Bacich v Collier - [2003] WASC 93

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: BACICH -v- COLLIER & ANOR [2003] WASC 93

CORAM: EM HEENAN J

HEARD: 5 MAY 2003

DELIVERED : 5 MAY 2003

FILE NO/S: CIV 1501 of 2003

BETWEEN: PETER BARRY BACICH
Plaintiff
AND
PETER COLLIER
First Defendant
LIBERAL PARTY OF AUSTRALIA (WESTERN AUSTRALIAN DIVISION) INCORPORATED
Second Defendant

Catchwords:

Corporations - Incorporated Association - Interlocutory injunction to restrain holding of annual general meeting - Authority to convene AGM - Rules of association providing for internal resolution of disputes to be binding on members - Interlocutory injunction refused

Legislation:

Nil

Result:

Application for interlocutory injunction dismissed

Category: B

Representation:

Counsel:

Plaintiff:     Ms K J Bennett
First Defendant             :     No appearance
Second Defendant         :     Mr S Penglis

Solicitors:

Plaintiff:     Mony de Kerloy
First Defendant             :     No appearance
Second Defendant         :     Freehills

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Nil

EM HEENAN J: In view of the urgency of this matter it is desirable that I should give my decision immediately and provide the best oral reasons I can in the circumstances, although having regard to the importance of the issue, some might have thought it preferable to have taken time to consider, yet I am satisfied that that is not practicable.
This is a summons for an interlocutory injunction brought by the plaintiff, a member of a political party, seeking an order that until trial or further order the first defendant, who is the director of that party, and the second defendant, the party itself, whether by its servants or agents or otherwise, be restrained from conducting the annual general meeting of the Wembley Downs branch of the party which is scheduled for 7 pm this evening, Monday, 5 May. The summons also seeks incidental orders for liberty to apply and for costs, but these need not be discussed at this point.
This action, which was commenced by a writ of summons issued last Friday, seeks declarations and orders that all the business transacted at an annual general meeting of the Wembley Downs branch of the Liberal Party said to have been held in September 2002 was validly transacted. It also seeks a declaration that a Mr Kagi, is the validly elected president of the Wembley Downs branch, he having been purportedly elected at that meeting. It also seeks declarations that a notice of April 2003, by which the first defendant is purporting to convene tonight's meeting, is void and of no effect. Further, the statement of claim seeks injunctions restraining the first defendant and the party from reconvening any annual general meeting of the Wembley Downs branch pursuant to the April 2003 notice and injunctions restraining the first defendant and the party from causing notices to be issued for the holding of any annual general meeting of the Wembley Downs branch before 5 September this year.
The writ with the endorsed statement of claim, the motion for the interlocutory injunction and the supporting affidavit and annexures of the plaintiff sworn 2 May 2003 have been served on the second defendant, the party, which has entered an appearance and has appeared by counsel before me today. Service has not formally been effected upon the first defendant, the director of the party, and no appearance has been entered on his behalf, nor has he sought to be heard by counsel. Nevertheless, the first defendant is the deponent to the affidavit of 5 May 2003 sworn on behalf of second defendant in opposition to the application for the interlocutory injunction. In those circumstances I am satisfied that these proceedings have come to the notice of the first defendant who as yet has not entered an appearance. The time for entering any such appearance has not yet expired.
As has emerged from what I have said so far, these proceedings essentially concern the validity of a branch meeting of the Wembley Downs branch of the Liberal Party said to have been held on 30 September 2002. If that meeting were held or, more accurately, if it had validly been held, then the office bearers purportedly elected by that meeting and the nominees to various other bodies within the party would have been validly appointed. If, however, the meeting were not validly convened or held, there would have been no annual general meeting for 2002-2003 year.
I have before me in evidence what the parties accept is an adequate, although not entirely up to date, set of the Rules and the Constitution of the Liberal Party of Australia (Western Australian Division), the rules of the divisions and the rules of the branches and the party rules. I turn first to the provisions of rule 30 of the Constitution which contains the obligations for each branch to hold an annual general meeting not later than the 15th day of September in each year.
At any such annual general meeting the members of the branch are obliged to elect various office bearers as set out by r 28(a). They include the president of the branch, vice presidents, secretary, treasurer, members of the branch committee, branch delegates to divisional conference, branch delegates to divisional council, branch delegates to state conference and certain others.
Any such AGM is to be called by the branch president or the branch itself, providing that if conflict should exist, the branch shall prevail. However, if no AGM is held prior to 15 September, then any one of the following may call the annual general meeting: firstly, the president of the branch; secondly, the branch and, thirdly, the divisional president. By naming those persons in that order I do not mean to imply that those persons only in that order of priority may convene the meeting, but rather that any one or more of them may. Subrule 30(c) provides:
"If a branch annual general meeting is not held by 15 October in accordance with clause 30(b), then the following may call the annual general meeting:
(1) the president of a branch;
(2) the branch;
(3) the divisional president;
(4) the state executive."
In the circumstances which have arisen in this case it is clear that there was some gathering held on the evening of 30 September 2002 and the question is whether or not that was a validly convened annual general meeting of the Wembley Downs branch. Putting that issue to one side for the moment, the notices of that meeting which were distributed to branch members gave notice that the meeting was to be held at 7.30 pm that evening. As appears from the minutes of the meeting or gathering of 30 September 2002, which are exhibited as annexure PBB3 to the affidavit of Mr Bacich in support of this motion, it is evident that some 11 persons attended at various times at that meeting, although not all were present together throughout and that Mr Kagi left the meeting at 7.15 pm, a Mr Halligan arrived at 7.20 pm and Ms Julie Bishop arrived at 7.35 pm. It is evident that at least the election of office bearers, said to have been completed at that meeting, took place before 7.15 pm, that is, before the departure of Mr Kagi and therefore before the 7.30 time appointed for the meeting.
It is accepted by both parties who have appeared before me this afternoon that under the rules of the party only ordinary members of the branch were entitled to vote at this meeting or to be counted in determining its quorum. The quorum is five members. Again it is accepted that of the 11 persons who attended at various times, only five were ordinary members of the branch and hence eligible to be counted in determining a quorum and that that five included Mr Kagi who left at 7.15 pm. Therefore, putting aside any other shortcomings about the meeting, the members present and entitled to be counted for determining a quorum certainly fell below the minimum at 7.15 pm and before the meeting was concluded. It is not possible to say whether there was a quorum from the start of the meeting until 7.15 pm on the present evidence.
Therefore, there are at least two serious questions which have arisen about the validity of this so-called annual general meeting which the plaintiff says was conducted on 30 September. The first is the adequacy of the notice given to branch members, which stipulated that the meeting was to commence at 7.30 pm, whereas, as I have indicated, the evidence shows that it was commenced at about 7.00 pm and was completed at about 7.30 pm or 7.35 pm by the time Ms Bishop arrived. The second serious question concerns whether or not the meeting retained a quorum, and hence its deliberative capacity, after the departure of Mr Kagi at 7.15 pm. On the face of it, it appears that those are both substantial questions which give rise to serious doubts about the validity of that meeting. It is, however, unnecessary for me to make any final determination about the validity of that meeting today.
I turn now to subsequent developments. Following the so-called meeting of 30 September 2003 communications were directed to the administration of the party by at least two persons who had been present at that meeting, expressing concerns about its validity. They were communications from Mr Halligan to Mr Peter Collier, the first defendant and president of the Curtin Division by letter dated 8 October 2002, which is annexure PC1 to the affidavit of Mr Collier sworn 5 May 2003 in opposition to the application. The second query was from Ms Julie Bishop, again to Mr Collier, by letter dated 21 March 2003.
These prompted various investigations by the office bearers of the party and by its director. By letter dated 24 March 2003, which is annexure PBB14 to the affidavit of Mr Bacich of 2 May 2003, Mr Collier, the first defendant, as president of the Curtin Division, wrote to Mr Paul Everingham, the state director of the party, saying among other things, "I would like to lodge a formal appeal against the validity of the annual general meeting of the Wembley Downs branch of the Liberal Party conducted on 13 September 2002. The delay in lodging the appeal is due to the fact that I was only privy to the details of the AGM as of 19 March 2003," and the letter then goes on setting out the details.
Whether in truth Mr Collier was only aware of doubts about the validity of the meeting of 30 September 2002 does not seem to me to be a vital question on this application. However, substantial significance is given to the question of the date of the so-called appeal and alleged prior knowledge of doubts about the validity of the so-called meeting by the submissions for the plaintiff. These submissions rely, in this regard, on cl 117 of the Constitution of the party as it appears in the printed materials at page 55 of the annexure to the affidavit to Mr Bacich. That rule deals with appeals and by subrule (4) provides;
"Subject to clause 17 – [a qualification which in my opinion does not apply in the present circumstances] - for any other appeal on any matter, including but not limited to appeals against the validity or not of the meetings of constituent bodies or the validity of election of office bearers, including delegates, such an appeal shall be lodged with the state director within 10 clear days of the day of the meeting or event."
The submissions for the plaintiff proceed on the footing that there are only 10 days within which any such appeal may be instituted and that this period has long since passed in the present instance, thus rendering the proposed appeal ineffective. Again, it is not necessary for me to determine this question which, in any event, would be difficult to do on the evidence now before me. I say difficult because there is very little in the materials which have been put in evidence this afternoon to indicate what are the powers of the body entertaining the appeal either generally or in regard to appeals which may be attempted after the 10-day period limited.
The body which may entertain such an appeal appears to be the Appeals and Disciplinary Committee, one of the nine standing committees of the State Council as established under r 80 of the Constitution, but just what are its powers in the circumstances are not clear. However, despite the tacit assumption to the contrary in the submissions for the plaintiff, it appears to me that challenges to the validity of a meeting of a branch or the appointment of officers elected at a branch meeting or delegates to other forums within the party may be challenged by other means as well as by an appeal. Although the letter of 24 March 2003 from Mr Collier to the director, Mr Everingham, which I have already mentioned is couched in the language of a formal appeal, it is relatively clear that it was not treated by the party in that fashion, or at least not only in that fashion.
There has been no evidence adduced in the proceedings before me this afternoon to show that that so-called appeal was ever referred to the Appeals or Disciplinary Committee or that, if it were, that any decision on the appeal was taken by that committee. Rather, what was done is clear from other correspondence which is in evidence. By a letter from the director, Mr Everingham, to Mr Kagi, the president of the Wembley Downs branch, dated 9 April this year, which is annexure PBB10 the affidavit of Mr Bacich already mentioned, there is the following passage and I quote:
"The constitutional validity of the 30 September 2002 AGM of the Wembley Downs branch has been brought into question by the Curtin Division of the Liberal Party of Western Australia. As such I have now referred the matter to the Constitutional and Drafting committee of the Liberal Party of Western Australia. I have asked this committee to assess the facts, make a determination and then advise me as to the constitutionality of the Wembley Downs AGM on 30 September 2002.
The letter goes on to deal with other matters, including an invitation to raise matters pertaining to the issue which might be put to the Constitutional and Drafting Committee before then. This reference to the Constitutional and Drafting Committee is a reference to another one of the nine standing committees of state council as established under r 80(h) of the Constitution of the party.
The role of the Constitutional and Drafting Committee is set out in rule 18 of the party rules which appear at pages 81 and 82 of the printout of those rules annexed to Mr Bacich's affidavit. That committee, among other things, has the following functions: "to maintain the Constitution and rules of the party under constant review" - I skip over the next subparagraph; thirdly:
"From time to time, at the request of State council, State executive, management executive, the state president and divisional council or any constituent body or the state director to consider and give opinions, advice, rulings and make determinations as to the interpretation of any particular point or points in the Constitution or rules or its application in given circumstances as may be requested of the committee; fourthly, all requests to the committee for opinions, advices, rulings and determinations shall be made through the state director."
I pause to mention that the letter from Mr Everingham of 9 April 2003, annexure PBB10 from which I have already read, plainly appears to be an exercise by the State director of his power to request the Constitutional and Drafting Committee to provide an opinion, advice or ruling on the question of the constitutionality of the meeting of 30 September 2002 of the Wembley Downs branch.
The party rules dealing with the Constitutional and Drafting Committee go on to include the following subclause:
"Until an opinion or ruling of the committee is overruled by State council or by a revised opinion or ruling of the committee, the party, its constituent body, members and staff shall interpret the Constitution and rules and act in accordance with that opinion or ruling."
It seems to me that despite the submissions pressed for the plaintiff, the effect of this rule is to give status and efficacy to a ruling of the Constitutional and Drafting Committee, despite any possible imperfections or flaws which it might have, until or unless it is overruled by State council or is revised by a further opinion or ruling of the committee.
I turn then to resume the narrative and to address the outcome of the reference to the Constitutional and Drafting Committee. That appears in a letter from the State director, Mr Everingham to the first defendant, Mr Collier, dated 16 April 2003, which is annexure PBB11 to the affidavit of the plaintiff. That letter, the material parts of which provides as follows, I shall now read:
"Dear Peter,
I refer to your letter dated 24 March 2003 seeking to challenge the validity of an annual general meeting of the Wembley Downs branch purported to be held on 30 September 2002. I referred the matter to the Constitutional and Drafting Committee for advice. The committee has determined that the proceedings on 30 September 2002 did not constitute a validly convened annual general meeting of the Wembley Downs branch."
There has been no challenge made to the accuracy of this letter from Mr Everingham or to the description which he has provided about the results of the reference to the Constitutional and Drafting Committee of this question touching the validity of the alleged meeting. Therefore, I consider that at this preliminary stage of the action I should simply act on the basis that the Constitutional and Drafting Committee has determined that the meeting of 30 September 2002 was not validly convened and is ineffective. Whether that is ultimately the final result may need to await either the outcome of this action or other internal proceedings of the party and its various bodies. What is clear is that, for the interim at least, under the rules of the party, all its members and constituent bodies are obliged to proceed on the footing that this decision of the Constitutional and Drafting Committee is the correct construction of the present state of affairs.
That being the case then, in conformity with the decision of the Constitutional and Drafting Committee there has been no valid annual general meeting of the Wembley Downs branch conducted by 15 September 2002, there being no evidence presented to me suggesting any such meeting on an occasion other than the disputed gathering of 30 September.
As there had been no valid meeting, then it seems to me that the way was open for the president of the branch, the branch, the divisional president or the State executive to convene such a meeting pursuant to the powers conferred under cl 30(c) of the Constitution. It is pursuant to that power that the party has acted to convene the meeting which is to be held tonight. I do not see any irregularity in that procedure nor any reason to restrain the progress of that meeting in view of the events which I have described, notwithstanding the submissions which were put to me this afternoon.
There is one other issue which I should address and it is the alternative submissions which have been put on behalf of the plaintiff to the effect that the notice of meeting which has been distributed to branch members for the meeting to be held this evening proposes the election of office bearers and delegates for the year 2003-2004. It is submitted that that is necessarily invalid because nothing has happened to trigger a power to hold an AGM for the 2003-2004 year because the last date for such a meeting to be held, as contemplated by r 30 of the Constitution, namely 15 September 2003 has not yet arrived. So much is self‑evident, but in reality it seems that the meeting which is to be held tonight has been convened to constitute a belated annual general meeting for the branch for the meeting which should have been called or held prior to 15 September 2002 and not 15 September 2003.

That being evident from the history and the powers relied upon for the calling of the meeting, it would seem to follow that the item in the agenda for the election of office bearers for the 2003-2004 year may, at the most, be a mistake, although it is possible that there might be some justification for the election of office bearers for the next 12-month period. Again it is not necessary for me to consider that issue and no detailed submissions were put to me concerning the power of the meeting, if otherwise validly convened, to elect office bearers for that duration.
If it is a mistake, then the question of the significance of the mistake and whether it can be cured seems to me to be a matter for consideration by that meeting which is to be convened tonight. Perhaps it may be addressed by the chairman and the members but, even if it were to be an irregularity, it does not seem to me to be any reason to restrain the conduct of that meeting.
In those circumstances I conclude that a serious question does exist in this litigation about the validity of the so-called meeting of 30 September 2002 but the evidence, such as it is, points more to the invalidity of that meeting than to its validity. So the serious question about whether there was ever a valid meeting emphasises the substantial doubt which exists about the validity of that meeting.
That may justify the continuation of these proceedings or the progress of the dispute otherwise within the forums of the party, but when it comes to the question of whether or not an injunction should be granted on an interim basis on this summons, I have no hesitation in saying that the balance of convenience is clearly against any intervention by this Court, for a variety of reasons.
Perhaps the most formidable problem facing the plaintiff is the provisions of the rules which give efficacy to the determination of the Constitutional and Drafting Committee unless its determination is set aside. However, while I place reliance on that factor, it is not the only factor which inclines me against any form of intervention. It seems to me that no irreparable prejudice is likely to occur if the meeting tonight proceeds. There is much to be said for leaving disputes of this nature for resolution by the internal mechanisms of such a party. It is preferable for the court only to exercise its powers when and if the matter has run its course within the mechanisms of the party or if a far more substantial result turns upon the outcome of deliberations made at any such proposed meeting.
In those circumstances I propose to refuse the application for the injunction and other relief which has been sought by the motion before me this afternoon.