New Zealand Qualifications Authority v Hunt
[2017] NZHC 2108
•31 August 2017
IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
CRI-2017-404-000185
[2017] NZHC 2108
BETWEEN NEW ZEALAND QUALIFICATIONS AUTHORITY
AppellantAND
DANIEL HUNT
First Respondent
DANIEL HUNT & ASSOCIATES
LIMITED (1922762) TRADING AS THE CAREER ACADEMYSecond Respondent
Hearing: 30 June 2017 Appearances:
M Harborow and D Wiseman for the Appellant
J Billington QC and G Schumacher for the Respondents
Judgment:
31 August 2017
JUDGMENT OF HINTON J
This judgment was delivered by me on 31 August 2017 at 4.45 pm pursuant to Rule 11.5 of the High Court Rules
…………………………………………………………………… Registrar/Deputy Registrar
Counsel/Solicitors:
Meredith Connell, Auckland J Billington QC, Auckland
NZQA v HUNT [2017] NZHC 2108 [31 August 2017]
Introduction
[1] The appellant, the New Zealand Qualifications Authority (NZQA), appeals the decision of Judge Bouchier in the District Court, dated 25 May 2017. The Judge granted the respondents’ application for name suppression pursuant to s 200 of the Criminal Procedure Act 2011 (the Act). The respondents have had name suppression pending the outcome of this appeal.
[2] NZQA’s appeal is on the basis that the Judge erred at both stages of the two-stage test under s 200 of the Act, whereby she, in error, considered that:
(a)one of the threshold grounds under s 200(2) was met, namely that the publication would “be likely to cause extreme hardship” under s 200(2)(a); and
(b)that it was appropriate to exercise her discretion to grant name suppression.
[3] Mr Hunt is the first respondent, in his capacity as sole director and shareholder of the second respondent, Daniel Hunt & Associates. The second respondent operates the Career Academy, an unregistered private training establishment. It provides online courses and grants various certificates and diplomas on completion. The courses have a focus on accountancy and bookkeeping. Because it is unregistered under the Education Act 1989, none of the Career Academy’s programmes are approved by NZQA and it cannot offer or deliver NZQA approved qualifications. It is therefore not under NZQA’s supervisory jurisdiction and there is no other government body or credible entity which oversees the quality of the services and products it provides.
[4] The two respondents face, in total, 76 charges under the Education Act, half of them being mirror charges faced by Mr Hunt in his capacity as the Managing Director and Chief Executive Officer of the second respondent.
[5] The allegations relate to the second respondent’s enrolling international students when it was not permitted to do so; falsely representing that it has NZQA consent to assess against certain unit standards; falsely representing that its training
schemes are approved by NZQA; representing that certain awards it provides are listed on the NZQA framework, and offering awards using protected terms like “national”, “New Zealand”, “Bachelor” and “degree”. Many of the charges relate to misleading representations on the second respondent’s website; in the advertising by the second respondent’s employees, and by the first respondent.
Facts
[6] The charging documents were filed on 21 December 2016. The respondents were served with the charging documents and a summons on 12 January 2017.
[7] On 31 January 2017, at the first callover, counsel for the respondents sought NZQA’s permission for interim name suppression. NZQA did not consent.
[8] On 7 February 2017, Judge Simpson in the District Court granted the respondents’ application for interim name suppression, pursuant to s 200(4) of the Act. Under s 200(5), this suppression was to continue until the next callover.
[9] On 4 April 2017, the respondents entered not guilty pleas in the District Court before Judge Hikaka. The respondents also applied to have name suppression continue. NZQA once again opposed, and requested that the matter be decided at a later hearing. Judge Hikaka imposed timetable orders for name suppression to be dealt with at the case review hearing, scheduled for 25 May 2017. It seems that Judge Hikaka also made a further interim order for name suppression. Section 200 does not permit a further interim order to be made after the order under s 200(4) unless the Court is satisfied that one of the grounds in s 200(2) applies.1 There is no copy of the decision or minute by Judge Hikaka on file, but it is clear that Judge Hikaka was not asked to rule on the merits.
District Court Decision
1 Criminal Procedure Act 2011, s 200(5).
[10] On 25 May 2017, in the District Court, Judge Bouchier granted the respondents’ application for continuing name suppression under s 200 of the Act, to apply until the matter is finally determined.
[11] Judge Bouchier began by noting that the starting point when considering whether to grant name suppression is the principle of open justice. She identified some underlying reasons for the principle, and assessed whether they applied to the present situation.
[12] Judge Bouchier considered that the threshold for determining whether to exercise her discretion to grant name suppression was met. She considered it could be inferred that there would be significant repercussions for the company and its staff if the respondents’ names were to be published. The second respondent would lose profits and staff would have to be let go. Judge Bouchier indicated her awareness of case law to the effect that protecting a company’s income is not determinative of a name suppression application, and stated that she would keep that in mind. However, she felt that the threshold had been met in this situation because “there is an effect on the company, there is an effect upon the staff”. 2
[13] While the Judge does not refer to the relevant threshold test, she must have been relying on s 200(2)(a) of the Act, and not any of the other threshold provisions.
[14] She also noted that “clearly two other Judges have found the same thing in previous decisions of this Court and I do not differ from them”.3
[15] Judge Bouchier also considered that it was appropriate to then exercise her discretion by granting name suppression. This was on the basis that while the public interest in this matter is important, the respondents’ pleas of not guilty and the presumption of innocence were also to be considered.
2 NZQA v H [2017] NZDC 11124 at [13].
3 At [13].
Grounds for appeal
[16]NZQA submits that Judge Bouchier erred by:
(a)failing to give open justice sufficient weight;
(b)incorrectly applying the statutory test required by s 200 of the Act;
(c)finding that the respondents and the employees of the second respondent would suffer extreme hardship if publication were to occur; and
(d)exercising the discretion in a manner that was contrary to principle and/or plainly wrong by:
(i)relying exclusively on the presumption of innocence; and
(ii)failing to properly take into account the public interest in publication, and in particular the interests of the current, past and prospective students of the second respondent in knowing the nature of the charges faced by the respondents.
Relevant legal principles
[17] A prosecutor has a right of appeal, pursuant to s 283 of the Act, against a decision of a Court making a suppression order.
[18] Such an appeal is a general appeal, following Austin, Nichols & Co Inc v Stichting Lodestar,4 if concerned with the first stage of the two-stage analysis required when determining whether to grant name suppression. It is an appeal against an exercise of discretion if directed at the second stage, which, following May v May,5 proceeds on the error principle.6
4 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
5 May v May (1982) 1 NZFLR 165 (CA).
6 See Robertson v Police [2015] NZCA 7 at [39]-[41]. See also K X v Serious Fraud Office [2016] NZHC 3154 at [22]; F v Police [2016] NZHC 1969 at [22].
[19]Section 200 of the Act provides, inter alia, as follows:
(1) A court may make an order forbidding publication of the name, address, or occupation of a person who is charged with, or convicted or acquitted of, an offence.
(2) The court may make an order under subsection (1) only if the court is satisfied that publication would be likely to—
(a) cause extreme hardship to the person charged with, or convicted of, or acquitted of the offence, or any person connected with that person; or
(b) cast suspicion on another person that may cause undue hardship to that person; or
(c) cause undue hardship to any victim of the offence; or
(d) create a real risk of prejudice to a fair trial; or
(e) endanger the safety of any person; or
(f) lead to the identification of another person whose name is suppressed by order or by law; or
(g) prejudice the maintenance of the law, including the prevention, investigation, and detection of offences; or
(h) prejudice the security or defence of New Zealand.
…
[20] The first stage of the two-stage analysis requires the Judge to determine whether one of the threshold grounds under s 200(2) of the Act is made out. As the Court of Appeal recorded in Robertson v Police when it expanded on this stage: 7
That is to say, whether publication would be likely to lead to one of the outcomes listed in subs (2). The listed outcomes are prerequisites to a court having jurisdiction to suppress the name of a defendant. It is “only if” one of the threshold grounds has been established that the judge is able to go on to the second stage.
[21] In accordance with Austin, Nichols & Co Inc v Stichting Lodestar, the appellate Court must come to its own view on the merits when deciding whether one of the threshold grounds in s 200(2) has been met. The weight given to the decision of the lower Court is a matter of judgment.8
7 Robertson v Police, above n 6, at [40].
8 Austin, Nichols & Co Inc v Stichting Lodestar, above n 4, at [5].
[22] As noted, the second stage of the two-stage test requires the Judge to exercise their discretion as to whether suppression should be granted or not. The Court of Appeal in Robertson v Police said that at this stage:9
… the judge weighs the competing interests of the applicant and the public, taking into account such matters as whether the applicant has been convicted, the seriousness of the offending, the views of the victims and the public interest in knowing the character of the offender.
[23] On appeal, in accordance with May v May, the appellant must establish in relation to the second stage that:10
(a)the lower Court’s decision was contrary to principle;
(b)the Judge failed to consider all relevant matters or took irrelevant matters into account; or
(c)the decision was plainly wrong.
[24] When assessing whether to make a name suppression order, there is a settled presumption in favour of open reporting. This is based on “the two fundamental principles of open justice and freedom of expression and extend[s] to all aspects of the criminal process including public identification of a person convicted of an offence.”11 This presumption has been given statutory form in the first stage of the two-stage process, whereby the presumption applies unless the applicant can establish one of the grounds to displace it.12 It is also relevant at the second stage, whereby the principle of open justice must be considered in exercising the discretion, notwithstanding that the threshold has been crossed.13
[25] In R v Liddell, the Court of Appeal stated that “the starting point must always be the importance in a democracy of freedom of speech, open judicial proceedings,
9 Robertson v Police, above n 6, at [41].
10 May v May, above n 5.
11 DP (CA418/2015) v R [2015] NZCA 476, [2016] 2 NZLR 306 at [9].
12 D (CA443/2015) v Police [2015] NZCA 541, (2015) 27 CRNZ 614 at [10].
13 At [12].
and the right of the media to report the latter fairly and accurately as surrogates of the public.”14
[26] The commonly expressed reasons for the pro-publication approach, as identified by the writers of Adams on Criminal Law, and quoted by this Court in R v Police, are that:15
(a) publication of the defendant's name avoids the possibility of suspicion falling on others;
(b) publicity may in itself lead to the discovery of additional evidence in relation to the offence;
(c) publication may help prevent further offending;
(d) publication promotes personal deterrence;
(e) publication enables those who are clients or patients or who may otherwise have contact with the accused to decide for themselves whether they do so; and
(f) where there is a significant risk of other undetected offending, publicity may encourage those victims to come forward thus enabling further charges to be laid and the victims of those offences to receive help.
Discussion
Would publication “be likely to cause extreme hardship” to the respondents or their staff? –s 200(2)(a)
[27] I turn to the interpretation of s 200(2) for the purposes of determining whether the first stage of the test under s 200 is met. Because this stage of the appeal is by way of general appeal, and therefore whether s 200(2) applies is assessed on its merits, I consider the matter afresh.
[28] The consequences set out in s 200(2) must be “likely” to occur if no suppression order is made. This has been taken to require more than a mere possibility, but does not require proof that the concerns specified are more likely than not to
14 R v Liddell [1995] 1 NZLR 538 (CA) at 546.
15 Bruce Robertson (ed) Adams on Criminal Law (online looseleaf ed, Thomson Reuters) at [CPA200.01]. See also R v Police [2014] NZHC 2178 at [30].
eventuate. The stated harm or risk of harm must be shown to be a real and appreciable possibility such that it cannot be dismissed or ignored as being remote or fanciful.16
[29] In relation to s 200(2)(a), determining whether there would likely be “extreme hardship” connotes a very high level of hardship, and as such, is a high threshold.17 Extreme hardship must be assessed contextually, and entails a relative comparison between the contended hardship and the consequences that are normally associated with the defendant’s name being published. The contended hardship must be something beyond the ordinary or normally associated consequences.18
[30] The Court of Appeal in D v Police noted that “[d]istress, embarrassment and adverse personal and financial consequences usually attend criminal proceedings, and something out of the ordinary is needed if the applicant is to get across the threshold”.19
[31] In Chand v Internal Affairs Department, Venning J noted that the financial impact on the businesses of one of the defendants was expected as a consequence of publication, given the defendant had been charged with dishonesty offending. The financial impact was a normal consequence of publicity. Furthermore, the difficulty the defendant faced was that he had not provided direct evidence of the impact that publication of his name would have on his businesses. It was speculative.20
[32] Duffy J in H v R stated that in “the majority of cases, name suppression should not be viewed as a tool to protect one's commercial interests.”21
[33] In the present case, the respondents point to likely extreme hardship to them and/or their staff, on the basis of financial harm.
16 Beacon Media Group Ltd v Waititi [2014] NZHC 281 at [21]. See also JM v R [2015] NZHC 426 at [35].
17 Robertson v Police, above n 6, at [48]-[49].
18 At [49]. See also R v Wilson [2014] NZHC 32 at [27].
19 D (CA443/2015) v Police, above n 12, at [11].
20 Chand v Internal Affairs Department [2016] NZHC 3112 at [22]-[25].
21 H v R [2015] NZHC 1501 at [41].
[34] In terms of likely extreme hardship on the part of the respondents, they point to evidence of the effect of publicity on similar education providers in the private education sector, and the current media climate. Mr Hunt refers to the specific circumstances of Intueri Education, a private education provider, which according to media reports experienced an 86 per cent drop in share price from 2014 to 2016, and forecast a 36 per cent drop in its 2016 earnings. The respondents say this was “following the mere announcement of its investigation by the [Serious Fraud Office]”. In Mr Hunt’s affidavit, he estimates that a conservative 27 per cent drop in enrolments at the Career Academy could be expected as a result of negative publicity.
[35] The respondents also say that, as a result of the likely financial effect on the second respondent, staff would in turn be likely to suffer extreme hardship by loss of employment. Mr Hunt records in his affidavit of 10 March 2017 that the second respondent employs 38 employees and 17 contractors. He records that he anticipates that eight employees and nine contractors will have to be laid off as a result of the anticipated financial loss that will occur if the respondents’ names are published. In a further affidavit sworn on 13 April 2017, Mr Hunt says there are 49 employees and 17 contractors employed by the second respondent. The difference may relate to overseas staff.
[36] Two affidavits are on file from employees as to likely extreme hardship. They record that employees are required to have particular experience in their respective fields. One 21 year old employee, a student advisor, states that she needed “a significant amount of sales experience with a proven track record and an empathetic and relatable personality” to get her job, “so our students feel comfortable and supported in starting their learning journey”. The other employee, an academic tutor for accounting, tax and bookkeeping papers, states that she needed to “qualify in both Certificate and Diploma level Accounting and Certificate level Payroll Administration” to obtain her job. These employees state that their roles are specific, and that they would find it difficult to find positions that are equivalent to the positions they have with the second respondent.
[37] I have considered the evidence and arguments provided by the respondents. I am not persuaded that publication of the respondents’ names is likely to cause
extreme hardship to the respondents, or any person connected with them. I reach this conclusion for the following reasons.
[38] I do not accept that the respondents have shown that they would themselves be likely to suffer extreme hardship. The media climate is not a factor justifying a finding of likely extreme hardship. That would apply across the board. The circumstances of the other institutions are also not sufficiently similar to be indicative of the sort of hardship (including media attention) that the respondents are likely to experience. In the case of the only relevant example, Intueri Education faced investigation by the Serious Fraud Office; was a listed entity, and was generally in a position which is a far cry from the situation here. The respondents face regulatory charges brought by NZQA. A closer analysis of the two Intueri media reports on which Mr Hunt relies, indicates that Intueri was facing extensive problems beyond the Serious Fraud Office investigation, including charges and fines following the death of a student on a diving course. The only reference to a drop “following the mere announcement of the SFO investigation” is a statement that Intueri’s share price fell more than 35 per cent after that announcement was made in about January 2016. That is a different matter to the claims Mr Hunt makes.
[39] The respondents say that publication could conservatively result in a 27 per cent decline in enrolments and a 35-40% drop in revenue based on potential loss of three corporate clients, although the link is not clear. These figures are based solely on the statements by Mr Hunt. They are entirely speculative. There is no supporting financial or other evidence in the vast volume of material that has been filed. I am also sceptical as to the claimed loss of three corporate clients and the consequences of that. The respondents may conceivably be less harmed than other equivalent institutes would be if similarly charged. They can identify the clients they say they would or might lose, and are able to contact them and explain their position. This might go some way to reducing the impact of publication.
[40] In the end, the evidence referred to by the respondents as to likely extreme hardship to themselves only points to hardship that might naturally be expected when entities and individuals are charged as the respondents have been. That does not qualify as evidence of likely extreme hardship.
[41] I also do not consider that the potential loss of jobs points in this case to likely extreme hardship. It would not be beyond the ordinary consequences of publication of the respondents’ names for some of the second respondent’s employees, and those in similar positions such as contractors, to be laid off. Even if some employees are laid off, which is not necessarily likely given the claims as to financial hardship by the respondents are speculative, I do not consider the work or skills of the staff are so highly specialised that they would be unable to seek employment elsewhere. In relation to contractors, given they have less expectation of continued work, it is unlikely that it would constitute extreme hardship if any individual hired in that capacity is laid off. I am not aware of any evidence from the current contractors. Overall, I do not consider that a potential loss of jobs by employees or contractors would be likely to cause extreme hardship to them.
[42] Before I conclude on this ground, I note as an aside the reference Judge Bouchier made to the fact that two Judges before her had also found in favour of name suppression. I do not consider that the point is relevant. The first Judge, Judge Simpson, made a suppression order on the basis that the respondents were entitled to it until the next call, and in doing so applied the test under s 200(4) of the Criminal Procedure Act, which has a lower threshold and simply required the respondents to demonstrate an arguable case that one or more of the circumstances under s 200(2) would result from publication. The second Judge, Judge Hikaka, as I understand the situation, did not assess the merits of the matter at all, and simply imposed timetable orders to enable the question of suppression to be considered later. In neither case was an order for name suppression made on the basis of a full assessment of the merits of the matter. In the case of the latter, it is likely that no assessment was made at all.22
[43]For the reasons set out above, the s 200(2)(a) ground is not established.
22 In Judge Bouchier’s judgment, she records that Mr Billington, counsel for the respondents, informed her that it was the third occasion upon which name suppression had been argued.
Would publication be likely to cause undue hardship to past and present students as victims? – s 200(2)(c)
[44] The respondents also contend on appeal that publication would likely cause past and present students undue hardship under s 200(2)(c) of the Act, insofar as their qualifications will be perceived as being of lower quality. The respondents argue this as if it were a basis for Judge Bouchier’s decision. That is not correct. Her Honour made her decision with reference to the respondents and their staff, not the students.23
[45] Mander J in R v Tully, in the context of s 205 of the Act, defined “undue hardship” as:24
… something more than the hardship that would normally attend publicity surrounding the criminal proceeding. The term “undue” indicates something more than ordinary and involves excessive or serious hardship greater than would otherwise be expected to arise from the publication of evidence adduced in a criminal trial. It is, however, to be contrasted with the phrase “extreme hardship” which connotes a very high level of hardship. The test is one of “likely to cause”. That is to be construed as an appreciable risk or real risk which cannot readily be discounted.
[46]In the context of s 200(2)(c), Duffy J in Tiwari v Police stated that:25
With regards to “undue hardship” to the victim, Henry J in Dalton v Auckland City: Porter v Auckland City said that “undue hardship” connotes “excessive or greater hardship than the circumstances warrant”. Though the case was decided in another context, this statement is relevant and helpful when it comes to consider this ground for suppression.
[47] The respondents provide evidence of a Dr Wood, an academic and practitioner in adult financial literacy. Dr Wood considers that publication:
… will have a serious impact on the reputation of the certificates [the second respondent] has awarded to past students. It is my belief, based on my industry experience, that this will be harmful for the students who have successfully obtained these awards, and are now looking for, or are in employment.
23 Judge Bouchier had earlier referred to the respondents’ submission that adverse publicity would have the potential to impact upon the perceived quality of the qualifications the second respondent provided. Her Honour did not refer to it again when she determined whether one of the grounds under s 200(2) was established.
24 R v Tully [2016] NZHC 621 at [10]. Section 205 of the Act concerns suppression of evidence from a proceeding on the basis that it would be likely to cause undue hardship to any victim of the offence.
25 Tiwari v Police [2014] NZHC 2509 at [57] (citations omitted).
[48]Later she says:
… Lifting of the name suppression is likely to disadvantage the past students with legitimate qualifications/awards and current students undertaking programme of study through this provider.
[49] I note that Dr Wood is not an independent witness. She has ties with the respondents, having had a professional relationship with them dating as far back as 2011. I accept that publication is likely to have a negative impact on the certificates and could therefore have a negative impact on some past (and perhaps present) students. However, Dr Wood’s affidavit is not evidence of likely “undue hardship” to past and present students. She says it will be harmful, which does not qualify as undue hardship. There is no evidence offered from any student. While some past students may be harmed, for present and future students I note that there may be a benefit, insofar as it may be preferable to know the allegations against the respondents.
[50] I do not consider that evidence has been raised that indicates likely undue hardship to past and present students.
[51] On that basis, I do not consider that the ground under s 200(2)(c) has been established.
Conclusion
[52] Ultimately, the points relied on by the respondents are generic points which could be made by any education provider, or similar business. These points are the negative media around others; negative consequences to others; nomination of a likely percentage loss (without accounting or other supporting evidence); nomination of numbers of staff likely to be let off; and the effect on past students’ qualifications. These claims do not distinguish the case from the ordinary case. If these generic or speculative factors establish extreme hardship, or undue hardship respectively, that would undermine the principle of open justice, particularly in relation to the education sector.
[53] My finding that no relevant threshold ground under s 200(2) has been met is sufficient to allow the appeal. Therefore, I do not consider it necessary to consider the
second limb, namely whether Judge Bouchier erred by exercising her discretion to allow interim name suppression.
Result
[54]The appeal against the interim name suppression order is allowed.
[55]The interim name suppression order is therefore rescinded.
[56] The respondents did not seek any interim orders. I direct that the judgment lie in court for 24 hours in the event they wish to do so.
Hinton J
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