The publication of the Mahon Report in April 1981 caused “political and public pandemonium”1 in New Zealand that extended to the highest levels. Prime Minister Robert Muldoon (a friend of Air New Zealand CEO Morrie Davis, and Deputy Chairman of the Board Des Dalgety, and, as Minister of Finance the company’s principal shareholder) was “not pleased with the suggestion that there had been ‘an orchestrated litany of lies’ by unidentified Air New Zealand witnesses. [He] commented that ‘it would have been better if Mr Justice Mahon had phrased his views ‘less elegantly and more precisely.’”2 Muldoon publicly challenged Mahon to name the ‘conspirators and liars’, and to provide evidence to back up his answers.
Those maligned by Mahon’s conclusions also reacted strongly. Morrie Davis resigned as CEO, and he, Air New Zealand as a single entity, and Captain Ian Gemmell (Chief Pilot, Air NZ) began combined legal action demanding judicial review of Justice Mahon’s findings. The applicants’ request for this review to be held in the Court of Appeal was initially rejected by the High Court, where Justice Speight proposed that a High Court trial take place after matters of law were debated upon by the appellant court. However, on appeal, judges Cooke, Richardson, McMullin and Somers held that: “This case was exceptional, not only because of the magnitude of the disaster and the public importance of the issues, but also because it related to the conduct of an inquiry held by a High Court Judge. Justice might be more manifestly seen to be done if the complaints were adjudicated on in a Court other than the one of which he is a member. It was also important that the complaints be finally adjudicated on as soon as possible. These two factors plainly outweighed any disadvantages involved in a single hearing in the Court of Appeal.”3 Accordingly, the matter found its way before the Court of Appeal for six days in October 1981.
The appellant court’s decision in favour of the applicants was a shattering blow to Justice Mahon, who “decided to retire immediately because he took the Court’s finding to mean his credibility as a judge had been destroyed and that he was ‘incapable of distinguishing truth from falsehood’.”4 Mahon’s offer of resignation caused political friction between the Prime Minister (who was ready to accept it immediately) and Attorney-General McLay (a strong defender of the judge) who objected strongly to that course of action.
Mahon petitioned the government to appeal to the Privy Council, both because he held that the Court of Appeal had “misconceived the true nature of a Royal Commission” and because both Woodhouse and McMullin had children who worked for Air New Zealand, creating questions over the propriety of their adjudicating on the matter.5 Unfortunately for the judge the Privy Council concurred with the assessment of the Court of Appeal and, despite their statement that “their Lordships’ recommendation that the appeal ought to be dismissed cannot have any adverse effect upon the reputation of the Judge among those who understand the legal position, and it should not do so with anyone else,”6 it did precisely that, and effectively ended Peter Mahon’s legal career.
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