Deep v Auckland Gold Line Co-Operative Taxi Society Ltd
[2019] NZHC 217
•22 February 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-1516
[2019] NZHC 217
BETWEEN RAMAL DEEP
First Plaintiff
SATNAM SINGH
Second PlaintiffSURINDER KUMAR
Third PlaintiffAND
AUCKLAND GOLD LINE CO-
OPERATIVE TAXI SOCIETY LIMITED
Defendant
Hearing: 4-5 & 7 February 2019 Appearances:
L T Keys for Plaintiffs
S Khan and M Orange for Defendant
Judgment:
22 February 2019
JUDGMENT OF LANG J
[on application for judicial review]
This judgment was delivered by me on 22 February 2019 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date……………
DEEP v AUCKLAND GOLD LINE CO-OPERATIVE TAXI SOCIETY LIMITED [2019] NZHC 217 [22
February 2019]
KAHLON KULVIR SINGH
Fourth Plaintiff
VIPAN KUMAR
Fifth Plaintiff
JASVINDER PAL SINGH GILL
Sixth Plaintiff
AMARJEET SINGH
Seventh Plaintiff
ANIL KUMAR
Eighth Plaintiff
VIKAS SAHARAN
Ninth Plaintiff
KANWALL HIT SINGH
Tenth Plaintiff
PRADEEP KUMAR
Eleventh Plaintiff
MANDIP SINGH GILL
Twelfth Plaintiff
SIKANDERJEET SINGH BAJWA
Thirteenth Plaintiff
Contents
Issues..................................................................................................................... [5]
The law................................................................................................................. [6]
Decision............................................................................................................... [16]
The process by which the Board purported to appoint four new directors,
including Mr Dua, in 2016. [16]
Decisions declining to hold any AGM of the Society between 2016 and 2018
[31]
Decisions declining to allow the plaintiffs to have access to information held by the Society [39]
Requests sent on 31 March 2016 [40]
The request dated 17 June 2017 [50]
Decisions made in relation to the tender submitted to Auckland Airport by ATS
in 2016................................................................................................................. [53]
Decisions declining to act on two requisitions by members asking for a Special General Meeting of the Society to be called................................................................... [60]
Requisition dated 31 March 2016 [60]
Requisition dated 6 June 2017 [65]
Decisions that resulted in the shares held by several members being surrendered or forfeited [79]
Kahlon Singh and Vipan Kumar [80]
Ramal Deep, Satnam Singh and Surinder Kumar [88]
Kanwall Jit Singh (Mr K J Singh) [93]
Decisions relating to the standing of Mr Gill, Mr Amarjeet Singh, Mr Anil
Kumar and Mr Sikanderjeet Singh-Bajwa [102]
29 March 2016 [103]
21 June 2017 [108]
2 August 2017 [111]
Decisions relating to an SGM that was held on 15 July 2017 and resulted in amendments being made to the Society’s rules [116]
Summary [124]
Bias and improper motive: some observations [125]
Relief................................................................................................................. [133]
Failure to hold an AGM between 2016 and 2018 [134]
Access to the share register [143]Orders............................................................................................................... [144]
Costs.................................................................................................................. [146]
Leave reserved................................................................................................. [148]
Confidentiality.................................................................................................. [149]
[1] This application for judicial review relates to Auckland Gold Line Co- Operative Taxi Society Limited (the Society), an entity incorporated under the Industrial and Provident Societies Act 1908 (the Act).
[2] All of the plaintiffs own, or claim to own, shares in the Society. They contend that the Society’s affairs have been run in a manner that breaches the rules of the Society and prejudices their rights and legitimate interests as shareholders. They lay the blame for this state of affairs on the current Board of the Society and, in particular, its Chairman, Mr Manmohan Dua.
[3] This is not the first occasion on which shareholders have taken issue with the actions of the Society’s Board. In 2015 the shareholders became dissatisfied with the Board as it then operated under its Chairman, Mr Gill, the twelfth defendant. In October 2015, the members elected a new Board of directors. Those directors then invited Mr Dua to join the Board as a director in March 2016. This precipitated the series of events that has led to the present proceeding.
[4] The plaintiffs seek judicial review of several decisions they say the Board has made between 2016 and 2017. They plaintiffs seek declarations that the decisions were made in breach of the Society’s rules and/or in a manner that shows the Board was biased against them and other shareholders, or that it acted for improper purposes. They also seek consequential relief.
Issues
[5] The current version of the statement of claim contains eight separate causes of action, some of which overlap. In essence, it requires the Court to determine whether it should review the following decisions and/or actions of the Board:
(a)The process by which the Board purported to appoint four new
directors, including Mr Dua, in 2016.
(b)Decisions declining to hold any Annual General Meeting (AGM) of the Society between 2016 and 2018.
(c)Decisions declining to allow the plaintiffs to have access to information held by the Society.
(d)Decisions relating to the tender submitted to the Auckland Airport by the Society’s subsidiary Auckland Taxi Services Ltd (ATS) in 2016.
(e)Decisions declining to act on two requisitions by members seeking the convening of a Special General Meeting (SGM) of the Society.
(f)Decisions that resulted in the shares held by several members being surrendered or forfeited.
(g)Decisions holding that Mr Gill, Mr Amarjeet Singh and Mr Anil Kumar were not members in good standing.
(h)Decisions relating to a SGM meeting that was held on 15 July 2017 and resulted in amendments being made to the Society’s rules.
The law
[6] There is no dispute regarding the ambit of the Court’s jurisdiction to judicially review the decisions or processes of the Society. They were canvassed comprehensively by Moore J in the context of an earlier application by the Society to strike the proceeding out for lack of jurisdiction.1 I take the reader to be familiar with the principles referred to in that judgment and therefore summarise them in the briefest of terms.
[7] The ability to judicially review decisions of incorporated societies, as distinct from societies incorporated under the Act, is established by the Judicature Amendment Act 1977.2 The Judicial Review Procedure Act 2016 has left this intact.3 In Singh v Auckland Cooperative Taxi Society Ltd, Palmer J observed that the definitions in the 1977 Act indicate this strand of the law of judicial review “subsists independently of
1 Deep v Auckland Gold Line Co-Operative Taxi Society Ltd [2018] NZHC 499 at [17].
2 Royal Australian College of Surgeons v Phipps [1999] 3 NZLR 1 (CA) at 11.
3 Judicial Review Procedure Act 2016, s 3(2).
the High Court’s supervisory power of the lawfulness of public, or executive government, decision-making.”4
[8] Although the jurisdiction extends to contractual decisions, an important limit exists in that there must generally be a public aspect to the powers or activities of the private entity.5 The Court of Appeal also noted in Hopper v North Shore Aero Club that a club’s rules will be reviewable where the rules or their application constitute a breach of natural justice, but said also that an intervention can only occur “on the basis of enforcing the contract constituted by the rules”.6 The Court observed by way of obiter that in the absence of the exercise of a “quasi-public function” and/or a breach of natural justice, it is unlikely that a decision of a private body would be amenable to review.7
[9] It is also settled that societies incorporated under the Act are amenable to review by the Court in the same way. Unlike societies incorporated under the Incorporated Societies Act 1908, members of a society incorporated under the Act may associate under the Act for pecuniary gain.8
[10] Section 12 of the Act provides that every dispute between members of a society incorporated under the Act shall be determined in the manner directed by the rules of the society. It also says that such decisions are “binding and conclusive on all parties without appeal, and shall not be removable into any Court”. Rule 35.1 of the Society’s rules provides that every dispute under the rules shall be decided by the Board of the Society, “whose decision shall be binding and conclusive on all parties”. Moore J held, applying principles enunciated in his earlier decision in Malhi v Auckland Co- Operative Taxi Society,9 that s 12 and r 35.1 do not preclude the Court from judicially reviewing decisions made under the Society’s rules governing its internal dispute resolution process.10
4 Singh v Auckland Cooperative Taxi Society Ltd [2016] NZHC 642 at [22].
5 Royal Australian College of Surgeons v Phipps [1999] 3 NZLR 1 (CA) at 10-12.
6 Hopper v North Shore Aero Club Inc [2007] NZAR 354 (CA) at [11].
7 At [12].
8 Section 4 of the Incorporated Societies Act 1908 prohibits a society incorporated under that Act from associating for the purpose of pecuniary gain.
9 Malhi v Auckland Co-operative Taxi Society Ltd [2014] NZHC 2814, [2015] 2 NZLR 552 at [34]- [39].
10 At [26]-[34].
[11] The plaintiffs in the present case ask the Court to judicially review decisions and acts of the Society that they say are in breach of the Society’s rules and/or in breach of principles of natural justice. They say the Society, through the Board, has breached fundamental principles of natural justice because it has acted for improper purposes and/or in a manner that exhibits bias against them. In the case of the former, they say members of the Board have acted to further their own interests rather than the objects of the Society. In the case of the latter, they say the Board has made decisions and acted generally in a manner designed to disadvantage them by effectively preventing them from earning a living as drivers for the Society or ATS. None of the plaintiffs is currently working for either the Society or ATS. All are now driving for other taxi organisations even though they claim that they still hold shares in the Society.
[12] The principles relating to bias are now well established. In Muir v Commissioner of Inland Revenue the Court of Appeal observed:11
In our view, the correct inquiry is a two-stage one. First, it is necessary to establish the actual circumstances which have a direct bearing on a suggestion that the Judge was or may be seen to be biased. This factual inquiry should be rigorous, in the sense that complainants cannot lightly throw the “bias” ball in the air. The second inquiry is to then ask whether those circumstances as established 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. This standard emphasises to the challenged Judge that a belief in her own purity will not do; she must consider how others would view her conduct.
[13] This approach was approved by the Supreme Court in Saxmere Co Ltd v Wool Board Disestablishment Co Ltd, which also noted that the key question is whether a “fair-minded lay observer” would consider that a decision maker might not bring an impartial mind to their decision.12
[14] Although Saxmere centred on the issue of apparent bias due to a relationship between a judge and counsel, the learned authors of Judicial Review: a New Zealand perspective express the view that the test for bias “extends wider than judges”.13 The
11 Muir v Commissioner of Inland Revenue [2007] NZCA 334, [2007] 3 NZLR 495 (CA) at [62].
12 Saxmere Co Ltd v Wool Board Disestablishment Co Ltd [2009] NZSC 72, [2010] 1 NZLR 35 at [3].
13 Graham Taylor Judicial Review: A New Zealand Perspective (4th ed, LexisNexis, Wellington, 2018) at 612.
particular neutrality required of the decision-maker will depend on the surrounding context.
[15] In Devonport Borough Council v Local Government Commission, for example, the requirement was only that the local authority did not exercise its decision with a closed mind.14 I consider the Board in the present case needed to make decisions and to act with a similar level of neutrality. To establish bias the plaintiffs would need establish circumstances that would lead an informed and fair-minded lay observer to reasonably consider the Board might act or make its decisions in relation to the plaintiffs with a closed mind.
Decision
The process by which the Board purported to appoint four new directors, including Mr Dua, in 2016.
[16]Rule 15.1 of the Society’s rules provides as follows:
The Board shall comprise not less than five nor more than seven Directors elected in accordance with these rules and the Secretary and Treasurer. Directors should be elected for terms of 3 years each.
[17] Rule 12.1 requires the Annual General Meeting (AGM) of the Society to be held every year within four months of the close of the Society’s financial year. The Society’s financial year ends on 31 March each year. As a result, the rules require the AGM to be held each year no later than 31 July.
[18] Rule 12.2(c) provides that one of the matters to be considered at any AGM is the election of directors to fill any vacancy on the Board:
12.2 The AGM shall receive and consider:
…
(c) nominations for vacancies in the Board and in the event of there being more nominations than there are vacancies shall appoint scrutineers for the purpose of conducting a postal ballot for the election of Members to fill such vacancies and an Auditor in the place of those retiring; and
14 Devonport Borough Council v Local Government Commission [1989] 2 NZLR 203 (CA).
[19] It follows that directors will ordinarily be elected by the members at or following an AGM. However, the Board has the power to fill casual vacancies in the Board. These may occur where a director resigns or otherwise becomes disqualified from being a director in terms of r 17.1. A director may be disqualified under r 17.1, for example, by becoming bankrupt or statutorily prohibited from acting as a director. Where casual vacancies cause the number of directors to fall below the required quorum, rr 17.3 and 17.4 permit the Board to appoint directors to replace those whose offices have become vacant. Directors appointed in this way will act as directors for the remainder of the terms of office of the directors they have replaced.
[20] There is no dispute in the present case that following the AGM held in October 2015, two of the directors appointed at that meeting became unable to fulfil their duties in terms of r 17.1. One of these persons stopped paying his levies to the Society and was therefore suspended. The other was deported from New Zealand. On 15 December 2015, the remaining members of the Board appointed the second plaintiff, Mr Satnam Singh, and Mr Baljinder Singh as directors, thereby bringing the total number of directors back to five.
[21] By February 2016 the Board had commenced the process of preparing a tender for a new three year contract with Auckland Airport to take effect at the expiry of the initial contract in July 2016. The Secretary of the Board at that time, Mr Kulwinder Singh, deposes that the Board considered it had insufficient expertise and experience to prepare the tender. The Board identified Mr Dua as being a person having the necessary attributes to oversee the tender process on behalf of the Society. As a result, the Board passed a unanimous resolution on 23 March 2016 appointing Mr Dua as an additional member of the Board. Mr Dua’s evidence regarding the reasons why he was appointed as a director in March 2016 supports the version of events given by Kulwinder Singh.
[22] At or about the same time the Board also appointed Mr Sukhdev Singh Hundal as a director. Mr Kulwinder Singh says the Board wanted Mr Hundal to be responsible for instilling discipline in the Society’s members. The appointments of Messrs Dua and Hundal increased the number of directors to seven, the maximum permitted under the Society’s rules.
[23] There can be no dispute regarding the Board’s ability to appoint Satnam Singh and Baljinder Singh as directors in December 2015. The Board had the power to appoint them to fill the casual vacancies created by the departure of the two directors who were no longer qualified or able to act as directors.
[24] An issue clearly arises, however, regarding the Board’s ability to appoint Mr Dua and Mr Hundal as additional directors in March 2016. Although the rules permitted the Board to comprise up to seven directors, the Board only had the power to appoint directors to fill casual vacancies. By March 2016, the casual vacancies had already been filled. Any additional directors needed to be appointed by the members at an AGM.
[25] The plaintiffs contend that the appointment of Mr Dua was ultra vires and made for an improper purpose, namely to enable the remaining members of the Board to take control of the Society’s affairs. They say this is demonstrated by the fact that the Board failed to notify the members of the Society that it had appointed Mr Dua and Mr Hundal as directors.
[26] On the plaintiffs’ behalf Mr Meys also submits that the appointment of Mr Dua was contrary to another resolution that the Society had passed at an AGM on 6 April 2013 after Mr Dua had left the Society to work for another taxi company. On this occasion the members of the Society had passed a resolution, referred to during the hearing as “the Dua resolution”, to the effect that any member who left the Society would not be eligible for appointment as an officer of the Society if he or she subsequently returned. Mr Meys points out that the re-appointment of Mr Dua as a director in March 2016 was obviously in breach of the Society’s earlier resolution.
[27] I consider all these arguments are answered by the fact that the appointment of the additional directors was discussed by the members of the Society at a Special General Meeting held on 7 May 2016. This was less than two months after the Board appointed Mr Dua and Mr Hundal as directors. It also followed a letter written to the Board on 31 March 2016 by 29 of the Society’s 36 shareholders endorsing the appointment of the new directors. Those present on 7 May 2016 voted unanimously to ratify the appointment of all the persons who now comprised the Board. On that
basis, and even if Mr Dua and Mr Hundal were invalidly appointed on 23 March, the Court must accept that the Society was clearly of the collective view on 7 May 2016 that their appointments should remain in place.
[28] Furthermore, r 16.8 provides that all acts of the Board are valid even though it may later be discovered that there was some defect in the appointment of the Board or any directors, or that any directors were disqualified. Mr Meys accepted that this provision meant the plaintiffs could not challenge any acts of the Board by virtue only of any defect in the appointment of either Mr Dua or Mr Hundal.
[29] There is no challenge by the plaintiffs to the evidence of Messrs Dua and Kulwinder Singh regarding the reasons why Mr Dua was appointed as a director. They have not shown that the members of the Board were motivated by an improper purpose, or that they had any motive other than that attributed to them by Kulwinder Singh. Furthermore, the members of the Society were entitled to change their minds in May 2016 and reverse the effect of the earlier Dua resolution if they saw fit to do so.
[30] Given the unequivocal nature of the resolution passed at the meeting on 7 May 2016 I do not consider this Court could or should review the Board’s decision to appoint Mr Dua and Mr Hundal as directors two months earlier. This ground of review fails as a result.
Decisions declining to hold any AGM of the Society between 2016 and 2018
[31] It is common ground that the Society has not held an AGM since October 2015.15 The plaintiffs contend the Board’s decision not to hold an AGM since that date was for an improper purpose and in breach of r 12.1, which requires an AGM to be held every year.
[32] The plaintiffs also rely on an electronic communication that the Board sent to all members of the Society at some stage early in 2016. This advised members that, because the Board was in the most sensitive stage of preparing the tender for the airport
15 The evidence does not disclose why the AGM in 2015 was held in October rather than prior to 31 July as the Society’s rules require.
contract, it had passed a bylaw “that no AGM, SGM or election can be held for at least 6 month period [sic] from today”. The communication went on to say that “any shareholders conspiring to do so will be dealt with strictly”. Mr Dua was not a member of the Board when this communication was sent, but he said he had seen it and agreed with the contents.
[33] Rule 18.1 gives the Board the power to pass, rescind and amend bylaws that are not inconsistent with the rules of the Society. A bylaw of the type referred to in this communication would not necessarily have been contrary to the rules relating to the holding of an AGM because the six month period referred to in the communication would have expired in early September 2016. This left sufficient time for the AGM to be held prior to 31 October as required by the rules.
[34] The communication would, however, have restricted or removed the right of members to ask for an SGM to be held. Rule 12.3 requires the Board to call an SGM on the requisition of not less than one-tenth of the members of the Society as at the date of the requisition. The bylaw referred to in the communication would therefore have been contrary to the Society’s rules to the extent that it purported to restrict the right of members to requisition an SGM.
[35] Again, however, this issue was subsequently considered by those members of the Society who attended the SGM on 7 May 2016. The Minutes of that meeting record that 29 out of 34 members of the Society voted for a resolution in the following terms:
“if this Board under leadership of Mr Dua is successful in obtaining airport tender for our company ATS, this board will remain unchanged under same leadership of Mr Dua as acknowledgement of their work till end of tender term and no elections, AGM will be held for tender term”.
[36] Mr Dua explains that his discussions with senior airport management in early 2016 revealed that the Society’s internal politics had led the airport to believe the Society was unstable. He says the resolution was passed to prevent further political unrest within the Society that could place members’ livelihoods at risk.
[37] I consider the Board’s subsequent decision to give effect to the resolutions breached the requirements imposed by r 12.1 of the Society’s rules. Rule 12.1 requires an AGM to be held within a specified timeframe. Furthermore, the resolutions cannot realistically be viewed as constituting amendments to the Society’s rules because they were not passed in those terms, and were never registered subsequently as required by s 7(1)(b) of the Act.
[38] The fact that the breach resulted from the Board giving effect to a decision made by the members of the Society confirms, however, that the Board was not motivated by an improper purpose or that it acted in a manner suggestive of bias. The decision affected all members of the Society and not just the plaintiffs. These factors will need to be taken into account when considering the issue of relief.
Decisions declining to allow the plaintiffs to have access to information held by the Society
[39] This issue arises because the solicitors acting for the plaintiffs have sought information from the Society on at least two occasions and the Board has declined to provide it.
Requests sent on 31 March 2016
[40] The first such request was contained in letters written to the Society on 31 March 2016 by solicitors acting on behalf of Messrs Anil Kumar and Amarjeet Singh. In both letters the solicitors referred to an earlier request by Mr Singh, Mr Kumar and other members of the Society for “access to the Society’s financial and Register information.” The letter sent on behalf of Mr Kumar went on to say:
12. Mr Kumar demands immediate access to the Share register and financial information including levy statements held by the Society. If you continue to ignore our clients’ requests for a SGM and access to the Society’s financial and register information we will be seeking instructions to take immediate steps to obtain an order for an injunction against the Society and costs.
[41] The Society responded to these letters in a letter sent by its solicitors to the plaintiffs’ solicitors dated 19 April 2016. That letter did not respond to the request for access to the register or financial information.
[42] The Society says that the letters sent on 31 March 2016 related to disciplinary proceedings against Messrs Amarjeet Singh and Anil Kumar that remain in existence but are currently in abeyance. This occurred after the Board became aware both men had filed affidavits in support of a proceeding Mr Gill filed against the Society in the District Court on 31 March 2016. Mr Khan advises the Court that the Society will provide the documents both men are seeking if and when the disciplinary proceedings resume.
[43] Mr Khan also points out that the Society’s rules do not require the share register to be produced on demand. Rather, r 6 is in the following terms:
6.REGISTER OF MEMBERS
6.1The Society shall keep a register of Members containing:
(a) The names, addresses, descriptions of the Members, the Shares held by Members and the amount paid or agreed to be considered as paid on the Share of each Member.
(b) The date at which each Person was entered in the Register.
(c) The date at which any Person ceased to be a Member.
6.2The Register shall be open to inspection of any Members at such times as the Board shall from time to time reasonably specify.
(Emphasis added)
[44] I accept Mr Khan’s submission on this point. The Board may specify the times at which the register will be available for inspection by members. In specifying those times, however, r 6.2 requires the Board to act reasonably. Mr Khan points out that by early April 2016 the Board was aware Messrs Amarjeet Singh and Anil Kumar had filed affidavits in support of the proceeding Mr Gill had filed against the Society in the District Court on 31 March 2016. He submits the Board acted reasonably in the present case by subsequently making the share register available for inspection by members who attended SGM’s held by the Society on 7 May 2016 and 15 July 2017.
[45] What is reasonable in terms of r 6.2 will obviously depend on the context. By way of example, where no members have made a specific request to view the register, it will probably be reasonable for the Board to make it available for inspection by all members at each general meeting of the Society.
[46] Where a member seeks to inspect the register, however, the Board will need to take a different approach. In that event the Board will need to consider the reasons advanced in support of the request. If a meeting of the Society is to be held in the near future and the request does not include grounds indicating urgency, it may be reasonable for the Board to advise the requesting member that the register will be available for inspection at the forthcoming meeting. In other cases the urgency of the situation may require the Board to make the register available for inspection immediately or within a few days of the request being made. Whenever a request is made, however, r 6.2 requires the Board to specify when and where the register will be available for inspection.
[47] In the present case the Board did not take that step although it could easily have done so. The letter from the Society’s solicitors dated 19 April 2016 advised the plaintiffs’ solicitors that the Board was in the process of checking a requisition it had received asking for an SGM to be convened. The Board could have complied with its obligations under r 6.2 by advising the plaintiffs’ solicitors that, in the absence of any circumstances indicating urgency, Messrs Amarjeet Singh and Anil Kumar would be able to inspect the register at the next meeting of the Society. In failing to specify the time at which they could do so, however, the Board failed to deal with the requests dated 31 March 2016 in accordance with r 6.2.
[48] Furthermore, the Board was not entitled to ignore the request because of the steps Messrs Singh and Kumar had taken in the District Court proceeding filed by Mr Gill. Their requests for access to the register and for financial information relevant to the disciplinary proceedings against them were made in the context of issues the Society had raised against them in those proceedings and needed to be dealt with in that context. Any steps they may have taken in the District Court proceeding issued by Mr Gill were irrelevant to their request. It is also noteworthy that the Society does not appear to have formally advised Messrs Singh and Kumar that the disciplinary proceedings are in abeyance, or that the information they seek will be made available if and when those proceedings resume.
[49] Messrs Amarjeet Singh and Anil Kumar have therefore established this ground of review because the Board acted in a manner that was contrary to the requirements
of the Society’s rules. I do not consider, however, that the decision was made on grounds tainted by bias or improper motive. Rather, it was a decision made in circumstances where the Board decided to leave the disciplinary proceedings against those parties in abeyance until the issues involving Mr Gill had been resolved. The circumstances giving rise to both this ground of review would not lead an informed and fair minded lay observer to reasonably consider the Board might be acting or making decisions with a closed mind.
The request dated 17 June 2017
[50] In an email dated 17 June 2017 the plaintiffs’ solicitors sought further material from the Society on behalf of Mr Gill. The email was in the following terms:
Subject: RE: CIV-2016-004-000395 Gill v Auckland Gold Line Co- Operative Taxi Society Limited
…
Dear all
We refer to the documents you recently provided to us and to our email below.
It is clear that the defendants have not searched for and/or disclosed all relevant documents in their possession or control. We have now received instructions to apply to the Court for further and/or particular discovery including (but not limited to):
1.All of the defendants’ shareholder register/transfer books;
2.Any resolutions and meeting minutes of the defendants’ board between the founding of the Society and 12 June 2017;
3.The defendants’ complete bank account records between the founding of the Society and 13 June 2017.
We put you on notice that our clients will be relying upon this correspondence in support of an application for costs on an indemnity basis.
[51] It is clear from the terms of this email that it related solely to discovery issues that had arisen in the proceeding issued by Mr Gill in the District Court. Counsel advised me during the hearing that those issues remain outstanding, and are shortly to be the subject of a hearing in the District Court.
[52] I do not consider the requests made in the letter dated 17 June 2017 engage judicial review principles. They relate to discovery obligations in another civil proceeding and are appropriately dealt with in that context.
Decisions made in relation to the tender submitted to Auckland Airport by ATS in 2016
[53] This issue arises because the Society submitted its tender for a new airport contract in 2016 through its wholly owned subsidiary ATS. Mr Dua explains that this was necessary because the internal disputes that had arisen within the Society during 2015 and early 2016 had harmed its reputation and jeopardised its prospects of obtaining a new contract. This led the Board to decide that it would advance its tender for the new contract in the name of ATS.
[54] The plaintiffs do not take issue with Mr Dua’s evidence on this point but the statement of claim alleges the decision was made for an improper purpose, namely to circumvent interlocutory orders that were made in the proceeding filed in the District Court by Mr Gill. There is no evidence to support the challenge under this head.
[55] Instead, the thrust of the challenge at the hearing related to the manner in which ATS has allocated work to drivers at the airport. The plaintiffs believe ATS has been biased against them in declining to allow them to work from the airport rank even though they are members of the Society. They say they should have received preferential treatment from ATS because they are members of the Society and this has not occurred. Instead, ATS has permitted some drivers who are not members of the Society to operate at the airport. They also say the Society should not have permitted ATS to submit its tender unless it was sure ATS was bound to give preference to members of the Society in the allocation of airport work.
[56] I do not consider these issues are amenable to judicial review for several reasons. First, the complaint relates primarily to the manner in which ATS has operated its business and ATS is not a party to the proceeding.16 It is a separate company and has its own Board of Directors. The Society cannot be held responsible
16 ATS was originally a second defendant but dropped out of the proceeding when the plaintiffs filed an amended statement of claim on 1 September 2017 naming the Society as the only defendant.
for the manner in which ATS conducts its business even though some of the directors of ATS are also members and directors of the Society.
[57] Secondly, the ATS tender was discussed at the SGM on 7 May 2016. The Minutes from that meeting record the outcome of the discussion as follows:
… Mr Dua then put forward a motion that if ATS is successful, ATS be allowed to work autonomously and free from interference of society till end of tender, so that in any other future tenders we do not face these type of problems, and proposed that board of directors of ATS will determine their policies, business plans and goals to be successful commercially, which obviously means that income for society at the end. Being shareholders our society members will definitely be able to apply for airport decals if ATS is successful, and could be considered and be provided certain additional benefits, but how many airport licences (decals) to issue and to whom will be decided by ATS board based on policies, history, various checks and their decisions should be on ATS board’s discretion, should be final and will be respected by all members of society. Objective of ATS would be to create best fleet towards success. Votes were asked to this motion and 23 votes by raise of hands and 3 proxies were in support of this motion, 3 votes were against this motion.
[58] This resolution makes it clear that the members of the Society were content in May 2016 to permit the Board of ATS to determine how any successful tender for work at the airport was to be put into practice. That was not a decision made by the Board or the Chairman, and issues relating to bias or acting for an improper purpose do not arise when the Board subsequently gave effect to it.
[59]This ground of review fails as a result.
Decisions declining to act on two requisitions by members asking for a Special General Meeting of the Society to be called
Requisition dated 31 March 2016
[60] On 31 March 2016, the Board received a requisition asking for an SGM to be convened. The requisition was signed by ten members of the Society.
[61]Rule 12.3 relevantly provides as follows:
12.3The Board shall on the requisition of not less than one tenth of the Members of the Society at the date of the deposit of the requisition (“Deposit Date”) convene a SGM:
(a) The requisition must state the object of the meeting and must be signed by the requisitioning Members and deposited at the Registered Office of the Society and may consist of several documents in like form each signed by one or more requisitioning Members. The requisitioning Members must be Members in good standing.
(b) If the Board does not within twenty-one (21) days of the Deposit Date convene an SGM to be held within forty (40) days of the Deposit Date not less than five of the requisitioning Members may convene an SGM but any meeting so convened shall not be held after the expiration of three months from the Deposit Date.
(c) An SGM convened pursuant to this rule shall be convened in the same manner as nearly as possible as that in which meetings are to be convened by the Board.
(Emphasis added)
[62] On 19 April 2016, the Society’s solicitors wrote to the plaintiffs’ solicitors advising that the Board had received written advice from five of the members who had signed the requisition to the effect that they were withdrawing their request for an SGM. A copy of this advice was attached to the letter. The letter also pointed out that three of the remaining members who had signed the requisition were in default with payment of levies and so were not members in good standing as required by r 12.3(a). The remaining two members were not sufficient to comprise one tenth of the members of the Society.
[63] The letter also advised that that the Society was currently checking the validity of a further requisition, and that if this was found to be in order an SGM would be convened. This ultimately led to the Board convening the SGM that was held on 7 May 2016.
[64] There is no basis on which the Court could review the Board’s approach to the requisition dated 31 March 2016 because it acted in accordance with the rules of the Society in dealing with it. The circumstances do not disclose that the Board acted with an improper motive, or that an informed and fair-minded observer might consider the Board was acting with a closed mind.
Requisition dated 6 June 2017
[65] On 6 June 2017, the plaintiffs’ solicitors delivered to the Society a letter attaching a document purporting to be a further requisition asking for an SGM to be convened. The requisition was headed up as follows:
We shareholders of Gold Line Taxi and authorized drivers of Auckland Taxi Services stating that we have lost trust in our present board members. The elected directors are targeting us and doing unfair dismissals. They are dictating us so we need a special general meeting and fair election as soon as possible before they do too much damage to the society. Therefore, we have signed below.
The document was signed by 22 members of the Society.17
[66] In order to understand the issues that this document raises it is necessary to describe a series of events that occurred on 31 May 2017. In doing so I draw largely on the affidavits filed by Mr Dua and the Society’s then Manager, Mr Sidney Thompson. The plaintiffs do not appear to take issue with the factual accounts given by Messrs Dua and Thompson regarding the events that occurred on that date.
[67] Mr Dua explains that on 26 May 2017, the Society had sent a letter to Mr Ramal Deep, the first plaintiff, asking him to attend a meeting with the Board to discuss allegations that he had been agitating against the Society and its Board. The meeting was to be held at the Society’s office at 5 pm on 31 May 2017.
[68] On the morning of 31 May 2017, Mr Dua received a visit by a person whom he knew to be a friend of the fifth plaintiff, Mr Vipan Kumar. This person came to Mr Dua’s home and served him with a document that purported to be a Trespass Notice issued under the Trespass Act 1980. The notice purported to prohibit Mr Dua from entering the Society’s offices. It stated that the offices were occupied by Mr Deep, Mr Vipan Kumar, Mr Kahlon Singh and Mr Anil Kumar. All of those parties are plaintiffs in this proceeding.
17 There are 25 signatures on the document but two of the signatories signed the document twice.
[69] Mr Dua then travelled to the Society’s office in Mangere to find out what was going on. He also telephoned the police and other directors because he was concerned for his safety.
[70] When Mr Dua arrived at the Society’s offices, he found two security guards stationed at the door. They would not let Mr Dua or any of the other directors of the Society into the building. Present in the Society’s offices at this time were Messrs Deep, Vipan Kumar, Kahlon Singh, Anil Kumar and the third plaintiff, Mr Surinder Kumar.
[71] Mr Thompson says he was sitting in the Society’s office at about 10 am on 31 May 2017 when two men entered the office. He recognised the men, but did not know their names. The men immediately began issuing instructions to Mr Thompson. They told him they had secured the office, and that he was not to receive or make any telephone calls. They also told Mr Thompson that they had taken steps to appoint a new Board of Directors.
[72] Mr Thompson now knows that the two men who came into the office were Messrs Vipan Kumar and Kahlon Singh. They instructed Mr Thompson to despatch orders to the Society’s drivers using a newly-formed group of WhatsApp users. A further Whatsapp communication was also sent to all the Society’s drivers advising them that the old Board had been deposed, and inviting them to call in at the Society’s offices. Mr Thompson could see there were security guards at the door, and they let the drivers into the office when they began to arrive. During this period Mr Thompson received three calls from Mr Dua but he was instructed not to answer them.
[73] After the police arrived at the premises they discussed the situation with the members of the Board and the persons who had occupied the building. The situation was ultimately resolved in the early afternoon, when the Board members were permitted to reoccupy the offices.
[74] Affidavits have been filed by two of the Society’s members, Messrs Balbir Singh Ranauta and Madan Singh, deposing that when they went to the Society’s offices in response to the WhatsApp communication they were asked to sign a blank
piece of paper. They were told they were required to sign the document if they wished to keep working. They later discovered that the heading set out above at [65] had been added.
[75] Other than Messrs Kahlon Singh and Vipan Kumar, all of the persons who signed the document have now signed a further document headed up as follows:
To whomsoever it may concern
We, all shareholders of The Auckland Goldline Cooperative Taxi Society Ltd, who are also driving for ATS, do solemnly declare that in past few days some signatures were obtained on a paper from some of us, by Mr Vipan and Kahlon. We were not aware of the real intentions of these two, and who we now feel have conspired against the company under the guidance from Mr Jasvinder Gill (Alert taxis), Pardeep Kumar and others with whom company is already in litigation.
We never authorized them to write to any authority on our behalf. We have not requested any SGM.
We hereby withdraw all our signatures on any paper submitted anywhere by Kulvir Kahlon and Vipan Kumar. We apologize to all concerned authorities for any convenience caused and assure of full support, confidence and solidarity to existing board.
[76] The Society contends this document establishes that it was not required to act on the basis of the requisition received pm 6 June 2017 because the signatures on the document were procured fraudulently, and all but two of the signatories subsequently withdrew their request for an SGM to be convened.
[77] The plaintiffs contend that those persons who subsequently withdrew their request were forced or coerced by the Society into doing so. I reject that submission because there is no evidence to support it. Furthermore, having regard to the events that occurred on 31 May 2017 I consider it likely that those who signed the document did not know what it was to be used for. That is so whether or not the heading was on the document when they signed it. Their interest at that time lay in being permitted to continue driving for the Society and/or ATS under the authority of the new regime they believed had taken control of the Society’s affairs. I therefore accept the Board was entitled to reject the requisition once it learned of the circumstances in which the signatures had been procured, and after all but two of the signatories had withdrawn
their requests. The Board’s decision has not been shown to have been made for an improper motive or that it meets the test for bias.
[78]It follows that this ground of review cannot succeed.
Decisions that resulted in the shares held by several members being surrendered or forfeited
[79] These issues arise largely as a consequence of the incident that occurred at the Society’s offices on 31 May 2017.
Kahlon Singh and Vipan Kumar
[80] The Society appears to have identified Messrs Kahlon Singh and Vipan Kumar as being the two ringleaders of the incident. For their part Messrs Singh and Kumar appear to accept that they were the persons who entered the offices and gave instructions to Mr Thompson. They and the remaining plaintiffs characterise the occupation of the Society’s offices as being a “peaceful protest”. In addition to the acts described above, however, at 10.35 am on 31 May 2017 Mr Singh sent an email to a senior executive at the airport advising him as follows:
Hi Martyn Brewer,
We are going to inform you that we remove Mr Dua from the ATS Office and now he has no authority to act on behalf of ATS in any form and also current board of directors has been dissolved
And please deactivate following drivers immediately
1) Manmohan Singh Dua, Cab No ATS 211
2) Joginder Singh, Cab No ATS 221
3) Kulwinder Singh Shant, Cab No ATS 209
If you have any query please do not hasitate [sic] to contact me
[81] Mr Singh also sent an email to the Society’s solicitors. He told them that Mr Dua and the current Board had been “removed from the office unanimously by the shareholders due to their irregularities”. He said that an interim management committee had been formed by the shareholders, and that they expected to call an
SGM on 3 June 2017 to elect a new Board of directors. Mr Singh described himself in the email as the Acting Manager of the Interim Management Committee.
[82] Mr Dua points out that r 7.1 permits the Board to remove a member of the Society where it is satisfied that it is not in the best interests of the Society for a member to retain his or her membership. He deposes that the Society set up a special committee to investigate the actions of Messrs Singh and Kumar, and to determine whether they should remain members of the Society given their actions on 31 May 2017.
[83] The Society’s Secretary, Mr Kulwinder Singh, wrote to both men on 5 June 2017 in the following terms:
…
RE: Hearing date for alleged breach of rules of society
Dear Mr Kumar,
On 31st May, you along with your friends, intruded into office of Auckland Taxi Service (ATS) Ltd, in absence of any director. ATS with which you have contract to drive at airport, although is separate entity but since society owns that company so it effects society and its members and overall reputation.
You went step further, and hired private security and stopped ATS directors from getting back into office.
We also understand from ATS that you had ongoing history of breaches and assaults while working under ATS contract and you did make a false declaration about your conviction history. Now we are informed that your contract with ATS is terminated, and you have been issued a trespass notice.
You then wrote to society Lawyers, claiming to be director of Auckland Goldline taxi society.
Despite knowing and aware of constitution of society, it is felt that you unauthorized acts have brought society into serious disrepute. Your actions also caused at least two dozen drivers losing their day’s earnings, who are already finding hard to feed their families, while stranded in drama created by you.
Shareholders of society also have alleged in writing that you had teamed up with Mr Jasvinder Gill and others who are against society in courts you sued their (shareholders’) signatures without authority. You are therefore also wanted not to use those signatures anywhere. Until you have got fresh authority from those shareholders which is signed in front of board or in front of person acceptable to board. Until then they have withdrawn all signatures.
The hearing date is scheduled for 15th June at 4.00 pm, at unit 9/203 Kudos Business centre, Mangere. You are entitled to a support person of good standing with company or from outside whoever you prefer. The trespass conditions will be relaxed by ATS on our request, till end of meeting with you.
Please note that if after hearing your submissions are not acceptable, the disciplinary proceedings may initiate which could result in action against you under clause 7.1(e) of Society Rules.
…
[84] On the evening of 14 June 2017, Mr Kumar sent an email to the Secretary seeking further time to prepare for the hearing. The Secretary declined that request later the same evening. Neither Mr Singh nor Mr Kumar attended the hearing that took place on 15 June 2017. After considering what had happened on 31 July, the committee recommended that the membership of both men should be revoked. The Board agreed. The Society then wrote to both Mr Singh and Mr Kumar on 15 June 2017 advising them of the Board’s decision and enclosing a cheque for their shares. The rules provide a right of appeal against revocation of membership but neither Mr Singh nor Mr Kumar elected to exercise that right.
[85] The statement of claim alleges that the Board breached its obligation to act in good faith towards Messrs Singh and Kumar and that it pre-determined their guilt. It also alleges the Board acted for an improper purpose in revoking their membership, and that it failed to provide them with all relevant information before making its decision.
[86] The letters the Secretary sent to both men on 5 June 2017 set out clearly the allegations they faced. These were relatively straightforward and would have been well known to them because of their involvement in the events that occurred on 31 May 2017. The Board also provided them with ten days within which to prepare for the hearing. I consider that to be more than adequate in the circumstances. Furthermore, the plaintiffs have not articulated what additional documentation they consider the Board ought to have given the two men before the hearing. Finally, neither has sought to exercise the appeal rights provided under the Society’s rules.
[87] None of the grounds of review under this head has been made out. There is no evidence to suggest the Board acted for an improper purpose or otherwise than in good
faith given the events that had occurred on 31 May 2017. Nor does it meet the test for bias or breach of other requirements of natural justice.
Ramal Deep, Satnam Singh and Surinder Kumar
[88] All of these persons went to the Society’s offices on 31 May 2017 after Messrs Kumar and Singh had taken control. The Society considered, however, that they were less culpable than those two men. Mr Dua deposes that the roles played by the three men during the incident, as well as their future status in the Society, were the subject of a mediation that took place during the days following 31 May. Mr Madan Singh confirms that he worked as an intermediary between the Board and the three men during this period, and that a solution was ultimately agreed on or about 4 June 2017. This involved the men surrendering their shares and receiving payment for them from the Society. Thereafter no further disciplinary action was taken against them and they were permitted to remain working as drivers for ATS.
[89] The settlement agreement signed by each of the three men was in the following terms:
Agreement with Auckland Goldline taxi society for my Share
I hereby surrender / sell my share to the Society as of today. I understand I won’t have any voting rights from hereon. I agree to value (as management seems appropriate) of share to be paid to Auckland Taxi Service Ltd, to be credited to my account.
I understand that my status in ATS will be as a driver only from today.
If I keep my conduct to company standards, I can apply for share again after end of tender.
I apologise for any inconvenience if caused due to my acts which brought society to disrepute.
Thanks [Signed]
[90] The case for the plaintiffs is that the three men were called into the Society’s office on 6 June 2017 and effectively given an ultimatum. They could either sign the document presented to them or their membership would be revoked and they would
not be permitted to drive for the Society or ATS in the future. Each then effectively signed under duress and without the ability to seek legal advice.
[91] Mr Meys accepts that this Court cannot reach any definitive conclusion regarding the circumstances in which the three men came to sign a surrender of their shares. Ultimately the events that occurred on 6 June 2017 give rise to a contractual issue between the Society and the three plaintiffs, and may need to be dealt with in another forum. He submits, however, that the Court can take the manner in which the Board dealt with them into account in assessing whether the Board has dealt with the plaintiffs as a whole in a manner that is both biased and evinces a lack of good faith.
[92] I decline to reach any conclusion of that type because I find the evidence relating to the events in question to be equivocal. I acknowledge the plaintiffs’ evidence regarding the circumstances in which they say they surrendered their shares. There is also, however, the unchallenged evidence of Mr Madan Singh, who describes the mediation process leading to the voluntary surrender of the shares. If that evidence is correct, the Society cannot be criticised for the manner in which it dealt with Mr Deep, Mr Surinder Singh and Mr Satnam Singh. I therefore regard the circumstances in which those three men surrendered their shares to be a neutral factor for present purposes.
Kanwall Jit Singh (Mr K J Singh)
[93] The plaintiffs’ claim in relation to Mr K J Singh is contained in the cause of action relating to alleged failure to provide access to information but I consider it to be more appropriately dealt with under the present head.
[94] Mr K J Singh was Chairman of the Board in or about 2013. In April 2016, the Society began an investigation after it received complaints about the manner in which Mr Singh had allegedly removed members of the Society whilst he was President. The Board could not find any written records of these incidents so Mr Dua and Mr Kulwinder Singh wrote to Mr K J Singh on 28 April 2016 seeking details about them and asking to meet with him to discuss them. The Board was also aware at this time that Mr Singh was driving taxis for a rival organisation.
[95] By letter dated 2 May 2016, Mr Singh responded to the questions raised by the Board. He advised that records of shares he removed from members were contained in the share register held by the Society’s Secretary. He also said he could elaborate on his answers at the SGM to be held on 7 May 2017 or, if the Board still wished to meet with him, they could do so “near shopping area at Airport”.
[96] Mr Singh’s solicitors then became involved and wrote to the Society on 27 May 2016. Further correspondence then ensued before Mr Singh eventually attended a meeting with Mr Dua on 8 July 2016. Mr Singh was accompanied to the meeting by his solicitor, Mr Meys. During the meeting Mr Singh acknowledged that he was working for another taxi company, but said Mr Gill had permitted him to do so. At the end of the meeting, which lasted for approximately 40 minutes, Mr Dua told Mr Singh and Mr Meys that he had enough information to enable him to make a recommendation to the Board.
[97] Mr Dua reported back to the Board and the Board resolved on 9 July 2016 to remove Mr Singh’s membership. It conveyed that decision to him in a letter dated 22 September 2016. The decision was based both on the manner in which Mr Singh had dealt with the removal of members’ shares and the fact that he was driving a taxi for another organisation in breach of r 7(1)(b) of the Society’s rules. The letter concluded by pointing out that Mr Singh had a right of appeal and suggesting that he should consult his solicitor about this. Mr Singh did not respond to the Board’s letter and he did not exercise his right of appeal.
[98] Mr Singh challenges the process that led to his removal as a member on two grounds. First, he submits that it was inappropriate for the meeting on 8 July 2016 to have been conducted by Mr Dua alone. There is nothing in this point because r 20.2 permits the Board to delegate its powers under the rules to any person. Furthermore, Mr Meys did not take issue with the meeting being conducted by Mr Dua on behalf of the Board. I have no doubt Mr Meys would have objected to Mr Dua’s involvement if he considered it would be unfairly to his client’s detriment.
[99] Secondly, Mr Singh says that Mr Dua undertook during the meeting to provide him with a copy of the Society’s share register before taking the matter further and he
failed to do so. Notes taken by Mr Meys during the meeting support Mr Singh’s evidence on this point.
[100] The Society does not provide an answer to this issue but, if it had been of any real importance, I consider it likely that Mr Singh or Mr Meys would have raised it with the Society during the period of more than two months that elapsed between the meeting on 8 April and the delivery of the Society’s decision on 22 September 2017. More importantly, I have no doubt that Mr Meys would have raised it as soon as the Society delivered its decision. At the very least he would have encouraged Mr Singh to exercise the right of appeal given to him by the Society’s rules. That would have been the appropriate forum within which to deal with this particular issue.
[101] Mr Singh was represented throughout this series of events by a solicitor who was fully conversant with the workings of the Society and the requirements imposed by the principles of natural justice. He obviously did not feel the need to raise any objection as events unfolded. I therefore do not consider there is any basis on which the Court can find any breach of the requirements of natural justice.
Decisions relating to the standing of Mr Gill, Mr Amarjeet Singh, Mr Anil Kumar and Mr Sikanderjeet Singh-Bajwa
[102] This cause of action relates to decisions allegedly made by the Board on 29 March 2016, 21 June 2017 and 2 August 2017.
29 March 2016
[103] The statement of claim refers to the Society making decisions on 29 March 2016 against Mr Gill, Mr Amarjeet Singh and Mr Anil Kumar. All of these so-called decisions are alleged to have been contained in a letter sent by a barrister acting for the Society on 29 March 2016.
[104] As may already be apparent, there has been a dispute between Mr Gill and the Society for some considerable time. This appeared to have been resolved on 25 February 2016, when Mr Gill prepared and signed an agreement purporting to resolve outstanding differences between himself and the Society at that time. The
agreement acknowledged that Mr Gill owed the Society outstanding levies in the sum of $18,287.
[105] The Society considers Mr Gill still needs to pay this sum but he disagrees. He considers the Society owes him other monies that equal or exceed any amount he may owe the Society. Matters came to a head when the Society’s barrister wrote to Mr Gill’s solicitors on 29 March 2016 responding to a letter they had sent on 24 March 2016. The letter concluded by stating that the Society intended to forfeit Mr Gill’s shares in the Society. It then said:
A resolution has already been passed by the BOD on 21 March 2016 to consider removal of your client from the membership of the company. However, keeping in view the principle of natural justice and out of fairness to your client, he is hereby invited to attend a meeting on 1st April 2016 at 11 am in the company’s office. He can bring a support person with him in the meeting. The meeting will decide on the outstanding levies due against him, breaches of the rules of the company leading to the outcome regarding striking off his membership. Failure to attend the meeting by your client may result in removal of our client from the membership of the company.
[106] Mr Gill responded to this letter by obtaining an interim order from the District Court preventing the Society from taking any further steps to remove his membership or forfeit his shares. The issues between Mr Gill and the Society accordingly remain to be determined by the District Court. It would be inappropriate for this Court to determine or pass comment on matters that are already the subject of proceedings in another forum. No ground of review therefore arises under this head.
[107] I have already referred18 to the fact that the Society has instituted disciplinary proceedings against Messrs Amarjeet Singh and Mr Anil Kumar. The Society has elected to leave those proceedings in abeyance until such time as the proceedings in the District Court have been resolved. However, the letter dated 29 March 2016 dealt only with issues relating to Mr Gill. It did not address any issues relating to Messrs Singh and Kumar. For that reason there is no decision amenable to review under this head in relation to them.
18 At [42].
21 June 2017
[108] This issue arises out of a letter the Society’s solicitors sent to the plaintiffs’ solicitors on 21 June 2017. The letter responded primarily to a letter the plaintiffs’ solicitors had sent on 16 June 2017. This raised issues about the manner in which the Society.was dealing with those involved in the incident on 31 May 2017. In the letter the Society’s solicitors also discussed the request for an SGM that the plaintiffs’ solicitors had delivered to the Society’s office on 6 June 2017. In dealing with that issue, the Society’s solicitors raised concerns about the list of signatories who had purported to request a further SGM. One concern related to the Society’s belief that all of the signatories listed on the second page of the requisition other than Mr Anil Kumar owed levies to the Society. The Society did not consider those persons to be members in good standing, and r 12.3(a) prohibited them from signing a requisition for a meeting to be called.
[109] The Society still maintains that at least five of the persons who signed the second page of the requisition owed money to it and were therefore not in good standing as at the date of the requisition. The plaintiffs disagree in relation to some of those persons. Whatever the true position may be, I do not consider that the observation made in the letter dated 21 June 2017 letter amounts to a reviewable decision or action in its own right. Rather, it formed part of the reasoning process leading to the Society’s decision not to act on the requisition received on 6 June 2017. It is clear, however, that the Society’s principal concern about the requisition related to the circumstances in which most of the signatories came to sign the document on or about 31 May 2017.19 That was an entirely different issue to the issue of whether or not those who signed the second page of the document were in good standing at the time they did so.
[110]This ground of review fails as a result.
19 Discussed above at [74]-[76].
2 August 2017
[111] This ground of review is based on observations made in two letters sent by the Society’s barrister to the plaintiffs’ solicitors on 2 August 2017. In both letters the Society’s barrister raised issues regarding the validity of an SGM the plaintiffs purported to convene on 26 July 2017 after the Society had refused to act on the requisition delivered on 6 June 2017.
[112] The first letter pointed out that 12 persons had attended the meeting on 26 July 2017. It asserted that six attendees were not members of the Society, and five owed money to the Society and were therefore ineligible to vote. It also said that two of the attendees were not in good standing. In one case this was because of alleged misappropriation of funds. The letter did not name either of these persons.
[113] In a subsequent letter sent later the same day, the Society’s barrister named Mr Anil Kumar and Mr Sikanderjeet Singh-Bajwa as being the two persons not in good standing as at the time of the meeting. The plaintiffs take issue with this because the Society had failed to advise Mr Singh-Bajwa prior to 2 August 2017 that he was not in good standing.
[114] Again, however, I do not consider this issue relates to a reviewable decision or action by the Society. The Society was clearly of the view that the plaintiffs’ SGM was not validly conducted, but that did not lead to any tangible outcome. The Society has not purported to act on the basis of its view. Rather, it has proceeded on the basis that the meeting was effectively a nullity.
[115]This ground of review fails as a result.
Decisions relating to an SGM that was held on 15 July 2017 and resulted in amendments being made to the Society’s rules
[116] This issue arises out of the fact that the Society held an AGM on 15 July 2017 at which resolutions were passed approving several amendments to the Society’s rules. The plaintiffs contend they were never given notice of the meeting in accordance with
the rules. They also say they are unfairly prejudiced by the amendments that were made.
[117] Mr Dua deposes that the SGM was called after the Board received a valid requisition signed by eight members in June 2017. One of the items on the proposed agenda set out in the requisition was an update from the Board “on progress of constitution committee and its proposals.” This was a reference to the fact that the Society had established a Constitution Review Committee to review the Society’s existing rules and to recommend appropriate changes. The committee had provided a report to the Board in May 2017.
[118] Mr Dua acknowledges that six of the plaintiffs20 would not have received notice of the meeting because, by the time notice was given, they had already been removed as members or had surrendered their shares. He points out that r 12.3 requires ten clear working days notice in writing of any proposed general meeting to be given “to every member at his registered mailing address”. Mr Dua deposes that he personally supervised the preparation and posting of notices of the meeting to all remaining members on 29 June 2017.
[119] For the reasons already given I am satisfied the Society was not required to give notice of the SGM to the plaintiffs who were either removed as members or surrendered their shares prior to 29 June 2017. Furthermore, I have no reason to doubt Mr Dua’s evidence that he gave postal notice of the meeting to all remaining members in accordance with the rules.
[120] In addition, the Society’s solicitors advised the plaintiffs’ solicitors in a letter dated 4 July 2017 that the SGM was to be held on 15 July 2017. The letter also confirmed that any of the plaintiffs who were still members of the Society in good standing should attend the meeting and exercise their rights. I am satisfied that by one of these two means all members of the Society had notice of the meeting well before it was held. Ultimately, however, none of the plaintiffs elected to attend the meeting.
20 Messrs Kahlon Singh, Vipan Kumar, K J Singh, Surinder Kumar, Satnam Singh and Ramal Deep.
[121] As Mr Khan points out, any defect in giving notice would not have had any effect on the validity of resolutions passed at the meeting in any event. This is because r 12.5 of the Society’s rules provides as follows:
12.5 The accidental omission to give or acknowledge receipt of any notice calling an AGM or SGM to or by any of the Members shall not invalidate any resolution at the meeting to which such notice related.
[122] The amendments recommended by the committee were unanimously adopted by those who attended the meeting on 15 July 2017. This effectively answers the plaintiffs’ argument that they were unfairly prejudiced by the amendments. If they believed that was the case, they needed to put their views to the remaining members at the SGM rather than to the Court in judicial review proceedings.
[123]There is no substance in this ground of review.
Summary
[124] For the reasons already given I am satisfied the plaintiffs have established two grounds of review. These are the failure to convene an AGM as required by the rules between 2016 and 2018, and the failure to make the share register available for inspection as requested by Messrs Anil Kumar and Amarjeet Singh. Before dealing with the issue of relief, however, I need to make some further observations regarding the allegations based on bias and actions taken for improper purposes.
Bias and improper motive: some further observations
[125] The plaintiffs’ theory under these grounds is based on the premise that Mr Dua initially bore ill-will towards at least some of the plaintiffs because of a dispute that had occurred when Mr Dua left the Society in or about February 2013. The plaintiffs rely in this context on Mr Dua’s evidence that, when he raised the issue of money owing to him at that time, Mr K J Singh “laughed in my face”. Mr Dua accepted that this made him angry, but he denied he took any further action to recover the money or that this left him ill-disposed towards Mr K J Singh or any other party. I consider this incident to be a dubious foundation for an allegation of bias, particularly given the fact that Mr Dua appears to have played no part in the Society’s affairs between 2013 and early 2016.
[126] Mr Dua accepted that he had some discussions with the Board in early 2016 when the Board was about to begin preparation of its tender for the renewal of the airport contract. This would not be surprising. He also accepted he was aware of the message the Board sent to drivers in February 2016 in which it said that no further meetings would be held for six months given the sensitive stage the airport tender was then at. By this stage, however, significant issues had already arisen between the Board and several of the plaintiffs. In particular, the dispute with Mr Gill was well underway. Responsibility for that issue cannot be laid at the feet of Mr Dua.
[127] Mr Meys attempted to develop the plaintiffs’ theory by submitting that Mr Dua’s initial antipathy towards Mr K J Singh translated into hostility towards the remaining plaintiffs and those who opposed the wishes of the Board. He submitted that, viewed collectively and cumulatively, the Board’s actions, and its treatment of the plaintiffs in particular, were based on decisions tainted by bias and motivated by improper purposes.
[128] I carefully considered all of the incidents on which Mr Meys relies to support the plaintiffs’ theory but I am unable to discern any pattern of conduct that would support Mr Meys’ submission. In particular, I do not consider Mr Dua or the Board can be criticised in any way for the fact that no AGM was held between 2016 and 2018 because that was the will of the members as expressed at the SGM on 7 May 2016.
[129] In addition, many of the issues that form the basis of the present proceeding arose directly out of the incident that occurred on 31 May 2017. As I have already observed, the plaintiffs seek to characterise that incident as a peaceful protest. I do not consider this to be an apt description. Rather, the incident amounted to a brazen attempt to take over the affairs of the Society by physical force and with no regard for the constitutional procedures set out in the rules. In doing so those who were involved placed at risk the commercial relationship between the airport and the Society.
[130] One can readily understand that the plaintiffs may have been frustrated by their perception of the Board’s attitude to their requisition for an SGM dated 31 March 2016. They may have felt the Board was deliberately attempting to obstruct their efforts to convene an SGM to discuss their grievances at that time. That cannot,
however, excuse what occurred on 31 May 2017. Nor can the Board be criticised for taking firm disciplinary action against those directly involved in the incident.
[131] Finally, I suspect that the Board of this particular Society has often been dominated by strong personalities. That appears to have been the case so far as Mr K J Singh was concerned, and my impression is that Mr Gill is also a very dominant character. Mr Dua may also fall into the same category. Ultimately, however, the power in any body such as this lies with the shareholders. They have the power to convene meetings and to pass resolutions they consider to be in the best interests of the Society as a whole.
[132] The plaintiffs, and perhaps others, may no longer feel the decisions the Society made on 7 May 2016 and 15 July 2017 meet that test. Their perception of the issue does not, however, give this Court the right to disturb acts or decisions that have already been made legitimately. Those plaintiffs who remain members of the Society are free to gather support from other members so that they can challenge the composition of the Board and the decisions it has made at the next general meeting of the Society. That is the appropriate and legitimate way in which to address the issue going forward. I wish to make it clear, however, that I have seen no evidence in relation to any of the issues raised by this proceeding to justify a finding that the decisions and acts of Mr Dua and/or the Board were tainted by either improper purposes or bias.
Relief
[133] It is now necessary to consider whether to grant relief in relation to the two grounds of review the plaintiffs have established.
Failure to hold an AGM between 2016 and 2018
[134] The Society seeks to invoke s 19 of the Judicial Review Procedure Act 2016, which provides the Court in judicial review proceedings with a discretion to refuse relief where a ground of review is established by virtue only of a defect in form or a technical irregularity, and where the Court finds that no substantial wrong or miscarriage of justice has occurred.
[135] I do not consider the failure to hold any AGM between 2016 and 2018 was caused by a defect in form or technical irregularity. Rather, it occurred because a significant majority of members who attended the SGM on 7 May 2016 did not want any further AGM’s or elections to be held during the term of the airport contract. In other words, they did not want the Society to comply with r 12.1, which requires an AGM to be held every year. They failed, however, to give their decision constitutional legitimacy by formally amending the rules to reflect their wishes.
[136] The resolution not to hold any AGM’s or elections during the term of the airport contract clearly reflects the fact that those present on 7 May 2016 were content for the same Board to be responsible for the Society’s management for the duration of the airport contract. All of the plaintiffs were present at the meeting, although the Minutes record that Mr Gill, Mr Amarjeet Singh, Mr Pradeep Kumar, Mr K J Singh and Mr Anil Kumar left the meeting before the resolution was passed.
[137] I therefore accept that although this ground of review has been established, care must be taken regarding the issue of relief. This is particularly so given the fact that the airport contract is about to expire, and the Society accepts that an AGM will need to be held later this year. It is therefore necessary to determine whether to allow matters to take their course or to order that an AGM be held earlier than otherwise might be the case.
[138] I consider it appropriate to grant relief for three reasons. First, the terms served by the existing directors expired in October 2018 and new elections need to be held promptly to address that issue. Secondly, one of the most important items on the agenda at any AGM is receipt and consideration of the Society’s financial statements.21 The members of this particular Society have not seen financial statements since 2015. That state of affairs cannot be permitted to continue longer than is absolutely necessary. Thirdly, I am conscious that the Society and/or ATS will now be in the process of preparing a new tender for the airport contract. It would be unfortunate in my view if the Board used that fact as justification for delaying the next AGM until the latter part of this year. An AGM needs to be held as soon as practicable
21 Rule 12.2(a).
notwithstanding the fact that the Society may be engaged in the process of submitting a new tender.
[139] The financial statements for the 2016, 2017 and 2018 years should have been prepared some time ago. It should not be difficult for the Board to arrange for updated financial information to be prepared quickly in relation to the period commencing on 1 April 2018. I therefore consider an AGM should be called no later than 31 March 2019.
[140] During the hearing Mr Khan raised a concern that those members who no longer drive taxis for the Society may seek to distribute the financial statements to other taxi organisations, and that this would damage the Society’s commercial interests. I accept the validity of the concern but do not consider it justifies the Board withholding information to which all members are entitled under the Society’s rules. One way of dealing with the issue is for the Board to require members to sign an undertaking not to disclose the financial statements to third parties other than their professional advisers.
[141] It will also be for the Board to determine whether members who attend the meeting are in good standing so that they have voting and speaking rights. The rules do not prescribe how the Society is to make this assessment. It will therefore be a matter of judgment as to how the criteria are applied. Members who are in default in paying their levies will obviously not be in good standing. Such persons should nevertheless be given notice of the meeting and of the fact that the Board considers them not to be of good standing. This will give those members an opportunity to pay any outstanding levies prior to the meeting and thereby preserve their ability to speak and vote.
[142] I consider the Board should adopt a conservative approach when it assesses the standing of members who are up to date with their levies but who may, for example, be subject to disciplinary proceedings that have not yet concluded. Notice of the meeting should be given to such persons. They should also, in my view, be permitted to speak and vote at the meeting because there has not yet been a finding that they are guilty of conduct evincing lack of good standing.
Access to the share register
[143] The Board must make the share register available to those who want to view it prior to the AGM being held. Members are entitled to know who is currently a member of the Society and therefore able to speak and vote at the AGM. It should be a simple matter for the Board to make the share register available for inspection at the Society’s offices between the hours of 10 am and 5 pm on a date to be nominated by the Board not less than seven days before the AGM is to be held.
Orders
[144] The Society is ordered to hold an AGM no later than 31 March 2019. It is to give notice of the meeting as required by the rules to all members, including those not in good standing by virtue of non-payment of levies and those who are subject to disciplinary proceedings that have not yet concluded.
[145] The Society is to make the share register available for inspection by all members between the hours of 10 am and 5 pm on a date to be nominated by the Society. That date is to be not less than seven days prior to the meeting.
Costs
[146] The plaintiffs are arguably the successful parties given the fact that they established two causes of action and obtained orders granting relief. They have failed on most of their arguments, however, including those based on allegations that the Board was guilty of bias and acted for improper motives. My preliminary view is therefore that honours were reasonably evenly shared, and it may not be appropriate to make any award of costs.
[147] If counsel cannot reach agreement regarding costs they may submit concise memoranda (ie no longer than five pages in length) and I will determine the issue on the papers.
Leave reserved
[148] I reserve leave to both parties to seek further and/or amended relief if difficulties arise in implementing the orders I have made.
Confidentiality
[149] During the hearing Mr Khan submitted that issues raised in this proceeding were sensitive and had the potential to damage the Society if they were permitted to enter the public domain. He also submitted that they relate to the affairs of the Society and have no wider public interest. He therefore sought an order that the file should not be inspected without the leave of a Judge. I did not take Mr Meys to object to such an order being made. I make an order accordingly.
Lang J
Solicitors:
Neilsons Lawyers, Auckland Fortune Manning, Auckland
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