Barfoot v O'Meara
[2019] NZHC 1186
•29 May 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-000686
[2019] NZHC 1186
UNDER the Judicial Review Procedure Act 2016 IN THE MATTER OF
the Tamaki Estuary Protection Society Inc.
BETWEEN
CHRISTOPHER BARFOOT, BETHANY MEGAN EVANS,
JAMES REGINALD SINCLAIR,
JULIE CHAMBERS, CHARLES WORTH, OLIVER HOFFMAN,
DORTHE SIGGAARD,SIU MAN LORA YOUNG and BARBARA SHAW
Applicants
AND
PATRICK O’MEARA
First Respondent
DENNY NGAHAUEWHA THOMPSON
Second RespondentTAMAKI ESTUARY PROTECTION SOCIETY INC
Third Respondent
Hearing: 6 May 2019 Appearances:
R S Pidgeon for the Applicants
P O’Meara (Self-represented First Respondent) in Person
D N Thompson (Self-represented Second Respondent) in Person K M Muller, Amicus Curiae
Judgment:
29 May 2019
JUDGMENT OF EDWARDS J
This judgment was delivered by me on 29 May 2019 at 2.00 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
BARFOOT v O’MEARA [2019] NZHC 1186 [29 May 2019]
[1] The Tamaki Estuary Protection Society Inc (TEPS) was incorporated with the aim of preserving, protecting and improving the waters, life and shores of the Tamaki Estuary. Regrettably, pursuit of those objectives since October 2017 has been waylaid by a dispute about who comprises the executive committee of the TEPS (Executive Committee).
[2] The respondents say they were validly reappointed at the annual general meeting (AGM) on 29 October 2017. The applicants dispute that and seek, by way of judicial review, declarations that the defendants were not lawfully appointed or elected to the Executive Committee, and an order directing a further AGM to be held.1
[3] Ms Muller was appointed amicus curiae to represent the interests of the third respondent, the TEPS. I am grateful for her careful and comprehensive submissions.
[4] The substantive issue to be determined is whether the respondents’ appointment was valid, and if not, what relief (if any) should be granted.
What happened?
[5] The TEPS was originally formed in the 1970s and was registered under the Incorporated Societies Act 1908 in 1994. It is also a registered charitable entity under the Charities Act 2005. The TEPS’s rules were adopted in 1994 (the Rules). They were amended in 2008 and 2009, but those amendments are not relevant to this case.
[6] Mr O’Meara, the first-named respondent, was elected Chair in 2014 (the plaintiffs say he was co-Chair; he says he was the only Chair) and re-elected in 2015, and 2016. Mr Thompson, the second-named respondent, became involved with the TEPS in 2017.
[7] Mr Barfoot, the first-named applicant, has been involved with the TEPS since 1972, and has been made a life member. He has been on the Executive Committee and held the Chair role on several occasions, and was on the Executive Committee in 2017. Mr Barfoot says that Mr O’Meara, in his capacity as Chair, began introducing
1 Mr Pigeon, for the plaintiffs, confirmed at the hearing that the declarations sought in paragraph [6(a)(ii) to (v)] of the amended statement of claim dated 10 December 2018 were no longer sought.
a practice of “vetting” new members, and refusing to accept membership applications until they had all been vetted. Mr O’Meara disputes that there was any such vetting practice.
[8] A key source of tension between the parties appears to relate to Mr O’Meara’s purported suspension of Mr Barfoot’s membership prior to the AGM. It is not necessary to canvass the source of that dispute in any detail, save to say that it relates to the deposit of funds into the TEPS’s bank account on behalf of the Tahuna Torea Nature Reserve Organisation. On 8 September 2017, Mr O’Meara purported to suspend Mr Barfoot’s life membership.
[9] An AGM was scheduled to be held on 10 September 2017. Notice of that meeting was placed in the NZ Herald. It was also advertised on the TEPS’s website. The notice on the website called for nominations to be made to the Executive Committee prior to the AGM and a nomination form was provided. However, neither the notice of the meeting nor the request for nominations to the Executive Committee were sent to individual members. Despite concerns raised about the lack of notice, the AGM went ahead on 10 September 2017 but was adjourned due to the lack of a quorum.
[10] A new meeting date was fixed for 29 October 2017. Notice of the date, time and place of the meeting was again placed in the NZ Herald. The AGM was mentioned in the October 2017 newsletter. Some, but not all, members received notice of the meeting by way of email. The agenda sent to those members listed the “Appointment of Committee” as one of the items of business, and “consideration of the annual subscription fees for the year 2017/2018 and amendments to the constitution” was listed as another item. Neither the agenda, nor the notice, sought nominations for the election of the Executive Committee.
[11] Approximately 37 people attended the AGM. The applicants say that on the day of the AGM, 29 October 2017, some existing members and some prospective members were told that they could not pay their $5.00 subscription on the day. This was a change to prior practice. The respondents vehemently deny that this occurred.
[12] At the start of the AGM, a different agenda was circulated to those present at the meeting. This new agenda included as item 9: “Appointment of Executive Committee – no new nominations have been received”. The applicants allege that this notice was misleading because there had been no prior notice that nominations had to be notified in writing five days before the AGM and prior practice had been that nominations would be received on the day of the AGM. The respondents assert that, in fact, there was prior notice of this requirement.
[13] It appears to have been a fiery meeting. There was discussion about the practice of vetting, and Mr Barfoot’s purported suspension. When the appointment of the Executive Committee and officers came up for discussion, Mr O’Meara, announced that no new nominations had been received and accordingly the existing committee (comprising both the respondents, Ms Marchant, Ms Rawlings, Mr Sinclair, Ms Hooper and Ms Ho and the first-named plaintiff, Mr Barfoot) would carry on. I shall refer to this existing committee as the “old” committee. There was a vote of no confidence moved from the floor. Mr O’Meara brought the meeting to a close and left the meeting with Mr Thompson and a few others in tow.
[14] Following their departure, a new Chair was appointed, nominations were called for and the applicants were elected as officers and Executive Committee members. For convenience I shall refer to these members as the “new” committee. The financial statements for the TEPS for the last financial year were also approved, and a motion of no confidence in Mr O’Meara was affirmed.
[15] Following the meeting the new committee requested copies of the TEPS’s records, including the minute book, bank account details, and membership lists to be provided. The respondents have refused to hand over those documents and they remain in the respondents’ possession and control.
[16] On 21 November 2017, Mr O’Meara sent a letter to Mr Barfoot, terminating his membership of the TEPS. Mr Barfoot, through his lawyers, challenged the validity of that termination. Mr Barfoot takes umbrage at the allegations levelled against him and considers the suspension and termination of his membership has been motivated by self-interest.
[17] In an effort to resolve matters, the applicants proposed that a special general meeting be called and sought the respondents’ cooperation. Unfortunately, those efforts were not reciprocated, and these proceedings were commenced in April 2018. Orders freezing the TEPS’s bank accounts were made on 19 April 2018, and the bank accounts have remained frozen since that time.
[18] During case management, Muir J made directions by consent which involved the appointment of an independent Chair, Ms Jane Anderson QC, to convene and chair another meeting. However, the acrimony between the parties was such that the meeting could not go ahead. The matter in dispute now falls for my determination.
[19] There are conflicts in the affidavit evidence before the Court. Mr Pigeon, for the applicants, made an application to cross-examine the respondents at the hearing. However, following the narrowing of the relief sought in the statement of claim, that application was not pressed at the outset of the hearing. Leave was reserved to the applicants to refresh that application should it become necessary to do so in the course of the hearing. That application was not refreshed, and Mr Pigeon confirmed at the conclusion of the hearing that it was no longer pursued.
[20] In any event, the outcome of this judicial review application does not turn on that wider controversy or the underlying factual disputes as is apparent from my reasoning below.
Was the respondents’ reappointment valid?
Notice of the meeting
[21]Rule 7 of the TEPS’s Rules provides:
(a)All general meetings of the Society whether annual or otherwise shall be called by not less than fourteen days written notice.
(b)The notice shall state the date, place and time of the meeting and the business to be conducted.
(c)Every notice to members shall be deemed to have been duly delivered or posted by pre-paid letter addressed to the last known place of abode or business of the member.
[22] Notice of the reconvened AGM was advertised in the NZ Herald and emailed to some members. However, there was substantial non-compliance with the Rules:
(a)Evidence before the Court suggests that not all members appear to have received the notice, whether by email or at all. That is in default of r 7(c) which provides for the means by which notice may be given.
(b)At least one of the plaintiffs (Ms Young) received notice of the AGM one day short of the 14-day period in r 7(a); and
(c)Notice by way of advertisement in the NZ Herald is not provided for in r 7(c).
[23] Most significantly, there is no evidence that members were put on notice that nominations for the Executive Committee had to be received prior to the AGM. There is some evidence that a call for nominations, and a nomination form, had been posted on the website and sent to some members for the AGM originally scheduled in September. But that meeting did not go ahead due to the lack of notice, and the lack of a quorum at the meeting.
[24] There is no evidence that the subsequent notice of the re-convened meeting for October 2017 included any notice that nominations for the Executive Committee were being called for, or that they had to be received within a certain time period. The agenda emailed to some of the members simply referred to “appointment of committee”. The validity of a requirement that nominations be received by a certain time prior to the AGM is questionable in this case. The Rules do not expressly provide for that process, and such a practice would appear to require a rule change. However, the respondents say that there was a prior practice of receiving nominations in advance. That is disputed by the applicants who say the prior practice was to receive nominations on the day. I note that the applicants’ evidence accords with the Rules which provides for an election at an AGM. In any respect, even if the requirement itself was valid, at the very least express notice of such a requirement had to be given to all of the members well in advance of the deadline, and it is quite clear that this did not occur.
[25] The cumulative effect of these deficiencies is that the notice of the AGM was inadequate, and the meeting was not properly convened. Any subsequent business transacted at that meeting, including the purported re-appointment of the “old” Executive Committee was of no legal effect. That is sufficient to determine the applicant’s judicial review. Nevertheless, counsel addressed me on other alleged deficiencies with the respondents’ appointment, and as they may be of assistance to the parties in convening future meetings, I address those submissions below.
Membership
[26]Rule 3 provides:
(a)Membership of the Society is open to any person engaged or interested in any manner in the protection, preservation or improvement of the Tamaki Estuary or any other objects of the Society and who may become a member of the Society upon payment of any subscription which may from time to time be levied on members by the Executive Committee in the name of the Society.
(b)Any member may resign from the Society by giving the Secretary written notice to that effect and paying all subscriptions theretofore due.
(c)Any member whose subscription is two years in arrears shall unless the Executive Committee resolved otherwise be deemed to have submitted a notice of resignation.
(d)The Executive Committee shall have power to determine any membership without explanation on a vote of not less than six or two- thirds of the Executive Committee whichever is the greater.
[27] The “old” committee, or at least Mr O’Meara, appears to have adopted practices not allowed for in the Rules.
[28] First, there is the practice of vetting. Mr O’Meara denied that members had been vetted prior to the meeting. But the documentary evidence suggests otherwise. For example:
(a)The minutes for the 6 August 2017 Executive Committee meeting record that the newest members “… were past [sic] as Members”.
(b)The transcript of the AGM records a vigorous debate about the vetting of members; and
(c)By letter dated 21 December 2017, following the AGM, Mr O’Meara returned a cheque to Mr Barfoot with the subscriptions for 14 members stating that none of these members had been vetted.
[29] The Rules do not expressly empower the Executive Committee to decline an application for membership. Rule 3(d) refers to a power to “determine” membership. However, I agree with Ms Muller’s submission that “determine” in the context of this clause must be taken to refer to the termination of membership, rather than the prospective vetting of new members. That interpretation gives meaning and effect to the broad criteria stated for membership in r 3(a). It is also consistent with the other ways membership may come to an end as stated in r 3(b) and (c).
[30] A vetting process which involves applying more restrictive eligibility criteria than that set out in r 3(a) would also be invalid. Members would not know of the criteria they would need to meet in order to be accepted for membership. Mr O’Meara denies that this sort of vetting went on, but the only evidence produced at the hearing suggests otherwise. There was affidavit evidence by those who had either been a member of the TEPS for some years, or had clearly established an interest in the protection, preservation and improvement of the Tamaki Estuary, had not been accepted for membership. That leads to a very strong inference that different (and unknown) eligibility criteria was applied as part of a vetting practice.
[31] In addition to the vetting of members, there also appears to be some evidence that members were prohibited from paying their $5.00 subscription on the day of the AGM as was the custom. The significance of this is that only a “financial member” may vote at an AGM. Mr O’Meara flatly denies that any member was prohibited from renewing their membership. I am unable to determine that particular dispute on the evidence before me, save to say that any attempt to prevent members from paying their subscriptions so as to limit those who could vote at the AGM would also render any subsequent vote or appointment invalid.
[32] Finally, there is the issue of the suspension, and subsequent termination, of Mr Barfoot’s membership. In Tamaki v Maori Women’s Welfare League, Kós J said that a power to suspend, expel or otherwise discipline a member had to be express, and it was not sufficient to imply such a power.2 The Rules do not include an express power to suspend membership, and so, on its face, the decision to suspend Mr Barfoot’s membership was invalid.
[33] Although there is no express power of suspension, r 3(d) empowers the Executive Committee to “determine” membership, without explanation, on a vote of not less than six or two-thirds of the Executive Committee, whichever is the greater. There is no evidence of compliance with this rule. The purported suspension, and subsequent termination, of Mr Barfoot’s membership, appears to have been a decision made by Mr O’Meara alone. This is sufficient to render the decision invalid and it is not necessary to consider the other grounds (such as improper purpose) of challenge.
[34] Actions taken to restrict the TEPS’s membership were in breach of the Rules and were accordingly invalid. Those irregularities affect those who were entitled to be present and vote at the AGM and provide further grounds for invalidating the results of any vote conducted at the meeting.
The appointment of the “old” committee
[35] The invalidity of any vote cast may be, however, a moot point – at least in respect of the re-appointment of the old committee. Rule 6(b)(ii) provides that the business of an AGM includes the “election” of officers and members of the Executive Committee. However, Mr O’Meara took steps to close the meeting before there was any resolution moved, let alone a vote on, the re-appointment of the existing Executive Committee.
[36] That is borne out by the transcript of the meeting. There was substantial discussion at the meeting on whether the existing Executive should be reappointed as no nominations had been received. This tied into a number of wider constitutional debates, including a discussion on membership, and the validity of vetting members.
2 Tamaki v Maori Women’s Welfare League [2011] NZAR 605 (HC) at [58].
There were other disagreements on whether nominations could be moved from the floor, whether the notice seeking nominations for the Executive had been properly distributed, and whether agenda item number nine, on the appointment of the Executive, could be passed given it was different to the agenda sent out before the meeting. None of these issues were resolved. After much disagreement, with some people calling for Mr O’Meara’s resignation, Mr O’Meara closed the meeting before any motions were put to a vote.
[37] Mr O’Meara does not accept the accuracy of the transcript, but he has not provided any justification for that position. In any respect, the sequence of events is corroborated by the minutes of the meeting which provide:
Appointment of Executive Committee: No other nominations were received prior to the AGM.
After a spirited discussion around an ongoing confidential investigation and what is or isn’t considered a current financial member, we broke for a short interval.
When the meeting commenced the Chairman explained the committee’s position. Due to some unhappy members of the public, the Chairman decided to close the meeting at 3.40pm.
[38] The Rules do not provide for the automatic re-appointment of the Committee in the event of no new nominations. There was no election of an Executive Committee in accordance with r 6, and no resolution passed on whether the “old” committee should continue to act. Those irregularities, on their face, render the purported re- appointment of the “old” committee, including the respondents’ appointment, to be null and void.
What (if any) relief should be granted?
[39] The catalogue of deficiencies and irregularities in the procedure leading up to the AGM, and at the AGM itself, mean that the purported appointment of the “old” committee on 29 October 2017 was invalid. It is appropriate that declaratory relief be granted to clarify the legality of those decisions. There is no reason why declaratory relief should not be granted, and declarations are set out at the end of this judgment.
[40] This is plainly a case where the Court should exercise its discretion and direct a further meeting to be held. The TEPS cannot move forwards unless and until a valid Executive Committee is appointed. Efforts to convene and conduct such a meeting without a Court order have been, regrettably, unsuccessful. The Court’s supervision and direction is accordingly required.
[41] A future meeting of the TEPS’s members should be convened and chaired by an independent Chair. Ms Jane Anderson QC was previously appointed to that role and she is eminently qualified to hold that position. I direct the Registrar to make inquiries with Ms Anderson to ascertain whether she is still prepared to act as independent Chair, and if so, to obtain such consent in writing. If Ms Anderson is no longer able or willing to act, then the proceeding will need to come back to Court for the appointment of a new independent Chair. Additional orders (if required) as to how the meeting should be convened and conducted may be addressed once an independent Chair has been appointed.
[42] That just leaves the issue of the TEPS’s records. Those are currently in the respondents’ possession. The independent Chair will need to take custody of those records for the purposes of convening a meeting. Ms Muller has kindly agreed to hold those records for safekeeping pending the appointment of the independent Chair, and I consider that to be appropriate. Orders in those terms are set out at the end of this judgment.
Result
[43] The applicants’ application for judicial review is allowed, and I make the following orders:
(a)The purported re-appointment of the respondents and others to the Executive Committee at the meeting on 29 October 2017 was invalid and of no effect.
(b)The TEPS shall hold fresh elections for the Executive Committee at a meeting convened for that purpose and chaired by an independent Chair.
(c)The Registrar is directed to make enquiries of Ms Anderson QC to see if she remains willing to accept the role of independent Chair, and if so, to obtain her consent in writing. If Ms Anderson is not able or willing to act, then the Registrar shall inform the parties and convene a telephone conference to discuss the process of appointment for a new independent Chair.
(d)Within two working days of the receipt of this judgment, the respondents shall deliver all records, minute books, membership register, financial accounts and any and all other TEPS’s documents to Ms Muller to be held pending further order of the Court.
[44] As to costs, the applicants have been the wholly successful party and are entitled to an award of costs on a schedule 2B basis. I would strongly urge the parties to attempt to agree costs so that they do not become a focal point for further dispute. However, if agreement cannot be reached, then the applicants may submit a memorandum in support of costs within 15 working days of this judgment, and the respondents may submit a memorandum in response five working days thereafter. Costs will be determined on the papers.
Edwards J
Counsel: R S Pidgeon, Auckland
K M Muller, Auckland
Solicitors: Tompkins Wake, Auckland
Copies To: P O’Meara, Auckland
D N Thompson, Auckland
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