Australian Federation of Islamic Councils Inc v United Muslims of New South Wales Inc

[2021] NSWCA 311

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Australian Federation of Islamic Councils Inc v United Muslims of New South Wales Inc [2021] NSWCA 311

Hearing dates:

13 July 2021

Decision date:

15 December 2021

Before:

Bathurst CJ at [1];
Bell P at [137];
Meagher JA at [138]

Decision:

(1)   Appeal dismissed with costs.

Catchwords:

ASSOCIATIONS AND CLUBS – rights, duties and liabilities of members – committees – association constitutions – whether an unincorporated association was capable of being a State Council under the AFIC Constitution – where the unincorporated association was a group of individuals

ASSOCIATIONS AND CLUBS – meetings – validity – association constitutions – whether UMNSW was removed as the State Council – whether the meeting at which the resolution removing UMNSW as State Council was properly convened

ASSOCIATIONS AND CLUBS – meetings – validity – association constitutions – whether UMNSW was replaced as the State Council by an elected committee of individuals

ASSOCIATIONS AND CLUBS – rights, duties and liabilities of members – election of members – association constitutions – whether an elected person was duly appointed as delegate of the State Council under the AFIC Constitution

Legislation Cited:

Associations Incorporation Act 1964 (Tas)

Associations Incorporation Act 2009 (NSW)

Charitable Collections Act 1934 (NSW)

Corporations Act 2001 (Cth)

Corporations (Ancillary Provisions) Act 2001 (Cth)

Income and Corporation Taxes Act 1970 (UK)

Cases Cited:

Buckley v Tutty (1971) 125 CLR 353; [1971] HCA 71

Cameron v Hogan (1934) 51 CLR 358; [1934] HCA 24

Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1980] 3 All ER 42

Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1982] 2 All ER 1

Glencore Coal Assets Australia Pty Ltd v Australian Competition Tribunal (2020) 280 FCR 194; [2020] FCAFC 145

Islamic Council of New South Wales v Australian Federation of Islamic Councils [2000] NSWSC 115

Islamic Council of NSW v The Australian Federation of Islamic Councils [2000] NSWSC 115

Kibby v Registrar of Titles (1999) 1 VR 861; [1998] VSC 148

Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404

Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1; [2006] FCAFC 144

Maddocks v DJE Constructions Pty Ltd (1982) 148 CLR 104; [1982] HCA 17

National Roads and Motorists’ Association Ltd v Parkin (2004) 60 NSWLR 224; [2004] NSWCA 153

North Sydney Brick & Tile Co Ltd v Darvall (1989) 17 NSWLR 327

The Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429; [1968] HCA 8

United Muslims New South Wales Inc v Australian Federation of Islamic Councils [2021] NSWSC 382

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Australian Federation of Islamic Councils Inc (First Appellant)
Abraham Zoabi (Second Appellant)
United Muslims of New South Wales (First Respondent)
The Council of Islamic Societies in New South Wales Inc (Second Respondent)

Representation:

Counsel:
M Ashhurst SC with D Meyerowitz-Katz (Appellants)
T Dixon with H Pararajasingham (Respondents)

Solicitors:
Birchgrove Legal (Appellants)
Madison Marcus (Respondents)

File Number(s):

2021/117125

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity

Citation:

[2021] NSWSC 382

Date of Decision:

16 April 2021

Before:

Black J

File Number(s):

2021/55621

HEADNOTE

[This headnote is not to be read as part of the judgment]

The first appellant, Australian Federation of Islamic Councils Inc (AFIC), and the second appellant, Abraham Zoabi (Mr Zoabi), sought to appeal against declarations made in proceedings arising out of disputes between AFIC and the first respondent, United Muslims of New South Wales Inc (UMNSW), in relation to the question of whether UMNSW remains the New South Wales State Council within the meaning of the expression “State Council” in the AFIC Constitution, with the consequential rights granted to it in that capacity.

Significant disagreements had arisen between the representatives of AFIC and UMNSW concerning the corporate governance and administration of each entity.

On 17 November 2020, in a letter circulated to AFIC and UMNSW member societies, AFIC alleged that UMNSW had breached the AFIC Constitution and that member societies “demanded” pursuant to the AFIC Constitution that a “caretaker interim committee” be appointed to manage the affairs of New South Wales member societies “until such time that an election of a new Executive Committee is held”. On 4 December 2020, Mr Zoabi on behalf of the caretaker interim committee circulated a similar letter to various Islamic societies of New South Wales.

Meanwhile, UMNSW notified its member societies that its Annual General Meeting would be held on 17 January 2021. The “Agenda” stated that the business of the meeting included the “election of office-bearers”.

On 28 December 2020 and again on 6 January 2021, Mr Zoabi notified AFIC member societies in New South Wales that the interim caretaker committee would be convening a meeting on 16 January 2021 to hold elections to “nominate their representatives with AFIC”.

Minutes of the AFIC meeting on 16 January 2021 record that delegates of New South Wales member societies present agreed to select a committee to represent them as “the Muslims of NSW”. Mr Zoabi was ultimately the sole nominee for president and was elected. Other office bearers were also elected. Together, Mr Zoabi and the office bearers formed an unincorporated association described in these proceedings as the “New Council”.

At the UMNSW Annual General Meeting on 17 January 2021, UMNSW member societies unanimously elected Hossam Elrayes (Mr Elrayes) as president. The other office bearers were also unanimously elected.

On 22 January 2021, UMNSW informed AFIC that Mr Elrayes would be the delegate for the State Council of New South Wales on the Federal Council of AFIC.

The questions raised by the proceedings can be summarised as follows:

1. Does UMNSW remain the State Council of New South Wales for the purpose of the AFIC Constitution?

2. Did the resolutions passed at the meeting on 16 January 2021 of what were described as “AFIC NSW members societies” have the effect of removing UMNSW as the State Council and replacing it with the New Council?

3. Following the election of Mr Elrayes as its president at its Annual General Meeting on 17 January 2021, was UMNSW entitled to nominate Mr Elrayes as the delegate for the State Council of New South Wales on the Federal Council of AFIC?

The primary judge answered questions (1) and (3) in the affirmative, declaring that UMNSW is the State Council for New South Wales as defined in cl 3 of the AFIC Constitution, and that Mr Elrayes is the duly appointed delegate for the State Council of New South Wales as provided for in the AFIC Constitution.

AFIC and Mr Zoabi sought leave to appeal against these declarations, contending that questions (1) and (3) should be answered in the negative and question (2) answered in the affirmative.

AFIC’s notice of appeal and UMNSW’s notice of contention raised the following issues:

1. Whether the primary judge erred in holding that the AFIC Constitution did not permit the removal or displacement of an existing State Council by AFIC’s member societies for that state electing a new State Council (appeal ground 1).

2. Whether the group of individuals constituting the New Council, purportedly appointed on 16 January 2021, was capable as an unincorporated association of being a State Council under the AFIC Constitution (notice of contention ground 1).

3. Whether the primary judge erred in not finding that at the meeting on 16 January 2021, the AFIC member societies in New South Wales who were present decided that UMNSW should be removed as State Council and replaced by the elected committee of individuals constituting the New Council (appeal ground 2).

4. If UMNSW remained the AFIC State Council for New South Wales, whether Mr Elrayes was duly appointed as its delegate under the AFIC Constitution (appeal grounds 3 and 4).

Construction of the AFIC Constitution and the UMNSW Constitution

1. The principles involving the interpretation of commercial contracts apply to the interpretation of the constitutions, although having regard to their public dimension, caution is required in the use of extrinsic material: [64] (Bathurst CJ); [137] (Bell P); [138] (Meagher JA).

Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1; [2006] FCAFC 144; National Roads and Motorists’ Association Ltd v Parkin (2004) 60 NSWLR 224; [2004] NSWCA 153; Glencore Coal Assets Australia Pty Ltd v Australian Competition Tribunal (2020) 280 FCR 194; [2020] FCAFC 145, referred to.

Whether the AFIC Constitution permits a State Council to be removed by AFIC’s member societies in that state (appeal ground 1)

1. Absent the use of the expulsion provisions in the Model Rules for associations incorporated under the Associations Incorporation Act 1964 (Tas), AFIC does not have the power to remove a State Council: [87] (Bathurst CJ); [137] (Bell P); [138] (Meagher JA).

Whether an unincorporated group of individuals was capable of being a State Council under the AFIC Constitution (notice of contention ground 1)

1. A group of individuals can join together to form an association and can hold property, whether jointly or by means of a trust structure, with rules whose efficacy will depend on the consensus reached by the parties who join together in forming the association: [92]-[94] (Bathurst CJ); [137] (Bell P); [138] (Meagher JA).

Cameron v Hogan (1934) 51 CLR 358; [1934[ HCA 24; Buckley v Tutty (1971) 125 CLR 353; [1971] HCA 71; Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1980] 3 All ER 42; Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1982] 2 All ER 1; Kibby v Registrar of Titles (1999) 1 VR 861; [1998] VSC 148, referred to.

1. The State Council is required by the AFIC Constitution to be an incorporated association. The primary judge erred in concluding that for the purposes of the AFIC Constitution, a State Council could be an unincorporated association: [95]-[99]; [137] (Bell P); [138] (Meagher JA).

Whether the meeting on 16 January 2021 resolved that the committee which was elected be constituted as a new State Council for New South Wales (appeal ground 2)

1. A resolution of which there is more than one possible meaning is not void for uncertainty and will ultimately bear the meaning that the court decides upon its proper construction: [104] (Bathurst CJ); [137] (Bell P); [138] (Meagher JA).

The Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429; [1968] HCA 8, referred to.

1. The approach of the court in construing the resolution would be to seek to ascertain the objective intention of those who resolved upon it: [104] (Bathurst CJ); [137] (Bell P); [138] (Meagher JA).

Cameron v Hogan (1934) 51 CLR 358; [1934[ HCA 24; Buckley v Tutty (1971) 125 CLR 353; [1971] HCA 71; Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1980] 3 All ER 42; Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1982] 2 All ER 1; Kibby v Registrar of Titles (1999) 1 VR 861; [1998] VSC 148, referred to.

1. What occurred at the 16 January 2021 meeting was insufficient to resolve that the committee be appointed as the new State Council and the UMNSW be removed: [104]-[110] (Bathurst CJ); [137] (Bell P); [138] (Meagher JA).

Whether Mr Elrayes was validly nominated by UMNSW as delegate for the New South Wales State Council to the Federal Council of AFIC (appeal grounds 3 and 4)

1. A person is not a member of a company until its name is entered on the register of members: [118] (Bathurst CJ); [137] (Bell P); [138] (Meagher JA).

Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404; Maddocks v DJE Constructions Pty Ltd (1982) 148 CLR 104; [1982] HCA 17, referred to.

1. Mr Elrayes was the duly appointed delegate for the State Council of New South Wales as provided for in the AFIC Constitution: [119]-[134] (Bathurst CJ); [137] (Bell P); [138] (Meagher JA).

Islamic Council of New South Wales v Australian Federation of Islamic Councils [2000] NSWSC 115, referred to.

Judgment

1. BATHURST CJ: These proceedings arise out of disputes between the first appellant, Australian Federation of Islamic Councils Inc (AFIC), and the first respondent, United Muslims of New South Wales Inc (UMNSW), in relation to, broadly speaking, the question of whether UMNSW remains the New South Wales State Council within the meaning of the expression “State Council” in the Constitution of AFIC (the AFIC Constitution) with the consequential rights granted to it in that capacity.

2. The questions raised by the proceedings can be summarised as follows.

1. Does UMNSW remain the State Council of New South Wales for the purpose of the AFIC Constitution?

2. Did the resolutions passed at a meeting on 16 January 2021 of what were described as “AFIC NSW member societies” have the effect of removing UMNSW as the State Council and replacing it with a committee, described as the “New Council”, chaired by the second appellant, Abraham Zoabi (Mr Zoabi), the convenor of the meeting?

3. Following the election of Hossam Elrayes (Mr Elrayes) as its president at its Annual General Meeting on 17 January 2021, was UMNSW entitled to nominate Mr Elrayes as the delegate for the State Council of New South Wales on the Federal Council of AFIC?

3. The primary judge answered questions (1) and (3) in the affirmative, declaring that UMNSW is the State Council for New South Wales, as defined in cl 3 of the AFIC Constitution, and that Mr Elrayes is the duly appointed delegate for the State Council of New South Wales, as defined in cl 12(1) of the AFIC Constitution.

4. AFIC and Mr Zoabi have sought to appeal against these declarations, contending that questions (1) and (3) should be answered in the negative and question (2) answered in the affirmative.

5. Three matters can be noted at the outset. First, the second respondent, The Council of Islamic Societies in New South Wales (CIS), was registered as an incorporated association by the committee chaired by Mr Zoabi. However, it was not contended that it replaced UMNSW as the State Council. CIS played no part in the proceedings.

6. Second, underlying the issues in the litigation are a number of disputes concerning the corporate governance of each of AFIC and UMNSW. These proceedings, which relate to the construction of the respective constitutions and the validity of resolutions passed at the two meetings to which I have referred above, do not consider, much less resolve, any of these disputes. They are in turn irrelevant to the issues in the appeal.

7. Third, UMNSW contends that AFIC requires leave to appeal. Both parties filed detailed written submissions on this issue. It is unnecessary to deal with these submissions. Resolution of the issues the subject of these proceedings is self-evidently of importance to a significant section of the Muslim community in this state. In these circumstances, to the extent that it is necessary, leave should be granted.

The constitutions

8. Because resolution of the proceedings turns in large measure on the construction and interaction of AFIC and UMNSW’s respective constitutions, it is convenient to set out the relevant portions of each prior to setting out the factual background relevant to the determination of these proceedings.

a   AFIC

9. AFIC was incorporated in Tasmania on 14 October 1999 under the Associations Incorporation Act 1964 (Tas) (the Tasmanian Act). Its present constitution was adopted in May 2018.

10. The Preamble to the AFIC Constitution summarised the objectives of AFIC. So far as it is relevant, the Preamble is in the following terms:

“We, the Muslims of Australia, … having formed local Islamic societies and in 1964 and the Australian Federation of Islamic Societies have further agreed to establish State Councils of Islamic societies in the States and Territories of Australia and now join together to form the Australian Federation of Islamic Councils thereby replacing the Australian Federation of Islamic Societies.”

11. There was some debate as to whether State Councils existed before the incorporation of AFIC. It was said to be relevant to the question of whether State Councils could be replaced. It appears from the Preamble that there were State Councils in existence prior to the incorporation of AFIC and indeed, there was a predecessor umbrella federal body. It should be noted, however, that UMNSW was not incorporated until 13 July 2016.

12. Clause 3 of the AFIC Constitution contains the following definitions of relevance:

“‘Constitution’ means the Constitution of the Australian Federation of Islamic Councils.

‘Delegate’ means a person accredited by a State Council as its representative to the Federal Congress.

‘Executive Committee’ is a body constituted in section 17 of this Constitution.

‘Federal Council’ is a body constituted in section 14 of this Constitution.

‘Federation'’ means the Australian Federation of Islamic Councils.

‘Member of Federation’ means a person who is a member of a Society and a State Council which has contributed a subscription to the Federation as provided by this Constitution, such Society or State Council being entitled to be represented at the Federal Congress in accordance with this Constitution.

…

‘Society’ means any Muslim association that is established in accordance with the Constitution and is carried on with the objects substantially similar to those of the Federation. All references to society or societies refer to AFIC's member societies.

‘State Council’ means Council of AFIC Societies formed in each State or Territory of Australia as provided by this Constitution.”

13. Clause 5 is of importance and is in the following terms:

“5.   Structure and Membership of AFIC

(1) The organisation of the Federation shall consist of State Councils, themselves formed by the local AFIC member societies of each State or Territory of Australia. Where there is only one Society in a State or Territory that Society shall act as State Council of AFIC for that State or Territory until such time as other Society or Societies are formed and have become AFIC members in accordance with this Constitution.

(2) It shall be incumbent on each State Council to remain a constituent body of the Federation, and on each local Islamic Society to be constituent part of the State Council. It shall also be incumbent on each Society and State Council to ensure that in principle its constitution is in conformity with this Constitution, and is registered with relevant State or Territory Government authorities.

(3) (a) For the purpose of this Constitution each Islamic Society should have a membership of not less than one hundred financial members except for Societies in remote areas where no other Society exists. Remote areas may be declared as such by the concerned State Council in agreement with the Executive Committee of AFIC.

(b)   A person who is already a member of the Federation by virtue of membership in a Society may not enrol as a member of another Society unless he resigns his membership in that Society.

(c) Admission to the Federation as a member by a Society shall be by completion of a membership application form by the Society and such application shall be considered by the Executive Committee of the Federation and upon being satisfied that the constitution of the Society complies with the Federation's own Constitution, and upon being satisfied that the Society meets all other relevant criteria in accordance with the Federation's membership rules, such Society shall be admitted as a member of the Federation.

(4)   The membership subscription payable to the AFIC shall from time to time be determined by the Federal Council.

(5)   Each State Council shall be responsible for administering the Islamic affairs of the State or Territory co-ordinating Islamic activities and establishing communication between the member Societies, other State Councils and the AFIC.

(6)   Each State Council and Society shall have full control of its properties and full responsibility to administer them.

(7) Acceptance of new member Societies or expulsion of an existing member Society shall be in accordance with the provisions of this Constitution and relevant resolutions of the Federal Congress/Council. Only member societies of the AFIC which have paid their membership subscription to the AFIC are eligible to participate in the affairs of the AFIC or the relevant State Council.

(8)   A Society which has been admitted as a member of the Federation according to the requirements of clause 5 (3) (c) shall hereby be admitted as a member of the respective State Islamic Council.”

14. AFIC contended that under the AFIC Constitution UMNSW as a relevant State Council was not required to be a member of AFIC, notwithstanding its description in the AFIC Constitution as a “constituent body”. If this submission was correct, there may be a difficulty in the contention that UMNSW was contractually bound by the AFIC Constitution: see Islamic Council of NSW v The Australian Federation of Islamic Councils [2000] NSWSC 115 at [101]. However, in my opinion, under the AFIC Constitution UMNSW was required to be a member of AFIC as well as being a constituent body in its capacity as a State Council. This is made clear by cl 12(3)(b) of the AFIC Constitution, which provides that where a society is acting as the State Council, it is entitled to be represented by two delegates at any meeting of Federal Congress, one delegate in its capacity as the State Council and one delegate as a member society (this matter is dealt with at [67]ff below).

15. The AFIC Constitution makes provision for three tiers of administration and governance. Clause 8 provides that the Federal Congress is the highest policy-making organ, with ultimate responsibility to achieve the objects and purposes of the Federation. Clause 9 vests the general governance and control of the affairs of the Federation in the Federal Council, subject to the AFIC Constitution and resolutions of the Federal Congress, whilst cl 10 provides that the business and affairs of AFIC shall be manned and administered by the Executive Committee in accordance with the Constitution and resolutions of the Federal Congress and the Federal Council.

16. Clauses 11 to 13 deal with the Federal Congress. So far as is relevant, they provide as follows:

“11.   Composition of Congress

There shall be a Federal Congress consisting of the following delegates:

(a)   Members of the Executive Committee of the Federation.

(b)   Delegates representing the State Councils.

12.   Delegates entitled to attend Federal Council and Federal Congress meetings

(1)   Every State Council shall be entitled to be represented at any meeting of the Federal Council or Federal Congress by one (1) delegate, being in order of priority:

(a)   the chairman of the State Council executive committee (or equivalent); or a member of the State Council executive committee nominated in writing by its chairman; or

(b)   a member of the State Council executive committee elected to represent the State Council by that committee; or

(c)   a member of the executive committee of a member Society of that State Council who is elected by a majority of the member Societies of that State Council present at that Federal Congress meeting to represent that State Council.

(2)   Every Society shall be entitled to be represented at any meeting of the Federal Congress by one (1) delegate, being in order of priority:

(a)   the chairman of the Society executive committee (or equivalent); or

(b)   a member of the Society executive committee nominated in writing by its chairman; or

(c)   a member of the Society executive committee elected to represent the Society by that committee; or

(d)   a member of the Society who is nominated by a resolution of the members of the Society to represent the Society.

(3)   Where a Society is acting as the State Council pursuant to section 5(3), that Society shall be entitled to be represented by:

(a)   One delegate at any Federal Council meeting, such delegate to be determined in accordance with subsection (1); and

(b)   two delegates at any Federal Congress meeting, being one delegate determined pursuant to subsection (1) and one delegate determined pursuant to subsection (2).

(4)   The members of the Executive Committee shall be entitled to attend and participate in every Federal Council and Federal Congress meeting, but are not entitled to separately vote on any resolution or in any election. For all resolutions at such meetings and in all elections the Executive Committee shall be entitled to cast one vote only, with that vote to be cast by its representative who shall be, in order of priority:

(a)   the President;

(b)   the Vice President[;]

(c)   a member of the Executive Committee nominated in writing by the President; or

(d)   a member of the Executive Committee elected by its members.

(5)   In the event of any doubt as to the authority of any person to be a delegate or representative at a Federal Council or Federal Congress meeting, the Chairman may require reasonable evidence of such authority and in the absence of such evidence, the AFIC Executive Committee may exclude that person from participating in the meeting.

13.   Powers and Functions of the Federal Congress

In addition to any powers conferred upon it by the Constitution the Federal Congress shall have powers:

(a)   To control, manage and administer the affairs of the Federation generally.

…

(c)   To make, amend, alter or modify its by-laws, rules and regulations for proper management of the affairs the Federation in accordance with the objects set out.

(d)   To advise and adjudicate upon all disputes concerning the Federation and Islamic Affairs and give decisions in respect thereof.

(e)   To adjudicate upon all matters of controversy and differences between the Federal Council, Executive Committee and the State Councils or between State Councils and their member Societies and give decisions in respect thereof.

…

(h)   To constitute a society in any part of Australia in the absence of a State Council and/or define the area of an existing society on the request of a State Council.

…

(l)   To make, amend, alter or rescind standing orders or rules of conduct for the proper management of the affairs of the Federation.”

17. Clauses 14 to 16 deal with the Federal Council. Clause 14 provides for its composition while cl 15 sets out its powers and functions. The clauses are in the following terms:

“14.   Composition of Federal Council

There shall be a Federal Council consisting of the following members:

(1)   Composition:

(a)   The President of the A.F.I.C. (Chairman)

(b)   Vice-President of the A.F.I.C.

(c)   President/Chairman of each State Council or his official nominee as notified to the Secretary in writing.

(d)   Secretary of the A.F.I.C.

(e)   Treasurer of the A.F.I.C.

(2)   The other members of the Executive Committee, who are not members of the Federal Council, shall be entitled to be present at the Councils meetings with the right to participate in the discussions, but without the right to vote.

15.   Powers and Functions of the Federal Council

The powers and Functions of the Federal Council shall be:

(a)   To act for and exercise all the functions of the Congress between its meetings in all matters provided always that such actions or decisions must be ratified or reversed by the Congress.

(b)   To determine the time, place and agenda of the Meetings of the Federal Congress.

(c) as expressly defined elsewhere in this Constitution.”

18. Clause 17 deals with the composition of the Executive Committee, whilst cl 18 deals with its powers and functions. Of relevance are the following:

“17.   Executive Committee

The Executive Committee of the Federation shall be comprised of the following members.

(a)   President of the A.F.I.C. elected by the Federal Congress.

(b)   Vice President of the A.F.I.C. elected by the Federal Congress.

(c)   Secretary to be elected by the Federal Congress.

(d)   Treasurer to be elected by the Federal Congress.

(e)   Assistant Secretary to be appointed by the elected President.

(f)   Assistant Treasurer to be appointed by the elected President

(g)   Three Executive members appointed by the Federal Congress, on the recommendation of the President.

18.   Powers and Functions of the Executive Committee

The powers and functions of the Executive Committee shall include:

(a)   To manage and administer the business and affairs of the Federation.

…

(e)   To exercise emergency powers and directly intervene in the affairs of a State Council only if the situation warrants immediate action by A.F.I.C. The degree and form of intervention will be determined by the Executive Committee itself. The Executive Committee may seek and obtain the advice of all the members on the panel of Islamic Arbitrators as per Rules for the Conduct of Islamic Arbitration as per Section 60(12) and act on this advice as early as possible to address and resolve the problems I disputes occurring in a member state Council or Islamic Society. Examples of circumstances which require invoking of these powers are:

(i)   Infiltration of non-Muslims in the State Council.

(ii)   Infiltration of persons widely suspected to be non-Muslims in the State Council.

(iii)   Persistent defiance of AFIC policies and AFIC Constitution by the State Council.

(iv)   Long absence from meetings of the majority of the office-bearers of the Slate Council paralysing the affairs of the State Council.

(v)   Serious division in the State Council members to run the affairs of the Council. Action taken under these powers shall be presented to and ratified by the Federal Council.”

19. Clause 31 provides that State Councils have the right to nominate candidates for the positions of president, vice-president, secretary and treasurer. Clause 32 deals with election to those positions. It provides that the persons entitled to vote in such elections are the delegates of each State Council and the representative of the Executive Committee as determined pursuant to cl 12(4).

20. Clauses 34 to 37 deal with meetings of the Federal Congress. Clause 35 provides that the “annual/Biannual” Congress meeting is to be held not more than four months after the close of the financial year. Clauses 36 and 37 are in the following terms:

“36.   Persons Entitled to be present and to Attend Congress Meetings

(1)   The delegates representing the State Councils and the members of the Federal Executive shall be entitled to be present at the Congress meetings and participate in the deliberations, the right to vote being regulated by Section 46.

(2)   Other members of the Federation may attend the meetings of the Federal Congress and participate in the discussions, if permitted to do so by the Chairman of the meeting.

37.   Notice of Congress Meeting

(1)   Notice convening the meeting of the Congress shall be forwarded at least six (6) weeks before the date of the meeting informing the place, date and hour of such meeting to those who are entitled to vote at that meeting and to all members of the Federation through the respective State Councils except for Special Meetings of the Federal Congress for which only two (2) week's notice shall be required.

(2)   The Agenda of the Federal Congress Meeting shall be forwarded to those who are entitled to vote at the meeting at least two (2) weeks before the date of the meeting except for special meetings of the Federal Congress for which it may be forwarded one week prior to such meeting.”

21. Clause 46 is in the following terms:

“46. Voting other than Elections under Section 32.

(1)   The following persons may vote at the Federal Congress meetings on all matters other than the election of officers of the Federation:

(a)   Each State Council delegate

(b)   Each Society delegate

(c)   The representative of the Executive Committee as determined pursuant to section 12(4).

(2)   The following persons may vote at the Federal Council meetings:

(a)   Each State Council delegate; and

(b)   The representative of the Executive Committee as determined pursuant to section 12(4).

(3)   Votes shall be indicated by a show of hands or poll when requested, unless the Chairman considers that a secret ballot is necessary.

(4)   All motions at meetings of the Federal Congress and Federal Council except motions which require carriage by Special Resolution shall be determined by a majority of votes of those present and entitled to vote.

(5)   In the event of a deadlock of votes on a motion the vote shall be determined by the Chairman of the meeting by exercising a casting vote.”

22. Clause 50(1) deals with membership subscriptions. It provides:

“50.   (1)   Each State Council shall collect and pay the Federation the annual membership subscription as the Federal Council shall from time to time approve upon recommendation from the Executive Committee.”

23. Clause 57 concerns amendments to the AFIC Constitution. It provides as follows:

“57. Amendments of the Constitution

(1)   (a)   By a first resolution of the Federal Congress passed    at the annual or special congress meeting by three    fourths (3/4) majority of those present and voting from    among the persons eligible to vote under Section    46(1)(a); and

(b)   By a second resolution of the Federal Council passed by three fourths (3/4) majority of those present and voting from among the persons eligible to vote under Section 46(1) (b) conducted at one of its next meetings following the Congress

(2) Motions to amend the Constitution may be initiated by the Executive Committee of the Federation or of a State Council, and no such motion shall be placed on the Agenda of the Federal Congress unless written notice thereof setting out its scope and nature has been received by the Secretary of the Federation at least four weeks before the relevant Congress meeting.

(3)   Upon receipt of the notice, the Secretary shall as soon as possible, and in any case not less than 3 weeks before the Congress meeting, circulate it among all the State Councils and member societies.”

24. Annexure A to the AFIC Constitution contains what are described as Rules for the Conduct of Islamic Arbitration. Neither party has sought to invoke those provisions.

25. It should be noted that the Model Rules for associations incorporated under the Tasmanian Act (the Model Rules) apply to AFIC to the extent they are not inconsistent with the AFIC Constitution (the Tasmanian Act s 16). I will refer to the Model Rules to the extent necessary later in this judgment.

b   UMNSW

26. UMNSW is registered under the Associations Incorporation Act 2009 (NSW) (the NSW Act). Clause 1 of UMNSW’s Constitution (the UMNSW Constitution) states that UMNSW is referred to in that document as the “Muslim Council or UMNSW or the Council or the State Council”.

27. Clause 4 describes the objectives of UMNSW. Of relevance are the following:

“4.   OBJECTIVES

The objectives of the Muslim Council are:

…

(ii)   To promote unity and co-ordination of the affairs of the Islamic Societies of New South Wales and to further co-operate with other Islamic Councils of Australia in the following manner:

(a)   By affiliating with the Australian Federation of Islamic Councils (AFlC) as a Member Council and by participating in the AFIC Federal Congress and the AFIC Federal Council in the decision making process of AFIC for the greater cause of the Muslim community in Australia.

(b)   The Muslim Council shall be a constituent member of AFIC at all times.

(c)   The Council's Constitution shall be consistent with AFIC's Constitution.”

28. Clause 5 deals with membership. It contains the following provisions (there being two paragraphs (v) in the original document, the first appearing after paragraph (iii)):

“5.   MEMBERSHIP

(i)   Membership of the Muslim Council is open to any Islamic Society or Islamic organisation formed in the state of New South Wales. An eligible Society shall fulfil the following conditions:

(a) The Constitution of such Islamic Society must be registered pursuant to the provisions of the Charitable Collections Act, 1934 as amended, and is not inconsistent with the Constitutions of the Muslim Council and AFlC.

(b)   It is not seemingly sectarian, national or racial;

(c)   Its membership is open to all Muslims irrespective of colour, race or nationality.

(ii)   Membership of the Muslim Council shall be granted to an Islamic Society or an Islamic organisation with not less than 100 members, except those in a remote area as declared by the Muslim Council in consultation with AFIC Executive Committee.

(iii)   Application for membership shall be made in writing and signed by President and Secretary of that Society, and shall be in such form and contain such requirements as the Muslim Council from time to time may prescribe.

(v)   Societies shall not enrol any member of another society which is a member of the Muslim Council.

(iv)   Application for membership by societies shall be considered by the Muslim Council of NSW (and the AFIC) on the following basis:

(a)   Muslim Council shall first assess the necessity for the formation of any new society in the State and upon satisfactory conclusion of this, should ensure that the new society complies with all the conditions laid down for membership.

(b)   Submission of a duly registered Constitution of the society.

(c)   Submission of the recent audited financial report, budget and the annual report of activities of the society.

(d)   Audited list of financial members with addresses.

(e)   Written undertaking by the Society to abide by the Constitutions, rules and policies of the Muslim Council.

(f)   Islamic societies and associations shall be discouraged from adopting ethnic names. This should be taken into account when considering membership applications.

(v)   Application for Membership shall be accompanied by an application fee of as determined from time to time· by the Muslim Council and the AFIC Federal Council.

…

(x)   A subscription shall be paid by all member societies, as determined by the Muslim Council from time to time. Annual membership fee of the Muslim Council shall include a membership fee for AFIC in accordance with the decision of the AFIC Congress and/or Federal Council decision.”

29. Clause 6 deals with management. Relevantly, it provides:

“6.   MANAGEMENT

(i)   The affairs of the Muslim Council shall be managed by:

(a)   An Executive Committee made up of office bearers and other executives duly elected in the Annual General Meeting herein provided for and subject to the authority of the Muslim Council Meeting representing member societies.

(b)   Nominations for election of office bearers shall be moved from the floor in the AGM.

(c)   Muslim Council Meeting of all member societies shall be the supreme body of the Muslim Council and shall be held every two months or as the Muslim Council decides from time to time.”

30. Clause 7 says that the office bearers shall consist of the chairman, vice chairman, secretary, assistant secretary, treasurer, assistant treasurer and at least five Executive Committee members. It provides for their election every two years at the Annual General Meeting.

31. Clauses 12 and 13 deal with special meetings and Annual General Meetings. These meetings are in addition to the meetings of all of the member societies of UMNSW required to be held every two months pursuant to cl 6(i)(c) of the UMNSW Constitution.

32. Clause 16 deals with expulsion of members. It is in the following terms:

“16.   EXPULSION OF MEMBER SOCIETIES

(i)   The Muslim Council may suspend or expel any Member Society:

(a)   If the Society has absented itself from the Muslim Council meeting for five consecutive times without notice.

(b)   If the Society failed to·pay annual subscription to Muslim Council and the AFIC for two consecutive years.

(c)   If the Society's constitution or its activities are detrimental to the interest of the Muslim Council and Federation.

(ii)   The resolution for suspension or expulsion is passed in a Special Meeting of the Muslim Council in which the Member Society whose expulsion is under consideration is allowed to offer an explanation of its conduct or activity verbally or in writing or both at the option such member Society before a resolution of suspension is passed by Muslim Council.”

33. Clause 21 concerns amendments to the UMNSW Constitution. It provides that the constitution may be amended by a resolution of AFIC at a general or special meeting and with the approval of the Minister administering the Charitable Collections Act 1934 (NSW).

34. Clause 23 deals with dissolution. It provides:

“23.   DISSOLUTION

(i)   The Muslim Council shall continue to function as long as there is one member Society after which it shall be dissolved in consultation with the Australian Federation of Islamic Muslim Councils Inc. (AFIC).

(ii)   Upon dissolution, all assets and funds of the Muslim Council on hand shall be passed on to AFIC after payment of all dues owed by the UM NSW.”

35. There are a number of matters which can be noted at this stage. First, it seems clear that UMNSW was incorporated to act as the umbrella society for Islamic societies in this state. Second, there was at least an anticipation that UMNSW would continue in that role until its dissolution. Third, its constitution was evidently drafted to operate coherently with the AFIC Constitution. Notably, it envisages that Islamic societies in New South Wales would be members of each of UMNSW and AFIC.

36. To some extent the difficulties in the present case arise from assertions by the parties that there are New South Wales Islamic societies that are members of AFIC but not members of UMNSW, as well as other such societies which are members of UMNSW but not of AFIC.

The background to the current dispute

37. As I indicated at the outset, significant disagreements had arisen between the representatives of AFIC and UMNSW concerning the corporate governance and administration of each entity. Abraham Hammoud (Mr Hammoud) and Hicham Zraika (Mr Zraika) had been making enquiries concerning certain financial dealings carried out by the then president of AFIC, Dr Rateb Jneid (Dr Jneid). Mr Hammoud was a member of North Shore Crescent Society Inc which was a New South Wales member society of UMNSW and AFIC. Between 5 May 2018 and 18 May 2020, he was also a member of the Executive Committee of AFIC. Mr Zraika at the time was the chief executive officer of AFIC.

38. On 18 May 2020, Mr Hammoud was removed from the Executive Committee of AFIC by Dr Jneid in purported exercise of his power under cl 20(1)(f) of the AFIC Constitution. That provision entitled the president to remove any Executive Committee member with the concurrence of five members of the Executive Committee. There was no issue raised as to the validity of his removal.

39. In June 2020, Mr Zraika was removed from his role as chief executive officer of AFIC.

40. On 9 November 2020, AFIC wrote to UMNSW asserting that “[a]s a result of AFIC’s member society review,” four officers of UMNSW “may no longer participate in UMNSW affairs”. The reason given was that in the case of three of those officers, their societies’ memberships of AFIC had lapsed whilst in the case of the fourth, his society had never been a member of AFIC. The letter referred to the UMNSW Executive as a “caretaker committee”.

41. On 10 November 2020, AFIC informed Talal Elcheikh (Mr Elcheikh) that he may be placed on AFIC’s “register of proscribed individuals”. On 17 December 2020, AFIC purported to add Mr Elcheikh’s name onto “the Register of Proscribed Persons”, stating that the effect was that Mr Elcheikh was barred for five years from holding office in the AFIC structure and attending any AFIC State Council meetings. It was conceded in the Court below that that action was invalid.

42. On 15 November 2020, the AFIC Executive Committee held what was described as an emergency meeting. In the course of the meeting, its new chief executive officer, Keysar Trad (Mr Trad), made the following proposal which was recorded in the minutes of that meeting in the following terms:

“5 – Councils: UMNSW …

Re. NSW ceo explained: We wrote to the member societies to advise them to advise whom amongst the UMNSW committee qualifies to be on the committee under the UMNSW and AFIC constitutions. Their former secretary refused AFIC’s advise [sic] and argued in writing that they regard AFIC’s letter as interference and they rejected AFIC intervention. We have to advise our member societies of this development and invite them to rectify the problem. AFIC has received a proposal from Br Ibrahim Zoabi, a very active elder in the NSW community and a person who was elected Secretary by the majority of member societies early last year. He proposed to work with an interim committee to facilitate elections for NSW member societies and to operate within the constitution. He has proposed that this interim committee be approved by AFIC and they will deliver an election and a functional committee within 6 weeks.”

43. On 17 November 2020, the secretary of AFIC, Arun Abdullah (Mr Abdullah), wrote to AFIC and UMNSW member societies in New South Wales. That letter headed “Re Changes at the UMNSW” included the following comments:

“Since we last wrote to you concerning the lack of quorum at UMNSW, AFIC was approached by member societies expressing profound concern about the state of affairs of UMNSW.

…

Certain officers at UMNSW have failed to fulfil their obligations under both the UMNSW and AFIC constitutions. They have also refused to facilitate an amicable handover of accounts and responsibilities.

In view of the constitutional breaches, member societies have demanded under clauses 5(1) and 5(7) of the AFIC constitution to appoint a caretaker interim committee (CIC) to manage the NSW affairs of member societies until such time that an election of a new executive committee is held.”

44. The “member societies” who made the demand under the clauses of the AFIC Constitution are not identified.

45. On 4 December 2020, Mr Zoabi sent an email to various Islamic societies in New South Wales in his capacity as “Interim Committee Coordinator” of the “Muslim Council of NSW and AFIC”. It contained the following comments:

“There is a conflict between AFIC and individuals who are not qualified under AFIC rules to be on the Council executive committee.

As a result of these conflicts, AFIC approved an interim caretaker committee to look after the affairs of its NSW member societies and convene an election to elect a new Council to represent NSW in AFIC.

As AFIC members, we cannot and should not ever allow a council committee to admit societies in an unconstitutional manner. According to the AFIC constitution, a state council can only be accepted by AFIC if it is representing the AFIC member societies in that state. No council can remain in AFIC if it admits non-members and gives them the same rights as AFIC members, this is not in our interests and not in AFIC’s interests.

AFIC already wrote to the NSW societies to explain that the UMNSW Council has executive members who are no longer members of AFIC and as a result, they cannot remain in an AFIC Council. Those members have rejected AFIC’s decision and have defied the AFIC and the Council constitutions. They have held meetings and made untrue allegations against AFIC. They rejected AFIC’s constitution and its laws. Their actions put them in conflict with AFIC.”

46. On 10 December 2020, UMNSW gave notice of its Annual General Meeting to be held on 17 January 2021. The “Agenda” stated that the business of the meeting included the “election of office-bearers”. It reminded members of the need to pay their subscriptions as determined by UMNSW and AFIC and to have completed the attached UMNSW membership form. It was not contended that the notice of meeting had not been given to all of the societies on UMNSW’s register of members. Rather, it was said by AFIC that non-AFIC member societies voted at the meeting and that five AFIC member societies (who were not members of UMNSW) had not been given notice of the meeting.

47. On 28 December 2020, Mr Zoabi sent the following notice to New South Wales AFIC member societies:

“The Interim committee for the AFIC members in NSW has the honour to invite you as a valid financial member of AFIC to our election meeting and dinner to be held at 6:00PM on Saturday 16 January 2021 at Al Aseel Function Centre at 173 Waterloo Rd in Greenacre.

Attached hereto is an agenda for the meeting, a delegate form and a blank nomination form. Member societies can make nominations for the following positions on the NSW council:

President

Vice president

Secretary

Assistant Secretary

Treasurer

Assistant Treasurer

Committee member (there are three committee member positions only)

Nominations close at 12:00PM on Monday 11 January 2021.

Delegate forms must be in by 12:00PM on Monday 11 January 2021.

Please note that this is a dinner-catered invitation only event, seats are limited, only one delegate of each AFIC member society and approved candidate are invited to attend.” (Emphasis in original.)

The agenda for the meeting was as follows:

“Agenda

Opening Du’a

Imam’s comments

A few words from the president of AFIC or his delegate

Coordinator’s comments

Where we stand in relation to UMNSW

The returning officer will conduct the election for each vacant position

General business

Dinner is served

Vote of thanks

Closing Du’a”

48. On the same day, Mr Zoabi wrote separately to Mr Mohamed Charchou (a representative of the Western Sydney Islamic Society) and Mr Hammoud, stating that they were not permitted to participate in AFIC’s affairs and requested details of their respective societies’ committee members so that he could extend them an invitation to the AFIC proposed meeting on 16 January 2021.

49. On 4 January 2021, Mr Zoabi wrote to AFIC’s member societies in New South Wales advising:

“First of all, I would like to thank you for your concern about the state of Muslims in NSW and your sincere intention to have an active state council to represent the hard-working AFIC members in NSW, the premier state in Australia.

I am writing to let you know that all the preparations are in place for a smooth meeting and dinner on Saturday 16^th January 2021 at Al Aseel function centre in Greenacre.

…

Finally, I would like to remind the member societies that AFIC will only recognise this meeting and will accept the people whom you elect through this meeting as the legitimate NSW representatives.”

50. On 6 January 2021, the president of AFIC wrote to “delegate[s] of NSW member societ[ies]” as follows:

“I have been receiving enquiries about the state of the Muslim council in NSW and the meetings that have been called by different groups claiming to represent different members.

AFIC shares your legitimate concerns about the failures of UMNSW. I would like to remind you that in recognition of your wishes and recommendations, AFIC appointed an interim committee to hold a meeting for NSW member societies and hold elections to nominate their representatives with AFIC.

The coordinator for the AFIC recognised committee for NSW member societies is Br Abrahim Zoabi. The meeting called by Br Abrahim Zoabi on behalf of the interim committee is the only meeting whose result will be accepted by AFIC. The recommendations of the interim committee will be the only recommendations with which AFIC will proceed.” (Emphasis in original.)

51. On 15 January 2021, UMNSW wrote to the UMNSW member societies reminding them of its Annual General Meeting, criticising AFIC and disputing the validity of the interim committee.

52. On 16 January 2021, the meeting convened by Mr Zoabi was held. It appears that 19 societies attended. Of those attending, 10 were not members of UMNSW and of the other nine, only one, the Canterbury Islamic Society, attended the subsequent UMNSW meeting of 17 January 2021.

53. The meeting of 16 January 2021 was opened by AFIC’s chief executive officer, Mr Trad, who is recorded as having made the following remarks:

“K Trad: This is a meeting of AFIC members in NSW. It is not a UMNSW meeting because UMNSW has not fulfilled its role as a member by failing to adhere to the AFIC constitution, this is a basic requirement of membership. It is the member societies who tell us who is to represent them in AFIC, not UMNSW, or any other group. You, the delegates who are gathered here are empowered by the AFIC constitution to keep AFIC accountable and to keep your council accountable and to select the representative in whom you believe.”

54. The minutes of the meeting record that thereafter, the delegates agreed to select a committee to represent them as “the Muslims of NSW”. Mr Zoabi was ultimately the sole nominee for president and was elected. Other office bearers were also elected.

55. After that vote took place, the following was recorded in the minutes under the heading “General Business”:

“Abraham Zoabi: As 19 of the member societies in NSW are here, I would like everyone to consider a name for our committee and invite you to agree to registering an association. I would like to suggest a name, subject to availability:

The Council of Islamic Societies of NSW

If this name is unavailable, then one of the following names:

The Council of Muslim Associations of NSW

The Muslim Communities Council of NSW

There was no disagreement recorded.”

56. On 1 February 2021, CIS was registered as an incorporated association under the NSW Act with the name “The Council of Islamic Societies in NSW Incorporated”.

57. On 17 January 2021, UMNSW’s Annual General Meeting was held. Seventeen Islamic societies which were member societies of UMNSW attended. Mr Elrayes was unanimously elected as president. The other office bearers were also unanimously elected. It was common ground that nine of the societies which voted were not members of AFIC. It was also accepted that at the time of this meeting there were 25 societies listed on the UMNSW register of member societies.

58. On 22 January 2021, UMNSW informed AFIC that Mr Elrayes would be the delegate for the State Council of New South Wales on the Federal Council of AFIC.

59. On 11 February 2021, AFIC wrote to the chairs of each of its State Councils stating that it had accepted the appointment of CIS as a State Council and that it had been advised Mr Zoabi was the representative of the State Council for New South Wales, pursuant to cl 12(1) of the AFIC Constitution. As has already been noted, it was not contended in the underlying proceedings, or in this Court, that CIS had in fact been appointed the State Council for New South Wales.

60. The underlying proceedings were commenced on 26 February 2021.

The issues in the appeal

61. AFIC’s notice of appeal and UMNSW’s notice of contention raise the following issues:

1. Whether the primary judge erred in holding that the AFIC Constitution does not permit the removal or displacement of an existing State Council by AFIC’s member societies for that state electing a new State Council (appeal ground 1).

2. Whether the group of individuals constituting the New Council, purportedly appointed on 16 January 2021, was capable as an unincorporated association of being a State Council under the AFIC Constitution (notice of contention ground 1).

3. Whether the primary judge erred in not finding that at the meeting on 16 January 2021, the AFIC member societies in New South Wales who were present decided that UMNSW should be removed as State Council and replaced by the elected committee of individuals constituting the New Council (appeal ground 2).

4. If UMNSW remained the AFIC State Council for New South Wales, whether Mr Elrayes was duly appointed as its delegate under cl 12(1) of the AFIC Constitution (appeal grounds 3 and 4).

Consideration

62. As the answers to the questions raised depend in large measure on the construction of the AFIC Constitution and of the UMNSW Constitution, it is convenient at the outset to say something about the correct approach to that exercise.

63. With respect to this subject several matters may be noted.

64. First, it does not seem to be disputed that the principles involving the interpretation of commercial contracts apply to the interpretation of the constitutions, although having regard to their public dimension, caution is required in the use of extrinsic material: Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1; [2006] FCAFC 144 at [55]-[56], [124], [239]-[242]; see also National Roads and Motorists’ Association Ltd v Parkin (2004) 60 NSWLR 224; [2004] NSWCA 153 at [81]-[84] and Glencore Coal Assets Australia Pty Ltd v Australian Competition Tribunal (2020) 280 FCR 194; [2020] FCAFC 145 at [90].

65. Thus, in considering the UMNSW Constitution it is appropriate to take into account, as part of the context, the provisions of the AFIC Constitution. Although the present AFIC Constitution only came into force in May 2018, subsequent to the incorporation of UMNSW, the AFIC Constitution in force previously was in similar terms.

66. Second, it was common ground that the respective constitutions operated as a contract between the associations and their members. In relation to UMNSW, that is given statutory force by s 26(1) of the NSW Act. Although there is no equivalent provision in the Tasmanian Act, it was accepted that the AFIC Constitution was equally binding on AFIC and its members.

67. Furthermore, the AFIC Constitution contemplates that UMNSW and each State Council will be a member of AFIC. This is apparent from two matters. First, as I mentioned earlier, cl 12(3)(b) of the AFIC Constitution provides that a State Council can have two representatives at Federal Congress meetings, one by virtue of it being the State Council and the other by virtue of it being a member society of AFIC. Consistently with cl 12(3)(b), cl 46 provides that at meetings of Federal Congress, each of the two delegates has a vote, one as the State Council delegate and the other as the delegate of the society which is the State Council. By contrast, only the State Council delegate can vote at Federal Council meetings (pursuant to cl 12(3)(a) of the AFIC Constitution).

68. The use of the expression “constituent body” when referring to the State Council in cl 5(2) of the AFIC Constitution does not alter that being the position. A similar expression, “constituent part”, is used in relation to each local Islamic society in cl 5(2) of the AFIC Constitution. It can be contrasted with the expression “Member of Federation”, which is defined in cl 3 of the AFIC Constitution as individual persons who are members of a society. It does not mean that the societies themselves, including the society which is the State Council, are not members of AFIC.

69. The significance of UMNSW being a member of AFIC is twofold. First and uncontroversially, UMNSW is a party to the contract constituted by the AFIC Constitution between AFIC on the one hand and its member societies on the other, as well as between those member societies themselves. Second, as a member society, UMNSW will be subject to the expulsion provisions contained in the Model Rules. Section 16 of the Tasmanian Act states that the Model Rules apply to the extent they are not inconsistent with or excluded by the AFIC Constitution.

70. Rules 33 and 34 of the Model Rules deal with expulsion. They are in the following terms:

“33.   Expulsion of members

(1)   The committee may expel a member from the Association if, in the opinion of the committee, the member is guilty of conduct detrimental to the interests of the Association.

(2)   The expulsion of a member under subrule (I) does not take effect until whichever of the following is the later date:

(a)   the expiration of 14 days after the service on the member of a notice under subrule (3);

(b)   if the member exercises his right of appeal under this rule, the conclusion of the special general meeting convened to hear the appeal.

(3)   If the committee expels a member from the Association, the public officer of the Association, without undue delay, is to cause to be served on the member a notice in writing –

(a)   stating that the committee has expelled the member; and

(b)   specifying the grounds for the expulsion; and

(c)   informing the member of a right to appeal against the expulsion under rule 34.

34.   Appeal against expulsion

(1)   A member may appeal against an expulsion under rule 33 by delivering or sending by post to the public officer of the Association, within 14 days after the service of a notice under rule 33(3), a requisition in writing demanding the convening of a special general meeting for the purpose of hearing the appeal.

(2)   On receipt of a requisition –

(a)   the public officer is to immediately notify the committee of its receipt; and

(b)   the committee is to cause a special general meeting of members to be held within 21 days after the date on which the requisition is received.

(3)   At a special general meeting convened for the purpose of this rule –

(a)   no business other than the question of the expulsion is to be transacted; and

(b)   the committee may place before the meeting details of the grounds of the expulsion and the committee's reasons for the expulsion; and

(c)   the expelled member is to be given an opportunity to be heard; and

(d)   the members present are to vote by secret ballot on the question whether the expulsion should be lifted or confirmed.

(4)   If at the special general meeting a majority of the members present vote in favour of the lifting of the expulsion –

(a)   the expulsion is to be taken to have been lifted; and

(b)   the expelled member is entitled to continue as a member of the Association.

(5)   If at the special general meeting a majority of the members present vote in favour of the confirmation of the expulsion –

(a)   the expulsion takes effect; and

(b)   the expelled member ceases to be a member of the Association.”

71. The third matter to be noted is that each of the constitutions also needs to be considered in its statutory context. In relation to the Tasmanian Act it should be noted that although s 3 declared an incorporated association as an excluded matter for the purposes of s 5F of the Corporations Act 2001 (Cth), that exclusion did not apply to the winding-up provisions. By s 32 of the Tasmanian Act, the winding-up of an incorporated association is deemed to be an “applied Corporations legislation matter” for the purposes of Pt 3 of the Corporations (Ancillary Provisions) Act 2001 (Cth) in relation to Pts 5.5, 5.6 and 5.7 of the Corporations Act. Those provisions include the power to wind-up a corporation on the just and equitable ground.

72. The winding-up provisions in the Corporations Act were not incorporated into the NSW Act in a similar fashion. However, s 63 of the NSW Act empowers a court to wind-up an incorporated association. That section is in the following terms:

“63   Winding up by Supreme Court

(1)   The Supreme Court may order the winding up or an association if–

(a)   the association has by special resolution resolved that it be wound up by the Court, or

(b)   the association does not commence its operations within one year after the date of its registration under this Act or suspends its operations for a whole year, or

(c)   the association is insolvent, or

(d)   the association has conducted its affairs (including its affairs as trustee of any trust) so as to provide pecuniary gain for its members, or

(e)   the association has engaged in activities inconsistent with its objects, or

(f)   the committee of the association has acted in affairs of the association in the interests of the committee or the committee members rather than in accordance with its objects, or in any other manner whatever that appears to the Court to be unfair or unjust to the association's members, or

(g)   the association would, if not registered under this Act, not be eligible to be so registered, or

(h)   the Secretary has, pursuant to section 73, directed the association to apply for cancellation of its registration and the association has failed to do so within the time fixed by the direction, or

(i)   the Court is of the opinion that it is just and equitable that the association be wound up.

(2)   An application to the Supreme Court for the winding up of an association may be made by the association, by a member or creditor of the association or by the Secretary.”

73. Further, it should be noted that whilst s 95(1) of the NSW Act declares an association to be an excluded matter for the purposes of s 5F of the Corporations Act, s 95(3) relevantly provides that the subsection does not apply to exclude the operation of Ch 2F of the Corporations Act, which deals with members’ rights and remedies. Section 231 of the Corporations Act, which appears in Ch 2F, provides that a person is a member of a company if they are a member of the company on its registration or agree to become a member after its registration and their name is entered onto the register of members. Part 2F.1 deals with members’ remedies, including oppression and derivative actions.

74. Fourth, looking at both constitutions overall it was plainly intended that each should operate harmoniously with the other and that member societies in New South Wales were to be members of each of AFIC and UMNSW. In the case of the AFIC Constitution, this is clear from cll 5(2), 5(7) and 5(8). In addition, cl 50(1) provides for State Councils to collect and pay AFIC members’ annual subscriptions to AFIC.

75. Similarly, cl 5(iv) of the UMNSW Constitution provides that applications for membership shall be considered by UMNSW and AFIC. It provides in cl 5(v) that the membership fee payable to UMNSW should include a membership fee for AFIC. Clause 16 provides that a ground for expulsion of a member society is that it has failed to pay an annual subscription to UMNSW and to AFIC for two consecutive years.

76. Finally, as I mentioned earlier, it was common ground between the parties that nine of the societies which voted at the 17 January meeting of UMNSW were not members of AFIC. It was also common ground between the parties that there were other New South Wales member societies of AFIC who did not appear on the UMNSW register. There was no evidence as to how this had occurred and in particular, it was not contended that any of the AFIC members not on the register of UMNSW were wrongly excluded from membership of that body or indeed, had made any attempt to join it. Further, notwithstanding the requirements in the AFIC Constitution that member societies be members of their local State Council and that UMNSW collect the AFIC subscription fee, no complaint was made that any non-AFIC members had been admitted to membership of UMNSW. In light of this and the absence of any argument that the meeting of 17 January was not validly called and conducted in accordance with the UMNSW Constitution, it is necessary to consider the issues raised in the appeal in circumstances not envisaged by either constitution, and with no explanation as to how those circumstances occurred.

Whether the AFIC Constitution permits a State Council to be removed by AFIC’s member societies in that state (appeal ground 1)

77. There is no express provision in the AFIC Constitution governing the removal of State Councils. The primary judge concluded that cl 5(2), which made it “incumbent” on a State Council to remain a member of AFIC, was inconsistent with an implied term permitting their removal (United Muslims New South Wales Inc v Australian Federation of Islamic Councils [2021] NSWSC 382 (the primary judgment) at [66]-[67]).

78. AFIC submits that this construction would mean that a State Council, once appointed, would remain in that position “for perpetuity”. That conclusion was said to be inconsistent with cl 5(1), which required a State Council to be replaced by a member society if it became the sole society in New South Wales. If a State Council does not necessarily hold that position indefinitely, it is said to follow that there is a mechanism for its removal and replacement. It further submits that cl 5(2) is not an impediment to that conclusion because on its proper construction it only requires that a State Council perform the acts required of it by the AFIC Constitution.

79. In response, UMNSW submits that the AFIC Constitution permits the State Council to be replaced, but only in limited circumstances. In addition to cl 5(1), those circumstances include where AFIC’s Executive Committee is justified in exercising its emergency powers to intervene in the affairs of a State Council (cl 18(e) of the AFIC Constitution). However, the exceptional nature of those circumstances suggests that there is no general power to remove a State Council.

80. Focusing on AFIC’s position, there is nothing in the AFIC Constitution which permits member societies of AFIC in a particular state to remove and replace its State Council. If there was such a power, it would be expected to be provided for expressly in the AFIC Constitution. However, there is nothing in the AFIC Constitution to empower such member societies of AFIC to exercise those powers. Nor do the powers conferred by the AFIC Constitution on the Executive Committee, the Federal Council and the Federal Congress include an express power to remove a State Council.

81. So far as the Executive Committee is concerned, whilst it may intervene in the affairs of a State Council under cl 18(e) of the AFIC Constitution, its powers do not extend to the removal of a State Council, and in any event are subject to ratification by the Federal Council acting on behalf of the Federal Congress.

82. The powers and functions of the Federal Council are set out at [17] above. The Federal Council is empowered to exercise the powers and functions of the Federal Congress in between Federal Congress meetings. Its decisions, however, have to be ratified and can be reversed.

83. The powers and functions of the Federal Congress are also set out at [16] above. The only power to constitute a society is contained in cl 13(h) of the AFIC Constitution, which does not include forming or appointing a State Council.

84. However, cl 13(e) of the AFIC Constitution gives power to adjudicate disputes between State Councils and AFIC member societies and to give directions in respect of such disputes. Whilst the contrary is arguable, I do not think that decision-making power goes so far as to enable the removal of the State Council. That is because of the existence of the expulsion provisions set out at [70] above. If AFIC wished to remove a State Council (which as I have indicated, is a member) it would need to resort to the procedures in those provisions. This has not occurred.

85. The current dispute might have been addressed by the New South Wales member societies in other ways. First, the difficulty which arises is at least partly due to the fact that some societies in New South Wales are members of AFIC and not of UMNSW, whilst others are members of UMNSW and not of AFIC. As I have pointed out, that is an outcome not intended by the respective constitutions. If, as was intended, societies were members of both bodies, decisions concerning the fate of UMNSW would be made by a majority of the AFIC/UMNSW societies in the state.

86. Second, the Court has power to wind-up a state association under s 63 of the NSW Act, including on the grounds that the committee has acted in a manner that is unfair and unjust to association members, and on the just and equitable ground. Further, disgruntled members would be able to access the oppression provisions in Ch 2F of the Corporations Act.

87. It follows that under the AFIC Constitution, a State Council can be removed by AFIC by the invocation of the expulsion provisions in the Model Rules, or as a result of it being wound up, or by orders made in proceedings under Ch 2F of the Corporations Act. However, absent the use of the expulsion provisions, AFIC does not have the power to remove a State Council. The removal of UMNSW in this case did not occur by invocation of either of those provisions.

Whether an unincorporated group of individuals was capable of being a State Council under the AFIC Constitution (notice of contention ground 1)

88. This issue logically precedes consideration of the issue of whether the meeting of 16 January 2021 purported to elect a new State Council because, irrespective of the intention of the parties at that meeting, it would not be effective if an unregistered and unincorporated group of individuals could not be a State Council.

89. The primary judge answered this question in the affirmative. His Honour observed that nothing in cl 5 specified the legal structure of a State Council and concluded that as a matter of construction, an unincorporated group of individuals, such as the New Council, could constitute a State Council (primary judgment at [64]).

90. In this Court, UMNSW submits that cl 5(2) contemplated that each State Council would have a constitution, because that clause required that constitution be “in conformity” with the AFIC Constitution. It submitted that the New Council did not satisfy that requirement because the evidence did not suggest that it had a constitution. UMNSW also relied on the reference in cl 5(6) of the AFIC Constitution to each State Council having full control over “its” property. That pronoun was said to be inconsistent with property being held jointly by the individuals constituting the new State Council. Although the primary judge acknowledged that a group of individuals could hold property jointly or through a trust structure (primary judgment at [62]), UMNSW submitted that such a structure would be “inconvenient” and was not intended by the framers of the AFIC Constitution.

91. AFIC submits that neither of those provisions precluded the New Council from comprising the State Council. It noted that nothing in cl 5(2) of the AFIC Constitution required the State Council to adopt a constitution before or at the time of its formation. Accordingly, AFIC relied on the fact that it was open to the group of individuals comprising the new State Council to agree to a constitution at some later point in time. With respect to cl 5(6) of the AFIC Constitution, AFIC relied on the primary judge’s observations that an unincorporated association could hold property, including as joint owners or on trust.

92. It is correct that a group of individuals can join together to form an association and can hold property, whether jointly or by means of a trust structure. It is also possible for such associations to have rules whose efficacy will depend on the consensus reached by the parties who join together in forming the association. Thus, in Cameron v Hogan (1934) 51 CLR 358; [1934] HCA 24, in rejecting Mr Hogan’s claim for an injunction restraining his expulsion from the Australian Labor Party of the state of Victoria, the plurality made the following remarks at 370-371:

“Judicial statements of authority are to be found to the effect that, except to enforce or establish some right of a proprietary nature, a member who complains that he has been unjustifiably excluded from a voluntary association, or that some breach of its rules has been committed, cannot maintain any action directly founded upon that complaint.

…

One reason which must contribute in a great degree to produce the result is the general character of the voluntary associations which are likely to be formed without property and without giving to their members any civil right of a proprietary nature. They are for the most part bodies of persons who have combined to further some common end or interest, which is social, sporting, political, scientific, religious, artistic or humanitarian in character, or otherwise stands apart from private gain and material advantage. Such associations are established upon a consensual basis, but, unless there were some clear positive indication that the members contemplated the creation of legal relations inter se, the rules adopted for their governance would not be treated as amounting to an enforceable contract. (Compare per Jessel M.R., Rigby v. Connol, and per Scrutton L.J., Rose and Frank Co. v. J. R. Crompton and Bros. Ltd.” (Footnotes omitted.)

See also Buckley v Tutty (1971) 125 CLR 353; [1971] HCA 71 at 374-375.

93. In Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1980] 3 All ER 42, Vinelott J held that the plaintiff, which could accurately be described as the Conservative Party, was not an unincorporated association for the purpose of the Income and Corporation Taxes Act 1970 (UK). In reaching that conclusion, Vinelott J made the following comments (at 58):

“Counsel for the Central Office had submitted that there are six characteristics which are either essential or normal characteristics of an unincorporated association. They are: (i) there must be members of the association; (ii) there must be a contract binding the members inter se; (iii) there will normally be some constitutional arrangement for meetings of members and for the appointment of committees and officers; (iv) a member will normally be free to join or leave the association at will; (v) the association will normally continue in existence independently of any change that may occur in the composition of the association; and (vi) there must as a matter of history have been a moment in time when a number of persons combined or banded together to form the association..

Counsel for the Central Office made it clear in his argument in this appeal that (iii), (iv) and (v) were not put forward as essential characteristics of an unincorporated association. It is possible to imagine an unincorporated association which lacked at least one of these characteristics. For instance, a members’ club might be so exclusive as to make no provision for the admission of new members and the original members might conceivably band themselves together in life membership. But the first two characteristics are put forward, I think rightly, as essential characteristics. Indeed, they seem to me no more than an analysis of the concept of an unincorporated association. The sixth characteristic is, I think, also a necessary characteristic of an unincorporated association. If an unincorporated association is a 'group of people defined and bound together by rules and called by a distinctive name' (see per Lord Buckmaster In Re Macaulay's Estate, Macaulay v O’Donnell [1943] Ch 435 at 428) there must have been a moment in time when the first members agreed expressly or impliedly to be bound by the rules. But in practice the task of answering the question whether a body with a distinctive name is an unincorporated association will rarely if ever be much assisted by asking when it came into existence. In many if not most cases an unincorporated association will have been gradually transformed over a period of time into something very different from the unincorporated association from which it grew, and it may well be impossible to ascertain either the date of its formation of [sic] the moment in time in this process of change when it assumed its distinctive contemporary character.”

The judgment was affirmed on appeal: Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1982] 2 All ER 1.

94. In Kibby v Registrar of Titles (1999) 1 VR 861; [1998] VSC 148, Mandie J set out what he regarded as the essential characteristics of an association:

“[50]   In the light of the judicial statements to which I have referred and the ordinary meaning of the words contained in the said definition, I consider that the essence of an ‘association’ may be described as some form of combination of persons (with a common interest or purpose) with a degree of organisation and continuity at least sufficient to distinguish the combination from an amorphous or fluctuating group of individuals and with some clear criteria or method for the identification of its members.

[51]   I do not think that a name or title, or the existence of a written constitution or rules governing the combination, or the existence of some form of contract between the members, is an essential characteristic, but clearly the existence of one or more of these would go a long way towards satisfying the need for some degree of organisation and continuity and for the satisfactory identification of members. Likewise, the existence of office-bearers, a committee and a bank account are relevant to a degree of organisation. The absence of all of these features makes it unlikely, but not impossible, that an association has been formed or is being carried on.”

95. In the present case the association said to have been formed by the appointment of the committee at the meeting of 16 January 2021 had no rules or any other form of agreement binding the original members (presumably, the original committee members), no mechanism for holding property and no procedure for the admission of members. All these seem to be essential requirements for a State Council under the AFIC Constitution (see cll 5(2), 5(6), 12(4)). Further, it had no procedures for the election of a chairman and other delegates to attend and participate in the Federal Council and Federal Congress, or procedures to levy subscriptions. In these circumstances, the committee formed was incapable of operating as a State Council.

96. However, the primary judge dealt with the matter at a higher level of abstraction, namely, that it was possible for the State Council to be an unincorporated association.

97. Accepting the possibility that such an association could have rules, provide for the admission of membership and take such other steps such that it could be described as an unincorporated association within the meaning of the authorities, and at least in theory could operate as a State Council, in my opinion the State Council is required by the AFIC Constitution to be an incorporated association, as is AFIC. Clause 5.2 of the AFIC Constitution requires State Councils to be registered with the relevant state or territory government authorities. The only way registration can occur, at least in New South Wales, is by an application under s 6 of the NSW Act. It is unnecessary to set out that section in detail but it includes particular requirements including, for example, a statement of the association’s objects, a copy of the proposed constitution and the identification of the person who is to be the association’s first public officer (see the NSW Act s 6(3)). It was not suggested that there was any other method by which an association could be registered with the relevant state authority.

98. This conclusion is supported by the context. The State Council is an umbrella organisation for other societies in the relevant state, most having in excess of 100 members. It is difficult to see how as a matter of practice it could operate other than as an incorporated association.

99. For these reasons, the primary judge erred in concluding that for the purposes of the AFIC Constitution, a State Council could be an unincorporated association.

Did the meeting on 16 January 2021 resolve that the committee which was elected be constituted as a new State Council for New South Wales (appeal ground 2)

100. The primary judge concluded that he was not able to find that the meeting resolved that the group of individuals comprising the New Council were to form the State Council, rather than CIS or some other body with a legal structure to be determined at a later date (primary judgment at [57]). It followed that his Honour could not make the declaration sought by AFIC’s originating process, which was that those individuals constituted the State Council. That conclusion was supported by the lack of clarity at the meeting as to the role of the new body, what rules it would have, and what consequence this had for UMNSW.

101. In its challenge to that conclusion, AFIC refers to the correspondence of late 2020 which recorded that member societies had expressed “profound concern” about UMNSW’s conduct and “demanded” that a caretaker interim committee be appointed “to manage the NSW affairs of member societies”; the nomination form for “AFIC NSW Islamic Council Committee 2021” attached to the notice of the meeting; and the minutes of the meeting itself. It submits that material supports the finding that a reasonable person attending the meeting would have understood that as member societies of AFIC, they were voting for UMNSW to be removed as State Council and replaced by a committee comprising the elected individuals.

102. AFIC also placed reliance on what was said by this Court in North Sydney Brick & Tile Co Ltd v Darvall (1989) 17 NSWLR 327. In that case, a resolution to make an in specie distribution of shares in a company was held to be a declaration of a dividend notwithstanding that that was not stated in the resolution. Clarke JA (Samuels JA agreeing) considered that it was necessary to look at the substance of the matter and concluded, having regard to the surrounding circumstances, that although the form of the resolution was deficient, the shareholders in substance agreed to make the distribution in the permitted way, namely by way of dividend (North Sydney Brick & Tile Co Ltd v Darvall at 338-341).

103. UMNSW submits that the primary judge’s conclusion on this issue was correct. It submits that neither the pre-meeting correspondence nor the minutes suggested that a specific issue voted on at the meeting was the removal and replacement of UMNSW as a State Council of AFIC. Although the minutes referred to the election of a committee “to represent them as the Muslims of NSW”, the nature of that representation and whether it was as the State Council to AFIC was not discussed or resolved.

104. I accept that a resolution of which there is more than one possible meaning is not void for uncertainty and will ultimately bear the meaning that the court decides upon its proper construction: The Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429; [1968] HCA 8. I also agree that the approach of the court in construing the resolution would be to seek to ascertain the objective intention of those who resolved upon it, consistently with the principles in the cases referred to at [64] above. However, the primary judge was correct in concluding that the resolution did not have the effect of removing UMNSW as State Council and appointing the committee in its place, quite apart from the question of whether it had power to do so.

105. Apart from the election of office bearers at the New Council, the only matter which could be said to constitute a resolution at the meeting was that recorded in the minutes under the heading “General Business”, which I have set out at [55] above. Importantly, there was no resolution appointing the elected committee members as a State Council. The only reference to the forming of an association was under the heading “General Business” where it was stated that no disagreement was recorded to the intention to register an association. However, it is not suggested that that association, CIS, which was registered on 1 February 2021, thereby became the State Council.

106. Further, the agenda attached to Mr Zoabi’s letter of 28 December 2020 convening the meeting (see at [47] above) made no reference to a proposal that the committee appointed would be the new State Council. Nor did it suggest that it was proposed to resolve that UMNSW be removed as State Council. The agenda item, “[w]here we stand in relation to UMNSW”, does not amount to or include such a suggestion.

107. In considering this issue it is relevant to take into account the various letters leading up to the meeting which assert dissatisfaction with UMNSW by AFIC member societies in New South Wales, AFIC’s support for the interim committee and the assertions made by Mr Trad at the meeting. All of this would indicate that some participants may have been dissatisfied with UMNSW and indeed, had a desire to see it replaced. However, this material does not warrant the conclusion that the effect of the resolution was to remove UMNSW as the State Council and replace it with the New Council.

108. This conclusion is supported by the fact that the committee had no constitution, no proposal regarding the payment of subscriptions and no structure by which it would hold property, matters which were essential attributes of a State Council.

109. In these circumstances, what occurred at the 16 January 2021 meeting fell well short of the meeting resolving that the committee be appointed as the new State Council and that UMNSW be removed. At most it could be regarded as being resolved to take steps towards that objective, but not as having achieved it.

110. In the circumstances, it follows that the primary judge was correct in declaring that UMNSW is the State Council for New South Wales, as defined in cl 3 of the AFIC Constitution.

Was Mr Elrayes validly nominated by UMNSW as delegate for the New South Wales State Council to the Federal Council of AFIC (appeal grounds 3 and 4)

111. The primary judge held that if Mr Elrayes was appointed as president of UMNSW, then its status as State Council meant that he would become its delegate to AFIC under cl 12(1)(a) of the AFIC Constitution. There was no challenge to the validity of the meeting of UMNSW at which that position was filled. Accordingly, his Honour made the declaration sought by UMNSW that Mr Elrayes was the delegate for the New South Wales State Council (primary judgment at [82]-[83]).

112. The primary judge reached that conclusion even though some of the members of UMNSW which participated at that meeting were not AFIC members. Clause 5(7) of the AFIC Constitution does not specify consequences for non-compliance with it. His Honour concluded that as a matter of construction it did not mean that the participation of non-AFIC members in a State Council’s affairs made those steps invalid for AFIC’s purposes. Otherwise the position would be unworkable, because the affairs of a State Council could be invalidated by the participation of a non-AFIC member even where the relevant State Council was not aware of their membership status. Nor did it matter that some AFIC members, who had not themselves applied to become members of UMNSW, were for that reason not given notice of that meeting. The primary judge accepted that cl 5(8) did not mean that AFIC members were automatically members of the State Council (primary judgment at [74]-[75]).

113. In this Court AFIC maintained that the appointment of Mr Elrayes as president of UMNSW did not need to be recognised by AFIC because it involved the participation of non-AFIC members. It contends that the primary judge’s contrary conclusion made the last sentence of cl 5(7) otiose. It repeated its submission made before the primary judge that cl 5(8) means that AFIC members automatically became members of the State Council who were entitled to be notified of its meeting. It also relies on provisions in the AFIC Constitution which contemplate that the State Council will be controlled by AFIC members. They include cl 38(1) which permits a State Council to propose motions to Federal Congress meetings, and cl 57(2) which permits it to propose alterations to the AFIC Constitution.

114. UMNSW submits that the AFIC Constitution cannot override the membership provisions of its own constitution. Accordingly, cl 5(8) cannot have the legal consequence of admitting AFIC’s members to membership of UMNSW. It also supports the primary judge’s reasoning as to the inconvenience that would arise if cl 5(7) is given the effect of invalidating the acts of a State Council where non-AFIC members participate.

115. AFIC’s argument depends in large measure on the construction and effect of cl 5 of the AFIC Constitution. It contends that voting on the election of the chairman of the State Council, who is entitled to represent the State Council at Federal Council and Federal Congress meetings, involved participation in the affairs of AFIC. By virtue of cl 5(7), AFIC says that only AFIC member societies resident in the relevant state could vote on that issue. So far as AFIC member societies which were not members of UMNSW were concerned, it was contended that cl 5(8) of the AFIC Constitution deemed them to be members of the New South Wales society.

116. This was contended to be the case notwithstanding that the validity of the UMNSW meeting was not challenged. Thus, as I have pointed out, it was contended that UMNSW could still elect a chairman or president but that the person elected would not be considered the chairman of the State Council for the purpose of cl 12(1) of the AFIC Constitution because that person was voted in by societies which were not members of AFIC.

117. Clause 12(1) of the AFIC Constitution does not contain any limitation of the nature suggested. It provides for particular persons to be the State Council representatives but says nothing about their method of election. If there is any limitation, it must be found in cl 5.

118. The first matter to note is self-evident. Clause 5 does not form part of the UMNSW Constitution. Thus, cl 5(8) of the AFIC Constitution cannot operate to constitute AFIC members as members of UMNSW irrespective of the latter’s constitutional and statutory requirements. In particular, it cannot override the statutory requirement in s 231 of the Corporations Act by deeming societies which have not agreed to become members in accordance with s 231(b) of the Corporations Act to be members. The principle that a person is not a member of a company until its name is entered on the register of members is well established: Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 409-411, 419. In Maddocks v DJE Constructions Pty Ltd (1982) 148 CLR 104; [1982] HCA 17, the Court noted (at 117) that the authorities and statutory provisions made it clear that a person is not and cannot become a member unless and until he or she agrees to become a member and his or her name is entered in the register of members.

119. Similarly, the provisions in cl 5(7) of the AFIC Constitution cannot of themselves override the entitlement of UMNSW members to exercise the rights conferred on them under the UMNSW Constitution by effectively prohibiting them from voting on a resolution at a general meeting of that association.

120. That is not to say that the provisions have no effect. Clause 5 of the AFIC Constitution is directed to ensuring that each of AFIC and the umbrella state organisations have common membership by imposing contractual obligations on the State Councils and the societies which have become members of AFIC. Clause 5(3)(c) obliges AFIC to admit a society to membership if it complies with the requirements of that provision. The relevant rules are made by Federal Congress in accordance with cl 13(c) and cl 13(l) of the AFIC Constitution (see [16] above).

121. Clause 5(2) of the AFIC Constitution obliges each local Islamic society to be a “constituent part” of the State Council. The first step in doing so is to apply for membership of that Council. The procedure requires consideration of that application for membership by UMNSW and AFIC (cl 5(iv) of the UMNSW Constitution). Clause 5(v) of the UMNSW Constitution provides that application for membership shall be accompanied by an application fee as determined from time to time by UMNSW and AFIC, whilst cl 5(x) provides that the annual membership fee of UMNSW shall include a membership fee for AFIC. Clause 50 of the AFIC Constitution provides for UMNSW as the State Council to collect that fee and account for it to AFIC.

122. It is in that context that cl 5(7) of the AFIC Constitution operates. The last sentence of that clause assumes that local societies are members of each State Council and have paid their subscription fees through that State Council. Assuming UMNSW is complying with its obligation under cl 50 of the AFIC Constitution, a non-financial member of AFIC would also be a non-financial member of UMNSW and liable to be expelled on a failure to pay the annual subscription for two consecutive financial years.

123. In those circumstances, cl 5(8) of the AFIC Constitution does not operate as a deeming provision. Rather, it makes it clear that an AFIC member society in New South Wales is entitled to membership of the State Council and imposes an obligation on UMNSW to admit them, subject to its constitution, which is required in principle to be in conformity with the AFIC Constitution.

124. In these circumstances, if UMNSW wrongfully refused to admit an AFIC member society to its membership, AFIC would be entitled to bring proceedings to enforce the obligation contained in cl 5(8) of the AFIC Constitution. Similarly, UMNSW could bring proceedings against AFIC if it refused to admit a member society of UMNSW which was entitled to admission under the AFIC rules.

125. Further, it may be possible for UMNSW member societies or AFIC to challenge the validity of a meeting of UMNSW on the basis that societies entitled to vote have been wrongly excluded, or because societies not entitled to vote have been wrongly included.

126. This is consistent with the view taken by Hodgson CJ in Eq (as his Honour then was) in Islamic Council of New South Wales v Australian Federation of Islamic Councils [2000] NSWSC 115 (ICNSW v AFIC). In that case AFIC had purported to appoint a caretaker committee to intervene in the affairs of the plaintiff (a predecessor to UMNSW) to run its affairs until new office bearers were elected. AFIC convened a meeting of the plaintiff to elect new office bearers and amend the plaintiff’s constitution. It should be noted that the relevant provisions of the AFIC Constitution at that time were in similar form to its present constitution.

127. Hodgson CJ in Eq stated that where intervention was authorised by AFIC’s rules, it did “not necessarily mean that the intervention which took place was valid and effectual” (ICNSW v AFIC at [93]). That depended on the NSW Act and the plaintiff’s constitution. His Honour reached the following conclusions (ICNSW v AFIC at [101]-[102]:

“[101]   Accordingly, in my opinion, the act of the Executive Council of AFIC in purportedly setting up an interim body to control the affairs of ICNSW was ineffectual under the rules of ICNSW. It was contrary to Rules 6 and 7 of the ICNSW Constitution, which are in turn given statutory effect by s.11(2) of the Associations Incorporation Act. Accordingly, this action by the AFIC Executive Committee was not effectual to remove the office bearers of ICNSW from their position.

[102]   However, ICNSW is contractually bound by the rules of AFIC, and those rules authorised intervention; and, as I have found, the plaintiffs have not shown that the circumstances of this case did not justify intervention. On the assumption that intervention was justified, ICNSW was contractually bound to submit to intervention, in any way consistent with its own rules; so that for example, if AFIC had required ICNSW to call a meeting of members, it would have been contractually bound to do so, and if it had failed to do this, AFIC could have sought specific performance of that obligation. However, although I do not need to decide this, it is questionable whether that would justify the direct calling of a meeting by the AFIC Executive Committee itself.”

128. In the present case AFIC did not seek to intervene in the affairs of UMNSW. Had it done so, as Hodgson CJ in Eq correctly emphasised, the relationship between the two societies was based in contract.

129. A further issue that arose in that case was the failure to give notice of the meeting to various societies which were members of the plaintiff but had not paid their subscriptions to AFIC. It was submitted by AFIC that because of cl 5(7) (identical to cl 5(7) in its present constitution), those societies were not entitled to participate in the affairs of the plaintiff. Hodgson CJ in Eq in rejecting the submission, observed (ICNSW v AFIC at [107]):

“[107]In my opinion, Rule 5(7) of the AFIC Rules is not incorporated into the ICNSW rules, so that the Turkish Muslim associations were entitled to notice of the meeting and were entitled to attend and vote at the meeting. For that reason alone, in my opinion the meeting was invalid and the resolutions at the meeting were invalid. In my opinion also, the purported election of office bearers was invalid because the previous office bearers had not validly been removed from office.”

130. I respectfully agree.

131. In the present case AFIC, in conceding the validity of the UMNSW meeting, has accepted that members of UMNSW were entitled to attend and vote. It follows that any resolution passed at the meeting was effective to appoint Mr Elrayes as president. Once it is accepted that cl 5(7) of the AFIC Constitution is not incorporated into the UMNSW Constitution, it does not seem to me that this result can be circumvented by the submission that whilst the resolution may be valid for UMNSW’s purposes, it was not sufficient to confer on Mr Elrayes the right to attend the Federal Council and Federal Congress meetings as a delegate of UMNSW.

130. It again must be emphasised that there is no suggestion that UMNSW acted improperly in admitting non-AFIC members to its society. Had such allegations been made, the validity of the meeting may have been open to challenge either by a UMNSW member or possibly by AFIC under the arrangements contained in the AFIC Constitution. However, absent any such allegation, participation of those members at the meeting did not invalidate the resolution or limit its effect.

131. So far as the AFIC members who were not UMNSW members were concerned, they had no entitlement to attend and vote as they were not members. I have pointed out that cl 5(8) of the AFIC Constitution did not deem AFIC members to be UMNSW members, as distinct from imposing a contractual obligation on UMNSW to admit them if they applied for membership. There is no suggestion that they applied and that UMNSW wrongfully refused to admit them. In those circumstances, their non-attendance did not affect the validity of the resolution.

132. The primary judge was thus correct in declaring that Mr Elrayes was the duly appointed delegate for the State Council of New South Wales as defined in cl 12(1) of the AFIC Constitution.

Conclusion

135. In the result none of grounds of appeal 1 to 4 is made out. At the same time notice of contention ground 1 should be upheld.

136. It follows that AFIC’s appeal from the declarations made by the primary judge on 26 April 2021 should be dismissed with costs.

137. BELL P: I agree with the reasons of the Chief Justice and the orders he proposes.

138. MEAGHER JA: For the reasons given by the Chief Justice, I agree that AFIC’s appeal should be dismissed with costs.

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Decision last updated: 15 December 2021