Tuoro v Land Agents Registration Board [2011] CKLC 3; Misc 21.2011 (14 September 2011)

IN THE HIGH COURT OF THE COOK ISLANDS
HELD AT RAROTONGA
(LAND DIVISION)

MISC: 21/2011

BETWEEN

NOOROA TUORO
Appellant

AND

LAND AGENTS REGISTRATION BOARD
First Respondent

AND

THE MINISTER FOR JUSTICE IN LAW

Second Respondent

Hearing: 6 September 2011

Counsel: L Rokoika for the Appellant
T Elikana, Solicitor-General, for the Respondents

Judgment: 14 September 2011 (NZT)

JUDGMENT OF THE COURT

Introduction

[1] This is an appeal brought in terms of s 24, Land Agents Registration Act 2009, by the appellant who had applied for registration but had been declined. This is the first such appeal under the Act and it raises some important issues as to the role of the Land Agents Registration Board established under that Act.

[2] At the outset, Ms Rokoika sought leave to rely upon an affidavit made by the appellant. She appeared to have assumed that such an affidavit could be filed as of right. I pointed out to her, however, that this was an appeal and that, without leave, there could be no fresh evidence introduced. Following further discussion on the topic, she withdrew the affidavit. Although it remains sitting on the file, I have not formally read it for the purposes of this judgment.

[3] Ms Rokoika also appeared to have assumed that the appeal was, in many ways, a form of judicial review. She referred extensively to judicial review cases and made little direct reference to the Act itself. At my request she confirmed that she was proceeding on the basis that her client was exercising the s 24 appeal. The reference to the judicial review cases was designed to support an allegation that the Board’s processes had miscarried and that, as a result, the Board had erred.

[4] The essential issue for determination by the Court is whether the Land Agents Registration Board erred in not giving the appellant an opportunity to address it in relation to adverse materials held by it and relied upon by it in declining registration.

The Facts

[5] The 2009 Act heralded a change of approach in relation to unqualified land agents appearing in the Land Division of the Court. The purpose of the Act was to provide for a system of registration with a view to ensuring a higher standard of service by such agents. The Act provided for a Board to oversee the operation of the Act and to provide a disciplinary function. I describe this in more detail in the next section of this judgment.

[6] As a result of the Act, it was necessary for persons who wished to act as land agents to apply for registration. The appellant did so by filing an application in standard form on 24 March 2010. Paragraph 9 of the standard form required her to set out particulars demonstrating a sound knowledge of Cook Islands land law, but the applicant omitted to set out such detail. There were some supporting letters including a letter from Mr Charles Petero, a barrister and solicitor practising in Rarotonga. The Board made various inquiries of persons including the Chairman of the Leases Approval Tribunal. Following those inquiries the appellant was granted a provisional registration for three months subject to conditions (in terms of s 13 of the Act). Mr Petero was referred to as her mentor.

[7] I do not have a copy of the grant of the provisional license granted to the appellant (a copy was not retained by the Board – a matter discussed by me below). I have been advised as to its contents, however, and counsel are agreed as to the position.

[8] A further application was then filed by the appellant in August 2010 and, following an inquiry, a further provisional registration was granted. As part of the consideration of this second application, a claim made by the appellant as to a comment supposedly made by Hingston J (favourable to her case) was reviewed and discussed with the Judge. He denied making the comment and, indeed, a review of the transcript of the relevant hearing provides little support for the claim.

[9] Following this second application, the Board granted a further three months provisional registration. As with the previous registration, the Board did not retain a copy.

[10] On 9 December 2010, the appellant made a further written application for registration. This was the third application made by her. It did not follow the prescribed form and provided very little information as to why she should be entitled to receive a full licence as from December 2010. One of the oversights was that there were no details as to a trust account which a land agent is required to have in terms of s 18 of the Act.

[11] I have seen some correspondence between the Board and the appellant in February and March 2011. Mr Solicitor, appearing for the respondents, argued that the second of the two (letter dated 8 March 2011) impliedly invited submissions from the applicant. I am satisfied that it did not.

[12] The Board considered the application at a meeting on 15 April 2011 and declined the registration. In paragraph [2] of a letter sent to the appellant almost a week later, it gave the following reasons:

After considering your application and other information provided to the Board, including reviewing the transcript of your recent appearance before Justice Hingston, the Board has noted the following:

1. It is evident from the transcript of your appearance before Justice Hingston that you lack the knowledge and understanding to conduct a hearing before a Judge of the High Court.
   
2. It is recorded in the transcript that you advised the Court that Mrs Tuaine Marsters was your mentor, and yet when asked during your application for registration, you advised the Board that Mr Petero was your mentor. The Board was not notified of the change by you and considers it has been misled.
   

[13] Prior to making its decision on 15 April 2011, the Board had made further inquiries including in relation to a Land Court hearing that took place on 9 March 2011 before Hingston J. This is the hearing referred to in the extract quoted above at subparagraph (a). A particular concern of the Board was that during the course of this hearing the appellant referred to Mrs Marsters as her mentor rather than Mr Petero. For the reasons set out below I am satisfied that this is not a particularly significant objection, although the appellant has also contributed to the problem.

[14] Of more significance, however, is that the transcript of the hearing hardly gives one confidence that the appellant does have a sound grasp of Cook Islands land law.

[15] The Board also made inquiries of counsel who appeared at the same hearing and she indicated some reservations as to whether thellant had a fundamental understanding of the law.

The Act

[16] The Board is established under s 3 of the Act. Its members are specifically defined as including the Solicitor-General who shall be the Chairperson. There shall then be one person appointed by the Minister. In the present case that is Mr Hagan, formerly Secretary of Justice and very experienced in these issues. The third person appointed by the Minister is Mr Tim Arnold, a highly experienced barrister and solicitor practising in Rarotonga. These three persons, together with a secretary, comprised the Board. Only the three full members, however, had voting rights.

[17] The procedure and proceedings of the Board are expressly stated to be subject to its own regulation: s 5. Section 5(2) specifically incorporates the First Sch of the Act into the Boae Board’s proceedings. Clause 12 of that Schedule is potentially relevant and I set out clauses 12(1) and 12(3):

12 Proceedings privileged –

(1) No proceedings, civil or criminal, shall lie against the Board for anything it may do or fail to do in the course of the exercise or intended exercise of its functions, unless it is shown that it acted in bad faith.

...

(3) No member of the Board, or person appointed or engaged under clauses 2 or 3 of this Schedule, shall be required to give evidence in any court, or in any proceedings of a judicial nature, in respect of anything coming to the knowledge of the member, or person in the course of the operations of the Board.

[18] The qualifications that must be met by an applicant for registration can be found in s 10. Section 10(1) is in the following form. I do not set out subcls (d) and (e) which are not relevant in the present case:

10 Qualifications for registration –

(1) No person shall be registered under this Act as a Land Agent unless the Board is satisfied, acting in its discretion that the person –

(a) has attained the age of 21 years; and

(b) is of good character and reputation; and

(c) has an appropriate (as determined by the Board) standard of professional competence; and

...

(f) has demonstrated to the satisfaction of the Board a sound knowledge of Cook Islands land law including an appreciation of the relevance of custom to the application of those laws; and

(g) has demonstrated to the Board adequate knowledge of the operation of a trust account for the safe keeping of client funds.

[19] Subparagraphs (c) and (f) in the quoted extract above do overlap to some extent but the requirement in subparagraph (c) focuses more on competencies such as document preparation, Court skills, use of trust accounts and so on.

[20] Section 11 provides that an applicant shall make a written application for registration.

[21] Section 12 then provides that the application is to be considered by the Board. Section 13 provides further detail as to that consideration. I now set out ss 12 and 13:

12 Applications to be considered by Board –

(1) As soon as practicable after the receipt of an application for registration, the Secretary shall –

(a) give public notice of the application on not less than two occasions within 10 days of having receiving the application; and

(b) circulate copies to every member of the Board which must consider the application within 14 days of having received the copies of the same.

(2) Notwithstanding subsection (1), the Board may dispense with or abridge any requirement as to time prescribed by that subsection, if it is satisfied that the public interest is not adversely affected by the dispensation or abridgment.

(3) The Board may, if it thinks fit, examine on oath or otherwise the applicant, or any person objecting to the application, or any other person, with respect to the application; and for the purposes of this subsection the Secretary of the Board may administer an oath to or require an affirmation from any person.

(4) The Board may also, if it thinks fit, require any person to verify on oath or by statutory declaration any statement made by that person with respect to any application, or with respect to any objection to an application.

13 Consideration of application –

(1) If the Board, after considering an application is of the opinion that the applicant is entitled to be registered under this Act, it shall direct the Secretary to enter the name and address of the applicant, together with such conditions and particulars as the Board may require, in the register of Land Agents kept pursuant to section 9 and to notify the applicant in writing accordingly.

(2) If the Board, after considering any application is of opinion that the applicant is not entitled to be registered under this Act it shall direct the Secretary to in writing notify the applicant accordingly and to give the applicant the reasons for the Board's decision.

(3) No entry in the register of the name of any person shall be made without the direction of the Board.

(4) The Board may adjourn any application where it requires further information from or in respect of an applicant.

[22] In this review of the Act I have also addressed the Board’s disciplinary powers. I set out s 20(3) as follows:

20 Inquiry by Board into allegations of misconduct –

...

(3) The Board shall, unless it is satisfied that there is no reasonable ground for the complaint, or that the complaint is frivolous or vexatious, hold an inquiry into the matter, and shall give to the Land Agent concerned not less than 14 days notice in writing of its intention to hold the inquiry, and of the time and place of hearing, and of the nature of the complaint to be inquired to. The notice may be served personally or by registered letter addressed to the Land Agent concerned at his or her last known place of business or abode.

...

[23] I have set out this provision because it deals with the question of notice to the relevant land agent.

[24] There do not appear to be any other provisions in the Act which are directly relevant.

The appellant’s submissions

[25] The appellant argued that the principles of natural justice apply in all cases unless one of the following circumstances applies:

• (a) there is an exhaustive procedural code which excludes natural justice;
  
• (b) in situations of emergency (not relevant here), or
  
• (c) by statutory words which expressly or by necessary implication exclude natural justice.
  

[26] In making this submission she referred to Wiseman v Borneman,[1] Durayappah v Fernando,[2] and the well-known New Zealand decision Daganayasi v&#16ister of Immigration.[3]

[27] Perhaps the high point of her submissions was the Court of Australia decision of Kioa v Minister of Immigration and Ethnic Affairs.[4] She referred to a lengthy extract:

A person whose interests are likely to be affected by an exercise of power must be given an opportunity to deal with relevant matters adverse to his interests which the repository of the power proposes to take into account in deciding upon its exercise... The person whose interests are likely to be affected does not have to be given an opportunity to comment on every adverse piece of information, irrespective of its credibility, relevance or significance. Administrative decision-making is not to be clogged by enquiries into allegations to which the repository of the power would not give credence, or which are not relevant to his decision or which are of little significance to the decision which is to be made. Administrative decisions are not necessarily to be held invalid because the procedures of adversary litigation are not fully observed...

Nevertheless in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made. It is not sufficient for the repository of the power to endeavour to shut information of that kind out of his mind and to reach a decision without reference to it. Information of that kind creates a real risk of prejudice, albeit subconscious, and it is unfair to deny a person whose interests are likely to be affected by the decision an opportunity to deal with the information. He will be neither consoled nor assured to be told that the prejudicial information was left out of account. The allegation in par.22 was apparently credible, relevant and damaging. The failure to give Mr Kioa an opportunity to deal with it before making an order that Mr and Mrs Kioa be deported left a risk of prejudice which ought to have been removed. There was nothing in the circumstances of the case - neither in the administrative framework created by the Act nor in any need for secrecy or speed in making the decision - which would have made it unreasonable to have given Mr and Mrs Kioa that opportunity. The failure to give Mr Kioa that opportunity amounts to a non-observance of the principles of natural justice. The result is that the condition governing the power to make the deportation orders was not satisfied and the orders must be set aside. If the Minister chooses to do so, a fresh decision may be made. There is nothing in these reasons which affects the merits of the decision made or of any decision which may be made in the future.

[28] She concluded with a reference to Lord Morris in Wiseman v Borneman where he said:

... I feel bound to express my prima facie dislike of a situation in which the tribunal has before it a document (which might contain both facts and arguments) which is calculated to influence the tribunal but which has not been seen by a party who will be affected by the tribunal's determination[5].

Crown Submissions

[29] The Solicitor-General's submissions focussed more on the Act and addressed the statutory provisions set out earlier. He emphasised that the overall scheme of the Act left little room, if any, to imply obligations of natural justice.

[30] He, too, referred to Kioa v Minister of Immigration and Ethnic Affairs emphasising Mason J at page 348 aid:

In the ordinary course of granting or refusing entry permits there is no occasion for the principles of natural justice to be called into play. The applicant is entitled to support his application by such information and material as he thinks appropriate and he cannot complain if the authorities reject his application because they do not accept, without further notice to him, what he puts forward. But if in fact the decision-maker intends to reject the application by reference to some consideration personal to the applicant on the basis of information obtained from another source which has not been dealt with by the applicant in his application there may be a case for saying that procedural fairness requires that he be given an opportunity of responding to the matter.

[31] The Solicitor-General was quite proper in referring the Court to this extract. He recognised that the last sentence was potentially unhelpful to him, but argued that there was no external information which was required to be put to the appellant. His argument was that the scheme of the Act required the Board to take account of its own knowledge and information gained by it in the normal course of its (or its members) business.

[32] He also, quite properly, referred to a decision of the former Chief Justice of the Cook Islands, Quillian CJ, given in Gragg v Akaruru.[6] As he acknowledged, however, that decision essentially supports the appellant's case. Tlevant statute clothed the Minister with an absolute discretion but, nevertheless, the prin principles of natural justice still applied.

Discussion

[33] The Act clearly gives the Board wide powers of decision-making and an extensive discretion in which to decide applications for registration. The Board is highly experienced, and also expert, and will be expected to bring its own opinions and experience to bear on any application for registration.[7] At first blush, the overall scheme of the Act leaves little room to impose an over-arching obligation of natural justice upon an investigatory process that is not, in my opinion, intended to be subject to extensive external review.

[34] Having said that, the Act does not clearly provide an exhaustive code[8]. I do not think it can be said, with complete certainty, that the legislature intended to exclude all obligations of natural justice from the Board's deliberations. The Solicitor-General argued that cl 12 of the First Schedule indicated that it was only in instances of bad faith that the Board's decisions could be impugned. While ouster clauses such as cl 12 are always difficult[9], there is some force in what the Solicitor-General says. Nevertheless, I do not think it is possible to conclude that cl 12, either viewed in isolation or as part of the overall statutory scheme, excludes any requirement of natural justice.

[35] Even though the Act does not provide an exhaustive code, it may still be possible to conclude that the Act, properly construed, excludes the Board's investigation from the obligations of natural justice. In other words, does the Act by express words or necessary implication exclude natural justice? There is some force in the Solicitor-General's argument that it does. For example,

• (a) Section 5 allows the Board to set its own procedure.
  
• (b) Section 10(1) gives the Board with a wide discretion in deciding whether it is satisfied as to the relevant qualifications.
  
• (c) Section 12(3) provides the Board with a discretion, if it thinks fit, to examine any relevant persons including any person objecting. Even though the Act specifically recognises that there might be objectors, there are no specific requirements that give an applicant an opportunity to respond to those objections.
  
• (d) By contrast, in s 20(3) in addressing the Board's disciplinary function, the Act specifically requires notice to be given to the relevant land agent.
  

[36] During the course of argument I also asked counsel to address me in relation to the process of application under the Law Practitioners Act. Section 4 of that Act clothes the Law Society with an investigatory role, but the Act makes it clear that an adverse report is to be given to an applicant. There is no similar provision in the Act here. I believe it can properly be assumed that the draftsman of the Act would have been aware of comparable legislation. From this it could be argued that the omission of any specific requirement to give notice to an applicant was deliberate.

[37] I believe these are powerful factors but they are not, finally, a complete answer. If the legislature had wished to give the Board a free hand, and to exclude any considerations of natural justice, this would have required express words. There is nothing of that sort, and, as a result, I believe that natural justice cannot be said to be excluded.

[38] I asked counsel whether it could be said there was a peculiar Cook Islands slant to this. In a small economy with limited resources, was there any scope to argue a lesser role for natural justice? The Solicitor-General quite properly argued that there could be no such exemption and referred to the decision of Quillian CJ mentioned above which did not make any such assumptions.

[39] On balance, I am satisfied that there is a limited role for natural justice in this case. Applications to the Board for registration are relevant to the ability of an applicant to earn a livelihood as a land agent. That is a situation where courts are ready to apply principles of natural justice[10]. In any case where the Board is giving consideration to refusing a registration, I believe it should give a form of notice to an applicant which sets out, in broad terms[11], the nature of the Board's concerns. That notice will not reveal details, nor names of objectors, unless there is a particular need to do so. It would be a matter for judgement in each case.

[40] In the present instance, had notice of this sort been given to the applicant, I believe that it would have become apparent that the reference to Mrs Masters as being the applicant's mentor would have been put into a better perspective. This was one of two reasons given by the Board for refusing registration and I do not believe it was a particularly strong reason. It became apparent during the course of argument that the Board's fundamental concern, a lack of a sound knowledge of Cook Islands land law, was what actually lay behind its decision. Nevertheless, as I will shortly discuss, the role of a mentor is viewed, by the Board, as a significant issue. I suspect that the appellant did not fully understand this.

[41] It seems to me that the main concern of the Board was the appellant's apparent lack of knowledge of the law. On the basis of my reasoning thus far, the Board should have given an opportunity to the appellant to answer its concerns that she lacked a sound knowledge. During the course of argument I raised the issue of whether this would be an empty exercise undertaken simply to satisfy the principles of natural justice. After all, I asked rhetorically, how could the appellant satisfy the Board at an interview that she did have a sound grasp of the law? What would she need to do? In raising the issue I was concerned whether, if such an exercise would be empty, it indicated that natural justice was excluded. I remind myself, however, that it is always unwise to assume a particular outcome if the principles of natural justice are complied with. That is, it would be unwise of the Court to assume that the exercise would be empty.

[42] I also remind myself that part of the essential problem in this case stemmed from the appellant's failure to provide any real details at the outset.

[43] The point of applying the principles of natural justice in favour of the appellant in this case is to ensure that the Board's concerns are based on sound grounds rather than upon assumptions. The Board's concerns in relation to the appellant's mentor provides a good for example of this. If that had been put to the appellant, then I am satisfied that the Board would have reached a different conclusion in relation to that aspect of its' reasoning. While I think that was a relevantly minor component of the Board's decision, it provides a useful example.

[44] I do sympathise with the Board's predicament. It is required to give effect to a statutory purpose which is not entirely easy of application. It is required to approve land agents to appear in Court in circumstances where they do not have formal qualifications. Of course, in some instances they may have qualifications, but in the present case, the appellant did not. Mr Solicitor argued that if the Board had applied the legal test strictly then no, or very few, applicants would have been registered. The papers before me do indicate that the Board had concerns as to the degree to which a number of applicants understood the law. However, the Board was prepared to take a practical approach to this and it developed a practice of requiring applicants to appoint mentors (for example, a qualified barrister and solicitor) who would support them as required. The Board believed this was a practical way to endeavour to make the Act work. In doing this, it had an eye to the future, recognising that by the use of a mentoring programme, land agents might thereby acquire a sufficient grounding in the law.

[45] I commend the Board's efforts to make the Act work but I must also sound a note of caution. Conceptually, and with respect, it might be said there is some muddled thinking which lies behind the Act. Similar problems have arisen in New Zealand when the legislature endeavoured to broaden recognised categories of experts in order to provide competition. For example there is a licensing process in New Zealand for conveyancers to undertake certain functions in competition with lawyers. Another example was the introduction of private certifiers into the area of building construction. The latter instance, certainly, has resulted in enormous problems. I do not understand that the introduction of conveyancers in New Zealand has been particularly successful. The fundamental difficulty is that in order to introduce such competition, standards of expertise need to be compromised. Some agency is then given oversight of the licensing of such persons, in circumstances where some means must be found to compensate for the lack of expertise.

[46] While, as I say, I sympathise with the Board's predicament, the fact that it has had to fit a square pole into a round hole means that there is a risk that it will proceed on erroneous assumptions if it does not, at least, give an applicant an opportunity to address any adverse concerns it may have. While it is beyond the scope of this Judgment to set out a full examination of the Board's powers to refuse an application (because that does not necessarily arise here) it is clear that the Act contains no bias towards granting applications. If the Board does not believe that the relevant factors in section 10 have been satisfied then it should be expected that it will refuse a registration.

[47] The end result is that I uphold the appeal to a very limited extent. The Court has a wide range of options at its disposal: s24. I require the Board to reconsider the application made by the appellant. It shall grant the appellant an opportunity to address the Board (whether in person, or in writing, and whether represented or not) as the Board may determine. Prior to that, the Board shall notify the appellant, in a broad sense, of the concerns which it holds and which the appellant must address. It will then be a matter for the Board to decide as to whether registration should be granted and, if so, the terms of that registration. Nothing in this Judgment should be taken as indicating a view one way or the other on that issue which is entirely a matter for the Board.

[48] I suggest another option which is open to the appellant. The application which she made to the Board was clearly deficient. There was very little material positively addressing the issue of her knowledge of the law. In these circumstances there may be some sense in her bringing a fresh application which sets out all of the details which she wishes to put before the Board. The Board will then consider this and make such inquiry as it thinks desirable. If any adverse materials arise then they should be put to the appellant as I have already discussed.

Some administrative issues

[49] As I mentioned above, the Board's secretariat had not retained copies of the provisional registration given to the appellant. The Solicitor-General accepted that the Board needs to tighten up its administrative processes and I would endorse that. I appreciate the Board is under-resourced but it might be able to refer to this judgement in order to pursue a case for funding so it can comply with its lawful requirements.

[50] Another administrative issue arose. It became clear that the appellant, concerned at the time taken to address her December 2010 application, endeavoured to approach the Solicitor-General personally to discuss her case. This was most inappropriate. Any communications to the Board should be made through the secretary who should then ensure that they are brought to the attention of the Board. It is always open to an applicant to retain legal advisors who will make such an approach on their behalf, should that be necessary. However, whatever approach is taken, it is not appropriate to make a personal approach.

Conclusion

[51] I leave it to the parties to confer as to the appropriate wording of any Judgment to be sealed. If the parties reach agreement then that should be submitted to me for approval. If not, the parties should prepare a joint memorandum setting out the competing contentions and I will rule upon the matter.

[52] My provisional view is that costs should lie where they fall. While the appellant has succeeded to some extent, she is, for the reasons discussed above, partly the author of her own misfortune. I invite counsel to confer. If the appellant does seek costs, contrary to my observation, then counsel should lodge a memorandum within twenty working days from the date of delivery of the Judgment. The respondent shall reply a further five working days later.

Tom Weston
Chief Justice

---

^[1] Wiseman v Borneman [1971] AC 297, 308. See Lord Morris at page 309: “Natural justice, it has been said, is only “fair play in action””
^[2] Durayappah v Fernando [1967] 2 AC, 337.
^[3] Daganayasi v Miniof Imtion [198 [1980] 2 NZLR 130.
^[4] Kioa v Minister of Immigration and Ethnic Affairs (1985) 159 CLR 550.
^[5] Wiseman v Borneman [1971] AC 297, 309.
^[6] Gragg v Akaruru [1997] CK HC 2.
^[7] Daganayasi v&Minister of Immigration [1980] 2 NZLR 130, 142 line 40 et seq.
^[8] Joseph “Constitutional & Administrative Law NZ”] at para 24.3.2.
^{[9] Joseph “Constitutional & Administrative Law NZ” [3ed] at para 21.8.1.
[10] Taylor “Judicial Review” [1991] at para 13.15;
Joseph “Constitutional & Administrative Law” [3ed] para 24.2.1}

^[11] Daganayasi v&Minister of Immigration [1980] 2 NZLR 130, 143: “... at least the substance of any prejudicial contents...”.