Daphne Lowe v Australian Chinese Community Association of NSW

[2010] NSWSC 1071

CITATION:	Daphne Lowe v Australian Chinese Community Association of NSW [2010] NSWSC 1071 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	10 September 2010
JUDGMENT OF:	Slattery J at 1
EX TEMPORE JUDGMENT DATE:	10 September 2010
DECISION:	1. The defendant be restrained until further order from acting upon or enforcing the resolutions of the executive committee of the defendant made on 11 August 2010 that: (a) the plaintiffs be expelled from the defendant; (b) a special general meeting be called to either ratify or revoke the resolution of the executive committee to expel the plaintiffs. 2. the defendant be restrained from holding the special general meeting referred to in the notice dated 16 August 2010. 3. these orders may be entered forthwith. 4. list the matter for mention at 9.30am on Thursday, 16 September 2010.
CATCHWORDS:	Associations and Clubs - Expulsion, suspension and disqualification - association incorporated under Associations Incorporat Act 2009 - expulsion of member - interlocutory injunction sought to restrain holding special general meeting - plaintiff member contends holding of proposed special general meeting would contravene Association's Rules - whether meeting would transact other business in addtion to expulsion, whether Association is acting without a "complaint" within the meaning of the Rules - whether a denial of procedural fairness - equitable remedies - interlocutory injunction - serious question to be tried - balance of convenience favours grant of relief - interlocutory injunction granted.
LEGISLATION CITED:	Associations Incorporation Act 2009
CATEGORY:	Procedural and other rulings
CASES CITED:	Australian Broadcasting Corporation v Lenah Game Meats [2001] HCA 63 Kolback Securities v Epoch Mining Pty NL (1987) 8 NSWLR 533
PARTIES:	Plaintiff- Daphne Lowe Defendant- Australian Chinese Community of Association of NSW
FILE NUMBER(S):	SC 2010/305598
COUNSEL:	Plaintiff- J.D.Smith Defendant- C.Stomo
SOLICITORS:	Plaintiff- David J. Adams, Adams Raves March & Co Defendant-Nicholas Prassas, Comino Prassas Solicitors

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY JUDGE LIST

SLATTERY J

FRIDAY, 10 SEPTEMBER 2010

2010/305598 DAPHNE LOWE & ORD v AUSTRALIAN CHINESE COMMUNITY ASSOCIATION OF NSW INC.

EX TEMPORE JUDGMENT

1 HIS HONOUR: This matter involving the affairs of the Australian Chinese Community Association of NSW Inc comes before the duty list today. The three plaintiffs, all members of the defendant Association, apply to restrain the holding of a Special General Meeting of the Association that is scheduled for next Sunday, 12 September 2010.

2 The interlocutory relief sought on the motion before the Court is substantially the same as would be obtained at final hearing. The factual issues in dispute are few. Because of the speed with which the matter came to Court and with which it was argued today the defendant Association has had to deploy evidence in response to the claim at relatively short notice. I suggested to the parties that the matter could be dealt with as a final hearing. Both parties pressed upon the Court their desire to have the matter heard only on an interlocutory basis. That is the basis on which the matter was argued and decided.

3 To obtain an interlocutory injunction the plaintiffs must show there is a serious question to be tried in relation to the final relief claimed, that damages are not an adequate remedy, and that the balance of convenience favours the granting of the injunction: Australian Broadcasting Corporation v Lenah Game Meats [2001] HCA 63 per Gleeson CJ at [13]. There is a close similarity here between the issues for the grant of both interlocutory and final relief and a grant of interlocutory relief will in a practical sense determine much of the substance of the matter in issue. In such cases in assessing the balance of convenience it is desirable to evaluate the strength of the plaintiff’s case for final relief: Kolback Securities v Epoch Mining Pty NL (1987) 8 NSWLR 533 at 536A-D per McLelland CJ in Eq. Consequently throughout this judgment some observations are made about the strengths of some of the plaintiff’s arguments.

Background to the Application

4 Some background about the relationships between the various parties to these proceedings is useful. The first plaintiff, Daphne Lowe, has been a life member of the defendant Association for some 27 years. She is presently its honorary secretary although she has been suspended from the duties of this position pending the outcome of this dispute. The second plaintiff, Dr Anthony Pun is a former President of the Association, holding office as President from 1989 to 1992. The third plaintiff, Maggie Wu is a member of the Executive Committee of the defendant Association. She was elected to that position on 9 August 2009. She too has been suspended from the duties of that position pending the outcome of this dispute.

5 The defendant was formed in 1974 to serve and promote the interests of the Chinese community in Australia and to foster the other related objectives set out in its Constitution. These objectives include the promotion of understanding between Australians of Chinese descent and other Australians. The Association has approximately 1,000 financial members including life members.

6 The events before the Court concern all the plaintiffs. But these events have conveniently been made the subject of submissions principally as they affect the first plaintiff, Ms Lowe. For convenience and without any disrespect to the other two plaintiffs, I will generally refer in this interlocutory judgment to the events as they affect her. Considering Ms Lowe's position as representative of all plaintiffs is generally sufficient to deal with all the issues presented for this interlocutory trial.

7 The wider events that led to the plaintiffs seeking to restrain the holding of the Special General Meeting on Sunday, 12 September 2010 first arose back in February this year. But the specific events relating to the proposed meeting commence in early July 2010 when a petition came to the attention of the defendant. Whether or not this petition was properly received will be one of the issues for final hearing.

8 The petition is written partly in English and partly in Chinese characters. The English version of the petition in evidence, I am assured, is a complete translation of the Chinese characters that also appear in the document, apart from the characters constituting petitioners’ names and signatures. The petition relates to the three plaintiffs. It is short and is reproduced below exactly as it is printed:

“We the undersigned members of ACCA, observe Mr Anthony Pun, Ms Daphne Lowe, and Ms Maggie Wu, have created confusions, attempted to usurper the legal position of ACCA and damaged and harmonious of ACCA undermined ACCA's reputation. Their misdemeanours critically impacted and affected ACCA normal activities and services. Then, they do not listen to the advices, are obdurate and hell bent on it."

9 The document goes on to request a Special General Meeting of the defendant Association to be convened to consider, and if thought fit, to pass resolutions that:

“(1) in accordance with clause 18.2 of the ACCA Constitution that Ms Daphne Lowe be removed as the secretary of the ACCA, and
(2) in accordance with clause 18.2 of the ACCA Constitution Ms Maggie Wu be removed as a member of the Executive Committee."

10 The petition bears many of the usual characteristics of a petition. It is actually a collection of separate documents, which are bundled together, each of which was likely to have been presented individually to potential signatories for signature. Some of the signatories have signed, placed their Association membership number and their signature on the document. Others have merely signed the document and not spelled out their name in addition to placing their signature on the document. Ms Lowe says that on 22 July 2010 she attended the offices of the defendant and checked the names on the petition against the names of the members on the members' register. Her evidence is that of all the names on the petition less than 50 are financial members of the Association. She further says that some of the names are also duplicated. The defendant has not had time to verify the correctness of this evidence about the petition, which would be in contest at final hearing.

11 In response to the petition a meeting of the Executive Committee of the defendant was held on 3 July 2010 in Surry Hills. A number of matters were dealt with at that meeting. In form the petition sought action under Rule 18.2, which empowers a general meeting to remove a member of the Executive Committee before the expiration of the member’s term of office. The Executive Committee regarded the petition as a basis to activate Rule 8 of the Association’s Rules relating to the Disciplining of Members. The Executive Committee resolved to allow the plaintiffs to each make submissions under Rule 8.2 of the Constitution, a rule relating to the Discipline of Members. The resolution for Ms Lowe was in the terms that follow: “Resolved that Daphne Lowe be given 14 days to make a submission to EXCO regarding the petition in accordance with clause 8.2 of the Constitution. Moved by Raymond Cheung, seconded by Rong Mu Dong”. The resolutions allowing the other plaintiffs to make submissions in response to the petition were in similar terms.

12 The 3 July Executive Committee meeting also resolved to suspend Ms Lowe from her position as honorary secretary and from all other positions within the defendant Association, pending her response to the petition. A similar resolution was passed suspending Ms Wu from her position as an Executive Committee member pending her response to the petition.

13 The effect of this meeting, therefore, was that Ms Lowe and the other plaintiffs were given 14 days to make a submission to the Executive Committee in relation to the petition. In the meantime Ms Lowe and Ms Wu were suspended from their executive roles. The document upon which the Executive Committee acted is described throughout these minutes as a "petition", as it mostly is described in the subsequent correspondence that the Association sent to the plaintiffs.

14 The Executive Committee acted on this resolution. On 6 July 2010 the Association sent a letter to Ms Lowe referring to the Executive Committee’s resolution of 3 July and asking for submissions in the following terms:

“Please be advised that at the Executive Committee meeting held on 3 July 2010 the following resolution was adopted-
‘That, in accordance with clause 8.2 (b) pf the Objects and Rules of ACCA, Ms. Daphne Lowe is asked to make submission to the Executive Committee in connection with the complaints from members of the Jung Sing Association and a petition received from ACCA members’.
An Executive Committee meeting is scheduled to be held on 24 July 3020 to consider any submission made by you in accordance with clause 8.2 (c)of the Objects and Rules of ACCA. Under clause 8.3 of same if the Executive Committee is satisfied the facts alleged in the complaint have been proven it could consider calling a SGM for the purpose of removing you as a life member of ACCA.
Accordingly, your submissions addressing the allegations raised in the petition, should reach ACCA office no later than 22 July 2010.”

15 Ms Lowe responded to the 3 July 2010 letter enclosing the petitions. She took many points in her response. I will not set them all out. Some of these points have been the foundation for the argument put by her Counsel this afternoon. After setting out the terms of the petition she said:

“4 (iii) In addition, there is no evidence to support the alleged complaints .
Both petitions make the following allegations:
…
No supporting evidence or facts are stated for any of the allegations made:
* have created confusion (what confusion have I created?)
* attempted to usurper the legal position of ACCA (how, when and what legal position am I attempting to ‘usurper’?)
* damaged the stability and harmonious of ACCA (how and when was this damage done to the stability and ‘harmonious ; if ACCA?)
* undermined ACCA’s reputation (how? In fact I believe these petitions and other unconstitutional actions is what is undermining ACCA’s reputation)
* their misdemeanours critically impacted and affected ACCA normal activities and services (what are these misdemeanours and how did they affect ACCA’s normal activities and services?)
* they do not listen to the advices (what advices and from whom?)
* are obdurate and hell-bent on it. (on what?)”

16 She was not alone in her response to the petition. Doctor Pun, the second plaintiff also responded making similar points to those argued by Ms Lowe.

17 These letters did not result in the Association providing more detailed particulars of complaint to the plaintiffs. Instead, an Executive Committee meeting was held on 11 August 2010 to consider the petitions under an agenda item "SGM petitions and related matters". The Executive Committee resolved at this meeting that the replies of each of the plaintiffs “be considered as unsatisfactory”. The 11 August 2010 Executive Committee meeting then proceeded to resolve to expel the plaintiffs from the defendant Association in the following terms:

“Resolved that Anthony Pun, Daphne Lowe and Maggie Wu be expelled from ACCA and a Special General Meeting be called to either ratify or revoke the resolution of the Executive Committee to expel them.
Moved by Raymond Cheung, seconded by Rong Mu Dong, Mimi Kwok voted against the resolution.”

18 The same meeting further resolved to suspend Ms Lowe and Ms Wu, from their participation in the affairs of the Association pursuant to Rule 8.3(c) pending the holding of the Special General Meeting.

19 A Special General Meeting was to be called to ratify the resolutions to expel the plaintiffs. A few days later on 16 August 2010 a formal notification of the meeting to be held this coming Sunday was sent to the plaintiffs. The notice of that meeting identified the proposed resolutions to remove Executive Committee members and to expel the plaintiffs as members. The form of these resolutions, so far as they concerned the plaintiff, was:

“Resolution 1:

That in accordance with clause 18.2 of the ACCA constitution Ms. Daphne Lowe be removed as the Honorary Secretary of ACCA.

Resolution 4:

That in accordance with the ACCA constitution Ms. Daphne Lowe be expelled as a life member of ACCA.”

20 Similar resolutions were passed removing Ms Wu as a member of the Executive Committee and expelling each of Dr Pun and Ms Wu respectively as a life member and a member of the defendant Association.

21 This sufficiently sets out the history leading to this hearing. Mr J.D. Smith appears for the plaintiffs and Mr Stomo appears for the defendant. Both counsel appearing in this case have argued it with appropriate focus, especially given the time constraints this afternoon. I am indebted to both of them for their precision.

The Rules of the Association and the Issues

22 The issues presented for consideration fall into the following categories: (1) issues relating to the alleged contravention of Rule 8 of the Constitution of the defendant; (2) issues concerning the validity of the resolution passed on 11 August to convene a Special General Meeting; (3) issues of alleged denial of procedural fairness; and, (4) issues of the balance of convenience. I will deal with these groups of issues under each of these four headings.

23 Rule 8 of the defendant's constitution entitled “Disciplining of Members” relevantly provides:

8.0 Disciplining of Members

8.1 A complaint may be made to the Executive Committee by any member of the
Association that some other member (referred to in this Rule as the “member
concerned”):-


(a) has persistently refused or neglected to comply with a provision or provisions of the Act of these rules; or

(b) has persistently and willfully acted in a manner prejudicial to the interests of the Association.

8.2 On receiving such a complaint, the Executive Committee:-


(a) shall cause notice of the complaint to be served on the member concerned; and

(b) shall give the member concerned at least fourteen (14) days from the time the notice is served within which to make submissions to the Executive Committee in connection with the complaint; and

(c) shall take into consideration any submissions made by the member in connection with the complaint.

8.3 If the Executive Committee is satisfied the facts alleged in the complaint have been proved and proposes to expel the member concerned by resolution, then the Executive Committee:

(a) shall call a Special General Meeting which must be convened within twenty-eight (28) days of the notice referred to in sub-rule (b) to either ratify or revoke the resolution of the Executive Committee to expel the member
concerned;

(b) shall notify the member concerned of the proposed resolution to expel him, her or it, and of the date, place and time of the Special General Meeting to be called pursuant to sub-rule (a);

(c) may suspend the member concerned from participation in the affairs of the Association pending the Special General Meeting to be called pursuant to sub-
rule (a).

8.4 At the Special General Meeting called pursuant to rule 8.3:


(a) no business other than the proposed expulsion of the member concerned shall be transacted;

(b) the member who made the complaint, the Executive Committee and the member concerned must be given the opportunity to state their respective cases both orally or in writing, or both;

(c) if the member who made the complaint or the member concerned wish to distribute prior to or at the Special General Meeting written representations then they shall prepare and distribute such written representations at his, her or its own cost;

(d) member entitled to vote at the Special General Meeting shall vote by secret ballot;

(e) the expulsion of the member concerned shall be only take effect if the Special General Meeting ratifies by Special Resolution, the resolution of the Executive Committee to expel the member concerned.

24 The constitution of the defendant Association including its rules operates as a contract as between the parties. Associations Incorporations Act s 26 and Goodwin v Vietnam Veteran Motor Cycle Club Australia (2008) 74 NSWLR 224, at 232 paragraph [38]. The plaintiffs rely in these proceedings upon that contractual relationship as the foundation of their claim for equitable relief and the Court’s intervention: Hawick v Flegg (1958) 75 WN (NSW) 255. Mr Smith points out that rules concerning the procedures for dismissal of a person from membership should be strictly complied with: Goodwin v Vietnam Veteran Motor Cycle Club Australia (2008) 74 NSWLR 224, at 232 paragraph [43].

(1) Alleged Contravention of Rule 8

25 The plaintiffs' first contention is that the petition does not qualify as a “complaint” within clause 8.1 of the rules. Within that contention there are really three separate points. The first point is that the complaint as conveyed in the form of the petition is so vague and uncertain that it simply does not qualify on that ground to be described as a “complaint”. The second point is to say that because the alleged complaint is so vague it is impossible to determine whether or not Rule 8.1(a) and (b) have been complied with, and so the petition also cannot be a “complaint” within Rule 8. There is a third point relating to procedural fairness but that that is best dealt with as part of the plaintiff's third contention below.

26 As to the first of these two points, the petition does not define with any precision the alleged conduct which might show a contravention of Rule 8.1 that the plaintiffs’ have “persistently refused or neglected to comply with a provision or provisions of the Act or of these rules (Rule 8.1(a))” or “wilfully acted in a manner prejudicial to the interests of the Association (Rule 8.1(b))” such that the petition will be a “complaint” within Rule 8.1.

27 There is a strong argument available to the plaintiff that the petition document does not qualify as a Rule 8.1 “complaint”. Looking at the first paragraph of the petition, it is impossible to discern: to what specific conduct it relates; on what occasions that conduct is said to have occurred such that it might be said the member “persistently refused and neglected” to comply with the Associations Incorporations Act or the Rules (see for example Randazzo v New South Wales Sport Aircraft Club [2009] NSWSC 1473 [23] – [25] and A-G for South Australia v Piepkorn [2005] SASC 425); and, what particular aspects of that conduct are alleged to be “prejudicial to the interests of the Association”. It is strongly arguable that any person receiving such a document would be unlikely to understand exactly what he or she was alleged to have done to attract action under Rule 8.1. It would be difficult for a member to organise any reasoned defence against expulsion faced with such limited material.

28 The Executive Committee describes the document as “a petition”. It appears that that is exactly the way that it has been framed, rather than as a “complaint” warranting action under Rule 8. Indeed when the petition was sent on by the Executive Committee to the plaintiffs it was sent not with further particulars, but with the exact covering words: "Please find enclosed the petition received in relation to complaint about your conduct and a request for a Special General Meeting for your removal as a life member of the ACCA”.

29 No attempt appears to have been made to turn the vague and uncertain expressions in the petition into defined particulars of the allegations of relevant misconduct. It was open to the defendant between receiving the petition and sending it to the plaintiffs to obtain legal advice and to convert the document into something capable of being answered. But if the Executive Committee obtained legal advice about this the letter of 6 July 2010 does not obviously disclose the influence of such advice.

30 The result was predictable. The letters in response from Dr Pun and Ms Lowe asked the very questions that any reasonable reader of the petition sent by the letter of 6 July would ask. Ms Lowe’s response has already been set out. At a final hearing it could reasonably be pressed by counsel on behalf of the plaintiffs that these petition documents give no relevant information about alleged misconduct of the plaintiffs, do not qualify as a “complaint” within Rule 8 and cannot be acted on by the Executive Committee.

31 A resolution has now been passed on 11 August to convene the meeting on Sunday. Ms Lowe is in no position to prepare for that meeting on the material that she has. Ms Lowe says that she has been denied procedural fairness and that the defendant is acting in contravention of its own Rule 8. Both of these Ms Lowe submits may be restrained by injunctive relief. The defendant seeks to answer that by relying upon Associations Incorporation Act 2009, s 20 which provides:

“(1) An association’s constitution may contain an express restriction on, or a prohibition of, the association’s exercise of any of its powers, but the exercise of a power by the association is not invalid merely because it is contrary to such a restriction or prohibition.
(2) An act of an association is not invalid merely because it is contrary to or beyond the association’s objects.”

32 The defendant submits that Associations Incorporation Act, s 20 means that the defendant's relevant exercise of its power to expel a member is not invalidated, merely because the defendant does not comply with particular prohibitions or restrictions in Rule 8.

33 But in my view, Associations Incorporation Act s 20 is not a strongly arguable answer to the plaintiffs’ first contention for two reasons. First, it does not take account of cases such as Goodwin v Vietnam Veteran Motor Cycle Club Australia (2008) 74 NSWLR 224, at 232 paragraph [43], which require strict compliance with the rules of expulsion of members of such Associations, rules that may not readily be classified as containing a “restriction or prohibition”. Secondly, the defendant’s claimed use of Associations Incorporation Act s 20 does not give adequate emphasis to the word "merely" in the section, which shows that the provision is not designed to address all the possible circumstances that may produce invalidity.

34 The plaintiffs would at final hearing point to the absence of particularisation of the allegations in the petition. In response Mr Stomo has referred to the decision of Young J (as his Honour then was) in the The Bodalla Company Pty Limited v Registrar of Co-operative Societies, Supreme Court of NSW, 6 December 1988, (unreported) BC8801258. Mr Stomo submits that I should follow the approach taken by Young J in Bodalla and allow this meeting to proceed, even though there may have been breaches of the rules of the association in the calling of the meeting. In my view, in Bodalla Company Young J was not dealing with the situation, which obtains here with the particular rule that apply here. A deliberate structure appears to have been created in the defendant Association’s rules in Rule 8.1 to 8.3 to require its Executive Committee to take preliminary steps before calling any general public meeting. Those preliminary steps involve considering the content of the complaint made, measuring it against the Rules and the interests of the Association. Then the structure requires the person complained about to be put in a position to exercise the right to respond to that complaint to the Executive Committee before having to deal with it in a public forum. Finally, before acting publicly the Executive Committee should be “satisfied that the facts alleged in the complaint have been proved”: Rule 8.3. The rules in issue in Bodalla’s case did not require any such preliminary consideration of a complaint by the Executive. In my view, the Bodalla case is not a complete answer to the plaintiffs' claim that it has an arguable case to require the defendant’s Executive Committee to do its duty according to the Association’s Rules before exposing the plaintiff’s to an Executive Committee sanctioned public meeting.

(2) The 11 August Resolution convening a Special General Meeting

35 Another way that the plaintiffs’ invoke Rule 8 is through the notice of meeting and the five resolutions proposed to be decided at the meeting. The decision to deal with the plaintiffs’ expulsion as a group was taken in the Executive Committee resolution on 11 August 2010. Ms Lowe says that the proposal to consider all those resolutions at the same meeting is a contravention of Rule 8.4(a) of the Rules. In my view, it is strongly arguable that it is such a contravention. Rule 8.4 arguably achieves some important purposes in the management of expulsions from incorporated associations. Where such a Rule is adopted it ensures that expulsion from clubs cannot occur en masse. It arguably ensures that the position of individual members facing expulsion is not too simply identified with the position of other members also facing expulsion. The Rule means that the circumstances of each member are separately and seriously considered at a meeting considering expulsion. Rule 8.4 (a) also has the advantage of ensuring that members who wish to speak in favour of other members being proposed for expulsion can do so without being tainted at the same time by defending their own proposed expulsion. In my view, Rule 8.4(a) serves those objectives, which are important rights of members.

36 The resolutions proposed on 11 August for Sunday’s meeting would quite arguably contravene Rule 8.4 (a) in several ways. Resolutions 3, 4 and 5 propose the expulsion of three persons, Ms Lowe, Dr Pun and Ms Wu, at the one meeting. Resolutions 1 and 2 propose the removal of Ms Lowe as the honorary secretary and Ms Wu as a member of the Executive Committee at the same meeting as the proposed expulsions. In my view both the proposal of multiple expulsion resolutions and the proposal of business relating to the Executive Committee and the secretaryship are other “business” that if conducted, in addition to a single expulsion, would arguably contravene Rule 8.4(a).

37 To overcome this problem the defendant indicated that it was prepared to undertake not to deal with resolutions 1 and 2 at this Special General Meeting. But it seems to me there are difficulties with that course. First, unless only one resolution was pressed, for example, resolution 4 against Ms Lowe, an arguable contravention of Rule 8.4 (a) would still remain. Secondly, the plaintiffs challenged the basis upon which such instructions were being given to take this course. Thirdly, the potential for interference with the orderly organisation and conduct of the meeting on Sunday and the confusion created for people who would come to this meeting, make it a difficult undertaking to accept. For those reasons, in my view, the proposed meeting would arguably be a contravention of clause 8.4(a). On this particular ground alone the plaintiff has a sufficiently strongly arguable case that, in my view, an injunction should go to restrain the holding of the meeting.

38 By this point in my oral reasons I had identified that the plaintiff’s first and second contentions were a sufficient legal basis for restraining the Special General Meeting. The hearing had adjourned during the afternoon due to the press of other business in the Duty List. By the time the other duty matters were finished and the oral reasons were delivered it was after 7.30 pm. It was indicated that unless any further reasons were required that evening as it had been established that there was a serious question to be tried, the balance of my reasons could be published later. The parties agreed with this course. In short additional reasons I evaluated the plaintiffs’ further arguments that there was a serious question to be tried. With the exception of the material below relating to the balance of convenience and the future management of the proceedings, what follows are those short additional reasons.

39 The plaintiffs sought to show that the Special General Meeting could not be held under the authority of the defendant’s Rule 21, which allows 50 ordinary members or four member of the Executive Committee to requisition a Special General Meeting through the Hon. Secretary. The plaintiffs said that 50 ordinary members had not signed the petition and that Ms Lowe as the Hon. Secretary had not received it, so Rule 21 was not enlivened. But the defendant did not seek to propound a case based on calling Special General Meetings under Rule 21 and with some justification, as Rule 8 seems to be the appropriate template for meetings to consider the expulsion of members.

40 The plaintiffs also sought to show that the 11 August 2010 Executive Committee meeting that called the Special General Meeting on 12 September was itself invalidly constituted because the Hon. Secretary, Ms Lowe had been excluded from it as a result of the Executive Committee’s challengeable resolutions of 3 July 2010, suspending her from her position. Ms Wu was also suspended from her role on the Executive Committee by the same meeting and the same consequence is said to flow from her suspension. It was said that the Rules do not allow for the suspension of a member of the Executive Committee as seems to have occurred on 3 July. Whilst the Rules do not expressly provide for that form of suspension it may be that Rule 8.3(c) is wide enough to authorise what happened here on 3 July. In any event the correct form of suspension seems to have been put in place on 11 August. This was another arguable issue available to the plaintiffs.

(3) Denial of Procedural Fairness

41 The plaintiffs also contended that they had been denied procedural fairness. They put this contention two ways. They first submit they have not been given an adequate opportunity to present their cases to the Executive committee before the Special General Meeting was called. The plaintiffs relied in support of this argument on much of the same material that was advanced under their first contention. Depending on the precise form of the rules of an association, if a Special General Meeting is characterised as an appeal from the decision of the Executive Committee, then such a Special General Meeting may cure any prior defects in providing procedural fairness: McClelland v Burning Palms Surf Lifesaving Club (20020 191 ALR 759; [2002] NSWSC 470, per McClelland J. But there can be debate as to whether the Special General Meeting here proposed is an appeal that will cure a prior denial of procedural fairness. Whether the defendant’s Rules have this effect or not is an arguable matter for final hearing.

42 The plaintiffs also submit that the Association has demonstrated actual, not just reasonably apprehended bias, in its approach to dealing with the plaintiffs. It is neither necessary nor desirable for the Court to express any views about this submission at an interlocutory hearing, other than to record that the submission is made and contested.

(4) The Balance of Convenience

43 Mr Smith says the balance of convenience favours the grant of an injunction. He points out that there is already another meeting being convened for 2pm on Sunday. He submits that any restraint will only interfere with the meeting to take place at 3pm. Many people will already be there for another meeting of the defendant Association, which is scheduled for 2pm at the same venue. Mr Stomo says though that the plaintiff can continue this action after the meeting; in substance, turning it into an action for damages. This was the balance of convenience point raised by the defendants.

44 The difficulty I have with that argument and with Bodalla's case, which was pressed upon me here, is that the plaintiffs appear to me to have a strong argument that the structure of the defendant’s Rules provides at least the possibility of the plaintiffs' understanding what might be said against them at a Special General Meeting. The material currently preferred against them does not allow them to do that. The meeting would take place on Sunday in circumstances where the plaintiffs would, in effect, have to defend themselves against an established position by the Executive Committee (being “satisfied that the facts alleged in the complaint have been proved” – Rule 8.3) that there was a case to answer, but without knowing what that case actually was. In my view, the damage to reputation, the predictable capacity for chaos likely to result at such a meeting on important issues of conduct and the need to enforce the Association’s Rules are sufficient that the balance of convenience weighs in favour of the meeting being restrained.

45 There are a number of issues remaining for final hearing, such as whether Ms Lowe and Ms Wu are suspended from their positions on the Executive Committee. The parties should consider what arrangements they wish to make about a final hearing. Such a hearing should take place soon, so that the affairs of the Association can be continued with these matters resolved.

Orders

46 Accordingly I make the following orders:

1. The defendant be restrained until further order from acting upon or enforcing the resolutions of the executive committee of the defendant made on 11 August 2010 that:

(a) the plaintiffs be expelled from the defendant;
(b) a special general meeting be called to either ratify or revoke the resolution of the executive committee to expel the plaintiffs.

2. the defendant be restrained from holding the special general meeting referred to in the notice dated 16 August 2010.

3. these orders may be entered forthwith.

4. list the matter for mention at 9.30am on Thursday, 16 September 2010.

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20/12/2010 - - Paragraph(s)