BHULLAR v AUCKLAND CO-OPERATIVE TAXI SOCIETY LTD [2018] NZHC 3435

BHULLAR v AUCKLAND CO-OPERATIVE TAXI SOCIETY LTD [2018] NZHC 3435 [20 December 2018]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2018-404-836[2018] NZHC 3435BETWEEN HARPREET BHULLARApplicantAND AUCKLAND CO-OPERATIVE TAXISOCIETY LIMITEDRespondentHearing: 19 December 2018Appearances: A Beck for the ApplicantG Judd QC for the RespondentJudgment: 20 December 2018JUDGMENT OF GORDON JThis judgment was delivered by meon 20 December 2018 at 1.00 pm, pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors: Integris Law Firm, AucklandKen Patterson, TaurangaCounsel: A Beck, AucklandG Judd QC, AucklandIntroduction[1] On 17 December 2018, I delivered a judgment refusing Mr Bhullar'sapplication for judicial review challenging three decisions of the respondent, theAuckland Co-Operative Taxi Society Limited (the Society).1[2] Those decisions were: the decision of the Board of Governance of the Society(the Board) to proceed to a hearing in relation to allegations that Mr Bhullar hadbreached the rules of the Society; the decision of the panel appointed by the Board thatMr Bhullar had breached those rules; and the decision by the panel that it was not inthe best interests of the Society for Mr Bhullar to remain a member of the Society.[3] Prior to the hearing, on 4 May 2018, Jagose J made an order pending furtherorder of this Court prohibiting the Society, and more particularly the Board, fromstriking Mr Bhullar off its register of members.[4] In my judgment refusing the application for review, I said in respect of thatorder:[185] Having dismissed the application for review, the interim order(prohibiting the Board from striking Mr Bhullar off its register of members)effectively falls away. To the extent that it is necessary, I formally dischargethat order. The Board may now proceed to strike Mr Bhullar off its register ofmembers in accordance with the decision made under Rule 11(d) of the Rules.[5] Mr Bhullar has filed an appeal against my decision.Application for stay or interim relief[6] Mr Bhullar has also filed a without notice application (but served on theSociety's solicitor) for an order staying execution of my judgment pendingMr Bhullar's appeal to the Court of Appeal from that judgment or alternatively, anorder for interim relief precluding the Society from striking Mr Bhullar off its registerof members pending determination of the appeal.[7] The grounds on which the orders are sought are:1 Bhullar v Auckland Co-Operative Taxi Society Ltd [2018] NZHC 3341.(a) Mr Bhullar has instructed counsel to file an appeal against the Court'sdecision;(b) the Society has already taken action purporting to enforce my decision;(c) there will be substantial prejudice to Mr Bhullar if his membership ofthe Society is terminated; and(d) there is no substantial prejudice to the Society in a stay of the judgmentpending determination of the appeal.[8] Mr Bhullar has filed an affidavit in support of the application. He deposes thatbeing struck off the register of members means that he cannot continue as a taxi driverfor the Society. He says that will prevent him from earning a living as a taxi driveruntil he is able to obtain membership of another taxi company. He says he has alreadybeen approached by the compliance manager of the Society demanding that he returnall property of the Society. He deposes that it is clear to him that unless immediateorders are made by the Court, the Society will prohibit him from continuing as a taxidriver for the Society and also carrying out his role as a director of the Board.[9] I conducted an urgent hearing of the application by telephone on 19 December2018.Submissions in support of the application[10] Mr Beck, for Mr Bhullar, refers to correspondence between the parties whichhe annexes to his memorandum and says that the Society has apparently already struckMr Bhullar off the register of members. He says the consequences of this action arethat Mr Bhullar has been unable to access the communication network operated by theSociety and has effectively been excluded from operating as a taxi driver.[11] Mr Beck refers to the commonly applied factors in applications for a stay andsubmits that this is a case where Mr Bhullar's appeal would be rendered nugatoryunless the status quo is maintained. The whole point of the appeal is to set aside thedecision of the Society to strike Mr Bhullar off the register of members and to ensurehis continued membership, as well as his ability to operate as a taxi driver.[12] Mr Beck submits that the application has properly been brought without noticebecause of what he describes as the "precipitate action" taken by the Society and theurgent need to obtain protection for Mr Bhullar's position.Submissions in opposition[13] Mr Judd QC, for the Society, submits that the application for a stay ismisconceived. There is no judgment of the Court requiring anyone to do anythingwhich could be stayed. He submits that the only possibility would be an interim order,but he submits that is also misconceived.[14] In relation to the statement in [185] of my judgment referred to in [4] above,Mr Judd submits that it was in fact not necessary for the Board to take steps to strikeoff Mr Bhullar from its register of members. Upon my discharge of the 4 May 2018order of Jagose J, an earlier resolution of the Board had immediate effect.[15] Mr Judd refers to minutes of the meeting of the Board of 18 July 2018. Theminutes record the following:[The lawyer for the Society] mentioned "the decision endorsed by the panelfor Bhullar's membership is subject to Court decision."The Board resolved to accept the decision of the panel.[16] The decision of the panel (in terms of the wording of the relevant rule) was thatit was "not in the best interest [sic] of Co-Op that Mr Bhullar remain a member".[17] Mr Judd submits that due to the Court's dismissal of the application for reviewand discharge of the order made by Jagose J on 4 May 2018, the impediment toimplementation of the decision of the panel, endorsed by the Board on 18 July 2018,disappeared. Mr Bhullar is no longer a member of the Society.Discussion[18] The application proceeds under r 12 of the Court of Appeal (Civil) Rules 2005.Under r 12(3)(b), the Court may grant interim relief. That rule gives jurisdiction tothe Court to make an interim order even where the relevant order was non-executoryand thus not amenable to an order for a stay under r 12(3)(a).2[19] If Mr Judd's analysis, that Mr Bhullar is in fact no longer a member of theSociety, is correct, then the Court would be required to make a mandatory orderdirecting the Society to reinstate Mr Bhullar as a member. Mr Judd's position is thatsuch an order would mean the Court would be directing the Board to act in a way thatis contrary to its rules. A person must be approved by the Board as a member and itwould have to be in the best interests of the Society for Mr Bhullar to become amember. It has already been found that it is not in the best interests of the Society forMr Bhullar to remain a member. Accordingly, the Board has no power to admit himas a member and the Court cannot make such a direction to the Board.[20] Mr Judd submits that to make an order in those circumstances is quite differentfrom the situation discussed in Yan v Mainzeal Property and Construction Ltd (in recand in liq), where the orders involved were part of the Court's own process.3[21] I first examine whether Mr Judd's analysis regarding the Board's process iscorrect. Or did the Board in fact need to take a further step consequent upon myjudgment, for Mr Bhullar to be removed as a member of the Society?[22] The minutes of the Board meeting on 6 November 2017 include the followingresolution:The Board resolved that it will appoint an independent panel to undertake the11D hearing in its place and endorse without reservation anyrecommendations the independent panel makes.2 Yan v Mainzeal Property and Construction Ltd (in rec and in liq) [2014] NZCA 86, (2014)22 PRNZ 296 at [21]-[22].3 Yan v Mainzeal Property and Construction Ltd (in rec and in liq), above n 2.[23] Rule 11(d) of the Rules of the Society provides:REMOVAL FROM MEMBERSHIP(11) The Board may strike a member off the register of members upon anyof the following grounds: --(d) Upon being satisfied that it is not in the best interests of theSociety that a licensee shall remain a member of the Society.[24] The panel decision on 12 July 2018 concluded that: it is not in the best interest [sic] of Co-op that Mr Bhullar remain a member.This is the position that we now forward to the Board.[25] The minutes of the Board referred to by Mr Judd and set out in part in [15]above, more completely read:Decision is put by [Chairman] to the board. As per the resolution [Chairman]presented the independent panel's decision to board that the panel has foundBhullar Harpreet guilty and in the society's best interest [sic] Bhullar Harpreetshould be struck off the society's register. The board should honour thepanel's decision as per the board resolution (dated 06th November 2017)."Board resolution on election""Incident involving Mr Harpreet Bhullar" signed by [board members][Lawyer advising the Board] mentioned the "decision endorsed by the panelfor Bhullar's membership is subject to court decision".The Board resolved to accept the decision of the panel.Moved seconded[26] When the minutes of the two Board meetings of 6 November 2017 and 18 July2018 are read in combination, I consider the Board had in fact already taken thedecision to strike Mr Bhullar off its register of members consequent upon the decisionof the independent panel. But, the Board's decision was subject to a decision of thisCourt, Mr Bhullar by then having filed his judicial review proceedings.[27] In other words, I accept the submission now made by Mr Judd that no furthersteps were in fact required by the Board following my decision, and that Mr Bhullarwas struck off the register of members as soon as I discharged the 4 May 2018 orderof Jagose J.[28] Does that then mean that this Court has no jurisdiction to direct that the Boardreinstate Mr Bhullar's membership of the Society pending the hearing of his appeal?[29] I do not accept the distinction Mr Judd makes between an order directing theBoard not to take steps to strike Mr Bhullar off the register if, in fact, the Board hadneeded to take that final step (consequent on my judgment) and an order directing theBoard to reinstate Mr Bhullar's membership.[30] Either way, the Board would be acting contrary to its rules by Mr Bhullar beinga member when there has been a finding that it is not in the best interests of the Societythat he remain a member of the Society.[31] I therefore consider, following Yan, the Court does have jurisdiction to make amandatory order directing that the Board reinstate Mr Bhullar's membership.[32] I now turn to consider whether such an order should be made in this case.[33] The well-known factors to be taken into account include the following:4(a) whether the appeal may be rendered nugatory by the lack of a stay;(b) the bona fides of the applicant as to the prosecution of the appeal;(c) whether the successful party will be injuriously affected by the stay;(d) the effect on third parties;(e) the novelty and importance of questions involved;4 Yan v Mainzeal Property and Construction Ltd (in rec and in liq), above n 2; Keung v GBRInvestment Ltd [2010] NZCA 396, [2012] NZAR 17 at [11]; citing Dymocks Franchise Systems(NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [9] and Body Corporate No188529 v North Shore City Council (No 6) HC Auckland CIV-2004-404-3230, 11 February 2009.(f) the public interest in the proceeding;(g) the overall balance of convenience; and(h) the apparent strength of the appeal.[34] Mr Bhullar will not be able to continue to operate as a taxi driver with theSociety and thus earn income from that work if the decision to strike him off theregister of members of the Society remains operative. However, that will not preventMr Bhullar from obtaining work with other taxi organisations. If he is successful onappeal, then it is open to Mr Bhullar to claim damages for breach of contract. Iconsider that would be an adequate remedy and that the appeal would not be renderednugatory by the lack of an interim order.[35] I accept Mr Bhullar's bona fides in prosecuting his appeal. A notice of appealdated 19 December 2018 is annexed to Mr Bhullar's affidavit.[36] As to whether the Society will be injuriously affected by an interim order, thereis a basis for such a conclusion. The Society will be required to operate with a personamongst its ranks in respect of whom it has been found it is not in the best interests ofthe Society that he remain a member. In coming to that conclusion, the independentpanel considered not only the breaches of the electoral rules referred to in myjudgment, but also a past incident recorded on video when Mr Bhullar confronted theChair of the Board; previous complaints against Mr Bhullar; various actions thatMr Bhullar had been part of against the Society; his repeated allegations of scams andcorruption of the Society; and his behaviour towards staff of the Society.[37] Having regard to all of those matters, I consider that the Society would beinjuriously affected by Mr Bhullar remaining a member pending the hearing of hisappeal.[38] In terms of third parties, Mr Beck submits that because Mr Bhullar hasresponsibilities as a director of the Board, he will be unable to exercise thoseresponsibilities. It is submitted that Mr Bhullar has the support of a significantproportion of members who elected him as a director.[39] However, as against that, the interests of the members would be protected by aperson elected to fill the vacancy on the Board (which the rules provide for).[40] I do not consider that there is any particular novelty and importance in thequestions involved in the appeal, nor is there a public interest in the proceeding.[41] As to the prospect of success on appeal, Mr Beck submits that there are issuesconcerning the proper exercise of exclusion powers by bodies such as the Society. Hesubmits that those issues are clearly arguable and the appeal is not one that is lackingany prospect of success. However, while that submission is made, the notice of appealsimply repeats the grounds of review argued in this Court. The memorandum insupport does not in fact address the strength of the appeal.[42] Weighing all the above factors, I consider that the balance of conveniencefavours the refusal of interim relief.[43] The application for a stay or interim relief is refused.Costs[44] I did not hear counsel on costs. Accordingly, I reserve costs. I invite counselto agree costs and to file a joint memorandum. Such memorandum should be filedwithin 30 working days of the date of this judgment. In the event that agreementcannot be reached, the Society is to file and serve its memorandum within five workingdays of the date for the joint memorandum. Mr Bhullar is to file and serve hismemorandum within a further five working days. Memoranda should not exceed fourpages.___________________________________Gordon J