Singh v Auckland Co-Operative Taxi Society Limited [2016] NZHC 1940 (19 August 2016)

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UNDER	the Industrial and Provident Societies Act 1908
AND	the Protected Disclosure Act 2000
IN THE MATTER OF	Auckland Co-operative Taxi Society Limited
BETWEEN	RANBIR SINGH Plaintiff
AND	AUCKLAND CO-OPERATIVE TAXI SOCIETY LIMITED First Defendant IAN GRAHAM, YAKUB (aka JACOB) MOHAMMED PATEL, KANWAJIT BHULLAR, KRISHNA DEO LAL Second Defendants

Hearing:	18 July 2016
Counsel:	R S Pidgeon for the Plaintiff G J Judd QC and S S Khan for the Defendants
_Judgment:	_{19 August 2016}

This judgment was delivered by Justice Edwards on 19 August 2016 at 1.30 pm, pursuant to

SINGH v AUCKLAND CO-OPERATIVE TAXI SOCIETY LTD [2016] NZHC 1940 [19 August 2016]

[1] Mr Singh is a taxi driver and a member of the first defendant, Auckland Co- operative Taxi Society Ltd (Society). Until recently he was also a member of the board of the Society (Board). The second defendants are four members of that Board.

[2] Mr Singh seeks discovery of 13 separate categories of documents from the defendants. He says that the discovery is necessary for the effective and just disposition of his judicial review proceeding. That proceeding concerns decisions made by the Society to terminate his membership, to remove him from the Board, and not to convene a Special General Meeting (SGM). That proceeding has been set down for a two day hearing commencing 31 October 2016.

2016.¹Those orders preserved Mr Singh’s membership in the Society, and restrained him from communicating with members of the Society on certain issues, pending determination of the judicial review proceeding. The defendants claim that Mr Singh breached those orders by posting comments and links to a film on a Viber chat group for members of the Society.

[4] Mr Singh has made a number of allegations against the Society concerning overcharging and favouritism towards a group of drivers in the allocation of work. Mr Singh made these allegations to Society members and the wider public. He also made complaints to the Police, Serious Fraud Office, Auditor-General, the Human Rights Commission, the Registrar of Co-operative Societies and the Ministry of Health. As a result there have been a number of inquiries into the Society.

[5] The Board considered that Mr Singh had improperly disclosed confidential information about the Society, personal information about its members, and had

acted in a threatening way towards members of the Society. It initiated a disciplinary process against Mr Singh, and gave notice of intention to remove him as a member.

[6] On 14 December 2015, a notice was sent on behalf of Mr Singh and signed by members of the Society asking the Board to convene an SGM. In an affidavit filed on behalf of the defendants, the Society’s Chairman explains that following receipt of the notice, a number of requests from members to withdraw their signatures were received. In addition, a number of signatures were not counted as those members were not financial at the time they signed. Accordingly, there were only 67 valid signatures which was less than the 70 members required to requisition the SGM. The Board refused to convene the meeting. This decision is one of those challenged by Mr Singh in his judicial review proceeding.

[7] A hearing concerning the proposal to remove Mr Singh as a member was conducted on 17 December 2015 before two individuals (Tribunal) whom the Board regarded as being independent.²Mr Singh attended that hearing and was legally represented.

[8] The Tribunal decision was released on 25 February 2016. The Tribunal agreed with the proposal to remove Mr Singh as a member but advised the Board to seek advice on whether to delay implementation of the decision pending the outcome of any of the inquiries into Mr Singh’s allegations by government agencies.

[9] On 29 February 2016, the Board gave Mr Singh notice that it would remove him as a member of the Society effective from 2 March 2016. That decision is challenged in Mr Singh’s judicial review application also.

[10] Mr Singh applied for interim relief preventing the Board from removing him as a member pending determination of the substantive proceeding. Orders by consent were made adjourning the application on the condition that the Society would not revoke Mr Singh’s permit to drive a taxi for the Society in the interim

_{period. The Society’s consent to those orders was on the basis of
an undertaking}

given by Mr Singh not to make any complaints or disclosures internally or externally, and not to solicit the making of such disclosures or complaints of the type already made.³

[11] The application came before Palmer J on 9 March 2016. After that hearing but before the judgment was released, the Society applied to rescind the interim consent orders on the basis that Mr Singh had breached his undertaking by sending two text messages to other members on 24 March 2016. Mr Singh disputed there was a breach. As judgment on Mr Singh’s application for interim relief was imminent that application was adjourned indefinitely.

[12] By decision dated 12 April 2016, Palmer J granted Mr Singh’s application for interim relief. He considered the overall justice of the case required the making of interim orders designed to preserve the positions of Mr Singh and the Society and internal relationships within the Society. The following interim orders were made:

(a) Mr Singh’s board membership will be suspended, and will not be filled, until it naturally expires under the Society’s rules.

(b) Mr Singh will remain a full member of the Society and, in particular, will continue to be able to drive his taxi for the Society, subject to the Society’s ordinary rules.

(c) Mr Singh will not make public comment on the issues involved in this proceeding unless he is responding to such public comment made by the Board of the Society.

(e) For the purposes of these orders the issues involved in this proceeding include, but are not limited to: the circumstances of Mr Singh’s termination of membership; the allegations he has made about the Society; and the way in which the Society has responded to those allegations.

(f) Leave is reserved to any party to apply to amend or rescind these orders if they are breached, and to apply for indemnity costs for so doing.

_{Society stating that an interim stay had been granted to Mr Singh, that
his seat would}

remain vacant, and that he remained a member of the Society and could drive his taxi. Mr Hapreet is a member of the Society and has sworn affidavits in support of Mr Singh in this proceeding. Although the Society considers this text to be in breach of the interim orders, no further action was taken.

[14] At 12.16 am on 21 May 2016, Mr Singh posted the following to a Viber chat group for members of the Society:

People in blue bubble admnistration [sic] should feel shame after watching this add and ask question whether they deserve the position what they hold since long ... My comments ... Just shame on u and get lost ... We are not slave labour ...

[15] At 1.04 am he posted a link to the final scene of a Bolliwood movie called Shool, and a further link to the entire movie. The movie is in Hindi. An interpreter engaged by the Society describes the movie as portraying “the politician-criminal nexus and the criminalisation of politics in the state of Bihar, in India, and its effect on the life of an honest police officer”. In the link to the scene posted by Mr Singh, the police officer shoots a corrupt politician in the head. The same comment and links were sent to a second Viber chat group around the same time.

[16] The defendants seek rescission of the interim orders on the grounds that Mr Singh’s communications have breached the interim order in (d) (set out in [12] above).

[17] Mr Singh’s claim is set out in the Third Amended Statement of Claim dated

[18] The first cause of action is targeted at the Board’s decision to refuse to call an SGM. Mr Singh pleads that the decision was ultra vires because the quorum required to requisition a meeting under the Society’s rules had been reached. It is also alleged that some or all of the second defendants exercised undue influence in “compelling signatories to the requisition notice to withdraw their support”. It is

also pleaded that the powers to prevent the SGM were exercised for an improper purpose to prevent the hearing of the substantive issues the plaintiff had raised.

[19] Encompassed within the first cause of action is an allegation that the suspension of Mr Singh as a Board member was conducted in a way which was ultra vires the rules. Mr Singh says that his suspension from the Board is in breach of the Human Rights Act 1993 and in breach of the rules which only allow for suspension of a Board member by the shareholders in general meeting.

[20] The second cause of action concerns the Board’s decision to ratify the Tribunal’s decision. Mr Singh pleads that the decision was made for an improper purpose, and that the Board acted unreasonably in failing to follow the Tribunal’s recommendations and in failing to adequately consider the welfare and interests of the full 700 shareholders in coming to the decision to ratify.

[21] The statement of defence dated 13 June 2016 denies Mr Singh’s allegations. The defendants plead that the Society did not convene the SGM as the requisition did not comply with constitutional requirement to have one-tenth of the members of the Society. They also plead that the decision to ratify the Tribunal’s decision took into account Mr Singh’s continuing unreasonable behaviour.

[22] Discovery orders in judicial review applications are made pursuant to section

[23] Whether discovery will be ordered is a matter of discretion to be determined on a case-by-case basis. The circumstances of the individual case, the issues raised, and the context in which the judicial review challenge is made are all relevant in

⁴Keenan v Attorney-General [2014] NZHC 1649 at [9] citing Environmental Defence Society Inc v South Pacific Aluminium Ltd [1981] NZCA 28; [1981] 1 NZLR 146 (CA); and Air New Zealand Ltd v Auckland International Airport Ltd (2001) 16 PRNZ 783 (HC).

[24] In Wellington International Airport Ltd v Commerce Commission, the Court found that the critical test is “whether discovery is ‘necessary’ for disposing fairly of the proceedings”.⁵In Northland Environmental Protection Society Inc v Chief Executive of the Ministry for Primary Industries, Woodhouse J observed that the discretion in s 10(1) does not require an applicant to establish necessity, although a Judge may determine that the discovery is not necessary and therefore decline to order discovery in a particular case.⁶

[25] Discovery will not be ordered unless the documents are relevant to the issues in the proceeding.⁷Relevance is determined by the pleadings.⁸Although the allegations which Mr Singh has levelled at the Society form part of the backdrop to his application for judicial review, the merits of those allegations are not directly in issue in the proceeding.

[26] Categories 1 to 5 describe documents relating to a defined group of shareholders in relation to various contracts, allocation of jobs, pricing of jobs, any sale of the defined group’s shares, and their log-on and log-off details. Category 6 seeks disclosure of any confidentiality agreements entered into in relation to some of these contracts.

[27] These categories of documents are relevant to Mr Singh’s allegation of preferential treatment of a group of members in relation to certain contracts. Discovery of those documents is not necessary to determine the judicial review application which will centre on the legality of the Board’s decision not to call an SGM and the Board’s decision to ratify the Tribunal’s decision. The merits of the

⁵Wellington International Airport Ltd v Commerce Commission HC Wellington CP 151/02,

⁶Northland Environmental Protections Society Inc v Chief Executive of the Ministry for Primary

⁸Diagnostic Medlab Ltd v Auckland District Health Board HC Auckland CIV-2006-404-4724,

30 October 2006 at [7]; and Wellington International Airport Ltd v Commerce Commission, above n 5, at [40].

[29] Category 7 seeks disclosure of shareholder motions submitted to the Society from 1 July 2013.

[30] Although the documents within this category appear to relate to the decision not to convene an SGM, it is not at all clear how shareholder motions submitted to the Society from 1 July 2013 will assist in determining the first cause of action. They are not relevant to the second cause of action.

[31] I am not persuaded that these documents are needed for the effective and complete determination of the proceeding and I decline to order discovery of this category of documents.

[32] Categories 8 and 9 concern the full identifying details of the members excluded as “unfinancial requisitioners”, Board meeting minutes and agendas, and SGM and AGM minutes.

[33] The defendants do not oppose an order of discovery of these categories. The parties have agreed to limit access to this material to counsel for Mr Singh (Mr Pidgeon) only.

[34] Orders by consent in terms of these two categories are set out at the end of this judgment.

[35] Category 10 seeks internal correspondence and legal advice in relation to the SGM with specific reference to all such advice made prior to the filing of the proceeding.

[36] In an affidavit filed in support of the discovery application, Mr Singh clarifies that his primary concern is to obtain copies of the legal advice on the calling of meetings and the operation of the democratic process, including the interpretation of the Society’s rules. He also seeks advice relating to the operation of the contracts in question and the allocation of work.

[37] Although these documents appear to be relevant to the refusal to convene a SGM, I am not persuaded they are necessary to determine the dispute. Whether the Board’s decision not to convene the SGM was valid will be determined by looking at what the rules require, and whether the Board acted in accordance with those rules. Legal advice on those issues is not necessary to determine the dispute.

[39] Category 11 seeks documents in relation to the Health Alliance, District Health Board, and the Ministry of Health contracts. Category 12 seeks correspondence with the Serious Fraud Office arising out of the complaint, including the s 9 notice issued by the Serious Fraud Office. Category 13 seeks all correspondence and reporting documentation with the Registrar of Societies arising out of Mr Singh’s complaint.

13. However, they submit that they are no longer in possession of any documents falling within category 12, and those within category 13 no longer exist.

[41] The documents sought in categories 11 to 13 appear to concern Mr Singh’s allegations against the Society, as opposed to the issues raised by the judicial review proceeding. I do not consider any of these documents to be either necessary or relevant to the determination of the dispute and I decline to order discovery of documents within categories 11 to 13.

[42] The Society has been successful in its opposition to the application. It is entitled to an order of costs on a 2B basis. I certify for one counsel only.

[43] The defendants’ application seeks rescission of the interim orders. At the hearing, counsel for the defendants confirmed that it is only rescission of the order in (b) (as set out in [12] above) which is sought. That order allows Mr Singh to remain as a full member of the Society, and to continue to drive his taxi for the Society. The defendants seek to maintain the orders restraining Mr Singh from communicating with other members and the public. An order of indemnity costs against Mr Singh is also sought.

[44] Mr Singh says that any breach of the orders was technical in nature. He also denies any link between the first post made at 12.16 am and the subsequent posts containing the movie links.

[45] I do not accept Mr Singh’s submission that the reference to “Blue Bubble” in the 12.16 am message was not a reference to the Society. Auckland Co-operative Taxi Society Ltd trades under the Blue Bubble banner and a blue bubble is a recognisable part of their branding.

[46] Mr Singh further submits that the reference to watching the “add” in this message is to an Uber advertisement and bears no relation to the movie links which follow. That submission lacks substance. There is no evidence of the Uber advertisement he was allegedly referring to in this post and no surrounding context to support Mr Singh’s explanation.

[47] I agree with the defendants’ submission that the movie links are intended to suggest that the Board of the Society is corrupt. Mr Singh is a former police officer and the movie links invite a comparison to be drawn between his campaign against

the Society and that waged by the police character in the movie. The level of violence in the movie clip adds a further, concerning, dimension to the posts.

[48] The interim orders restrained Mr Singh from communicating with members of the Society regarding allegations Mr Singh has made against the Society, and the Society’s response to them. Corruption is at the heart of Mr Singh’s allegations. I consider the interim orders were designed to prevent exactly these sorts of communications by Mr Singh.

[50] Mr Singh submits that rescission of the orders would be heavy-handed. He suggests an order preventing him from using Viber would adequately respond to the breach.

[51] Rescission of the membership order will mean that Mr Singh will be unable to drive for the Society pending the determination of his judicial review proceeding. Although he will have to find alternative employment (and he appears to have options open to him in that regard), there is no evidence that this will cause him any particular difficulties or any financial hardship. Mr Singh’s affidavits filed in opposition to the rescission application do not refer to any financial impact should his membership be suspended. That is significant in my view.

[52] I accept that rescission will mean Mr Singh will be hampered in his political campaign within the Society and that is another prejudice to be weighed in the balance. However, there is no evidence of any specific prejudice that may arise in this respect and certainly nothing between now and the hearing of Mr Singh’s substantive application in October 2016.

should his judicial review application be successful. The interim order in (a) suspending Mr Singh’s Board membership but requiring that the position not be filled, serves the same purpose. Those orders mitigate any prejudice to Mr Singh arising from rescission should he ultimately be successful at trial. In those circumstances, I intend to maintain the order in (a) and make the order preserving Mr Singh’s share in the interim.

[54] Mr Singh’s proposal to restrain him from using Viber does not adequately respond to the gravity of the breach in my view. This is not the first allegation of breach made against Mr Singh. Although the first occasion was considered somewhat technical in nature,⁹the fact that a breach has occurred more than once leaves me with no confidence that an order prohibiting Mr Singh from using Viber will be effective.

[55] Overall, I do not consider rescission to be a disproportionate response to the breach of the Court orders. Mr Singh was granted an indulgence by the Court to afford him the continued benefits of membership pending determination of his substantive proceeding. That indulgence was granted on certain conditions designed to protect the Society’s interests and the harm caused by ongoing communications with members of the Society and the wider public. Mr Singh’s breach of those conditions has altered the balance of convenience so that it no longer favours interim relief on those terms.

[56] I consider rescission of the interim orders, subject to the maintenance of the Board position and the preservation of Mr Singh’s share, to be appropriate in the circumstances.

[57] However, I do not consider it appropriate to rescind the order in (b) alone without rescinding the other orders placing restraints on Mr Singh. The interim orders were crafted so as to meet the competing detriments to both Mr Singh and the Society. They are interrelated and interlinked. The restraint on Mr Singh was a

⁹The text messages were a response to media statements made by the Secretary of the Society

[58] I have considered whether the interim orders I intend to make preserving his Board membership and share are sufficient to warrant a restraint on Mr Singh. Those orders hold the position, but they do not afford Mr Singh an entitlement to enjoy the benefits of membership in the meantime. I consider any restraint on Mr Singh would be disproportionate and unjustified in those circumstances. I therefore intend to rescind the orders in (b) to (f).

[59] An order of indemnity costs is appropriate in this case. It is specifically provided for in r 14.6(4)(b) of the High Court Rules, and was signalled as a possible consequence of breach in the leave reserved in interim order (d).

[60] I did not receive submissions as to actual and reasonable costs incurred. If the parties cannot agree on the reasonableness of the actual costs incurred, they may submit memoranda directed to that issue, with the final determination to be made on the papers.

(a) By 4.00 pm Friday, 16 September 2016, the defendants shall file and serve on Mr Singh’s counsel:

(i) Full identification details and the financial position of persons deemed by the defendants to be “unfinancial requisitioners” in terms of the first defendant’s constitution and in relation to the SGM outlined in the Third Amended Statement of Claim; and

(b) Inspection of the documents set out in (a)(i) is restricted to Mr Singh’s counsel (Mr Pidgeon) who shall not disclose copies of those documents or their contents to his client or to any other person.

(a) Interim Order (a) dated 12 April 2016 remains in force. That order provides:

Mr Singh’s board membership will be suspended, and will not be filled, until it naturally expires under the Society’s rules.

(d) The Auckland Co-operative Taxi Society Ltd is entitled to an order of indemnity costs in relation to its application only. If the parties cannot agree on quantum, then the Society shall submit a memorandum of counsel within 15 working days of this judgment, with a memorandum of counsel in reply being filed five working days

High Court of New Zealand Decisions

Singh v Auckland Co-Operative Taxi Society Limited [2016] NZHC 1940 (19 August 2016)

High Court of New Zealand

Singh v Auckland Co-Operative Taxi Society Limited [2016] NZHC 1940 (19 August 2016)