Clark v Framlingham Aboriginal Trust

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2014 00672

IN THE MATTER
OF FRAMLINGHAM ABORIGINAL TRUST

BETWEEN:

AARON CLARK JEREMY CLARK and TIM CHATFIELD	First Plaintiff Second Plaintiff Third Plaintiff
v
FRAMLINGHAM ABORIGINAL TRUST and	First Defendant
GEOFFREY (POSSUM) CLARK-UGLE	Second Defendant

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	23 and 24 June 2014
DATE OF JUDGMENT:	6 August 2014
CASE MAY BE CITED AS:	Clark v Framlingham Aboriginal Trust
MEDIUM NEUTRAL CITATION:	[2014] VSC 367

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ADMINISTRATIVE LAW – Election of members to the committee of management of the Framlingham Aboriginal Trust established under Aboriginal Lands Act 1970 (Vic) (the Act) - Dispute as to entitlement of the plaintiffs as registered shareholders to vote and otherwise exercise the rights of shareholders in the election of the committee of management of the Trust – Entitlement to vote based on shareholding in the Trust – Plaintiffs took transfer of shares in the Trust from a previous shareholder who was declared bankrupt – At the time of the election of the committee of the Trust the trustee in bankruptcy of the former shareholder had taken no steps to lay claim to the shares under s 58(1) of the Bankruptcy Act 1966 (Cth) – Held plaintiffs entitled to vote.

Whether affairs of trust being conducted in an oppressive manner within the meaning of s 27(1) of the Act – Whether plaintiffs aggrieved by anything which the Trust had done or failed to do within the meaning of s 27(2) of the Act – Relief granted - Aboriginal Lands Act 1970 (Vic), s 27.

The Act provided for staggered elections of members of the committee – Whether staggered elections could be reintroduced under the Act where they had previously fallen into abeyance – Held the Act did not provide a mechanism to reintroduce staggered elections – Aboriginal Lands Act 1970 (Vic), s 15.

PRACTICE AND PROCEDURE – Consideration of power to make declarations – Supreme Court (General Civil Procedure) Rules 2005, r 23.05.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr DM Ryan QC with Mr T Greenway	Shayne Daley & Associates
For the Defendants	Mr JL Evans	Stratmann & Co Lawyers

TABLE OF CONTENTS

Introduction and summary........................................................................................................ 2
The relevant facts........................................................................................................................ 6
The claims of the trustee in bankruptcy.................................................................................... 27
The plaintiffs’ claims................................................................................................................. 28
The plaintiffs’ first and second complaints – decision concerning “staggered elections”......... 32
The plaintiffs’ third complaint - the decision on nominations................................................... 38
The plaintiffs’ fourth complaint – the chairman’s decision as to who could attend the annual general meeting.................................................................................................................................................. 39
The plaintiffs’ fifth complaint – that Aaron Clark was not entitled to nominate, attend or vote 40
Has the Court’s power under s 27(1) been enlivened?............................................................. 46
Has the Court’s power to grant relief been enlivened?............................................................. 51
Relief......................................................................................................................................... 53
Orders proposed........................................................................................................................ 54
Concluding observations.......................................................................................................... 54

HIS HONOUR:

Introduction and summary

The Framlingham Aboriginal Trust, the first defendant, was established by the Aboriginal Lands Act1970 (Vic) (the Act). Under the Act, two so called Trusts were established; one to own and operate the former Lake Tyres Reserve and the second to own and operate the Framlingham Reserve, in the Parish of Purnim, near Warrnambool. Each Trust is subject to Ministerial supervision by the Office of Aboriginal Affairs Victoria ("OAAV") and receives State government funding for its activities. Although called a Trust, the Framlingham Aboriginal Trust is a body corporate incorporated pursuant to the Act, the members of which hold shares in the Trust much like in a company. I shall hereafter refer to the Framlingham Aboriginal Trust as the Trust.

Before May 2002, Geoff Clark had been the registered holder of 2000 shares in the Trust. In June 2009, Geoff Clark was declared bankrupt. Jeremy Clark, the second plaintiff, deposes in his affidavit of 13 February 2014 that on or about 1 May 2002, Geoff Clark transferred 1900 of those shares to him by instrument of transfer which was approved and registered pursuant to a resolution of the committee of the Trust on or about the same date, leaving Geoff Clark with 100 shares.

Jeremy Clark deposes that on or about August 2011, he executed a similar instrument of transfer to his brother Aaron Clark, the first plaintiff, of 900 shares in the Trust which had been transferred by Geoff Clark to Jeremy Clark in May 2002, leaving Jeremy Clark with 1000 shares.

The alleged transfer of these shares is being investigated by the trustee in bankruptcy of Geoff Clark. The trustee now asserts that Geoff Clark was the holder of the 2000 shares when he became bankrupt and the shares vested in the trustee pursuant to s 58(1) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act). Jeremy Clark and Geoff Clark were examined in the Federal Circuit Court about these share transactions in or about August 2013. After the alleged share transactions, Geoff Clark was left as the holder of 100 shares. I shall have more to say about the position of the trustee in due course. Tim Chatfield, the third plaintiff, is and has, since before 3 October 2011, been the registered holder of 500 shares in the Trust.

Under the Act, the Trust is administered by a committee of management. At all relevant times since 3 October 2011, Geoffrey (Possum) Clark-Ugle, the second defendant, has acted as chairman of the committee of management of the Trust. Mr Clark-Ugle has adopted the name of Possum to distinguish himself from Geoff Clark. Mr Clark-Ugle deposes that prior to 3 October 2011, the Trust was in disarray.

On 3 October 2011, a general meeting of the Trust was called and the committee of management was removed and replaced. Aaron Clark had been a member of the former committee and was removed from the committee at that general meeting. Mr Clark-Ugle was elected to the committee and to be chairman of the committee. Jeremy Clark was a former administrator of the Trust.

Subsequent to 3 October 2011, disputes arose among the members of the Trust as to the ownership of shares in the Trust. The register recorded that Geoff Clark owned 100 shares, Jeremy Clark his son owned 1000 shares, and Aaron Clark, also Geoff Clark’s son, owned 900 shares. It was alleged that the entries in the share register were incorrect, that Aaron Clark and Jeremy Clark were not entitled to ownership of the shares registered in each of their names, and that the shares were actually owned by Geoff Clark.

As indicated above, Geoff Clark had been declared bankrupt in about June 2009. The trustee in bankruptcy of Geoff Clark’s estate had indicated to the Trust that he was investigating whether Geoff Clark had owned the 2000 shares when he went bankrupt and that if so they were vested in the trustee pursuant to s 58(1) of the Bankruptcy Act.

Litigation ensued between members of the Trust. The litigation was settled in March 2013. One of the issues was whether Jeremy and Aaron Clark were entitled to be registered as members of the Trust. Under terms of settlement entered into to resolve the litigation the Trust agreed that subject to any claim the trustee in bankruptcy of Geoff Clark may have in relation to the shares of Geoff, Jeremy or Aaron Clark, the respective shareholdings of each of Geoff, Jeremy and Aaron were Geoff 100 shares, Jeremy 1000 and Aaron 900.

The Trust had been operating since 1970 or 1971. The Act provided for a seven member committee. The Act provided for a rotational system of elections whereby members of the committee served a three year term with elections conducted so that after an annual general meeting (the base general meeting), two members retired at the next annual general meeting after the base general meeting, two retired at the second annual general meeting held after the base general meeting and three retired at the third annual general meeting after the base general meeting. There was special provision for the staggering of the initial seven members. The parties are agreed that the rotational system fell into abeyance such that when the new committee was elected in 2011, nobody had any idea who was replacing which member whose term was to expire at which annual general meeting. Accordingly, at any particular annual general meeting, there would be two or three vacancies to fill.

In December 2013, the Trust held an annual general meeting. Prior to the meeting, the committee of management under the chairmanship of Mr Clark-Ugle, after taking legal advice, informed Aaron Clark that the ownership of the shares registered in his name was in dispute by reason of Geoff Clark’s bankruptcy and that accordingly Aaron would not be able to nominate a person (including himself) for membership of the committee, attend the annual general meeting, or vote at the meeting on the election of members of the committee.

Also prior to the meeting, the committee also resolved that only two vacancies on the committee were to be filled despite the advice of the OAAV that there should be four vacancies. The committee also resolved that Aaron Clark’s nomination of himself for the committee was invalid despite the Act permitting a shareholder to nominate him or herself and despite the Act permitting a non-member of the Trust to be elected to the committee.

Pursuant to the decision of the committee, Aaron Clark was denied entry to the annual general meeting. As a consequence, he and his supporters (who included shareholders) departed and the meeting proceeded without the presence of Aaron Clark and other members who had wanted to attend.

The plaintiffs contend that this conduct of the committee entitles the plaintiffs to seek relief under s 27 of the Act, and otherwise declarations. It will be necessary to explain in detail the provisions of s 27 later in these reasons.

In substance, the issues raised for consideration by the Court by the plaintiffs are as follows:

(a) did the defendants improperly determine that only two vacancies on the committee of management were open to be filled at the December 2013 annual general meeting;

(b) did the defendants improperly determine that only members of the committee of management, shareholders of the Trust and persons appointed by the chairman of the committee could attend the annual general meeting;

(c) did the defendants improperly decide that nominations of the two persons to join the committee of management should be in writing and close by 4 December 2013 (which date was extended to 9 December 2013 on about 29 November 2013);

(d) did the second defendant improperly determine that Aaron Clark was not entitled to nominate himself to be a member of the committee, to vote or to attend the annual general meeting;

(e) whether the committee of management appointed at the annual general meeting was validly appointed;

(f) if the plaintiffs are successful on any of the above issues, are the Court’s powers under s 27 of the Act enlivened and should those powers be exercised; and

(g) if the Court’s powers should be exercised, what orders should be made.

For the reasons given below I find that:

(a) the defendants improperly determined that only two vacancies on the committee of management were open to be filled at the annual general meeting;

(b) the defendants did not improperly determine that only members of the committee of management, shareholders of the Trust and persons appointed by the chairman of the committee could attend the annual general meeting;

(c) the defendants did not improperly decide that nominations of the two persons to join the committee of management should be in writing and close by 4 December 2013 (which date was extended to 9 December 2013 on about 29 November 2013);

(d) the second defendant improperly determined that Aaron Clark was not entitled to nominate himself to be a member of the committee, to vote or to attend the annual general meeting;

(e) the committee of management appointed at the annual general meeting was not properly appointed; and

(f) the Court’s powers under s 27 of the Act have been enlivened and the powers of the Court should be exercised.

The relevant facts

I now turn to the relevant facts. Save where indicated, the relevant facts I now set out are not in dispute between the parties.

In September 2010, the OAAV began conducting a review of the financial affairs and governance of the Trust. The Trust was receiving government funding and the OAAV was concerned that the Trust was not complying with its financial and governance obligations, particularly in relation to the funding it was receiving.

The review by the OAAV was completed in March 2011. One of the findings of the review was that the Trust had no audited financial accounts, minutes of meetings, or any other evidence of regular committee meetings, including agenda items and resolutions.

At the time of the review by the OAAV, the members of the committee of management were:

(a) Lionel Harradine;

(b) Trudy Clark;

(c) Maisie Davis;

(d) Violet Mary Clark;

(e) Violet Jennifer Clark;

(f) Brenda Chatfield; and

(g) Aaron Clark.

The committee of management was responsible for exercising the powers and functions of the Trust. As mentioned above, the Act provided for the committee to serve rotational terms so that at each annual general meeting some members’ terms would expire whilst the terms of the other members would continue for a further one or two years. For some time past, the committee had not been observing this requirement. Section 15 of the Act provided as follows:

15 Committee of management
(1) Seven persons shall be elected at the first general meeting of a Trust to form a committee of management of the Trust, and of these—
(a) two shall be elected to hold office until the second annual general meeting;
(b) two shall be elected to hold office until the third annual general meeting; and
(c) three shall be elected to hold office until the fourth annual general meeting.

(2) The members of a Trust shall from time to time in general meeting as may be required elect a person to fill any vacancy in the committee of management.
(3) Any person elected to fill a vacancy arising by expiration of the term of office for which a member was elected shall hold office until the third annual general meeting following his or her election, and any person elected to fill a vacancy otherwise arising shall hold office for the balance of the term of office of the member he or she replaces.
(4) It shall not be necessary for a member of a committee of management of a Trust to be a member of the Trust.
(5) No person shall be disqualified from being elected as a member of a committee of management of a Trust by reason of the fact that he or she is an officer or employee of the Trust or is interested in a contract made by the Trust, but a member of a committee of management shall not vote or take part in any discussion on any matter affecting any contract in which he or she may be interested (other than a contract of service).
(6) The office of a member of a committee of management of a Trust shall become vacant if the member—
(a) becomes of unsound mind or otherwise incapable of acting;
(b) becomes bankrupt;
(c) resigns from office in writing addressed to the Chairperson of the Trust; or
(d) is removed from office by a resolution of which special notice is given passed at a general meeting of the Trust.
(7) A member of a committee of management shall be A member of a committee of management shall be eligible for re-election.
(8) The members of a committee of management of a Trust shall be entitled to receive such fees and travelling expenses (if any) as are from time to time fixed by resolution of the Trust passed in general meeting.
(9) A committee of management shall at its first meeting—
(a) elect one of its members to be Chairman of the Trust, and determine the period for which he is to hold office;
(b) appoint a Secretary of the Trust; and
(c) appoint some place to be the office of the Trust—
and thereafter make such elections determinations and appointments as often as may be required.
(10) A committee of management shall meet at least six times in each year.
(11) Three members of a committee of management shall constitute a quorum at any meeting.
(12) During a vacancy in the office of any member of a committee of management, the continuing members may (if there is a quorum) act as if the vacancy had not occurred.
(13) Subject to this Act, a question arising at any meeting of a committee of management shall be decided by a majority of votes of those present at the meeting, but where there is no majority, the Chairperson of the Trust or, if he or she is not present, the person chosen to preside at the meeting in his or her absence, shall have a second or casting vote.

On or about 21 August 2011, the OAAV held a meeting with the members of the Trust, including all members of the then committee of management, to discuss its findings following a review of the financial affairs. At the meeting, the OAAV asked the then committee of management to step down because of the serious problems the OAAV identified during its investigations, including allegations of criminal conduct by some members of the previous committee of management. All but one member of the previous committee of management refused to step down.

On 12 September 2011, Mr Clark-Ugle and various other members of the Trust requested the secretary of the Trust, Trudy Clark, to call a general meeting of the Trust. Shortly afterwards, a special notice of resolution from the Trust was sent to shareholders regarding a general meeting of the Trust to be held on 3 October 2011.

On 3 October 2011, a general meeting of the Trust was held (as opposed to an annual general meeting) and it was unanimously resolved at that meeting that the positions on the then committee of management held by Trudy Clark, Lionel Harradine, Maisie Davis and Aaron Clark all be declared vacant. Violet Mary Clark and Violet Jennifer Clark had resigned prior to this meeting, which left Brenda Chatfield as the only remaining member of the committee of management.

The shareholders elected people to fill the six vacant positions. As a result of the election held on 3 October 2011, the members of the committee of management were:

(a) Jim Berg, chairman, to fill the vacancy of Lionel Harradine for the balance of his term as chairman;

(b) Kyeema Penrith, secretary, to fill the vacancy of Trudy Clark for the balance of her term as secretary;

(c) Tim Chatfield to fill the vacancy of Maisie Davis for the balance of her term;

(d) Violet Mary Clark to fill the vacancy of Aaron Clark for the balance of his term;

(e) Shirley McGuinness (also known as Shirley Clark) to fill the first current vacancy for the balance of that term;

(f) Mr Clark-Ugle to fill the second current vacancy for the balance of that term; and

(g) Brenda Chatfield (also known as Brenda Clark)

(collectively, the new committee of management).

The new committee of management held its first meeting on 4 October 2011. On or shortly after 4 October 2011, the committee of management issued a letter to all shareholders of the Trust regarding the changes to the committee of management of the Trust, as well as providing a list of the shareholders recorded in the official share register of the Trust and recognised by the OAAV.

On 25 October 2011, the OAAV also issued letters to shareholders of the Trust regarding the changes to the committee of management and the Trust.

On 31 October 2011, the committee of management held its next meeting and Ian Hamm from the OAAV attended this meeting. One of the items discussed was the official share register of the Trust. The committee of management, including Tim Chatfield, unanimously agreed that the share register dated 8 June 2010, recognised by the OAAV, was a true and accurate account of the share register of the Trust.

After the meetings in August 2011 and October 2011, a number of allegations started arising in relation to the ownership of shares in the Trust. The allegations called into question the accuracy of the share register relied on by the OAAV, that is, the share register as at 8 June 2010. This included the shares owned by Geoff Clark. Geoff Clark alleged that he had transferred 1900 of his 2000 shares to his son, Jeremy Clark, but the 8 June 2010 register did not acknowledge this transfer. Jeremy Clark was registered as a shareholder from, at the latest, 1 September 2011.

On 28 October 2011, Veronica Harradine commenced proceedings in the Supreme Court of Victoria (Harradine proceedings) against the members of the new committee of management regarding her alleged ownership of shares in the Trust. As part of the Harradine proceedings, the committee of management began investigating the various allegations regarding ownership and transfer of shares.

On 12 February 2012, the new committee of management commenced proceedings against Kirrae Whurrong Community Inc (the Kirrae proceedings) to recover money that had been incorrectly or inappropriately transferred to that organisation by the Trust, while it was managed by the previous committee of management.

In the Harradine proceedings, the plaintiffs were Veronica Harradine and Trudy Clark. The defendants were Jim Berg, Fay Clark, Shirley McGuinness, Brenda Chatfield, Violet Clark and the Trust. The statement of claim of 16 December 2011 included an allegation that the defendants had asserted and claimed that the entries of Aaron Clark and Jeremy Clark in the register of members were invalid and incorrect. The defence and counterclaim contended that Geoff Clark became bankrupt on 1 June 2009 and that by reason of s 58(1)(a) of the Bankruptcy Act the shares held by Geoff Clark were vested in the trustee of his bankrupt estate. The defence and counterclaim alleged that Jeremy Clark acquired his shares from Geoff Clark during Geoff Clark’s bankruptcy. The defendants relied upon the register as at 8 June 2010, which did not list Jeremy Clark as a shareholder. The defendants alleged that Jeremy Clark was listed as a shareholder as at 1 September 2011. Accordingly, the defendants alleged that Geoff Clark had no power to transfer the shares to Jeremy Clark and the purported transfer of shares by Jeremy to Aaron Clark was void and of no effect.

On 23 April 2013, the Trust, Mr Clark-Ugle and each of Aaron Clark, Jeremy Clark and Tim Chatfield, amongst others, executed a deed of settlement in the Kirrae and Harradine proceedings. The evidence does not disclose how Aaron Clark and Jeremy Clark came to execute the deed of settlement even though they were not parties to either proceeding or the connection between Geoff, Jeremy and Aaron Clark and the Harradine/Kirrae proceedings.

The issue concerning Geoff Clark’s shareholding was resolved as between the signatories to the deed by clause 6 of the said deed which provided, so far as is relevant:

The parties to this deed acknowledge and agree that, in relation to the members of the Trust;
.......................................
(c)subject to any claim that the trustee in bankruptcy of Geoffrey Wayne Clark may have in relation to the shares of Geoff, Jeremy or Aaron Clark, the respective shareholdings of each of Geoff, Jeremy and Aaron Clark are as follows: Geoff (100 shares); Jeremy (1,000 shares) and Aaron (900 shares).

At the time the deed was signed, Geoff Clark was a bankrupt. He remains a bankrupt. Daniel Juratowitch, the trustee of Geoff Clark’s bankrupt estate, contacted the Trust as part of his investigations regarding the shares held by Geoff Clark. Mr Clark-Ugle deposes that as no record could be located of any transfer of shares before October 2011, Mr Juratowitch was disputing the alleged transfer of shares by Geoff Clark to Jeremy Clark. Mr Clark-Ugle does not depose as to the basis for his assertion about Mr Juratowitch’s reasons for disputing the transfer to Jeremy Clark.

The Trust contacted Mr Juratowitch at the time the terms of the deed were being negotiated because of the dispute and Mr Juratowitch agreed to the term quoted above being included in the deed.

It was a further term of the settlement deed that a general meeting of the Trust was to be called within 28 days of the signing of the deed to consider the following resolutions:

(a) that the appointment of the present committee of management of the Trust made on 3 October 2011 be ratified; and

(b) that all decisions, resolutions and actions of the current committee since its appointment on 3 October 2011 be ratified.

On 1 May 2013, a notice of meeting was sent by registered post to all shareholders of the Trust, advising of the general meeting scheduled for 17 May 2013.

On 17 May 2013, the general meeting was held and the resolutions set out above were unanimously carried. Tim Chatfield attended this meeting, but Aaron Clark and Jeremy Clark did not. Tim Chatfield voted in favour of the resolutions.

Since October 2011, the new committee of management has been attempting to sort out and fix the financial and governance issues caused by the previous committee of management. The OAAV continues to monitor the Trust, including by providing assistance and advice on governance issues to make sure that the Trust is complying with its financial and governance obligations.

In 2012, the Trust did not hold an annual general meeting as was required under the Act.

On 20 May 2013, Tim Chatfield resigned from the committee of management citing time pressures as his reason for resigning.

On 25 July 2013, Jim Berg resigned from the committee of management during a meeting of the committee of management. The committee of management did not accept Mr Berg’s resignation straight away and Kyeema Penrith tried to talk him out of his resignation, but he would not change his mind.

On 13 August 2013, the committee of management met and accepted the resignation of Jim Berg. A motion was unanimously carried that Mr Clark-Ugle be appointed the chairperson of the committee of management until the next annual general meeting.

On 22 November 2013, the committee of management met and discussed the length of members’ terms on the committee of management. Various motions were carried in relation to determining each member’s term. The committee of management also passed a motion to set the date of the annual general meeting required under the Act to be held before the end of the year.

The minutes of the meeting record a resolution about the committee members’ terms of office in these terms:

3. Length of Committee Member Terms
As the current committee members were all installed at the same time there needs to be member term lengths agreed upon. The Act specifies that two members shall be elected to hold office until the second annual general meeting; two members shall be elected to hold office until the third annual general meeting, and; three members shall be elected to hold office until the fourth annual general meeting.
MOTION: that Geoffrey (Possum) Clark-Ugle, Brenda Chatfield and Kyeema Penrith be appointed until the fourth annual general meeting since and including the meeting at which they were elected.
that Shirley McGuiness and Violet Clark be appointed until the third annual general meeting and including the meeting at which they were elected.

On 26 November 2013, the committee of management met and carried resolutions that the share register of the Trust as at 26 November 2013 be accepted as the current, true and active record of the shareholdings in the Trust. The committee also resolved to find an independent person to run the election to be held at the annual general meeting.

On 26 November 2013, Mr Clark-Ugle , as chairman of the committee, sent a letter to members of the Trust enclosing a notice of an annual general meeting of the Trust to be held on 11 December 2013 and the following documents:

(a)an agenda for the annual general meeting of the Trust to be held on 11 December 2013;
(b)two nomination forms for election of members of the Trust committee of management; and
(c)a document headed “Framlingham Aboriginal Trust Register of Shareholders.”

The enclosed register of shareholders recorded that Jeremy Clark was the registered holder of 1000 shares and Aaron Clark was the registered holder of 900 shares. Each entry also had noted “Shares in dispute, Cannot be exercised due to claims of ownership by Trustee in Bankruptcy.” There was no evidence put before the Court as to who made this annotation and by what authority it was made.

The agenda recited under the heading “Election of Committee Members”:

The Committee comprises
·three members appointed until the fourth annual general meeting including the one at which they were elected (these positions are currently filled);
·two members appointed until the third annual general meeting including the one at which they were elected (these positions are currently filled);
·two members appointed until the second annual general meeting including the one at which they were elected (these positions are currently vacant).

The election is for two positions until the next annual general meeting. Nominations were called on Wednesday November 26 and closed on Wednesday December 4. Information provided by nominees was distributed to shareholders prior to the annual general meeting.
An independent person will run the election.

On or about 26 November 2013, the Trust received an email from Jim Berg raising, amongst other things, concerns about the timing of the annual general meeting. Mr Clark-Ugle asked Bruce Campbell, the acting chief executive officer of the Trust, to contact the OAAV to discuss the election procedure with them and, following those discussions, Mr Clark-Ugle decided that the Trust needed to change the date of the annual general meeting and re-issue notices to all shareholders.

On 28 November 2013, the Trust sent a notice of general meeting (re-issued) to all shareholders, advising that the meeting date had been changed to 16 December 2013.

The letter to shareholders noted that the meeting could only be attended by committee members, shareholders and people appointed by the chairman to assist with the running of the meeting.

The agenda gave notice to the members of the Trust of the proposal by the committee to restore staggered terms for members of the committee. The agenda attached to the reissued notice of meeting recited amongst other things:

4. Election of Committee Members
The Committee was reformed at the previous general meeting. In the spirit of the Aboriginal Lands Act a proper cycle of staggered member vacancies and elections now needs to be re-established to support the Trust’s good governance. The current Committee has determined that three current members are appointed for three ‘periods’ and will have two ‘periods’ remaining after this annual general meeting(a ‘period’ being the time from one annual general meeting to the next annual general meeting); and two current members are appointed for two ‘periods’ and will have one ‘period’ remaining after this annual general meeting.
Consequently the election at this meeting is for two members for three ‘periods’. Nominations were called and then closed on Monday December 9. Information provided by nominees was distributed to shareholders prior to the annual general meeting.
An independent person will run the election.

On 29 November 2013, the Trust received a letter from Angela Singh, the executive director of the OAAV, regarding the annual general meeting. The letter said:

I refer to recent discussions between my office and your Acting CEO regarding the forthcoming annual general meeting for the Framlingham Aboriginal Trust (Trust), and the term of office of persons elected to fill vacancies that have arisen on the Committee of Management (CoM) for the Trust.
As you are aware, the Minister for Aboriginal Affairs is responsible for the administration of the Aboriginal Lands Act 1970 (AL Act) and is assisted by the Office of Aboriginal Affairs Victoria (OAAV) in this role. You have sought advice from OAAV on the terms of office of a person appointed to fill a vacancy on the CoM, as prescribed by the AL Act.
Subsection 15(3) is relevant to determining the period of appointment for members elected to fill a vacancy on the CoM. The person elected to fill the vacancy arising by the expiry of the term of office of a member of the CoM will hold office until the Third annual general meeting following the election of that person. If a vacancy arises for a reason other than expiry of a term of office, (if, for example, the person resigns, see section 15(6)), then the person elected to fill the vacancy will only hold office for the balance of the term of office of the vacating member.
I understand that members of the Trust will be requested to elect persons to fill vacancies on the CoM at the forthcoming AGM. Section 22(2) requires that the Secretary call the AGM. The Secretary is responsible for ensuring that the contents of the notice of AGM comply with legislative requirements and are correct and not misleading. The notice should include accurate information about the circumstances in which a vacancy has arisen (i.e. whether on expiry of a term or for other reasons) because this will determine the term of office for the person elected to fill that vacancy. Persons elected to replace members whose term of office has expired, will hold office until the third AGM following their election.
You may be assisted in carrying out your duties by obtaining legal advice regarding the information contained in the notice for the forthcoming 2013 AGM (including appointments to fill vacancies on the CoM and the terms of office for persons so appointed) to ensure that the AGM can proceed without challenge. On 6 September 2013 OAAV was advised by Framlingham Aboriginal Trust of the names of the members of the Committee of Management as required by sub-sections 23T(1) and 24AA(1)(b). That advice failed to identify the expiry of each member’s term. Could you please provide that information at your earliest convenience.

Mr Clark-Ugle discussed the letter of 29 November 2013 with Bruce Campbell and asked him to respond to the letter.

On 30 November 2013, Bruce Campbell, by email, informed the OAAV that no records had been located describing the length of terms of committee members prior to 3 October 2011. Mr Campbell said:

This being the case the Committee resolved at its meeting dated 22 November 2013 to fix terms of office for current members in order to re-establish a staggered election of Committee members in the spirit of the Act. The following two motions were put and carried unanimously at this meeting:
“That Geoffrey (Possum) Clark-Ugle, Brenda Chatfield and Kyeema Penrith be appointed until the fourth annual general meeting since and including the meeting at which they were elected.”
“That Shirley McGuiness and Violet Clark be appointed until the third annual general meeting since the meeting at which they were elected.”

Consequent to these decisions, the annual general meeting of the Trust to be held on December 16, 2013 will elect members to fill two vacancies until the fourth annual general meeting since and including this meeting.
After this annual general meeting the Committee will comprise the following members with, in brackets, the anticipated years their positions will become vacant and open to election for three ‘year’ (annual general meeting to annual general meeting) terms:
Violet Clark (2014)
Shirley McGuiness (2014)
Geoffrey (Possum) Clark-Ugle (2015)
Brenda Chatfield (2015)
Kyeema Penrith (2015)
New member (2016)
New member (2016).

As will be seen below, the OAAV did not agree that these terms of office would meet the staggered term requirements of the Act.

On 1 December 2013, the Trust received a letter from Jim Berg and Tim Chatfield proposing a motion to be put to the annual general meeting for discussion that, amongst other matters, challenged the staggered terms proposed by the committee. The motion was in these terms:

The current Committee of Management of Framlingham Aboriginal Trust has demonstrated their failure to show good governance by not acting in the best interest of all shareholders and by not complying with the Act in regards to the AGM.
The Committee of Management:
1 has not provided all reports to shareholders with the papers for the AGM as required by the Act, and
2 has not set the length of terms of committee members at the time of their election as required per the Act, resulting in the agenda item for the AGM stating that there are only two (2) current vacancies for the committee, when there should be seven (7).

We wish to move a motion of no confidence in the Current Committee of Management.

On 2 December 2013, Mr Clark-Ugle asked Bruce Campbell to contact the OAAV to get advice in relation to the issues that had been raised by Jim Berg and Tim Chatfield regarding the validity of the calling of the annual general meeting.

By email dated 2 December 2013, Bruce Campbell wrote to Simon Holmes of the OAAV seeking advice as to whether the Trust had complied with the Act regarding documentation to be sent to Trust shareholders 14 days prior to the annual general meeting. The email does not refer to the motion proposed by Jim Berg and Tim Chatfield concerning the staggered terms.

Simon Holmes of the OAAV responded to Mr Campbell’s email on 3 December 2013 referring to emails of 30 November 2013 and 2 December 2013.

Mr Simon Holmes’ email said in part:

The current committee members were appointed on 3 October 2011, two years ago. Some of these members were appointed for a full term of three years in order to fill vacancies arising on the expiry of the terms of the previous committee members whilst others were appointed for the balance of the terms resigning committee members. Given this is the first general meeting since those appointments, the staggered terms of the committee members would mean that there are four old committee of management vacancies to be filled at the annual general meeting, comprised of two committee members whose terms expired at the end of the 2012 financial year and a further two vacancies occurring at the end of the 2013 financial year. Elections at the forthcoming annual general meeting to fill these four vacancies would require appointing two members for a two year term and appointing another two members for a three year term. The remaining three positions would become vacant at the 2014 annual general meeting.
We understand that there remains some uncertainty due to bankruptcy proceedings, as to the status of 1900 shares purportedly transferred by Geoff Clark to Jeremy Clark and the subsequent purported transfer of 900 shares from Jeremy Clark to Aaron Clark. Our understanding is that the status of these shares may remain uncertain for another 6-12 months and could then be subject to court challenge once a decision is taken by the bankruptcy trustee. We understand that the bankruptcy trustee has or will advise FAT that until this matter has been resolved the Chair should exercise discretion as to the voting rights of Jeremy and Aaron Clark.

Mr Holmes went on to recommend that independent legal advice be sought on these matters. It can be seen, therefore, that the OAAV did not agree with the staggered terms proposed by the committee of management. In particular, the OAAV considered that at the proposed general meeting there were four vacancies to fill and that the terms of the remaining three members would expire in 2014.

On 3 December 2013, Kyeema Penrith, Bruce Campbell and Mr Clark-Ugle took legal advice from Ms Fran O’Brien QC, pro-bono counsel for the Trust, regarding the issues raised by Jim Berg and Tim Chatfield, and to ensure that the Trust had complied with its obligations in relation to the calling of the annual general meeting.

Mr Clark-Ugle says that the advice given to them by Ms O’Brien QC (which was not in writing) was that the Trust had complied with its obligations in relation to calling the annual general meeting and that the proposed election and re-introduction of the staggered terms was consistent with the intention of the Act. The precise terms of Ms O’Brien’s advice were not tendered in evidence.

On 3 December 2013, Mr Clark-Ugle directed Kyeema Penrith to send a response to Jim Berg regarding the emails and letters from him. In relation to the staggered terms proposal the response said:

Jim you were not present at the first meeting of the Trust where positions were allocated by special resolution. We refer you to the special resolution attached below.
It is unknown what the balance of the terms of offices held in 2011 even if it could be said that any of the then office holders had held office in accordance with the [Act]. As you know there are no recent records despite independent and thorough searching of the records of the Trust upon the Committee taking up its role in October 2011.
The Committee upon advice have correctly approached this matter of the election on the basis that is proposed and for the reasons stated.
Second in accordance with the Act other positions have been allocated.
Accordingly the committee makes a second request that you withdraw your resolution as it is clearly misleading on this point.

During the period 3 December 2013 to 9 December 2013, the Trust received nomination forms completed by the following people:

(a) Jim Berg, nominating himself;

(b) Brenda Clarke (Chatfield), nominating herself;

(c) Ronald Chatfield, nominating himself;

(d) Tim Chatfield, nominating himself;

(e) Louise Wackett, nominating herself;

(f) Tim Chatfield, nominating Jim Berg;

(g) Aaron Clark, nominating himself; and

(h) Shirley McGuinness, nominating Joanne McGuinness.

By a letter dated 9 December 2013, Mr Clark-Ugle was informed by Mr Juratowitch, the trustee of the bankrupt estate of Geoff Clark, that he did not intend to exercise the voting rights attached to the 100 shares previously held by Geoff Clark, and that he was still investigating the purported transfer by Geoff Clark to Jeremy Clark. The letter said as follows:

I refer to the Notice of annual general meeting dated 29 November 2013 in relation to the Framlingham Aboriginal Trust (“the Trust”) and advise that I will not be attending the meeting to be held on 16 December 2013.
I note that the Trust share register which was provided with the meeting documentation shows the following:
1. The bankrupt is the holder of 100 shares in the Trust; and
2. The shareholding of Jeremy W Clark (1,000 shares) and Aaron M Clark (900 shares) are in dispute.
In respect of the 100 shares which are undisputedly held by the bankrupt, as Trustee of the bankrupt estate, I do not propose to exercise any votes in respect of these shares.
In respect of the balance of the 1,900 shares in dispute, I advise that my investigations are still continuing in respect of the purported transfer of shares by the bankrupt to Jeremy Clark (some of which were ultimately transferred to Aaron Clark).
If you have any queries, please contact Johan Ying of this office on (03) 8320 5628 or alternatively at [email protected].

Subsequently, on 11 December 2013, Mr Clark-Ugle sent letters to Jeremy Clark and Aaron Clark regarding the dispute in relation to their shares and advising that, because of the dispute, no voting rights could be exercised in relation to those shares. The letter to Jeremy Clark stated as follows:

The Trustee in bankruptcy has advised us in writing that the shares in the Trust in your name are a matter of dispute with the trustee. As such the Trust is unable to recognise any entitlement on your part to nominate, vote or attend meetings of the Trust.

This letter does not accurately reflect what the trustee had written in his letter. The trustee made no mention that the shares in the name of Jeremy Clark were a matter of dispute with the trustee. No other evidence was tendered to support the existence of a dispute as opposed to the making of an investigation that might lead to a dispute.

On or about 11 December 2013, Mr Clark-Ugle went through the nomination forms received and reviewed each one to determine if they were valid or not. Mr Clark-Ugle then compiled the list of the nominations as follows:
“NOMINATIONS

NAME

VALID or INVALID

JIM BERG

VALID

LOUISE WACKETT

VALID

RONALD CHATFIELD

VALID

TIM CHATFIELD

VALID

JOANNE MCGUINNESS

VALID

AARON CLARK

INVALID due to shares being in dispute.

BRENDA CHATFIELD

INVALID due to being a current Committee member whose position is not becoming vacant at this election.”

On 11 December 2013, a copy of the list of nominations was either sent by post or hand delivered to each shareholder entitled to vote at the annual general meeting.

On 11 December 2013, Mr Clark-Ugle as chairman of the committee wrote to Aaron Clark informing him that the trustee in bankruptcy had advised that the shares in the Trust in his name were a matter of dispute with the trustee and “as such the Trust is unable to recognise any entitlement on your part to nominate, vote or attend meetings of the Trust.” As indicated above, this statement was not consistent with the letter sent by the trustee to the Trust.

On 12 December 2013, Bruce Campbell and Mr Clark-Ugle met with Russell Worland, the independent scrutineer, at the Lady Bay Resort to discuss what his requirements were, and anything he needed, to be able to conduct the election to be held at the annual general meeting.

On 13 December 2013, the Trust received a letter from Shayne Daley & Associates, the solicitors acting for Jeremy Clark and Aaron Clark. The letter protested the assertion by Mr Clark-Ugle in his letter of 11 December 2013 that Aaron and Jeremy Clark were not entitled to nominate, vote or attend meetings of the Trust. The letter went on to note that the writer had spoken with Nathan Bunt, the solicitor acting for the trustee in the bankruptcy of Geoff Clark and that Nathan Bunt had indicated that the trustee in bankruptcy had not yet formed the view as to whether he would further challenge the ownership of the shares transferred to Aaron and Jeremy Clark. Nathan Bunt agreed with Mr Daley that in order to challenge the ownership of those shares, the trustee would have to apply to a court for orders declaring the share transfers void or otherwise invalid.

On 16 December 2013, Kyeema Penrith and Mr Clark-Ugle arrived at the Lady Bay Resort, Warrnambool, at approximately 9.00am to start preparing for the annual general meeting that was to commence at 10.00am.

As they approached the hotel, there was a group of people standing near the main entrance. The people were Jim Berg, Geoff Clark, Aaron Clark, Shayne Daley (of Shayne Daley & Associates), Brenda Clarke (Chatfield), Tim Chatfield, Louise Wackett-Chatfield, Ronald Chatfield, Maisie Davis and Brian Davis. Mr Clark-Ugle gave instructions to a security guard and a list as to who was to be permitted to enter the meeting. The guard was instructed that if the person’s name was not on the list, then they were not allowed into the meeting. The list contained the names of shareholders, Bruce Campbell the acting CEO, Russell Worland the returning officer, Felicity Melican the auditor and Fran O’Brien QC the legal adviser. Aaron and Jeremy Clark were not included on the list.

Aaron Clark deposes that when he arrived outside the Lady Bay Resort, a large group of Trust shareholders had gathered outside the hotel prior to the appointed meeting time. He deposes that this group comprised those who were opposed to the re-election of the incumbent committee. He deposes that he had known many of these people all of his life and it was clear to him that all of them were proposing to vote for candidates other than the incumbent committee members. Aaron Clark deposes that this group included Jim Berg, who he understood, had resigned from the committee because of concerns he held about the way the committee had been conducting Trust affairs and managing its finances and assets.

Aaron Clark deposes:

15.     Inside the meeting room at the Lady Bay Resort were the remaining Trust shareholders and almost all of the then current Committee of the Trust. There was a security guard at the door of the meeting room. At this time some of those who were part of the group outside tried to enter the meeting room to discuss what was happening. Some of the Trust shareholders already inside the meeting room refused entry to some of these people.
16.     Those outside the meeting then tallied the number of voting shares which they held between them. The view among those people was that they would only have a majority of votes at the meeting if I were allowed to vote my 900 shares. It was also clear to those outside that the Chairman and other incumbent Trust Committee members intended to exclude me from the meeting and from voting my shares.
17.     Accordingly I approached the door of the meeting at about 10.00 am with my solicitor Shayne Daley. Also near the door at that time were Geoffrey (Possum) Clark-Ugle, Kyeema Penrith, the Trust secretary, and the security guard.
18.     I attempted to enter the meeting. Kyeema Penrith then said to me that I was not allowed to enter the room as my name was not on the list of those entitled to attend.
19.     I then asked to see the list. Kyeema then said to me that I was not a shareholder and the Trust had a letter from the Trustee in Bankruptcy stating that my shares were in dispute.
20.     I then asked who was disputing my shares as I had already received notification of the meeting on the basis I was a shareholder.
21.     I then introduced Shayne Daley to Kyeema. He then also asked Kyeema if I was being refused entry to the meeting. Kyeema said I was being excluded and the bankruptcy letter said so. Shayne Daley continued discussing the position of the trustee in bankruptcy but at this point Geoffrey (Possum) Clark-Ugle stepped in and said ‘Well, I am the Chairman and I say he can’t come in’. I took this last statement as a definitive refusal of my entry to the meeting.
22.     Thereafter I returned to the group waiting outside. When I told them that I had been excluded from the meeting they agreed that there was no point in their trying to participate in the meeting without me and they all left.
23. I was upset by being excluded from the meeting. Never before in all my years of attending Trust meetings have I or any other member of the Framlingham community been excluded from a general meeting of the Trust. I am also aggrieved by the unwarranted action of the Committee in treating my shares in the Trust as being ‘in dispute’ so that I was unable to test in an election of Committee members the level of support which I enjoy among Trust shareholders. Quite independently of my shareholding, I consider that the refusal of my nomination was contrary to s 15(4) of the Aboriginal Lands Act 1970 (Cth) as explained in paragraph 29 of Jeremy Clark’s affidavit.

According to Mr Clark-Ugle, at about 9.55am, he was inside the meeting room, waiting to start the annual general meeting, when he heard someone at the door getting angry and speaking loudly. He recognised the voice to be that of Aaron Clark.

As Mr Clark-Ugle approached Kyeema Penrith and the security guard he saw Geoff Clark and Aaron Clark. In substance, there were words exchanged between Mr Clark-Ugle and Geoff and Aaron Clark, and Aaron Clark was informed that he and Jeremy Clark were not entitled to enter the meeting because the shares that Aaron and Jeremy were registered as owning were being disputed by the trustee in bankruptcy.

The verbal altercation between Aaron Clark and Kyeema Penrith continued, and Mr Clark-Ugle informed Aaron Clark that he was the chairperson and that Aaron was not entitled to enter the annual general meeting. Eventually, Shayne Daley interrupted and said words to the following effect: “Stop Aaron, let’s leave. That’s all we needed to hear.” Aaron continued to mouth off as he walked away from Kyeema Penrith and Mr Clark-Ugle. Kyeema Penrith then left to go into the meeting room.

Subsequently, at about 10.00am, Mr Clark-Ugle informed the meeting that he would like to start the meeting, and he asked Bruce Campbell to go outside and give a second call for members outside and advise them that the annual general meeting was just about to start.

Mr Campbell left the meeting room and went outside where he informed the members outside that “We will hold off from starting the annual general meeting until 10.30 so this gives the shareholders outside time to make their way into the room.”

At 10.25am, Mr Clark-Ugle asked Bruce Campbell to go outside for a second time to give a final call for shareholders to come into the meeting. None of the shareholders from the group outside went into the meeting room.

Mr Clark-Ugle checked the attendance list that had been signed by everyone that had entered the meeting room and determined that they had a quorum for the annual general meeting.

The shareholders who made up the quorum were Violet Clark, Shirley McGuinness, Alice Ugle, Fay Clark and Mr Clark-Ugle. Brenda Chatfield, a resident of the reserve and a shareholder, was part of the group that chose not to go into the meeting. At 10.30am, Mr Clark-Ugle declared the annual general meeting open. He confirmed to the meeting that there was a quorum of shareholders present entitled to vote. The annual general meeting was then conducted in accordance with the agenda that had been sent to shareholders. The voting for the committee was carried out.

After the votes were counted, Russell Worland told the annual general meeting that the successful candidates in the election were Ronald Chatfield and Joanne McGuinness. As there was no other business, Mr Clark-Ugle declared the annual general meeting closed at 11.10am.

On 17 December 2013, Mr Clark-Ugle received letters from Ronald Chatfield (despite him having been just elected) and Brenda Chatfield resigning from their positions on the committee of management.

The claims of the trustee in bankruptcy

I have set out above the terms of the letter of the trustee to Mr Clark-Ugle of 9 December 2013. I have also set out the evidence of Shayne Daley concerning his conversation with Nathan Bunt, the solicitor for the trustee.

At the first directions hearing in this matter held on 23 February 2014, Mr Lhuede appeared as solicitor for the trustee in bankruptcy Mr Juratowitch. Mr Lhuede sought to clarify the trustee’s position. Mr Lhuede submitted to the Court that Geoff Clark became bankrupt on 1 June 2009, and that he did not disclose any interest in any shareholding in the Trust at that time. He submitted that subsequent investigations revealed that the share register at 8 June 2010, that is after the date of the bankruptcy, disclosed Mr Clark as having 2000 shares registered in his name. Mr Lhuede submitted that a bit over one year later, the register showed that Geoff Clark owned 100 shares. Mr Lhuede submitted that the transfer after 1 June 2009 is void, not voidable, and it was the contention of the trustee that the 1900 shares in issue in this proceeding are in fact the property of the bankrupt estate. He submitted that the transfer was void as against the trustee.

Counsel for the plaintiffs thereupon informed the Court that this was the first time that the trustee had indicated an intention to bring proceedings, and that Geoff Clark was examined in June 2013 and the trustee to date had not brought proceedings.

By letter dated 19 May 2014, DLA Piper, the solicitors for the trustee, informed the solicitors for the defendants that they acted for the trustee and that their client claimed the 2000 shares previously held by Geoff Clark. DLA Piper also said that their client intended to issue an application in the Federal Court of Australia seeking declarations under the Bankruptcy Act that, inter alia, the 1900 shares transferred to Jeremy Clark have vested in the trustee pursuant to s 58(1) of the Bankruptcy Act. The solicitors stated that the Trust was thereby put on notice that ownership of those shares was claimed by their client and that their client requested that the Trust not permit any person to exercise any rights conferred by the 1900 shares contrary to their client’s instructions until such time as the foreshadowed application had been heard and determined by the Federal Court.

The Court was informed at the hearing of this application that as at the date of the hearing before me (23 June 2014), the trustee had still not brought any proceedings to recover the shares transferred to Jeremy Clark despite his stated intention to do so.

The plaintiffs’ claims

The plaintiffs seek declarations and/or relief under s 27 of the Act. Section 27 provides:

Court may grant relief to persons aggrieved in certain circumstances
(1) A member of a Trust who complains that the affairs of the Trust are being conducted in a manner oppressive to one or more of the members (including himself or herself) may apply to the Supreme Court for an order under this section and, if the Court is of opinion that the affairs of the Trust are being so conducted and that it would be just and equitable to make an order under this section, the Court may make such order as the Court thinks fit whether for regulating the affairs of the Trust in future or for the purchase of the shares of any members by other members or by the Trust, or otherwise.
(2) Any person (whether a member of a Trust or not) who is aggrieved by anything which the Trust has done or failed to do in contravention of this Act may apply to the Supreme Court for an order under this section and, if the Court is of the opinion that the Trust has contravened this Act and that the person aggrieved has suffered injustice on that account, the Court may make such order as appears to the Court to be necessary to give proper relief to the person aggrieved.

The plaintiffs make several allegations of oppressive conduct or conduct in contravention of the Act regarding the conduct of the affairs of the Trust that allegedly enlivens the Court’s jurisdiction under s 27 of the Act as follows:

(1)That the committee of management without any warrant in the Act or otherwise determined that three incumbent members of the committee should continue to hold office for a further two years from the 2013 annual general meeting without facing re-election;
(2)That the committee of management without any warrant in the Act or otherwise determined that two incumbent members of the committee should continue to hold office for a further term from the 2013 annual general meeting without facing re-election;
(3)That the committee of management without any warrant in the Act or otherwise determined that nominations for election for two positions on the committee should be in writing and should close at midnight on 4 December 2013 or alternatively 9 December 2013;
(4)That the committee of management, or alternatively the second defendant, without any warrant in the Act of otherwise determined that only shareholders and persons appointed by the chairman could attend the annual general meeting to be held on 16 December 2013; and

The form of wording in respect of the shareholder oppression provisions in corporations law was substantially amended in 1983, by adding to the word “oppressive”" the words ”or unfairly prejudicial to or unfairly discriminatory against.”[7] The amended wording is now found in s 232 of the Corporations Act 2001 (Cth). But no amendment has ever been made to s 27(1) of the Act.
[7]In Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459, 470-1, Brennan J identified the reason for the amendment as reflecting the intention of the legislature "to provide a greater measure of curial protection to members of a company, especially if they be in a minority, than the protection afforded under earlier Companies Acts."

This part of the reasons gratefully adopts the written submissions of counsel for the defendants.

The defendants contend that the cases interpreting s 186 of the Companies Act should be applied by the Court in this case. Several Cases have considered the meaning of s 186 of the Companies Act and its statutory equivalents in England as well as elsewhere in Australia. These authorities include two Victorian cases, which offer a useful summary of the applicable principles. These are Re Bright Pine Mills Pty Ltd[8] (a decision of the Full Court from 1963) and Re Tivoli Freeholds Ltd.[9]
[8][1969] VR 1002 (Bright Pine).
[9][1972] VR 445 (Tivoli).

In Tivoli, Menhennitt J summarised the principles as follows:

Whether or not a company is being conducted in a manner oppressive to certain shareholders depends upon all the circumstances and it is not possible to attempt a universal definition. However, in the kind of situation which arises in this case and having regard to the matters relied upon by the petitioner and the supporting members, the following elements are I think included in the matters postulated in the section and are also established by the authorities: -
Those alleging that the affairs of the company have been conducted in a manner oppressive to them must establish, as one element, conduct which the Court of Appeal has recently restated in the case of Re Jermyn Street Turkish Baths Ltd …, as conduct which "is unfair or, to use the expression adopted by Viscount Simonds in Scottish Co-operative Wholesale Society Ltd v Meyer …, 'burdensome, harsh and wrongful' to the other members of the company or some of them, and lacks that degree of probity which they are entitled to expect in the conduct of the company's affairs: see Scottish Co-operative Wholesale Society Ltd v Meyer and Re H. R. Harmer Ltd…".
It is to be noted that Buckley, LJ, delivering the judgment of the Court, appears to have stated lack of probity of the kind described as an element additional to the requirement that the conduct must be unfair or burdensome, harsh and wrongful. In Scottish Co-operative Wholesale Society Ltd v Meyer, Lord Keith stated the test as "lack of probity and fair dealing", using the word "and". However, in Lord Keith's judgment in Elder v Elder and Watson Limited, adopted by Jenkins, LJ, in the case of Re Harmer Ltd, Lord Keith said: "oppression involves, I think, at least an element of lack of probity or fair dealing to a member in the matter of his proprietary right as a shareholder." There it is put in the alternative. In the light of these statements, I deal with this petition on the basis that there may be cases in which either lack of probity or unfairness may be sufficient in itself to make conduct oppressive to a member…
(2) The oppression must be of the members as such, that is in their capacity as shareholders. It was so decided in Re H. R. Harmer Ltd, …, in respect of the English equivalent provision, namely, s210, and the Full Court in Re Bright Pine Mills Pty Ltd, held that this consideration applies to s186(1) of the Victoria Companies Act: see also per Lord Keith in the passage cited above from Elder v Elder and Watson Ltd.
(3) It appears to follow from the last-mentioned concept and the reference in the section to the affairs of the company being conducted in a manner oppressive to members that there must be something adverse or detrimental to the members' financial interests as shareholders. In all the reported cases of which I am aware, where oppression has been found, this has been the fact and it was this aspect to which I understand Jacob, J, referred when he said in Re Broadcasting Station 2GB Pty Ltd, that, the word oppressive involves, among other things, that "some member or members have suffered in a pecuniary sense in their capacity of members (Scottish Co-operative Wholesale Society v Meyer) that is to say, their rights as members have been affected".
(4) The affairs of the company must be being conducted in a manner oppressive to some member or members when the petition is presented. This is involved in the expression "are being conducted": see Re Jermyn Street Turkish Baths Ltd ….
(5) Oppression may occur even although all the members of a company are treated equally: see, for example, Meyer's Case. The unfairness may arise, for example, by reason of an advantage to a parent company.
(6) So far as the alleged oppressors are concerned, it must also be established it seems to me that oppression results from "some overbearing act or attitude on the part of the oppressor": Re Jermyn Street Turkish Baths Ltd. In delivering the judgment of the Court of Appeal, Buckley, LJ, having defined aspects of oppression applicable to that case, then said: "We do not say that this is necessarily a comprehensive definition of the meaning of the word 'oppressive' in s210, for the affairs of life are so diverse that it is dangerous to attempt a universal definition. We think, however, that it may serve as a sufficient definition for the present purpose. Oppression must, we think, import that the oppressed are being constrained to submit to something which is unfair to them as the result of some overbearing act or attitude on the part of the oppressor."
Having stated that what had earlier been said was not necessarily a comprehensive definition, his Lordship appears to me to have then stated what is a universal element in the sentence beginning "Oppression must, we think, import". Again, whilst not stating it as a universal test, the Full Court in Re Bright Pine Mills Pty Ltd, applied the test that "conduct would be oppressive within the meaning of s186 if directors or shareholders holding a controlling power in the direction of the company's affairs were to pursue a course of conduct designed by them to advance their own interests or the interests of others of their choice to the detriment of the company or to the detriment of other shareholders". The concept of "some overbearing act or attitude" appears to me to be involved in Viscount Simonds's expression "burdensome, harsh and wrongful". To determine whether conduct is unfair it is necessary to examine it from the point of view of both the alleged oppressed and the alleged oppressor…
(7) It is a corollary of the element referred to in (6) above that "it was not intended by s186 or s94 to give jurisdiction to the Court (a jurisdiction the courts have always been loath to assume) to interfere with the internal management of a company by directors who in the exercise of the powers conferred upon them by the memorandum and articles of association are acting honestly and without any purpose of advancing the interest of themselves or others of their choice at the expense of the company or contrary to the interest of other shareholders" (per the Full Court in Re Bright Pine Mills Pty Ltd).
Buckley, J, as he then was, referred to the same aspect in Re Five Minute Car Wash Service Ltd when he said: "The mere fact that a member of a company has lost confidence in the manner in which the company's affairs are conducted does not lead to the conclusion that he is oppressed; nor can resentment at being outvoted; nor mere dissatisfaction with or disapproval of the conduct of the company's affairs, whether on grounds relating to policy or to efficiency, however well founded. Those who are alleging to have acted oppressively must be shown to have acted at least unfairly towards those who claim to have been oppressed.[10]

[10]Ibid, 452-454 (citations omitted).

In Wayde v New South Wales Rugby League Ltd,[11] Brennan J specifically referred to the test for oppression under the original companies legislation as being confined to cases where the conduct was ”burdensome, harsh and wrongful,” citing the words of Viscount Simonds in Scottish Co-operative Wholesale Society Ltd v Meyer,[12] which were also cited with approval in Bright Pine and Tivoli, as the above extract from the latter case demonstrates.
[11](1985) 180 CLR 459, 470-471.
[12][1959] AC 324, 342.

Accepting for present purposes that the principles applied under s 186 of the Companies Act are applicable to s 27(1) of the Act, then the following principles are relevant for present purposes:

(a) It is necessary to have regard to all the circumstances;

(b) The conduct complained of must be burdensome, harsh and wrongful to other members of the Trust;

(c) The oppression must be of the members as such in their capacity as shareholders;

(d) There must be something adverse or detrimental to the members’ interest in the Trust;

(e) The conduct complained of must be being conducted in a manner oppressive to some member or members when the application is made;

(f) The oppression must result from some overbearing act or attitude on the part of the oppressor; and

(g) The provision is not designed to interfere with the internal management of the Trust.

In my opinion, it is probable that the members of the committee were aware that they were keeping themselves on the committee longer than they were allowed to be on it, and they probably did so to advance their own interests. Further, the conduct of the defendants in excluding Aaron and Jeremy Clark from nominating, attending or voting at the annual general meeting was and is oppressive to Aaron and Jeremy Clark. I am satisfied that the oppression results from overbearing acts and attitudes on the part of the defendants. The conduct has had a detrimental effect on the interests of Aaron and Jeremy Clark in the governance of the Trust.

Having regard to the defendants’ conduct as a whole in all the circumstances surrounding the administration of the Trust, I consider that their conduct has been burdensome, harsh and wrongful to Aaron Clark and Jeremy Clark. The defendants initially agreed to recognize their shareholding then reneged on the terms of settlement and denied them the benefits of their shareholding.

I am of the opinion that the affairs of the Trust are being conducted in a manner oppressive to one or more members of the Trust and that it would be just and equitable to make an order under s 27(1) of the Act. Accordingly, in my opinion, the Court’s power to make such order as it thinks fit for regulating the affairs of the Trust in future is enlivened.

Under s 27(2) of the Act the Court’s jurisdiction to make orders has two prerequisites:

(a) first, the Court must find that the Trust has contravened the Act; and

(b) second, the Court must consider that one or more of the plaintiffs is a person who has suffered injustice on account of that contravention.

If those two prerequisites are satisfied, the Court then has a discretion to make a wide range of orders.

The wording of s 27(2) appears not to be modelled upon any existing statute, nor to have been employed in other statutes subsequently. In Re Compaction Systems Pty Ltd,[13] the term "injustice" was considered in a similar context (being injustice to a member in the conduct of affairs of a company) in respect of the procedural irregularity provisions under s 366 of the Companies Act. There, Bowen CJ stated:

the word “injustice” in this provision requires the court to consider any real, and not merely insubstantial or theoretical, prejudice which will be suffered by, for example, a member.[14]

[13][1976] 2 NSWLR 477.

[14]Ibid, 493.

In my opinion, the defendants have denied Aaron Clark and Jeremy Clark the right to nominate, attend and vote in relation to the election of members of the committee of management. In doing so the Trust has contravened the Act. I am also of the opinion for the reasons given above, that Aaron Clark and Jeremy Clark have suffered injustice on that account. Accordingly, in my opinion, the Court’s powers under s 27(2) have been enlivened. The Court may make such order as appears to the Court to be necessary to give proper relief to the persons aggrieved.

Has the Court’s power to grant relief been enlivened?

The defendants submit that if I decide that Geoff Clark was wrongly prevented from attending and voting at the annual general meeting in 2013, the appropriate approach is for the Court to make declarations on the matter and let the parties avail themselves of the procedures provided under the Act.

The Secretary of the Trust is required to call a general meeting of the Trust if called upon to do so by a requisition in writing under the hands of not less than one-quarter of those members of the Trust who are not infants (s 22(3)). I was informed that there are currently 17 members of the Trust if Aaron and Jeremy Clark are included as members. Thus, a general meeting could be called on the requisition of five members.

The office of a member of the committee of management of the Trust shall become vacant if the member is removed from office by a resolution of which special notice is given and which is passed at a general meeting of the Trust. The quorum for a general meeting is one-half of the persons entitled to vote at the meeting who are residents of the reserve on the date the meeting was called in accordance with s 22(4). I was informed that currently six members reside on the reserve. On that basis, three members who reside on the reserve would be required to attend the meeting for a quorum. Thus, the plaintiffs, if they have the numbers, could call a general meeting and remove members of the committee.

In my opinion, the Court also has jurisdiction to make declarations as to the rights of the parties.[15] The jurisdiction to make a declaration is a very wide one. It has been said that the power, where it is a question of defining rights of two parties, is almost unlimited. The jurisdiction is limited only by the discretion of the Court: Forster v Jododex Aust Pty Ltd.[16]
[15]Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 23.05.
[16](1972) 127 CLR 421 (Forster), 435 (Gibbs J with whom McTiernan, Walsh, Stephen and Mason JJ agreed on this issue); LexisNexis Butterworths, Civil Procedure: Victoria, vol 1 (at Service 280) [I 23.05.15].

In Forster, the Court said:

It is neither possible nor desirable to fetter the broad discretion…. by laying down rules as to the manner of its exercise. The Court, however, applied the rules summarised by Lord Dunedin in The Russian Bank case[17] as being the general guide to be satisfied before the discretion is exercised in favour of making a declaration. “The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor…”[18]

[17][1981] 2 AC 438, 448.

[18]Forster, 437.

The High Court then said, “Beyond that, however, little guidance can be given.”[19]
[19]See generally P W Young, Declaratory Orders (Butterworths, 2^nd ed, 1984).

In this case, the matter is real and not a theoretical question. The plaintiffs have a real interest in raising it. There is a proper contradictor in the defendants. There is utility in making the declaration and it is in the interests of the Trust and all its members to clarify the position, especially in view of the delay taken by the trustee in bankruptcy to purse the claim that he has now made that the shares have in fact vested in him under s 58(1) of the Bankruptcy Act.

Relief

Under s 27(1) the Court may make such order as the Court thinks fit for regulating the affairs of the Trust in the future or for the purchase of the shares of any member by other members or by the Trust or otherwise. Under s 27(2) the Court may make such order as appears to the Court to be necessary to give proper relief to the person aggrieved by the contravention of the Act.

In my opinion the proper way to rectify the injustice caused to the plaintiffs by the way the defendants held the annual general meeting in December 2013 is to hold fresh elections. The plaintiffs have sought orders that an election be held for all seven positions on the committee, at an annual general meeting to be conducted by an officer of the Department of Aboriginal Affairs to be nominated by the secretary of the Department. I consider that this is an appropriate course.

The plaintiffs have also put forward draft minutes of order providing for staggered elections to be re-introduced. I consider that it would be appropriate to do so to properly regulate the affairs of the Trust in the future despite s 15(1) having been spent. Such an order will permit the Trust to continue as it should have if the Act had been properly observed in the past.

I now turn to whether Aaron and Jeremy Clark are entitled to vote at a meeting prior to the resolution of the foreshadowed claim by the trustee.

Jeremy and Aaron Clark may become disentitled to exercise the rights of shareholders by virtue of s 23(5) of the Act or by virtue of the terms of the deed.

It is not necessary for me to determine the circumstances that must exist for s 23(5) of the Act to be enlivened. All that is necessary for me to decide, is that on the facts established in this case, s 23(5) has not been enlivened at the time of the hearing to disentitle Aaron Clark and Jeremy Clark from exercising the rights otherwise attached to the shares of which they are the registered holders. Of course, section 23(5) would apply if the trustee made a successful claim for the shares. As mentioned above, this is not a matter for this Court to resolve.

The trustee has now indicated that he proposes to take proceedings to establish the disputed shares are vested in him as the trustee under s 58(1) of the Bankruptcy Act. For the reasons given above, in my opinion, that statement does not activate the proviso in the deed, and accordingly Aaron and Jeremy Clark are entitled to exercise the rights attached to their registered holding. Nor, for the reasons given, does the statement enliven s 23(5) of the Act.

Orders proposed

In my opinion, it is appropriate to make the declarations sought by the plaintiffs and also to provide for fresh elections as sought by the plaintiffs. I am minded therefore to make the orders proposed by the plaintiffs as set out above.

Concluding observations

I do not consider it appropriate that this case should pass without me making some observations on the statutory election regime. It is obvious from these reasons that the election regime of the Trust is imprecise, problematic and unwieldy. Once the staggered election system is confused and starts to get out of order, there is no provision in the Act to revive it. The Trust has failed to get it right, it has had to seek legal advice and ask the OAAV for help. In my opinion, the OAAV also got it wrong. This does not bode well for the election regime. Also as mentioned, the Act assumes that it will be faithfully followed. As this case demonstrates, that assumption is misconceived.

This may be a matter that the Government may wish to consider.

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Citations

Clark v Framlingham Aboriginal Trust [2014] VSC 367

Most Recent Citation

Clark v Framlingham Aboriginal Trust [2014] VSC 642

Cases Citing This Decision

7

Kitay v Frigger [2022] WASC 284

Wilson v Indigenous Services Pty Ltd [No 2] [2021] WASC 338 (S)

Wilson v Indigenous Services Pty Ltd [No 2] [2021] WASC 338

Cases Cited

2

Statutory Material Cited

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Morgan v 45 Flers Avenue Pty Ltd [1985] HCA 68

Martin v Taylor [2000] FCA 1002

NAME	VALID or INVALID
JIM BERG	VALID
LOUISE WACKETT	VALID
RONALD CHATFIELD	VALID
TIM CHATFIELD	VALID
JOANNE MCGUINNESS	VALID
AARON CLARK	INVALID due to shares being in dispute.
BRENDA CHATFIELD	INVALID due to being a current Committee member whose position is not becoming vacant at this election.”

[2014] VSC 367

6 August 2014