law challenge, i.e. one raising public law issues of general importance, having merit and not brought for personal gain. [127] On the one hand, therefore, the test case rule favours the award made by the Tribunal. At the same time, the general principle recognised as regards public interest challenges may favour the Director. The question here is where the balance is to be drawn. [128] In its costs decision, the Tribunal carefully considered the circumstances relating to Ms Smith's case, its own obligations under s 92L of the HRA, and the reality that, because of s 92C(4) of the HRA, any award the Tribunal might make against Ms Smith would be payable by the Director. In that context, the Tribunal bore in mind the observations of the High Court in its decision in Claymore Management Ltd v Anderson HC AK CIV-2002-404-95 2 September 2003 that some weight was to be given to the fact that the Director's office was publicly funded and that he had only limited resources with which to represent litigants. It also considered the Director's argument that Air New Zealand had succeeded in part only, that it had not succeeded under s 44. It thought the Director should be given some credit for that factor, and reduced the award of costs that it would otherwise have made by one third. [129] It then considered the test case argument. It concluded on that point:[28] Our own assessment of the authorities we were referred to is that, in the end, they do no more than confirm the most basic underlying proposition that each case must depend on its own facts. To simply label a case as a 'test' case and, on that basis, to determine that costs ought not be awarded seems to us to oversimplify the analysis that ought to be brought to bear when it comes to assessing costs. Each case has it [sic] own dynamic. [29] We can certainly envisage circumstances in which litigation might be pursued by willing parties for the very reason that they wish to have a definitive ruling to inform their future behaviour, and that in those situations it would be wrong to award costs one way or another. Perhaps the fact that one or other of the parties is a governmental agency, or that human rights issues are involved, will be far more influential aspects of the consideration in other cases. But in this case we have already taken some account of the fact that the Office of the Director of Human Rights Proceedings is publicly funded, and that he has limited resources with which to representlitigants (see para [13] above). That seems to us to meet the circumstances of this case sufficiently. And in any event we consider that it is at least as important in the balancing exercise in this case that the defendant did not share the plaintiff's interest in the litigation for the sake of any precedent it might set; to the contrary, the defendant neither sought the proceedings out nor wished them to continue. Indeed the evidence established that it had earlier set up a working group to consult with interested parties in the hope of finding ways to meet the concerns of people in the position of the plaintiff through consultation and debate. [30] The reality is that the defendant has been put to the cost of the litigation, and the plaintiff was not successful in obtaining the outcome she was looking for. We are not persuaded that there is in the factors at work in this case to justify a decision to refuse costs, or even to discount them any further, under this heading.[130] In Commerce Commission v Southern Cross Medical Care [2004] 1 NZLR 491, the Court of Appeal (at 494) recognised that reasons must be shown for interfering with the exercise of discretion as to costs. The Court had repeatedly said that costs decisions were influenced by a myriad of details that were difficult to replicate on appeal. The award of costs was quintessentially discretionary. [131] In that case, the Court of Appeal allowed an appeal against an award of costs against the Commerce Commission in the High Court, when all the Commerce Commission had done, as the only respondent, was to assist the High Court, in the public interest, by presenting necessary evidence and argument in opposition to an appeal against one of its determinations. Interestingly, the Commerce Commission had appealed against the High Court decision and lost. In the Court of Appeal, costs were awarded in favour of the successful respondent, Southern Cross. [132] Whilst we recognise the test case and public interest arguments, these were factors that the Tribunal explicitly considered. In these circumstances, we do not see any reason to interfere with the discretionary decision made by the Tribunal on the question of costs. [133] On this appeal, Air New Zealand having succeeded, costs in our view should follow the event on a 2B basis. We will, however, reserve costs. In the event that the parties are unable to agree on quantum, or the Director considers that costsshould not follow the event, the parties may apply for orders. Any such application should be filed no later than one month from the date of this decision. [134] By reference to the "public interest" principle, we do not consider that any award of costs against the Human Rights Commission as intervenor is appropriate."Clifford J" for the Court