Summary
Three vaping businesses were unsuccessful in challenging regulations setting the maximum permissible nicotine concentration in vaping products.
Background
In 2020, Parliament amended what is now the Smokefree Environments and Regulated Products Act 1990 (“Act”) by including vaping-related products as ‘notifiable products’ under the Act. Section 84(1)(a) of the Act allows the Governor-General to make regulations prescribing safety requirements for notifiable products.
The applicants were three related companies that manufacture, import, and sell vaping products (“Companies”).
On 11 August 2021, The Smokefree Environments and Regulated Products Regulations 2021 (“Original Regulations”) came into effect. The applicants had challenged the validity of these regulations in earlier proceedings.
While those proceedings were afoot, the government began a process to clarify an ambiguity in the Original Regulations. It was unclear under those regulations whether the maximum allowable nicotine concentration in a class of vaping products was 50mg/mL or 28.5mg/mL.
The Minister of Health submitted two papers to Cabinet in mid-2023. The papers set out the details of targeted consultation undertaken by officials (which included consultation with vaping industry participants) and options analysis. The papers recommended that the regulatory limited be set at 28.5mg/mL.
Cabinet approved the recommended changes to the regulations on 21 August 2023, and they came into effect the following month (“Amended Regulations”).
Upon learning this, the Companies filed judicial review proceedings claiming that the Amended Regulations were unlawful. Broadly, their challenge focused on inadequate consultation and a lack of evidence of a link between nicotine concentration in vaping products and resulting user harm.
The High Court rejected the Companies’ claim on all grounds. The court found no duty to consult, and held that the evidential criticisms, while framed a legal errors, were in substance a challenge to the merits of the decision (and therefore outside the scope of judicial review).
The Companies appealed to the Court of Appeal.
The case
The issues on appeal were whether the Ministry had a duty to consult on the Amended Regulations, whether they had consulted adequately, and whether the decision was rendered unlawful by the allegedly inadequate advice provided by officials.
Duty to consult
The Companies accepted there was no duty under the Act to consult but argued a common law duty to consult arose due to the significant public health and commercial impacts of the Amended Regulations. Alternatively, they argued the Ministry’s voluntary consultation created a duty to do so adequately.
The court squarely rejected that the Minister had any duty to consult. Formally, the Amended Regulations were made by the Governor-General acting on the advice of the Executive Council – following a decision of Cabinet. Previous case law held that it would highly unusual for consultation to be legally required for Cabinet decisions like making regulations. If consultation was intended by Parliament, the Act would have said so.
The court also rejected the claim that the Ministry’s voluntary decision to consult imposed legal duties on the Ministry as to how that consultation was undertaken. Consultation was good governance practice. Imposing legal duties on voluntary consultation would strongly disincentivise the practice.
Finally, the court held on the evidence that even if a duty to consult existed, the Companies failed to demonstrate the process was inadequate.
Inadequate advice
Relying on the earlier Court of Appeal decision Air Nelson Ltd v Minister of Transport, the Companies argued that the Amended Regulations were unlawful as they were based on official advice that was neither fair, accurate, nor adequate. The advice, the Companies claimed, was so on-sided that only one rational outcome was possible.
The court held that the Companies had mischaracterised the Air Nelson decision. That case concerned advice that failed to address matters that the Minister was legally required to consider. It did not establish a principle that the decision-maker must have all conflicting views before them when making decisions.
In this case, Cabinet made a high-level policy decision as a time-limited but democratically accountable body. It was not acting as a court or tribunal, but rather as a body making high level public policy in the general public interest. In such situations, individuals had limited rights to have their specific views put before the decision-maker.
In any event, the court found that the advice to Cabinet was sufficiently balanced. The Companies’ detailed criticisms of minutiae in official advice were matters for debate, not failures to consider mandatory considerations. The Ministry was not obliged to present industry or other specific arguments in detail and Cabinet was not required to consider them; it was permissible for Cabinet to deal with such matters at a macro level. Unlike in Air Nelson, the Minister and Cabinet were adequately informed of opposing views.
Result
The court dismissed the appeal and the Amendment Regulations remained in force.
The decision affirms important administrative law principles, including that the courts:
1. are unlikely to recognise non-statutory rights to consultation, particularly in high-level policy decisions; and
2. will not otherwise impose exacting procedural requirements on high level policy decisions, particularly those of Cabinet.
For futhur informatiion on this or similar cases please contact Director, Brigitte Morten
