Dunstan v Credit Union South - [2021] NZCA 656

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA317/2020
[2021] NZCA 656

BETWEEN	ANTHONY DUNSTAN Appellant
AND	CREDIT UNION SOUTH First Respondent JANICE FREDRIC, PETER MCKNIGHT, LOUISE EDWARDS, PETER BOOTH AND SHONA CUMMING Second Respondents

Hearing:	14 June 2021
Court:	Clifford, Thomas and Muir JJ
Counsel:	Appellant in person D G Hurd and E M Buckley for Respondents
Judgment:	3 December 2021 at 12 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
B Costs are reserved.

____________________________________________________________________

REASONS OF THE COURT

(Given by Clifford J)

Introduction

In September 2013 the appellant, Anthony Dunstan, became a director of the first respondent, Credit Union South (CU South). In March 2015 he was appointed chair of the Board of CU South. In January 2017, in circumstances to which we return, he resigned from both of those positions.
Later that year Mr Dunstan was nominated for election as a director of CU South in the regular cycle of those elections. The second respondents, the then directors of CU South, determined that Mr Dunstan did not meet CU South’s “Fit and Proper” policy applying to directors. On that basis, Mr Dunstan’s name did not appear on the ballot paper for the 2017 Board election.
Mr Dunstan challenged that decision by way of an application for judicial review to the High Court. That application was dismissed.[1]
[1]Dunstan v Credit Union South [2020] NZHC 1063 [Judgment under appeal].
Mr Dunstan now appeals.

Background

CU South no longer exists. Subsequent to the events at issue here, its operations were merged into a broader grouping of previously independent regional credit unions.
At the time of those events, CU South was, as its name reflects, a credit union. As such, it was registered and operated under pt 3 of the Friendly Societies and Credit Unions Act 1982 (the Credit Unions Act). As then required by that Act, CU South was an unincorporated society.[2] It administered a fund into which its members contributed money and from which its members borrowed money. CU South’s constitution comprised a document called “Rules of Credit Union South” (the Rules).
[2]At [50].
Pursuant to the Rules:
(a)CU South’s objects were to promote thrift and the accumulation of savings by its members and to allow the use of those savings for its members’ mutual benefit by making them loans for provident or productive purposes.
(b)CU South was governed by an annual meeting and, between those meetings, its affairs were conducted by the Board.
(c)The Board, which was also CU South’s “committee of management” as defined in the Credit Unions Act,[3] comprised a minimum of five and a maximum of seven directors. Of those seven directors, a maximum of two could be appointed by the elected members of the Board as independent directors. Independent directors were persons who did not have a significant contractual relationship with CU South.
(d)Directors were elected for a three-year term, and retired in rotation.
(e)Various persons were disqualified from holding office as directors including, as…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NZCA 656
Decision Date: 3 December 2021 at 12 pm

CaseChat Overview and Summary

Dunstan v Credit Union South involved an appeal by Anthony Dunstan against the decision of the High Court dismissing his application for judicial review of the decision by the Board of Credit Union South (CU South) to exclude him from the ballot for election as a director. CU South was a credit union operating under the Friendly Societies and Credit Unions Act 1982. The central legal issues were whether the Board's decision was amenable to judicial review and, if so, whether the Board had applied the 'Fit and Proper' policy to Dunstan in a procedurally fair and substantively reasonable way. The Court of Appeal concluded that the Board's decision was not amenable to judicial review as CU South, being an unincorporated society, did not exercise a statutory power. Even if it had been amenable to review, the Court found that the Board had properly applied the Fit and Proper policy to Dunstan and reached its conclusion in a procedurally fair and substantively reasonable way. The appeal was therefore dismissed and costs were reserved.

Orders