Resign to Avoid a Society’s Disciplinary Processes? – CTV Building Collapse

Resign to Avoid a Society’s Disciplinary Processes? – CTV Building Collapse

Complaints were made to the Institution of Professional Engineers of New Zealand Inc (“IPENZ”) about Harding, an engineer involved in the design and construction of the former CTV building in Christchurch which collapsed during the 22 February 2011 earthquake.  After disciplinary proceedings were commenced he resigned from IPENZ, apparently hoping to avoid the disciplinary process, and, on the face of it, you might well have thought that if he was no longer a member then he could no longer be disciplined by that Institute.  The High Court concluded otherwise – Harding v Institution of Professional Engineers of New Zealand Inc [2014] NZHC 2251 (17 September 2014).

Contract of membership

While not referred to in the IPENZ decision:

  • As stated in Te Runanga o Muriwhenua Inc Society v Neho (High Court, Whangarei CP 43/98, 2 December 1998, Fisher J, at 4), “It is fundamental to the structure of an incorporated society that by the voluntary act of joining such a society every member opts into a contract to be bound by the rules of that society,” and
  • Further, on becoming the terms of the contract between a society and its members are set out in the rules of the society (see, for instance, Finnigan v New Zealand Rugby Football Union Inc [1985] 2 NZLR 159 at 177 (CA)), with a member by virtue of membership agreeing to be bound by the rules (Tucker v Auckland Racing Club [1956] NZLR 1).

In fact, an IPENZ Rule referred to a mandatory undertaking entered into by a candidate for membership that he or she would abide by IPENZ’s Rules and Regulations; stating that “Each candidate for election to any class of Membership must undertake to abide by the Rules and Regulations of the Institution and future revisions thereof (Membership obligation). This undertaking will be regarded as continuing until the person resigns or is removed from the roll of Members.”  I venture to suggest that this Rule may, in fact, have added little to Harding’s contractual obligations after becoming a member of a society.

Applicable rules and consequences

Further Rules imposed a competence obligation on members and a “good character obligation,” and the Judge concluded that “Mr Harding, upon becoming a member of IPENZ, undertook to comply with these obligations.”  After considering the relevant Rules, the Judge also concluded that “IPENZ upon receipt of a complaint must either refer the matter to a Disciplinary Committee or refer the matter for investigation.”  The Judge held that the Rules required that, if that complaint was not dismissed after preliminary investigations had been carried out, “a Disciplinary Committee must determine a complaint” and “that a Disciplinary Committee must, as soon as practicable after hearing the complaint, hear the matter and determine whether or not there are grounds for disciplining the member … .  If there are no grounds for discipline, the complaint must be dismissed.  If there are grounds for discipline, a Disciplinary Committee must decide ‘whether and how to exercise the Institution’s powers under Rule 11 of the Institution’.”

Harding’s primary argument

Harding argued that, as he was no longer a member of IPENZ, its rules and regulations could no longer have any application to him.  The Judgment dealt with that argument as follows:

The reference to “member” must be considered against the objects and purpose of the complaint process and the disciplinary procedure provided by IPENZ’s Rules and Regulations.  A complaint focuses on an individual’s conduct.  If the individual at the time of the conduct complained of was a member of IPENZ, then jurisdiction is triggered by force of the contractual relationship that existed at the time of the conduct and at the time of the complaint.

Harding became a member of IPENZ in 1985.  He did so cognisant of the obligations and responsibilities that attached to that membership.  As already observed, the conduct the subject of the complaints occurred at the time of his membership, as did the complaints.

The Judge concluded that the construction of the term “member” referred to in the Rules and Regulations includes a member who may have resigned prior to the hearing of complaints made against him or her by a disciplinary committee.

That construction of the IPENZ Rules and Regulations is consistent with the public interest in the availability of an effective complaints procedure to investigate and hold to account individuals who hold themselves out as a member of a recognised professional body at the time of the conduct the subject of the complaint, or at least at the time the complaint was made and received. The reference to “a member” in [the relevant rules] includes such a person, regardless of any subsequent resignation of membership.

Reflection

It is natural to applaud the Judgment simply because many in the community would wish to see a professional involved in the design and construction of the CTV building held accountable by his professional body for the building’s collapse and the deaths and injuries that followed.   However, Harding is legally, more important than that, as it is a forceful reminder that society membership involves potentially significant obligations which it may not be possible to avoid by resigning.

 

This is one of a series of articles on societies and charitable trusts (originally published in the NewLaw magazine) by Mark von Dadelszen, a Hastings lawyer and author of Law of Societies, 3rd Edition, 2013. If any reader has examples of issues that have arisen or questions about societies or charitable trusts that might be a suitable subject for one of these articles please contact Mark at mark.vondadelszen@bvond.co.nz.