Court of Appeal Judgement

The 50 pages of the Court of Appeal judgement are a meaty read – as one would expect of the summary of the deliberations of five judges of the Court of Appeal – but entirely worth the time and concentration required for their digestion. Little sense will be made of their content, however, if the reader has not previously considered at length the text of the Mahon Report – the focus of the appeal, and a ‘must-read’ in any examination of the Erebus tragedy

The Issues Under Review

In October 1981, Air New Zealand, Morrie Davis and Ian Gemmell brought a request for judicial review of certain findings in the Mahon Report under the Judicature Amendment Act 1972.

It is important to realise that the scope of the Court of Appeal hearing did not (and could not) include the causes of the disaster. The applicants sought “orders that the findings should be set aside and for declarations that they had been made in excess of jurisdiction and in circumstances involving unfairness and breaches of the rules of natural justice.” 7

The parts of the report at issue were that the following conclusions were explicitly expressed, or insinuated, by Justice Mahon in his report without the support of ‘probative’ evidence:

  • That Air New Zealand had orchestrated a ‘pre-determined plan of deception’ and committed organised perjury whilst giving evidence before the Commission;
  • That CEO Morrie Davis – by his instruction to destroy ‘irrelevant’ documents – had sought to ensure the destruction of evidence harmful to Air New Zealand’s case before the Commission;
  • That the catalogue of errors within the flight operations and navigation divisions (that resulted in the changing of the McMurdo waypoint without the knowledge of the flight crew) reported to the Commission was a fabricated story: a story concocted to explain away the airline’s deliberate actions undertaken to deceive both the Civil Aviation Division in New Zealand and the air traffic control authorities at McMurdo Sound;
  • That Captain Eden had coerced the testimony of First Officer Rhodes regarding the character of Captain Gemmell;
  • That Captain Gemmell had removed from the crash site documents vital to the investigation, but harmful to Air New Zealand’s case, and not disclosed those documents to the Commission.

And, finally, the applicants claimed that Justice Mahon’s order that Air New Zealand pay $150,000 towards the $275,000 cost of the Commission was invalid. Mahon had, in an appendix to the report, made this finding against Air New Zealand because he claimed their adversarial conduct and reluctant sharing of information had unnecessarily prolonged the proceedings.

Jurisdiction and Judgement

The case was heard by five judges, and two judgements were delivered: that of judges Cook, Richardson and Somers (presented first in the following material); and that of judges Woodhouse and McMullin (see page 18). Both judgements reach the same conclusions, but the latter gives more attention to the points of law and jurisdiction at issue, and reaches a more comprehensive denouncement of Justice Mahon’s report.

To get a thorough understanding of the finer points of law that dictated the degree and nature of response the Court of Appeal could deliver, it is suggested that the reader pay closer attention to the judgement of Woodhouse and McMullin.

Firstly, they explain that 1977 amendments to the Judicature Amendment Act make reviews under its powers relevant to any exercise of ‘statutory power’, and that the Commission of Inquiry was indeed an exercise of statutory power, because it affected the ‘rights’ of those involved: “At common law every citizen has a right not to be defamed without justification. Severe criticism by a public officer made after a public inquiry and inevitably accompanied by the widest publicity affects that right especially when the officer has judicial status…”8 Woodhouse and McMullin state that “[P]aragraph 377 amounted to public and official disclosures of alleged criminal conduct… [and] the individuals concerned were exposed to the hazard of prosecution... [therefore] it affords a striking instance of how contrary to the public interest it would be if the Courts were not prepared to protect the right to reputation.”9

They clarify, previous to these statements, that the applicants did not have available to them any other form of legal redress (refer to page 21).

Natural Justice

The discussion then turns to the issue of “natural justice”, and their legal assertion that the laws of natural justice were applicable to the activities of a royal commission. Specifically they cite an amendment made in 1980 to the Commissions of Inquiry Act 1908. This amendment stipulated that “any person who satisfied the Commission that any evidence given before it may adversely affect his interests must be given an opportunity to be heard in respect of the matter to which the evidence relates.”10 The essence of the ‘natural justice’ complaint made by the applicants is that they were never given the opportunity to counter Justice Mahon’s conclusions about their conduct and character.

Both judgements conclude that Justice Mahon – by not directly confronting the alleged conspirators with his “grave findings of concerted misconduct”11 – breached the laws of natural justice.

Both judgements also cover in detail each specific point of objection cited by the applicants. The judges systematically discredit Justice Mahon’s assessment of the evidence available to him, and the method by which he arrived at his opinions and conclusions in each case, concluding without exception that the judge did not abide by the laws of natural justice.

Contrary to Law – Costs

More black-and-white (to the non-legal mind) was the judges’ ruling on the issue of costs. The decision comprises two elements:

  • The amount of the award was illegal. Under a “long out-of-date but apparently still extant scale prescribed in 1903”12, the maximum amount of costs able to be made in such an instance was $600.13
  • The award of costs itself was an illegal use of the discretion granted under the Commissions of Inquiry Act 1908.

On the second matter, Justice Mahon’s opinion and judgement again comes under attack. Under section 11 of the 1908 Act, Mahon had the statutory authority to “order that the whole or any portion of the costs of the inquiry… shall be paid by any of the parties to the inquiry...”14 The Court of Appeal judges concluded that Mahon’s application of that statutory discretion was flawed.

Justice Mahon felt that the power to order costs “should be exercised… whenever the conduct of that party at the hearing has materially and unnecessarily extended the duration of the hearing.”15 With reference to Air New Zealand’s conduct he opined: “There were material elements of information in the possession of the airline which were originally not disclosed… It was not a question of the airline putting all its cards on the table. The cards were produced reluctantly, and at long intervals, and I have little doubt that there are one or two which will lie hidden in the pack. In such circumstances the airline must make a contribution towards the public cost of the Inquiry.” 16

In view of those words, the Court of Appeal judges concluded that “the imposition of an order for costs in the sum of $150,000 was nothing less than the exaction of a penalty,” 17 (suggesting that imposition of penalties was outside the jurisdiction of a royal commissioner) and that that penalty was imposed on the basis of the invalid finding of an orchestrated conspiracy to perjure, and therefore illegal itself.

In Excess of Jurisdiction

Justice Mahon’s most damning conclusion was that of the ‘orchestrated litany of lies’, and it was with regard to this opinion that the applicants claimed he had acted outside his jurisdiction as commissioner.

Before the Court of Appeal hearing, counsel for Justice Mahon cited the Commission of Inquiry’s terms of reference as the source of scope for the inclusion of these comments. Paragraph (j) required the Commissioner to report upon “facts or matters arising out of the crash that, in the interests of public safety, should be known to the authorities charged with the administration of civil aviation…” The presiding judges, however, concluded that Mahon’s ‘vehement and pungent’ 18 comments about the integrity of the airline’s witnesses were “collateral assessments of conduct made outside of and were not needed to answer any part of the terms of reference. The Commissioner had no authority or jurisdiction to deal with the affected officers in such a fashion and the findings themselves are a regrettable addition to the Report.” 19

The judges had already – in the process of individually assessing each of the other matters – discredited Mahon’s sources of evidence for an organised conspiracy, thus allowing them to declare his assessment not only non-jurisdictional in nature, but also substantially invalid.

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