Conflicts - Appearance of Bias

A good practice guide under section 21 of the Public Audit Act 2001 was published by the Office of the Auditor General in June 2007 under the title, Guidance for members of local authorities about the law on conflicts of interest. In Part 5 that guide addresses the law as to non-pecuniary conflicts of interest and, in particular, the appearance of bias.

We now have a decision of the Court of Appeal in Muir v Commissioner of Inland Revenue [2007] NZCA 334, that has closely examined the test for apparent bias. It has ruled in favour of the reasonable suspicion test stated in Porter v Magill [2002] 1 AC 357, which had been tentatively adopted in two earlier New Zealand cases. This brings New Zealand into line with all other common law countries.

The correct procedure is a rigorous enquiry in two stages;
• first, to establish the actual circumstances and
• secondly, to ask whether those circumstances,

“… might lead a fair-minded lay observer to reasonably apprehend that the judge might not bring an impartial mind to the resolution of the instant case.”

In Muir the allegation of bias was made against a judge, but the same two-stage test is appropriate for any local authority decision-maker. The Court of Appeal in Muir went on to observe that,

“… a reasonable member of the public is neither complacent nor unduly sensitive or suspicious.”

It is important, however, to give due attention to the first stage of the enquiry, that is to say an examination of the facts that are alleged to give rise to the conflict and appearance of bias. Facts and not mere assumptions are required. There needs to be,

“… an articulation of the logical connection between the matter and the feared deviation from the course of deciding the (matter) on its merits.”

Allegations of conflict and the appearance of bias are rather easily made, but need to be tested rigorously. If financial interests are involved then the legal tests are different, as are the consequences.

For more information, please contact our Local Government Team:

Last updated: July 2007

This article is intended to be brief in nature and should be used for information only. It should not be relied on as legal advice.