Contents

Chapter 6
Judicial conflicts
of interest

A register of judges’ pecuniary interests?

6.25Another mechanism that has been proposed as a way of avoiding judicial conflicts of interest is the establishment of a register of judges’ pecuniary interests. This was explored in Issues Paper 21, which outlined the disclosure scheme for pecuniary interests of MPs, international comparisons for dealing with judges’ interests, arguments in favour of the imposition of such a register, and difficulties associated with establishing and maintaining a register.70

Summary of international comparisons

6.26Issues Paper 21 contains details on developments in other countries regarding judicial interest registers. In this section of the Report, we summarise and update these developments.

United Kingdom

6.27In the United Kingdom, when the highest court was the Appellate Committee of the House of Lords, the members of the Committee were Lords of Appeal in Ordinary appointed under the Appellate Jurisdiction Act 1876. Those appointments gave them full voting and other rights in the House of Lords. Although in practice the Law Lords did not usually participate in the legislative work of the House, they were nonetheless bound by the rules of the House, which required them to make entries on the House of Lords Register of Interests.

6.28On the commencement of the United Kingdom Supreme Court in October 2009, the Lords of Appeal in Ordinary became Justices of the Supreme Court. They are still Peers of the Realm, but they are unable to sit or vote in the House while they remain in office as Justices of the Supreme Court. They are therefore treated as Peers on leave of absence, and do not make entries in the House of Lords Register of Interests.

6.29In relation to the current practice, the United Kingdom Supreme Court website states:71

… the Justices have decided that it would not be appropriate or indeed feasible for them to have a comprehensive Register of Interests, as it would be impossible for them to identify all the interests, which might conceivably arise, in any future case that came before them. To draw up a Register of Interests, which people believed to be complete, could potentially be misleading. Instead the Justices of the Supreme Court have agreed a formal Code of Conduct by which they will all be bound, and which is now publicly available on the UKSC website. In addition all the Justices have taken the Judicial Oath – and they all took it again on 1 October 2009 – which obliges them to “do right to all manner of people after the law and usages of this Realm without fear or favour, affection or ill will”; and, as is already the practice with all other members of the judiciary, they will continue to declare any interest which arises in the context of a particular case and, if necessary, recuse themselves from sitting in that case - whether a substantive hearing, or an application for permission to appeal.

6.30We note the Supreme Court website also provides information on annual judicial expenses, including figures for domestic travel, international travel, and subsistence for attendance at conferences and meetings of international organisations. The Law Commission would be pleased to see similar information provided in relation to our own courts on the Courts of New Zealand website.

6.31There is presently an “e-petition” running in the United Kingdom, which requests that:

the Government bring about a Register of Pecuniary Interests of Judges Bill (as is currently being considered in New Zealand's Parliament) or amend present UK legislation to require all members of the Judiciary to submit their interests & hospitality to a publicly available Register of Interests.

6.32The e-petition closes on 20 October 2012 (one year after it was created). If it attracts 100,000 signatures, it will be considered for debate in the House of Commons. This seems highly unlikely, however, given the low number of signatures collected at time of writing.72

United States of America

6.33In the United States, federal and some state judges, court employees and other public officials are required to make annual financial disclosures. These financial disclosure requirements were designed to meet a growing public demand for accountability and integrity of public officials. Detailed information is required. The disclosure forms of judges are available to the public on the internet, although as a result of security concerns, judges may redact information from their financial disclosure reports in certain circumstances.

South Africa

6.34Legislation in South Africa provides for the development of a code of judicial conduct and the establishment and maintenance of a register of judges’ “registrable interests”.73  When Issues Paper 21 was published, draft regulations on the code and the details of what the register of judges’ interests would require were being consulted on.

6.35At the time of writing this chapter, these were still being considered by an ad hoc Parliamentary committee.

India

6.36In India, the Indian Supreme Court and a number of High Courts have voluntarily made publicly accessible asset declarations. Given the constitutional importance of judicial independence, this might be seen as the optimal approach if there is to be a judicial interests register, but this does not presently seem to be in contemplation by the New Zealand judiciary.

Key features of the MPs’ register

6.37In New Zealand, members of Parliament must make returns of pecuniary and other specified interests in accordance with the provisions of Part 1 of Appendix B of the Standing Orders of the House of Representatives.74  These returns are maintained in a register by the Registrar (currently Dame Margaret Bazley) in accordance with Part 2 of Appendix B.

6.38All returns and information held by the Registrar relating to an individual member are confidential. They must be destroyed after three terms of Parliament.

6.39The Registrar must publish a summary of the returns of current members within 90 days of the due date for transmitting initial and annual returns. The summary must contain a fair and accurate description of the information contained in members’ returns. The summary is presented to the House by the Speaker, and is available for public inspection, including on Parliament’s website.

6.40The Standing Orders define “pecuniary interest” as “a matter or activity of financial benefit to the member that is required to be declared under clause 5 or clause 8 [of Appendix B]”. “Other specified interest” means “a matter or activity that may not be of financial benefit to the member and that is required to be declared under clause 5 or clause 8”.

6.41Members of Parliament are required to make an initial return and then an annual return each year as at 31 January.

6.42Every return must contain the following information for the previous 12 months as at the effective date of the return:75
6.43Relationship property settlements and debts owed to the member by the member’s spouse, domestic partner, parent, child, step-child, foster-child or grandchild do not have to be disclosed.79  Nor do short-term debts for supply of goods or services.80

6.44Every return must also contain:

6.45The actual value, amount, or extent of any asset, payment, interest, gift or contribution or debt is not required to be disclosed.

6.46Any member who becomes aware of an error or omission in any return previously made by that member must advise the Registrar as soon as practicable after becoming aware of it. The Registrar may, at the Registrar’s own discretion, publish amendments on a website to correct such errors or omissions.

6.47A member who has reasonable grounds to believe that another member has not complied with his or her obligations to make a return may request that the Registrar conduct an inquiry into the matter. The Standing Orders set out detailed provisions relating to such an inquiry.82

Arguments in favour of a register of judges’ pecuniary interests

6.48As a branch of government, it is vital that the judiciary has the confidence of the public. In Issues Paper 21 the Commission noted that there is value in the greater transparency a register would provide in that it may be said to increase public confidence in the integrity of the judiciary, reduce the risk of conflicts of interest arising, and ensure the maintenance of high standards and accountability.83

6.49While the existence of a register may not necessarily prevent conflicts arising, it may alert counsel or other members of the judiciary to the possibility of a conflict so that any issues can be properly explored.

6.50The establishment of a register would also be consistent with the requirements for members of Parliament and Ministers to disclose their pecuniary interests, and international trends towards greater transparency in government.

Views of submitters in response to Issues Paper 21

6.51Only one submitter, WM Wilson QC, expressly supported a requirement for a register of judges’ pecuniary interests. He submitted that although disclosure on a register of his joint interest with Mr Galbraith would not have revealed their shareholder account balances at any time, such disclosure would have put the parties clearly on notice of the interest, and thus enabled them to seek any information which they wished to obtain about the interest.

6.52Other submitters stressed the importance of ensuring public confidence in the judiciary, but did not suggest that a register was the best way to achieve that.

6.53The New Zealand Bar Association pointed out that there is no evidence of a decline in public confidence in the judiciary.

6.54The Chief Justice, the Bar Association and the Law Society submitted that the creation of a register is unnecessary and unjustified. A number of reasons were given:

Commission’s view

6.55The Law Commission has no reason to think that public confidence in the judiciary is not high in New Zealand. While in principle there are arguments in favour of a register of judges’ pecuniary interests, there are also significant practical difficulties associated with such a register. On balance, we do not think the establishment of a register is the best solution for managing judicial conflicts of interest.

6.56When judicial conflicts of interest arise, they are more likely to involve the relationship between judge and counsel (as was the case in Saxmere) or a party to the proceedings, than a financial interest in the outcome of the proceedings. While it could be argued that there is merit in adopting a pre-emptive approach to avoid potential future situations arising, we are not convinced that a register would be effective in revealing actual or even potential conflicts of interest in many cases, and in our view the potential problems it would create outweigh the benefits.

6.57The level of disclosure required for a register to operate effectively would be considerably greater than the disclosure currently required of members of Parliament, and would intrude too far on the privacy of judges and their families. It may also encourage people to structure their affairs to avoid having to make full disclosure.

6.58In our view, the best way to deal with potential judicial conflicts of interest is to have clear, robust and well-publicised rules and processes for recusal, as discussed later in this chapter. If the judges implement the Commission’s recommendations on recusal procedure, and there is a statutory requirement for all judges to seek approval from the Chief Justice for any outside office (which would include acting as a trustee or director of an organisation), in our view there is no need for the additional requirement of a register of judicial interests.

Register of Pecuniary Interests of Judges Bill 2010

6.59As most submitters who responded to Issues Paper 21 did not think there was a need for a register of judges’ interests, they did not comment on issues relating to the most appropriate form such a register should take.

6.60WM Wilson QC made the important point that a register should include liabilities as well as assets. For example, a loan from a financial institution to a judge is at least as relevant as a deposit by the judge with the institution.

6.61While the Commission does not consider that a scheme requiring judges to disclose their pecuniary interests in a register is necessary or appropriate in New Zealand, as there is currently a Bill before the House to establish such a scheme, we should note that the Commission considers the Register of the Pecuniary Interests of Judges Bill would not be effective if enacted in its current form.

Level of detail

6.62To be effective, the detail required to be disclosed in a register must be sufficient to disclose the nature of the relevant interests. For example, it would not be sufficient to disclose the existence of a trust, but not its holdings. If there is to be a register, sufficient detail would need to be disclosed to put counsel on notice of a potential conflict. However, this needs to be balanced against the privacy interests of individual judges.

Definition of pecuniary interest

6.63The Bill defines “pecuniary interest” much more widely than the equivalent definition for the members of Parliament’s register under the Standing Orders of the House of Representatives. Clause 5 of the Bill defines pecuniary interest to mean “any interest in anything that reasonably gives rise to an expectation of a gain or loss of money for a judge, or their spouse, partner, child, step-child, foster child or grandchild.” Thus, when a judge is required by clause 9(1)(b) to disclose the name of each company or business in which the judge has a pecuniary interest, the list potentially extends to all companies and businesses in which their spouses and adult children and grandchildren have a financial interest. In our view, this intrudes too far into the security and safety interests of judges, and the privacy interests of individual judges and their families.

6.64By way of contrast, the definition of pecuniary interest in the Standing Orders is limited to a matter or activity of financial benefit to the member that is required to be declared under clause 5 or clause 8 of Appendix B of the Standing Orders.

6.65We also note that the register for members of Parliament includes requirements for the disclosure of “other specified interests” in addition to pecuniary interests, which should also be considered if there is to be a judicial interests register.

Administration of the register

6.66The Bill provides for the Judicial Conduct Commissioner to compile and maintain the register. However, the Judicial Conduct Commissioner would also be responsible for receiving and deciding complaints that a judge has failed to make a return of pecuniary interests in accordance with the statutory scheme. We are concerned at the conflation of roles this creates, and consider instead that, if there is to be a register, it should be compiled and maintained by a person in the office of the Chief Justice or nominated by the Chief Justice.

Publication of information contained in returns

6.67The Bill requires the publication of the information contained in the returns. This contrasts with the members of Parliament’s register, where the requirement is only to publish a fair and accurate summary of the information contained in the returns. If there is to be a register, we suggest that a similar requirement would be appropriate for the register of pecuniary interests of judges, in the interests of protecting privacy. That summary would still need to contain sufficient detail on the nature of the interests to put counsel on notice of a potential conflict, however. The summary should be made publicly available on the Courts of New Zealand website.

R21 A register of judges’ pecuniary interests should not be established by statute in New Zealand.

R22 If, contrary to the above recommendation, there is to be such a register:
  • it should include sufficient detail to disclose the nature of a judge’s interests (subject to the protection of the privacy interests of judges);
  • the register should be compiled and maintained by a person in the office of, or nominated by, the Chief Justice;
  • there should be a requirement for the publication of a fair and accurate summary of the information contained in the annual returns by judges; and
  • the summary should be made publicly available on the Courts of New Zealand website.
70Towards a New Courts Act – A Register of Judges’ Pecuniary Interests? Review of the Judicature Act 1908 First Issues Paper, above n 61.
71United Kingdom Supreme Court “About interests and expenses” <www.supremecourt.gov.uk>.
72See <www.epetitions.direct.gov.uk>. As at 31 August 2012 only 22 people had registered their signatures.
73Judicial Service Commission Amendment Act 2008 (South Africa).
74Standing Orders of the House of Representatives 2011, SO 160.
75Appendix B, cl 5.
76A member does not have a pecuniary interest in a company or business entity (entity A) merely because the member has a pecuniary interest in another company or business entity that has a pecuniary interest in entity A: Appendix B, cl 4(2).
77A member who is patron or vice-patron of an organisation that receives, or has applied to receive, Government funding, and who is not also a member of its governing body, does not have to name the organisation, unless the member has been actively involved in seeking such funding during the period covered by the return.
78In relation to disclosed creditors and debtors, a member must also declare if the rate of interest payable in relation to any debt owed to a person other than a registered bank or a building society is less than the normal market interest rate that applied at the time the debt was incurred, or, if the terms of the debt are amended, at the time of that amendment: Appendix B, cl 5.
79Appendix B, cl 5.
80Appendix B, cl 6.
81Information does not have to be included in the return if the travel costs or accommodation costs were paid by or by any combination of: the member; the member’s spouse or domestic partner; the member’s parent, child, step- foster- or grandchild; the Crown; any government, parliament, or international parliamentary organisation, if the primary purpose of the travel was in connection with an official parliamentary visit.
82Appendix B, cl 15A.
83Towards a New Courts Act – A Register of Judges’ Pecuniary Interests? Review of the Judicature Act 1908 First Issues Paper, above n 61, at [8.23].