Henderson v Blenheim Workingmen's Club and Literary Institute
[2019] NZHC 2081
•22 August 2019
IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WAIHARAKEKE ROHE
CIV-2018-406-037
[2019] NZHC 2081
UNDER the Judicial Review Procedure Act 2016 IN THE MATTER OF
judicial review of the exercise of a statutory power of decision
BETWEEN
ROBERT JAMES HENDERSON
Applicant
AND
BLENHEIM WORKINGMEN’S CLUB AND LITERARY INSTITUTE
Respondent
Hearing: 5 August 2019 Counsel:
S F Gaines for applicant
B A Fletcher and J S Marshall for respondent
Judgment:
22 August 2019
RESERVED JUDGMENT OF DOBSON J
Contents
Introduction [1]
The Club [4]
Mr Henderson [7]
The complaint [10]
Process dealing with the complaint [18]
The rules [41]
Interpretation of the rules [44]
Adequacy of process [61]
Relief [75]
Costs [82]
HENDERSON v BLENHEIM WORKINGMEN’S CLUB AND LITERARY INSTITUTE [2019] NZHC 2081
[22 August 2019]
Introduction
[1] This judicial review challenges the lawfulness of decisions by the respondent (the Club) to suspend the membership of the applicant (Mr Henderson), and then to expel him from the Club.
[2] Mr Henderson pleaded that the Club misapplied the provisions in its rules in determining those which should apply to regulate the disciplinary process against him. Alternatively and separately, he pleaded that there were numerous deficiencies in the steps taken, when measured against the appropriate rules of natural justice that should have been complied with, when he was suspended and then expelled.
[3] The Club’s response was that it correctly interpreted the provisions in its rules that applied, and that the procedures it adopted, when viewed overall in light of the context, constituted adequate compliance with the obligations of natural justice.
The Club
[4] In 2000, the Blenheim Workingmen’s Club and the Marlborough Club merged, and they were subsequently joined by the Marlborough Returned Servicemen’s Association Incorporated. The combined entity operates as Clubs of Marlborough, under a permanent charter originally granted to the Blenheim Workingmen’s Club in 1889. The Club has approximately 6,000 financial members and is administered by the Club’s management committee (CMC).
[5]The current version of the rules of the Club is not dated. The rules stipulate:
The registered name of the Club shall be the “Blenheim Workingmen’s Club and Literary Institute”. The generic name of the Club shall be Clubs of Marlborough working under the Charter of the Blenheim Working Men’s Club.
[6] Various sectional interests within the Club, relevantly the pool section and the snooker section, operate with a measure of autonomy, but subject to the overall superintendence by the CMC.
Mr Henderson
[7] Mr Henderson returned to Blenheim in 2010 after living away from the region for 34 years. Over that time, he was involved in organising pool and snooker activities, including competitions, in various contexts.
[8] On his return to Blenheim, Mr Henderson became a member of the Club and has involved himself in organising activities in its pool and snooker sections. He claims to have stimulated additional activities in those sections of the Club, resulting in increased participation in various events. He was twice nominated as section administrator of the year, winning that accolade within the Club in 2016.
[9] Mr Henderson has also been involved in organising pool competitions outside of the Club and has arranged super league pool competitions, with tournaments being held at the Club’s premises. He has undertaken a range of fund-raising activities by seeking sponsorship for tournaments, both for Club activities and for cue sport activities outside the Club.
The complaint
[10] On 3 May 2018, Mr Roger Mitchell, the owner of a Blenheim motor lodge, called at the Club to raise a concern. In 2017, he had paid $250 for advertising for his business that was to be displayed in the Club. He complained that he could not see any sign promoting his business and the receptionist with whom he spoke told him that, if that was the case, it amounted to fraud.
[11] Mr Lee Davis, the chief executive officer of the Club, was advised of the complaint by the receptionist. In the following days, Mr Davis had a telephone conversation, then a meeting, with Mr Mitchell. Mr Mitchell provided Mr Davis with a copy of the invoice for $250 dated 5 October 2017 from Cue Power Promotions Incorporated, which he had paid by direct credit to a bank account for that organisation. He believed he was supporting the Club and possibly its pool and snooker sections, and that the signage would be erected above the table lights in the cue sports area of the Club.
[12] Mr Davis made an enquiry of the president of the snooker section as to whether the arrangement was with the snooker section. The secretary of that section responded by email, advising that the invoice for sponsorship related to signage over the pool tables and not snooker. That email was copied to the president of the snooker section and to Mr Henderson. The same evening, Mr Davis received an email from the president of the snooker section, who advised him:
Spoken with Bob [Mr Henderson] and can confirm relates to superleague pool. Bob has the signage ready to go but states needs to lower the lights to fit 2 signs per table. He states will speak to the plaintive [sic].
[13] In a report to the CMC dated 26 June 2018, Mr Davis described the next development:
The next Morning Bob rang me. He said that he had just been down to see Roger [Mr Mitchell] and had shown him the sign and told him the story about having to adjust the chains on the lights to enable two signs to be fitted per table. Bob assured me that it was a simple process, which was work currently in action and that Roger was satisfied with his response.
[14] Mr Davis also told the CMC that Mr Mitchell confirmed dialogue with Mr Henderson, who had assured Mr Mitchell that his sign had been on display in the sports lounge all the time. However, Mr Mitchell had called at the Club several times since that dialogue and had been unable to find his sign on display.
[15] Mr Davis’s report stated that he had searched the New Zealand Incorporated Societies Register and could find no record of any organisation called Cue Power Promotions Incorporated, the entity named on the invoice which Mr Mitchell had paid.
[16]Mr Davis’s report to the CMC concluded:
These funds have not been raised on behalf of our Pool Section with the monies banked going into what looks like a personal account and permission has not been granted for a non-Club Section in particular to use the Clubs name and facilities to raise funds outside of the Club by offering to provide long term in-house advertising.
[17]On the same day as Mr Davis’s report to the CMC, it met and resolved:
… that the President request a meeting with Bob Henderson and the full Committee to explain the relationship and standing that Cue Power Promotions Incorporated has with the Clubs of Marlborough.
Process dealing with the complaint
[18] The day after the CMC’s resolution, the president of the Club, Mr Gordon Herkt, wrote to Mr Henderson:
At our monthly meeting of the Committee the advertising in the Sports Lounge was discussed and as a result you have been requested to attend a meeting of the Committee in the Boardroom 10 July at 5.30pm
[19] Two days later, on 29 June 2018, Mr Henderson responded to Mr Herkt. He expressed surprise that he should be asked to answer questions about advertising, implied criticism of those administering the Club for not supporting sports lounge activities and stated that he had a lot of work to do in organising forthcoming tournaments. He ended the letter stating:
Before I attend any meeting I would like in writing the matters you want to question me on and then I can bring the appropriate people to the meeting to answer your questions if we can. Could you please outline in writing your questions you would like answered.
[20] At the president’s request, on 6 July 2018 Mr Davis responded to Mr Henderson’s 29 June 2018 letter, clarifying that the 27 June 2018 letter had been written at the request of the CMC and had been addressed to Mr Henderson in his capacity as president of the Club’s snooker section. The letter continued:
The reasons for your reluctance to attend the meeting of the Clubs Management Committee have been noted and will be tabled and addressed by the Management Committee at its meeting on Tuesday to determine the options available to it.
In the circumstances your attendance at the meeting will not be required.
[21] The minutes of the CMC meeting of 10 July 2018 record a resolution in respect of Mr Henderson in the following terms:
… that Pursuant to Rule 11.1(c) of the Clubs Rules, the Committee, having considered various matters concerning his conduct relating to signage and sponsorship in the Clubs Sports Lounge together with making patently false statements in his capacity as President of the Clubs Snooker Section when corresponding with the Clubs Executive Committee and CEO concerning the lack of support for the NZ Masters Snooker Competition held at the Club over Easter weekend, suspends Robert Henderson’s membership at the Club, effective midnight 10 July 2018, until such time as the Committee has further investigated all matters relating to his misrepresentations, inducements and use of documents to entities concerning signage and sponsorship and the
receipt and accounting of monies received for signs and sponsorship and other monies purporting to be for the benefit of the Club and or its Adjuncts and is satisfied that the relevant matters have been resolved and or remedied. During his suspension, Mr. Henderson is totally excluded from the Club’s premises and Club activities until the relevant matters have been dealt with by the Committee.
[22] As well as Mr Henderson’s conduct in relation to the signage, the resolution refers to a second matter that was relied on by the CMC in suspending Mr Henderson’s membership. The CMC considered Mr Henderson was responsible for a letter of complaint to the CMC about the lack of support for a tournament that the snooker section of the Club had held there, and CMC members were offended that the letter of complaint included statements they considered to be patently false.
[23] The same meeting of the CMC moved that Mr Davis as CEO should further investigate the sponsorship arrangements in the sports lounge, arrange separate meetings with both the pool and snooker sections and that a sub-committee of the parent body was to discuss the financial arrangements associated with the advertising.
[24] Advice of Mr Henderson’s immediate suspension was conveyed in a letter dated 11 July 2018, quoting the resolution from [21] above. That letter was handed to Mr Henderson by Mr Davis on 11 July 2018.
[25] On 13 July 2018, Mr Henderson gave notice that he wished to appeal his suspension, citing rule 27 of the Club’s rules. He recorded that the queries in his letter of 29 June 2018 had not been answered,1 and that the letter of complaint in relation to the tournament had been written collectively by the snooker section of the Club and not constructed by individuals.
[26] On 19 July 2018, the president wrote to Mr Henderson requesting his attendance at a meeting of a sub-committee that had been appointed by the Club to investigate his involvement in the sale of advertising for the sports lounge. The date indicated was 30 July 2018 at 9.00 am.
1 Mr Henderson’s 13 July 2018 letter incorrectly referred to the earlier one as being dated 27 July 2018.
[27] Mr Henderson responded the following day, 20 July 2018. He objected that the Club had not followed correct procedures, and recorded that if relevant information had been supplied he would have had no problem attending the meeting. He requested that the meeting be scheduled earlier “so the whole situation can be resolved quickly”. Mr Henderson’s letter also sought information about who was on the sub-committee, who had carried out the preliminary investigation and as to the nature of complaints. He also sought access to the information that had been collected.
[28] On 23 July 2018, Mr Davis responded to Mr Henderson’s 13 and 20 July letters. He advised that there was no right to appeal the suspension because it had not been ordered by a judicial committee of the Club. As to reasons for suspension, Mr Davis cited the complaint from the local business sponsor about soliciting sponsorship for signs that had not appeared and for which the Club had not received money. The CMC considered this was conduct that brought the Club into disrepute. He referred to the suspension as facilitating an orderly investigation into the alleged conduct, and suggested such an investigation “may have been avoided if you had attended the committee meeting on 10 July”. Notably, there was no repetition of the reasons that appeared in the resolution passed at the 10 July 2018 meeting, attributing responsibility to Mr Henderson for patently false statements made when the snooker section corresponded with the Club.
[29] The procedures adopted by the Club were guided by advice from its vice president, Mr Jason Clouston, a retired barrister and solicitor. He completed an affidavit in the proceeding explaining his approach to the application of the Club’s rules, including his interpretation of them as affording grounds for appointment of a sub-committee to consider a complaint made by a non-member. Mr Clouston’s analysis distinguishes the circumstances of complaints made by members, for which cases the rules provide that a judicial committee is to be appointed, with consequences including a right of appeal.
[30] Mr Henderson attended the meeting on 30 July 2018 with Mr Gaines as his solicitor, and his brother, Graham Henderson, as a support person. In an affidavit in support of the application, Graham Henderson describes how the meeting was delayed for some five minutes after all of the committee who they had been told would attend
were present, it having been noted that Mr Henderson was attending with a lawyer. Mr Clouston then arrived. On Graham Henderson’s recollection, before the president opened the meeting, Mr Clouston pointed successively at him and then at Mr Gaines and said words to the effect that “you and you, have no right to be at this meeting and you will not be saying anything – alright”. Graham Henderson describes Mr Clouston’s behaviour as very rude. Mr Henderson’s own affidavit describes Mr Clouston’s actions as rude and aggressive. After exchanges about the interpretation of the Club rules, Mr Henderson deposes that the rest of the meeting was “difficult”.
[31] Mr Clouston’s affidavit describes his involvement in the 30 July 2018 meeting in apparent contrast to Mr Henderson. He acknowledges his introductory challenge, describing it as being “in what I regarded as a light-hearted way”. Mr Clouston annexed a short note he made the same day as his record of the meeting, which includes an introductory statement:
Did a [M] – whack around the chops to unsettle; worked a treat.2
[32] I asked Mr Fletcher if it was fair to interpret this part of Mr Clouston’s note as a reference to his using an aggressive and unexpected tactic at the outset of the meeting to unsettle the party to whom it was addressed. Mr Fletcher accepted that was a fair inference to draw.
[33] Reflecting on all the affidavit evidence about the meeting, it is not possible to accept that Mr Clouston’s opening salvo was a “light-hearted” one.
[34] All of the members of the sub-committee representing the Club at the 30 July 2018 meeting who have completed affidavits attribute to Mr Gaines an acknowledgement along the lines that Mr Henderson was a liar, and that Mr Gaines had to check the truth of matters with others. Both Messrs Henderson in their affidavits in reply deny that such a statement was made by Mr Gaines. Both make the point that had there been any such statement, it would necessarily have resulted in terminating the instructions to Mr Gaines. No explanation is offered as to any
2 Mr Clouston’s note specified the name of a well-known legal practitioner. That practitioner’s identity is not relevant to the narrative.
statement that Mr Gaines might have made, intending to convey something else but which could have been misconstrued. Mr Gaines having elected to continue as Mr Henderson’s counsel, it was inappropriate to hear from him on the point.
[35] On 3 August 2018, Mr Gaines wrote a lengthy letter to the president of the Club protesting at inadequacies in the procedure that had been adopted. He described numerous respects in which Mr Henderson had been prejudiced by the absence of particulars of the complaint and alleged non-compliance by the Club with the requirements of its rules.
[36] Two and a half weeks later, on 21 August 2018, the Club responded in a letter signed by the president. Although the letter stated that the Club had not sought legal advice, it is apparent from the terms of at least some of its content that the letter had been drafted with the assistance of someone with legal qualifications. In summary, that letter:
· strongly defended the procedure that had been adopted and treated Mr Gaines’ narrative of what had transpired at the 30 July 2018 meeting as “disingenuous … deceptive and self-serving”;
· defended the procedure of appointing a sub-committee and the adequacy of the opportunity that had been afforded to Mr Henderson;
· advised that sub-committee members treat the purported acknowledgement by Mr Gaines that no reliance could be placed on the truth of what Mr Henderson said as a sufficient admission that Mr Henderson’s deceptive conduct had brought the Club into disrepute, but no attempt was made to relate any such acknowledgement to alleged falsehoods about any particular aspect of the conduct concerning the Club;
· included a passage warning, “in the interests of fairness”, that there were other matters the CMC would take into account when it met to consider continuing Mr Henderson’s suspension or his expulsion from the Club;
· referred to a Christchurch Press article reporting that Mr Henderson had served a prison sentence for misappropriating $250,000 from the Canterbury Pool Association, and asserted that Mr Henderson had not disclosed, as required in the membership form, that he had served a prison sentence;
· characterised Mr Henderson’s authorship of the April 2018 letter on behalf of the Club’s snooker section complaining at lack of support as deceitful and fraudulent;
· rejected as false Mr Henderson’s claims that the sign for Mr Mitchell’s motel business had always been located in the Club’s sports lounge, waiting to be hung once certain electrical work had been completed;
· detailed a number of unsuccessful searches for the sign and that a closed- circuit surveillance system had recorded an identified individual bringing the sign into the sports lounge early on 28 July 2018;
· disputed Mr Henderson’s reason for not having hung the sign where he claimed that he was waiting for further electrical work to be done so as to better fit the sign above the lights on the pool tables whereas, after the issue had arisen, the sign had been erected without any additional electrical work being done; and
· recorded that a search had revealed no incorporated society named Cue Power Promotions Limited or Cue Power Promotions Inc, the name used in the invoices Mr Henderson had issued.
[37] The letter also recorded the analysis of the bank statements that had been provided by Mr Henderson for the Cue Power Promotions entity where amounts charged to sponsors and paid into that account appeared consistently to have been paid out forthwith to Mr Henderson personally. In circumstances where the Club alleged he had only raised the sponsorship funds on representations that the money was for
the benefit of the Club, payment out of those funds to himself allegedly precluded his claiming that the funds were raised for the Club.
[38] The list of matters did not purport to be exhaustive. They were those that were identified “to date”. Nor did the letter provide any procedure for response or suggestion for a meeting to afford an opportunity for Mr Henderson to respond.
[39] Mr Gaines did respond to the letter on 28 August 2018, concluding with an acknowledgement that the Club’s CMC was meeting that evening and requesting that all correspondence be addressed for Mr Gaines’ attention. Mr Gaines refuted numerous factual matters in the Club’s 21 August 2018 letter and objected that, to the extent new matters were raised, the Club had to provide Mr Henderson with a procedure to respond to the allegations made.
[40] The CMC met that evening, 28 August 2018. The minutes record a motion that, having heard recommendations of the sub-committee appointed to investigate the “Bob Henderson allegations”, the committee expel Mr Henderson. The motion was carried unanimously. In submissions, Mr Gaines made the point that there is no evidence that his letter of 28 August 2018 was indeed considered by either the sub- committee or the CMC before the expulsion decision was made. As an instance of that, his letter had requested that all correspondence be addressed to him, whereas the following day advice of Mr Henderson’s expulsion was sent directly to Mr Henderson in the letter from Mr Davis. In an undated circular apparently published on 4 September 2018, the CMC publicised the expulsion of Mr Henderson, citing as the reason his having procured the payment of sponsorship monies for signage that had not been authorised by the Club. Thereafter, further correspondence ensued, and the present proceeding was commenced on 16 October 2018.
The rules
[41] The rules provide separately for immediate suspension, and for expulsion and suspension. Rules 10.1 and 10.2 provide grounds for immediate suspension and the procedure that is to be adopted. That is not relevant in the present case except to the extent that, after defined employees have summarily suspended a member, the
procedure for a judicial committee to consider the suspension relies on the rules in the more general expulsion and suspension provisions (rule 11).
[42]The relevant parts of rule 11 are:
11.EXPULSION AND SUSPENSION
11.1Grounds for expulsion or suspension: A Member shall be liable to be expelled or suspended from the Club if he or she:
(a)breaches these Rules;
(b)is convicted of:
(i)bookmaking; or,
(ii)a Crime (as defined in the Crimes Act 1961) for which a penalty is imposed; or,
(iii)an offence which, in the opinion of the Committee, is likely to prejudice any charter or licence held by the Club;
(c)in the opinion of the Committee, brings the Club into disrepute; or,
(d)is found by the Committee to have committed any of the acts set out in Rule 10.1.
11.2Procedure for expulsion or suspension:
(a)Any Member may notify the Committee if he or she believes a Member may be liable to expulsion or suspension pursuant to Rule 11.1.
(b)Within three (3) working days of receipt of such notice, or of a Member being immediately suspended pursuant to Rule 10, the President or in his absence the Vice President, in accordance with Rule 11.2(c) shall appoint a Judicial Committee and set a date for that Committee to consider the notice or suspension.
(c)The Judicial Committee shall comprise of the President or Vice President and four (4) other Members from the Committee.
(d)Such a Meeting shall be held within two (2) weeks of receipt of the notice, or of the suspension.
(e)The Judicial Committee must give the Member concerned at least seven (7) days’ written notice of that Meeting, informing him or her of:
(i)the nature of the complaint; and
(ii)how the complaint will be heard;
(iii)his or her right to appear and be heard at that Meeting; and
(iv)the process of the Meeting.
(f)After the Member concerned has had the opportunity to be heard and if the complaint is found to be proven, the Judicial Committee may elect to:
(i)expel him or her; or
(ii)suspend him or her for a determined period, or until a particular event.
(g)Any Member expelled or suspended shall have the right to appeal under Rule 27.
(h)Any expulsion or suspension shall be advised to the Committee and entered in the Minutes of the Committee, together with the name of the Member concerned.
(i)Notes of the Disciplinary Meeting shall be kept until the period of Appeal has expired. If no Appeal is lodged the notes may be destroyed.
…
11.5 Any Member expelled from the Club shall not be eligible for re- election to membership unless a period of at least twelve (12) months has passed since the date of expulsion, and a sixty six percent (66%) majority of Committee Members then in office vote in favour of such re-election.
…
[43]The position of the CMC as provided for in the rules is also relevant:
13.COMMITTEE OF MANAGEMENT
13.1Committee Members: The general business, management and control of the Club shall be vested in and conducted by a Committee comprising:
(a)a President;
(b)a Vice-President;
(c)Three Trustees
(d)a Treasurer;
(e)Seven Committee persons
(f)Two Members appointed by the Marlborough Returned Services Association (Inc).
(g)And the Immediate Past President (if any) who shall hold office for a period of one year only, in an ex officio role without voting power.
…
13.13Powers: The Committee shall, subject to any limitations imposed by these Rules, have the power to:
(a)exercise all the powers and authorities of the Club;
(b)do such other acts and things as it deems necessary or expedient for carrying on the business of the Club;
(c)form standing or ad hoc committees for the purpose of exercising its duties, authorities or powers;
(d)delegate its duties, powers and authorities to the Chief Executive Officer or to a committee formed under clause 13.13(c); and
(e)co-opt any person to assist with its functions.
13.14Duties: Committee Members shall at all times:
(a)render every assistance to the President, Vice-President and staff of the Club to maintain order and to prevent infringement of the Rules, Regulations or By-Laws or the terms of any charter or licence which may from time to time be granted to the Club;
(b)in the execution of their duties, exercise fiduciary responsibility and act in the best interests of the Members.
27.BOARD OF APPEAL
27.1A Board of Appeal consisting of five (5) Members shall be elected at each Annual General Meeting. Committee Members shall not be eligible for membership of the Board of Appeal.
27.2The Board of Appeal shall hear and decide any appeal lodged by a Member or Members against any decision of the Judicial Committee entailing suspension or expulsion in accordance with the following:
(a)Any member being suspended or expelled who wishes to appeal must give notice in writing to the Chief Executive Officer within seven (7) days of the date of such suspension or expulsion, stating the grounds for appealing.
(b)Within forty-eight (48) hours of receiving such notice, the Chief Executive Officer shall convene a Meeting of the Board of Appeal.
(c)The Board of Appeal shall re-hear the case but shall not admit fresh evidence, except where an application has been made to the Committee for a re-hearing and has been refused.
27.3The decision of the Board of Appeal shall be final.
28.DISPUTES
28.1Except as otherwise provided in these Rules, every dispute in relation to these Rules between a Member or persons claiming through a Member and the Club or a Committee Member shall be decided by the Judicial Committee and the decision shall be binding and conclusive on all parties without appeal.
Interpretation of the rules
[44] The Club’s rationale for the procedure it adopted is that the procedure for suspension or expulsion in r 11.2 did not apply in this case because the process was not initiated by a member notifying the CMC of a belief that another member may be liable for suspension or expulsion pursuant to r 11.1. In the absence of a complaint from a member, the Club contends it was proper for the CMC to exercise powers under r 13.13 to form an ad hoc committee for the purpose of exercising the powers of suspension or expulsion.
[45] For the Club, Mr Fletcher acknowledged that the consequence of applying the rules in this way meant that Mr Henderson did not have the advantage of the procedures specified in r 11.2(b) to (i), including the right to appeal from an adverse decision (provided for in r 11.2(g) and subsequent r 27). Mr Fletcher submitted that the Club did not have any ability under the rules to appoint a judicial committee, but could exercise the power in r 11.1 to expel or suspend a member, inter alia, if the committee formed the opinion that conduct had brought the Club into disrepute under r 11.1(c).
[46] Mr Fletcher submitted that the rules operated as a contract between individual members and the Club, that the Club was constrained to act in accordance with the rules and that members dealt with the Club subject to the rights and obligations in the rules, having to live with the consequences of that.
[47] The consequence of this approach is that where a member is faced with a complaint advanced by another member which, if upheld, might lead to expulsion or suspension, the member in jeopardy has the protection of the procedures specified in r 11.2. In contrast, if the Club accepts a complaint from a non-member, then (presumably subject to some overriding implied obligation of fairness) the Club can elect to deal with the steps up to making a decision on expulsion as it sees fit, and the member in jeopardy has none of the protections in r 11.2. Mr Fletcher did not concede that this outcome revealed any inadequacy or gap in the terms of the Club’s rules.
[48] For Mr Henderson, Mr Gaines’ primary argument was that the provisions of r 11.1 to 11.6 are the only provisions that can apply to any initiative to expel or suspend a member (except for the narrower circumstances for immediate suspension under r 10). If the circumstances of the concerns about Mr Henderson’s conduct could not be brought within r 11, then the Club could not exercise powers to expel or suspend him and the process the Club purported to adopt was ultra vires its rules. On this approach, the powers in r 13.13 could not be used to form an ad hoc committee because those powers were subject to limitations imposed by the rules and the relevant limitation was the requirement for all initiatives to expel or suspend a member being undertaken pursuant to the powers in r 11.
[49] In oral argument, I took Mr Gaines to acknowledge that his interpretation would not have left the Club powerless to deal with its concerns about Mr Henderson’s conduct. Mr Gaines suggested that the reference to “Member” in r 11.2(a) could be interpreted in context to extend to a non-member where such person had a relevant interest in complaining about a member’s conduct. That is an artificial and forced approach which would be unlikely to prevail if challenged.
[50] Mr Gaines also submitted that, given the compelling interest for all concerned to have the provisions of r 11 regulate the process, the Club might reasonably have recognised the gap in r 11.2(a) and invited Mr Henderson to concur that the complaint from Mr Mitchell was to be treated as if made by a member to enable the appropriate procedure to apply. Predictably, Mr Gaines indicated that Mr Henderson would readily have agreed to that.
[51] A further alternative would have been for the chief executive, as recipient of the complaint, to invite a member (for example one of the committee who would thereafter not be able to deliberate on it) to adopt Mr Mitchell’s concerns so as to qualify as a member complainant.
[52] There are deficiencies in the evidence as to how the procedure came to be adopted. It is explained only in Mr Clouston’s affidavit, sworn many months after the events. There is no contemporaneous written record of advice to the Club as to the procedural options open to it. Nor is there a resolution recording reliance on r 13.13 to appoint an ad hoc committee, or a written acknowledgement of the reasons why the procedures in r 11 were not to be adopted or adapted. None of the communications to Mr Henderson advised of a decision not to follow the provisions in r 11.
[53] Further, it is not explicitly clear when responsibility for considering the matter passed from the CMC to an ad hoc committee. The Club’s letter of 6 July 2018 uninviting Mr Henderson to the 10 July 2018 meeting made it clear that the matter was being dealt with by the CMC. The decision to suspend was made unanimously by the CMC, as confirmed in the letter to Mr Henderson of 11 July 2018.
[54] The formal terms of the 10 July 2018 resolution to suspend Mr Henderson contemplated that further investigation would be undertaken by the CMC.3 The minutes of that same meeting do record the appointment of a sub-committee to discuss the financial arrangements associated with advertising arrangements in the sports lounge, but that task bears no relationship to a disciplinary inquiry into Mr Henderson’s conduct.
[55] The president’s request for Mr Henderson to attend the 30 July 2018 meeting describes it as a meeting of “a Sub-Committee appointed by the Clubs of Marlborough Committee to investigate your involvement in the sale of advertising for the Sports Lounge”.
[56] Mr Davis explains in his affidavit a process of further investigation by a sub- committee which appears to have been managed by him. Mr Davis deposes that it had
3 Quoted at [21] above.
originally been intended that Mr Henderson be invited to a further meeting at which the CMC would consider the sub-committee’s views on possible expulsion. However, he, along with the president and vice president, considered that Mr Henderson’s performance at the 10 July 2018 meeting had been characterised by so many untruths that they considered it “neither prudent nor reasonable that the Clubs’ [sic] Management Committee be subjected to another such performance”. Accordingly, the CMC considered an oral report from the sub-committee at its 28 August 2018 meeting, unanimously resolving to expel Mr Henderson. The minutes of that meeting provide no detail of the matters discussed.
[57] I find there was a relevant deficiency in the Club’s rules. I do not accept that those responsible for drafting such rules would have distinguished between complaints made by members, and those made by non-members. In the latter circumstance, the member who was the subject of the complaint was vulnerable to an ad hoc procedure by a non-specified body not obliged to adopt the conventional procedure that would apply if the complainant was a fellow member.
[58] I consider it highly doubtful that the powers of the CMC under r 13.13 could be used to form the ad hoc committee on terms permitting the procedure that was adopted. It is not necessary to make a finite determination on this. However, a reasonable reading of the scope of r 13.13 in the context of all of the rules suggests that the limitations imposed by other rules would include a limit on the CMC’s power to form an ad hoc committee for disciplinary purposes that did not adhere to the basic requirements of fairness that would always apply under r 11.2 if the complainant was, as the drafters of the rules contemplated, another member.
[59] In the circumstances confronting the CMC, the minimum standard required in discharging the Club’s obligations to the prejudiced member was to adopt a procedure by analogy with that provided for in r 11.2. There were significant deficiencies of process up until the decision to expel and also a denial of the right of appeal which, by analogy, ought to have been afforded.
[60] Before considering the appropriate remedy for an expulsion that has occurred inconsistently with the rules of the Club, and in the event that I have erred in
interpreting the relevant rules as I have, it is appropriate to review the substance of Mr Henderson’s complaints about the deficiencies in the process adopted, relative to the appropriate measure of obligations of natural justice.
Adequacy of process
[61] Of a larger number of pleaded criticisms of the process, Mr Henderson advanced argument on the alleged failures by the Club to notify him of the case he had to meet, to provide particulars and to give him an adequate hearing.
[62] Dealing first with the 10 July 2018 decision to suspend Mr Henderson’s membership, the president’s letter of 27 June 2018 gave no warning that Mr Henderson might be vulnerable to suspension or other adverse consequences. He was simply asked to attend a meeting to discuss advertising in the sports lounge. Mr Henderson requested provision of details of the questions to be asked prior to the meeting, on the basis that he would then bring the appropriate people to address the questions. The chief executive’s reply treated the terms of Mr Henderson’s request as evincing “reluctance to attend the meeting” and, in apparent reliance on that perceived reluctance, advised that his attendance at the meeting “will not be required”.
[63] The result is that Mr Henderson was suspended from membership at a meeting from which he had been uninvited, without having the terms of any charge or complaint about his conduct as a member being put to him. The procedural rules for expulsion or suspension in r 11.2 of the Club’s rules are, at the least, a reasonable proxy for the standard of procedural fairness Mr Henderson was entitled to expect, irrespective of whether that was the rule that ought explicitly to have applied. None of the four elements of the procedure set out in r 11.2(e) were complied with. Accordingly, the suspension decision was made in breach of standards that ought reasonably to have applied.
[64] A theme in the Club’s defence of its conduct is that Mr Henderson knew full well what the CMC wanted to talk to him about, so it was unnecessary to provide him with either the terms of a complaint, the identity of a complainant, or the process that would follow up to the point of a decision adverse to him on suspension or expulsion.
[65] Shortly after Mr Mitchell had made his complaint to the Club, Mr Henderson had been in touch with him and gave his explanation as to why the signage had not yet been displayed. The Club appears to attribute sufficient knowledge to Mr Henderson of what its concerns were because he had provided Mr Mitchell with an explanation about the delay in displaying the signage shortly after Mr Mitchell raised his concerns with the Club. That assumption that Mr Henderson must have known what the complaint was does not excuse the lack of a timely warning identifying the nature of the complaint, confirming that it was Mr Mitchell’s complaint and specifying to Mr Henderson in advance what the process and likely consequences were.
[66] In submissions defending the judicial review, it was asserted that Mr Henderson appeared reluctant to front up and explain his conduct, and that he chose not to attend the informal meeting on 10 July 2018. There is no reasonable basis for either assertion. The statement in Mr Davis’s 6 July 2018 letter that Mr Henderson’s attendance was not required certainly did not present him with an invitation that he had chosen not to accept.
[67] Mr Fletcher also submitted that if this aspect involved a breach of the requirements of natural justice, it was technical and had only a temporary effect for which any remedy would now not be useful. During the hearing, I invited counsel to reflect on the characterisation of suspension from a voluntary organisation in John v Rees, which involved the legality of suspension of a member of a political party.4 Megarry J observed that in relation to the rules of natural justice, no distinction is made between suspension and expulsion:5
… in essence suspension is merely expulsion pro tanto. Each is penal, and each deprives the member concerned of the enjoyment of his rights of membership or office. Accordingly, in my judgment the rules of natural justice prima facie apply to any process of suspension in the same way that they apply to expulsion.
[68] Mr Fletcher responded to this reference by seeking to distinguish suspension from a political party as having graver consequences. I do not agree that there is a material distinction. In the present context, Mr Henderson was immediately excluded
4 John v Rees [1970] Ch 345; [1969] 2 All ER 274.
5 At 305.
from the premises and his reputation with all those in the Club and familiar with it would be tarnished by the implication of a wrong-doing sufficient to warrant his suspension.
[69] The suspension was said to be in order to facilitate further investigation, but no material distinction can be drawn between the nature and scope of steps taken before 11 July 2018 and those taken thereafter, which might suggest the Club would be impeded in such investigation by Mr Henderson’s continued presence as a member.
[70] The 11 July 2018 advice to Mr Henderson of grounds for his suspension cited two reasons. First, his making patently false statements in correspondence with the Club and, secondly, his misrepresentations, inducements and use of documents to entities concerning signage and sponsorship, and the receipt and accounting of monies received for them. Thereafter, without formulating a charge, on 19 July 2018 the Club president requested Mr Henderson’s attendance at a meeting on 30 July 2018. Mr Henderson sought clarification in advance of that meeting as to the personnel of the sub-committee, who had carried out the preliminary investigation, the nature of the complaint, and who the complaint had come from. He also requested access to the information that had been collected.
[71] Mr Davis responded to two letters from Mr Henderson, including that one, on 23 July 2018. He described the nature of the complaint without identifying the complainant. Soliciting sponsorship by having signage made for the sports lounge which had never appeared but for which money had been paid was treated as sufficient for the committee to determine that the complaint and the surrounding circumstances were on the face of it conduct by Mr Henderson that brought the Club into disrepute. The email purported to add an additional reason for suspension, as follows:
To facilitate an orderly investigation by the Committee into the alleged conduct, that may have been avoided if you had attended the Committee Meeting on the 10th of July.
[72] The implicit criticism of Mr Henderson for not appearing at the meeting, when he had in essence been firmly uninvited, is extraordinary. On the terms of Mr Davis’s 23 July 2018 email, non-attendance was a factor held against Mr Henderson in deciding to suspend his membership.
[73] On 21 August 2018, the Club added additional matters that it indicated would form part of its deliberations on whether Mr Henderson was to be expelled from the Club. On Mr Henderson’s behalf, Mr Gaines wrote in reply to that on 28 August 2019 emphasising that the Club must provide Mr Henderson with a procedure to respond to the allegations. No invitation was extended and the expulsion decision was made on the recommendation of a sub-committee at the CMC’s meeting that evening.
[74] On the affidavit evidence, I find that a primary reason why Mr Henderson was not offered the opportunity to answer the expanded allegations was the perceived deficiencies in his performance (and that of his solicitor) at the meeting on 30 July 2018. Given the range of additional matters on which there were contested issues of fact, I am satisfied that it breached any basic obligations of natural justice to proceed with the expulsion decision without affording Mr Henderson an opportunity to be heard.
Relief
[75] Mr Henderson sought declarations that on various grounds the decisions to suspend and expel him were void, and that his membership rights were therefore reinstated.
[76] Mr Gaines accepted that Mr Henderson could not seek relief that precluded the Club from undertaking a reconsideration of his membership, provided that it did so in compliance with the Club’s rules and the obligations to respect the extent to which the rules of natural justice are appropriately applied.
[77]Grounds are made out for quashing the challenged decisions.
[78] In the event that I determined that grounds for review were made out, I canvassed with counsel during the hearing the appropriate scope of relief. The affidavits completed, in particular those by the president and vice president, contain an exceptional level of vitriol about Mr Henderson. Their thorough denigration of him means that any repeat disciplinary process over which they exerted control would be challenged on grounds of demonstrated bias and potentially pre-determination.
[79] Given that the disciplinary process is primarily contractual, it is beyond the scope of the present proceedings to provide specific directions to the Club that would mandatorily require it to adopt a specific procedure to the extent that the appropriate procedure deviated from the Club’s rules, as correctly applied.
[80] However, all involved ought to share a commitment to reach a final determination on the issue as expeditiously as possible. To achieve that, if the Club wishes to pursue the matter, then it would be prudent to adapt the procedures for suspension and expulsion in r 11 of its rules, and to recognise, given the history of the previous determination of the issue, that the president and vice president ought to exempt themselves from any sub-committee formed to deal with the matter. At least a majority of those nominated to deal with it would desirably be members who did not participate in the sub-committee that reported to the CMC in August 2018. Further, it would be prudent for the Club to invite an appropriately qualified outsider, such as a legal practitioner with no connection to either side, to act as chair of the deliberative committee.
[81] It will be a matter for the Club and its advisers, but a failure to adopt a procedure reflecting these concerns is likely to leave the Club vulnerable to further challenge by way of application for judicial review.
Costs
[82] Mr Henderson is entitled to costs on the judicial review. If costs are unable to be agreed between counsel, I will receive memoranda (limited to six pages in length):
· on behalf of Mr Henderson within 20 working days of delivery of this judgment; and
· on behalf of the Club within 15 working days of service of the memorandum on behalf of Mr Henderson.
Dobson J
Solicitors:
Lundons Law, Blenheim for applicant Gascoigne Wicks, Blenheim for respondent
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