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High Court of New Zealand Decisions |
Last Updated: 8 June 2020
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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
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CIV-2019-404-1183
[2019] NZHC 3499 |
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UNDER
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Section 116 of the Real Estate Agents Act 2008
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IN THE MATTER
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Of an appeal against a decision of the Real Estate Agents Disciplinary
Tribunal
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BETWEEN
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REAL ESTATE AGENTS AUTHORITY
Appellant
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AND
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GARY STONE
First Respondent
SUSAN LIM
Second Respondent
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Hearing:
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10 December 2019
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Counsel:
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C Paterson for Appellant
B Upton and L B Harrison Court appointed Contradictor No appearance for
Respondents
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Judgment:
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23 December 2019
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JUDGMENT OF WHATA J
This judgment was delivered by me on 23 December 2019 at 2.00 pm,
pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date: ...............................
Solicitors: Meredith Connell, Auckland
REAL ESTATE AGENTS AUTHORITY v STONE [2019] NZHC 3499 [23 December 2019]
[1] The Complaints Assessment Committee (CAC) twice decided to take no further action on a complaint Mr Stone made against Ms Lim. Mr Stone claims that Ms Lim made false allegations of sexual abuse about him to, among others, the Real Estate Agents Authority (REAA). The Disciplinary Tribunal (the Tribunal) has twice reversed the decision of the CAC. The Tribunal found, in short, that the CAC overreached by assessing the substantive merits of Mr Stone’s complaint.1 The REAA appeals against this second decision.
[2] With the benefit of argument, the key issue on appeal is: did the Tribunal apply the wrong threshold test?
Background
[3] Save in two respects (which I will address briefly below), the background was accurately summarised by the CAC in its decision. I therefore adopt that background as follows:2
- 3.3. In 2008 the Complainant [Mr Stone] was a tutor/team leader of the real estate faculty at the Open Polytechnic in Auckland. At the time he held an Agent license. The Licensee [Ms Lim] was a student of the Open Polytechnic studying to become a real estate salesperson. Although not the Licensee's tutor, the Complainant was asked to assess some of the Licensee's work and conducted a face to face assessment with the Licensee. The Licensee failed that assessment.
3.4. The Complainant alleges that around this time the Licensee invited him out to dinner which the Complainant declined. A few days later the Complainant was approached by his manager and told the Licensee had accused him of:
3.5. The matter was dealt with in house by the Open Polytechnic in Auckland and as a result the Complainant had no further contact with the Licensee and continued to work for the Polytechnic. The Complainant claims his manager at the time, Ms Sue Matehaere and the Open Polytechnic expressed no concern with his conduct.
1 Stone v Real Estate Agents Authority [2019] NZREADT 20.
3.7. On 14 December 2015, the Licensee lodged a complaint with the Authority about, among other matters, the alleged incident in 2008 while the Complainant was at the Open Polytechnic. The Licensee's complaint made allegations about:
"did sexual abuse and demanding extra cash ... I gave him some extra cash but Open Polytechnic did not receive the money. Gary Stone interfered a lot for my obtaining my real estate diploma. I believe that all this TAFE situation is Controlled by Gary Stone."
3.8. On 15 December 2015, the Licensee made a complaint in similar terms to the New Zealand Qualifications Authority (NZQA). NZQA responded to the Licensee's complaint by way of letter dated 22 January 2016. NZQA considered the concerns regarding the course materials had been resolved and that any allegations of sexual harassment/abuse were matters for the Police. As such, NZQA determined not to conduct an investigation in to the complaint.
3.9. On 3 February 2016, an Early Resolution Facilitator from the Authority spoke to the Licensee. The Licensee gave further details of her complaint, including that:
(a) the Complainant told her that he wanted to come to her house; and
(b) took her in to a carpark where he touched her back.
3.10. In relation to the allegation of inappropriate sexual conduct, the Authority explained the importance of reporting any allegations of sexual abuse to the Police.
3.11. On 4 February 2016, the Authority responded to the Licensee's complaint by way of letter. The Authority decided to take no further action in respect of the complaint. The Authority's response noted its understanding that the matter about the course fee and materials was
now dealt with. In respect of the remaining allegations, the Authority's position was:
"The allegations relating to Mr Stone's inappropriate behaviour are serious and we refer you to the Open Polytechnic, being the appropriate organisation to investigate this matter further. You can request the Open Polytechnic to advise the Authority of the outcome of their investigation. The Authority can then re-consider this matter and decide if any further action is required on our part. We also suggest you report your allegations of Mr Stone's inappropriate behaviour to the Police."
3.12. Accordingly, the matter was not referred to a Complaints Assessment Committee and the Authority did not conduct any investigation at that time into substantiating the Licensee's complaint.
3.13. The Complainant, on learning of the complaint made about him, obtained a copy of the Licensee's complaints from the Authority and NZQA and on the 7 June 2016, he made this complaint to the Authority about the actions of the Licensee.
3.14. In his complaint, the Complainant set out his recollection of events in 2008 (the time of the alleged sexually inappropriate conduct) and 2015 (the time of the alleged course fee and materials conduct). The Complainant strongly disputed the truth of the allegations. As he put it:
"The Licensee has made untrue, and baseless allegations against me, comprising theft, corruption, assault, sexual abuse and abduction. These allegations are totally vindictive and designed to cause me as much embarrassment, humiliation and loss of reputation in the eyes of the REAA, NZQA and my employer, TAFE College."
3.15. The complaint alleges breaches of Rules 6.3 (bringing the profession into disrepute) and 7.3 (not to use complaints procedures for improper purposes) of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 (the Rules). The Complainant suggested the breaches of the Rules were so egregious as to amount to misconduct under s73 of the Act.
3.16. The Complainant insisted his complaint be considered by the Authority and not dealt with by way of compliance letter.
3.17. The complaint was referred to the Committee at the request of the Complainant. The Committee initially decided not to inquire into the complaint.
3.18. The Complainant successfully appealed this decision and the Real Estate Agents Disciplinary Tribunal (the Tribunal) referred the matter back to the Committee with a direction that the Committee inquire into the complaint. On 15 June 2017, the Committee authorised the Authority investigator to assist the Committee with its inquiry.
3.19. On 10 July 2017, the Licensee was advised of the complaint against her.
3.20. On 17 July 2017, the Licensee replied and advised that she would email the Investigator when she had permission from the New Zealand Police (the Police) to use a police interview room. She would only meet at a police station, allegedly for her security and both the Investigator and the Authority Office Administrator were to be required to bring photo ID's and a driver's license or passport. The Licensee indicated she would record the interview and a police officer would need to be present for the duration of the interview.
3.21. The Investigator followed up this correspondence on the 28 September 2017, he had been unavailable prior to this date, and asked the Licensee if she had made a complaint to the Police.
3.22. On 29 September 2017, the Licensee replied she had complained to the Police and stated she would obtain the date she did so and respond by the end of October 2017.
3.23. On 7 October 2017, the Licensee sent the Investigator an email outlining the complaint she had made against the Complainant. The Investigator asked for proof she had made this complaint. The Licensee replied that she made the complaint to the Police in January 2016.
3.24. On 9 October 2017, the Investigator again requested a meeting with the Licensee. The Licensee responded saying she would meet once she had received confirmation of her complaint from the Police reiterating that she wished the meeting to take place at a police station.
3.25. On 27 October 2017, the Investigator again contacted the Licensee and asked if she had received anything from the Police. The Licensee replied that she was still awaiting the information.
3.26. On 7 November 2017, the Investigator advised the Licensee it had been over 20 working days since his request and had she received anything from the Police. The Licensee replied that she was still waiting for the information.
3.27. The Investigator requested a further update on 10 November 2017. The Licensee replied that she was still waiting for the information.
3.28. On 13 November 2017, the Investigator advised the Licensee that as it was now nearly 30 working days, had she received anything from the Police stating that if the Licensee hadn't responded by Friday 17 November 2017 the investigation would continue on the basis the Police were not able to locate a complaint made to them by the Licensee.
3.29. On the 20 November 2017, the Investigator asked the Licensee if they could meet to discuss the matter. The Licensee declined by email accusing the Authority staff and CAC members of not being fair and racial discriminating against her "as an Asian solo women".
3.30. On 11 December 2017, the Licensee reported the alleged assault of 2008 to the Police.
CAC decision of 25 May 2018
[4] The CAC found:
3.33 The Committee as stated above has carefully considered the evidence of dispute between the Complainant and the Licensee, acknowledges the passage of time since the alleged events (which allegedly took place in 2008) and considers that’s (sic) any further inquiries are unlikely to assist the Committee or support a finding of misconduct.
3.34 There is a high threshold to meet in determining a preliminary finding of disgraceful conduct. Indeed, in the earlier appeal related to this matter the Tribunal approved the Committee’s description of the test for disgraceful conduct and reliance on the decision in Morton-Jones v Real Estate Agents Authority. As this test has been carefully set out and approved by the Tribunal in the earlier appeal decision the Committee has not restated it here. Suffice to say the Committee has paid careful attention to the findings of the Tribunal in this regard.
[5] The CAC then acknowledged that further investigations of this matter since it was referred back have been limited but that, given the time since the alleged offence occurred and the nature of the allegations, the Committee was persuaded that very few further investigative avenues were open to it.3
[6] The CAC also acknowledged that it did not have much more information since its first decision, but that it had considered three pieces of new evidence, namely:4
(a) Ms Lim claimed to have reported her matter to the Police but had not. She eventually did report the matter to Police on 11 December 2017;
(b) Mr Stone provided character references; and
(c) Ms Lim contacted Sue Matahaere by phone and apparently accused her of committing perjury.
[7] The CAC then observed:
3.37 None of these pieces of evidence directly go to the substantive complaint or disprove the Licensee’s original allegations against the Complainant. The Committee considers this new evidence as weak circumstantial evidence in that it neither goes to the truth of the
3 At 3.35.
4 At 3.36.
Licensee’s complaint nor how she views her complaint. This evidence could also be considered either contradictory or evidence of distress and uncertainty on the Licensee’s behalf with the exception of the Complainant’s evidence as to his character.
3.38. Given the acknowledged difficulty in obtaining any further evidence the Committee has determined to proceed to consider the complaint on the evidence that has been obtained. The Committee has considered whether this evidence could support a charge of disgraceful conduct against the Licensee, based on the allegation that she has either fabricated the complaint and/or has used Authority complaints processes for improper purposes.
[8] The CAC then referred to past Tribunal decisions in the context of its assessment of breach of r 7.3. That rule states:
A licensee must not use, or threaten to use, the complaints or disciplinary process for an improper purpose.
[9] The Committee noted that it must be kept in mind that the relevant test is disgracefulness, rather than breach of r 7.3. The Tribunal referred to the decision of Garlick v Real Estate Agents Authority5 and noted that where a complaint is made for multiple purposes and where one of those purposes is legitimate, it is unlikely to be a breach of r 7.3 (or otherwise an abuse of Authority processes).
[10] The Committee then observed:
3.43. Even if the Committee was to find that there was sufficient evidence before it to determine that the Licensee’s original complaint against the Complainant was fabricated, and on the evidence before it the Committee is far from making this determination, the evidence would need to establish further that the Licensee had no genuine reason at all for making her complaint.
[11] The CAC observed that there is no contemporaneous evidence before the CAC that either supports Mr Stone’s complaint or undermines it. The CAC therefore resolved that it must look to any surrounding or circumstantial evidence that might support the allegation that Ms Lim had an ulterior motive or had no genuine reason for raising her complaint in the first instance. The CAC found that, with some small exceptions, the only real evidence before the CAC was Mr Stone’s allegation that the
5 Garlick v Real Estate Agents Authority [2014] NZREADT 40.
licensee had either fabricated the complaint and/or had used the Authority’s complaint processes for improper purposes.6
[12] The CAC went on to find that it had no direct or written evidence before it that supported Mr Stone’s allegation that Ms Lim fabricated her complaint. It said Ms Lim had made complaints of reasonable detail and specificity and that she had identified times and places and the substance of what was said. The CAC said that the complaint is, on its face, not completely fanciful. That is, it could not be dismissed as inherently implausible.7
[13] The delay in making the complaint was acknowledged. The CAC noted that there could be a myriad of reasons for this and it did not accept that the initial, and then delayed non-reporting to the police, was evidence of any improper purpose.
[14] The CAC also referred to Mr Lim repeating her complaint, but the CAC accepted that Ms Lim appeared to have expanded the subject matter of her complaint over time. It noted that in 2008 she made a complaint to the head of the Open Polytechnic, Ms Matahaere, about her allegations that Mr Stone invited her to dinner. According to Ms Matahaere’s recollection, Ms Lim did not mention the allegations about Mr Stone touching Ms Lim’s back in the carpark. The CAC did not, however, accept these different recollections could necessarily be characterised as inconsistencies as the different accounts only expand rather than contradict each other.
[15] The CAC then went on to say:
3.49. ... Having analysed the variation in the description of the complaint the Committee is not persuaded this variation lends any significant support of the Complainant’s position that the Licensee was aware her complaint was “false, malicious and a blatant lie”.
[16] The CAC also concluded that aside from a dispute about the provision of materials and enrolment, there was nothing to suggest that Ms Lim sought to extract any advantage from the complainant at the time of making her complaint or that making a complaint against him would serve some ulterior motive.
6 At 3.45.
7 At 3.46.
[17] The CAC also considered whether it was entitled to draw any conclusion from Ms Lim’s response, or lack thereof, to the CAC during the course of the investigation. The CAC found that it did not consider Ms Lim’s failure to provide supporting information provided evidential support for the complaint. At most, the failure could be considered circumstantially relevant, in that it provided some inference into Ms Lim’s state of mind. The CAC, however, considered that such an approach was fraught with difficulty.
[18] The CAC then said:
3.56. The Licensee’s decision, either intentionally or due to an inability to respond for her own personal reasons, to not to engage in any significant way with the Committee’s investigation, is against the background that she previously made a complaint to the Authority about the alleged sexual harassment and a decision was taken not to enquire into that complaint. The Committee accepts there could be a myriad of reasons why the Licensee would not want to revisit this matter now.
[19] The CAC then referred to matters that could be verified, including that Mr Stone was a tutor at the Open Polytechnic and did teach Ms Lim. The CAC then said that it did not accept that Ms Lim’s failure to provide more evidence when that evidence did not exist, was a factor that could count against her when considering whether this matter should be referred to the Tribunal.
[20] The CAC then referred to references about Mr Stone’s character. The CAC observed that the present complaint was not about Mr Stone’s character and that the focus of the CAC was Ms Lim’s motivations in making the complaint. The CAC accepted that Mr Stone felt aggrieved by being the subject of a complaint that he said was false. It observed, however, that disciplinary charges are concerned with the maintenance of professional standards and their primary focus is not vindication of a complainant’s reputation (or in other cases, financial interests) and the CAC has a very limited ability, if any, to take this concern into account in determining the complaint.8
[21] The Committee then concluded:
8 At 3.60.
3.62. The Committee accepts absolutely that cases involving sexual harassment are always difficult cases. They often reduce to a “he said, she said” scenario where, once the burden of proof is factored in, accusations become difficult to prove. In addition, the Authority and Committees are not specialist investigators of sexual assault. Crimes should be reported to the Police. There will be cases that cannot be progressed for these reasons. Regardless, Committees and the Authority can always consider what action is then taken in respect of a complainant.
3.63. The Committee considers it important to take a generous and understanding assessment of the motivation for making complaints of this nature. The Committee is and should be hesitant to conclude that any complaint of sexual harassment is baseless, or improper, or malicious. The alternative is to create a not unjustified perception in the industry that they should be sure before alleging misconduct and come armed with conclusive proof, lest they face charges themselves.
3.64. This is likely to be a different approach than has often been taken in such areas as commission disputes where misuse of the complaints process is more easily assessed, and charges or unsatisfactory conduct can be considered more easily. For an area as difficult to prove as sexual harassment, however, the risk of an overly zealous approach to charging complainants risks long term damage to the complaints and discipline process. This would not be consistent with the goal of promoting public confidence in the performance of real estate agency work.
6.65. Having said that the guiding principle for the Committee is not the nature of the allegations the Complainant and Licensee have made against each other but rather our focus has been on whether there is sufficient evidence to lay a charge and refer the matter to the Tribunal.
3.66. For the many reasons outlined above the Committee considers it has insufficient evidence to prove the Licensee had improper motives when she made the complaint or otherwise completely fabricated the allegations. Without that evidential foundation it is unlikely the Tribunal could find disgraceful conduct on the part of the Licensee.
3.67. Further, the Committee accepts there are public interest grounds that favour only proceeding with charges like these where there is a strong case to be made that the allegations were intentionally false. The Committee cannot ignore the purposes of the disciplinary process and accepts that care must be taken not to deter genuine, or genuine but mistaken complainants.
Decision of the Tribunal
[22] The Tribunal identified the threshold issue, namely, whether the alleged conduct was disgraceful conduct under s 73(a).9 The Tribunal noted the underlying
9 Stone v Real Estate Agents Authority above n 1.
position which Mr Stone put forward was that, in making what are alleged to be false complaints about him to the REAA which had the potential to damage his reputation and standing, Ms Lim behaved disgracefully.
[23] The Tribunal then set out its understanding of what Mr Stone had to prove and to what standard, namely:
[5] Mr Stone has the burden of proof in establishing on the balance of probabilities that the statements were made and that they were false. If Mr Stone provides evidence which is acceptable which carries the factfinder to the point where, in the absence of any evidence to the contrary, that it is satisfied that it is more likely than not that the claims were false, then the charge will be proved. If, however, at that point evidence is provided by the licensee which causes the factfinder doubt whether the charges are proved on the balance of probabilities that the complaints were false, then the charge must be dismissed.
[24] The Tribunal recorded that the decision which the CAC made was made pursuant to s 80 of the Real Estate Agents Act 2008 (the Act) which states that the CAC “may” decide to take no action. It is said to give rise to the question of what limits there are to the choices that they can make and the grounds on which they can make them.
[25] The Tribunal identified that when making a decision not to bring charges the CAC is acting as a prosecutor and guided by wider statements of principle governing the discretion of prosecutors generally when deciding to prosecute.10
[26] The Tribunal then reviewed the CAC’s decision, including authorities cited in that decision. The Tribunal accepted the Authority’s submissions that:
(a) the CAC must be satisfied there is a prima facie case of misconduct or evidence that provides a reasonable prospect of a finding of misconduct;
(b) the CAC has a gatekeeping and screening role as to whether charges should be laid;
10 At [9].
(c) there must be sufficient evidence in order to consider that there are grounds to lay a charge and a key issue is whether “there is a case to answer”;
(d) the CAC’s discretion is akin to a prosecutorial discretion, but the
disciplinary process is not a criminal prosecution;
(e) while a CAC decision not to prosecute involves the exercise of a discretion, the context may be such that the same level of deference may not need to be afforded to the responsible charging body as would be the case when the police or Crown make such charging decisions;
(f) there are two main broad categories of issue, namely:
(i) whether there is sufficient evidence; and
(ii) Whether there is sufficient public interest in referring a matter.
(g) by analogy to the Solicitor-General’s Prosecution Guidelines, the evidence must be sufficient to provide “a reasonable prospect of a conviction” (the evidential test); and
(h) the prosecution is required in the public interest (the public interest test).
(i) it is not a rule that all offences for which there is sufficient evidence must be prosecuted – the prosecutors must exercise their discretion as to whether a prosecution is required in the public interest.
[27] The Tribunal agreed with that summary and moved on to assess the CAC’s decision. The Tribunal then identified the accusations made against Mr Stone, namely, accusations made against him while he was a tutor at the Open Polytechnic in 2008, while Ms Lim was an enrolled student and he was asked to conduct a face-to-face assessment with Ms Lim on which he failed her. The Tribunal recorded Mr Stone’s denial of Ms Lim’s allegations.
[28] The Tribunal also referred to an additional matter, namely, that Ms Lim served a trespass notice on Mr Stone which stated that the reasons why it had been served were because of “sexual assaults, theft, false statements, forged identity and threatening for cancelling my licence”. The Tribunal noted this information was not before the CAC when it made its decision.
[29] The Tribunal then summarised the CAC decision.
[30] In assessing the decision, the Tribunal said that “the key question that needed to be determined was whether there was a prima facie case which Ms Lim was required to answer”.11
[31] The Tribunal then noted:
[30] In our view, the decision of the CAC taken overall has gone beyond the point of determining whether there was a prima facie case which would support charges against Ms Lim.
[31] Mr Stone has given evidence that Ms Lim made the statements and that they are false. If the evidence that he has given on this point was uncontradicted, then it is likely that a Tribunal would take the view that Ms Lim has made the allegations attributed to her against him and that they were false.
[32] In our view, the CAC was not required to go further and examine possible defence evidence and come to a view about whether having weighed the evidence of Mr Stone against that of Ms Lim, the charges would not be established to the required standard. We consider that the description of the role of the CAC which is set out in Sherburn v Complaints Assessment Committee12 and to which counsel for the authority referred us makes that clear.
[33] Considerations of the kind which the CAC went into such as the level of particularisation of the complaint of sexual abuse, the consistency of the assertions made by the complainant over time in matters of that sort are not required to be gone into at this stage. ...
[32] The Tribunal said that s 89(a) makes it clear that it was for the Tribunal, rather than the CAC, to enquire into the questions that were necessary for a determination to be made of the case and these include issues of credibility.
11 At [29].
12 Sherburn v Complaints Assessment Committee [2012] NZREADT 33.
[33] The Tribunal said it was necessary to keep in mind that what was being considered at the CAC stage of the hearing was the question of whether, assuming the evidence of Mr Stone is accepted, the acts and conduct generally of Ms Lim which that evidence describes amounted to a breach of s 72 of the Act. The Tribunal said if that was answered in the affirmative and the charge was consequently issued, it would then be for the Tribunal, after hearing all the evidence, to determine whether the charge was proved on the balance of probabilities.
[34] The key reasoning of the Tribunal was as follows:
[36] In anticipating defences of the kind which the Committee consider Ms Lim would be able to put before the adjudicating body, the Committee went beyond what was permissible. It would seem to be correct in principle that in deciding whether there is a prima facie case or not there may be circumstances not disclosed by the evidence of the complainant which the Tribunal is required to take into account because they may have the effect of defeating a prosecution. It may be instructive to take a simple example borrowed from criminal jurisdiction. In such an example, if there was evidence that a person accused of an act was actually serving a term of imprisonment at the time or, to take another example, if DNA evidence established that it could not have been him who was responsible, then the prosecution would be entitled to take these into account even thought they might strictly be viewed as defence contentions. The prosecution would be able to take those circumstances into account in deciding that there was no substantial prospect of a conviction.
[37] It is a question of fact and degree. If establishing such propositions was a relatively straightforward matter, then the prosecution could well take the view that there was no point in bringing a prosecution because there was no realistic prospect of a conviction.
[35] The Tribunal went on to say that to go beyond that issue and to draw conclusions as the CAC did about the veracity of the complaints, internal consistency of Ms Lim’s evidence and its inherent credibility, level of particularisation and other issues went “well beyond” the filtering role which the CAC was required to discharge. Matters like this, the Tribunal said, were substantive issues to be left to trial.
[36] The Tribunal went on to acknowledge that a reasonably lengthy period had elapsed, but that Mr Stone’s complaint was made in 2016. The lapse of time does not justify the exercise of a prosecutor’s discretion not to proceed. The Tribunal also referred to the fact that accountability is one of the purposes of the Act and that misconduct on the part of a licensed agent, even if it occurred some years previously, is no less relevant for the purposes of the Act.
[37] It went on to say that the making of damaging assertions to the Authority, should not be left unresolved in the manner the CAC proposed. It said the fact the Authority decided not to take action at one of two points of time at which the allegations were made, the subject of complaints – one by Ms Lim and the other by Mr Stone – is not a compelling reason to decide against bringing a discretion for a prosecution. It also said that transparency of the disciplinary process would serve the purpose of encouraging public confidence.
[38] The Tribunal therefore concluded that the grounds for reviewing the exercise of the discretion had been made out because the Committee, in exercising its discretion, took into account irrelevant matters and they considered the credibility of the respective parties. It was in error because they did not restrict themselves to exercising a filtering role when deciding if charges ought to be brought.
Did the Tribunal apply the wrong legal test?
[39] Ms Paterson submits that the Tribunal was wrong to identify the threshold test as “whether there was a prima facie case which Ms Lim was required to answer?” She also says that the Tribunal then wrongly circumscribed the CAC’s assessment to the assessment of the complainant’s evidence and failed to have regard to the public interest. Rather, she submits that the correct test has three aspects, by analogy to the Solicitor General’s guidelines:
(a) There must be sufficient evidence to provide a reasonable prospect of proving the charge;
(b) The CAC must analyse and evaluate all of the evidence and information in a thorough and critical manner; and
(c) The CAC must exercise its discretion as to whether charges are required in the public interest.
[40] Mr Upton, who took up the role of contradictor, submits that the “prima facie” test adopted by the Tribunal accords with authority and that the Tribunal did not adopt or direct that a complainant’s evidence only approach is required. Rather, he says the
Tribunal expressly went on to say: “in deciding whether there is a prima facie case or not there may be circumstances not disclosed by the evidence of the complainant which the tribunal is required to take into account because they may have the effect of defeating a prosecution”. However, he submitted that the Tribunal was correct insofar as it said that the CAC was not to undertake a detailed assessment of credibility, consistency and potential motivations of a defendant. That function was to be performed by the Tribunal. He also said the Tribunal clearly had regard to public interest considerations, for example the requirement for transparency.
Assessment
[41] The function of the CAC for the purposes of s 80 and ss 89(2)(a) and (c) is akin to that of a prosecutor.13 As Ms Paterson submits, this involves a three-step assessment.
[42] First, the functions of a CAC include:
(a) to inquire into and investigate complaints made under section 74;14
(b) to make final determinations in relation to complaints, inquiries, or investigations;15
(c) to lay, and prosecute, charges before the Disciplinary Tribunal.16
[43] Second, the CAC “must consider the complaint and determine whether to inquire into it.”17 This includes an assessment of whether the complaint alleges unsatisfactory conduct or misconduct,18 discloses only an inconsequential matter,19 is frivolous or vexatious and not made in good faith, should be referred to another agency,20 or whether the CAC should inquire into it.21
13 Edinburgh Realty Limited v Scandrett [2016] NZHC 2989, (2016) 18 NZCPR 23 at [113].
14 Section 78(1)(a).
15 Section 78 (d).
16 Section 78(e).
17 Section 79.
18 Section 79(2)(a).
19 Section 79(3).
20 Section 79(d).
21 Section 79(e).
[44] Third, the CAC may make a decision to take no action on a complaint, if in the course of the investigation and “having regard to all of the circumstances of the case”, any further action is “unnecessary or inappropriate”.22
[45] Fourth, s 89 states that the CAC may then make one or more of the following determinations, after “both inquiring into a complaint or allegation and conducting a hearing”:23
(a) a determination that the complaint or allegation be considered by the Tribunal;
(b) a determination that it has been proved, on the balance of probabilities, that the licensee has engaged in unsatisfactory conduct;
(c) a determination that the Committee take no further action with regard to the complaint or allegation or any issue involved in the complaint or allegation.
[46] Further emphasising the investigative and prosecutorial role performed by the CAC, s 89(3) states:
Nothing in this section limits the power of the Committee to make, at any time, a decision under section 80 with regard to a complaint.
[47] I agree with the Tribunal that the threshold test for sufficiency is a prima facie case or, as the Guidelines put it, a reasonable prospect of proving the charge; but the CAC is required to assess the weight and worth of the evidence before it when making any of the determinations it must make. That does not usurp the Tribunal’s final adjudicative function. Rather, it simply discharges the obligation of the CAC to inquire into and then make determinations about how the complaint should be dealt with, including as to the necessity and appropriateness of the decision to take further action on a complaint.
22 Section 80.
23 Section 89.
[48] I accept that there are considerations that must moderate the nature and scale of the evaluation undertaken by the CAC when deciding to lay a charge. As the Court of Appeal stated in relation to the lawyers and conveyancer’s complaint process, the decision whether to lay a charge is procedural in nature and occurs at a very preliminary stage of what is a comprehensive statutory process.24 But, as Ms Paterson aptly put it, the dividing line here is one of role – a CAC is not determining the charge, but it should be able to scrutinise the evidence in a meaningful way, and consider the public interest in a charge.
[49] I therefore consider that the Tribunal erred insofar as it confined the CAC’s assessment function to an assessment of the complainant’s evidence only. Rather, like all prosecutors, the CAC had to evaluate all of the evidence before coming to a conclusion as to whether it should lay and then prosecute a charge. Contrary to the observation made by the Tribunal, this involved an assessment of the credibility and reliability of the evidence, albeit only for the purpose of assessing whether there is a prima facie case.
[50] For completeness, the Tribunal did not fail to have regard to public interest considerations. As noted by Mr Upton, it specifically weighed the importance of transparency. In this regard, I am prepared to find the Tribunal when referring to transparency was directing itself to the matters highlighted by Mander J in Edinburgh Reality Limited,25 namely, the regulation of agents, the raising of industry standards and accountability through disciplinary process that is independent, transparent and effective. But I think it is necessary to record that the Tribunal needed to remind itself it was exercising jurisdiction on appeal against the exercise of discretion. It was not enough for the Tribunal to disagree with the CAC’s assessment of the public interest. It had to identify error (for example failure to have regard to relevant considerations) or that the assessment of the public interest was plainly wrong. Having said that, as also highlighted by Mander J, the degree of deference in the present context is not the same as the deference afforded to the police or Crown prosecutors in a criminal
25 Edinburgh Reality Limited v Scandrett, above n 13 at [117].
prosecution.26 Furthermore, the Tribunal is well placed to assess the public interest considerations in light of the legislative purpose and the objects just mentioned.
Relief
[51] I was encouraged to make a final decision. Ms Paterson sought reinstatement of the decision of the CAC. Mr Upton, however, submitted that CAC made numerous errors and so I should, in effect, reverse the CAC’s decision. His critique of the CAC’s decision was, in short, forensic. In so doing, Mr Upton took up the role of advocate for the Tribunal and Mr Stone. Problematically, it does not appear that all of the claimed errors were raised in the first appeal or considered by the Tribunal and they were not raised in a cross-appeal. Therefore, I have not had the benefit of the Tribunal’s assessment of all of them and I have not heard from Ms Lim about them. Ms Paterson’s submissions in response were understandably sparse given that, it appears, they were only raised in Mr Upton’s submissions filed shortly before the hearing of the appeal. In those circumstances, I am not prepared to finally resolve the appeal by reference to them.
[52] The issues raised by Mr Upton, nevertheless, strongly favour a cautious approach. Indeed, I am satisfied that the better course is to refer this matter back to the Tribunal for reconsideration rather than to simply reinstate the CAC’s decision. This is a particularly important case, involving the discretion to lay charges of misconduct in respect of allegedly false allegations of sexual abuse and a further opportunity should be afforded to both Mr Stone and Ms Lim to be heard on a matter of very real significance to them. I am fortified in this view because any decision of this Court is final, with only a limited right of appeal on points of law to the Court of Appeal.
[53] To assist the Tribunal, I assemble the key points of my judgment for the purpose of rehearing as follows:
(a) The threshold test for a decision to lay misconduct charges is threefold:
26 At [117].
(i) there must be sufficient evidence to provide a reasonable prospect of proving the charge – that is a prima facie case;
(ii) the CAC must analyse and evaluate all of the evidence and information in a thorough and critical manner; and
(iii) the CAC must exercise its discretion as to whether charges are required in the public interest.
(b) In determining whether to lay a charge, the CAC is exercising a discretion. As per Kacem, the criteria for a successful appeal are therefore stricter than a general appeal: (1) error of law or principle, (2) taking into account irrelevant considerations; (3) failing to take into account of a relevant consideration; or (4) the decision was plainly wrong.27
(c) However, the preliminary nature of the decision to lay charges and raising of industry standards and accountability through disciplinary process that is independent, transparent and effective are important factors to be weighed.
(d) The degree of deference to the CAC is not the same as the deference afforded to the police or Crown prosecutors in a criminal prosecution.
Outcome
[54] The appeal is allowed. The Tribunal erred. It was wrong to find that the CAC must confine itself to an assessment of Mr Stone’s evidence only. Given the significance of the decision, I refer the matter back to the Tribunal to reconsider in light of my judgment.
27 Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32].
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