High Court Finds Level 4 'Lockdown' Unlawful for First Nine Days, Considers Lawfulness of Non-Essential Business Closures

The High Court has found that the Government's announcement of an Alert Level 4 'Lockdown' for four weeks from 26 March 2020 in response to the Covid-19 pandemic was unlawful and potentially unenforceable for the first nine days (Borrowdale v Director-General of Health [2020] NZHC 2090). The Court also reviewed the closure of all non-essential businesses, which is significant for business owners hoping to file civil liability claims for lost revenue during this period.

Health Orders and the Bill of Rights Act 1990

The claimant, Mr Borrowdale, challenged the legality of the Health Orders issued by the New Zealand Government between March and May 2020. The Court confirmed that Section 70 of the Health Act 1956 ("the Act") gave Dr Bloomfield, as the Director-General of Health, the authority to exercise special powers under the Act to prevent the outbreak or spread of any infectious disease. Furthermore, while these powers limited the rights and freedoms contained in the New Zealand Bill of Rights Act 1990 ("the NZBORA"), this was permitted under Section 5 of the NZBORA so long as this was done according to reasonable limits prescribed by law. The Health Orders (discussed further below) were necessary, reasonable, and proportionate responses to Covid-19, the Court held.  

Directions to Stay Home

The High Court considered that the Government's decisions to “go hard and go early” in response to the COVID-19 pandemic were appropriate and necessary. The Orders under the Act also gave effect to New Zealand's international obligations under the International Health Regulations 2005, which require the New Zealand Government to take measures to prevent the spread of infectious diseases both within New Zealand, and beyond its borders. But the Court took issue with the Government's announcement on 23 March 2020, in which the Prime Minster told people to stay at home from 26 March 2020.  

While the Court recognised the need for urgency in response to the global pandemic it highlighted that "even in times of emergency … and even when the merits of the Government response are not widely contested, the rule of law matters". Only Dr Bloomfield exercising special powers under Section 70 of the Health Act could lawfully direct people to stay at home due to the pandemic. When the Prime Minster told people on 23 March 2020 to stay home in their "bubbles", there was no order in place requiring this, but the Government's announcements created the impression that Lockdown was legally enforceable. The Court referred to the principle under the old 1688 UK Bill of Rights Act, which confirms that governments cannot override or disregard existing law unless there is a legal basis for doing so.  Therefore from 26 March 2020 people were not legally obligated to stay at home in their "bubble". This changed when Dr Bloomfield's second Order under Section 70 of the Act came into effect on 3 April 2020 that lawfully required people to stay home ("Order 2").  Consequently the first nine days of Level 4 Lockdown were unlawful and contrary to Section 5 of the NZBORA.

Closure of All Non-Essential Businesses

The Court also considered Dr Bloomfield's Section 70 Order regarding the closure of all non-essential businesses. This Order came into effect on Wednesday 25 March 2020, the day before New Zealand's Level 4 lockdown began ("Order 1"). The issue was whether Order 1 and its appendix “involved an unlawful delegation of the Director-General’s power to determine what was an “essential business” to the Ministry of Business, Innovation, and Employment ("MBIE")”.  

The Law Society was concerned that the generality of the definition of "non-essential business" in Order 1 offended the rule of law’s requirement for reasonable certainty. Order 1 defined non-essential businesses as those businesses that were essential to the provision of the necessities of life (such as supermarkets, pharmacies, clinics) and those businesses that support them. The Order also referred to an appendix prepared by the MBIE, which identified essential businesses, workers, and their supply chains within 12 industry sectors.  

The Crown submitted that the assessment of precisely which businesses in New Zealand are “essential” was not a public health issue, and the Ministry of Health was not in any position to undertake that assessment. It was therefore necessary, and lawful, to leave that kind of operational detail to the lead agencies operating in the relevant sectors. The High Court agreed and found that the definition of “essential businesses” in Order 1 and was at all times clear and fixed. Operational matters, or giving effect to the definition, lay with officials. Accordingly there was no delegation in Order 1, and no breach of the rule of law. The closure of all non-essential businesses from 26 March 2020 was lawful.

Steps Going Forward

It is possible that anyone who suffered a loss, during the first nine days of Lockdown could bring a claim for such proven loss or have a defence to prosecution. However, since the closure of non-essential businesses was mandated under Order 1 this appears to restrict possible claimants from recovering business-related losses. The Government of course did provide an employer a wage subsidy scheme as well as loan initiatives for businesses during this period. Furthermore, while the first nine days of Lockdown was not mandatory, it could be argued that people were willing to voluntarily comply with the Government's directions to enter Lockdown, despite the fact that this was not mandatory. So causation could be a real debate. Any potential claim would also be capped to nine days given that the Government lawfully imposed a shut-down thereafter.  

If you consider that you suffered a loss during the first nine days caused by the Government’s restrictive measures and can prove such loss, or you face a prosecution for breach in that same period, please contact us if you seek advice and guidance for your claim.

Please direct any enquiries to:

James Turner (Partner) on (09) 966 3603 (jturner@mcveaghfleming.co.nz)

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