Link: Case Summary Document
Citation:  NZHC 1320 (High Court of New Zealand, Collins J)
Acknowledgement:The Pemsel Case Foundation thanks The Australian Centre for Philanthropy and Nonprofit Studies for its contribution in the drafting of this Case Note.
The plaintiff (Mr Gibson) sought judicial review of a decision of New Zealand Land Search and Rescue Dogs Incorporated (SAR Dogs) expelling him from its organisation. The decision by SAR Dogs to expel the plaintiff arose primarily from events that occurred at an evaluation camp held in late August 2010.
SAR Dogs is a voluntary organisation in New Zealand. Its members provide rescue services in both alpine and wilderness environments. This entirely voluntary work is extremely dangerous. The focus of this proceeding was on search and rescue dogs and their handlers who perform in alpine terrain.
The plaintiff was instrumental in the establishment of SAR Dogs in New Zealand in 1988. He played a significant role in setting up the protocols for the training, assessment and development of SAR Dog handlers.
SAR Dogs organised an avalanche training and assessment camp from 27 to 30 August 2010. The Annual General Meeting (AGM) of SAR Dogs was also held during the course of this camp. Mr Gibson was one of the assessors at the camp. During the camp, several issues relating to the behaviour of the plaintiff arose, which led to his expulsion. These included his behaviour during assessments, his behaviour at the AGM, and the manner in which he left the camp.
Correspondence ensued between the parties, and then the committee of SAR Dogs, consisting of 6 persons, met on 27 November 2010 to consider the matter. The committee unanimously resolved that Mr Gibson’s behaviour rendered him unfit to be a member of SAR Dogs. This decision was conveyed to the plaintiff by letter on 4 December 2010.
The plaintiff exercised a right of reply to the findings against him at a committee meeting held on 19 March 2011. However, on 2 April 2011, the Chairman of SAR Dogs wrote to Mr Gibson, saying that the committee was unanimously of the view that the original decision to expel him would be upheld.
His Honour said (at ) that the key principles of natural justice engaged by this case were:
1. The need for an accused person to know the nature of the accusations against him;
2. The need for decision-makers to disregard irrelevant considerations;
3. The need for decision-makers to act impartially.
His Honour held that not all the allegations against the plaintiff were made known to him before the decision was taken to expel him. This was enough of itself to quash the decision on judicial review. There had also been some consideration of irrelevant matters which was also enough of itself to justify quashing the decision.
As to the need to act impartially, His Honour found that the committee members who had expelled the plaintiff were also those who heard his ‘appeal’ against that decision. This was a constitutional flaw in SAR Dog’s proceedings. Mr Gibson’s ‘appeal’ needed to be considered by persons who had not made the decision to expel him from SAR Dogs. Usually, small organisations like SAR Dogs can achieve compliance with this requirement of natural justice by providing for a small independent body to hear appeals on disciplinary decisions from an administrative committee.
Therefore, despite His Honour being unimpressed with the plaintiff as a witness, the decision to expel the plaintiff was held to have breached the requirements of natural justice in several respects.
On the issue of the contractual basis underlying membership of a voluntary body, in New Zealand law the terms of the constitution of an incorporated society can constitute a contract between the society and its members: Henderson v Kane and Pioneer Club  NZLR 1073 (SC). In this case His Honour said that (with one exception), the defendant’s breaches of the principles of natural justice also implicitly breached the terms of its own constitution. In terms of the ‘appeal’ process, this was explicitly a breach of clause 5(ii)(b) of SAR Dogs’s constitution.
In light of these breaches, were damages payable? Case law certainly indicated that damages were a possible remedy for this type of breach of contract: Henderson v Kane and Pioneer Club  NZLR 1073 (SC) at 1076. However, on this point His Honour said (at ):
The defendant is a voluntary body with limited financial resources. Any award of damages will dilute the defendant’s ability to carry on its invaluable search and rescue activities.
In fact, His Honour expressed the view that he doubted ‘whether or not awarding general damages for breach of contract is truly a matter for the Court’s discretion’. He said (at –) that:
In New Zealand, the exact scope of a Court’s ability to award general damages for distress and anxiety arising from a breach of contract is not completely clear. In Byrne v Auckland Irish Society Inc  1 NZLR 351 (SC) at 362 Vautier J was willing to give the plaintiffs a modest award of damages for the ‘minor degree’ of distress they suffered from having been unlawfully expelled from the defendant society. It is questionable whether that decision would be made today in light of the decision of a majority of the Court of Appeal in Bloxham v Robinson (1996) 7 TCLR 122. In that case the majority of the Court of Appeal aligned themselves with the English authorities and held that those who breach contracts are only likely to be liable to pay general damages for distress suffered by a plaintiff when one of the objects of the contract is to safeguard the innocent party from losses of that kind…. The Court of Appeal confirmed in that case that as a general rule damages for mental distress are not recoverable for breach of contract…. In this case the constitution of SAR Dogs did not include the objective of protecting members from distress and emotional harm if they were unlawfully expelled. Accordingly, SAR Dogs’ breaches of its implied obligation to adhere to the principles of natural justice could not give rise to an award of damages for distress and emotional harm, even though such harm was probably foreseeable in this case.
Therefore, the plaintiff was successful in having the decision to expel him from SAR Dogs quashed (with costs). He was unsuccessful in a claim for damages.
The case may be viewed at: http://www.nzlii.org/nz/cases/NZHC/2012/1320.html
Implications of this case
This case illustrates the need for even small voluntary organisations to pay attention to matters of constitutional propriety and procedural fairness. As His Honour said (at ):
The Court has some sympathy for the difficulties which the defendant has become embroiled in. It is a small organisation that is dependent upon volunteers. It has limited access to legal advice and assistance. Its members’ natural environment is far removed from the Wellington High Court. Nevertheless, the defendant needed to ensure that Mr Gibson was treated fairly when initiating and considering the disciplinary case against Mr Gibson…. [T]he defendant failed to comply with the basic principles of natural justice in multiple ways.
In simple terms, natural justice requires that:
· a person subject to disciplinary proceedings:
o must be given details of the breach or what he or she is accused of; and
o must be given an opportunity to be heard (put his or her side of the case); and
· the person or tribunal making the decision:
o must act impartially (including that those making the review decision must not be the same as those who made the original decision); and
o must not take irrelevant matters into account.