DARUL-IMAN (WA) Incorporated v Raja

Case

[2010] WASC 299

28 OCTOBER 2010


JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   DARUL-IMAN (WA) INCORPORATED -v- RAJA [2010] WASC 299

CORAM:   MASTER SANDERSON

HEARD:   27 FEBRUARY, 13 MARCH & 31 MAY 2006, 4 MAY, 29 JULY & 5 NOVEMBER 2009

DELIVERED          :   11 JUNE 2010

PUBLISHED           :  28 OCTOBER 2010

FILE NO/S:   CIV 1241 of 2005

BETWEEN:   DARUL-IMAN (WA) INCORPORATED

Plaintiff

AND

FAYYAZ AHMAD RAJA
Defendant

Catchwords:

Incorporated associations - Application of ultra vires doctrine to contracts made with association - Whether present office holder's duty related - Effect of improper election

Legislation:

Associations Incorporation Act 1987 (WA)

Result:

Application for stay of action dismissed

Category:    A

Representation:

Counsel:

Plaintiff:     Mr M F Rynne

Defendant:     Mr R J Nash

Solicitors:

Plaintiff:     Tottle Partners

Defendant:     Arns & Associates

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

Advance Bank Australia Ltd v FAI Insurances Ltd (1987) 5 ACLC 725

ANZ Executors & Trustee Co Ltd v Qintex Australia Ltd (1990) 8 ACLC 980

Brick & Pipe Industries Ltd v Occidental Life Nominees Pty Ltd (1990) 9 ACLC 324

Darvall v North Sydney Brick & Tile Co Ltd (No 4) (1988) 6 ACLC 1095

Northside Developments Pty Ltd v Registrar‑General (1990) 64 ALJR 427

Queensland Rugby Football League Ltd v Worrell [2000] QSC 381

Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1982] 3 All ER 1057

Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1986] Ch 246

  1. MASTER SANDERSON:  The plaintiff commenced these proceedings on 2 March 2005.  The plaintiff seeks to have the defendant specifically perform a contract for the sale of land situated at Smokebush Place, High Wycombe.  The relevant contract was dated 19 October 2002.  There is a further plea in relation to a sum of money allegedly paid by the plaintiff to the defendant.  It is the enforcement of the contract of sale of land which is the central issue between the parties. 

  2. The defendant has not lodged a defence.  However, he has applied to have proceedings struck out or stayed.  Before detailing why the defendant's application was made and the grounds upon which it is made, I should note a number of matters which are not in dispute.

  3. The plaintiff is a voluntary association (the Association) incorporated pursuant to the provisions of the Associations Incorporation Act 1987 (WA) (the Act). At the time he entered into the contract for the sale of land, the defendant was a member of the Association. Mr Imtiaz Ahmed (Mr Ahmed) is the brother of the defendant. Mr Ahmed asserts that he is the president of the plaintiff pursuant to a resolution of the plaintiff association at its annual general meeting on 3 October 2004. He further asserts the Association is controlled by the persons elected at that meeting. The protagonists, who include the defendant, I will refer to as the Ahmed Group.

  4. The Ahmed Group is opposed by a group associated with Mr Abdul Sulaiman Bin Omar (Mr Omar) and Saaid Abdullah (Mr Abdullah).  Mr Omar and Mr Abdullah maintain the plaintiff is controlled by persons who were elected at the plaintiff association's annual general meeting on 10 October 2004.  This group I will refer to as the Omar Group.  There is no common ground between the parties as to which of these two groups properly controls the plaintiff.

  5. It is the Ahmed Group's position that they properly control the plaintiff and they have not provided the instructions to the plaintiff's lawyers to bring these proceedings.  In other words, they challenge the plaintiff's solicitor's retainer.  The grounds upon which they challenge the retainer were set out in the defendant's written submissions.  They are:

    (a)The evidence shows that those purporting to have authority to act on behalf of Darul‑Iman (WA) Incorporated (the plaintiff) purportedly derive their office and authority from meetings of persons held on 10 October 2004 and 14 August 2005 who cannot be demonstrated to be the duly elected members of Darul‑Iman.  The membership of the Association is substantially uncertain and there are two disparate groups, each claiming to constitute the membership. 

    (b)Darul‑Iman has failed to such a substantial degree to conduct its affairs in accordance with its Constitution and the requirements of the Act, that it is apparent that it is not operated in a constitutionally valid sense, as an incorporated association at all.

    (c)Alternatively, the respondent to this application has, through Mr Omar, conceded that Mr Fayyaz Ahmad Raja (Mr Raja), at least, is still a member of Darul‑Iman.  The evidence is that Mr Raja was not provided with notices of meetings of the organisation at which office bearers to Darul‑Iman were purportedly elected at the annual general meetings in 2004 and 2005.  The irresistible inference is that Mr Raja was deliberately omitted as a recipient of these notices of meetings. 

    (d)The notices of meetings of 10 October 2004 and 14 September 2005 were issued without valid authority and, accordingly, any appointments of office bearers or resolutions made at these meetings were invalid.

  6. Issue was joined between the parties on all of these questions.  For reasons which follow, I am satisfied the persons who presently purport to hold office within the plaintiff (that is the Omar Group) were not properly elected to their respective positions.  In other words, I am satisfied the defendant has made good par (a) quoted above.

  7. That is not the end of the matter.  The plaintiff submits under the provisions of the Act the retainer agreement is valid and enforceable and not open to challenge.  Before exploring that submission in detail, it is necessary to say something about applications which challenge a solicitor's retainer.  There was no real dispute between the parties as to the applicable principles.

  8. A party challenging a retainer has the onus of establishing on the evidence a lack of authority.  That means in this case, the defendant must produce sufficient evidence to negative the proposition that the plaintiff's solicitors have authority.  Once the evidence establishes that proposition, then an evidentiary onus shifts to the plaintiff.  In other words, the situation is no different from any party who asserts a particular set of facts which are said to give rise to a particular legal consequence. 

  9. It is important to note what is attacked in this application is the contractual arrangement between the plaintiff and its solicitors.  The defendant is not a party to that contract.  What the defendant is attacking is the legal capacity of one party - the plaintiff - to enter into a binding agreement.  If, for whatever reason, there exists a valid contract which presently binds both the plaintiff and its solicitors, then the defendant's challenge must fail.

  10. In his written submissions, counsel for the plaintiff relied upon provisions of the Act.  In particular, s 14 and s 15 of the Act.  These sections are in the following terms:

    14.     Manner in which contracts may be made

    (1)Contracts may be made by or on behalf of an incorporated association as follows ‑

    (a)a contract which, if made between natural persons, would be required to be in writing under seal may be made by the incorporated association under its common seal;

    (b)a contract which, if made between natural persons, would be required to be in writing signed by the parties may be made on behalf of the association in writing by any person acting under its express or implied authority; and

    (c)a contract which, if made between natural persons, would be valid although not in writing signed by the parties may be made orally on behalf of the association by any person acting under its express or implied authority.

    (2)A contract may be varied or rescinded by or on behalf of an incorporated association in the same manner as it is authorised to be made.

    15.     Limitation of doctrine of ultra vires

    (1)A contract made with an incorporated association is not invalid by reason of any deficiency in the legal capacity of the association to enter into, or carry out, the contract unless the person contracting with the association has actual notice of the deficiency.

    (2)An incorporated association that enters into a contract that would, but for the provisions of subsection (1), be invalid is empowered to carry out the contract.

    (3)This section does not prejudice an action by a member of an incorporated association to restrain the association from entering into a transaction that lies beyond the powers conferred on the association by this Act or its rules.

  11. Clearly, the contract between the plaintiff association and its solicitors is one which is covered by s 14(1)(c).  It may be there is, in fact, a written contract between the plaintiff association and its solicitors.  These days, such contracts are often referred to as 'Costs Agreements'.  A contract between a solicitor and client does not have to be in writing.  Certain consequences may flow if it is not in writing, but that is not to the point.  It is open to the parties to contract by oral agreement.  The retainer between the plaintiff and its solicitors would be permitted by s 14(1)(c) of the Act.

  12. The thrust of the defendant's argument is that those purporting to act on behalf of the plaintiff do not have proper authority.  In other words, there is a deficiency in the legal capacity of the plaintiff association to enter into the retainer agreement with its solicitors.  This would seem to be covered by s 15(1) of the Act.  There is no evidence the solicitors purportedly acting for the plaintiff had any notice of the deficiency of the legal capacity of the Association at the time they entered into the retainer agreement.  It is to be remembered the retainer agreement must have been entered into well before this legal capacity question was raised.  These proceedings were issued in 2005 and the present application was not brought until some four months after the proceedings had been issued.

  13. That then raises the question of the effect of s 15(1).  It is the defendant's position s 15(1) does not assist the plaintiff.  In his 'written responsive submissions', counsel put the position this way:

    2.It is submitted that section 15 of the Act does not operate to presume the validity of the plaintiff's action because section 15 does not overcome the circumstance where the contract entered into was not the contract of the Association as distinct from the circumstance where the contract is made by the Association albeit beyond its constitutional power. 

    3.Section 15 refers to the legal capacity of the association to enter into contracts and ostensibly applies to those cases in which an association enters into a contract which it may be prohibited by its constitution (or the Act) from entering into.  Section 15 does not concern the legal capacity of a person to act on behalf of the association.  The plaintiff's misinterpretation would, ostensibly, validate contracts which people completely unrelated to an association purport to enter into on that association's behalf.

    4.Even if unauthorised persons could be deemed to have validly contracted on the Association's behalf, the contract itself, being thus validated, cannot be presumed to validate otherwise unauthorised court proceedings in the name of the Association.  A person appearing in court on another's behalf requires the authority of the party and that authority must be actual authority.  A challenge to that authority cannot be defended on the basis that it is presumed to exist rather than actually exist.

  14. As the Act makes clear, the aim of s 15 is to validate acts undertaken by an association, or purportedly undertaken by an association, which would otherwise be ultra vires that association.  The doctrine of ultra vires had, at one stage, particular relevance to corporations.  These days, the Corporations Act 2001 (Cth) has virtually done away with any challenge to actions of a corporation based upon a want of authority. Company cases do help to explain how the doctrine operated. In Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1986] Ch 246, Browne‑Wilkinson LJ put the position this way:

    The critical distinction is, therefore, between acts done in excess of the capacity of the company on the one hand and acts done in excess or abuse of the powers of the company on the other.  If the transaction is beyond the capacity of the company it is in any event a nullity and wholly void:  whether or not the third party had notice of the invalidity, property transferred or money paid under such a transaction will be recoverable from the third party.  If, on the other hand, the transaction (although in excess or abuse of powers) is within the capacity of the company, the position of the third party depends upon whether or not he had notice that the transaction was in excess or abuse of the powers of the company.  As between the shareholders and the directors, for most purposes it makes no practical difference whether the transaction is beyond the capacity of the company or merely in excess or abuse of its power:  in either event the shareholders will be able to restrain the carrying out of the transaction or hold liable those who have carried it out.  Only if the question of ratification by all the shareholders arises will it be material to consider whether the transaction is beyond the capacity of the company since it is established that, although all the shareholders can ratify a transaction within the company's capacity, they cannot ratify a transaction falling outside its objects.

    In this judgment I therefore use the words 'ultra vires' as covering only those transactions which the company has no capacity to carry out, i.e., those things the company cannot do at all as opposed to those things it cannot properly do (304).

  15. The defendant's argument, then, picks up the definition of ultra vires offered by his Lordship.  If the plaintiff did not have the capacity to engage solicitors, but had purported to do so, then unless the solicitors had actual notice of the deficiency, the retainer would be binding.  It is submitted by the defendant s 15 does not operate because there is no 'deficiency in the legal capacity of the Association to enter into or carry out the contract'.  The problem arises because the persons who purported to act on behalf of the Association did not have the authority to do so.  The act of the Association purporting to enter into the retainer agreement was not an ultra vires act at all and s 15 has no application. 

  16. This raises the question of what precisely is meant by 'ultra vires'.  The passage I have quoted from Rolled Steel Products v British Steel Corporation sets out what is sometimes referred to as the narrow view of the doctrine.  His Lordship's judgment was in response to what was said by Vinelott J at first instance:  Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1982] 3 All ER 1057. The learned judge said:

    [T]he phrase 'ultra vires' is used, even in cases where what is in question is the capacity of a company to enter into a given transaction, and not the extent of the powers of the directors or of the power of a majority of the shareholders to bind the minority, in a narrow and in a wider sense. It is used in a narrow sense to describe a transaction which is outside the scope of the powers expressed in the memorandum of association of a company or which can be implied as reasonably incidental to the furtherance of the objects thereby authorised.

    ...

    The phrase 'ultra vires' is also used to describe a transaction which, although it falls within the scope of the powers of a company, express or implied, is entered into in furtherance of some purpose which is not an authorised purpose (1076).

  17. In Australia, there has been some difference of judicial opinion as to whether or not the doctrine of ultra vires should be given the wide or the narrow meaning.  There is little to be gained in examining these cases in detail, save to note that Advance Bank Australia Ltd v FAI Insurances Ltd (1987) 5 ACLC 725, 733 ‑ 734 and Brick & Pipe Industries Ltd v Occidental Life Nominees Pty Ltd (1990) 9 ACLC 324, 341 the court took the narrow view. In Darvall v North Sydney Brick & Tile Co Ltd (No 4) (1988) 6 ACLC 1095, 1103 ‑ 1104; Northside Developments Pty Ltd v Registrar‑General (1990) 64 ALJR 427, 433; and ANZ Executors & Trustee Co Ltd v Qintex Australia Ltd (1990) 8 ACLC 980, 988 the court took the wider view. However, the Corporations Act has effectively done away with the ultra vires doctrine to the extent it is now not an issue in corporate disputes.  The most recent of the cases I have just mentioned is almost 20 years old and, in any event, relates to corporations.  Here, of course, we are dealing with an unincorporated association. 

  18. The scope of the ultra vires doctrine as it relates to unincorporated associations was considered by Helman J in Queensland Rugby Football League Ltd v Worrell [2000] QSC 381. This case involved an application under s 536 of the Corporations Law by the Queensland Rugby Football League Ltd and the Burdekin Junior Rugby League Club Inc. The application was for an order that the court make an inquiry into the conduct of the respondent in relation to his actions as liquidator in distributing the surplus assets of the Colts League Club Inc. Section 536 of the Corporations Law provided that, where a complaint was made to the court by any person with respect to the conduct of a liquidator in connection with the performance of his or her duties, the court could inquire into the matter.  Where the court made such an inquiry, it could take such action as it considered fit.  The facts of the case were as follows. 

  19. The Colts League Club Inc was incorporated under the Associations Incorporation Act 1981 (Qld) (the Qld Act) to foster the sport of rugby league in its local area and to support two local rugby league teams. The two local rugby league teams had ceased to exist and the members resolved, under s 89 of the Qld Act that the club be voluntarily wound up. By virtue of s 91(1),of this Act, the provisions of the Corporations Law that dealt with winding‑up applied to the winding‑up of the club.  Mr Worrell was appointed liquidator.  As liquidator, he was a party to a deed of settlement which terminated a joint venture agreement between the Colts League Club and another incorporated association.  Under the deed of settlement, payments were made from club funds to the other joint venturers.  After payment of the club's creditors, a surplus remained.  Rule 31 of the club's constitution dealt with the distribution of surplus assets as follows:

    If the club shall be wound up in accordance with the provisions of the Associations Incorporation Act 1981, and there remains, after satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the members of the club, but shall be given to or transferred to some other institution or institutions having objects similar to the objects of the club, and which shall prohibit the distribution of its or their income and property among its or their members to an extent at least as great as is imposed on the club under or by virtue of rule 28(j), such institution of institutions to be determined by the members of the club.

  20. The respondent, after consulting the club's members, distributed the surplus funds to four local sporting clubs, none of which were rugby league clubs.  Before the final general meeting of the club's members and creditors, the applicants complained to the liquidator about the distribution of the surplus funds.  Accordingly, at the final general meeting, the respondent proceeded to have the distribution ratified by special resolution of the club's members.  Thereafter, the incorporation of the club was cancelled.  This application was then filed.  The first applicant governed and controlled rugby league football throughout Queensland.

  1. One of the complaints made by the applicants was that the respondent had acted ultra vires because the power to distribute any surplus was reserved to the club members.  It can be seen that this submission adopts the wide view of the ultra vires doctrine.  There was undoubtedly power under the club's constitution to distribute surplus funds.  What was argued was Mr Worrell, as liquidator, had no power to make that distribution.  It was said that the power rested only with the members. 

  2. Helman J disposed of the matter by deciding Mr Worrell was an agent of the members and therefore was acting on their behalf. Accordingly, he was not acting without authority and, even on the wide view of the ultra vires doctrine, his conduct was not improper. In response to the applicants' submission, the respondent relied upon s 26 of the Qld Act. That section reads as follows:

    (1)No act of an incorporated association (including the entering into of an agreement by the incorporated association) and no conveyance or transfer of property, whether real or personal, to or by an incorporated association shall be invalid by reason only of the fact that the incorporated association was without capacity or power (whether by provision of this Act or by its rules or otherwise) to do such an act or to execute or take such conveyance or transfer.

    (2)Any such lack of capacity or power may be asserted or relied upon only in ‑

    (a)proceedings against the incorporated association by any member of the incorporated association to restrain the doing of any act or acts or the conveyance or transfer of any property to or by the incorporated association;

    (b)any proceedings by the incorporated association or by any member of the incorporated association against the present or former officers of the incorporated association.

  3. Helman J dealt with the argument put to him on s 26 in the following way:

    Mr Wilson argued that even if the distribution was beyond the power conferred by rule 31, the applicants are prevented from asserting or relying on any such lack of capacity because this application is not one in which such an assertion or such reliance is permitted. For this part of the argument, Mr Wilson conceded that the distribution was beyond the power conferred by rule 31, although he added that it would depend on how the similar‑objects provision was construed. My conclusion is, however, that, even if it is accepted that the concession without the qualification is correct, the respondent can rely on s 26 in resisting this application. There is no reason to suppose that a special resolution to which s 92(1) applies should be regarded as outside the scope of s 26, which is consistent with the provisions in the Corporations Law concerning the old narrow ultra vires doctrine.

  4. As can be seen, s 26 of the Qld Act is somewhat different from s 15 of the WA Act. In my view, there are sufficient similarities between the two sections to make the reasoning of Helman J applicable to this case. In my view, the clear intent of s 15 is to do away with the doctrine of ultra vires applied in the widest sense. It is not then incumbent upon a party contracting with a voluntary association to make inquiries of those purporting to act on behalf of the association as to whether or not they have the actual authority to bind that association.

  5. On behalf of the defendant, it was submitted this could lead to a situation where an individual who had no connection with an association at all, even to the point where he or she was not a member, purporting to act on behalf of the association and binding the association to a contract.  The first thing to say about that submission is it anticipates fraud on the part of the individual purporting to enter into the contract on behalf of the association.  But otherwise it must be acknowledged that doing away with the ultra vires doctrine does pose risks for an unincorporated association.  Those risks are the same as the risk involved in dealing with corporations.  It is a balancing act and the legislature had determined the greater good lies in protecting those persons dealing with companies and incorporated associations who do so without actual knowledge that the person they are dealing with does not have authority to enter into the contract.

  6. It is worthy of note the Queensland legislation preserves the right of members of the association to take proceedings to restrain persons who intend to act beyond power from doing so.  These same rights are provided to shareholders in the Corporations Act.  It may well have been the case if the defendant had realised the purported office holders of the plaintiff intended to engage solicitors, he could have restrained them from doing so.  But the plaintiff and its solicitors have now entered into a contractual arrangement in circumstances where, on the evidence, the solicitors did not have any actual notice of the want of authority of the office holders with whom they were dealing.  That being the case, there is no basis upon which the retainer can be impinged and no grounds for staying the proceedings. 

  7. That conclusion makes it unnecessary to determine whether or not the Omar Group may properly be regarded as the office holders of the plaintiff.  But because extensive evidence was led on this issue and the deponents were cross‑examined on their affidavits, and because a determination of the question may be relevant in other proceedings, I will deal with this issue.

  8. The evidence adduced on behalf of the defendant is contained in the affidavits of Mr Ahmed sworn 13 July 2005 and 31 October 2005 and the affidavit of the defendant sworn 31 October 2005.  In opposition to the application, the plaintiff filed affidavits of Mr Abdullah sworn 27 September 2005 and an affidavit of Mr Omar sworn 27 September 2005.  All of these witnesses were cross‑examined on their affidavits.

  9. In his first affidavit, Mr Ahmed deposes that he is the president of the Association.  He says that the office bearers of the current Council of the plaintiff were elected at the Association's annual general meeting on 3 October 2004.  He says that neither the Council nor the executive officer have authorised or instructed the present solicitors of the Council to issue proceedings.

  10. In response, Mr Omar says in his affidavit that he is the president of the plaintiff, having been appointed on 10 October 2004.  He says that there was a formal meeting of the plaintiff association on 13 May 2001 which identifies the defendant as a trustee and member of the Association and identifies Mr Ahmed as a member.  He says that there was an extraordinary meeting on 5 September 2001 at which the defendant was identified as present.  He also alleges that a meeting was held on 27 October 2002, but no minute of that meeting is produced, nor is there any evidence as to the nature of the meeting.  It is simply described as 'a meeting of the members'.

  11. Mr Omar alleges that an annual general meeting of the plaintiff was held on 10 October 2004.  In his affidavit he does not say he was elected president but it is in annexure F (the Minutes).  Appearing as annexure F to his affidavit is what are said to be minutes of that meeting which reflect Mr Omar was elected president of the plaintiff.  Also produced (as annexure G) is what are said to be registers of membership lists for the years 2001 ‑ 2006.  Mr Omar also annexes a bundle of attendance registers from 2001 to 2005.  He denies that Mr Ahmed is president and says that he did not receive notice of the annual general meeting allegedly held on 3 October 2004.

  12. Two points should be noted in relation to this affidavit.  First, the minutes of the meeting annexed to Mr Omar's affidavit are at odds with minutes of the meetings provided to Westpac Bank.  The minutes provided to the bank are found in Mr Ahmed's second affidavit at page 46.  The two documents are of different lengths.  The contents of point 8 have been significantly changed, as have the contents of point 9.  Mr Omar explained these differences as being occasioned by the rush to get accounts unfrozen (ts 199).  Mr Omar's evidence on this point was entirely unsatisfactory. 

  13. Second, it is clear the attendance register for the meeting is not accurate.  The register does not show, for instance, Mr Pervez Ibal Cheema was present.  But the minutes of the meeting of 10 October 2004 show Mr Cheema confirmed minutes of the previous meeting alleged to have been held on 30 November 2003.  No satisfactory explanation as to why this discrepancy exists is provided.

  14. In his second affidavit, Mr Ahmed says that he has been a member of the plaintiff since the first formal meeting of the Association on 13 May 2001.  He says in early 2003 the then president of the Association, Mr Abbasau Zuberali left the country and no meetings of the Association could be held until his return.  Thereafter, he says that he and a number of others became concerned that Mr Omar and his associates were trying to run the Association for their own personal gain and were not accounting to the members in respect of the Association's finances.  As a result, a request was made by a number of members to the defendant to convene a special general meeting.  Mr Ahmed says that the defendant had occupied the position of executive officer since 2001.  The Constitution of the plaintiff allows the executive officer to call a special general meeting.  The defendant maintains he never resigned from the position of executive officer and there is no evidence to the effect that he ever did so.

  15. Mr Ahmed says, and the evidence establishes, that notice of the special general meeting was given to all members, including Mr Omar and Mr Abdullah.  The special general meeting was held on 8 August 2004.  That meeting suspended the executive committee of the Association and a special investigating committee was appointed to investigate the failure of the executive committee of the Association to account in respect of the Association's funds and its failure to disclose information to members.

  16. It really is unnecessary to go any further with the evidence.  I did not find Mr Omar a credible witness.  As was pointed out by counsel for the defendant, Mr Omar is a businessman who has lived in Australia for 22 years.  He has been involved with the plaintiff since 1991.  The plaintiff's records are all in English.  Mr Omar's affidavit is signed by him and he says that he has read and understood its contents.  Yet, when cross‑examined, Mr Omar required the services of an interpreter.  Even then, his response to questions was unsatisfactory.  I simply do not accept the evidence contained in his affidavit or the truth of what was said in cross‑examination, or re‑examination.

  17. I accept neither Mr Ahmed nor the defendant were given notice of the alleged annual general meeting held on 10 October 2004.  That being so, the meeting was not properly called and any decisions taken at that meeting were invalid.  For the purposes of this application, that is the end of the matter.  In my view, it is clear Mr Omar and the present committee do not have the authority to act on behalf of the plaintiff.

  18. That conclusion leaves the plaintiff's present solicitors in a difficult position.  They now have actual knowledge of the lack of authority of the individuals purporting to instruct them on behalf of the Association.  At the same time, they have a retainer which requires them to represent the plaintiff's interests in this litigation and entitles them to payment for their services.  Accordingly, while I would not stay these proceedings on the present application, there is, I think, a real question as to how the matter should proceed hereafter. 

  19. I will hear the parties as to the precise form of orders and as to costs.

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Cases Citing This Decision

3

Omar v Darul-Iman (WA) Inc [2013] WASC 311
Cases Cited

3

Statutory Material Cited

1

QFL Limited v Worrell [2000] QSC 381