KINGSLAND INSTITUTE OF NZ LIMITED V THE SECRETARY OF LABOUR HC AK CIV-2010-404-6186

KINGSLAND INSTITUTE OF NZ LIMITED V THE SECRETARY OF LABOUR HC AK CIV-2010-404- 6186 1 October 2010IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2010-404-6186IN THE MATTER OF the Judicature Amendment Act 1972 AND IN THE MATTER OF the Immigration Act 1987 AND IN THE MATTER OF the Declaratory Judgments Act 1908 BETWEEN KINGSLAND INSTITUTE OF NZ LIMITED Applicant AND THE SECRETARY OF LABOUR Respondent Hearing: 30 September 2010 Counsel: J R Billington QC and S J Corlett for Applicant A R Longdill for Respondent Judgment: 1 October 2010 at 4.30pm I direct the Registrar to endorse this judgment with a delivery time of 4.30pm on the 1st day of October 2010.RESERVED JUDGMENT OF MACKENZIE J[1] This is an application for interim relief under s 8 of the Judicature Amendment Act 1972. The plaintiff (Kingsland) has since 2002 operated a private education training facility in Auckland. The Institute is registered with the New Zealand's Qualification Authority (NZQA) under the Education Act 1989. It operates two campuses, in Auckland central city and Panmure, and employsapproximately 40 staff. The majority of its students are international students who come to New Zealand to study and further their education. It offers nine courses of study, principally in the areas of business and cookery. [2] Many of the international students who study at the Institute require some form of immigration permit to allow them to study in New Zealand. Kingsland's standing as an education facility accredited by NZQA is relevant for immigration purposes, in that applicants for immigration permits to study at an accredited facility are subject to specific procedures. [3] The respondent is responsible for Immigration New Zealand, a division of the Department of Labour. Immigration New Zealand is responsible for the issue of the permits which the students require. It relies on applicants and other persons providing information to visa officers or immigration officers to provide honest and complete answers to information. [4] As a result of information received, Immigration New Zealand commenced an investigation into a number of visa and permit applications for students at Kingsland. On 21 July 2010 Mr Lepcha, a licensed immigration adviser, and Mr Donald Han, the General Manager of Kingsland were arrested. Mr Lepcha faces two charges and Mr Han five charges. The charges against Mr Lepcha, and two of the charges against Mr Han, relate to one student of Kingsland. The essence of the most serious allegation against Mr Han is that he provided false and misleading information to Immigration New Zealand by issuing a receipt indicating that Kingsland had been paid over $17,000 in fees by that student when that was not the case. The second charge in respect of that student alleges that Mr Han provided immigration advice to the student without being licensed under the Immigration Advisers Licensing Act 2007 or being exempt from the licensing requirement. The other three charges against Mr Han relate to a second student. It is alleged that Mr Han deposited $3,000 into the student's bank account so that a bank statement would be available showing that, with other funds available to the student, the student had funds in excess of $10,000. The money was allegedly subsequently withdrawn. Mr Han faces charges of supplying the bank statement to an immigration officer knowing it was false and misleading, providing immigrationadvice to the student without being licensed, and altering and forwarding the Immigration New Zealand an application form signed by the student. [5] On 23 July 2010 Mr Cantlon, Group Manager Service Delivery with Immigration New Zealand issued the following instruction.Pursuant to section 13BA of the Immigration Act 1987 and acting under delegated authority from the Chief Executive of the Department of Labour, I hereby give the following General Instructions as to the order and manner of processing of student visa and permit applications under Government immigrant policy:1. Student visa and permit applications to attend Kingsland Institute of New Zealand are not to be processed until further notice.[6] Kingsland became aware that applications for its students were not being normally processed as a result of information received on or about 13 July and subsequently on 21 and 22 July. Kingsland's lawyer contacted Immigration New Zealand and were advised on 23 July of the issue of the general instruction. Subsequent representations from Kingsland's lawyer to Immigration New Zealand to have the ban lifted were not successful. This proceeding, with the application for interim relief, was issued on 17 September 2010. In a minute issued on 20 September 2010 Lang J fixed a timetable and fixed this date for hearing the application for interim relief. [7] Jurisdiction to grant interim relief arises under s 8 of the Judicature Amendment Act 1972. The approach to be adopted on an application for interim relief was described by the Court of Appeal in Carlton & United Breweries Ltd v Minister of Customs.1 The Court must be satisfied that the order sought is reasonably necessary to preserve the position of the applicant. If that condition is satisfied the Court has a wide discretion to consider all of the circumstances of the case, including the apparent strengths or weaknesses of the claim of the applicant for review and all the repercussions, public or private, of granting interim relief. Counsel for the respondent also refers, because this is an immigration case, to the decision of this Court in Esekielu v Attorney-General,2 where Hammond J suggested1 Carlton & United Breweries Ltd v Minister of Customs [1986] 1 NZLR 423.2 Esekielu v Attorney-General (1993) 6 PRNZ 309.that the threshold test may differ depending on the area of law involved and that in an immigration case an applicant for relief should not be required to demonstrate a very strong probability of success, but rather there is "a real contest between the parties, and that the applicant has a respectable chance of succeeding in that contest". 3[8] The threshold test, whether the order sought is reasonably necessary to preserve the position of the applicant, involves a consideration of Kingsland's position before the challenged action was taken, and its position as at the time of the hearing of this application. Prior to July 2010, applications by students of Kingsland for permits and visas were apparently being routinely considered by Immigration New Zealand. By reason of the imposition of the ban, they are no longer being processed. The evidence in support of the application was contained in an affidavit and reply affidavit by Ms Hou, a director of Kingsland. She is married to Mr Han. Her evidence as to the effect on the Institute is that the immediate effect of suspension on the Institute was as follows:34. As soon as the blanket suspension was imposed, I started receiving a number of enquiries from the Institute's students requesting withdrawal from their courses and seeking refunds. In addition, I also received continual enquiries from local and overseas agents expressing their concern that as a result of the Institute being under investigation and the suspension that the school's good reputation had been damaged and, as such, their clients would be looking to study elsewhere.[9] She further says:53. The effect of suspension on the Institute has been enormous. The school's reputation has been severely damaged, it's finances have been so affected that if the suspension is not lifted, it is likely within the next few weeks, the Institute will have to consider its continued future. 54. To date, as a direct result of the suspension, I confirm that the Institute has had 75 students indicate they wish to withdraw and/or have lodged withdrawal forms seeking to withdraw from their courses and requesting that their course fees be refunded. As at the date of this affidavit, approximately $700,000 has been refunded on account of these students. In addition, I estimate that at least another 100 prospective students both locally and from overseas have decided not to study with the school because of the suspension. The3 At 313.financial cost to the Institute in respect of those students is approximately $1.4m. 55. Therefore at this time, I estimate the financial costs to the Institute arising from INZ's suspension to date is approximately $2.1m. It must be noted that this estimated loss is continuing every day that the suspension continues in place. I estimate that another 50 students will withdraw from their courses and request refunds at a further cost to the Institute of approximately $700,000 within the next fortnight. 56. The longer the suspension remain, the greater the likelihood that the Institute will be forced to consider closing its doors.[10] Many of the effects which Ms Hou describes are effects which will have been suffered as a result of the publicity surrounding the charges laid, and the imposition of the ban. They are not direct consequences of the imposition of the ban per se. Damage suffered in that way is not damage which could be ameliorated or removed by any interim relief which this Court could properly grant. The only relief which may be considered would be some form of relief directed to insuring that the general instruction was not to be implemented pending the hearing of the proceeding. [11] The issuing of the general instruction will have a direct effect on applications by students involving proposed study at Kingsland while the general instruction is in force. Ms Hou's evidence is that over the last two years Kingsland has enrolled about 300 to 400 students per annum. Mr Billington QC indicated from the bar that courses commence throughout the year, so that enrolments might be expected to be spread throughout the year. [12] On this basis, I accept that it is likely that the general instruction will have an effect on students wishing to enrol at Kingsland, and consequently on Kingsland itself. I accordingly find that the threshold test, that interim relief might potentially be reasonably necessary to protect the position of the applicant, is established. I leave for later consideration, when dealing with the repercussions of granting or refusing relief, whether the potential effect on Kingsland may appropriately be the subject of interim relief, and the potential effect of any interim relief. [13] The second aspect is a consideration of all the circumstances of the case, including the apparent strengths or weaknesses of the claim for review and all therepercussions, public or private, or granting interim relief. The essence of the applicant's claim is that the imposition of a blanket ban on processing all applications for study visas wishing to enrol in the applicant's institute is an unlawful exercise of the powers under s 13BA of the Act. Counsel submits that this provision relates to the processing of individual applications for visas and that it does not authorise a blanket ban on the educational establishment. The focus on the section is on the applicant for the visa, and not, as has been the focus in this case, on the accredited educational institute. Counsel for the respondent submits that the grounds of challenge do not have a respectable chance of success in that the powers under s 13BA are broadly defined and that the general instruction was clearly within the scope of these powers. I consider that the question whether the general instruction comes within the scope of s 13BA is at least arguable. [14] There is a subsidiary point that the general instruction was issued by Mr Cantlon under delegated authority. The applicant submits that the evidence fails to establish a proper chain of delegation. Counsel for the respondent submits that s 41(5) of the State Sector Act 1998 creates a statutory presumption of the validity of the delegation and that Kingsland has presented no proof to the contrary to displace this statutory presumption. This aspect was not pursued in oral argument at the hearing, and I need not address it. [15] Counsel for the respondent further submits that regardless of the merits of the substantive challenge to the general instruction, this application for review cannot succeed because it is subject to the privative provisions of s 13BA(7)(b) of the Act. Mr Billington submits that the general instruction is outside the proper scope of s 13BA, so that the issuing of it was without jurisdiction. He submits that the privative provisions do not apply in that situation, and relies on Zaoui v Attorney-General (No 2). 4 Ms Longdill contests that proposition, and submits that s 13BA(7)(b) does extend to prevent a challenge on jurisdictional grounds. She notes that there was a specific exclusion of a challenge based on lack of jurisdiction from the privative clause in issue in Zaoui. I do not propose to examine this question in detail on this application. It is sufficient to observe that this Court will carefully4 Zaoui v Attorney-General (No 2) [2005] 1 NZLR 690 (CA).examine the scope of a privative provision, and that such provisions will generally be strictly construed. [16] For these reasons I do not consider that the applicant's claim can be said to have no prospects of success. I consider that, at the least, it meets the test proffered by Hammond J in Esekielu, namely that it raises a real contest between the parties and that the applicant has a respectable chance of succeeding in that contest. Beyond that, I should not go. [17] I must next consider that the repercussions, both public and private, of granting relief. I consider first the private repercussions, for Kingsland, of granting or not granting relief. As I have earlier noted, much of the damage which has apparently been suffered and which continues to be suffered by Kingsland is a result of the publicity rather than of the processing ban itself. I have however accepted that there is a potential effect, in the interim, on new applicants. [18] An important aspect is that any interim relief directed to the removal of the general instruction would not of itself lead to a grant of visas or permits to applicants. All that the Court could do would be to provide that the general instruction should not be acted on in the interim. That would have the effect that applications would need to be processed. That processing would be subject to s 13BA(1), under which the order and manner of processing any application for a visa or permit is a matter for the discretion of the officer concerned. Indeed, subs (6) gives that discretion priority over the general instruction. It is possible, indeed likely, that Immigration New Zealand's concerns over the situation at Kingsland, and the reliability of information from Kingsland might lead to a scrutiny of individual applications which might affect the timeframe of their processing. Mr Billington properly acknowledged that this was so. The concerns might lead to the rejection of individual applications. It is therefore unlikely that the position of the applicant would be substantially improved if interim relief were granted to provide that the general instruction should not be acted upon in the interim. [19] The converse of the proposition that the granting of interim relief in respect of the general instruction would have little effect on the position of the applicantmight seem to be that the public repercussions, for Immigration New Zealand, would also be small. Ms Longdill submits that the public repercussions of granting relief are severe in that the integrity of New Zealand's immigration system and in particular the foreign student market (worth $2 billion a year) is of paramount importance. The importance of the foreign student market is not in question. What I must consider is the potential effect of the granting of relief. Immigration New Zealand has means available to it to protect the integrity of its processes, and of the foreign student market, which do not depend on the general instruction. [20] In response to questions from me as to why interim relief in respect of the general instruction would have serious repercussions for Immigration New Zealand, in the light of the facts that Kingsland's position is known, that officers handling visa or permit applications may properly take that into account, and that they may properly scrutinise applications where reliance is placed upon information from Kingsland, Ms Longdill submitted that visa and permit applications must be processed by a large number of different officers, both in New Zealand and overseas. She submits that there is a danger than applications might be granted without proper scrutiny in the absence of the general instruction. [21] I find that submission persuasive. Immigration New Zealand does need to be in a position to ensure that the issues which have arisen with regard to Kingsland are properly taken into account in all visa and permit applications related to study at that institution. It would not be appropriate for this Court to grant any interim relief which would have the effect of preventing Immigration New Zealand from informing all of its officers throughout the world of material considered relevant by Immigration New Zealand to the processing of applications. If interim relief were granted in respect of the general instruction, then it would be necessary for Immigration New Zealand to advise its officers by some other means of the relevant information. [22] For these reasons, I consider that the granting of interim relief would lead to considerable inconvenience to Immigration New Zealand, through the need to advise its officers of the relevant situation concerning Kingsland by other means. Conversely, the granting of interim relief would be likely to bring little benefit toKingsland, since the issues raised in relation to Kingsland, while they persist, are likely to result in at least a significant delay in the processing of applications. Kingsland's concern is that students who may wish to apply for study at Kingsland will apply for study at other institutions. That possibility seems likely to continue if the issues surrounding applications for study at Kingsland are addressed by Immigration New Zealand, as they properly could be, by means other than the general instruction. [23] For these reasons, I consider that, to apply the test often applied to such applications, the balance of convenience favours the refusal of interim relief. [24] The application for interim relief is accordingly refused. [25] Costs of this application are reserved."A D MacKenzie J"Solicitors: Brookfields Lawyers, PO Box 240, Auckland and J R Billington QC, PO Box 4338, Auckland for Applicant Crown Solicitors, PO Box 2213, Auckland for Respondent