HARDING v INSTITUTION OF PROFESSIONAL ENGINEERS NEW ZEALAND INCORPORATED [2014] NZHC 2251

HARDING v INSTITUTION OF PROFESSIONAL ENGINEERS NEW ZEALAND INCORPORATED [2014] NZHC 2251 [17 September 2014]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2014-409-559[2014] NZHC 2251BETWEEN DAVID HARDINGPlaintiffAND INSTITUTION OF PROFESSIONALENGINEERS NEW ZEALANDINCORPORATEDDefendantAND MIKE STANNARD AND TIM ELMSInterested PartyHearing: 9 September 2014Appearances: J Kirkland and J Taylor for PlaintiffP Jagose and R Dixon for DefendantJudgment: 17 September 2014JUDGMENT OF MANDER J[1] David Harding was a member of the Institution of Professional Engineers of New Zealand Incorporated (IPENZ) at the time of his involvement in the design and construction of the CTV Building in 1986. As a result of the Christchurch earthquake in February 2011 that building collapsed, causing significant loss of life. Complaints were received by IPENZ regarding Mr Harding's involvement in the design of this building.[2] The complaints set in train IPENZ's disciplinary procedure, which resulted in an investigating committee in April 2014 determining that the complaint should be referred to a Disciplinary Committee (the Committee). Mr Harding resigned his membership of IPENZ on 25 June 2014.[3] On 14 August 2014 the complaints were the subject of a hearing before the Committee. At the commencement of the hearing, Mr Harding took objection to thejurisdiction of IPENZ in light of his resignation the previous month. Afterconsidering Mr Harding's objection, IPENZ proceeded on the basis that it did have jurisdiction and subsequently, in August, released its ruling on that issue. Its substantive decision in relation to the complaints is presently stayed pursuant to an undertaking pending resolution of this proceeding.[4] Mr Harding seeks to judicially review IPENZ's decision that it has jurisdiction following his resignation. He maintains that IPENZ's jurisdiction is limited only to current members. Mr Harding further submits that a breach of natural justice arises or would do so if IPENZ retains jurisdiction in such circumstances. In that regard, he contends that rights of appeal are limited to current members and, as he no longer has membership, he cannot request an appeal from the decision of the Committee.[5] In response, IPENZ contends that the disciplinary procedures relate to the complaint or the conduct, and it is an individual's membership status at that timewhich bears on the question of jurisdiction, not at the time of hearing. IPENZ submits it is sufficient that at the time of the conduct giving rise to the complaints and when the complaints were made that Mr Harding was a member of IPENZ.[6] Mr Harding seeks an injunction prohibiting IPENZ from releasing its substantive decision and a declaration to the effect that it has no jurisdiction to hear the complaint.IssuesRules and Regulations[7] The Rules and Regulations are central to this dispute. The argument between the parties distils to a narrow issue of interpretation of the relevant IPENZ Rules (Rules) and Disciplinary Regulations (Regulations). No challenge has been made to those rules or regulations; the single issue is whether they provide jurisdiction to IPENZ to hear a complaint and make a decision regarding a former member. It isnecessary to examine them in some detail. Under the Rules, a "member" is defined as follows:1b. "Member" means a person who holds any current class ofmembership as defined in Rule 6, unless a contrary interpretation is specified.[8] It is not disputed that Mr Harding was a member of IPENZ at the time of his involvement in the design of the CTV Building and at the time of the complaints the subject of the disciplinary hearing.[9] Rule 3 sets out the object of IPENZ, as follows:3. RULE 3 OBJECTThe Object of the Institution shall be the advancement of the professions of engineering within New Zealand by means including but not limited to:a. developing and sharing advances in engineering and technological knowledge;b. developing technological skills to improve the well-being of society;c. representing the engineering professions;d. contributing to the development and recognition of good engineering practice;e. recognising, regulating and supporting those demonstrating competence in the engineering professions;f. supporting engineers in their career development; andg. contributing to meeting the needs of the community.[10] Rule 4 sets out the professional obligations of members. Rule 4.1 requires a mandatory undertaking to be entered into by a candidate for membership that he or she will abide by IPENZ's Rules and Regulations. It provides as follows:4.1 MEMBERSHIP OBLIGATIONEach candidate for election to any class of Membership must undertake to abide by the Rules and Regulations of the Institution and future revisions thereof (the "Membership obligation"). This undertaking will be regarded1 The IPENZ Rules accepted by the parties for the purpose of argument are dated "March 2014".It is presumed that these rules are the same at those in force at the date of the complaints made against Mr Harding. Absent any indication to the contrary, I proceed on that basis.as continuing until the person resigns or is removed from the roll of Members.[11] Rule 4.2 requires IPENZ to prescribe a code of ethics which must be complied with by members. That ethical obligation includes five fundamental ethical values including the protection of life and safeguarding people, commitment to community well-being, and professionalism, integrity and competence. Rule 4.3imposes a competence obligation on members, and r 4.4 a "good characterobligation". Mr Harding, upon becoming a member of IPENZ, undertook to complywith these obligations.[12] Rule 11.1 requires IPENZ to prescribe disciplinary regulations that:a. Set out the procedures for the investigation, hearing and determination of complaints against Members in respect of Rule 4.b. Appoint and set out the powers of Complaints Research Officers, Investigating Committees, Disciplinary Committees, Appeal Committees and Chairs of these Committees of the Institution.[13] Upon receipt of a complaint which may indicate that a member has acted in breach of the r 4 membership obligation, the Chief Executive of IPENZ must initiate action to investigate a member's behaviour in accordance with regulations prescribed pursuant to r 11.1.2[14] Rule 11.5 provides as follows:11.5 If a Disciplinary Committee appointed under Rule 11.1 decides that a member whose conduct is the subject of the investigation has acted in breach of Rule 4, the Committee may make one or more of the following orders:a. That such Member be expelled from Membership of the Institution.b. That such Member be suspended from Membership for any period.c. That such Member be suspended from Membership until such time as the Member has fulfilled the requirements of professional development as have been specified by the Committee.2 IPENZ Rules, rr 11.2-11.3,d. That if by a prescribed date the Member fails to fulfil requirements for professional development as have been specified by the Committee such Member be suspended from Membership for a specified period of time.e. That a fine not exceeding an amount determined from time to time by the Board and duly published in the official journal of the Institution be imposed on such Member.f. That such Member be reprimanded or admonished.g. That such Member pay a sum not exceeding an amount determined from time to time by the Board and duly published in the official journal of the Institution towards such costs incurred by the Institution and/or the complainant as are directly attributable to the investigation, hearing and/or determination of the complaint.h. That upon completion of consideration of the complaint according to the procedures under the Disciplinary Regulations, the Member be named, the order made against the Member be stated, the nature of the breach described in the official journal of the Institution, the matter publicised in any other manner as may be prescribed by the Committee, or any combination of these possibilities as the Committee might prescribe.[15] The Regulations contemplated by r 11.1, provide the process by which complaints received by IPENZ are to be dealt with.3 Regulation 5 provides as follows:5. INSTITUTION MAY REFER COMPLAINT TO DISCIPLINARY COMMITTEEThe Institution must, as soon as practicable after receiving a complaint –(a) Refer the matter to a Disciplinary Committee; or(b) Investigate the matter according to clause 7.It follows therefore that IPENZ upon receipt of a complaint must either refer the matter to a Disciplinary Committee or refer the matter for investigation.4[16] Regulation 6 provides the grounds for referral of a complaint to a Disciplinary Committee without investigation. If the complaint has been referred for3 These rules came into force on 1 January 2012.4 See IPENZ Disciplinary Regulations, reg 7.investigation under reg 7, IPENZ must "carry out an initial investigation" or dismiss the complaint. The process for an initial investigation of a complaint is set out in reg 9, and can only result in the complaint either being referred to an Investigating Committee or it being dismissed.[17] Regulation 8 lists a number of circumstances whereby IPENZ may dismiss a complaint without referring it to an Investigating Committee, which includes where there is no applicable ground of discipline under r 11.[18] Regulation 11 provides that upon completion of its investigation, an Investigating Committee must either refer the matter to a Disciplinary Committee or dismiss the matter.[19] Regulation 17 sets out the way in which a Disciplinary Committee must determine a complaint. It provides as follows:17. DISCIPLINARY COMMITTEE MUST DETERMINE COMPLAINT OR INQUIRY(1) A Disciplinary Committee must, as soon as practicable after receiving a complaint or inquiry, hear the matter and decide whether or not there are grounds for disciplining the Member complained about under Rule 11 of the Institution.(2) If the Disciplinary Committee decides under sub clause (1) that there are no grounds for disciplining the Member complained about under Rule 22 of the Institution, the Institution must dismiss the complaint.(3) If the Disciplinary Committee decides under sub clause (1) that there are grounds for disciplining the Member complained about under Rule 11 of the Institution, the Disciplinary Committee must decide whether and how toexercise the Institution's powers under Rule 11 of theInstitution, including imposing one or more of the following penalties:(Thereafter, reg 17 sets out the orders contained in r 11.5 at [14].)[20] Regulation 17 therefore provides that a Disciplinary Committee must, as soon as practicable after hearing the complaint, hear the matter and determine whether or not there are grounds for disciplining the member under r 11. If there are no groundsfor discipline, the complaint must be dismissed. If there are grounds for discipline, a Disciplinary Committee must decide "whether and how to exercise the Institution's powers under Rule 11 of the Institution". Such consideration will also includewhether one or more of the penalties set out in reg 17(3), which replicate those provided under r 11 of the Rules, are to be imposed.Mr Harding's argument[21] The application seeks to review IPENZ's determination of jurisdiction asbeing ultra vires its rules and regulations. The parties are agreed that the appropriate analysis to be applied is contractual. In that regard, the Court of Appeal has observed:5The internal workings of incorporated societies with respect to members are primarily reviewable under the law of contract: Peters v Collinge [1993] 2 NZLR 554 at 566 (HC) A Club's rules will be reviewable where they, or the way in which they are applied, constitute a breach of natural justice:Dawkins v Antrobus (1881) 17 Ch D 615 at 630 (CA). And the basis for intervention has not been the Court's power under the Act — rather, it has been on the basis of enforcing the contract constituted by the rules.[22] Mr Harding submitted that as he is no longer a member of IPENZ its rules and regulations can no longer have any application to him. He correctly referred to his undertaking under r 4 to abide by the rules and regulations but submits that, as provided by that rule, the undertaking only continues until such time as the member resigns or is removed from the roll of members. It is submitted on his behalf that his resignation ended the contract. That submission is no doubt accurate in terms of Mr Hardings' position as it currently applies to his conduct and insofar as it applied from the date of his resignation. It does not however confront the fact that at the time of the conduct in question and when the complaints were made his undertaking to IPENZ was in force.[23] Mr Harding was dismissive of an outcome that resulted in him still being subject to the jurisdiction of IPENZ. In that regard, he emphasised what he considered was the obvious meaning of the term "member" in reg 17, and that, as theCommittee no longer had power to make any orders against him, proceeding to hear5 Hopper v North Shore Aero Club Inc [2007] NZAR 354 (CA) at [11].the complaint was an empty exercise. In that regard, Mr Harding relied on the acknowledgment by the Committee itself in its decision on jurisdiction, that it no longer has powers to make any orders against him as a member of IPENZ. He submitted that the Committee, while identifying it had to have regard to the plain meaning of the words of reg 17(1) failed to recognise that, if it did so, it could onlyconclude that the reference to "member" must be to a current member.[24] Mr Harding sought to rely on what he described as the orthodox and modernapproach to the interpretation of "contracts", set out by Lord Hoffman in Investors'Compensation Scheme Ltd v West Bromwich Building Society.6 It was submitted thatthe reference to a "member" in the Rules and Regulations must be to a "current member", that being the "natural and ordinary" meaning conveyed to a reasonableperson having all the background knowledge to the matter in question. To attribute some other meaning not plain on the face of the word, it was submitted would not accord with a commonsense interpretation. In that regard, reference was made to other professional rules and regulations which expressly extended jurisdiction "to hear and determine any charge against a practitioner or former practitioner".7Similarly, reference was made to reg 32 which provides for the recovery of any fines or costs ordered to be paid as a result of disciplinary proceedings, whether or not a member is suspended or expelled under the Regulations or resigns after the order is made.Decision[25] In my view the reference to "member" must be considered against the objectsand purpose of the complaint process and the disciplinary procedure provided byIPENZ's Rules and Regulations.8 A complaint focuses on an individual's conduct.If the individual at the time of the conduct complained of was a member of IPENZ, then jurisdiction is triggered by force of the contractual relationship that existed at6 Investors' Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 (HL).7 See for example Lawyers and Conveyancers Act 2006, s 227.8 Beaton v Institute of Chartered Accountants of New Zealand HC Auckland CIV-2005-404-2462, 17 November 2005 at [127].the time of the conduct and at the time of the complaint. The situation is put succinctly by the learned author of Judicial Review : A New Zealand Perspective:9A voluntary organisation can deal only with its members or those bringing themselves within jurisdiction, such as by participating in an activity governed by an organisation. But a person within such a jurisdiction cannot escape it by resigning, so far as actions while a member are concerned, the resignation may well limit the types of actions which may be taken against the former member.(Citations omitted)[26] This conclusion is borne out in the instant case upon application and analysis of the mechanics of the complaint procedure provided for in the Rules and Regulations. Once a complaint has been received by IPENZ, the complaint procedure is triggered. The mandatory process by which the complaint is required to be dealt with under the Rules and Regulations results, as it was was put by IPENZ, in a "binary" process that unfolds at the various stages of the prescribed procedure. In a similar context, the Queensland Supreme Court observed:10I am, however, not persuaded that there is any substance in the submission that the authority of the Disciplinary Committee, as a matter of contractcame to end with the prosecutor's resignation from the Institute If thiswas so, as was pointed out in argument, he might sit through the hearing as a member and avoid the ultimate determination by resigning at the last moment or could even hear a determination of misconduct and avoid anorder for costs by then resigning It is clear in my judgment that a personwho is a member when the report which initiates the disciplinary machinery is received by the Institute has contracted that he will submit to the progressive steps provided for by the article and that his subsequent resignation can have no effect upon that contractual submission.[27] Mr Harding became a member of IPENZ in 1985. He did so cognisant of the obligations and responsibilities that attached to that membership. As already observed, the conduct the subject of the complaints occurred at the time of hismembership, as did the complaints. In the Committee's decision regardingjurisdiction it considered the purpose of the complaint procedure and the hearing of such matters in furtherance of the objects of IPENZ. After referring to thecomplainant's right to be heard, the Committee observed as follows:9 G Taylor Judicial Review: A New Zealand Perspective (3rd ed, LexisNexis, Wellington, 2014) at 571-572.10 R v Wilson, ex parte Robinson [1982] Qd R 642 (QSC) at 646-647.31. Those rights point to the wider purposes served by "hearing the matter". As has already been noted, the primary purpose of thehearing is to inform the decision whether or not there are grounds for disciplining the Member complained about. But that is not thehearing's sole purpose.32. With reference to IPENZ's objects, and in no particular order:32.1 Consistent with Rule 3.g., hearing the complainant and others aggrieved may contribute to "meeting the needs of thecommunity" by providing a forum for the community to explain the impact on it of allegedly deficient professional engineering conduct. None could deny that proceeding with the hearing of these complaints in its own small way contributed to such needs.32.2 Consistent with Rule 3.d., "hearing the matter" may also help "contribut[e] to the development and recognition of good engineering practice" by seeking to define the boundaries of acceptable standards of professional engineering and ultimately, to learn from past mistakes. Again, the Disciplinary Committee considers that hearingthese matters was important to contribute to a better understanding of acceptable intra-office engineering practices.32.3 Last, consistent with Rule 3.c., the Disciplinary Committee considers that "hearing the matter" is an important aspect ofIPENZ's "representing the profession". Especially by holding the hearing in public, the Disciplinary Committee, which in the performance of its functions embodies IPENZ,increases the profession's accountability to the public.Further, the Disciplinary Committee itself represents the profession by upholding standards or good engineering practice. Hearing the matter and making findings may help to achieve these ends regardless of whether or not there any grounds for disciplining the Member complained about.33. The Committee sees all of these as legitimate purposes of thehearing. Moreover, they are expressly among the Institution'sobjects[28] As IPENZ has recognised for itself, Mr Harding's resignation only alters itspowers to the extent that the full range of disciplinary measures are no longeravailable to it. It would appear that the Committee's acknowledgment in that regard may have gone too far. As IPENZ noted in the course of argument, that concession may not have taken into account the sanction of publication which still remains available and has the potential to be punitive in its own right.[29] I have concluded that the construction of the term "member" referred to inthe Rules and Regulations, specifically r 11.5 and reg 17, includes a member who may have resigned prior to the hearing of complaints made against him by a disciplinary committee. Jurisdiction over a member in respect of IPENZ'sdisciplinary process triggers at the time of the member's conduct and/or the timingof the complaint. Whether there are grounds to discipline a member will turn on his or her conduct whilst he or she was bound by the undertaking to abide by the Rules and Regulations which include obligations of competence and ethical conduct.11[30] That construction of the IPENZ Rules and Regulations is consistent with the public interest in the availability of an effective complaints procedure to investigate and hold to account individuals who hold themselves out as a member of a recognised professional body at the time of the conduct the subject of the complaint,or at least at the time the complaint was made and received. The reference to "a member" in r 11.5 or "the member" in reg 17 includes such a person, regardless ofany subsequent resignation of membership.Natural justice argument[31] Regulation 22 provides as follows:22. LODGING OF APPEALSEither the complainant or the Member complained of may lodge a request for an appeal against the decision or any penalty imposed bya Disciplinary Committee to be heard, [32] A member may lodge a request for an appeal against a decision or penalty imposed by a disciplinary committee. Consistent with Mr Harding's argument that the term "member" was limited to a current member, he sought to argue that the effect of the Committee continuing to have jurisdiction over him was that he wouldbe denied a right to appeal the Committee's decision.[33] The argument is without merit. Mr Harding would have a right to make such a request. The complaint relates to his conduct as a member. That conduct is what the Committee is concerned with examining, and likewise would be the focus of any11 See IPENZ Rules, r 4.Appeal Committee. Just as the Committee has jurisdiction in respect of Mr Harding in respect of a complaint regarding his conduct as a member, so too would an Appeal Committee. Mr Harding as the member the subject of the complaint would be entitled to make a request for an appeal. It is not disputed otherwise by IPENZ.[34] I did not understand Mr Harding to be arguing that a breach of natural justice arose as a result of him having no discrete avenue of appeal from the Committee'sfinding of jurisdiction. If that is the case, the position is equally clear. The only process of appeal provided for in the Regulations is "against the decision or anypenalty imposed by a Disciplinary Committee".12 The "decision" is that under reg17, which is a finding of whether or not there are grounds for disciplining a member.[35] The Rules and Regulations do not provide access to an appeal against a preliminary decision regarding jurisdiction. The question of whether the Committee had jurisdiction to make such findings may potentially be able to be raised as part of a request to lodge an appeal from a decision that there are grounds for disciplining a member. The preliminary ruling provided by the Committee however is not a decision as to whether there are grounds to discipline the member, and is not therefore amenable to such a request. The absence of a right to appeal a preliminary ruling cannot ground a complaint of breach of natural justice.13Result[36] IPENZ has jurisdiction to hear the complaints regarding Mr Harding'sconduct whilst a member of IPENZ which were made when he was a member of that organisation. This finding of jurisdiction also disposes of Mr Harding's challenge onthe grounds of natural justice. The appeal process provided by the regulations has application to his case.[37] The application for judicial review is dismissed.12 IPENZ Disciplinary Regulations, reg 22.13 Loh v Immigration Advisers Complaints and Disciplinary Tribunal [2014] NZHC 1166 at [50].Costs[38] As the application has failed, the defendant is entitled to costs on a 2B basis. In the event of the parties being unable to agree to costs, the parties are to file and exchange memorandum (limit of five pages) within 21 days of the date of this judgment.Solicitors:Saunders & Co, ChristchurchChapman Tripp, Wellington