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Accident Compensation Cases

Legal Aid Review Panel Decision No 17/09 (LARP, 08/09/08)

Judgment Text

Convenor D.J. Maze
An aided person (the “Applicant”) has applied for a review of the decision of the Legal Services Agency (the “Agency”) dated 24 June 2008. By that decision the Agency confirmed its decision to grant aid of $860.00, subject to a contribution from the Applicant of $859.00. The Agency also required a statutory land charge over a property. 
Grounds of the Application 
A decision may be reviewed on the grounds that it is either manifestly unreasonable or wrong in law. 
The Applicant submits the Agency's decision was either manifestly unreasonable or wrong in law or both. 
The Facts 
The Applicant through his solicitor applied to the Agency for a grant of aid to pursue an appeal against a decision of ACC. The Agency received that application on 28 July 2006. 
In the financial statement section of the application for aid, the Applicant stated that he was paying a mortgage in the sum of $257.00 per week and rates of $22.00 per week, but that he had no legal interest in his home. He stated that a trust owned his home. 
He had calculated his total assets as being $271,000.00 but had qualified that in the following way, “should be $1000.00 as Trust owns home”
He also stated that he was a trustee of a named trust that appeared on the District Council Valuation Roll. 
The Agency wrote to the Applicant seeking a copy of the trust deed. It pointed out that although the property was owned by the trust, the Applicant was claiming mortgage and rates payments as weekly outgoings and sought an explanation. 
The Applicant declined to provide the trust deed on grounds of confidentiality and the protection of intellectual property rights. 
On 3 November 2006, the Agency declined the application for aid on the grounds that insufficient information had been provided, a decision which was confirmed by the Panel on 7 February 2007. The Applicant appealed to the High Court. 
Following protracted proceedings, the Applicant provided the trust deed to the Agency. The High Court proceedings were adjourned sine die. In his minute of 6 December 2007 recording this, Ronald Young J noted, “(h)is Legal Aid application can now be considered. … In summary, therefore, his application for Legal Aid is back on track and the decision will be made on the merits as it should be”
The Agency granted aid of $860.00 on 17 March 2008. 
However, having assessed the Applicant's capital, including the house occupied by the Applicant but held in trust, the Agency imposed a contribution of $859.00. 
The Agency in its decision required the Applicant to obtain authorisation for a registration of a statutory land charge over the property. The authorisation was signed on 9 April 2008. 
The Applicant then sought reconsideration of the Agency's decision to take the trust property into account. On 24 June 2008, the Agency confirmed its decision. 
The Applicant then made this application for review. 
The Applicant's Submissions 
The Applicant submits: 
He does not own the property, but rather it is owned by a separate entity, a named trust. This is confirmed by a letter, dated 26 June 2008, from the lawyer who set up the trust. 
He does not control the trust. 
The value of the property should not be included in the calculation of his disposable income. 
Requiring a statutory charge over assets which are not his is unlawful. 
The Agency's Submissions 
The Agency submits: 
It is entitled to include the property in its assessment of the Applicant's disposable income. 
The Applicant is the settlor of the trust. 
The Applicant is a primary beneficiary of the trust. 
The Applicant holds the power to appoint trustees. 
The Applicant is the sole occupant of the property. 
Taking account of these factors, the Applicant has a large measure of control of the trust and its assets, and obtains benefit from the trust as occupant of the property. 
It is fair and reasonable to include the value of the trust property in assessing the Applicant's disposable capital. 
The Issue 
The issues before the Panel are whether it was manifestly unreasonable or wrong in law for the Agency to take the trust property into account when granting legal aid. 
The Law 
A decision is “manifestly unreasonable” if it is shown “clearly and unmistakably” that the Agency's decision “went beyond what was reasonable or was irrational or logically flawed” (Legal Services Agency v Fainu [2002] 17 PRNZ 433). 
A decision may be wrong in law for a variety of reasons. It may be wrong in law, for example, if it derives from an inaccurate application or interpretation of a statute, or is wrong in principle. It may be wrong in law if a decision-maker has failed to take into account some relevant matter or takes into account some irrelevant matter, or if the decision depends on findings which are unsupported by the evidence (Legal Services Agency v Fainu [2002] 17 PRNZ 433). 
In Legal Services Agency v A and O [2003] 17 PRNZ 443 John Hansen J said at paragraph 11 that manifestly unreasonable meant “something different from what is ‘wrong in law’, and would be made out “where it is shown, clearly and unmistakably, that the decision made by the Agency went beyond what was reasonable, or was irrational or logically flawed”. His Honour also said that “manifestly unreasonable” required “not only that the decision be found to be unreasonable but that LARP forms the view that the decision is so clearly unreasonable that the intervention of the Panel is called for”. His Honour added that “the determination of what is ‘manifestly unreasonable’ is to be made objectively by the members of LARP applying their judgment to the matter in accordance with the principles stated” and that it was “not for LARP to substitute its view of what the decision should have been for that of the Agency”
The statutory provisions at the time of the original application apply: see section 47(2) of the Legal Services Amendment Act 2006. The applicable sections of the Legal Services Act 2000 (the “Act”) read: 
Conditions on grant of legal aid- 
A grant of legal aid may be subject to a condition that the aided person will pay the Agency a contribution of a specified amount towards the cost of services … provided to the person … . 
A grant of legal aid in respect of civil proceedings may be subject to a condition that the aided person will authorise a charge to be registered in favour of the Agency over specified property of the aided person, as security for payment of the contribution, the repayment, or both. 
Amount of contribution payable- 
If a contribution under section 15(1) is payable under a grant of legal aid, the amount of contribution must be determined in accordance with regulations made under this Act. ”
“Income” and “disposable capital” are defined in Schedule 1 of the Act and must be calculated accordingly, and with reference to the applicable regulations. 
Regulation 6(2)(b) of the Legal Services Regulations 2000 (the “Regulations”) directs the Agency as follows: 
“the value of any interest in a reversion or remainder (whether legal or equitable) in any property, or in a trust or other fund (whether the applicant's interest is held solely, jointly, or in common, and whether it is vested or contingent) must be computed in a manner that is both fair and reasonable. ”
The original application was lodged on 28 July 2006. Although it did not provide all the information the Agency required, it otherwise complied with the legislation and is to be treated as being made on that date. It is this application which Ronald Young J described as “back on track”. There has been no subsequent application. Applying section 47 of the Legal Services Amendment Act 2006, the law to be applied in this review is that in force on 28 July 2006. The Panel notes, however, that the overall outcome of the review would be unchanged by amendments that came into force on 1 March 2007. 
The Agency is entitled under section 15 of the Act to require a contribution from a legally aided person. In applying that section in the present case, the Agency has complied with the proper process and has taken the Applicant's circumstances into account. 
It is apparent from the wording of the legislation that Parliament intended the Agency to be able to take an interest in trust property into account in assessing an applicant's disposable capital for the purposes of the Act. 
The Panel accepts the Agency's submission that the Applicant has the requisite interest in the trust property in question. The Applicant is a primary beneficiary under the trust, and has the power to remove and appoint trustees. It was neither manifestly unreasonable nor wrong in law for the Agency to take the Applicant's interest into account in assessing his disposable capital. 
The Panel can find no flaw in the calculations used to assess the Applicant's contribution. 
The Panel notes that, even if the value of the trust property were not to be included in the calculations, the Applicant's income alone would be sufficient to raise the contribution to the level identified in the Agency's decision. 
For the reasons set out above, the Agency's decision of 24 June 2008 is confirmed. 

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