Bagri v Arik

[2022] SADC 27

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil: Application for Review)

BAGRI AND ORS v ARIK AND ORS

[2022] SADC 27

Reasons for Decision of his Honour Judge Slattery  

10 March 2022

MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA

ASSOCIATIONS AND CLUBS

Application involving an incorporated association under the Associations Incorporated Act 1985.

Dispute between two principal factions of an incorporated society based in the Riverland of South Australia. It is alleged that there is a convention agreed between these factions such that, on alternate years at the election of Members of the Board of Management, these two factions would be represented on that board.

A dispute before the Court, the subject of the proceedings, concerned inter alia the holding of the 2019 elections and other conduct.

There has now been a further election of the Members of the Board of Management in 2021. Four new members of the Board of Management were then elected, none of whom were board members in 2019. The applicants in the proceedings, the respondents on the application for review, now challenge the validity of the 2021 elections by a late amendments to their pleadings.

The respondents allege that the resources of the association are being used to pay the costs of the representation of the respondent board members, including the four board members sued by the appellants in the proceedings none of whom were board members following the 2019 election.

The applicants in the proceedings, the respondents on the review sought and obtained an order with injunction in the Magistrates Court restraining the use of the Society’s funds to pay legal costs. An undertaking as to damages was given by each person who sought the orders with injunction.

The second to ninth respondents to the application in the Magistrates Court, the appellants on this review, seek a review of the orders of the learned Magistrate. The appellants have separately provided an undertaking as to damages in an appropriate form and signed by each of them. There has been no challenge to the content of the efficacy of these undertakings as to damages.

•       Whether the action is to be properly characterised as an oppression action and whether the Society has an interest in the issue in the proceedings and whether its funds and capital be expended to that end on costs that are incurred.

•       Whether the learned Magistrate had jurisdiction to injunct the incurring of costs;

•       Whether a prima facie case had been established by the applicants for injunction; and

•       Whether in the application of the settled law of Australia, an undertaking as to damages by the respondents to the injunction application, the appellants on this review,  would adequately compensate the applicants by an award of damages sustained as a result of the alleged actions of those appellants.

Held:

1.      The order with injunction is discharged.

2.      The learned Magistrate failed to properly address the question of undertakings as to  damages and the balance of convenience when considering the grant of an…