Auckland Boxing Association Inc v New Zealand Boxing Association Incoporated HC Auckland M No1993-SW00

[2001] NZHC 445

IN THE HIGH COURT OF NEW ZEALAND
ADMINISTRATIVE DIVISION
AUCKLAND REGISTRY M No1993-SW00

IN THE MATTER of Part 1 of the Judicature Amendment Act 1972

BETWEEN AUCKLAND BOXING ASSOCIATION INCORPORATED
Applicant

AND THE NEW ZEALAND BOXING ASSOCIATION INCORPORATED
First Respondent

AND THE NEW ZEALAND BOXING COUNCIL
Second Respondent

Date of Hearing: 8 March 2001

Counsel: G P Denholm for Applicant
L M Riddiford for Respondents

Judgment: 8 May 2001

RESERVED JUDGMENT OF PRIESTLEY J

The Issue

[1] On 20 September 2000 the second respondent, which is for all material purposes the executive body of the first respondent, suspended the applicant from membership of the first respondent. The financial repercussions of that suspension on the applicant were serious, as were the practical ramifications of the suspension for the sport of boxing in the Auckland region. The issue at the heart of this proceeding is whether the first and second respondents’ suspension of the applicant’s membership was lawful.

The Proceeding

[2] The applicant seeks relief under the Judicature Amendment Act 1972. It specifically alleges that the second respondent exceeded its jurisdiction and authority in suspending the applicant and alleges that the second respondent’s actions and decision were ultra vires, invalid and illegal.

[3] The applicant (“ABA”) seeks orders and declarations that the 20 September 2000 decisions of both the first respondent (“NZBA”) and the second respondent (“the Council”) be set aside and declared invalid.

The Suspension

[4] The Council’s decision is contained in a letter dated 20 September 2000 to the ABA. That letter states:

“Dear Mr Wahlstrom

I refer to the Council letter of 14/9/00.

Council has noted that advice of the required resignations from the ABA executive was not received within the stipulated timeframe.

In consequence of that the Auckland Boxing Association is with effect from the date of this letter, suspended from membership of the NZBA.

This suspension will be reviewed by Council when the ABA has reordered its affairs so as to eliminate from its executive the identified persons who attended or were involved in the organisation and/or conduct of the boxing tournament held at Dargaville on 29 July and, has determined by motion recorded in its minutes of proceedings, that in all future activity it will comply with the Rules and Regulations of the New Zealand Boxing Association.

In the event that this suspension is not lifted prior to the New Zealand Boxing Championships scheduled to be held in Christchurch in October of this year, the ABA will not be permitted to enter a team at those championships.

In accordance with NZBA Rule No 15 this matter will be reported by Council to the scheduled Annual General Meeting to be held in October.

Council have noted that notwithstanding the continuance of this suspension, the ABA, if fully financial as at the time of the Annual General Meeting, may, if that is agreed by a majority of delegates to that meeting, exercise standard speaking and voting rights on this issue when it is raised at the AGM.

In accordance with NZBA Rule 14, notification of this suspension and the reasons for it have been given to the Minister of Internal Affairs, the Commissioner of Police and all other NZBA members.

Council members advise their unanimous and deep regret at the need to effect this suspension. There is however no alternative. The attitude of the ABA to this issue has been such that any other decision by the Council would betray all other NZBA member Associations that faithfully comply with the Rules and Regulations of the NZBA and by doing so, promote our sport and its administrative reputation with external sport. Administrative and control agencies.

Yours faithfully

T H Dunn”

Relevant Rules and Regulations

[5] The relevant provisions of the NZBA’s Rules and Regulations were annexed to Mr P J Wahlstrom’s affidavit of 7 December 2000. They were also helpfully annexed to the submissions of counsel for the respondents. The ABA is a specified member, along with 18 other regional associations, in Rule 5. The responsibilities and obligations of member associations are set out in Rules 12 and 13:

“12. Local Associations and Affiliate Members whether or not financial members of the Association shall submit to and comply with the responsibilities and obligations specified in or by these Rules or otherwise specified in or by the Regulations annexed hereto unless or until discharged from those obligations and responsibilities by decision of the Association taken in an Annual General Meeting or a Special General Meeting called for that purpose.

13. Local Associations and Affiliate Members shall be responsible and accountable to the Association for any actions taken or, as the case may be, not taken, by their office bearers and other members.”

[6] The power of the NZBA to suspend a member is contained in Rules 14 and 15:

“14. Where a member other than a Life Member has committed or is alleged to have committed a breach of these Rules that in the opinion of the Council would, or likely would, warrant termination of membership, the Council shall suspend the membership of that member and shall forthwith notify that member and all other members of that decision and in addition shall notify the Minister of Internal Affairs and the Commissioner of Police of that action and the reasons for it.

15. In any instance of suspension the Council shall report with recommendation to the next Annual General Meeting if that meeting is to occur within three months of the date of the event or shall call a Special General Meeting of the Association in accordance with these Rules and report with recommendation to that meeting.”

[7] The termination provisions of membership are as follows:

“18. Grounds for termination of membership, other than life membership, shall exist if the member has committed a breach of any responsibility or obligation imposed by these Rules or the Regulations annexed hereto, if the member has been inactive for a period of not less than two years or has been, as is, unfinancial for a period of not less than two years.

19. The membership of any member, other than a Life Member, of the Association may be terminated at any Annual General Meeting or Special General Meeting called for that purpose provided that the motion proposing such termination is passed by not less than three quarters of the votes exercised by attendant delegates entitled to vote at that meeting.

20. Termination of membership shall not relieve any member or past member from any financial or other obligation incurred prior to the date of termination.”

[8] Also relevant to the purpose and scope of the power to suspend are the other disciplinary powers of the Council. Rules 72 - 74 appear under the heading “Offences and Penalties” and read as follows:

“72. Notwithstanding any other provision of these Rules or and Regulations annexed hereto, the Council may in consideration of any breach by a member of these Rules and Regulations impose a fine on that member being an amount up to but not exceeding five hundred dollars.

73. In addition to or separate from any fine that might be imposed on a member the council may in such circumstances as it deems to be appropriate, ban any individual person or group of persons from attendance at, or participation in, any boxing related activity undertaken in accordance with these Rules or any Regulations annexed hereto and any such decision so taken shall, in accordance with these Rules, be binding on members.

74. All penalties imposed by the Council in accordance with these Rules and Regulations must be reported to the next following Annual General Meeting of the Association.”

[9] Various of the NZBA Regulations are also relevant. Regulations 1 to 4 of Annex A deal with the constitutional requirements to be met by Local Associations:

“1. Local Associations shall be registered as Incorporated Societies and shall each maintain a constitutional framework and rules that inter alia conform to the requirements of the rules if the New Zealand Boxing Association Incorporated and any regulations annexed thereto.

2. The constitution of each Local Association shall state the intention of achieving and maintaining affiliation to the New Zealand Boxing Association Inc and of acting in strict accordance with the rules and regulations of that society.

3. A copy of the constitution and annexed rules, if any, of each Local Association is to be lodged with the Secretary of the Association and any amendments to such documents are to be advised to the Council immediately on the acceptance of such by the Registrar of Incorporated Societies.

4. Local Associations are to be approved by the Minister of Internal Affairs as Approved Organisations in terms of the Boxing and Wrestling Act 1981 and any amendments thereto.”

[10] Regulations 5 and 6 appear under the subheading “Structure of Local Associations and Responsibility for the Actions of Members Thereof.” They provide:

“5. A Local Associations [sic] shall be comprised of, an executive elected from its ordinary members, such office bearers including honorary office bearers as are provided for in each constitution, affiliate clubs and ordinary members and its constitution shall provide that the Association is in control of and otherwise responsible to the Council for all relevant actions of the aforesaid persons.

6. Notwithstanding the provisions of regulation 5 hereof, it is hereby expressly stated that a Local Association and its executive members are jointly and severally responsible and liable for any breach of these regulations.”

[11] Also relevant are Regulations 7 to 9, which govern who may be members of Local Associations:

“7. Ordinary membership of Local Associations shall be limited to persons of good repute. However no person otherwise of good repute shall be admitted to membership or permitted to continue in membership, or to be appointed to an official position or permitted to continue in such a position, if he or she has, within the previous period of 10 years, been convicted of an indictable offence carrying a possible term of imprisonment of 3 or more years, or has, within the previous period of 15 years, been convicted of any offence involving a Class A or Class B drug or is, subject to regulation 8 hereof, a current or past professional boxer or promoter of professional boxing.

8. A Local Association may, by motion duly moved and passed in accordance with its constitutional process, determine to apply to the New Zealand Boxing Council for permission to admit, to membership, or to appoint to an official, a person who has been a professional boxer or promoter of professional boxing. The Council’s decision on any such application shall be final and subject only to the appeals provisions of the rules of the New Zealand Boxing Association.

9. Any approval given by the Council in terms of regulation 8 hereof shall entitle the designate person to stand for election to and otherwise to officiate in any position recognised by the New Zealand Boxing Association other than a position as a boxing judge or referee which matters separately dealt with elsewhere in these regulations.”

Background Facts

[12] The dispute centres around a “pro-am” boxing tournament. A pro-am tournament is one which includes both amateur and professional bouts in the same event. The tournament was to take place on 29 July 2000 in Dargaville.

[13] The amateur part of the tournament was to be held under the auspices of the applicant (‘ABA’), while the professional bouts were the responsibility of the New Zealand National Boxing Federation Inc. (‘NZNBF’). This organisation has no connection with the NZBA. The promoter of the tournament was Mr Jim Mahoney, who was assisted by Mr Gary McCrystal, the President of the NZNBF. Both men were executive committee members of the ABA.

[l4] On 14 June 2000, the ABA made an application to the NZBA for a permit to hold the amateur part of the tournament. This was approved by the NZBA on 16 June 2000. On 28 June 2000 both the NZNBF and the ABA made applications to the Whangarei Police to hold their respective parts of the tournament. On 21 July 2000, the Police replied to Mr Mahoney requiring more information about the amateur bouts. Mr Mahoney made a detailed reply on 23 July, which, among other things, reiterated that the amateur bouts were being organised by the ABA. This reply, made personally by Mr Mahoney, was neither discussed with nor approved by the ABA.

[15] A Police permit was dated 27 July 2000 and was delivered to Mr Mahoney the next day. Mistakenly, only one permit was issued to cover both the professional and amateur bouts. It specified that the referees for the amateur bouts were to be Mr P McSharry and Mr L Lyall. The permit was in the name of the ABA. It was, however, sent not to the ABA itself but direct to Mr Mahoney. The mistake was not picked up, nor was action taken to have it corrected. Neither Mr McCrystal nor the ABA, saw the permit before the tournament.

[16] As the day of the tournament approached, it appeared there was little interest in the amateur side of the tournament. Few officials and boxers were prepared to travel to Dargaville. Mr Lyall had been trying to secure officials for the amateur bouts. The day before the tournament this situation had not changed. The ABA therefore notified Mr McCrystal and Mr Mahoney that it was pulling out of the tournament.

[17] It appears that Mr Mahoney then telephoned Mr Reese Facoory, the head of the ABA, and told him that he was going to “can” the tournament because of the lack of amateur bouts. However, Mr Mahoney was apparently concerned that if he cancelled the tournament he would lose money and credibility. He discussed the position with Mr McCrystal and they decided to hold the tournament entirely under the auspices of the NZNBF.

[18] Neither the NZBA nor the ABA were made aware of this decision. A new Police permit was not sought. The original permit had only been delivered the day before the tournament, and the decision to restructure the tournament was taken that morning.

[19] On 30 July 2000, the day after the tournament the NZBA discovered that an unregulated tournament, including some amateur bouts, had taken place in Dargaville. There were a number of irregularities at the tournament which I accept were of legitimate concern to the NZBA so far as the conduct of the sport of boxing in New Zealand was concerned. Mr Keith Walker, Chairman of the Council, spoke to Mr Facoory and asked for a written explanation. As a result of these communications, it became apparent that as many as seven amateur bouts occurred at the Dargaville event.

[20] The NZBA received a letter from the Whangarei Police dated 2 August 2000 which set out a number of concerns the Police had with respect to the Dargaville tournament and requesting clarification. These issues included the fact that neither of the specified referees had attended which meant the terms of the permit had been breached.

[21] The NZBA therefore wrote to Mr Peter Wahlstrom, the Secretary of the ABA, on 4 August 2000. This letter outlined the Police concerns, and detailed the course of events then known to the NZBA. It stated that, on the basis of those facts, the NZBA was of the opinion that the ABA had committed “one or more serious breaches” of the NZBA rules and regulations, and that these breaches could potentially have wide-ranging impact on the credibility of boxing generally and upon the NZBA’s relationship with the Police.

[22] The letter stated that a special meeting of the Council would be needed to consider these matters. To that end the ABA was requested to provide the tournament result sheet, the Pro Am report including the names of the officials, and a separate report on the conduct and running of the tournament. Thus information was to be submitted by 9 August 2000. Three pending ABA amateur permit applications were put on hold by the NZBA pending resolution of the issue.

[23] No reply to the letter was received by 9 August. The NZBA did receive a letter from Mr Wahlstrom dated 10 August 2000 requesting that the pending permit applications be approved. Mr Dunn’s reply, dated 11 August 2000, observed that the NZBA had yet to receive a response to its letter of 4 August and advised that the Council would deal with the issue of the Dargaville tournament as soon as the requested report was received. Until that time, the pending permit applications would remain on hold.

[24] On 13 August 2000, Mr Dunn submitted a confidential draft report to members of the Council. It largely accords with the chronology set out in this judgement. It states that Mr Albie Williams and Mr Gill Sullivan acted as officials at Dargaville and also refers to Mr McCrystal and Mr Mahoney. Neither Mr Williams nor Mr Sullivan are member of the ABA executive. The draft states that Mr J Stuart and Mr L Tulesi, both members of the ABA executive, attended the tournament and seconded boxers.

[25] At paragraph 12 of his draft report, Mr Dunn states that the draft was made in the absence of a formal report from the ABA, but as a result of “a number of advices now to hand.” Some of these sources of information were listed as annexes to the draft memo, although not, apparently, actually included in the copies sent to the members of the Council. The annexes which were provided to the Council included letters from both Mr Mahoney and Mr McCrystal, and an article written by Mr Mahoney in the New Zealand Truth dated 4 August 2000. It is clear, however, that this draft report was never disclosed to the ABA.

[26] On the basis of the matters as set out in the draft, Mr Dunn goes on to conclude that, while the ABA did not itself “wittingly” conduct any part of the Dargaville tournament, it could be held responsible on a number of counts. It describes ABA as “administratively incompetent” for allegedly failing to follow up appropriately on the Police permit application, and for failing to notify the Police or the NZBA of the decision to pull out of the tournament.

[27] The report also expresses the view that the ABA was “very badly let down” by the four executive members involved and that, under the regulations, the ABA may be held accountable for the actions of those members. The actions of those members were “incompatible with continued membership of the executive of an affiliated organisation.”

[28] The report goes on to recommend that the Council wait and observe the outcome of an ABA executive meeting to be held on 15 August 2000. If the ABA obtained the resignation of the four members involved, then no further action should be taken. If that did not occur, then the Council would have to consider “a more fundamental approach.”

[29] The “more fundamental approach” referred to by Mr Dunn in his confidential report refers specifically to what Mr Dunn specifies as “. . . the problems being experienced by, and/or being caused by, the current management regime of the ABA.” In Mr Dunn’s 13 August 2000 letter to all Council members which contained his draft report he also states:

“It is clear that the ABA have serious internal problems. The internally initiated cleanup of the executive that is indicated in my draft report as an appropriate action will, if it takes place, be a start only to other internally initiated cleanup actions that are obviously necessary.”

The evidence does not extend to what “internal problems” if any the ABA was experiencing in Mr Dunn’s perception. However, the references to a desirable “cleanup” and to the possibility of the Council addressing problems caused by the ABA’s “current management regime” demonstrate a mind-set which led to error.

[30] On 15 August 2000, Mr Wahlstrom sent a letter to the NZBA on behalf of the ABA. This letter stated that the ABA had not been directly involved in the final conduct of the Dargaville tournament, and that therefore it could not be held liable in relation to it. The letter also pointed out that the Police permit had been issued in error.

[31] Having received this report, Mr Dunn issued his final report to the Council on 18 August 2000. It notes that the ABA response of 15 August acknowledges indirectly that both Mr McCrystal and Mr Mahoney were independent promoters of boxing tournaments. In Mr Dunn’s opinion, this constitutes a further breach of NZBA regulations.

[32] The report then set out the facts in substantially the same form as they were contained in the 13 August draft. It goes on to note that the ABA had not required the resignations of the four members involved at its meeting of 15 August. On that basis, it states:

“We are dealing, then, with significant transgressions against the Rules and Regulations of the NZBA. Moreover, we are dealing with a member Association that has passed up on an opportunity to deal with its failings and initiate internal corrections.”

[33] A significant fine and suspension was then suggested as the only feasible response to the situation, in order to protect the reputation of the NZBA, and its relationships with various sporting and governmental agencies. Draft letters to both the ABA and to the Whangarei Police were annexed to the report for approval.

[34] On 22 August 2000, a letter in similar terms to the draft was sent by the NZBA to the ABA stating the Council’s conclusions. The letter reiterates what was stated in both the draft report and the final report as the Council’s understanding of the facts of the case. It then goes on to detail its conclusions. The ABA was fined $1000 and informed that no further permits would be issued to it while the offending members (Messrs Mahoney, McCrystal, Stuart and Tulesi) remained on its executive. In addition, unless those members resigned or were removed before 4 September 2000, the ABA’s membership of the NZBA would be formally suspended. A contribution of $400 to the administrative costs of the NZBA in dealing with the matter was required. The letter also advised the ABA of its right of appeal under rules 79 to 82 of the NZBA Rules.

[35] The ABA replied by letter dated 4 September 2000. A meeting of the ABA executive had been held on 29 August 2000. It passed a resolution reprimanding the relevant members of the executive, but did not request their resignation. In respect of Messrs Stuart and Tulesi, the letter stated that they had attended in their private capacity and as spectators only. With respect to Mr McCrystal and Mr Mahoney, the ABA was satisfied that they attended in their private capacities, and that therefore the ABA maintained its position that it was not liable for their behaviour. It therefore requested the Council:

“. . . to suspend any disciplinary action until the full situation is placed before [the Council] including . . . statutory declarations . . . and submissions regarding the position of Messrs Mahoney and McCrystal.”

[36] The ABA’s same letter addressed the issue of suspension and the serious consequences which such an action would have for the ABA. The letter stated that a formal suspension would cause damage to the ABA’s reputation with possible consequential economic loss and loss of membership (a reference which I am satisfied refers to boxers in the Auckland region joining the ABA).

[37] A second letter from the ABA was sent on 6 September 2000. It expanded the reasons why the ABA did not accept responsibility for the actions of its executive members in this matter, and also challenged the interpretation of the relevant provisions of the Rules and Regulations alleged to support such responsibility. Included with the letter were personal statements from Messrs Stuart and Tulesi indicating that they had attended the Tournament in their personal capacity and as spectators only. The letter ends with a plea for the Council to reconsider the issue.

[38] In anticipation of a Council meeting to discuss the ABA responses Mr Dunn once again prepared a draft report. This is dated 8 September 2000, and was sent to the Council members under a covering letter dated 10 September 2000. The report analyses the statements of Messrs Stuart and Tulesi, and concludes that there is insufficient evidence that either of these two men were involved in the Dargaville tournament as anything other than spectators. However, the report continued to express the opinion that the presence of Messrs Stuart and Tulesi at the tournament amounted to the ABA countenancing a rogue boxing event.

[39] The report also rejects the submission of the ABA that Mr McCrystal was at all relevant times acting in his capacity as President of the NZNBF. It continues to hold the view that the ABA is responsible for the conduct of all its executive members, regardless of their relationship with other boxing bodies.

[40] The ABA’s arguments regarding Mr Mahoney’s actions were rejected on similar grounds. The report notes that it is in contravention of the Regulations for a current promoter of professional boxing to be a member of the ABA executive, and cites Annex A Regulations 7 - 9. The withdrawal of the ABA from the tournament is discounted on the grounds the two permit-issuing authorities - the Police or the NZBA - were not notified of the ABA’s withdrawal. There is a suggestion that Police investigation might reveal that the ABA did not in fact cancel the tournament, but that is ostensibly discounted for the purposes of the Council’s deliberations.

[41] The report concludes by stating that, apart from the matter of Mr Stuart and Mr Tulesi, the ABA’s responses of 4 and 6 September change nothing, and recommends that the Council’s decision stand with revised deadlines. This report was not disclosed to the ABA.

[42] The report was discussed at a Council meeting on 13 September 2000. The minutes reveal that Mr Lyall had in the interim spoken to Inspector Dinnery of the Whangarei Police, and had been told that either Mr Mahoney or Mr McCrystal had seen the Police permit when it was issued on 27 July 2000, and that the Police had at all times been of the view that the tournament was being conducted by the ABA. The Council’s minutes record that, after discussion, the conclusions and recommendations of the report were accepted.

[43] A letter was accordingly sent to Mr Wahlstrom on 14 September 2000. It states that the Council has received “separate and different advice” regarding the involvement of Mr Stuart and Mr Tulesi, but that there was no point in pursuing this matter when it is their presence at the tournament which was objectionable. The letter reiterates the Council’s position that the Regulations impute liability for executive members’ actions to the ABA, and goes on to express substantially the conclusions reached in the report of 8 September. The decision of the Council was confirmed, and the ABA given until noon on 20 September 2000 to effect the required resignations or face suspension.

[44] No response was made by the ABA. On 20 September 2000, Mr Dunn sent the letter (supra, para [4]) formally suspending the ABA’s membership from that date. The suspension would be reviewed when the ABA had eliminated from its executive membership the stipulated people, and determined by a recorded minuted motion to comply at all times in the future with the NZBA Rules and Regulations. The suspension was to be reported to the NZBA Annual General Meeting, where, despite the suspension, the ABA would have full speaking and voting rights on the issue.

[45] The ABA responded the letter of 16 October 2000 to the effect that they would not be sending a delegate to the AGM.

[46] It appears that the matter was discussed at the NZBA’s AGM on 22 October 2000, as a letter was sent to the ABA dated 25 October 2000 stating that the assembled delegates had endorsed the actions of the Council.

Natural Justice

[47] The first ground of judicial review advanced by the applicant is breach of natural justice. In its submissions, the applicant particularised the alleged breaches of natural justice as being:

“Providing insufficient time to the Applicant to provide evidence in answer to the allegations, failing to provide a hearing to the Applicant, failure to provide the Applicant with an opportunity to make submissions as to penalty and failure to adequately advise the Applicant regarding appeal procedures.”

[48] There was no dispute that the Council and the NZBA are subject to the requirements of natural justice. Cases such as Byrne v Auckland Irish Society [1979] 1 NZLR 351 make it abundantly clear that incorporated societies, despite their private law nature, are potentially reviewable on this ground. So does the inclusion of the exercise of powers under the constitution of incorporated societies in the definition of “statutory power of decision” in s 3 the Judicature Amendment Act 1972. However, the respondents’ counsel submitted that, as a voluntary organisation concerned with the sport of amateur boxing, a lower standard of procedural correctness was appropriate than would normally be applied to, for example, an administrative body.

[49] That there is such an allowance made for purely leisure-based private organisations is beyond doubt. It is implicit in some of the classic statements regarding the susceptibility of such organisations to judicial review. Examples of these are Abbot v Sullivan [1952] 1 KB 189 (CA) and Russell v Duke of Norfolk [1949] 1 All ER 109 (CA).

[50] The NZBA does not, in my judgment, fall within the category of a private organisation entitled to this allowance. In Abbot v Sullivan, Denning LJ stated at 198:

“These bodies [referring to trade unions], however, which exercise a monopoly in an important sphere of human activity, with the power of depriving a man of his livelihood, must act in accordance with the elementary rules of justice. They must not condemn a man without giving him an opportunity to be heard in his own defence: and any agreement or practice to the contrary would be invalid.”

[51] The level of the requirement to observe the standards of natural justice and fairness must reflect the significance and consequences of the relevant decision to those affected by it. Where the decision-making body is effectively capable of denying someone their livelihood, then the requirements of natural justice will be of a high order. Where no such weighty matters turn of the decision, less stringent standards are appropriate.

[52] Mr P J Wahlstrom’s affidavit of 7 December 2000 deposes that the ABA suspension means that ABA boxer members cannot compete in national tournaments or sanctioned competitions of the NZBA. It further deposes that the ABA is likely to lose its membership and competition boxers with resulting economic loss and long term damage to its position as the main body associated with the sport of boxing in the Auckland metropolitan region. The written submissions on behalf of the ABA further refers to the prejudicial affect that a resulting loss of income will have on the ABA’s ability to service and maintain a valuable commercial property which it has. On this basis, therefore, I find that the Council is not entitled to any significant relaxation in the standard of natural justice required of it.

Failure to Provide a Hearing

[53] The most fundamental natural justice ground advanced by ABA is that the Council, in deciding that it would suspend the Applicant, failed to allow a proper hearing.

[54] The duty to hear all sides before deciding is a fundamental aspect of natural justice. Basic to that duty is the requirement of notice. This may, in the circumstances, include notice of the potential outcomes of the decision-making process. I note the comments of the Judicial Committee of the Privy Council in Re Erebus Royal Commission; Air New Zealand Ltd v Mahon [1983] NZLR 662, 671. Diplock LJ makes it clear that the duty to hear all sides of a matter includes giving the opportunity to make submissions in full knowledge of the possible consequences of a tribunal’s decision.

[55] In the letter of 4 August 2000, the ABA was given the opportunity to submit a report on the Dargaville tournament. It was notified of the fact that the Council would be convened to consider the matter and that their preliminary view was that serious breaches of the Rules had occurred.

[56] There are two areas in which I consider that this notice was deficient. First, I do not consider that the ABA was given sufficient notice of the fact that the Council was contemplating suspending their membership. In fact, no mention was made of possible penalties until the letter of 22 August 2000, after the decision of the Council was made. In the letter to the ABA of 4 August 2000, the only indication given of the contemplated course of events was that a special meeting of the Council would be convened, aimed at providing a response to the concerns of the Police. While it was made clear that the Council, or some of its members, regarded the Dargaville tournament as a serious breach of NZBA Rules, suspension was not foreshadowed.

[57] It is clear that part of the duty to provide a fair hearing includes disclosure to a party of prejudicial information, in order that the party may respond: reHK (an Infant) [1967] 2 QB 617 at 630; Kioa v West (1985) 159 CLR 550 at 587 per Mason J. Much of the information upon which the Council based its decision was obtained by independent inquiries. In some cases individual members of the ABA executive were requested to, and did, make personal statements to the Council. None of these statements were disclosed to the ABA, although the fact that they came from members of the ABA’s executive diminishes the objectionable nature of this failure.

[58] More importantly, the confidential reports of Mr Dunn to the Council were not available to the ABA in order that it might have responded. The earliest notification of the facts upon which the Council was proceeding was given in the letter of 22 August 2000. This is contrary to the requirements of natural justice. So too were Mr Dunn’s concerns about ABA’s perceived management problems concealed.

[59] The ABA’s letter of 4 September 2000 constituted a response to the stance which the Council had signalled in its 22 August letter. Obviously the Council reconsidered its stance in part in the light of what the ABA had to say about the involvement of Messrs Tulesi and Stuart. The Council’s 22 August stance was arguably not set in concrete.

[60] The approach taken by Mr Dunn in his confidential report dated 8 September 2000 is critical. In fairness to Mr Dunn his report constitutes a reanalysis of the situation. The emphasis which he places on various matters is, however, significant.

[61] With regard to Mr McCrystal and the ABA’s contention that Mr McCrystal was acting in his individual capacity and as President of the NZNBF Mr Dunn says:

“. . . it seems that no one other than Mr McCrystal himself and some among the executive members of the ABA know when Mr McCystal is, in regard to boxing as is, fully engaged as an executive member of the ABA . . . and when he is otherwise engaged as the President of the NZNBF . . . The problem is not Mr McCrystal’s, it rests with the ABA. While Mr McCrystal remains a member of the ABA executive that body must be prepared to accept responsibility for any boxing activities undertaken by him that breach the Rules and/or Regulations of the NZBA.”

Those concerns as they relate to Mr McCrystal’s activities, which must range more widely than the circumstances of the Dargaville tournament, were not specifically raised by the Council to the ABA as a matter of ongoing concern and as a discrete issue from the Dargaville tournament.

[62] Mr Dunn highlights in his same report another facet of the same problem when he states:

“Auckland have not otherwise in their response attempted to deal with their breach of Annex A Regulations 7-9. That is - the continued membership on the executive of a current promoter of professional boxing. This breach needs to be kept in mind as it provides further grounds, if such is needed, for the required resignations of McCrystal and Mahoney. [emphasis added]”

[63] When viewed against the background of the legitimate concerns raised by the Dargaville tournament; the facts which I have found; and the parties’ respective affidavits and annexed materials, the concerns raised in Mr Dunn’s two reports have huge significance. I have no difficulty in accepting that the actions of Messrs Mahoney and McCrystal raised issues of legitimate concern for the NZBA and its Council. Those concerns on the materials before me may well have augmented other concerns which NZBA had about the ABA’s internal management in general and the activities of Mr McCrystal and the NZNBF in particular. My conclusion is that instead of raising those more global concerns with the ABA and in particular its stated objective of requiring a “cleanup” at the ABA’s executive (which was to start with “the required resignations” of Messrs McCrystal and Mahoney), the Council has instead purported to limit its concerns and inquiries to alleged breaches of its Rules flowing from the Dargaville tournament. In short the Council concealed from the ABA some of its major concerns and objectives and thus denied to the ABA the opportunity to put its case and comment on those concerns.

[64] The ABA was not properly notified of the scope of the Council’s concerns, or of the potential consequences of the decision. In the absence of such notice, they were unable fully to put their own case to the Council. This is a serious breach of natural justice.

Improper Purpose and Ultra Vires

[65] Breach of natural justice is not, however, the only ground advanced by the applicant. It also alleges that the Council’s power to suspend was exercised improperly. For the purposes of this analysis, I proceed on the basis that there has in fact been a breach of the NZBA Rules or Regulations which can be attributed to the ABA, although I recognise that the applicant submits otherwise.

[66] Assuming, therefore, that such a breach exists, the ABA’s submission is that it is outside the power of the NZBA to suspend in this manner. This submission can be broken down into three separate facets. The first is whether the power may be employed as a punitive measure. The second is whether suspension may be used as a coercive tool. Linked to this is the third aspect of the allegation, which is whether the Council is empowered to impose a conditional suspension. The final two aspects are essentially different sides of the same issue. I believe they are usefully addressed separately, as the use of the power to suspend for coercive reasons is a question of improper purpose, while the question of whether conditional suspension is available is a broader question of vires.

[67] With respect to the first question, I do not believe the Rules contemplate the use of suspension as a punishment. I regard it as a procedural device for use in cases which, in the opinion of the Council, may result in termination of membership. I am led to this conclusion by several factors. First, the power to suspend is only available to the Council in cases where termination is, or is likely to be, the consequence of the relevant breach of the Rules: see Rule 14 (supra) Secondly, in cases where the Council is satisfied that this is the case, the requirement to suspend is mandatory. If the power were for use as a disciplinary measure per se, I would expect it to be discretionary. The fact that suspension is mandatory suggests that it is a procedural device preliminary to disciplinary action. Thirdly, Rule 15 provides that in every case where the Council suspends a member, it is required to “report with recommendation” to a General Meeting within three months. This again suggests that a suspension imposed by the Council is merely a temporary measure.

[68] This interpretation is reinforced by Rules 72 to 74, regarding Offences and Penalties. It is clear those rules define the options available to the Council in disciplining members. Termination is dealt with separately, but is an option available not to the Council, but to the Association in General Meeting. The Council’s options are two: a fine of up to five hundred dollars and/or a ban imposed on certain identified individuals. There is no mention the use of suspension as a penalty. Indeed, as is apparent, the suspension provisions are dealt with in an entirely different context from the penalties for offences against the Rules. Both these considerations suggest that suspension is not to be regarded as a punitive or coercive power.

[69] Moreover, I also note that when a fine or ban is imposed by the Council, the requirement is only that it be reported to the Annual General Meeting. As already discussed, however, a suspension must be reported to a General Meeting within three months, and accompanied by a recommendation. Once again, this suggests that suspension is a procedural measure rather than a final result.

[70] These factors lead me to the conclusion that the power of suspension, as granted to the Council under the Rules, operates as an antecedent to the termination of membership or imposition of another penalty by a General Meeting. It effectively prevents a member from exercising membership rights pending a General Meeting convened to consider whether its membership should be terminated. It is not in itself intended to be used as a punitive measure. The punitive use of suspension is therefore motivated by an impermissible purpose.

[71] As well as being punitive, the decision of the Council is also clearly intended to be coercive. This emerges from the reports of Mr Dunn which I have referred to. The decision was designed to force the ABA to require the resignations of certain of its members. In the light of the above analysis of the purpose of the power to suspend, it is clear that this is an improper purpose.

[72] The final aspect of this submission is whether it was outside the Council’s power to impose a conditional suspension. The Council is not specifically authorised under the Rules to impose a conditional suspension. As already stated, a suspension is a procedural device designed to preserve the status quo until a meeting of the Association can be convened to consider the issue of termination. Imposing a conditional suspension is inconsistent with this purpose.

[73] I note at this point that Rule 74 may expose another flaw in the respondent’s action, one which was not discussed during the hearing. That rule provides that the Council may fine a member a sum up to $500. In this case, the fine imposed was $1000. There is no indication in the Rules whether the $500 maximum is to be assessed on a “per breach” basis, or whether it is a cumulative limit. If the former is true, and the NZBA can identify two or more breaches, then a fine of that magnitude was available to them. If, however, the limit is a cumulative one, or if only one breach can be identified, then the imposition of the fine is clearly ultra vires. I did not, however, have the benefit of argument on this point, and given my conclusions on the other grounds of review raised by the applicant, it is unnecessary for me finally to decide it.

[74] I therefore conclude that the decision of the Council to suspend the ABA was both ultra vires and motivated by impermissible and improper purposes. Suspension is a procedural device, not available for use as either a punitive or coercive measure. Moreover, it is outside the power of the Council to impose a conditional suspension.

Attribution

[75] The applicant’s next alleged ground of review is that the NZBA erred in holding the conduct of the various executive members involved, but particularly that of Mr Mahoney and Mr McCrystal, could be attributed to the ABA. The Council therefore erred in finding that the ABA was vicariously liable for the behaviour of those executive members. It is clear that the NZBA at no stage alleged that the ABA was directly or deliberately involved in the running of the Dargaville tournament. This is acknowledged in the reports submitted to the Council by Mr Dunn. The finding that the ABA was in breach of the Rules rests entirely on the conduct of the various executive members to the ABA.

[76] Rules 12 and 13, set out above at paragraph [5], are relevant to the question of the ABA’s liability, as are Regulations 5 and 6.

[77] It is the respondents’ submission that, in the light of these regulations, the conduct of any ABA executive members involved in the Dargaville tournament can be attributed to the ABA and therefore constitutes a breach of the NZBA Rules by the ABA. The NZBA has maintained that stance throughout its dealings with the ABA and during this proceeding.

[78] The ABA, on the other hand, maintains that the actions of its executive members were taken in their personal capacities, and are in no way connected to the ABA. On that basis, they claim that no responsibility for the actions of those members can be attributed to the ABA.

[79] It is clear, particularly in the light of Rule 13, that the ABA is required to take responsibility for the conduct of its members, and is accountable on that matter to the Council. It is required to maintain a constitution which not only establishes that the ABA is in control of the conduct of its members, but also conforms strictly in its terms with the Rules and Regulations of the NZBA: see Annex A, regulations 1 and 2. Thus it is reasonable to assume that the obligations placed on members of the ABA are similar if not identical in form to those set out in the NZBA Rules.

[80] However, being accountable to the Council and responsible for the actions of Executive members is not identical to the proposition that the actions of its members are attributable to the ABA. The NZBA rules could be interpreted as requiring the ABA to have a constitution which places similar obligations upon ABA members as those imposed by the NZBA Rules, and to have disciplinary procedures to ensure that its members comply. This would be consistent with the requirement in the regulations that the local association’s constitution be submitted to the Council as part of their membership application. It would also give the applicant a necessary degree of internal autonomy.

[81] If this is indeed the case, and the ABA has complied with its constitution in disciplining its members, then I have difficulty in seeing how the ABA’s disciplining process can constitute a breach of NZBA Rules. The ABA’s responsibility and accountability to the NZBA is to demonstrate that the necessary internal measures have been taken as required by their constitution. Where that constitution grants discretion to the ABA, the NZBA cannot interfere with the manner of its exercise.

[82] As already noted, the ABA constitution is not in evidence before the Court. Moreover, as I have found against the respondents on other issues, it is not strictly necessary to decide the point.

Appeal right

[83] In the Council’s letter of 22 August 2000, the ABA was advised of its right of appeal to the Appeals Committee of the NZBA, and directed to Rules 79 to 82. This right of appeal was never exercised or adverted to by the ABA.

[84] The existence of an unexercised right of appeal does not preclude the grant of judicial review. The concepts of appeal and review are fundamentally different, and will be appropriate in different circumstances. However, the existence of a domestic right of appeal does affect the Court’s discretion to grant review. If the ABA failed to take advantage of an opportunity to correct the errors it complains of or if the appeal right was a more appropriate means of dealing with the complaint, this weighs against the grant of review.

[85] Counsel for the respondents referred me to the judgement of Cooke J, as he then was, in Norrie v Auckland University Senate [1984] 1 NZLR 129. That case concerned the powers and jurisdiction of the University Visitor as a appellate tribunal, and the relationship between that jurisdiction and the jurisdiction of the Courts to review a decision able to be appealed to the Visitor. At 141, Cooke J commented that in most cases where the plaintiff has resort to a domestic remedy, the Courts should be unwilling themselves to grant discretionary remedies.

[86] I note, however, that Cooke J modifies this by reference to two cases where judicial review may be appropriate notwithstanding the existence of an unexercised appeal right. The first of these is a case of flagrant unfairness, and the second is one where a pure question of law may be isolated. Only in very clear cases of this type, however, should the Courts contemplate proceeding in the face of available appeal rights.

[87] In this context, the applicant submitted that, while it had been notified of the existence of their appeal right, the respondent had failed to do anything to notify them of procedures, or of the composition of the Appeal Committee. In these circumstances, the applicant assumed that the Committee would be made up of Council members, and would therefore be biased. It also alleges that there was no evidence that the Appeals Committee was in fact constituted at the time of the Council’s decision. On this basis, it argues that its failure to exercise its appeal right was justifiable.

[88] I do not agree. As to the question of procedure, the method of initiating an appeal is set out in Rule 80. All appeals must be lodged in writing with the Secretary of the NZBA. From that point, Rule 81 makes it clear that the Committee has jurisdiction to determine its own procedure. These provisions were expressly drawn to the attention of the applicant. With respect to allegations relating to the composition of the Committee, it is clear from the affidavit of Deirdre Rogers, dated 29 March 2001, that the Committee was in fact constituted at the relevant time, and that none of its three members are members of the Council. This information would have been readily available to the ABA had it taken the trouble to inquire. I accordingly conclude that its failure to exercise its appeal right was unjustified.

[89] Errors of natural justice are able to be cured on appeal. That is a matter of common sense. Where a party is given a genuine opportunity to re-ventilate an issue on appeal, any inadequacies in the procedure used in the first instance hearing will be remedied. In this case, the ABA were entitled to be heard by the Appeals Committee. It chose not to exercise that right.

[90] In this case, however, where I have held that the Council failed to disclose to the ABA some of its fundamental concerns, where the penalty of suspension imposed was for improper purposes; and where the suspension imposed being in the nature of a conditional suspension was in any event ultra vires, the resulting illegalities of the Council’s decision cannot be cured by an appeal. It follows that the Applicant’s failure to exercise its appeal rights is not fatal to the remedies it seeks.

Decision

[91] I therefore find that the decision of the New Zealand Boxing Council to suspend conditionally the membership of the Auckland Boxing Association is invalid by virtue of being both ultra vires and an impermissible and improper use of the power to suspend. It was further a decision reached in breach of the rules of natural justice. I therefore grant the Applicant judicial review and, pursuant to s 4(2) of the Judicature Amendment Act 1972, I set aside the decision of the Council.

Orders

[92] The decisions of the First and Second Respondents dated 20 September 2000 suspending the Applicant from membership of the First Respondent are declared to be invalid and are set aside.

[93] The Respondents are ordered to pay the Applicant’s costs calculated on the 2B Scale.

Additional Comment

[94] I was advised at the outset of the hearing by counsel that although the parties had attempted settlement negotiations and although Mr Mahoney had resigned voluntarily from the Executive of the Applicant, Mr McCrystal remained a member of the Applicant’s Executive and that in any event settlement negotiations had failed.

[95] I have no doubt that the purported suspension of the Applicant which has lasted for eight months will have inflicted considerable loss and damage not only specifically on the Applicant but also to boxing as a sport in the Auckland region.

[96] The Court expresses the hope that the parties in the wake of this decision will be able to reconcile their differences and work together co-operatively for the greater benefit of the sport both in Auckland and New Zealand.