Summary
Financial Services Complaints Limited (FSCL) successfully appealed a direction by the High Court that FSCL’s application to use “ombudsman” in their name be reconsidered by delegation from the Chief Ombudsman.
Background
An Ombudsman is an independent official appointed by Parliament to investigate complaints regarding the conduct of government executives and agencies. The name ‘Ombudsman’ is protected under the Ombudsmen Act, which states only those appointed by legislation or written consent of the Chief Ombudsman may use it.
FSCL was the first scheme to be established under the Financial Service Providers (Registration and Dispute Resolution) Act 2008. The scheme provides an avenue for financial service customers to seek dispute resolution against participating financial service providers.
FSCL made several unsuccessful applications to the Chief Ombudsman for approval to describe itself as “FSCL – a Financial Ombudsman Service”, and its CEO as “Financial Ombudsman and CEO”. The first decision of the Chief Ombudsman to refuse FSCL was made in 2016, and was subsequently set aside by the Court of Appeal. FSCL successfully reviewed a second refusal of permission by the Chief Ombudsman in the High Court in 2021, where the matter was directed back for reconsideration on the grounds of predetermination.
The Case
FSCL appealed the 2021 High Court decision, alleging the Court had failed to adjudicate on 8 of the 9 grounds raised and erred in referring the matter back rather than granting the relief sought. Of the 8 additional grounds sought in the High Court, FSCL limited its appeal to 2. The first was the Chief Ombudsman had failed to treat like cases alike by granting the ombudsman name to similar schemes to FSCL. The second was the decision was an unreasonable limitation on FSCL’s right to freedom of expression under the New Zealand Bill of Rights Act (NZBORA).
Failure to treat like cases alike
The Court of Appeal accepted the High Court failed to adjudicate the issue and instead recorded the Chief Ombudsman’s statements regarding the need to treat like applicants alike. The Court noted similar applicants for the ombudsman name should be treated consistently unless there is a valid reason to do otherwise. Prior to rejecting FSCL, the Chief Ombudsman accepted the applications of two materially similar organisations. These were the Insurance and Financial Services Ombudsman Scheme Inc (IFSO) and the Banking Ombudsman Scheme (BOS). The Court held there was no rationally justifiable basis on which to distinguish FSCL from the IFSO and BOS schemes.
Freedom of expression under NZBORA
The Court of Appeal noted that any limitation of a right provided under NZBORA must be rationally connected to its objective and impair the right as little as possible. The Chief Ombudsman acknowledged FSCL’s right to freedom of expression in using the ombudsman name, though deemed its refusal to be a justified limitation. They argued it was due to FSCL operating as a commercial entity, and its use of the ombudsman name would dilute the significance of the Parliamentary Ombudsman.
The Court of Appeal noted while FSCL is a commercial entity, it operates its scheme within a statutory framework that exists for the public interest. The Court also did not consider FSCL’s use of the ombudsman name would lessen the public understanding and importance of the Parliamentary Ombudsman. For these reasons, the refusal of permission was an unreasonable limitation on FSCL’s right to freedom of expression.
Appropriate relief
In light of its previous findings, the Court held there was no objectively reliable basis for the Chief Ombudsman’s decision to refuse FSCL’s application.
Courtney J noted several concerns with directing the matter back for reconsideration. FSCL had made its first application 7 years prior,with two previous decisions of the Chief Ombudsman being set aside by the Court of Appeal. It was not in the interests of FSCL nor wider justice to allow the matter to be protracted further.
Additionally, any subsequent decision, even if delegated,could be undermined by another predetermined process. The proposed reconsideration would be undertaken by a delegate holding office under the Chief Ombudsman, and briefed on the decision by the Chief Ombudsman. This created an unacceptable risk to the impartiality of the decision maker.
It was therefore inappropriate to refer the matter back to the Chief Ombudsman, and the Court was entitled to make its own declaration.
Result
The Court of Appeal set aside the High Court’s decision, and declared FSCL was entitled to the Chief Ombudsman’s consent to use the ombudsman name in connection with its scheme.
For further information, please contact Director Brigitte Morten.
