ANZ Sky Tours Ltd v New Zealand Tourism Board Trading as Tourism New Zealand

JurisdictionNew Zealand
JudgeCull J
Judgment Date30 April 2019
Neutral Citation[2019] NZHC 925
CourtHigh Court
Docket NumberCIV-2017-485-944
Date30 April 2019
Between
ANZ Sky Tours Limited
Applicant
and
New Zealand Tourism Board Trading as Tourism New Zealand
Respondent

[2019] NZHC 925

CIV-2017-485-944

IN THE HIGH COURT OF NEW ZEALAND

WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE WHANGANUI-A-TARA ROHE

Judicial Review — tour operator for Chinese tourists — recommended revocation of Approved Destination Status accreditation — whether decision of respondent were reviewable under the Judicial Review Procedure Act 2016 — mistake of fact as a reviewable ground — breach of natural justice

Appearances:

J R Billington QC and L George for the Applicant

L Clark and B A Mathers for the Respondent

JUDGMENT OF Cull J

TABLE OF CONTENTS

Introduction

[1]

The issues

[5]

Summary

[6]

The events leading to Tourism NZ's recommendation

[7]

The Arrowtown incident

[11]

The parties' communications from midnight 14 March 2017

[14]

Tourism NZ's status

[24]

The ADS system and the Code of Conduct

[25]

Tourism NZ's response to Donghu's complaints

[34]

Tourism NZ's decisions

[36]

Issue 1 – Are Tourism NZ's decisions reviewable?

[41]

Legal principles

[47]

Discussion

[53]

Conclusion

[60]

Issue 2 – Are there grounds to judicially review the decision?

[61]

Mistake of fact

[64]

Legal principles

[66]

Discussion

[68]

Conclusion

[76]

Breaches of natural justice

[78]

Failure to investigate

[85]

Failure to consider all facts

[99]

Failure to disclose information

[111]

Failure to give reasons for revocation

[118]

Conclusion

[125]

Unreasonableness/Proportionality

[129]

Legal principles

[131]

Discussion

[141]

Conclusion

[150]

Issue 3: What remedy, (if any), is appropriate?

[151]

Relief

[152]

Costs

[154]

Introduction
1

ANZ Sky Tours Limited (Sky Tours) is accredited as an inbound tour operator to conduct tours in New Zealand for Chinese tourists. The accreditation is important to its reputation and commercial standing. It has been marketing and selling New Zealand tourism products and services to Chinese visitors since 2000. 1 Since 2006 it has been operating in Australia as well as New Zealand and the South Pacific. Only approved New Zealand inbound tour operators who hold the accreditation can operate tours for Chinese tourists who travel to New Zealand under Approved Destination Status (ADS) visas. Tourism New Zealand (Tourism NZ) manages and oversees the ADS accreditation system. Only 37 tour operators are approved.

2

In 2017, Tourism NZ recommended to the Chief Executive of the Ministry of Business, Innovation and Employment (MBIE) that Sky Tours' ADS accreditation be revoked for breaches of the Code of Conduct. 2 If its ADS accreditation were revoked, Sky Tours would not be permitted to operate tours for Chinese ADS visa travellers.

3

Sky Tours claims that Tourism NZ made reviewable errors in the course of making three decisions, when it concluded that Sky Tours was in serious breach of the

Code of Conduct and recommended revocation of its ADS accreditation. Sky Tours says these decisions and consequent recommendations are judicially reviewable and should be quashed, and Tourism NZ be directed to reconsider the matters
4

Tourism NZ opposes the application for judicial review and raises the preliminary issue of whether its decisions, which they say are preliminary and recommendatory only, are amenable to judicial review.

The issues
5

The issues raised in this application are:

  • 1. Are Tourism NZ's decisions reviewable?

  • 2. Are there grounds to judicially review the decisions?

    • — were there mistakes of fact and did the process breach natural justice; and

    • — was the decision unreasonable, disproportionate, and/or substantively unfair. 3

  • 3. If so, what remedy (if any) is appropriate?

Summary
6

I have found that the final recommendation decision made by Tourism NZ is reviewable. I have also found that Tourism NZ made reviewable errors in making that decision and recommendation to revoke Sky Tours' ADS accreditation. Those errors are:

  • (a) Breaches of natural justice. Tourism NZ failed to investigate and consider all the facts, made mistakes of fact, failed to disclose the original complaints to Sky Tours, and failed to give reasons for its revocation recommendation.

  • (b) Disproportionate penalty. Tourism NZ's revocation recommendation was disproportionate in the circumstances.

The events leading to Tourism NZ's recommendation
7

In late 2016, Sky Tours entered into a commercial relationship with a China-based travel seller, Shanghai Donghu International Travel Agency (Donghu), appointing Sky Tours to act as Donghu's New Zealand ADS-approved operator. Under the written agreement for services, Sky Tours would, amongst other things, book and arrange New Zealand land tour components for tour groups promoted and booked by Donghu, including travel coaches, accommodation, meals and tour guides. Donghu was required to pay a fee for these services. Up until March 2017, Sky Tours organised and ran 49 successful tours for Donghu.

8

This case involves tour group 0310D (the tour group). Donghu contracted Sky Tours to be the tour group's inbound tour operator. Sky Tours was, therefore, the ADS-approved operator arranging and managing the tour.

9

On 11 March 2017, the tour group arrived in New Zealand for a nine-day tour. The tour included a stop-over in Queenstown, scheduled for three nights from 13 March 2017. Ms Liu was the appointed tour guide to accompany the tour group. Ms Liu was a contractor for Sky Tours and was herself an ADS-approved tour guide. The tour group also travelled with a Chinese speaking tour guide, Ms Wang. Ms Wang travelled with the group to and from China. She was employed by Donghu and is not ADS approved.

10

On 12 March 2017, the tour group was scheduled to stay at the Kingsgate Hotel in Greymouth. When the group arrived, the hotel did not have any rooms available and Sky Tours had to, and did, arrange alternative accommodation.

The Arrowtown incident
11

On the afternoon of 13 March 2017, the tour group was scheduled to spend approximately 30 minutes in Arrowtown, with one and a half hours scheduled for the drive back to Queenstown where the group was booked to stay at the Crowne Plaza Hotel. While the tour group was in Arrowtown, Ms Liu left the group and travelled to Queenstown on the tour bus to check that the Queenstown accommodation was confirmed and available.

12

Tourism NZ claims Ms Liu did not tell the members of the tour group where she was going or why. Sky Tours claims that Ms Liu was made aware of a problem with the booking at the Crowne Plaza and travelled ahead to Queenstown with the coach and driver to resolve this, advising Ms Wang of her plans. The coach returned to Arrowtown approximately one and a half hours later, without Ms Liu, and picked up the tour group, returning them to Queenstown where the group checked into the Crowne Plaza Hotel for three nights. Ms Liu was not present when the tour group checked in. There were no further scheduled activities for that evening and the tour group did not see Ms Liu again that day.

13

Following communications between Sky Tours and Donghu overnight, at midday on 14 March 2017 Ms He, the sole director and majority shareholder of Sky Tours, cancelled the tour group's booking at the Crowne Plaza Hotel. The cancellation arose as part of a commercial dispute between Sky Tours and Donghu. It is the events leading up to and following this cancellation of the accommodation that is at the core of these proceedings.

The parties' communications from midnight 14 March 2017
14

Although the commercial relationship between Donghu and Sky Tours was initially positive and successful, in early 2017 it soured, because of disputes over late payments by Donghu and disagreements over tour group and business arrangements made by Sky Tours (the commercial dispute).

15

At approximately midnight (Sydney time), Donghu and Ms He from Sky Tours exchanged a series of WeChat messages. The communications were prompted by a dispute about the failure of Donghu to pay invoices for Sky Tours services on time, contrary to their contract. The parties then entered into an argument about the conduct of the tour group's trip to date. Between 12.23 am and 12.51 am, the following messages were sent: 4

Donghu: … based on the current situation, I have to find another inbound operator to finish the rest of the itinerary and I'll seek compensation from you for the actual costs.

You had abandoned the tour in Arrowtown for more than 2 hours this afternoon, which the visitors had already questioned us. This is why we have to take action to protect our clients. It's impossible for us to risk our clients in being abandoned and carry on the rest of the itinerary with you.

Sky Tours: Your tours were abandoned in South Africa is publicly known.

The really interesting part of the show is yet to come. A person like you would want to play games (with me)?

Donghu: Ok ok, can the tours be run normally?

Sky Tours: Impossible

We will take action today to protect our right.

16

The following sequence of timing of the communications among the parties and Tourism NZ is important to an understanding of the events on 14 March:

Midnight 14 March: At or around midnight, Donghu arranged a new tour operator to take over the tour group and booked a day trip for the tour group to Doubtful Sound. After midnight (Sydney time) the above WeChat communications took place between Donghu and Sky Tours where Donghu alleges Sky Tours “abandoned the tour in Arrowtown for more than 2 hours this afternoon” and that it has to take action to “protect our clients”.

3.00 am: Sky Tours tells Ms Liu, the tour guide, to rest in the...

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