Dunstan v Credit Union South - [2020] NZHC 1063

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2018-412-000046

[2020] NZHC 1063

BETWEEN
ANTHONY DUNSTAN

Applicant

AND

CREDIT UNION SOUTH

First Respondent

AND

JANICE FREDRIC, PETER MCKNIGHT, LOUISE EDWARDS, PETER BOOTH AND SHONA CUMMING

Second Respondents

Hearing: 23 March 2020 (By way of AVL)

Appearances:

D R Tobin for Applicant

D G Hurd for Respondents

Judgment:

20 May 2020

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 20 May 2020 at 4.00 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: 20 May 2020

DUNSTAN v CREDIT UNION SOUTH [2020] NZHC 1063 [20 May 2020]

CONTENTS

Introduction [1]

Background [6]

The applicant’s involvement on the Board [15]

The election process [28]

Are the decisions reviewable under the JRP Act or otherwise? [49]

The respondents’ submissions [50]

Mr Dunstan’s submissions [51]

Discussion [53]

Judicial Review under pt 30 of the High Court Rules 2016 [57]

Mr Dunstan’s submissions [57]

The respondents’ submissions [61]

Discussion [65]

Was there a failure to comply with r 23(a) of the CUS rules applying to members nominations? [70]

Mr Dunstan’s submissions  [70]
Respondents’ submissions  [75]
Discussion  [79]

Were the committees inquorate? [90]

Mr Dunstan’s submissions [90]

Respondents’ submissions [95]

Discussion [99]

Were the decision-makers entitled to take into account third party

enquiries?  [109]
Mr Dunstan’s submissions  [109]
Respondents’ submissions  [112]
Discussion  [114]

Was there a requirement to apply the principles of natural justice and, if so, was the requirement breached? [118]

Mr Dunstan’s submissions  [118]
Respondents’ submissions  [120]
Discussion  [126]

Exercise of the discretion [133]

The respondents’ submissions [134]

Mr Dunstan’s submissions [137]

Discussion [139]

Result [141]

Introduction

[1] In May 2017 Credit Union South (CUS) called for nominations for its annual election of Board members. Mr Dunstan, who had formerly been on the Board of Directors of CUS, and was its chairperson until his resignation on 27 January 2017, was nominated to stand by CUS members.

[2] However, his name was never put forward for election. Instead the Governance Committee, having regard to concerns raised by the Nominations Committee, determined that he did not meet the requisite fit and proper criteria. As a consequence, the Board held that he was ineligible under the rules of CUS to hold office as a director. That meant an election of Board members was not required as the number of candidates remaining equalled the number of vacancies.

[3] Mr Dunstan is aggrieved by that decision. He seeks judicial review of the Board’s decision ratifying the decisions of the Nominations and Governance Committees that he did not meet the fit and proper criteria, alleging:

(a)a failure to comply with the rules applying to members’ nominations under r 23(a) of the CUS rules;

(b)the Governance and Nominations Committees were inquorate;

(c)the Board and its respective Committees took into account…

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: [2020] NZHC 1063
Decision Date: 20 May 2020

CaseChat Overview and Summary

In this case, the applicant, Anthony Dunstan, sought judicial review of the decision of Credit Union South (CUS) and its Board of Directors to not allow him to stand for election as a director. The CUS Board had decided that Mr Dunstan did not meet the fit and proper criteria, and so was ineligible to be a director. The applicant argued that the decision was not reviewable, or if it was, that it was flawed on various grounds, including that the committees that made the decision were inquorate, and that the principles of natural justice had not been applied. The court held that the decisions were not amenable to judicial review. However, it went on to consider the merits of the applicant's arguments. The court rejected the applicant's arguments and found that the decision of the Board was valid and appropriately made. The applicant's application was dismissed. The court ordered that if the parties could not agree on costs, they were to file and serve their respective submissions within 20 working days of the date of the decision.

Orders