Mitchell v Royal New South Wales Canine Council Limited

Mitchell v Royal New South Wales Canine Council Limited - [2001] NSWCA 162 - NSWCA 2001 case summary — Zoe

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The finding of misconduct and the arguments on appeal 4 The respondent is the Royal New South Wales Canine Council Limited, a voluntary association. The appellant is a member and director of the respondent. 5 Towards the end of 1998 the respondent charged the appellant with a single offence of "misconduct" as defined by its articles of association. The misconduct was said to arise from false statements the appellant allegedly made in various campaigns she conducted for election as a director of the respondent. On 2 February 1999, a Committee of Inquiry, appointed by the respondent to hear the charge, found the appellant guilty. 6 By way of penalty, the Committee of Inquiry required the appellant to retract, in writing, the statements she had made. The retraction was to be in terms specified by the Committee and made by the April issue of the respondent's journal, otherwise the appellant was to pay a fine of $2,500. 7 An appeal against the decisions of the Committee of Inquiry ensued (in controversial circumstances) to an Appeal Committee appointed under the respondent's articles of association. The appellant did not participate in the hearing of the appeal. On 15 September 1999 the Appeal Committee allowed the appeal in part. It varied the penalty imposed by the Committee of Inquiry by substituting a fine of $100 for the entirety of that penalty. 8 Before the Appeal Committee had handed down its decision, the appellant commenced proceedings by summons in the Supreme Court for orders setting aside the decision and orders made by the Committee of Inquiry. The relief claimed was later amended to incorporate claims for orders setting aside the decision and orders made by the Appeal Committee. 9 The matter came before Simpson J who dismissed the appellant's summons. The appellant now appeals against the decision of her Honour. 10 Several arguments were raised by the appellant but Mr Roberts SC, senior counsel for the appellant, was stopped save in regard to one category of arguments, and the appeal proceeded only in regard to the latter. 11 The arguments in question were as follows:

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The relevant factual background 12 The appellant is a breeder of Papillon dogs. She is also qualified internationally as a judge of all breeds of dogs. Unless she continues to be a member of the respondent, she will not be able to obtain work as a judge of dogs. 13 Simpson J inferred that the appellant derived income from her practice as a judge of dogs and also inferred that the appellant's accreditation as a judge had some bearing on her business activities as a breeder. Accordingly, her Honour held, the finding that the appellant was guilty of misconduct carried with it "clear potential financial implications" and, additionally, there were likely to be professional implications concerning the appellant's reputation as a judge and breeder of dogs. The respondent did not contend that her Honour was wrong in these respects. 14 In 1978 the appellant became a member of the Papillon (Dog) Club of New South Wales Inc and in 1981 she became a member of the committee of that club. From 1982 to 1984 she acted as the Club's publicity officer. 15 The appellant became involved in the preparation of a handbook which was eventually published in 1982 or 1983 under the title "Papillons in Australasia 1983". 16 In 1992 the appellant stood for election to the board of directors of the respondent. In support of her campaign she published a statement in the respondent's journal setting out her credentials for election. In that statement was the following passage: "Past publicity officer and committee member of Papillon Club - financed and published the first breed history and handbook". 17 The appellant was elected to the board. In 1995 and 1998 she again stood for election and on each occasion re-published a statement in the same terms. On each occasion she was re-elected. 18 On 19 June 1998 the secretary of the Papillon Club wrote as follows to the manager of the respondent concerning the appellant's election statement: "In this section Mrs C Mitchell states that she 'financed and published' the first Papillon handbook. Whilst we admit Mrs Mitchell paid for the location of breeders and researchers, which was greatly appreciated, the handbook was financed by members through their advertisement. The Club feels a retraction from Mrs Mitchell should appear in the Viewpoint column". 19 This letter led to a complaint of misconduct being preferred against the appellant and the appointment of the Committee of Inquiry with the consequences I have set out above.

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The court's jurisdiction to intervene 34 The jurisdictional basis of the exercise of the court's discretionary power to intervene in the affairs of voluntary tribunals has long been recognised. The discretion will more readily be exercised where (as in the present case) a person's livelihood substantially depends upon membership of the association. 35 Despite the long-standing recognition of the court's power to intervene, there is no unanimity as to its source and it has been explained on varying grounds. 36 Generally, the power is ordinarily regarded to be derived from consensual arrangements or contracts between the members of the association concerned: see Scandrett v Dowling (1992) 27 NSWLR 483 at 504 to 505 and at 507 per Mahoney JA. Once it is established that a decision is in breach of the arrangements or contract between the parties, a provision that the decision is final will not prevent the court from intervening. 37 It has further been held that, in certain circumstances, the court has power to intervene, irrespective of the terms of any contract that may be applicable. In Australian Football League v Carlton Football Club Limited [1998] 2 VR 546, Tadgell JA (at 552) observed: "I do not think it is satisfactory to regard a tribunal's obligation to act, for example, honestly and in good faith, as depending on any implication of a contractual term … it goes against the grain to say that an obligation to act honestly and in good faith should be a matter of implication of a term of … a contract …. The law does not countenance the establishment or the existence of any body for the purpose of its acting dishonestly or without good faith. Rather than implying a term that a body will act honestly and in good faith the law axiomatically assumes that that will be done: the body has no option that depends on the presence or absence of an implied term. At least, therefore, the legal obligation of a body to act honestly and in good faith goes hand in hand with an obligation to accord procedural fairness, but it may go further. The courts ought, I should think, in cases where they assume jurisdiction to interfere with decisions of domestic tribunals at all, to treat the power which any domestic tribunal may exercise as exercised defectively unless exercised honestly and in good faith." 38 In the course of his extensive discussion of the topic, Tadgell JA said (at 550): "Statutes aside, the courts have been disposed to interfere in a limited way with decisions of private or domestic tribunals in order to protect private rights that have been adjudged to deserve protection, including rights in property. The concept of property has been broadly interpreted for this purpose and, in cases within that category, I believe that there is no decision of a private or domestic tribunal with which the courts will refuse to interfere if interference be considered necessary for the attainment of justice".

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39 The approach of Hayne JA in the same case was not dissimilar to that of Tadgell JA. His Honour said at 568: "Rule 27.1(d) of the AFL Rules and Regulations provides that 'the decision of the Tribunal should be final and binding'. In my view that provision does not prevent a player suing for breach of contract if enforcement of the Tribunal's decision would constitute such a breach. Likewise, it is not effective to preclude the court applying a general principle of law (if that is its proper characterisation) that enforcement will be restrained of decisions of domestic tribunals that are 'absurd' or 'unreasonable' ( Dickason v Edwards (1910) 10 CLR 243 at 254 per O'Connor J) or are decisions that 'no reasonable man could come to' ( Dickason at 254 per O'Connor J) or are decisions contrary to 'fundamental principles of common justice' ( Dickason at 255 per O'Connor J) or are decisions 'at which no reasonable man could honestly arrive' ( Dickason at 258 per Isaacs J) or are decisions for which there is 'no evidence' ( Lee v Showmen's Guild of Great Britain [1952] 2 QB 329 at 340 per Somervell LJ) or are decisions affected by ' Wednesbury unreasonableness' ( Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223). (I need not and do not choose between these various expressions)." 40 I return now to the two arguments that were advanced on the appellant's behalf, to which I earlier referred. In summary these were, firstly, that the Committee of Inquiry failed to make certain findings of fact that were essential to a finding that the appellant was guilty of misconduct. Secondly, the findings of the Committee of Inquiry were ambiguous in material respects and thereby resulted in gross unfairness to the appellant. 41 The first argument in essence is based on a breach of contract, that is to say, the appellant submits that, by the articles, before a finding of misconduct could be made, the Committee of Inquiry was required to make certain essential factual findings. It did not make those findings; therefore it had no power under the articles to find the appellant guilty. 42 The second argument is based on lack of fairness in a fundamental part of the proceedings, namely, the terms of the decision that was pronounced. Fairness is an ambulatory concept in that it depends on the particular circumstances and it usually involves matters of fact and degree. But a material lack of fairness, if established, is itself a form of injustice. Thus, following the approach of Tadgell and Hayne JJA in Australian Football League v Carlton Football Club Limited, the jurisdiction to intervene on the basis of the second argument depends on the appellant establishing that the terms of the Committee of Inquiry's decision were contrary to "fundamental principles of common justice" (per O'Connor J in Dickason v Edwards (1910) 10 CLR 243 at 254) or unfair in a material respect (cf Hayman v Governors of Rugby School (1874) LR 18 Eq 28 at 68) or that intervention is "necessary for the attainment of justice" (per Tadgell JA in Australian Football League v Carlton Football Club Limited).

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The charge and its duplicitous nature 43 The two arguments advanced on the appellant's behalf are best understood in the light of the precise terms of the charge of misconduct brought against her. 44 The charge was in the following terms: "[The appellant] was guilty of misconduct by causing to be published in The Canine Journal of RNSWCC in May 1992, May 1995 and May 1998, a claim that she did finance and publish the first Papillon Breed History and Handbook, being claims allegedly not correct in truth and in fact ('the conduct'). By reason of the conduct, she has allegedly been guilty of misconduct in that she breached the following Regulations: 1. 17(b)(i) of the Memorandum and Articles of association in that the conduct was dishonest. 2. 17(b)(ii) of the Memorandum and Articles of association in that the conduct was discreditable to herself. 3. Article 20 of the Memorandum and Articles of association in that the conduct brought herself, as a Member, into discredit. 4. [Item 1 32(a)] in that the conduct was conduct which would be considered by a reasonable person to be of a nature which is contrary to the manner in which a person ought properly to conduct herself. 5. Item 1(32)(e) of the Memorandum and Articles of association in that the conduct was conduct bringing herself, as a Member, into discredit." 45 It can be seen that the single charge of misconduct is based on breaches of five separate provisions of the respondent's Articles. These separate breaches are set out in the form of five particulars to the allegation of misconduct. The first particular alleges dishonest conduct on the part of the appellant. The remaining four particulars all involve allegations that the appellant was guilty of conduct that brought herself as a member into discredit. 46 Thus, the elements of the misconduct alleged in particulars 2 to 5 are the same, but differ from those in particular 1. The difference arises from the fact that misconduct involving dishonesty is an essential element of a breach of article 17(b)(i), as alleged in particular 1, but dishonesty forms no part of the misconduct alleged in particulars 2 to 5 . 47 Accordingly, while the charge brought against the appellant alleged only one offence, there were at least two distinct offences contained in the charge. The charge in these terms was, therefore, duplicitous: Johnson v Miller (1937) 59 CLR 467 at 489; see also Walsh v Tattersall (1996) 188 CLR 77 (at 84 per Dawson and Toohey JJ). 48 In Vrisakis v Australian Securities Commission (1993) 9 WAR 395 at 438 I remarked that the vice of duplicity is injustice; that is, unfairness in the trial, an unfairness that may take many forms. Similar observations were made in Duncan v Medical Disciplinary Committee [1986] 1 NZLR 513 at 535 to 536 and on appeal at [1986] 1 NZLR 537 at 545. 49 In R v General Medical Council, Ex parte Gee [1986] 1 WLR 226 Mann J, at first instance, said (at 238 to 239): "A person should know of what it is that he has been found guilty (if guilty he should be found). He cannot know if he has been found guilty on a duplicitous charge whether he has been found guilty of one offence or of many. He should have the opportunity of submitting that there is no case to answer in relation to a particular occasion. That he cannot do if he is confronted with a duplicitous charge. A person cannot make a sensible plea in mitigation unless he knows of the number of his offences. The rule concerning duplicity seems to me to be a rule of elementary fairness which should apply to a charge before the Professional Conduct Committee".

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51 The decision of the Committee of Inquiry was contained in a written report as required by s 6.1(a) of the regulations. The report commenced: "The Committee was to inquire into and report in relation to an allegation that Mrs C Mitchell was guilty of misconduct by causing to be published in The Canine Journal of [the respondent] in May 1992, May 1995, May 1998, a claim that she did finance and publish the first Papillon Breed History and Handbook, being claims not correct in truth and in fact". 52 The Committee identified the issue before it as: "a quite narrow one of fact as to whether Mrs Mitchell did finance and publish the first Papillon Breed History and Handbook as she had alleged". 53 After a brief discussion of some of the evidence the report went on to say: "After a short adjournment, the Committee of Inquiry by a unanimous decision found that Mrs Mitchell was guilty of misconduct by causing to be published in The Canine Journal of [the respondent]in May, 1992, May 1995 and May 1998 a claim that she did finance and publish the first Papillon Breed History and Handbook when in fact those claims were not true. While it is clear that Mrs Mitchell undertook a substantial amount of work in producing this Handbook, it was not she who was the sole person who published it. Further, Mrs Mitchell was involved in raising revenue from advertising and sponsorship and also would have met some of the costs of the publication, in particular some later photocopying to enhance the quality of the Handbook and also include [sic] costs in taking trips to the printer in Goulburn, the evidence reveals that she did not solely finance the book. Indeed, the records clearly indicate that Mrs Mitchell received reimbursement of at least $1,000 from the Papillon (Dog) Club of NSW Inc in respect of the printing of the Handbook. Mrs Mitchell can be congratulated for the amount of time and effort she took in to the preparation of this Handbook, but she cannot allege that it was she alone who financed and published this Book". 54 The report was entirely silent as to whether the Committee found the appellant guilty of misconduct by reason of dishonesty or whether it found merely that she was guilty of misconduct on the grounds of conduct discreditable to her as a member.

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The first argument: the failure to make essential findings of fact 55 The charge of misconduct against the appellant was based solely on the publication of an alleged false statement. Misconduct arising in this way must involve some mental element on the part of the appellant that, together with the false statement, results in conduct that is improper. The making of a false statement alone will not ordinarily constitute misconduct. For example, if the false statement is made inadvertently, as a result of a misunderstanding and without carelessness, it is not likely to constitute misconduct. It is not desirable or necessary to give a catalogue of the mental elements that may result in a false statement being misconduct. Suffice it to say that well-known examples are dishonesty, reckless indifference to whether the statement is true or not, and gross carelessness. 56 The report of the Committee of Inquiry omits any reference to any mental element involved in the misconduct it found. As I have pointed out, the finding of misconduct is based merely on the finding that the appellant's statement that she financed and published the first Papillon Breed History and Handbook was not true. There is no finding that this statement was made dishonestly, or with reckless indifference as to its truth, or even negligently. 57 Mr Beech-Jones, counsel for the respondent, submitted that, properly construed, the report contained no finding of dishonest conduct and the Committee's finding of misconduct involved only a finding that the appellant was guilty of discreditable conduct in accordance with particulars 2 to 5 of the charge. This submission rested entirely on the Committee' failure to make any reference to dishonesty. Mr Beech-Jones submitted that in the light of the absence of an express finding of dishonesty, it should be inferred that the finding was one of discreditable conduct. 58 I do not accept this submission. Not only does the report make no reference to dishonesty, it makes no reference to any other mental element relating to the false statement it found, and, indeed, makes no reference to discreditable conduct. There is thus no reason to infer that the Committee found discreditable conduct rather than dishonesty. 59 I would add that having regard to the fine of $2500 imposed in the event of a retraction as required not being published, there is reason to think that the Committee may well have found dishonesty. The fine is a substantial one that would not ordinarily be imposed unless the misconduct was particularly serious. 60 On the other hand, the terms of the Committee's report also give rise to a real possibility that it made no finding whatever as to a mental element. This inference arises particularly as a result of the duplex charge. But for the duplicity in the charge, it might have been open to argument that the requisite mental element should be inferred. In other words, had the charge been one of misconduct based solely on dishonesty, a guilty verdict based on the finding that the statement in question was false might be open to the argument that the Committee, self-evidently, held that the representation was made dishonestly. Had the charge been based solely on discreditable conduct, the requisite mental element for a guilty verdict might, arguably, similarly be inferred. But in the circumstances, inferences of this kind cannot be drawn. 61 Additionally, the statement by the Committee that the issue before it was the narrow question whether the appellant did in fact finance and publish the first Papillon Breed History and Handbook suggests that the Committee may not have thought it necessary to make any finding as to the appellant's mental state when she made the statement found to be false. 62 Accordingly, on the basis of the report of the Committee of Inquiry, it is simply not apparent whether the Committee found dishonesty established, or some lesser mental element, or simply did not apply its mind at all to the need to find an appropriate mental element. 63 Accordingly, in my opinion, the findings of the Committee of Inquiry are materially ambiguous and defective. I accept the argument advanced on behalf of the appellant that the report does not disclose findings adequate to ground a verdict of guilty of misconduct under the respondent's articles of association and regulations.

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