Wong v United Chinese Associations of New Zealand Incorporated

[2017] NZHC 1598

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-1233 [2017] NZHC 1598

IN THE MATTER

of an action for judicial review

BETWEEN

STEVEN WAI CHEUNG WONG Plaintiff

AND

UNITED CHINESE ASSOCIATIONS OF NEW ZEALAND INCORPORATED

First Defendant

CHEN JIMNING
Second Defendant (removed)

HONG (HARVEY) GUO Third Defendant

Hearing:	On the Papers
Counsel:	I F Williams and A J Steel for Plaintiff R S Pidgeon for First Defendant No appearance for Second Defendant T-C D Wu for Third Defendant
Judgment:	11 July 2017

JUDGMENT (No.3) OF FOGARTY J

This judgment was delivered by Justice Fogarty on

11 July 2017 at 4.00 p.m., pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:

Kemps Weir, Auckland

Pidgeon Law, Auckland

Dawsons Lawyers, East Tamaki, Auckland

WONG v UNITED CHINESE ASSOCIATIONS OF NEW ZEALAND INCORPORATED [2017] NZHC 1598 [11 July 2017]

[1]      I  delivered  two  judgments  on  the  judicial  review  of  a  decision  by  the Committee of the United Chinese Associations of New Zealand Incorporated (UCANZ) to expel the president from the Executive Committee and so from his office as President.1

[2]      In the first judgment, the Court declared that Mr Wong is still a member of the Executive Committee.  It adjourned the question of whether or not he was still the President of UCANZ.

[3]      The  second  judgment  responded  to  an  application  by  Mr Wong  for  a declaration  that  he  continued  lawfully  to  be  the  president  of  the  defendant association.   The merit of the argument for such a declaration was noted in the judgment:2

As noted in the 27 February judgment, the declaration sought by Mr Wong was adjourned to provide the parties with an opportunity to determine the president of the Association. It has now transpired that Mr Wong does not wish to be the next president. He intends to resign his presidency the day before the scheduled election. In those circumstances, I can see no reason not to grant the declaration. It follows from my findings in the judgment that Mr Wong’s  presidency did not  lawfully terminate at  general  meeting in October 2015. He ought, therefore, to be declared to be the president up until the forthcoming election.

[4]      Following delivery of the second judgment on 24 March 2017, the Registry executed a “sealed judgment  of the Court” without,  apparently,  consulting with counsel for the defendants.   Paragraph [13] was summarised, incorrectly, into the following proposition:

The plaintiff retains the office of president of UCANZ until he resigns that office or until the next election is held in accordance with the UCANZ’s constitution.

[5]      If the judgment is to be resealed, that incorrect proposition should be deleted and replaced with the following, correct, proposition:

The plaintiff retains the office of president of UCANZ until he resigns his presidency the day before the scheduled election.

1      Wong v United Chinese Associations of New Zealand Inc [2017] NZHC 274; Wong v United

Chinese Associations of New Zealand Inc (No 2) [2017] NZHC 551.

2      Wong v United Chinese Associations of New Zealand Inc (No 2) [2017] NZHC 551 at [13].

Additional Costs

[6]      The annual general meeting of the Association was held on 2 April 2017.  At that annual  general meeting, Mr Wong asked to postpone the election until the financial accounts of UCANZ were audited by an independent auditor.   Mr Wong contended that he would decide another election date.  He repeated three times that he would not attend the election of the eighth Executive Committee and would not stand as a candidate for the presidency.

[7]      That proposition was rejected by UCANZ in the general meeting and the election was carried out as planned.

[8]      On 26 April 2017, I considered the plaintiff ’s application to seek an award of costs of $44,600, plus disbursements, allocated between the first defendant and the third defendant.  In a minute of the same day I declined to fix costs at that stage as it was unclear whether or not Mr Wong had imposed unjustifiably further legal costs on the Association and on Mr Guo, the third defendant.

[9]      Following that minute, I have received two further submissions on costs.

Arguments for the Plaintiff

[10]     In the first plaintiff’s memorandum regarding costs, dated 19 May 2017,

counsel for Mr Wong, Mr Williams, identified the issues arising from the minute of

26 April as being:

(a)       Whether there had been any conduct on the part of Mr Wong that justifies the Court refusing or reducing costs;

(b)      Whether Mr Guo was a “reluctant participant” such that costs should

not be apportioned to him;

(c)       Whether Mr Wong has imposed any unnecessary or further legal costs on UCANZ relevant to the question of costs;  and

(d)      The relevance of UCANZ’s limited resources.

[11]     Dealing with the first point, he submitted that there had been no conduct by Mr Wong disentitling him to costs.  He contended there was no Court order that he should not contest the 2017 elections.  Nonetheless, counsel reiterated that Mr Wong had told the Court he would not stand for re-election.

[12]     The memorandum argues that the correct appreciation of the situation is that shortly  prior  to  the  annual  general  meeting,   Mr Wong  was  approached  by representatives of a significant portion of the UCANZ membership.  They expressed concern that the Executive Committee’s financial reporting was not sufficient.  Of concern to Mr Wong was a lack of detail about where $72,617.67 of UCANZ funds had been applied in the period to 31 March 2017.  It was argued that an established convention required Mr Wong, as UCANZ President, to collate financial records since the prior annual  general meeting and  report on all the expenditure at the following annual general meeting.  He requested this information before the meeting. It was not forthcoming and he therefore sought a short adjournment to enable the task to be completed.

[13]     Mr Wong’s request was made formally but Jim He, chairman of the annual general meeting, declined to put the resolution to a vote and continued with the agenda, eventually including the elections.

[14]     Mr Williams submitted that, critically, in the light of the Court’s present concern and against Mr Guo’s version of events, the minutes confirm that Mr Wong repeated three times his intention not to offer himself for office again.  His position would have been clear to all those present; the adjournment of the meeting was sought only to comply with the reporting of historical accounts.

[15]     Mr Williams argued further that prior to and at the annual general meeting, but following the second judgment, a number of the Committee continued to hold out that Mr Wong was not the President.  In consequence, Mr Wong made copies of both judgments available to the meeting and arranged for the Court’s orders to be read out.

[16]     It  was  submitted  that  there  was  no  change  of  heart  on  Mr Wong’s  part. Rather his actions at the annual general meeting were his last step in office and reflected a genuine desire to adhere to the duties of that office by ensuring full and proper  reporting  to  the  membership  as  a  whole.    Mr  Williams  contended  that Mr Wong left the meeting when his proposal was not put to the floor; that he acted genuinely, reasonably and in no way reprehensibly.  The meeting continued and Mr Guo was elected as President.

Analysis

[17]     The aforesaid argument relies on the incorrect summary of the judgment, unilaterally sealed on 24 March 2017, discussed above at [6] and [7], which reads:

The plaintiff retains the office of president of UCANZ until he resigns that office or until the next election is held in accordance with UCANZ’s constitution.

[18]     As noted, that proposition should have been put correctly in the following terms:

The plaintiff retains the office of president of UCANZ until he resigns his presidency the day before the scheduled election.

[19]     In fact, Mr Wong did not resign the presidency on the day before the next election.  To the contrary, he took advantage of his status as President to address the general meeting for approximately 30 minutes and sought to persuade the general meeting not to continue until there was an examination of the financial accounts.

[20]     If Mr Wong had informed the Court of his intended conduct during the second application he would not have obtained the declaration.

[21]     In the argument on costs before me, counsel for Mr Wong sought to take advantage of the fact that Mr Wong was neither directed nor ordered that he should not contest the 2017 elections.  It was noted the Court did not convert the assurance given by Mr Wong into a condition of its second judgment.

[22]     I took Mr Wong at his word.   It would have been demeaning of him to formulate the judgment making it a condition that he keep his word.  It needs to be kept in mind that, in the first judgment, I said:3

[64]     The question as to whether or not he is still the president of the defendant is adjourned pending an opportunity being given to the parties to this litigation to resolve that issue by calling for the election of president, an event which falls due in any event, quite independently of this litigation, this month.

[23]     It was never my intention in either judgment to do more than right the past wrong that Mr Wong had suffered.  Indeed, I was cautious in the first judgment about granting a declaration.  I thought it was sufficient to declare he was still a member of the Executive Committee.

[24]     Reading both  judgments  in  context,  I am  satisfied  that  Mr Wong,  in  the subsequent annual general meeting for the election, took advantage of the fact his assurance to me that he would resign the day before was not expressly stated in the incorrectly-sealed order.

[25]     Mr Wong’s intervention at the annual general meeting has caused UCANZ to incur further legal costs, as is reflected by the memoranda which have been filed since that annual general meeting.

[26]     In my minute of 26 April I put the question of whether Mr Wong’s conduct after the second judgment was disentitling conduct for the costs determination.   I also recorded that I had difficulty fixing costs at that stage because, if the affidavit of Mr Guo is correct, Mr Wong has imposed further legal costs unjustifiably on the association and on Mr Guo.

[27]     It is my judgment that Mr Wong’s conduct after the second judgment does disentitle him to the costs determination which would otherwise have followed from his successful application for the declaration.   Mr Wong has also imposed further legal  costs  on  UCANZ  and  Mr  Guo  by  way  of  their  counsel’s  minute  and attachments to which I have already referred.

Resolving the Costs Issues

[28]     Under the High Court Rules, all matters of costs arising out of proceedings are within the discretion of the court.4    Rule 14.7 provides for exceptions to, inter alia, the general rule that costs will be awarded to the successful party in a suit. Subclauses (f) and (g) of r 14.7 provide:

(f)       the party claiming costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i)       failing to comply with these rules or a direction of the court;

or

(ii)      taking or pursuing an unnecessary step or an argument that lacks merit; or

(iii)     failing, without reasonable justification, to admit facts, evidence, or documents, or accept a legal argument; or

(iv)      failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or

(v)       failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or

(g)       some other reason exists which justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.

[29]     In my judgment, the first and third defendants are now entitled to costs on the second judgment on a 2B basis.

[30]     Mr  Wong’s  actions  in  relying  on  that  judgment,  despite  having  made  a contrary representation to secure the declaration of his presidency contained therein, provide sufficient justification for the Court refusing an award of costs against the first defendant, UCANZ.  Mr Wong’s actions caused further costs to be incurred by UCANZ.  In my judgment Mr Wong should be liable for those costs.

[31]     Nevertheless, Mr Wong remains entitled to costs against UCANZ on a 2B basis on the proceedings up to and including the first judgment of 27 February 2017, but excluding the application for the declaration and the resulting second judgment.

[32]     Mr Guo became a party following a direction by Duffy J to ensure all parties were represented and after the original second defendant stepped aside.  As it happened, Mr Guo’s participation in the main hearing, through his counsel, was negligible and quite properly so.   In my view, Mr Guo has incurred costs unnecessarily due to the need to file the affidavit referred to above post the first judgment.    Accordingly,  I  agree  that  r  14.7(g)  is  also  applicable  to  Mr  Guo’s situation.   In short, the additional costs were necessarily imposed on Mr Guo by reason of Mr Wong’s conduct on the day of UCANZ’s election and subsequently. That conduct constitutes a reason which justifies the Court refusing costs in favour of Mr Wong against Mr Guo in these proceedings.

[33]     UCANZ’s entitlement to costs on a 2B basis includes costs incurred in the preparation of the memorandum filed in relation to this application.  It is also entitled to costs incurred in the preparation of Mr Guo’s affidavit, affirmed on 12 April, it being relied upon for the arguments I am resolving in this judgment.

[34]     As to the enforcement of costs, Mr Williams for the plaintiff indicated he intends to apply under r 17.29 for a stay of enforcement of collection of the whole of the costs.  He suggested the Association intends to offer to settle the costs by way of payments at a likely rate of $1,000 per month.  This is because the association does not have annual members’ dues; ,money is raised from the members as it is needed. That application for stay of enforcement need not be placed before me.

Disposition

[35]     UCANZ and Mr Guo are entitled to costs on a 2B basis for the costs incurred relating to the second judgment and this judgment.

[36]     Mr Wong is entitled to costs from UCANZ on a 2B basis in the proceedings up to and including the first judgment of 27  February 2017,  but excluding the application for the declaration and the resulting second judgment.

[37]     I have written this judgment (number 3) without a further hearing of counsel as I apprehend it is important to try to keep costs down.  I reserve the right for either party to seek a rehearing of all or part of the matters discussed and decided in this judgment but, if this leave is taken advantage of, I will likely award costs on an indemnity basis against the losing party in such further hearing.

[38]     Rather,  and  again,  I  urge  the  parties  to  complete  the  settlement  of  this litigation in a seemly fashion so that the UCANZ can put this litigation behind it and focus on meeting the needs of Chinese Associations in New Zealand, rather than litigation in this Court.