Chapter 5
Civil proceedings

Establishing closed processes and appointing special advocates on a case-by-case basis

5.4Some of the areas where national security information might become relevant to decision making have already been addressed by legislation (discussed above). However, as has been demonstrated by the recent litigation involving Mr Dotcom and employment law proceedings brought by Mr Zhou, national security information may still be relevant in general civil proceedings against the Crown. These two sets of proceedings are discussed in detail below.

5.5Section 27 of the Crown Proceedings Act 1950 and section 70 of the Evidence Act 2006 enable national security information to be withheld in civil proceedings where the Crown asserts that the disclosure of information would be prejudicial to important national interests or contrary to the public interest. As outlined in our earlier Issues Paper A New Crown Civil Proceedings Act for New Zealand,171 it is not clear whether common law public interest immunity continues as well, nor is it clear how the provision in the Crown Proceedings Act 1950 and Evidence Act 2006 relate to each other.

5.6There is no statutory authority that would allow national security information to be taken into account by the court or decision maker but not disclosed to the affected party in general civil proceedings. Where national security information does become relevant or potentially relevant, the courts have relied on their inherent powers and the consent of the parties to establish closed processes on a case-by-case basis. This could include the consideration of national security information in the absence of one of the parties, the appointment of special advocates or the summarising of national security information.

Dotcom v Attorney-General

5.7The ongoing litigation relating to the search of Mr Dotcom’s home in January 2012 is the most current example of national security information being relevant in civil proceedings.172 During the course of proceedings regarding the lawfulness of the search and subsequent activities of the Police, information came to light that showed that the Police were given reports based on interceptions of the claimant’s communications unlawfully obtained by the Government Communications Security Bureau (GCSB).
5.8As noted by Winkelmann J in her 5 December 2012 judgment,173 the fact that the Police were provided with information based on interceptions caused difficulties in the proceedings. The information was likely to be relevant and should have been available at prior hearings. However, the Crown claimed that disclosure of the communications would prejudice New Zealand’s national security interests.
5.9The Court appointed Stuart Grieve QC as an amicus, although his role is more akin to that of a special advocate. His role is to:174

… assist with consideration of the relevance of that information to the proceeding and if the information is relevant, to assist the Court with assessing the claim to confidentiality, and finally, if confidentiality claims are upheld, to advance such arguments on behalf of the plaintiffs as can be advanced in reliance upon that material.

5.10A key feature of the system established is that it is created under the inherent powers of the court rather than a statutory regime and is therefore dependent upon the continued co-operation and consent of the parties. A further significant factor is that, despite the Crown acknowledging that the interception of the claimant’s communications was unlawful, the claimant has publicly stated that he is not willing to settle.175 When the plaintiffs sought access to the classified material despite the involvement of the special advocate, the Crown brought a section 70 Evidence Act application to maintain confidentiality over the classified information. This application has yet to be heard.

Zhou v Chief Executive of the Department of LabourTop

5.11Another relevant example is in the context of employment proceedings. Mr Zhou was an immigration officer employed by the Department of Labour. He was dismissed from his employment after the Chief Executive of the Department of Labour withdrew his security clearance upon receipt of information from the New Zealand Security Service (NZSIS). Mr Zhou commenced a personal grievance for unjustified disadvantage and unjustified dismissal in the Employment Relations Authority, which was removed to the Employment Court due to the presence of novel questions of law relating to security clearances for public sector employees. The Director of the NZSIS was joined as an intervener to the proceedings.176

5.12The Department of Labour resisted disclosure of some information and claimed public interest immunity. Mr Zhou’s counsel asked the Employment Court to examine the withheld documents to determine whether the claim to public interest immunity could be maintained. The proposal anticipated that the Court would be assisted by special counsel, with security clearance, being appointed to also view the material and make submissions for Mr Zhou to the Court.

5.13The Employment Court ruled that it had the power to appoint special advocates, relying on Regulation 6(2)(b) of the Employment Court Regulations, which enables a form of procedure “as the Court considers will best promote the object of the Act and the ends of justice”. The Court considered that the appointment of special advocates was “no different in principle to the power to impose the conditions that the Court frequently directs upon disclosure and inspection of sensitive documents including by requiring undertakings as to confidentiality, specifying the return of all copies of documents, requiring the redaction of privileged parts of documents and the like”.177
5.14The Court decided that it was premature to determine whether or not to appoint special advocates as the case was still at the disclosure and inspection stage.178 The Court considered that the Crown’s claim for public interest immunity should be determined before moving on to consider whether or not special advocates should be appointed.

5.15The Court was never required to address either point as the proceedings were resolved by the parties.

Section 52(4) Evidence Act 2006Top

5.16Section 52(4) of the Evidence Act 2006 grants the judge a broad discretion to give any directions necessary to protect the confidentiality of or limit the use that may be made of information that is subject to a direction under section 70 (relating to matters of state).179

5.17To date, this section does not appear to have been used in civil proceedings in respect of information subject to a direction under section 70 of the Evidence Act 2006. It therefore remains to be seen how the courts will interpret the scope of this power.

Issues arising from a case-by-case approachTop

5.18In the absence of a statutory model under which national security information can be considered and protected, the courts are placed in a difficult situation. The options are for the Crown to rely on a claim for public interest immunity and remove the relevant information from the case entirely, or for the court to rely on its inherent powers (or, if applicable, the general power in section 52(4) of the Evidence Act 2006) to develop a procedure by which the national security information can be used and protected but that also affords appropriate respect to fair trial rights, natural justice and the principles of open justice. A third option, which is plainly untenable from a security perspective, is for the national security information to be disclosed to the parties.

5.19For the reasons below, as a matter of policy, we do not think that the courts should be left to grapple with the development of such procedures on a case-by-case basis. Further guidance should be given.

5.20In Al Rawi v Security Service, the United Kingdom Supreme Court ruled that the courts could not require the use of a closed process in the absence of statutory authority and without the consent of all parties. It was held that the inherent power of the courts to regulate their own procedures were still subject to limitations. The closed process advocated for in that case involved a departure from fundamental principles of natural justice and the Supreme Court considered that was an area for Parliament, rather than the courts, to develop. The question was left open as to whether a closed material process could be used by the consent of the parties.180

5.21Ad-hoc procedures based on consent have the potential to result in significant administrative and financial cost. If one party withdraws their consent or ceases to co-operate part way through the process the other party will have incurred unnecessary cost, proceedings will have been delayed and administrative resources needlessly expended.

5.22Case-by-case development (whether by consent or under section 52(4) of the Evidence Act) results in uncertainty. Judicial opinion may differ, resulting in different cases adopting slightly different processes. The roles of the judge, court staff, special advocates, intelligence and security agencies and the claimant must be re-established each time a new case arises. Therefore, neither prospective parties to a claim nor the public have a clear idea of the process by which the claim will ultimately be determined.

5.23These issues, along with the repercussions such procedures have for natural justice and international obligations as well as the financial and administrative burden that accompanies them, present a strong argument for a legislative response to the use of national security information in civil proceedings. While the broad discretionary powers under s 52(4) could be interpreted to give a judge scope to respond to the use of national security information in the case at hand, a more certain process would have the advantage of clarity and predictability.

171 Law Commission, above n 14.
172Dotcom v Attorney-General CIV 2012-404-001928.
173At [3].
174 At [16].
175Rob Kidd, Hamish Rutherford and Francesca Lee “Dotcom joins rally against GCSB” Stuff.co.nz (<www.stuff.co.nz>, New Zealand, 27 July 2013).
176Zhou v Chief Executive of the Department of Labour [2010] NZEmpC 162, [2010] ERNZ 400.
177 Zhou v Chief Executive of the Department of Labour [2011] NZEmpC 36 at [76].
178 At [82].
179 Section 70 of the Evidence Act 2006 enables the court to order that relevant documents not be disclosed on the grounds that to do so would prejudice matters of state. Section 70 is discussed in more detail in Chapter 3 of this paper.
180 Al Rawi v Security Service, above n 67.