Te Whānau O Waipareira Trust v Charities Registration Board
[2025] NZHC 1877
•10 July 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2025-485-000134
[2025] NZHC 1877
UNDER the Judicial Review Procedure Act 2016 BETWEEN
TE WHĀNAU O WAIPAREIRA TRUST
Appellant
AND
CHARITIES REGISTRATION BOARD
Respondent
Hearing: 6 May 2025 Appearances:
J B Orpin-Dowell and M R G van Alphen Fyfe for Appellant A S Butler KC for Respondent
Judgment:
10 July 2025
JUDGMENT OF PRESTON J
This judgment was delivered by me on 10 July 2025 at 11.30 am, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date……………
TE WHĀNAU O WAIPAREIRA TRUST v CHARITIES REGISTRATION BOARD [2025] NZHC 1877 [10 July 2025]
Introduction
[1] The applicant Te Whānau o Waipareira Trust (Waipareira) is a charitable trust. Waipareira seeks judicial review of a decision by the respondent, the Charities Registration Board (Board): namely a notice of the Board’s intended decision to deregister Waipareira as a charitable entity (intended decision).1
[2] The application raises a narrow point of law: challenging the intended decision as ultra vires, due to the Board being improperly constituted at the relevant time.
[3] This as, with effect from 6 July 2023, Parliament amended the Charities Act 2005 (Act) to provide for a Board “comprising 5 members”.2 Yet, as is common ground, the Board comprised only three members at the time it considered the intended decision.
[4] Waipareira says the Board was therefore not properly constituted and as a consequence the Board was incompetent to act when it gave notice. Accordingly, Waipareira argues the notice (and intended decision) is invalid and of no effect.
[5] Waipareira asks the Court to quash the intended decision so that the matter can be reconsidered by a properly constituted Board.
[6] The Board says the Act does not require that there be five members and, even if it did, the fact that there are vacancies on the Board at any relevant time does not mean the Board is incompetent to act.
[7] Further, even if incompetent to act when not at full complement, any invalidity should only apply to acts having determinative legal effect. Here, the intended decision simply indicates that the Board is minded to deregister Waipareira, but that it can be dissuaded from that course after hearing from Waipareira. As the Board is now at full complement it should be free to continue with the process that is in train, rather than having to start all over again.
1 Charities Act 2005, s 55B.
2 Charities Act 2005, s 8(1). See s 5 of the Charities Amendment Act 2023.
Relief
[8]Waipareira seeks relief by:
(a)a declaration the intended decision is ultra vires; and
(b)an order in the nature of certiorari quashing the intended decision; and
(c)costs.
Background in outline
The entities
[9] Waipareira was established in 1982. For over 40 years it has provided services to the Māori community. It is now the largest integrated social service provided in Aotearoa New Zealand, serving whānau of all ages in West Auckland with free services and support in health, housing and education, as well as legal support. Waipareira presently offers 53 different front-line services.
[10] Since the enactment of the Act in 2005, the composition of the Board3 has varied, but from 1 July 2012 until 5 July 2023 the Act provided for the Board to be comprised of three members. Following the 2023 law change,4 and for a period of 15 months following the amendment, no further appointments were made to the Board to increase its complement from three to five, in accordance with the amended Act.
The sequence of events
[11] Fourteen months into that period, on 23 September 2024 the Board sent Waipareira the contested intended decision.
[12]At that time, the Board remained comprised of only three members.
3 As is discussed below, from enactment in 2005 until amendment of the Act in 2012, the relevant body was the Board’s predecessor (a crown entity) the Charities Commission.
4 With effect from 6 July 2023.
[13] The intended decision notified the intention to remove Waipareira from the register on grounds which it is not necessary for present purposes to record, save as to note I am told Waipareira strongly disputes the basis for the intended decision.
[14]On 7 October 2024 a fourth member was appointed.
[15] As is explained further below and within the mandatory timeframe under the Act, Waipareira subsequently filed a notice of objection (objection).
[16] However, before filing the objection, on 23 October 2024 through its solicitor, Waipareira wrote to the Board to raise a number of issues challenging its process, including:
(a)notifying, with reasons, its view the notice was invalid as the Board was not properly constituted when it was issued (the invalidity issue) and seeking reconsideration of the intended decision by a full Board after a fifth member was appointed;5
(b)seeking the opportunity, prior to any reconsideration by what it contended was a properly constituted Board, to provide legal and factual information to the Board prior to any decision whether to issue a new intended decision; and
(c)raising for consideration a potential conflict of interest in relation to a member of the Board who had participated in the intended decision (the conflict issue).
[17] The Board also made a request for information under the Official Information Act 1981 (OIA), by the 23 October letter.
5 As its notice of objection was required by 22 November 2024, Waipareira sought any reconsideration by 1 November 2024.
[18] Further correspondence followed between the parties over the next four months. I largely adopt the summary of that correspondence and chronology as set out in the submissions for the applicant:
(a)On 1 November 2024, the Board replied to Waipareira’s letter of 23 October. It acknowledged the OIA request and stated that it was “currently considering [the matters referred to at [16(a) and (c)] above]” and would respond in due course.
(b)On 19 November 2024, the Board wrote again to Waipareira noting that more time was needed to respond to its OIA request. It restated that it was considering the other matters raised in the 23 October letter and would respond in due course.
(c)Having not received a substantive response to the issues it raised by the expiry of the statutory deadline, on 22 November 2024 Waipareira filed its notice of objection. It did so reserving its position on the invalidity issue and the conflict issue (pending receipt of the Board’s response on that point).
[19] On 17 December 2024, a further appointment was made to the Board, bringing the total number of members to five.18
[20] Although the Board was now at full complement and could have elected to reconsider the intended decision as Waipareira sought, this did not occur. Accordingly, the correspondence between the parties continued:
(a)On 3 February 2025, the Board wrote again to Waipareira, noting it had now provided responses to the OIA request. The Board advised a deadline of 4 March 2025, by which Waipareira was required to provide any further supporting information, an amended objection and/or request to be heard in person. The letter made no reference to the invalidity issue or the conflict issue.
(b)Waipareira responded on 10 February 2025. It noted:
(i)it had yet to receive a substantive response to its view the intended decision was invalid and so would need to be reconsidered by the Board;
(ii)it had yet to receive a response in relation to the issue of a potential conflict of interest; and
(iii)it was premature to set a deadline for Waipareira to provide further information to the Board without responses on those matters and, noting the deadline set by the Board, it sought a response from the Board on those matters by 14 February 2025.
(c)On 12 February 2025 the Board responded, stating it “does not accept that its decision to issue the Notice of Intention to Remove [Waipareira] was invalid”. Despite the issue being raised almost four months previously, the Board gave no reasons or explanation for its view.
[21] This last letter did not respond to the conflict issue but restated the previous timetabling directions.
[22] Ultimately, thus, Waipareira’s efforts to ‘correct’ what it saw as the procedural failings were in vain: the Board declined to reconsider the intended decision, as Waipareira invited, by a five-person Board and following opportunity for Waipareira to submit information prior to that reconsideration.
[23]And so to the present application, which requires me to determine two issues:
(a)is the intended decision invalid?
This turns on whether a statutory decision made by a Board of (only) three is lawfully made or ultra vires.
(b)if so, should the Court grant relief?
This is the discretionary question.
The legislative scheme, the history and the 2023 amendments
[24] In considering the first question, a narrow but not straightforward question of statutory interpretation, I look through the lens of the text, in the light of the Act’s purpose and context is all.6
The Board and its predecessor
[25]The Board is established under s 8 of the Charities Act 2005 (the Act).7
[26] Since its enactment, Parliament has varied the Board’s complement over time. Thus, from enactment on 1 July 2005 until 30 June 2012, the newly created Charities Commission (the Board’s predecessor) was to be comprised of “no more than 7, and no fewer than 5, members”.8
[27] The Commission was an autonomous Crown entity.9 However, with effect from 1 July 2012, the Commission was abolished and the Board established in its place.10 On Mr Butler’s argument and for reasons I discuss below, this is a significant moment as the newly established Board was no longer governed by the terms of the Crown Entities Act 2004, as had been its predecessor.
6 Legislation Act 2019, s 10(1).
7 As counsel explained, by (informal) convention, the Board is known as the Charities Registration Board, although the Act nowhere so describes it, referring only to the Board.
8 Charities Act 2005, s 11(1) (as enacted) by s 11(2) members of the Commission were the “board” for the purposes of the Crown Entities Act 2004.
9 Charities Act 2005 (as enacted), s 9(1). Charities Commission was repealed from sch 1, pt 2 of the Crown Entities Act 2004 on 1 July 2012, by s 16(2) of the Charities Amendment Act (No 2) 2012.
10 Charities Amendment Act (No 2) 2012, s 7.
[28] Indeed, the 2012 amendments represented significant change, as was described in the first reading of the amendment legislation:11
The bill … disestablishes the Charities Commission and reassigns the functions and duties under the Charities Act 2005 to the Chief Executive of the Department of Internal Affairs, with the exception of decisions relating to the registration and deregistration of charities, which will be carried out by an independent decision-making board of three persons … The bill provides that the board members are not subject to direction from ministers in performing or exercising their functions, duties, or powers, and that each member must act independently in exercising his or her professional judgment. This will ensure independence in decision making.
…
[29] Consistent with the reassignment to the chief executive of functions and duties previously the province of the Commission, s 8 was accordingly amended, reducing the size of the newly established Board down to a Board of three.
[30] It is useful to set out in full the substitute provisions in ss 8–10 of the 2012 amendments, as follow:
Board and chief executive
8Establishment, functions, duties, and powers of Board
(1)A Board comprising 3 members appointed by the Minister is established.
(2)The Minister must notify in the Gazette—
(a) the names of the members of the Board; and
(b) the name of the chairperson of the Board.
11 (4 October 2011) 676 NZPD 21654. (Emphasis added). The amendment act commenced as part an omnibus Crown Entities Reform Bill, providing for the machinery of government changes in the health and charitable sectors. The omnibus bill was introduced at first reading with stated intention that in the Committee of the whole House stage the bill would be divided into separate bills, in relation to the health (and mental health) and charitable sectors. In relation to the Charities Act amendments, the moving minister (the Hon Craig Foss on behalf of the Minister of State Services) noted additionally “the bill places a requirement on the board to actively consider delegations to the chief executive or another person, such as a board member. This will ensure the effective and efficient use of resources. Any delegations carry with them the same independent and professional judgment and decision making. The bill provides that the chief executive must supply all secretarial and administrative services required to enable the independent board to carry out its functions, duties, and powers”. By the third reading, the Bill had been separated into the Charities Amendment Bill (No 2).
(3)The Board has the functions, duties, and powers relating to the registration and deregistration of charitable entities that are conferred or imposed on it by this Act.
(4)In performing or exercising his or her functions, duties, or powers, each member of the Board—
(a) must act independently in exercising his or her professional judgement; and
(b) is not subject to direction from the Minister.
(5)The Board must, subject to subsection (6), consider whether it could most efficiently and effectively perform or exercise any functions, duties, or powers itself or by delegating the functions, duties, or powers to the chief executive or some other person under section 9.
(6)The chief executive must supply all secretarial and administrative services required to enable the Board to perform or exercise its functions, duties, and powers.
(7)The Schedule applies to the Board and to the members and chairperson of the Board.
9Board may delegate
(1)The Board may, either generally or particularly and by resolution, delegate any of its functions, duties, or powers under this Act to—
(a) the chief executive; or
(b) any member of the Board.
(2)If functions, duties, or powers are delegated to the chief executive under subsection (1),—
(a) the chief executive is not responsible to the Minister for the performance or exercise of those functions, duties, or powers but must act independently in exercising his or her professional judgement; and
(b) the chief executive may delegate those functions or powers to employees or holders of specified offices in the department under section 41 of the State Sector Act 1988.
(3)No delegation under subsection (1) or (2)(b) affects the responsibility of the Board for the actions of any person acting under the delegation.
(4)The Board must not make a delegation under this section unless satisfied that the delegation is consistent with section 8(5).
(5)A person to whom any functions, duties, or powers are delegated may perform and exercise them in the same manner and with the same effect as if they had been conferred directly by this Act and not by delegation.
10Functions of chief executive
The functions of the chief executive are—
(a) to educate and assist charities in relation to matters of good governance and management, for example,—
(i)by issuing guidelines or recommendations on the best practice to be observed by charities and by persons concerned with the management or administration of charities:
(ii)by issuing model rules:
(iii)by providing information to charities about their rights, duties, and obligations under this Act and other enactments; and
(b) to make appropriate information available to assist persons to make applications for registration under this Act; and
(c) to receive and process applications for registration as charitable entities; and
(d) to refer to the Board for its decision all applications for registration as charitable entities and proposals for deregistration as charitable entities; and
(e) to ensure that the register of charitable entities is compiled and maintained; and
(f) to receive, consider, and process annual returns submitted by charitable entities; and
(g) to supply information and documents in appropriate circumstances for the purposes of the Inland Revenue Acts; and
(h) to monitor charitable entities and their activities to ensure that entities that are registered as charitable entities continue to be qualified for registration as charitable entities; and
(i) to inquire into charitable entities and into persons who have engaged in, or are engaging in, conduct that constitutes, or may constitute, a breach of this Act or serious wrongdoing in connection with a charitable entity; and
(j) to monitor and promote compliance with this Act, including by taking prosecutions for offences against this Act in appropriate circumstances; and
(k) to stimulate and promote research into any matter relating to charities, for example,—
(i)by collecting and disseminating information or research about charities:
(ii)by advising on areas where further research or information about charities should be undertaken or collected:
(iii)by entering into contracts or arrangements for research or information about charities to be undertaken or collected.
[31] Following the 2012 amendments, the Board of three continued for the following 11 years before s 8 was again amended, with effect from 6 July 2023 and as part of a suite of amendments made by the Charities Amendment Act 2023, to provide for a Board “comprising 5 members appointed by the Minister”.12
[32] The rationale behind the 2023 amendments including the increase in the Board’s complement was set out in the explanatory note to the Bill:13
Regulatory decision-making
The Charities Act requires the Board and chief executive to comply with certain processes when exercising functions and powers under the Act. The Bill enhances these processes to align with best practice and improve transparency, fairness, and accountability of decision making.
The Bill expands the ability for entities to object to decisions made under the Charities Act. This includes expanding objection rights from deregistration decisions to other significant decisions, such as a decision to decline an application for registration or a decision not to withhold information from the register at the request of a charity. The new process also includes the ability for charities to be heard by the decision maker in person. The process aims to ensure natural justice is achieved for decision making that impacts charities.
The Bill expands the time for lodging objections and submitting information to the chief executive on administrative matters from 20 working days to 2 months, recognising that charities are often time poor. The Bill also requires the Board to publish all decline and deregistration decisions for transparency.
The Bill increases the number of Board members from 3 to 5, which aims to improve the Board’s diversity of backgrounds and experience and address potential quorum and conflict of interest issues.
12 Charities Amendment Act 2023, s 5 and see Charities Act 2005, s 8.
13 Charities Amendment Bill 2022 (169-1) (explanatory note) at 3.
The purpose of the Act and functions, duties and powers of the Board
[33] The purpose of the Act includes the promotion of public trust and confidence in the charitable sector; encouragement and promotion of effective use of charitable resources; and provision for registration of charitable entities,14 and:15
to provide for the Board to make decisions about the registration and deregistration of charitable entities and to meet requirements imposed in relation to those functions:
[34] As seen, related to this purpose, the Board has the functions, duties and powers relating to the registration and deregistration of charitable entitles that are conferred or imposed on it by the Act.16 Each member of the Board must act independently in exercising his or her professional judgement, and is not subject to direction from the Minister in performing or exercising those functions, duties, or powers.17
[35]Section 32 confers the power to deregister an entity:
Grounds for removal from register
(1) The Board may direct that an entity be removed from the register if—
…
(b) there has been a significant or persistent failure by the entity to meet its obligations under this Act or any other enactment; or
…
(e) the entity has engaged in serious wrongdoing or any person has engaged in serious wrongdoing in connection with the entity; or
…
14 Section 3(a)–(c). It is a further purpose to require charitable entities and certain other persons to comply with certain obligations: s 3(d).
15 Section 3(e). The establishment of the role of chief executive, with functions, duties and powers under the Act was created as part of the 2012 amendments to the Act: Charities Amendment Act (No 2) 2012.
16 Charities Act 2005, s 8(3).
17 Charities Act, s 8(4).
Schedule 2
[36] Schedule 2 of the Act, also inserted as part of the 2012 amendments, sets out provisions relating to the Board, chairperson, and members. It addresses the method of, and criteria for, appointment by the Minister to the Board. Clauses 5–7 address the term of office, removal and resignation of a member. A member holds office for three years or any shorter period stated in the notice of appointment, and may be reappointed.18
[37] Clause 5(3) provides that, subject to cls 6 and 7, a member whose term of office has expired continues in office until reappointed; or the member’s successor is appointed; or:
the Minister informs the member by written notice (with a copy to the Board) that the member is not to be reappointed, and no successor is to be appointed at that time.
[38] Clause 6 confers power on the Minister, after consultation with a member of the Board, at any time to remove that member from office.19 There is no requirement in cl 6, or elsewhere in the Act, that the Minister immediately appoint a successor in that case.
[39] Clause 7 permits a board member to resign from office by written notice to the Minister (with a copy to the Board). Resignation is effective on receipt by the Minister of the notice, or at any later time specified in the notice.
[40] It is clear from those provisions that there may be periods during which there is a vacancy on the Board, for a range of reasons. However, all three provisions are silent on the issue whether a vacancy prevents the Board from undertaking any function, power or duty until such vacancy is filled; that is, while the Board is not at full complement.
18 Clause 5(1) and (2)
19 The Minister may not remove a member unless the Minister has properly considered the matter and complied with the principles of natural justice: cl 6(5).
[41] The Board may regulate its own procedure, subject only to cls 13–15,20 which provide:
13Meetings
(1)The Board or its chairperson must appoint the times and places of meetings of the Board, and give notice of those meetings to each member not present when the appointment is made.
(2)The chairperson must preside at a meeting if the chairperson is present and not interested (as defined in clause 21(5)) in the matter.
(3)If the chairperson is not present, or is interested in the matter, the Board must appoint one of its members to preside.
(4)No business may be transacted at a meeting of the Board if a quorum is not present.
(5)For the purposes of subclause (4) and clause 14, quorum means a majority of the members.
(6)Each member has 1 vote and, in addition to his or her general vote, the chairperson has a casting vote in the case of an equality of votes.
(7)A resolution of the Board is passed if it is agreed to by all members present without dissent or if a majority of the votes cast on it are in favour of it.
14Methods of holding meetings
A meeting of the Board may be held—
(a) by a quorum of the members, being assembled together at the time and place appointed for the meeting; or
(b) by means of audio, audio and visual, or electronic communication provided that—
(i)all of the members who wish to participate in the meeting have access to the technology needed to participate in the meeting; and
(ii)a quorum of members can simultaneously communicate with each other throughout the meeting.
15Unanimous written resolutions
(1)A resolution signed or assented to in writing (whether sent by post, delivery, or electronic communication) by all members is as valid and effectual as if it had been passed at a meeting of the Board duly called and constituted.
20 Clause 12.
(2)The resolution may consist of several documents containing the same resolution, each signed or assented to in writing by 1 or more members.
A decision to deregister
[42] The chief executive has discretion to examine and inquire into any charitable entity, or any person who has engaged or is engaging in conduct that constitutes or may constitute a breach of the Act or serious wrongdoing in connection with a charitable entity.21 The chief executive may give warning notices in relation to such conduct.22 But only the Board is empowered to make a decision to deregister a charitable entity, on any ground under the Act.23
[43]In that case, the Act prescribes a two-stage procedure the Board must follow:24
(a)First, under s 55B the Board must give notice of its intended decision; the grounds under the Act for the intended decision; and the date, no later than two months from the date of the notice, by which any objection to the intended decision must be received by the Board.
(b)Second, if an objection is received, the Board must give the entity an opportunity to be heard and must not proceed to make the intended decision unless it is satisfied that it is in the public interest to do so and that:
21 Section 50(1).
22 Section 54. The Board may publish details of any such matter if it considers there has been a failure to remedy the matter within a prescribed period following the provision of the chief executive’s notice: s 55 and s 54(3)(d).
23 Section 55A defines “decision”, for purposes of the statutory objections process relating to certain decisions in relation to charitable entities which may be made by either the chief executive or the Board, including seven categories of decision which the chief executive is empowered under the Act to make, and “any decision of the Board under this Act”.
24 As set out in ss 55A to 55E. These provisions, entitled “Objections to decisions of Board and chief executive” provide the statutory process for objections to a range of decisions, including those within the power of the chief executive and (all) Board decisions. They were inserted by s 25 of the Charities Amendment Act 2023, with effect from 6 July 2024, replacing ss 32-36 of the Act. Prior to this an entity had no opportunity to seek a substantive hearing at which to advance its case objecting to the intended decision to deregister, which would be dealt with by the Board on the papers.
(i)the grounds for the intended decision have been satisfied;
(ii)the objection has been withdrawn;
(iii)any facts on which the objection is based are not correct; or
(iv)the objection is frivolous or vexatious.
[44] As is evident, the Board may not issue a notice under s 55B unless it considers there are grounds under the Act for making the intended decision, as must be specified in the notice. At the first stage the Board is required to reach a substantive decision albeit one which is not final pending the receipt and determination of any objection to the intended decision. The opportunity at the second stage for an entity to be heard in-person on its objection to an intended decision was a further notable change introduced by the 2023 amendments, as reflected in the comments at the introduction of the Bill into the House noted at [32] above.
[45] If the Board proceeds to make a decision, in the absence of objection or following conclusion of that process, removal takes effect the day after receiving the notice of the decision, unless another date is specified in that notice.25
Analysis
Issue one: is the intended decision ultra vires?
[46] The first issue is squarely one of statutory interpretation. Is an intended decision made by a Board of (only) three members ultra vires the Act?
[47] To answer that question the Court must decide whether, notwithstanding the plain words of s 8(1), the Act confers a discretion on the Minister to appoint fewer than the statutory complement. In other words, is the size of the Board a matter within the discretion of the Minister?
25 Section 55D(3).
[48] For Waipareira, Mr Orpin-Dowell argues there is no reason to look beyond the plain meaning of s 8(1) which requires the Board comprise five members. There is no discretion for the Minister to appoint a lesser number, which would undermine the clear purpose of the 2023 amendments to improve statutory decision-making. He argues the Board cannot pray in aid the vacancy provisions in sch 2 to override the express statutory requirement. In any event, on the facts there was no omission to fill a vacancy but rather a decision not to appoint the requisite statutory complement, which invalidates the decision to issue the intended decision.
[49] Mr Orpin-Dowell points to a cabinet office circular of 27 January 2023 as demonstrating that the three-month pre-election period of conventional restraint against significant appointments by the executive exercised by successive governments does not operate as an absolute ban.26 It cannot be argued that no appointment was made because of the impending general election, on 14 October 2023, by convention or otherwise.27
[50] This is as, Waipareira argues, appointments to the Board are important decisions but are not of such significance as would require restraint; for example the appointment of the Reserve Bank Governor or the Governor-General. But even if the court finds otherwise, Waipareira points to the further delay of 11 months following the 2023 general election before the appointment of the fourth member of the Board, and yet more delay before appointing the full complement of five.28 In those circumstances, Mr Orpin-Dowell contends, the only reasonable inference is that the Minister determined not to comprise a Board of five members and must live with the consequence of that decision, which invalidates the intended decision itself.
[51] For the Board, Mr Butler KC submits there are powerful textual, purposive and contextual reasons to show that the establishment of a board of five members appointed by the Minister does not exclude discretion for the Minister to appoint a board of fewer number.
26 Cabinet Office Circular “Government Decisions and Actions in the Pre-election Period” (27 January 2023) CO (23) 1.
27 As noted, the operative amendments to s 8 and sch 2 providing for the increased complement of the Board came into force on 6 July 2023: Charities Amendment Act 2023, s 2(3). The pre-election period commenced eight days later, on 14 July 2023.
28 The two appointments were made on 7 October 2024 and later on 17 December 2024.
[52] Mr Butler argues the language of the Act is “descriptive [but] not stipulative” of the complement of the Board; it does not preclude a discretion in the Minister to appoint a smaller board. Further, the Act does not expressly provide that the Board is not legally competent to act when not at full complement and Mr Butler argues that conclusion cannot have been the intention of the drafters of the 2023 amendment Act.
[53] Mr Butler submits, having regard to the vacancy provisions in sch 2, it is inconceivable that Parliament would have intended that the Board be unable to act during any vacancy in circumstances which may arise outside the control of the Minister and/or with next to no notice, particularly when it is well-known that the statutory process of appointment may often be lengthy. Rather, he submits, the legislative history suggests what likely occurred is a drafting oversight which failed to implement a provision to the effect of s 77 of the Crown Entities Act 2004 as applied to the Board’s predecessor Commission that: “the powers and functions of a statutory entity are not affected by any vacancy in the membership of its board”. Mr Butler notes that equivalent provisions are found numerously in legislation such as the Local Government Act 2002;29 Education and Training Act 2020;30 Gambling Act 2003;31 and Reserve Bank of New Zealand Act 2021.32
[54] Thus, the Board says the Act when considered as a whole does not require that there be five members; and even if it did, the fact that there are vacancies on the Board does not mean that the Board is incompetent to act. However, if this Court finds the Board is incompetent when not at full complement, the invalidity should only apply to actions having determinative legal effect. Here, the intended decision issued simply indicated that the Board was minded to deregister Waipareira, but that it can be dissuaded from that course after hearing from Waipareira at the objection hearing.
[55]The starting point in considering this issue is the plain meaning of s 8(1).
[56] The statutory language is clear. With effect from 6 July 2023, the requirement was that there be a board “comprising 5 members”. Had the legislature intended to
29 Local Government Act 2002, s 33(3) (Local Government Commission).
30 Education and Training Act 2020, sch 19, cl 8(1) (Teaching Council).
31 Gambling Act 2003, sch 5, pt 1, cl 4 (Lottery Grants Board)
32 Reserve Bank of New Zealand Act 2021, s 78 (Reserve Bank Board).
create the discretion in the Minister for which the respondent contends: to establish a board within a range, for example up to five members; or within parameters, such as the predecessor provision prescribing that the Commission comprise no more than seven and no fewer than five members,33 it could have said so. Given the uplift in 2023 from three to five and the election of the drafters at that time not to provide for a range as had previously been used, on its face there is no reason to look beyond the wording of s 8. In other words, five means five and a board comprised of fewer than that complement is without authority to act in discharge of its statutory powers and functions.
[57] I agree as Mr Orpin-Dowell contends the legislative history of the 2023 amendments also makes clear that Parliament’s purpose in increasing the Board’s complement was to improve the quality of decision making. In this respect, Parliament gave effect to the presumption that a decision maker including a greater diversity of backgrounds and experience increases the quality of decision making. In Minister of Immigration v Zhang, the Court of Appeal recognised this principle in a judicial context, explaining the structure of courts of criminal and civil jurisdiction in New Zealand is predicated on the premise that “extra decision makers provide a safeguard or a sounder decision making structure”.34 This is a powerful contextual clue supporting the conclusion that s 8 means what it says, creating a board of five independent decision makers and does not include a discretion in the Minister to reduce that complement.
[58] Further, it is relevant that the lawmakers’ stated intention in 2012 when reassigning many of the functions, duties, powers previously the province of the commission, to the chief executive was at the same time to establish a board that “must act independently”35 in relation to those statutory decisions reserved to that Board. Absent express provision in the Act empowering the Minister to appoint a board comprising fewer than the (then) requisite complement of three (and, by extension, after 6 July 2023 five) it would seem anomalous that the Minister could undermine this clear statutory purpose by doing so.
33 With effect between 1 July 2005 and the commencement of the relevant 2012 amendment to s 8.
34 Minister of Immigration v Zhang [2013] NZCA 487, [2014] NZAR 88 at [45].
35 Charities Act, s 8(4)(a).
[59] It may be that as Mr Butler suggests there was a drafting oversight by omission to include a provision equivalent to s 77 of the Crown Entities Act. If so, then the Court may be entitled to infer an equivalent power, at least to preserve the Board’s power to act during a temporary vacancy. But if the Board’s argument is correct, the legislative oversight initially occurred in 2012 when the Board (of three) was established. At the third reading of the Charities Amendment Bill (No 2), the sponsor of the bill noted it:36
… disestablishes the Charities Commission and transfers its functions to the Department of Internal Affairs, except for the registration and deregistration of charities, which will be performed by an independent statutory board of three persons.
[60] The amendments thus transferred to the executive branch of government extensive responsibility for functions, duties and powers (and associated administrative burden) previously the responsibility of the Commission of no more than seven but no fewer than five members. There is an available inference that the drafters saw no requirement for a s 77 equivalent given this significant redistribution of the functions, powers and duties formerly solely the province of the crown entity Commission. Under the new structure, the chief executive and staff would continue to discharge the significant extent of the functions, duties, and powers under the Act largely unaffected by any vacancy upon the Board, during the period until the Minister made further appointment of a replacement member.
[61] Further, if so this legislative oversight was again overlooked in 2023, notwithstanding that as the explanatory materials make clear the further amendment of the Act at that time was undertaken on a considered basis: following a review of Act and the regulatory scheme.
[62] But the short point in any event is that, even if a s 77 equivalent power is to be read in, as Waipareira suggests it may be, it does not avail the Board in this case, as it would not confer the discretion in the Minister for which the respondent contends (where otherwise none exists), given the express purpose of the drafters of the 2023 amendments in enlarging the Board to five.
36 (30 May 2012) 680 NZPD 2715.
[63] The respondent argues the expression “a [B]oard comprising five members appointed by the Minister is established” is descriptive not stipulative. It is true that the phrase in s 8 does not stipulate that the Board is not legally competent if fewer than this number. However, it is worth recalling that it was in 2012 that the newly established Board, an independent (of the Minister) board of three persons was first created, later uplifted to a board of five persons in 2023. Thus, on Mr Butler’s argument since 2012 the Minister has been entitled by the inferred discretion for which the respondent contends not to appoint members up to the statutory complement, including where vacancies arise. With effect that, throughout those 13 years, a Board of only two or indeed one would be legally competent to exercise its statutory power of decision.
[64] To conclude the Minister, through this silent mechanism, is empowered to repose the Board’s statutory power of (potentially momentous) decision to deregister a charitable entity in a mere shadow of the full complement of the Board prescribed by statute is both anomalous and inconsistent with Parliament’s intention. That intention was expressed at the introduction and passage of the 2012 bill through the House and in enlarging the Board’s complement in July 2023. Moreover and for the same reason, I do not agree that the aim of the 2023 increase in the Board’s complement to increase diversity of the decision-making body can sensibly be reconciled with the Board’s proposition before me that Parliament was simply prescribing membership of the independent decision maker up to five members and thereby enabling diversity as the Minister saw fit.
[65] In a different context, on a challenge to the legislative scheme in the Land Transport Act 1998 of offence provisions of causing death or injury while in charge of a motor vehicle,37 when read together giving rise to an “irresistible” inference that something was missing or redundant in the statutory provisions, Miller J for the Court of Appeal in Skipper v R38 observed that a court would require clear evidence of legislative purpose before reading additional words into the provisions or discarding one of them as an apparent mistake in the legislative scheme. In that case, although regard was had to the legislative record, it was uninformative as to what was
37 Sections 61(2)(b) and 62(1)(b).
38 Skipper v R [2017] NZCA 399 at [22].
Parliament’s purpose in relation to the particular provisions. Here, reference to the legislative materials discloses no indication of an intended Ministerial discretion as the Board suggests, and there is no basis on the purposive analysis to overlook the express legislative intent to increase the independent decision-making complement.
[66] Nor am I persuaded, as Mr Butler argues, that a residual discretion in the Minister must be inferred from the language of the Act considered as a whole.
[67] It does not follow from the vacancy provisions that such an intention must be inferred. I agree cl 5 of sch 2 contemplates that there may be a period of deliberate vacancy if the Minister sacks a board member whose service had continued after the expiry of their appointed term, notwithstanding the Minister does not intend immediately appointing a replacement. It is true the provision—and the other vacancy provisions in cl 6 and 7—do not prescribe any time within which an appointment must be made, but equally nor does any of them provide a power for the Minister not to appoint a replacement member at all. Had that been the intention of the drafters one might expect it would have been expressed and, further, likely within the principal provisions of the Act rather than left to be inferred from the operational provisions in sch 2.
[68] Related, on closer review a vacancy does not remove the ability of the Board to function at all, until returned to full complement by a further appointment. Mr Butler contends that if Waipareira’s interpretation is correct the activities of the Board would be brought “to a shuddering halt” in any case where an unforeseen or immediate vacancy, due to death, resignation, retirement or following the Minister firing a board member, arose. As he points out, such circumstances will not uncommonly arise. This is a consequence which he suggests would have to be undergirded by a compelling public policy rationale or logic to persuade this Court.
[69] But when one examines cls 12–14, it is clear that the Act contemplates the Board undertaking activities as part of its conduct which do not involve exercises of a statutory power to act—relevantly to deregister a charity. The Board may regulate its own procedure.39 It may conduct meetings at which “no business is transacted”, and
39 Clause 12(1).
therefore by cl 13 no quorum is required.40 Such conduct by members of the Board while not at statutory complement would not be inconsistent with the applicant’s argument here. As noted, cls 5, 6 and 7 contemplate a period of vacancy before the Board is returned to full complement. Common sense may suggest the drafters overlooked to provide, if such was intended, a s 77 substitute provision to preserve the Board decision-making capacity in the interim. But I am not persuaded, as the Board contends, that absent such a provision it is inconceivable as a matter of public policy that it may be unable to exercise its statutory decision-making power for a period before appointment of a replacement member, given the clear wording of s 8. I am reinforced in this conclusion by the capacity of the chief executive to continue to discharge the majority of functions, duties and powers under the Act in the interim, including the operational or day to day administrative duties, powers and functions in relation to the charitable sector.
[70] Finally, it is true as Mr Butler also notes that there was no post-enactment lead- in period provided to provide time for the ministerial appointment process, and that the Act was passed shortly prior to the beginning of the pre-election period of conventional restraint. Mr Butler argues this is a further contextual indication that it cannot have been intended to prescribe a Board of five, notwithstanding the plain wording in s 8. But first, as Mr Orpin-Dowell submits, it is arguable the appointment(s) while important independent roles would not be regarded as caught by the longstanding convention. And even if they were, given that the Bill was introduced mid-term41 by the government of the day it could be inferred the chief executive on behalf of the Minister could and would continue to progress the administrative steps in the appointment process to enable new appointments promptly following the election, in accordance with the statutory intent.42
[71] Weighing all these matters, having regard to the plain language of the Act, its scheme and the purpose in particular of the 2023 amendments as expressed by the legislature, I do not agree it is available, far less necessary, to read into the Act the
40 Clause 13(4).
41 In September 2022.
42 Schedule 2, cl 1(1) sets out the method of appointment whereby the Minister appoints or reappoints a member of the Board, and a chairperson of the Board, by giving written notice to the member concerned. See, also, Legislation Act 2019, ss 43, 44.
discretion for which the Board contends. Ultimately, and even were the Court to read in a s 77 equivalent provision, it would not assist the Board here. On any view the Board’s intended decision was made not simply during a period of vacancy—whether due to parliamentary convention pre-election, on short notice due to resignation, non- replacement, termination or otherwise—but following such an extended period of “vacancy” that it is an irresistible inference the Minister chose not to bring the Board up to complement in accordance with the 2023 amendments.
[72] For these reasons I conclude the intended decision is invalid as ultra vires the Act.
Issue two: the discretionary question: should this Court grant relief?
[73] I must then consider whether to exercise discretion to grant the further relief as sought—for an order quashing the decision.
[74] It is common ground that, since 17 December 2024 the Board is now at full complement.
[75] For Waipareira Mr Orpin-Dowell submits the process is tainted and incapable of cure without recommencing the two-stage statutory process before a properly constituted Board of five.
[76] Waipareira submits the first stage of the process is not simply an administrative requirement or mere formality, as can be seen from nature of the (contested) intended decision at issue here. The Board must substantively satisfy itself that grounds exist justifying removal, that the decision is one that it ought to make, and further that it ought to deregister the entity having regard to those grounds. Further, Mr Orpin- Dowell argues the second stage of the procedure provides an additional level of protection through the right to an in person hearing and opportunity to persuade the Board that the grounds for its intended decision are not satisfied, or that it would not be in the public interest to make the intended decision.
[77] For these reasons, Waipareira seeks an order in the nature of certiorari, quashing the intended decision. This will ensure that the Board, at full complement, considers again whether to issue a notice and will re-start the legislative objection process.
[78] On the other hand, Mr Butler urges the Court to enable the Board to continue with the process that is in train, rather than having to start all over again.
[79] Even if the Court holds the decision was unlawful, he argues the invalidity can be remedied, as the substantive or “operative” decision of the Board will not occur until the second stage of the statutory process. At that time, Waipareira has the opportunity to advocate against deregistration and to put all relevant information before the Board for its consideration. This Court, therefore, should not exercise its discretion in favour of relief. Mr Butler argues the process has been protracted to this point and nothing is to be gained from requiring recommencement from the preliminary stage of the statutory process.
[80] There is some force in Waipareira’s argument that the first stage is not merely administrative. Here, the intended decision was given by a covering letter and comprehensive paper running to 116 paragraphs recording the Board’s understanding of the factual position, analysis and grounds for the intended decision.
[81] However, this issue is not to be decided in a vacuum. I have regard to the statutory process. Notwithstanding the finding that the intended decision was made ultra vires the Act, the statutory procedure available to Waipareira flowing from the issue of the intended decision counts against the further grant of relief in the form of certiorari/quashing the decision.43 This is because I conclude there will be a sufficient opportunity for Waipareira to challenge the intended decision on the merits, before a properly constituted Board.
43 See: Preliminary Proceedings Committee of the Medical Council of New Zealand v Duncan [1986] 1 NZLR 513 (CA) at 539; and BNZ Investments Ltd v Holland (CA 91/97), 31 July 1997 at 13, “The principle that the Courts may decline relief by way of judicial review where Parliament has provided a statutory procedure for the resolution of the merits , as distinct from the legality, of a decision is well-established”.
[82] First, it is common ground on the application for review that the investigation by the Board, or more accurately the preliminary investigations by the executive and staff on behalf of the Board prior to and informing the Board’s consideration and intended decision did not “come out of the blue”. Counsel acknowledged these took place over an extended period and there was extensive communication between the department of internal affairs and Waipareira.
[83] Second, at heart Waipareira’s essential complaint is that there has been a breach of natural justice through the failure to ensure the Board was at full complement when making a potentially momentous decision. This should have occurred in accordance with the intention of the legislature thereby meeting the aim of improving the Board’s decision-making function by providing for a diversity of backgrounds and experience in the decision maker; its intended decision was flawed for this reason. However, the intended decision is a preliminary determination, only. Given the two-stage statutory objection process and in particular the ability since the 2023 amendments to seek an in-person hearing, the position of Waipareira is not materially different than if a properly constituted Board had come to the same intended decision.
[84] Third, I accept it is regrettable that the response of the Board did not concede the procedural issue or accept the invitation for a properly constituted Board to reconsider. Had they done so, likely the re-initiated process would be further along than now.
[85]But the position was preserved by Waipareira:
(a)notifying clearly and with further information the issues of concern to it relating to the intended decision; and
(b)lodging the notice of objection to preserve their position.
[86]This is a significant factor on the question of relief.
[87] Fourth, as counsel confirmed in argument, at the first stage there was no obligation of disclosure during the enquiry phase largely undertaken/managed by the chief executive to assist the Board and which informed its intended decision. Nor any requirement for consultation with Waipareira on the matters said to constitute serious wrongdoing or misconduct. Therefore to the extent to which—for example as Waipareira wishes to argue before the Board—there was information overlooked by the Board at first stage that concern would not, of itself, have been cured even had the intended decision been considered by a Board of five.
[88] Further, as Mr Butler notes the intended decision was given following a meeting at which the three (then) members of the Board were present. It follows that the requirements in cl 13(5) and (7) of sch 2 were met in any event, such that the intended decision was given by a number of persons who would have met the quorum requirements of the Act even had the Board been properly constituted at the time, albeit the three were not drawn from the larger board of five as I have found was required.
[89] Section 55E of the Act provides that, in considering whether to make a decision, the decision maker must observe the rules of natural justice. Only following that second stage of the process will the Board as decision-maker under s 55D(2) be in a position to proceed to make a decision, having given the charity the opportunity to appear and be heard in relation to the intended decision and the objection.
[90] There is nothing to suggest the objection hearing before the Board cannot ensure due process at the second stage including by considering all arguments challenging the intended decision and the basis on which Waipareira says this has led to a flawed intended decision. I am satisfied the second stage thus has capacity to be curative of any preliminary procedural failing, as the Board at full complement will be provided with full argument and materials to support Waipareira’s challenge to the intended decision.
[91] I note, also, the second and third tiers of relief available to Waipareira under the appeal provisions in the Act.44 The decision on the application for review does not remove Waipareira’s remedies against any decision of the Board after hearing the challenge on the merits.
[92] Finally, any decision by the Board following the objection process to remove the entity takes effect when notified on the date of the decision or on any other date as notified. Although an appeal does not operate as a stay and notwithstanding the parties’ positions on the review, I note they have worked collaboratively together through senior counsel to date. There is no reason to expect this will not continue as appropriate to preserve an effective appeal right against any unfavourable decision, if sought to be exercised, given the significance of the decision to Waipareira.
[93] I conclude, accordingly, in the unusual circumstances of this case it is not necessary to make an order in the nature of certoriari, as sought.
Result
[94]I make a declaration that the intended decision is ultra vires the Act.
[95]I decline to make an order quashing the intended decision.
Costs
[96]Counsel made no submissions as to costs at the hearing.
[97] Waipareira is the substantially successful party on the review, albeit both parties have had some measure of success.
44 Charities Act, part 2A, providing for rights of appeal to the Taxation and Charities Review Authority (Authority) and, further, to the High Court. Under s 58Q the Authority may make an interim order pending determination of appeal including requiring that an entity remain registered in the register of charitable entities. Under s 58R, if an Authority refuses to make an interim order under s 58Q, the person or persons who applied for the order may, within 1 month after the date of the refusal, appeal to the High Court against the decision.
[98] My preliminary view is that costs should follow the event. If no memoranda are filed as set out below, that shall be the order of the Court. If costs are not able to be agreed, memoranda (of no more than four pages) are to be filed:
(a)by the applicant within fifteen (15) working days of the date of this decision;
(b)by the respondent within ten (10) working days thereafter;
(c)the file is then to be referred to me for determination on the papers.
………………………………………
Preston J
Solicitors:
Grove Darlow & Partners, Auckland Department of Internal Affairs, A Speir
Counsel:
J B Orpin-Dowell and M R van Alphen Fyfe, Wellington A S Butler KC, Wellington
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