Rabson v Transparency International (New Zealand) Inc.

• Jurisdiction: New Zealand
• Judge: Mallon J
• Judgment Date: 03 March 2015
• Neutral Citation: [2015] NZHC 334
• Docket Number: CIV 2014-485-10920
• Court: High Court
• Date: 03 March 2015

In The Matter of an application for judicial review under the Judicature Amendment Act 1972 and s 27(2) of the New Zealand Bill of Rights Act 1990

Between

Malcolm Edward Rabson and Richard John Creser

Plaintiff

and

Transparency International (New Zealand) Inc

Defendant

[2015] NZHC 334

CIV 2014-485-10920

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

Application to strike out an application for judicial review of how an incorporated society had handled an inquiry into an alleged breach of its charitable purposes and concerns about a potential conflict of interest — inquiry had been made by a person who was previously declared to be a vexatious litigant and was said to be made on behalf of the plaintiffs who were members of the society — society had passed inquiry to its Ethics Committee for consideration, which dismissed the matter — whether the society had been discharging purely administrative and management functions which were not generally reviewable.

Appearances:

M Rabson appearing in person

D Kalderimis and K Yesberg for the Defendant

JUDGMENT OF JUDGE Mallon J

Table of Contents

Introduction	[1]
The pleadings	[2]
Affidavit evidence	[5]
Approach to the evidence	[5]
TINZ	[9]
The inquiry	[15]
Amenable to review?	[19]
Fair process?	[23]
Frivolous and vexatious?	[26]
Other matters	[27]
Result	[32]

Introduction

1 Transparency International (New Zealand) Inc (TINZ) applies to strike out Mr Rabson and Mr Creser's statement of claim seeking judicial review. Their claim relates to how an enquiry initially made by Mr Siemer was dealt with by TINZ. TINZ says that the application for judicial review discloses no reasonably arguable cause of action, is frivolous and vexatious and is otherwise an abuse of the Court's process, and it is in the interests of justice to make the strike out order. The strike out application is opposed by Mr Rabson and Mr Creser.

The pleadings

2 The statement of claim, in summary, pleads that:

• (a) TINZ is an incorporated society, which receives the majority of its funding from the New Zealand Government (the Government), which has been granted charitable status for the purpose of advancing education, and which has educational objectives as stated in its rules;

• (b) Mr Rabson and Mr Creser each paid the $80 membership fee;

• (c) on 15 November 2013 Mr Siemer made an enquiry of Transparency International (TI), on behalf of Mr Rabson and Mr Creser, concerning the government's control of TINZ and conflicts of interest of its executive director (Ms Snively);

• (d) Mr Rabson and Mr Creser were concerned about Government funding of TINZ, that TINZ partnered with the Government for a survey that found no corruption by the Government and that Ms Snively was trading on a fictitious name to promote her consultancy services;

• (e) on 4 December 2013 TI advised Mr Siemer that national chapters were responsible for their own funding and on 27 February 2014 TI advised that the TINZ Ethics Committee (the Ethics Committee) would be the best place to address the matter;

• (f) on 28 February 2014 Mr Siemer was advised by TINZ (Mr Sheard) that the Ethics Committee was considering the matter and would report back;

• (g) on 1 April 2014, by an email copied to TI Secreteriat staff and Mr Siemer, Mr Sheard presented an unauthored, unreasoned, undated and unpublished dismissal of the matter;

• (h) two of the three members of the Ethics Committee had decided to dismiss “out of hand” and “ignore completely” the matter;

• (i) by an email dated 22 April 2014, Mr Rabson and Mr Creser sought review/appeal of the dismissal on the grounds that the process breached fundamental principles of due process and natural justice;

• (j) by an email dated 24 April 2014, TI advised that its Terms of Reference do not allow any review to the Transparency International Board Ethics Committee unless TINZ allowed such an appeal in its Code of Ethics or Conduct;

• (k) the TINZ Code of Ethics or Conduct does not allow such a review.

3 The statement of claim pleads two causes of action:

• (a) The Ethics Committee breached natural justice because its process lacked transparency or due process (in that two of three members sought to dismiss the complaint out of hand, no one conducted any official inquiry, and the Ethics Committee concealed its process even from its members).

• (b) The Ethics Committee's approach involved predetermination and was procedurally improper because it did not involve talking to either side officially, did involve talking to the Executive privately and off the record, sought to have Mr Rabson and Mr Creser withdraw the complaint, reported only to the Board which the Executive controlled, and the chair of the Ethics Committee stated that the accusation of conflict of interest was false even though TI had confirmed that the company being promoted did not in fact exist.

4 The relief sought is an order quashing TINZ's dismissal of the complaint, a direction that TINZ properly consider it according to the principles of due process and natural justice and a direction “advising the [G]overnment that [TINZ] is in breach of the criteria by which it was granted charitable status”.

Affidavit evidence

Approach to the evidence

5 A strike out application proceeds on the basis that the pleaded facts can be proved. The Court is, however, entitled to receive affidavit evidence on matters which are not in dispute 1

6 An affidavit has been filed by Ms Claire Johnstone, the Deputy Chair of TINZ, in support of the strike out application. To some extent the affidavit goes beyond matters that are appropriately considered on a strike out application. This includes the evidence that responds to Mr Siemer's complaint 2 However, the affidavit also includes information that is appropriately considered on a strike out application. In this category are the emails and other communications referred to in the statement of claim, together with the TINZ rules. Also in this category is information about the membership status of Mr Rabson, Mr Creser and Mr Siemer: Mr Rabson and Mr Creser were members but rejoined in April 2014; Mr Siemer has never been a member of TINZ.

7 An affidavit was also filed by Stanislas Cutzach, the Governance Manager at TI in support of the strike out application. This affidavit discusses a review that was sought of the Ethics Committee decision. I have not considered it because I understand there is a dispute between the parties as to whether a review was available and/or pursued.

8 Affidavits from Mr Siemer, Mr Rabson and Mr Creser dated 6 November 2014 were filed in support of the opposition to the strike out application 3 These affidavits provide personal perspectives about various matters that are not appropriately considered on a strike out application. For example, they include matters of submissions or comment and mention further concerns beyond those relied on in the statement of claim.

TINZ

9 As set out in its rules, TINZ has general and specific objectives. The general objectives are:

• 4.1.1. to promote transparency, good governance and ethical practices in all sectors of society in New Zealand;

• 4.1.2. to promote ethical business practices by New Zealand business offshore, and transparency and good governance in our region;

• 4.1.3. to contribute to the international effort to reduce corruption and promote good governance and ethical business practices[.]

10 The specific objectives include:

• 4.2.1. to raise public awareness and advance the general education of the public in matters relating to the nature and consequences of corruption in business transactions, including development initiatives and existing legislation and other guidelines which exist to combat corruption;

• 4.2.2. to promote, undertake or commission research for the public benefit in matters relating to the nature and consequences of corruption in business transactions and the cost-effectiveness of development initiatives and to disseminate the useful results of any such research;

  …

• 4.2.5. to give the legislative and public bodies and others, facilities for conferring with and ascertaining the views of persons and institutions engaged in combating corruption as regards matters directly or indirectly affecting that activity;

  …

11 Its “over-arching principles” are that:

• 4.3.1. the Society is politically non-partisan; and

• 4.3.2. the Society will not be involved in investigating or exposing individual cases.

12 Under the rules any organisation or individual can apply to be a member of TINZ. The Board considers the application in accordance with any criteria in the rules, or if no such criteria exist, then at its discretion. A member may resign by giving written notice. Membership may also be terminated by the Board in its sole discretion after allowing the member a reasonable opportunity to respond to the Board's concerns.

13 The rules provide for the holding of annual and special general meetings. Members of the Board are elected. The Board conducts and manages the affairs of TINZ. Board meetings are chaired by the Chairperson, or the Deputy Chairperson in the Chairperson's absence, and failing that the directors may appoint a person to act as Chairperson. The Board has the power to (amongst other things) make rules and regulations as it thinks expedient, to approve any work programme and to delegate any of its powers to any member at any time and on such terms as it decides. Except as may be required by the rules, the Board determines its own procedures.

14 The rules provide that no pecuniary profit may be made by any member of TINZ. This is subject to a number of exceptions.

The inquiry

15 The inquiry dated 15 November 2013 to TI was written by Mr Siemer who described himself as “Editor”. He said that he had discovered that TINZ receives up...