Singh v Auckland Co-operative Taxi Society Limited HC Auckland CIV 2010-404-1445
[2010] NZHC 1304
•2 July 2010
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2010-404-001445
BETWEEN SUKHDEV SINGH First Plaintiff
ANDAJAY RAM Second Plaintiff
ANDAUCKLAND CO-OPERATIVE TAXI SOCIETY LIMITED
Defendant
Hearing: 16 April 2010
Appearances: M M Edwards for Plaintiffs
S Khan as Co-counsel for Plaintiffs
K J Patterson for Defendants
Judgment: 2 July 2010 at 3:00 pm
JUDGMENT OF COURTNEY J
This judgment was delivered by Justice Courtney on 2 July 2010 at 3:00 pm
pursuant to R 11.5 of the High Court Rules.
Registrar / Deputy Registrar
Date……………………….
Solicitors: Fortune Manning, P O Box 4139, Auckland Fax: (09) 915-2402 – M Edwards / S Khan K J Patterson, P O Box 13006, Tauranga Fax: (07) 579-0404
SINGH & ANOR V AUCKLAND CO-OPERATIVE TAXI SOCIETY LTD HC AK CIV-2010-404-001445 2
July 2010
Introduction
[1] The plaintiffs, Mr Singh and Mr Ram, are taxi drivers and members of the Auckland Co-operative Taxi Society Incorporated. In January 2010 they were found guilty of breaches of certain of the Society’s rules. Penalties were imposed which included suspension of their permits. Following an unsuccessful appeal to the Appeal Committee the Society’s Board of Governance advised the plaintiffs that it did not consider it to be in the Society’s best interests for them to remain members and invited them to appear at a further hearing on this issue. The plaintiffs obtained interim relief preventing the Board of Governance proceeding to terminate their membership pending disposition of the present application for judicial review on the ground that there had been breaches of natural justice.
[2] Although the statement of claim alleged breaches of natural justice in relation to an initial inquiry held by the Society as well as the hearing and the appeal, the only relief sought was a declaration in relation to the appeal. However, submissions filed by the plaintiffs’ counsel, Mr Edwards, referred to the entire process. The Society did not accept that the inquiry, which was informal, was amenable to judicial review but was agreeable to the case being argued in relation to both the hearing and the appeal. As a result, the hearing proceeded on the basis that both the hearing and the appeal were the subject of judicial review.
[3] The Society accepted that, in conducting both the hearing and the appeal, it was required to observe the principles of natural justice and that these included the need to give adequate notice of the hearings, provide the plaintiffs with details of the allegations against them and give them an adequate opportunity to be heard. What constitutes substantive unfairness amounting to a breach of natural justice depends on the circumstances of the particular case. Not everything that might in everyday language be described as unfair will necessarily constitute substantive unfairness for
this purpose.[1]
[1] Thames Valley Electric Power Board v NZFP Pulp & Paper Limited [1994] 2 NZLR 641; Bovaird v The Board of Trustees of Lynfield College [2008] NZCA 325
[4] The various breaches of natural justice asserted in this case can be summarised conveniently as allegations that the Society:
a) Gave inadequate notice of the hearings;
b) Did not allow lawyers at the hearings;
c) Failed to apprise the plaintiffs of the case against them by making specific allegations and disclosing the evidence relied on. There is also a complaint of failing to prove a breach of Rule 44. But I deal with that as part of the complaint of failing to apprise.
d)Failed to prove the alleged breach of Rule 44, which permits a penalty to be imposed on any member who commits an act which the Committee considers contrary to the interests of the Society or which brings the Society into public or financial odium or disrepute.
The Society’s rules
[5] The Society is incorporated under the Industrial and Provident Societies Act
1908 and has Operating Rules pursuant to Schedule 2 of the Act to which all its members are subject. Rule 7 permits the Management Committee of the Society to impose penalties, including fines and suspension, for any breach of the rules.
[6] The rules that are relevant in this case are Rules 6, 37 and 44. Under Rule 6 it is an offence to breach any provision of the Transport Act 1962, Transport Services Licensing Act 1989, Transit New Zealand Act 1989, Transport (Vehicle & Driver Licensing) Act 1986 and any amendments/replacing legislation or regulations under such Acts.
[7] Rule 37 relevantly provides that:
(a) Members and drivers must present their service ordesrs at the taxi office within two weeks of their receipt by the taxi…
(c) It shall be an offence for any member or driver to accept or submit for payment any service orders for work not carried out by the taxi being operated by the claimant.
[8] Rule 44 provides that:
Any member, employed driver or employee who commits an act considered by the Committee to be contrary to the interests of this Society or to be an act which brings the Society into public or financial odium or disrepute may be penalised in any manner, in conformity with these rules as may be justified in the opinion of the Committee.
[9] The rules contain provisions for the determination of breaches by way of a hearing. Representation is not permitted at such hearings except in specific circumstances which are not relevant in this case. Rule 14 confers a right of appeal from the whole or any part of a decision following a hearing. Representation is not permitted at an appeal hearing except in specified circumstances, one of which is where the appeal is against a decision involving expulsion, dismissal, suspension or curtailment of radio rights for a period of more than 14 days.
The initial inquiry
[10] In early December 2009 Mr Singh and Mr Ram each received a document described as a “Notice of Hearing re Serious Complaint”. The Society accepts that this document should have, in fact, been described as a notice of inquiry. The notice advised that:
A complaint has been made against you, the abovenamed, by the Compliance Department of the Auckland Co-operative Taxi Service Limited. The Compliance Department has charged that between October and December 2009 you breached the operating rules of the Society in particular Rules 44, 37…
The society takes this complaint very seriously. This letter is to provide you with notice to convene a disciplinary hearing.
This hearing is relation to a serious complaint re alleged credit card abuse.
It is require (sic) that you bring your log Books for the period mid- September to present day. We also require that you bring all credit card signed receipts relating to credit card hirings done during this period.
As this hearing is extremely serious and could jeopardise your membership with the society you are advised that a support person could be of help to you. The society’s driver’s advocates are referred to in this letter…
(emphasis added)
[11] It appeared that the complaint related, in part at least, to credit card transactions. Each taxi had a Cadmus Terminal installed in it so that drivers could accept payment by credit card. Unlike an EFTPOS system, the Cadmus terminal system is offline i.e. does not verify the credit card payments with the bank at the time payment is made. Instead, the Cadmus terminal stores all its transactions on a coded card. Drivers take their cards to a factoring company (Taxi Charge or Auckland Collections Limited), which downloads the information, pays the drivers the value of the transactions (less commission and charges) and then forwards the information to the issuing banks for payment. In the event of a transaction being declined by a bank, the Society is required to repay the amount and can recover that from the driver.
[12] The Society’s Compliance Officer, Mr O’Brien, deposed that Taxi Charge and Auckland Collections Limited had alerted the Society to possible credit card misuse after noting a large number of transactions being rejected by the banks after the taxi drivers had been paid out. It appeared that the same or similar cards were being used repeatedly for small transactions by a large number of drivers.
[13] The Society decided to conduct an initial inquiry and ask drivers to attend with their logbooks and receipts. According to Mr O’Brien, the drivers were told that the meeting was only to be in the nature of an inquiry to determine whether or not a hearing was warranted. No specific allegations of credit card fraud were made. The drivers were presented with a spreadsheet showing the declined credit card transactions and asked to explain them or provide details of receipts and logbooks to confirm their position at the relevant times and dates. There was also another issue raised, namely whether the drivers were logged on to the Society’s system at the time the transactions took place, i.e. whether they were available to accept work from it at the particular time.
[14] Mr Singh and Mr Ram both deposed that they were unaware of credit card transactions submitted by them being rejected by the banks. They maintain that they had not received prior notice of their credit card transactions being rejected. The Society did not challenge this assertion.
[15] Mr Singh said that he was shown a spreadsheet showing declined credit card transactions for his cab. He provided 28 receipts for the period but notes that he did not keep receipts for a long period; if he was not advised of a declinature there was no reason to keep them. Mr Singh accepted that some of the transactions took place when he was not logged on because he sometimes undertook work that did not emanate from the Society. According to Mr O’Brien, Mr Singh also confirmed that he had reduced the value of some large transactions to multiples of $100 to ensure that they were processed without query. There was no reply evidence refuting this.
[16] Mr Ram gave very similar evidence. He was shown a spreadsheet showing declined credit card transactions and asked to explain them. Some of the transactions had taken place when he was not logged on, which he said occurred in relation to private work that did not emanate from the Society.
[17] Mr O’Brien deposed that in the group of taxi drivers that attended the inquiry, most of the amounts involved were relatively low. The Society decided that if the number of transactions connected with a particular driver were relatively few, involved amounts under $1,000, and there were no other significant breaches of the Land Transport Act, then no further action would be taken against the driver provided the amounts were repaid. However, where drivers were unable to produce receipts for a significant number of transactions and there were obvious and admitted breaches of the Land Transport Act in terms of logging on and significant potential losses i.e. in excess of $1,000 then it was decided that a full hearing would be held so that the driver could explain the discrepancies.
Were the hearings conducted unfairly?
The process and resultant decisions
[18] Because of the similarities between the hearings and consequent decisions I deal with the two hearings together. Following the inquiry on 9 December 2009 the Society issued a notice to Mr Singh advising of a hearing on 18 December 2010:
After reviewing the information tabled at that meeting a further meeting under the Society disciplinary procedure is to be held…
The Compliance Department has charged that on between September December 2009 you breached the operating rules of the Society in particular Rules 44, 37. Also, Land Transport Act 1998 Part 4B Clauses 30Z to and including 30ZI and any other relevant parts of this Act…
This hearing is in relation to a serious complaint re alleged credit card abuse…
As this hearing is extremely serious and could jeopardise your membership with the Society you are advised that a support person could be of help to you. The Society’s driver’s advocates are referred to in this letter…
[19] Attached to each notice was a summary of facts. The summary of facts relating to Mr Singh stated that:
During the period from 15 October to 22 November 2009 there were six different credit cards processed through your Cadmus Terminal.
The days in which these credit card transactions took place were 20 days during this period.
The total value of these transactions was $3,258.40 before the surcharge
$3,394.40 after surcharge.
There were 68 transactions in total.
You have produced signed receipts for 28 transactions.
That leaves a balance of 40 transactions that you have failed to account for. There were also 5 transactions at times you were either not logged on or did
not have a logbook entry indicating that you were working.
The total of logbook days when these transactions took place where there were errors or omissions were 18.
It is the Society’s view that the above summary of facts and the spreadsheets attached point to real and significant breaches of the rules of the society as a result of the manner in which you have operated your cab 180.
You have been advised in the notice of hearing of the rules which may have been breached and there may be other breaches depending on your explanation.
[20] Mr Singh gave little evidence about the hearing. He attended with a driver’s advocate. According to Mr O’Brien he admitted the summary of facts and then gave further details of the relevant events. Mr O’Brien said that Mr Singh’s hearing was adjourned twice during the day to allow him to gather further information.
[21] Mr Ram received a virtually identical notice dated 5 January 2010 advising of a hearing on 12 January 2010. Attached to that notice was the following summary of facts:
During the period from 2 September-15 November 2009 there were nine different credit card transactions processed through your Cadmus Terminal.
The days in which these credit card transactions took place were 26 days during this period. The total value of these transactions was $6,689.50 before the surcharge $7,134.50 after surcharge.
There were 109 transactions in total.
At the initial enquiry you have produced signed receipts for none of these transactions. You did produce 114 signed receipts all of which referred to transactions done after the dates referred to on the spreadsheet obtained from the office. You also did not produce logbooks for this period.
On the Afternoon of the 8 January you produced 98 receipts of which 73 were related to transactions listed two receipts were unreadable. The remaining 23 receipts indicate a further number of transactions possibly being refused by the banks.
You also produced logbooks for the period required.
There were also 49 transactions at times you were not logged on.
The times available from Taxicharge, logsheets and a flat file show that you overworked the legal hours as defined by the transport act 11 times during the period.
There were 12 occasions where you logged onto the Raywood system and no logsheets were recorded.
There were additionally 32 errors and/or omissions in timekeeping in your logbook after giving an allowance of +/- 30 mins grace.
It is the Society’s view that the above summary of facts and the spreadsheets attached point toward real and significant breaches of the rules of the Society as a result of the manner in which you have operated your cab 662. You have been advised in the notice of hearing of the rules which may have been breached and there may be other breaches depending on your explanation.
[22] Mr Ram attended the hearing with a colleague who acted as a lay advocate. He accepted the summary of facts. Mr Ram claims that he tried to produce additional evidence in the form of his fuel bill to show that he had actually undertaken the work that was the subject of the credit card transactions but was not permitted to do so. That assertion was not disputed by Mr O’Brien in his affidavit.
[23] The Chairman of Complaints delivered decisions on the same day as the hearings. The decisions were in similar terms:
Your (sic) were advised that:
[Facts contained in summary of facts]…
7You appear to have willingly entered into an arrangement with your clients and accepted the position thereby created which you now find yourself. Namely not able to properly explain the inconsistencies and errors.
8I find it unrealistic to believe that you did not become suspicious at nature and value of these transactions and expenditure.
9 I found that there were several breaches in the system you used.
Namely
(a)The credit card usage when not logged on or had no log entries.
(b)Other usage was personal through cellphone, known in the industry as “jack up jobs”.
I have considered the above in light of potential breaches of Rule 37. (It shall be an offence for any member to accept or submit for payment any service order for work not carried out by the taxi being operated by the claimant).
I consider that there has been a breach of Rule 37.
I have also considered the above in light of potential breaches of Rule 44. (Acting contrary to the interests of the society or an act which brings the Society into financial odium or public disrepute).
I consider that there has been a breach of Rule 44.
I have also considered the above in light of potential breaches of Land Transport Act Part 4B clauses 30Z to 30ZI (Law relating to Working time and keeping Logbooks).
I consider that there has been a breach of Land Transport Act Part 4B
clauses 30Z-30ZI.
[24] The penalties on each plaintiff were similar; suspension of permits forthwith, fines and claw-back of the dishonoured transactions.
Was there adequate notice of the hearings?
[25] The plaintiffs complain that the provisions of Rule 10, which requires four clear days notice of a hearing of any complaint, is inherently unfair because it does not provide sufficient time for the driver to consider the allegations, seek advice and prepare for the hearing. In Mr Singh’s case, Mr Edwards submitted that the fact that Mr Singh’s hearing was adjourned twice during the day to allow him to gather further information was a direct result of Mr Singh not having adequate time to prepare and not having sufficient information about the allegations against him.
[26] I do not need to consider whether four clear days notice of a hearing of any complaint is inherently unfair; the question is whether it was unfair in this particular case. The plaintiffs received notices of the hearing after they had attended the initial inquiry on 9 December 2009. As a result, they were not taken by surprise; the terms of the notice of hearing were in virtually identical terms to the notice advising them of the initial inquiry and attached to the notices were summaries of fact which both plaintiffs accepted. Given the information that the plaintiffs already had and the ambit of the inquiry, I do not think that four days notice was inadequate. The real nature of the plaintiffs’ complaints is that they were not told exactly what they were alleged to have done.
Was it unfair not to allow legal representation?
[27] Under Rule 11:
(a)No party shall appear at the hearing of a complaint by a representative unless it appears to the Committee (at its absolute discretion) to be proper in the circumstances to so allow such a representative and the Committee approves the representative proposed.
(b)The following parties may appear by a representative who is approved by the Committee:
(i)A Corporation, company or unincorporated body of persons if the representative is the person recorded in the records of the Society as being the person entitled to represent such company and to be responsible for its compliance with these Operating Rules.
(ii) A person jointly liable or entitled with another or others, if the representative is one of the persons jointly liable or entitled.
(iii) A minor or other person under disability.
(c)The Committee shall not appoint or approve as a representative under Subsection (b) of this Rule a person who is or has been enrolled as a Barrister or Solicitor or who in the opinion of the Committee is or has been engaged in advocacy before other Tribunals, but this prohibition does not apply where the person proposed for approval is the person or persons described in (b)(i) hereof or is one of the persons jointly liable or entitled with another or others as described in paragraph (b)(ii) hereof.
[28] As already noted, the contents of the Notice of Hearing did advise that a support person in the form of a drivers’ advocate was available to the plaintiffs. Both plaintiffs took advantage of this service. Neither requested permission to have legal representation. Had the Society made it clear what the real nature of the allegations against the plaintiffs were they may have done so. However, this falls more appropriately to be dealt with under the next complaint. In terms of lack of representation where the services of a lay advocate were available and no request was made for representation I find that there was no substantive unfairness.
Failure to explain allegations
[29] The plaintiffs’ main complaint is that they did not understand exactly what they were alleged to have done wrong. The Notice of Hearing has to be viewed against the initial inquiry at which there was discussion and questions put to the drivers which would have made it clear about some of the concerns the Society held. In particular, it would have been apparent that the reference to possible breaches of Rule 37 related to the failure to produce receipts for transactions. It would also have been apparent that the breaches of the Land Transport Act 1998 related to the keeping of logbooks and working while not logged on. However, there was no indication as to exactly what the alleged breach of Rule 44 was. It might reasonably be inferred that it related to “credit card abuse”. But the Notice of Hearing gave no indication as to precisely what kind of conduct was involved in the alleged credit card abuse. Nor, according to the plaintiffs, was this made clear at the initial inquiry.
[30] Even on Mr O’Brien’s evidence, there was no explanation as to how the
Society’s concerns regarding credit card abuse were conveyed to the plaintiffs:
30In each case both first and second plaintiff were unable to provide all the receipts for transactions for which they had been paid.
31The first and second plaintiffs were unable to provide any reasonable explanation as to why their log books did not coincide with the times that they were logged on to the Cadmus terminal and did not provide adequate explanation as to how they could be receipting or undertaking credit card transactions when they were not apparently driving or logged on to drive.
32 At all times during the hearing which are of a relatively informal basis save for procedure to instigate and formally hold them. The drivers had an opportunity to bring any information forward which they wished and to ask for any explanation of the nature and intent at the hearing if they did not understand it. In the case of the first plaintiff, the hearing was adjourned twice during the day to allow him to gather further information.
33At no time during those hearings were the first and second plaintiff accused of fraud. The failures and breaches were specifically related to breach of Rules 37 and 44 of the operating rules of the Society and of the Land Transport Act, specifically Parts 4(b) clauses 30Z to
30Z(1).
[31] It is apparent from Mr O’Brien’s affadavit that the Society did not think that it was accusing the plaintiffs of fraud. It is, however, difficult to envisage what other meaning “credit card abuse” could have in this context. It is hardly surprising that the plaintiffs were confused about aspects of the complaints being made against them. The lack of specificity regarding credit card abuse was carried through into the decision; no specific conduct was identified as constituting credit card abuse, or a breach of Rule 44. There is nothing in either the plaintiffs’ evidence or in Mr O’Brien’s evidence to suggest that the Society’s suspicions as to what exactly had occurred in relation to the credit card transactions was put to either of the plaintiffs. Rather, the onus was put on the plaintiffs to substantiate declined transactions.
[32] Under the general description of “credit card abuse” the Committee effectively required the plaintiffs to assume the burden of proving that they had not done anything to fall within this description. The reality was, however, that the Society had formed the view that the plaintiffs had been knowingly involved in a
scam involving the use of stolen credit cards to produce cash. This was an allegation of fraud and should have been put plainly in those terms. The conclusions at [7] and [8] of the decision convey that the burden was on the plaintiffs to prove that they had not conducted themselves in a certain way when specifics of the allegations had never been made clear. Although the Society might now say that it did not make allegations of fraud, the terms of the notice of hearing, the conclusions at [7] and [8] and the serious nature of the penalties imposed are consistent with an allegation of fraud. I find that there was substantive unfairness in the conduct of the hearings as a result of the Society not making it clear to the plaintiffs precisely what was being alleged against them.
Was a breach of Rule 44 made out?
[33] The plaintiffs also say that the Society failed to show any breach of Rule 44. It is outside the scope of judicial review to determine whether the Committee was correct in concluding that there had been a breach of Rule 44. However, there are concerns about the way the Society approached this issue that warrant comment.
[34] There are two limbs to Rule 44. The first relates to acts “considered by the Committee to be contrary to the interests of the Society”. The second is an act which brings the Society into public or financial odium or disrepute. Neither the notices of hearing nor the decisions identified which limb was relied on though in the subsequent appeal by Mr Singh there was an exchange between the respective counsel from which I infer that the Society intended to rely on the second limb. Mr Edwards submitted that this limb would require evidence either of the effect of the acts in question on the Society or from which one could infer such public or financial odium or disrepute. I agree with that and with the fact that no evidence was disclosed to the plaintiffs that might have supported such a conclusion.
Were the appeals conducted unfairly?
[35] Under Rule 14 there is a right of appeal from the whole or any part of a decision of the Committee on the hearing of a complaint. An appeals committee is formed to hear the appeal and the proceedings are recorded and later transcribed. Both plaintiffs exercised their right to appeal against the decisions of the Complaints
Committee and an issue therefore arises as to whether, notwithstanding the breach of natural justice in relation to the hearing, it is appropriate to grant relief because of the possibility of the appeal curing the defect in the hearing. In Nicholls v Registrar of the Court of Appeal the Court of Appeal said:[2]
[2] [1998] 2 NZLR 385 at 436 per Tipping J
…the Court should first identify the error, or errors, which are said to vitiate the first instant decision. The second step is to examine what effect the appeal has had on the error, or errors, found at the first stage. If the appeal has in substance removed the prejudice which would otherwise have resulted to the complaining party, the Court should exercise its discretion against relief, because overall no continuing prejudice from what went wrong at first instance can be shown. Where, as here, there has been review by way of a rehearing, which is said to have cured any earlier problems, I would put the onus on the applicant for judicial review to demonstrate continuing prejudice. It is only if there is continuing prejudice that the first instant error, or errors, have continuing relevance. The effect of the appeal and the exercise of my discretion in relation to the first hearing is therefore an issue that should be considered following my discussion regarding the alleged errors in relation to the appeal.
[36] In relation to the appeal the plaintiffs complain that there was no proper explanation of what was alleged against them.
Mr Singh’s appeal
[37] It is apparent from the transcript of Mr Singh’s appeal that his counsel, Mr Khan, made it plain from the outset that the major complaint was that Mr Singh had not been properly advised of the nature of the allegations against him. He pointed out that, although Mr Singh accepted that there had been times he had undertaken work when not being logged on, he adamantly denied any participation in credit card fraud. When the Society’s counsel, Mr Patterson, asked what Mr Singh thought the hearings were about Mr Khan responded that Mr Singh thought the hearings:
…were about credit cards that have not gone through which the Society wants him to pay for them. That’s what he thought it was. And he was of the view that it was the Society’s terminal that accepted those credit cards and why should he be paying for something which the Society has imposed on them to use. If the Society’s terminal had declined the credit cards as they do now he wouldn’t be in this position to repay the money. That was what his view is.
[38] Further, cross-examination elicited the explanation that Mr Singh believed that if the Cadmus Terminal accepted the credit card and produced a receipt for the customer to sign then there was no reason for him to be suspicious. If the credit card was stolen then he expected the Cadmus Terminal to decline it there and then.
[39] At the end of the transcript of Mr Singh’s appeal is a brief discussion about the alleged breach of Rule 44 with Mr Patterson commenting that Rule 44 “deals with bringing the Society into disrepute” and Mr Khan responding that Rule 44 “is something that should have a matter of element of intention…there is no intention to bring the Society into disrepute or cause loss to the Society or to cause loss to himself…”. That, however, was the extent of the discussion about Rule 44 but I infer from that that the Society intended to rely on the second limb of Rule 44.
[40] The Appeal Committee delivered a written but undated decision in respect of Mr Singh. In dealing with the breach of natural justice argument the Appeal Committee summarised the complaints by Mr Singh as being:
a) No reasonable chance to defend himself at the hearing (gross breach of natural justice and unfairness).
b) Inadequate or misleading notices for the inquiry and the hearing. c) Letters not received.
d) No evidence of a willing arrangement entered into with clients. e) No allegations of not actually doing the work.
f) No evidence of fraud.
g) Insufficient time between the inquiry and the hearing to properly prepare.
h)Unfair in that a description of activity did not go deep enough. It required something more than a request for provision of receipts.
i)There should have been a requirement for an element of intention for any breach of Rule 44.
[41] The Appeal Committee immediately rejected grounds (a), (b), (c), (g) and (h). In relation to the complaint at (h) the Committee said:
…[the notices] were clear and direct advising that the purpose of the enquiry and the hearing and stating it was with respect to suspect abuse of credit cards being processed with the appellant’s Cadmus terminal. All parties were very well aware of the circumstances and purpose of the enquiry…
The Appeal Committee also notes the Appellant and his advocate had free range at the hearing to provide any and all information it wished to provide and in terms of advocacy was freely entitled to raise any issue it thought valid at the time. If they did not understand or needed more depth as to what the enquiry or hearing was about they were free t o do so. The Appellant chose not to bring those issues up at the time and the Judge cannot be criticised for not taking them into account, even if they were found to be relevant, if they were not presented to him.
[42] I consider that the Appeal Committee’s approach to the issue of whether Mr Singh was properly apprised of the nature of the allegations against him to be inadequate. What came through clearly from the transcript of the appeal hearing was Mr Singh’s argument that he did not fully understand what was being alleged against him. Reliance by the Appeal Committee on the bald statement in the Notice of Hearing regarding abuse of credit cards completely fails to address that issue. It is no answer to a complaint that Mr Singh was not adequately apprised of the allegation against him to say that he or his advocate could have asked for more details at the hearing itself. Further, this issue was squarely raised at the appeal hearing, with the driver giving an explanation for his conduct which the Appeal Committee did not refer to at all. In relation to this complaint I consider that the approach of the Appeal Committee failed to address the problems that arose at the hearing and, as a result, the appeal did not cure the defects of the hearing.
[43] Allied to the complaint that the true nature of the allegations were not properly explained was the ground at (f) that there was no evidence of fraud. In respect of this ground the Committee simply held that “there were never any allegations of fraud made at any time and at the appeal hearing Mr Khan conceded that no fraud is alleged”. This statement does not fairly represent Mr Khan’s
recorded statements. There is no record in the transcript of Mr Khan making a concession as such. The point Mr Khan did make was that the real nature of the allegations were allegations of fraud but that those allegations were not actually put to Mr Singh and nor was there any evidence of fraud. To dismiss that argument in the way that the Appeal Committee did suggests a complete misunderstanding of the argument being advanced.
[44] Finally, in relation to the argument that there should have been a requirement for an element of intention for any breach of Rule 44 the appeal committee concluded, rather extraordinarily, that:
…all taxi drivers develop a sixth sense and when drivers have a customer in the car and they know its not right and should take appropriate action. The fact that there had been no malice and no intention was not an overriding consideration. The driver is the person at the coal face so to speak and they have to be aware and it was inconsistent with this approach that the Appellant should be involved in large and unusual transactions without taking some initiative or action to ensure that the transactions were genuine and not likely to bring the Society into financial odium.
[45] It is difficult to discern from this statement precisely what the Appeal Committee considered to be the proper interpretation of Rule 44. At the least, however, the Committee misstated the effect of Rule 44 by referring to acts “likely” to bring the Society into financial odium. Rule 44 only applies to acts actually considered by the Committee to bring the Society into public or financial odium. It therefore seems that the Appeal committee did not properly consider the effect of Rule 44.
Mr Ram’s appeal
[46] Mr Ram’s appeal was conducted by Mr Shafraz with Mr Patterson appearing for the Society. Mr Shafraz argued that the Complaints Committee had failed to consider the explanation given by Mr Ram at the hearing, namely that he had received repeat business from new customers, believed them to be genuine and was himself duped by their use of a “fraudulent credit card”. Further, Mr Shafraz referred to evidence provided at the hearing which was disregarded, namely the record of fuel expenses for the relevant period showing a significant increase in fuel consumption. In addition, Mr Shafraz pointed out the difficulty faced by Mr Ram
and others drivers from the fact that the Cadmus Terminal continued to accept the same credit card over a period of several days without any indication to the driver that there might be a difficulty. He referred to an incident on 29 September when a police officer came to ask him about the use of stolen credit cards and actually tried a stolen credit card on Mr Ram’s system and found that the system accepted it.
[47] A little further on during the hearing the issue arose as to precisely what was being alleged against Mr Ram. There was obvious confusion with members of the Society and Mr Patterson not viewing the allegations as being allegations of fraud and one Committee member trying to draw a distinction between “abuse of credit cards” and “stolen credit cards”.
[48] A review of the transcript of Mr Ram’s appeal shows that the issue of precisely what was being alleged arose as a consequence of a submission by Mr Shafraz that there was insufficient evidence to justify a finding of fraud for the purposes of Rule 4. The confusion was immediately apparent with the following exchange:
Shafraz [Mr Ram’s counsel]:
Well that’s what I’m saying this is an implication that this whole thing has been fraudulent has been an abuse of stolen credit cards isn’t that the allegation?
Ian [Appeals Committee]:
No no, it’s abuse of credit cards, abuse of credit cards not stolen credit cards…
Shafraz:
So are you saying Ian that there is no allegation that they were abusing stolen credit cards?
Ian:
On that second thing… Shafraz:
No no I’m not talking about that sentence. I’m saying this is what the perceived allegation was when they came over here.
Ken [Society’s counsel]:
On what basis did they perceive that allegation, even if they did prior to the enquiry…
And a little further on:
Shafraz:
Okay I take that thing back. But drawing an implication that is, I’ll ask my client in front of you, did you think that you had been accused of fraud of what you were going through this process?
Ajay [Mr Ram]: Exactly.
Shafraz:
Why did you think you were being accused of fraud? Ajay:
Because I been working in taxis industry and never do this sort of thing. Never been to, I’ve been here 25 years, I never did a fraud and I never stolen anything. And this thing I don’t know come it matches I mean I was just like doing another job and I got the cash out of from those Taxicharge and I thought this is genuine you know. And these guys are genuine and that’s what I was doing but if I knew that I won’t do those sorts of things in my life.
Shafraz:
But when it came to the hearing why did you think you had been accused of fraud?
Ajay:
Just because I mean a judgment has been made that’s what I heard you know and judgment had been made before and I don’t want to come and just get talk to them because it had been done and those guys were sitting and just doing all those judgments already it’s judgment done…
[49] The Appeal Committee delivered a written, undated decision. It recorded the grounds of appeal which included:
a) Appellant not given proper opportunity to present his case at the hearing.
…
d) The proceedings were unfair and unjust in all the circumstances.
e)The Committee failed to put all relevant information before the judges enable a fair hearing.
f)The decision lacks any specific details of what the appellant was found guilty of.
[50] In the recitation of points discussed during the hearing the Appeal Committee recorded the following:
(36) Mr Khan raised the issue of fraudulent use of credit cards. The Chairman advised that there had never been any allegations of fraud and none were being made now. He pointed out that the enquiry concerned the abuse of credit cards and nothing more.
[51] There was no specific reference to a failure to properly identify what the allegation against Mr Ram was and in relation to the ground that the proceedings were unfair and unjust the Appeal Committee found simply that:
(60)In terms of procedure clearly that had been followed thoroughly and notwithstanding the Appellant lack of response initially and failure to follow them exactly it is apparent that he was well aware of the nature and extent of the hearing, having gone through the enquiry process and was well represented at the hearing.
(61)The initial judge had experience and indicated no predisposition to any finding…
[52] In relation to the ground of appeal that the decision lacked any specific details of what Mr Ram had been found guilty of, the Appeal Committee found that:
(68)The decision stated what rules were breached and how they have been breached…
(70)There could be no doubt that the Society was suffering financial odium and the decisions specifically stated that the bank had refused to pay for the transactions. The Affect of that was the Society had to foot the bill.
(71)The overall Affect was that there had been a breach of Rule 44 in its entirety…
[53] It is apparent from the transcript and the Appeal Committee’s decision that the Appeal Committee failed to identify precisely what it was that Mr Ram was said to have done wrong. The statement at (68) that the decision of the Complaints Committee had stated what rules were breached and how they had been breached is incorrect because the decision of the Complaints Committee is silent on any detail beyond “abuse of credit cards”. I cannot find anything to suggest that it was spelt out clearly to Mr Ram precisely what it was that he had done wrong.
Conclusion
[54] I have found that the hearing was conducted unfairly in that it was never put clearly to either Mr Singh or Mr Ram precisely what they were alleged to have done that might have constituted a breach of Rule 44. The statement that the complaint related “to abuse of credit cards” was wholly inadequate. This failing was not adequately addressed on appeal, where there was still no clear assertion by the Society of what it said the plaintiffs had done wrong. The plaintiffs’ applications are therefore granted and the decisions of the Complaints Committee set aside.
[55] The plaintiffs are entitled to costs and counsel may address that issue by way of memoranda filed on behalf of the plaintiffs by 5pm 9 July 2010 and by the defendant in reply by 5pm 16 July 2010 and any response by the plaintiffs by 5pm
23 July 2010.
P Courtney J
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