Dixon v Esperance Bay Turf Club (Inc)
[2002] WASC 110
DIXON -v- ESPERANCE BAY TURF CLUB (INC) [2002] WASC 110
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 110 | |
| Case No: | CIV:2088/2001 | 18 & 19 APRIL 2002 | |
| Coram: | ROBERTS-SMITH J | 17/05/02 | |
| 50 | Judgment Part: | 1 of 1 | |
| Result: | Action dismissed | ||
| A | |||
| PDF Version |
| Parties: | CRAIG RICHARD DIXON ESPERANCE BAY TURF CLUB (INC) |
Catchwords: | Clubs and associations Constitution and rules Declaration Validity of resolution adopting new constitution and rules Subsequent resolution refusing plaintiff membership Resolution made pursuant to power under new constitution Constitution not in force until registered Whether power in original rules could be relied upon Voluntary associations Rules of association Whether resolutions ultra vires Whether claim for declarations justiciable Voluntary associations Rules Meetings Notice required Prerogative relief Declaration Clubs and associations Declaratory order discretionary |
Legislation: | Associations Incorporation Act 1987 (WA), s 17(2), s 21, s 22 Rules of the Supreme Court of Western Australia, O 18 r 16 Supreme Court Act 1935 (WA), s 25(6) |
Case References: | Baker v The Liberal Party of Australia (South Australian Division) (1997) 68 SASR 366 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 Brown v West (1990) 169 CLR 195 Cameron v Hogan (1934) 51 CLR 358 Campbell v Higgins (1957) 3 FLR 317 Clarke v The Australian Labour Party (1999) 74 SASR 110 Connell v Reynolds SM (1993) 9 WAR 27 Edgar v Meade (1916) 23 CLR 29 Egan v Willis (1998) 195 CLR 424 Engineers v Smith (1913) 16 CLR 537 Ex parte Appleton [1982] Qd R 107 Green v Page [1957] Tas SR 66 Higgins v Nicol (1971) 18 FLR 343 J N Taylor Holdings Ltd (In Liq) v Bond (1993) 59 SASR 432 Johns v The Australian Securities Commission (1993) 178 CLR 408 Lockwood v The Commonwealth (1954) 90 CLR 177 Mansfield v New South Wales Leagues Bowling Club Ltd (1963) 80 WN (NSW) 1407 McLure v Mitchell (1974) 6 ALR 471 Mercantile Mutual Life Insurance Company Ltd & Anor v Australian Securities Commission & Ors (1993) 112 ALR 463 Moore v Attorney General for the Irish Free State & Ors [1935] AC 484 Plenty v Seventh Day Adventists Church of Port Pirie (1986) 43 SASR 121 Popovic v Tanasijevic (No 5) (2000) 34 ACSR 1 R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 Stevens v Keogh (1946) 72 CLR 1 Tanasijevic v Popovic BC 200104971, [2001] SASC 289 (FC) White-Gourley & Anor v Goonan & Ors (1935) 37 WALR 99 Winter v McAdam (1957) 1 FLR 210 Cameron v Hogan (1934) 57 CLR 357 Giacci Bros Pty Ltd v Bunbury-Harvey Regional Council [2001] WASCA 282 Mercantile Mutual Life Insurance Co Ltd & Anor v Australian Securities Commission & Ors (1993) 112 ALR 463 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
ESPERANCE BAY TURF CLUB (INC)
Defendant
Catchwords:
Clubs and associations - Constitution and rules - Declaration - Validity of resolution adopting new constitution and rules - Subsequent resolution refusing plaintiff membership - Resolution made pursuant to power under new constitution - Constitution not in force until registered - Whether power in original rules could be relied upon
Voluntary associations - Rules of association - Whether resolutions ultra vires - Whether claim for declarations justiciable
Voluntary associations - Rules - Meetings - Notice required
Prerogative relief - Declaration - Clubs and associations - Declaratory order discretionary
(Page 2)
Legislation:
Associations Incorporation Act 1987 (WA), s 17(2), s 21, s 22
Rules of the Supreme Court of Western Australia, O 18 r 16
Supreme Court Act 1935 (WA), s 25(6)
Result:
Action dismissed
Category: A
Representation:
Counsel:
Plaintiff : In person
Defendant : Mr P E Harris
Solicitors:
Plaintiff : In person
Defendant : D G Price & Co
Case(s) referred to in judgment(s):
Baker v The Liberal Party of Australia (South Australian Division) (1997) 68 SASR 366
Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334
Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247
Brown v West (1990) 169 CLR 195
Cameron v Hogan (1934) 51 CLR 358
Campbell v Higgins (1957) 3 FLR 317
Clarke v The Australian Labour Party (1999) 74 SASR 110
Connell v Reynolds SM (1993) 9 WAR 27
Edgar v Meade (1916) 23 CLR 29
Egan v Willis (1998) 195 CLR 424
Engineers v Smith (1913) 16 CLR 537
Ex parte Appleton [1982] Qd R 107
(Page 3)
Green v Page [1957] Tas SR 66
Higgins v Nicol (1971) 18 FLR 343
J N Taylor Holdings Ltd (In Liq) v Bond (1993) 59 SASR 432
Johns v The Australian Securities Commission (1993) 178 CLR 408
Lockwood v The Commonwealth (1954) 90 CLR 177
Mansfield v New South Wales Leagues Bowling Club Ltd (1963) 80 WN (NSW) 1407
McLure v Mitchell (1974) 6 ALR 471
Mercantile Mutual Life Insurance Company Ltd & Anor v Australian Securities Commission & Ors (1993) 112 ALR 463
Moore v Attorney General for the Irish Free State & Ors [1935] AC 484
Plenty v Seventh Day Adventists Church of Port Pirie (1986) 43 SASR 121
Popovic v Tanasijevic (No 5) (2000) 34 ACSR 1
R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452
Stevens v Keogh (1946) 72 CLR 1
Tanasijevic v Popovic BC 200104971, [2001] SASC 289 (FC)
White-Gourley & Anor v Goonan & Ors (1935) 37 WALR 99
Winter v McAdam (1957) 1 FLR 210
Case(s) also cited:
Cameron v Hogan (1934) 57 CLR 357
Giacci Bros Pty Ltd v Bunbury-Harvey Regional Council [2001] WASCA 282
Mercantile Mutual Life Insurance Co Ltd & Anor v Australian Securities Commission & Ors (1993) 112 ALR 463
Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28
(Page 4)
1 ROBERTS-SMITH J: The Esperance Bay Turf Club (Inc) ("the Club") was incorporated on 24 October 1957. The principal objects or purposes of the Association were stated in the Memorial for Incorporation as being to reconstitute the existing horse racing club at Esperance and to take over all its assets and liabilities and to promote and conduct race meetings.
2 The Rules of the Association filed on incorporation were dated 26 June 1957 ("the 1957 Rules").
3 The plaintiff was a member of the Club from about August 1996 to 4 September 1997 and was a member of the Committee from 29 August 1996 to 31 July 1997.
4 On 28 August 1997 a meeting of members was convened at which a resolution was passed adopting a new Constitution ("the 1997 Constitution").
5 At a committee meeting on 4 September 1997 the defendant resolved to refuse the plaintiff membership of it, pursuant to cl 15(b)(v) of the 1997 Constitution.
6 By writ of summons and statement of claim filed by Metaxas & Vernon, the plaintiff's then solicitors, on 1 August 2001 and subsequently amended, the plaintiff seeks a number of declarations and orders in respect of these events. By par 12 of his statement of claim the plaintiff seeks:
"12.1 a declaration that the new constitution was not validly adopted;
12.2 consequent upon the declaration in 12.1 above:
(a) a declaration that the plaintiff's expulsion of 4 September 1997 was invalid; and
(b) an order that the defendant re-admit the plaintiff to membership of the defendant upon the plaintiff making application;
12.3 further or in the alternative to 12.1 and 12.2 above:
(a) a declaration that the new constitution was not operative as at 4 September 1997;
(Page 5)
- (b) a declaration that the resolution of 4 September 1997 to refuse the plaintiff membership was a nullity; and
(c) an order that the defendant re-admit the plaintiff to membership upon application; ... "
7 The defendant's amended defence dated 10 April 2002 made some significant admissions (including that the 1997 Constitution was not operative as at 4 September 1997 and that therefore the defendant had no power pursuant to it to refuse the plaintiff's membership) to which I will return below, but otherwise pleaded the resolution was in any event effective and within power pursuant to the 1957 Rules.
8 Ms Vernon appeared as counsel for the plaintiff when the matter came on for hearing before me on 18 April 2002. However, on the following day, and whilst the plaintiff was still under cross-examination, she appeared at the outset only to inform me that the plaintiff had terminated her instructions and those of her firm and to seek leave to withdraw. That was granted, and for the remainder of the hearing the plaintiff conducted his own case.
9 Only two witnesses were called on the trial. They were the plaintiff himself and (for the defendant) Mr Wesley Graham, the current Vice President of the defendant's Committee. He was President in 1997-1998.
10 It is logical to begin with the relevant provisions of the 1957 Rules.
11 Rule 11 gives the management of the affairs and general business of the Club to the Committee consisting of 12 members.
12 Rule 12 is central to the plaintiff's case. It reads:
"No person shall be eligible to become a member of the Committee if he be a steward or official or committee man of any other racing club or trotting club or if he be under contract with the club or if he holds a licence under the provisions of the Betting Control Act 1954."
13 Rules 18 – 25 set out the powers of the Committee. Rule 18 provides that the Committee shall have power from time to time to appoint and dismiss such officers and servants as they think necessary for carrying out the objects of the Club. That includes a secretary.
14 At meetings of the Committee five members form a quorum (r 26).
(Page 6)
15 The plaintiff also particularly relies on r 38 and r 40. So far as is pertinent here, they provide respectively:
"38.The Annual General Meeting of the Club shall be held in September in each year on a date to be determined by the Committee for the purpose of electing members of the Committee discussing the general business of the Club, and receiving from the Committee an abstract of the state of the accounts of the receipts and expenditure with a report of the general concerns of the Club ... .
40.Should any member desire to bring forward any proposition or motion at any general meeting of the Club, he shall give written notice thereof to the Secretary at least 14 clear days prior to the General Meeting at which he may wish his proposition considered; and the Secretary shall embody such proposition in the notice convening the meeting. No business of a special description shall be transacted at any such meeting unless special notice of such business shall have been given in the circular letter convening the meeting."
16 It is also necessary to set out the terms of r 41:
"41.The Committee may, whenever they think fit, and they shall upon a requisition in writing under the hands of not fewer than 12 members, convene a Special General Meeting."
17 By r 44 no business is to be entered upon by any Special General Meeting except that set forth in the notice convening the meeting.
18 Ten members are required to form a quorum for a general meeting of members (r 45).
19 Rule 49 empowers the Committee to discipline members:
"49.If any person shall be proved to the satisfaction of the Committee to have insulted, abused or imputed improper motives to any member of Committee, Steward Handicapper, or official of the Club, in connection with the performance of any matter or thing done by him, them or any of them in the exercise or performance of his or their duty, such person shall be punished by the Committee in such manner, either by being fined a sum not exceeding Ten Pounds, being warned off or otherwise as the nature of the case may require."
(Page 7)
20 By r 5 (sic: 51) the Rules are to be printed and a copy delivered to each member or to his address. Amendment of the Rules is covered by r 52, which states that the Rules may be added to, altered or amended at any Annual General Meeting ("AGM") if notice of such alteration has been included in the notice convening the meeting or at any Special General Meeting called for the purpose.
21 The plaintiff is a farrier by trade. He is currently living and working in Singapore. He owns a property at Esperance. He grew up in Esperance in a family that was heavily involved in horse racing. The current Vice President of the Club, Mr Wesley Graham, is his first cousin. The plaintiff had been a member of the Club for some years, including periods during which he lived away from Esperance.
22 In 1996 he was living in Esperance and operating a horse racing stable at his property there. He raced horses at the Club. It appears that he had for some time held concerns about the control of the Club and when he raised them at the 1996 AGM on 29 August 1996, the suggestion was made that he join the Committee, which he did. According to the plaintiff he was asked at the AGM to sign a declaration that he agreed to abide by the Constitution of the Club. He queried that, saying that despite requests he had never been given a copy of it. He raised that again at the first committee meeting he attended which was on 5 September 1996.
23 The plaintiff's view, apparently from an early stage, was that the Club was being run by people who had a pecuniary interest in its activities. As he expressed it in cross-examination, he felt the racing industry in Esperance was being oppressed by people with a pecuniary interest in it. That was his view before he attended his second committee meeting, but having attended it and having seen the procedures of the meeting, he became convinced that committee members were "proceeding on agendas they ... were deriving a financial benefit from" (t 70), because of their involvement in the industry.
24 The minutes of the committee meeting on 5 September 1996 (Exhibit D7) showed the plaintiff apologising for his actions at the AGM and criticising the way the Club had been promoted the previous year. They also record him pointing out that constitutional procedures were not being followed at meetings and saying that everyone should receive a copy of the Constitution so that the committee could review it. The minutes then record:
(Page 8)
- "A special AGM has to be called and all financial members must be advised. A Copy of the constitution shall be handed to Mr Thomas so that he may take a look at it. Tony will speak to him and we will then form a sub committee of 6 people and then draft a new constitution. We have copies of the Albany and Mount Barker constitutions so we may be able to have a look and get some ideas from these."
25 It is common ground that there was no copy of the 1957 Rules available at that meeting.
26 In his evidence the plaintiff initially maintained that the discussion was simply about the 1957 Rules and the need to obtain a copy of them; he did not agree with the proposition that one or more members of the committee had expressed the view that the existing Rules should be reviewed and updated by means of a new Constitution. However, when the minutes were put to him, he did agree that after he raised the issue the Committee resolved in the terms recorded in the minutes.
27 The "Mr Thomas" referred to there was an Esperance solicitor.
28 Shortly after the meeting the plaintiff decided to leave Esperance and moved to Melbourne where he obtained a job. He said in cross-examination he did so because he decided it was futile trying to pursue (sic) a racing stable in Esperance because the industry was oppressed by people with a pecuniary interest.
29 The plaintiff testified that both at that meeting and previously he had expressed his view that horse trainers and bookmakers ought not to be on the committee. He said this was an objection he had been "discreetly" making for some time. He was insistent in his evidence that he had suggested at the meeting that it was inappropriate for horse trainers to be resolving some of the issues that were being discussed.
30 Mr Graham denies this – he says the plaintiff said nothing about that.
31 The plaintiff returned to Esperance from Melbourne for the Christmas break and was invited to attend a committee meeting on 30 December 1996, which he did. The purpose of that meeting was to discuss some dissatisfaction about the conduct of a racing steward of the Club. The issue of the Rules or a new Constitution was not raised.
32 That was the only other committee meeting the plaintiff attended.
(Page 9)
33 He then returned to Melbourne and about mid-2000 moved to Singapore. He has not lived in Esperance since the end of 1996. However, that he was still concerned about membership of the committee and that it was an issue for him is evident from the fact that on 7 May 1997 he had written to the Western Australian Turf Club ("the WATC") requesting information as to the eligibility of bookmakers and/or trainers to be elected to the committee of the WATC or its affiliated clubs. By letter dated 20 May 1997 the Chief Executive of the WATC advised that:
• each racing club in Western Australia has its own constitution and by-laws and he was therefore not able to comment on whether bookmakers and trainers are eligible to sit on the committees of those clubs;
• so far as the WATC is concerned its by-laws allow bookmakers and trainers to be members of the club;
• any person who has been a member for 18 months is eligible to nominate for committee unless they are already on the committee or are a steward of any other race club, trotting club, greyhound racing club or Tattersalls Club;
• any member who has been found guilty of a corrupt practice, under the Rules of Racing ... shall ipso facto be expelled from the club.
34 He said he did not know whether those provisions answered any of the plaintiff's concerns but suggested the plaintiff contact his own legal representatives.
35 The plaintiff finally managed to obtain a copy of the 1957 Rules in mid-July 1997. He obtained it from the Ministry of Fair Trading ("the Ministry") under the Freedom of Information Act 1992 (WA).
36 On 25 July 1997 he wrote to the committee forwarding a copy of the 1957 Rules. In that letter he suggested that all other documents purporting to be the constitution of the Club be destroyed so as not to be confused with the 1957 Rules. He added that he was unaware if the Club had set a date for the next AGM but believed reference should be made to r 38 of the 1957 Rules. There was no mention made that the committee was invalidly constituted as comprising bookmakers and horse trainers. Rule 38 was the rule which required the AGM to be held in September each year.
(Page 10)
37 The next development was that on 25 August 1997 the plaintiff received a letter from the Secretary of the Club, Ms Diane Carr, dated 12 August 1997 advising:
"Dear Member,
As a valued member of our club, we wish to advise you that our A.G.M. will be held on the 28th August 1997 at The Travellers Inn at 7.00pm.
At this meeting you will be informed on any new upcoming ventures that we intend to commence this season.
You will be given the opportunity to elect new committee members and be able to vote on any decisions made that night.
A draft copy of our new constitution will be available as will the copies of our financial statements for the 1996/97 season.
We look forward to seeing you there.
Yours sincerely
Diane Carr
SECRETARY"
38 A notice was published in the "Esperance Express" newspaper on 7, 14 and 21 August 1997. That read:
" PUBLIC NOTICES
ESPERANCE BAY TURF CLUB
AGM
To be held Thursday August 28, 1997 at
the Travellers Inn at 7pm
Ratifications to be made to new constitution
also new nominations for committee. All
members and public are encouraged to attend.
Constitution may be viewed by ringing 9071 4940."
39 There is no suggestion that the plaintiff saw the notice until some time after the meeting.
(Page 11)
40 The day after the plaintiff received the letter advising of the 1997 AGM his then solicitor, Mr Ian Tait, wrote to the Club saying that:
"My client has for some time now been concerned at the fact that there are bookmakers and horse trainers on the committee of the Club. Under rule 12 of the Club Rules, such persons are ineligible for election to that committee.
It has very recently come to my client's attention that the present committee (being invalidly constituted as comprising of bookmakers and horse trainers) are seeking to have the rules of the Club changed so as to enable the election of bookmakers and horse trainers in the future. My client opposes this change and considers it undesirable that bookmakers and horse trainers should be on the committee of the Club, given that their interests conflict with those of the Club to a large extent. Furthermore the motion put forward by the present committee to alter rule 12 is invalid in that the committee is invalidly constituted.
In the premises I am instructed to inform you, as I hereby do, that my client shall seek appropriate relief in the courts including by way of injunction to stop any attempt to alter the rules so that bookmakers and horse trainers may be elected to the committee.
Please confirm by return that the motion to this effect will not be put to members at the meeting scheduled for 28 August 1997 or at any time whatsoever, failing which I shall seek my client's instructions to make the necessary application to court."
41 On 28 August 1997 the Club secretary sent a faxed response to Mr Tait advising that the Club members would be asked to discuss the proposed new Constitution, and if that were adopted, the AGM would then follow. She further advised that the Club had sought the opinion of the WATC and a barrister. She said that the (proposed) new Constitution conformed with the recently amended Constitution of the WATC relating to members eligible for election on the committee. She also referred him to r 40 of the 1957 Constitution.
42 The meeting was held on 28 August 1997. The minutes (Exhibit P9) record it as the AGM. Item 7 is headed "New Constitution". The minutes read that a copy of the "updated Constitution" was available for all members to look at and that a motion was moved that the Constitution be
(Page 12)
- received as the new Constitution. That was seconded and it is recorded that "the motion was moved". I should pause here to point out that consistently through the minutes this formula is clearly used to indicate that a motion has been carried. This appears to be an idiosyncrasy of the person recording the minutes. There is no dispute that this motion was in fact carried at the meeting.
43 The committee held its first meeting following the AGM on 4 September 1997. The letter from Mr Tait was before the meeting as incoming correspondence. The office bearers were elected. Mr Graham was re-elected President for 1997/98. Under "General Business", the minutes record:
"Craig Dixon has sent in his membership for this season.
Tony moved a motion that this membership be refused on the grounds of 15b(v) of the Constitution. Seconded Barry. Motion moved. Craig to be notified."
44 Once again it is accepted by the parties that this was a motion moved and carried.
45 The plaintiff continued his complaints to other bodies. By letter dated 24 September 1997 (Exhibit D10) he wrote to the Betting Control Board suggesting that reference to the 1957 Rules would reveal that the Club was operating with disregard for the Rules. He pointed out there were three bookmakers and three professional horse trainers sitting on the committee when the Rules made them ineligible for election. Having quoted r 12 and r 25 he continued:
"I believe it is inappropriate for bookmakers (and horse trainers) to be on the committees of race clubs because:
-There is the potential for these committeemen to gain financial advantage above and beyond what other members (and racing industry participants) are likely to attain.
- The conflicts of interest they encounter with the objectives of the Club.
- The potential for the rorting of races."
- And he concluded with the allegation that:
(Page 13)
- "Persons ineligible for the committee have hijacked this association to serve there [sic] own pecuniary interests and oppress those of their competitors (particularly other horse trainers and other gaming activities of the Club)."
46 In evidence the plaintiff acknowledged that the content of this letter was similar to letters he had written to other authorities and agencies.
47 On 9 September 1997 the plaintiff's Melbourne solicitors, Riordans, wrote to the Ministry to the effect that the plaintiff believed that the Club had unconstitutionally ratified a new Constitution at an AGM on 28 August 1997. The solicitors wrote that he believed the 1997 Constitution should not be accepted by the Ministry because:
1. Insufficient notice of the AGM was given to club members.
2. Not all registered club members received notification of the AGM.
3. The proposed new constitution was not circulated to all club members prior to the AGM.
4. Three current committee members were bookmakers and were therefore in breach of rule 12 of the 1957 Rules.
5. The committee was in breach of section 20 of the Associations Incorporation Act 1987 ('the Act'); and
6. the Association was ineligible to be incorporated by reason of s 4(1)(e) of the Act which provides that an Association is ineligible for incorporation if 'members ... compete with each other for ... money prizes'.
- The solicitors said it was their understanding that some committee members were horse trainers who may be directly competing for a percentage of race prize money.
48 The letter of 9 September 1997 from the plaintiff's solicitors prompted a letter of enquiry from the Ministry to the Club, dated 2 October 1997, to which the President, Mr Wes Graham, responded by letter dated 9 October 1997.
49 In his letter Mr Graham referred to the claims made by "a former member" of the Club. He then set out the position of the Club as follows (Exhibit P 11):
(Page 14)
- "Mr Dixon was voted to become a member of the Esperance Bay Turf Club committee in August 1996. He was at the time a licensed trainer of the Western Australian Turf Club and he attended two committee meetings following the AGM and then left the district and went to Melbourne to commence work. One agenda item he bought to the committees attention at his first meeting was to update our constitution which had already been on our agenda for some time. The club employed a local solicitor and obtained copies of the constitution from the Mt Barker Turf Club and our solicitor then adapted this constitution to our club. No wording of the rules was changed, so there is absolutely nothing our club is doing that is different to other clubs.
Trainers have been on the committee and two have held the position of President in the last ten years and at least one Bookmaker has been on the committee for a longer term than this.
According to our old constitution, we have broken the rules, but the members of the club have always been happy to allow these people to serve on the committee at all levels.
To answer the claims of Mr Dixon, I would like to state that the old constitution was made in 1957 and it is believed that many of those rules were broken over the years and it was the intention to adopt a whole new constitution and not just change a few rules.
The committee officially passed a motion to present the new constitution at a meeting on the 31st July 1997. A notice was placed on the public notice board and an advert was placed the [sic] the local newspaper at the first available time. Letters were sent to all members from the current members file.
In the letter and advert it was stated that a copy of the constitution was available by contacting the Secretary of the Esperance Bay Turf Club (a constitution was also faxed to Mr Dixon as he was out of the district).
We currently have three bookmakers on our committee, one of which (sic) joined the committee at the same time as Mr Dixon. He was also on the committee for many years previously. All three have been local residents and have the future of the club at
(Page 15)
- heart. They have also stood down from decisions made regarding bookmakers.
We have 3 horse trainers on the committee. All have been involved for a long time and their input to the committee is very valuable. We believe we have a balanced committee with people from all sections of the industry and have established a very strong Country Racing Club in the last ten years.
The constitution was ratified at the recent AGM on the 28th August 1997 and after a little discussion was passed by 100% of members present.
The club committee believes it has presented the resolution to adopt a new constitution in accordance with the present rules and was passed with the requirements of the Act."
50 This response found favour with the Ministry, at least as to the new Constitution. The Assistant Manager, Compliance, Mr Mineif, wrote to Mr Graham on 11 November 1997 advising that he was satisfied that:
" ... there was no fundamental flaw in the manner in which the association presented to members at the annual general meeting the resolution to adopt a new constitution and therefore the Commissioner will accept the new constitution when the following matters detailed below have been dealt with."
51 There was then set out a number of specific drafting changes required. Mr Mineif then advised that the Commissioner could not file the new Constitution until those matters were dealt with and a Notice of Special Resolution was completed and returned.
52 Mr Mineif then referred to another allegation made by the plaintiff in other correspondence, that the Committee had failed to comply with s 21 and s 22 of the Act. He wrote that in order for the Commissioner to determine the truth of that allegation he required pursuant to s 39(3) of the Act that the Club provide a copy of minutes of all Committee meetings from 1 July 1996 to 31 October 1997, within 14 days.
53 The decision of the committee to refuse the plaintiff's application for membership was conveyed to him by letter from the Secretary dated 25 September 1997. That was quite brief. It read:
"Dear Mr Dixon,
(Page 16)
- At a committee meeting held by the Esperance Bay Turf Club on the 4th September 1997, a motion was moved that your membership for the 1997/98 season be refused on the grounds of 15(b)(v) of the Constitution.
Enclosed please find a copy of this Rule and also your money order of $35.
Yours sincerely,
Diane Carr
Secretary"
54 Notice of the adoption of the new Constitution was given to the Ministry by a notice of special resolution dated 25 November 1997, with a copy of the 1997 Constitution attached. These were received by it on 1 December 1997. The documents bear the stamps of the Ministry's Business Names Branch and the Office of the Commissioner for Corporate Affairs, each dated 15 December 1997. The photocopy notice tendered in evidence by consent (Exhibit P7) shows a superimposed handwritten note that:
"This notice of special resolution has not been recieved [sic] in 30 days of passing of the resolution as required by the Act."
55 That was no doubt a reference to s 17(2) of the Act which provides that:
"Within one month of the passing of a special resolution altering its rules, or such further time as the Commissioner may in a particular case allow, an incorporated association shall lodge with the Commissioner notice of the special resolution ... ".
56 In the present case there is no direct evidence that the Commissioner extended the time for lodgement of the special resolution. In my view, however, that is necessarily to be implied from the notification given to the Club by the Manager, Business Names Branch, of the Ministry dated 15 December 1997, advising that the notice of special resolution had been filed and the effective date of it was 15 December 1997. No point was taken about this but it was common ground before me that as a
(Page 17)
- consequence the 1997 Constitution did not become effective until 15 December 1997.
57 In February 1998 the plaintiff was successful in obtaining from the Ministry copies of the Club's minutes from 1 July 1996 to 31 September 1997. On 21 May 1998 he wrote to the Ministry complaining that minutes of meetings on particular dates (which he specified) had not been included. He requested the Ministry investigate the Club's "failure to produce these documents". He also repeated his earlier allegations that committee members continued to be in breach of various sections of the Act (as to disclosure of interest (s 21), voting on contracts in which they had an interest (s 22) and failing to take all reasonable steps to secure compliance by the Club with its obligations under the Act (s 42)). He enclosed a copy of the notice of the AGM dated 28 August 1997 and concluded:
"Mr Wes Graham's statement of 9 October 1997 that the 'Delivered Notice' stated that: 'A copy of Constitution was available by contacting the secretary of the Esperance Bay Turf Club', is false and misleading (Section 43).
Ms Diane Carr's statement of 25 November 1997: "I am a duly appointed Committee member of the Association", is false and misleading (Section 43).
In light of this 'previously suppressed' evidence I ask the Commissioner's Office to reconsider it's approval of the amendments to the 1957 EBTC Constitution as they do not conform with Sections 20 and 24 of the Act.
The Committee has been intentionally deceitful, oppressive and self serving in it's actions in assuming a new constitution."
58 In cross-examination the plaintiff said that the view expressed in the last paragraph of that letter was one he came to shortly after the AGM on 28 August 1997, but this was the first time he had expressed or detailed it. He did not raise those allegations with members of the committee, he said, because it would have been pointless.
59 The plaintiff conceded that the first time he had actually expressed his allegations to the Club was in a letter dated 8 August 2000 (Exhibit D4), which was described in evidence as his "letter of demand".
(Page 18)
60 In that letter he wrote that for some four years he had been demanding the management of the Club conform with the law, particularly with respect to persons with a pecuniary interest in the business or objectives of the Club (in which regard he nominated bookmakers and horse trainers) being on the committee which "resolves to commit the Club's finances to contract".
61 He said that he had acquired documents from the Ministry which substantiated his claims.
62 He asserted that:
"Due to this oppressive and illegal nature of which [sic] contracts have been entered into by this committee my own financial interests have been significantly aggrieved"
- and said that his patience with the "unlawfully convening" of committee meetings had long since passed. He gave notice of his intention to seek redress in the courts unless the following demands were met by 10 October 2000:
"1...Re-instatement of myself to full membership of the EBTC. (On the 4/9/97 I was unconstitutionally and unjustly refused membership to this Association.)
2...Resolution to resume the original 1957 constitution as the 1997 alterations to this document do not conform with the WA Associations Incorporations Act. And have been passed by deceitful disclosure to the members and the WA Ministry of Fair Trading.
3...The resignations from the committee of Mr. Wes Graham, Ms Dianne Carr, all persons licensed under the Betting Control Act and all persons holding a permit to train with the WATC.
4...Notice in writing to the above address, showing intent of the EBTC and committee persons to negotiate settlement for damages including legal fees, compensation for refusal of membership and loss of income incurred during the this [sic] committee's contempt for the WA Associations Incorporation Act and its own Rules."
and he concluded:
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- "Please not [sic] that my claim for damages will be against committee persons in breach of the Act not the Esperance Bay Turf Club Incorporated. And although my concern is with bookmakers and horse trainers proceeding on the committee, all committee persons have an obligation under the act to insure [sic] business is conducted at committee meetings in accordance with the Associations Incorporations Act."
63 As I have already noted, the plaintiff commenced these proceedings by writ of summons on 1 August 2001.
64 The Club committee obviously continued to feel some uncertainty about the constitutionality of its position, because in early 2002 notice was given that a special meeting was to be held on 9 February 2002 " ... to re-ratify" the 1997 Constitution.
65 So it was that by letter dated 7 February 2002 the plaintiff again came to write to the committee, referring to the notice of special meeting, asserting that it was not in conformity with the Act and advising that he would be seeking a declaration from the court that the business of that meeting be (declared) invalid should it proceed. He concluded (Exhibit D12, p 2):
"In light of the committee's two unlawful attempt's [sic] to assume a new constitution, I suggest that the 1957 rules be delivered to each and every member and all further meetings of the EBTC be convened in accordance with the 1957 rules to avoid any further embarrassment and liability to committee persons past and present.
Please note with respect to the 1957 rules
Rule 12 .... No person shall be eligible to become a member of the committee (if he be a steward or official or committeeman of any other Racing Club or trotting club or if he be under contract with the club or if he holds a license under the provisions of the Betting Control Act 1954.
My legal advice is Horse Trainer's [sic] are most certainly and very frequently contracted to the club. Horse Trainer's [sic] are also contracted to owners, an interest over and above any other class of member, that would breach sections 21 and 22 with regards to the management of racing" (emphasis in the original).
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66 When the meeting convened the Chairman (Mr Graham) drew attention to the plaintiff's letter and informed those present that legal advice had been taken on it and it was that the meeting should proceed as planned. A motion was then put to "re-ratify the Constitution as tabled". It was passed unanimously.
67 To complete this narrative of the factual background it is necessary only to refer to the relevant provisions of the 1997 Constitution.
68 Clause 15 deals with expulsion of members; it provides that:
"The Committee may expel any Member who:-
i) has been found guilty by the Committee or Stewards of any Racing Club of malpractice or who has been disqualified under the Rules of Racing by the Committee or Stewards of any Racing Club;
ii) has been guilty of grossly improper conduct or riotous behaviour at any race meeting;
iii) is a defaulter in stakes or bets in reference to any race;
iv) declines or neglects to pay any fine imposed on him by the Stewards or Committee;
v) is guilty of any act which in the opinion of the Committee renders it undesirable that he should continue a Member."
69 In cross-examination the plaintiff did concede that in a country town like Esperance, if part-time bookmakers, horse trainers and owners were not able to be on horse racing club committee, it would be very difficult indeed to get enough people on such committees.
70 In his evidence Mr Graham said he had been a member of the Club for probably 12 years and a committee member for almost 10 (including five years as President). He said the plaintiff joined the Club just prior to the 1996 AGM and became a member of the committee at that meeting. The plaintiff had raised the subject of the Constitution, or Rules, but according to Mr Graham, had never specifically referred to any particular concerns he had with them.
71 Mr Graham explained that when the issue of the Rules was raised and they got a copy of the 1957 Rules, the committee members realised they were outdated and were not in fact being complied with in many
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- respects. The committee therefore decided that instead of changing just a few rules they should have a complete new Constitution. They put the task into the hands of Mr Thomas, a local solicitor, who was a member of the Club.
72 As to the resolution passed on 31 July 1997 Mr Graham said (t 142) that a member moved the motion that another committee member and the plaintiff be removed from the committee due to lack of attendance. There were nine members present at that meeting.
73 Asked about the fact that the 1997 AGM was held in August, Mr Graham said he had reviewed the records and over the last 17 years only two AGMs had been held in September. The reason for that was because the racing season starts in November and the aim is to hold the AGM as soon as possible after the date of the books closing to give the new committee enough time to set the programs, obtain sponsorships and generally do the business necessary to prepare for the racing season. He pointed out that r 9(a) of the 1997 Constitution provides the AGM should be held not later than the second Tuesday in September each year.
74 The AGM at which the 1997 Constitution was passed was attended by 26 members (the 1957 Rules required 10 for a quorum) and the vote in favour of adopting the new Constitution was unanimous.
75 Mr Graham's evidence was that horse trainers are not in contract to a club; they are licensed under the Rules of Racing.
76 Asked about the reasons for the committee's resolution on 4 September 1997 refusing the plaintiff's application for membership, Mr Graham explained that two days before the meeting though he had received a letter from the plaintiff's solicitor threatening to stop the AGM going ahead. They were upset because he was a member of the committee, it was he who had originally brought up the subject of the Constitution and he had the whole 12 months prior to that point of being able to bring his concerns to the committee and the process of drafting a new Constitution. They were upset that he had waited until 26 August to air his grievances regarding the Constitution. He had also been accusing a number of members of the committee for several years of taking advantage, or appearing to take advantage, of membership of the committee but notwithstanding that, he had been given the opportunity to himself serve on the committee. There was a feeling that he had been wrongfully accusing other committee members who had worked hard for long periods of time for the Club and that under the circumstances it was
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- not appropriate that he should remain a member. Having become aware that the old Rules were out of date and there was a concern that every decision made by the committee possibly was invalid, nonetheless they felt they had to continue on in the way the committee had operated for many years. They were happy with bookmakers serving on the committee and with AGMs not necessarily happening in September. Once the new Constitution was passed on 28 August they felt the members had given them the right in good faith and in the interests of the Club to use that Constitution. They were not aware of the statutory provision which meant the Constitution was not operative until accepted by the Commissioner. It was on that basis they decided to use r 15(b)(v).
77 In cross-examination Mr Graham admitted that he did not become aware of the content of the 1957 Rules until the plaintiff raised the issue in September 1996. There was no copy initially available and he had not seen one at that time.
78 When Mr Graham joined the committee there were already two licensed bookmakers on it. He had no reason to think they should not have been. A life member who joined the same time as the plaintiff was a licensed bookmaker. Mr Graham acknowledged that some committee meetings had been held in breach of the 1957 Rules but not all would have been because there had not always been bookmakers on the committee – but that was why they had acted to adopt a new Constitution, as soon as they found out. Again, he agreed that all members of the committee at some stage would have owned and raced horses at the Club.
79 The first issue with which I must deal may be stated as being whether the plaintiff has standing to claim the relief he seeks, or more accurately whether this Court has jurisdiction to grant it.
Jurisdiction
80 Historically the jurisdiction of the courts to intervene in matters concerning voluntary non-profit clubs or associations was seen as being based on the members' proprietary interests in the property of the club or association (Amalgamated Society of Engineers v Smith (1913) 16 CLR 537; Edgar v Meade (1916) 23 CLR 29; Clarke v The Australian Labour Party (1999) 74 SASR 110, or on the fact, if it were clearly demonstrated, that the rules of the club or association were intended to create a legally enforceable contractual relationship between the members (Cameron v Hogan (1934) 51 CLR 358, 370 – 372 and 384; Baker v The Liberal
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- Party of Australia (South Australian Division) (1997) 68 SASR 366, 275).
81 As explained in Halsbury's Laws of Australia, vol 28, [435 - 370]:
"Unless a member's proprietary rights were involved or the circumstances showed clearly that the rules of an association were intended to create a legally enforceable contractual relationship among the members inter se, the traditional approach adopted by the courts was to refuse to intervene in the internal affairs of voluntary not-for-profit associations to review alleged breaches of the consensual relationship between the members."
82 The seminal Australian authority is Cameron v Hogan (supra) and the joint judgment of Rich, Dixon, Evatt and McTiernan JJ at 370 – 371:
"There are, however, reasons which justify the statement that, at common law as well as in equity, no actionable breach of contract was committed by an unauthorized resolution expelling a member of a voluntary association, or by the failure on the part of its officers to observe the rules regulating its affairs, unless the members enjoyed under them some civil right of a proprietary nature. As a generalization it expresses the result produced by the application of a number of independent legal principles: it is not in itself the enunciation of explanation of a rule or rules of the common law. One reason which must contribute in a great degree to produce the result is the general character of the voluntary associations which are likely to be formed without property and without giving to their members any civil right of a proprietary nature. They are for the most part bodies of persons who have combined to further some common end or interest, which is social, sporting, political, scientific, religious, artistic or humanitarian in character, or otherwise stands apart from private gain and material advantage. Such associations are established upon a consensual basis, but, unless there were some clear positive indication that the members contemplated the creation of legal relations inter se, the rules adopted for their governance would not be treated as amounting to an enforceable contract."
83 Halsbury notes (at [435 – 325]) that a more liberal application of the traditional approach has been apparent in recent years to the extent that in
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- many instances Australian courts have been prepared to intervene in the affairs of voluntary non-profit clubs or associations in circumstances "where traditionally there was no basis for jurisdiction", citing, inter alia, Stevens v Keogh (1946) 72 CLR 1; Plenty v Seventh Day Adventists Church of Port Pirie (1986) 43 SASR 121 and Popovic v Tanasijevic (No 5) (2000) 34 ACSR 1 (affirmed in Tanasijevic v Popovic BC 200104971, [2001] SASC 289 (FC)).
84 In Stevens v Keogh the plaintiff had sought a declaration that a payment made by a police union out of union funds, in respect of the costs of a police officer whose action for defamation against the Commissioner of Police had been dismissed by a jury, was ultra vires. The plaintiff was held to have standing notwithstanding that union members had no right to share in its property either during its existence or on its liquidation or winding up, because the rules contained provision with respect to the application of its funds and the plaintiff, as a member, was entitled to invoke the assistance of a court in order to prevent misapplication of the funds. As Latham CJ pointed out (ibid 11 – 12):
'"If he were unable to take proceedings in any court for this purpose, then a member would be quite helpless if the controlling body of the association deliberately determined to misuse the funds of the association."
85 Plenty v SDA Church was held to be entirely distinguishable from Cameron v Hogan. Jacobs J was prepared to hold that the injury to the plaintiffs by reason of their expulsion from the Church on allegedly false grounds of wilful and habitual falsehood, with no other means of redress, was sufficient to distinguish the case, in fact and law, from Cameron v Hogan. Perhaps more importantly, however, his Honour considered it at least arguable (which was all that was necessary, given that the court was dealing with an appeal from an order striking out the plaintiff's statement of claim) that the rules of the Church appeared themselves to recognise a right of recourse to the courts and so contemplated the creation of legal relations as between the members. Matheson J agreed on both these features but was also inclined to recognise the plaintiffs had a sufficient proprietary interest. Both Matheson and Olssen JJ also took the view that s 31 of the Supreme Court Act (SA) was a further and critical point of distinction between that case and Cameron v Hogan, where the relevant statutory provision (s 62 of the Supreme Court Act (Vic)) was still in the narrower language of the Chancery Procedure Act 1852 (England). The Victorian provision at the time provided:
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- "No action shall be open to objection on the ground that a mere declaratory judgment is sought thereby, and it shall be lawful for the court to make binding declarations of right without granting consequential relief."
86 However s 31 of the South Australian Supreme Court Act was wider:
"No action or proceeding shall be open to objection on the ground that a merely declaratory judgment or order is sought thereby, and the court shall have power to make binding declarations of right whether any consequential relief is or could be claimed or not."
87 The corresponding provision in this State is s 25(6) of the Supreme Court Act 1935(WA); it is in exactly the same terms as s 62 of the Victorian Supreme Court Act when Cameron v Hogan was decided. Thus, to the extent the decision in Plenty relied upon the wider formulation in s 31 of the South Australian Supreme Court Act, it cannot avail the plaintiff here. Interestingly, O 18 r 16 of the Western Australian Rules of the Supreme Court ("SCR") reflects the wider South Australian rule, concluding with the words:
"… whether or not any consequential relief is or could be claimed."
88 There may be some argument that the rule is ultra vires, but I do not think I need to resolve that here.
89 Tanasijevic v Popovic affords useful guidance in the present case. That was a decision of the Full Court of South Australia upholding a trial Judge's decision that the two plaintiffs (Popovic and Jovicevic) were members of the Serbian Community Welfare Association of South Australia Inc ("the Serbian Association") and had standing to bring the action for declarations and other orders concerning the office bearers and rules of the Serbian Association.
90 The grounds of appeal in that case raised several issues strikingly similar to those now raised by the plaintiff here. The first was that the plaintiffs had insufficient standing to bring the proceedings because they were not members of the Serbian Association and had no special interest entitling them to declaratory relief; the second was that a meeting of 10 December 1995 upon which the plaintiffs relied for their status, was an invalid meeting; the third was that the learned trial Judge erred in finding that the principles of Cameron v Hogan did not apply to the Serbian
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- Association and the fourth was the purported election of the plaintiffs at the meeting on 10 December 1995 was not in accord with the requirements of the rules and constitution of the Serbian Association as to requirements for a quorum.
91 The point urged on behalf of the defendant (respondent) was that as the relevant meeting had been held in December and the rules stipulated the AGM was to be held in January, it could not have been an AGM but some other form of meeting and under the rules office bearers could only be elected at an AGM.
92 Williams J (with whom Doyle CJ and Martin J agreed) upheld the trial Judge's finding that the plaintiffs had standing. The dispute about what the rules of the Serbian Association actually were and as to their construction, had reached an impasse. If the plaintiffs had been validly elected they had duties to perform. They claimed they had been validly elected; the personal defendants denied that. The activities of the Club were in chaos. Williams J considered that only a court could resolve the deadlock.
93 His Honour said the defendants' reliance on Cameron v Hogan was misconceived. That was based on the proposition that members of voluntary associations who come together to further some community interest do not intend to create legal relationships between themselves for private gain or material advantage. Consequently the bond which draws them together is to be regarded not as a contract recognised and enforceable by law but only as a purely personal relationship. The principle in Cameron v Hogan has the consequence that the terms of the consensus are not enforceable by the court. His Honour opined (ibid [44]) that the position would necessarily be different if the dispute involved property which was susceptible of personal enjoyment and observed that:
"Cases since Cameron v Hogan show that there may be debate as to the point at which the proprietary or personal interests of a person (including reputation) are to be regarded upon the facts of the case as sufficiently substantial to warrant the protection by the court (see for example Clarke v Australian Labor Party, SA Branch, Hurley & Ors & Brown (1999) 74 SASR 109). However, if such an issue be treated as justiciable, the character of the voluntary association is not thereby altered."
94 The final point which Williams J saw as distinguishing Tanasijevic from Cameron v Hogan on the question of standing (or more accurately,
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- as his Honour pointed out, at [46], justiciability) was that in the latter the dispute was only of domestic concern, where is the former the Serbian Association was a body incorporated pursuant to the Association Incorporation Act 1985 (SA) and in accordance with s 23 of that Act its rules were binding on the Association and its members. His Honour held [46] that the principles of Cameron v Hogan are confined to voluntary organisations whose membership is based upon consensus and are not applicable to an incorporated association whose rules are binding in law by virtue of statute.
95 It cannot be said in the present case that the members of the Club have any proprietary interest in it or in its property.
96 Rule 2 of the 1957 Rules sets out the objects of the Club. Broadly, they are to support and encourage the sport of horse racing and to promote and conduct race meetings. Paragraphs (d) – (g) inclusive state the further objectives as including to acquire land and erect buildings, to borrow or raise money, to acquire a liquor licence and to mortgage, sell or otherwise dispose of assets of the Club. There are no provisions in the 1957 Rules dealing with the disposal or disposition of Club assets or property upon its winding up. However the Club was incorporated under the Associations Incorporation Act 1895 (WA) ("the 1895 Act") which was subsequently repealed by s 47 of the Associations Incorporation Act 1987 (WA) ("the 1987 Act").
97 An association incorporated under the 1895 Act was required to file a copy of its rules and regulations (s 5(4)). The purposes of incorporation effected by the 1895 Act included the capacity of the association to sue or be sued in its incorporated name in respect of any claim by or on it, upon or by any person, whether having an interest in the association or not (s 6(3)). By s 7(2) of the 1895 Act an incorporated association was empowered to alter, vary or rescind any or all of its rules or regulations. There was no provision in the 1895 Act for the disposition of the property of an incorporated association upon its winding up.
98 The 1997 Constitution is more specific about the objects of the Club insofar as they relate to the development of land and property held or acquired by it. Rule 2(c) expressly describes that as being the for the purpose of horse racing or other competitive sports. The authority to purchase or otherwise deal with such property is more appropriately detailed in a separate rule (r(2)) entitled "Powers".
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99 Rule 5 of the 1997 Constitution is headed "Election of Members". Rule 5(a) requires a candidate seeking election to membership to be proposed and seconded in writing by two ordinary members. The candidate is required to complete a nomination form which shows his address, occupation and the class of membership sought. The rule then states that by signing such form the candidate shall be deemed to agree to and undertake to abide by the Rules of the Club and all additions and amendments thereto.
100 Rule 7 of the 1997 Constitution sets out the privileges of membership of the Club. They that in addition to the right to vote at any general meeting, all financial ordinary members are entitled to a ticket or badge and at least one ladies' ticket. These entitle the holder to admission to any race meeting held by the Club. The privileges of members may be extended to include admission to portions of the race course set apart for use of members only, or the issue of additional admission tickets or passes, for special parking facilities or other concessions (r 7(c)).
101 The property of the Club is vested in the trustees (r 21(a)) and the property and income is to be applied solely for the promotion of the objects of the Club. Significantly, r 21(b) also provides that no part of the property or income of the Club:
" ... shall be paid or transferred directly or indirectly by way of dividend bonus or otherwise by way of pecuniary profit to the Members or any of them provided that remuneration may be paid in good faith to any Office Bearers Members or Servants of the Club in return for services actually rendered to the Club and property may be held on lease or hire from any Member at a reasonable rental and nothing herein shall preclude the Club from paying any prize or stake money to any Member who shall have become entitled thereto as the result of competitive sport and in accordance with the rules governing such sport."
102 The 1997 Constitution does specifically cover the circumstance of the dissolution of the Club. Rule 24 stipulates that on the dissolution or winding up of the Club its property and assets are to be applied first to any costs or expenses incurred in liquidation or winding up, secondly in payment of the Club's liabilities and thirdly, any surplus funds or assets shall be paid or transferred to some other incorporated association having objects similar to those of the Club and conducting or promoting the sport of horse racing in a town or district conveniently close to Esperance.
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103 Under the 1987 Act a member of an incorporated association is entitled to inspect the association's register of members and to make a copy of or take away an extract from it (s 27). By s 28 of the 1987 Act an incorporated association is required to keep and maintain in an up-to-date condition the rules of the association and to make them available to members on request.
104 Section 33 of the 1987 Act deals with the distribution of the surplus property of an incorporated association upon its winding up. It expressly prohibits the distribution of such property among members or former members (s 33(2)(a)).
105 Neither the 1895 nor the 1987 Act contains any provision making the rules of an incorporated association binding on its members by virtue of the statute.
106 Given the admission of the defendant that the 1997 Constitution was not operative at 4 September 1997 when the resolution refusing the plaintiff's membership was passed, and that the very validity of the 1997 Constitution is in issue in these proceedings, I will confine myself for the moment on the issue of the plaintiff's standing, or the justiciability of his action, to the position under the 1957 Rules. Of course, that issue was also to be determined in the context of the 1987 Act, which was the applicable legislation at all material times.
107 The plaintiff was unable to point to any evidence demonstrating members have a proprietary interest in the Club. I do not accept that the right to run horses in Club races, with the opportunity to win prize money, is such a proprietary interest. In any event, it is not an incident of membership. Nor was there any evidence of any financial or material benefit which might accrue, or be denied, from membership of the Club or its committee. I appreciate the plaintiff's complaint about bookmakers and horse trainers being on the committee has always been expressed to be predicated on his concern that such persons would (or may) have a conflict of interest of a pecuniary nature, but there is no evidence before me of what that might be, nor indeed, that it exists or has existed at all. I further realise that in correspondence with the Club he has in the past asserted that for example, due to "oppressive and illegal nature" of contracts entered into by the committee, his own financial interests had been "significantly aggrieved" (the plaintiff's letter to the Club dated 8 August 2000 – Exhibit D4). But how that was said to be so was not explained and there is no evidence of financial loss by the plaintiff before me.
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108 There was no suggestion of any consequence of the refusal of his membership other than an ability to exercise the benefits of membership to which I have already referred – that is to attend and vote at general meetings, to stand for election to the committee and to attend within members' enclosures or places at the race course. In particular, it was not suggested that by being refused membership he was prevented from training or racing horses at the Club race course or in Esperance generally, or otherwise prevented from earning his livelihood or enjoying the sport.
109 In this regard the plaintiff's situation is quite unlike that of the football coach in Rush v W A Amateur Football League [2001] WASC 154, 14 June 2001, in which Templeman J pointed out (ibid [54]) that although a registered football player had no proprietary right nor interest in the WA Amateur Football League, his right to play or participate in Australian Rules Football in this State, as an amateur, was governed exclusively by the League. While no pecuniary value could be placed on that right, it nevertheless had considerable value to those who play the game for the love of it. No greater control, his Honour said, could be exercised by an association over its members than to deprive them permanently of that enjoyment. His Honour went on to comment that in any event he thought it arguable that the plaintiff's ability and potential to derive income from coaching was a proprietary right and that would also distinguish the case before him from Cameron v Hogan (see also Ex parte Appleton [1982] Qd R 107).
110 That, however, was not his Honour's primary reason for concluding that the plaintiff there had an arguable case that his claim for a declaration that the decision of the League to suspend him for 10 years from having any involvement in amateur football was invalid, was justiciable. Templeman J made that finding because he considered it to be clear from the application form which the plaintiff had been required to complete, supported by a statutory declaration confirming his amateur status, and by which form he agreed to abide by the Constitution and by-laws of the League, that registration as a player was no mere formality. It required the plaintiff to make a serious commitment, reinforced by his agreement to abide by the Constitution and by-laws. His Honour concluded ([31]):
" That being so, there is, in my view, a serious question whether these matters constitute a 'clear positive indication' that registered players and the League contemplated the creation of legal relations between them so as to be outside the general principle stated by the majority of the High court in Cameron v Hogan (supra). I therefore consider there is merit in the
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- submission by counsel for the plaintiff that registered players, who had bound themselves to agree to abide by the Constitution and by-laws of the League, would be astonished to learn that they would have no redress against the League if it chose not to abide by its constitution and by-laws in its dealings with them. In short, I think it arguable that a contract should be implied between the plaintiff and the League to the effect that the League will abide by its constitution and by-laws in dealing with him. A similar conclusion was reached in Hawick v Flegg (1958) 75 WN (NSW) 255,259."
111 I am, of course, cognisant that Templeman J was concerned in that case only to determine whether or not the propositions being advanced by the plaintiff were arguable (the application before him being for an interlocutory injunction) and that he did not purport to make any final findings on them.
112 Be that as it may, I think the present case is distinguishable. I have already said that I consider the plaintiff has not demonstrated any proprietary interest. Nor am I satisfied that the 1957 Rules (nor the 1997 Constitution, if it comes to that) evinces any intention to create a legal contractual relationship between the Club and its members inter se. Indeed, I think they do not.
113 Nor is this situation like that in Tanasijevic. Unlike that case the Rules of the Club (whether they be the 1957 Rules or the 1997 Constitution) are not made binding in law by legislation. Neither does s 25(6) of the Supreme Court Act WA permit the making of a declaration of right where what is claimed does not amount to a legally enforceable right. Declaratory relief should be directed to the determination of legal controversies concerning rights, liabilities and interests of a kind which are protected or enforced in the courts (Egan v Willis (1998) 195 CLR 424, 438). Seaman notes (at [18.6.1]) that it is not necessary that the plaintiff should have a cause of action against the party against whom declaratory relief is sought (citing J N Taylor Holdings Ltd (In Liq) v Bond (1993) 59 SASR 432, 435, 443), but there must be a justiciable controversy between them. On the other hand the expression "declaration of right" is a wide one, apt I think to comprehend the final determination of a disputed question affecting entitlements and privileges (Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334, 335 - 336). Furthermore, it has been held that the existence of a right is a matter going to the discretion rather than to the jurisdiction to grant declaratory relief (Connell v Reynolds SM (1993) 9 WAR 27, 30, 35, 49, 55). The
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- plaintiff's claim here is one which is capable of determining the controversy between the parties as to the validity of the Club's resolutions to adopt the 1997 Constitution and to refuse the plaintiff membership. The claim is one of ultra vires. In my view this Court does have jurisdiction to grant declaratory relief.
1997 Constitution not valid
114 The first argument advanced by the plaintiff on this was that the general meeting of 28 August 1997 was not validly convened because it had not been requisitioned by 12 members as required by r 41 of the 1957 Rules. The argument is entirely one of the proper construction of r 41. In my view the meaning of the rule is plain. It is not that for which the plaintiff contends. The rule clearly means that the committee may convene a Special General Meeting whenever they think fit and that they must do so upon a written requisition from not fewer than 12 members. I reject the plaintiff's proposition that the rule does no more than allow the committee to determine when a Special General Meeting shall be held once one has been requisitioned by 12 members.
115 The second argument advanced by the plaintiff against the validity of the resolutions at the General Meeting on 28 August 1997 was that the meeting could not have been a valid General Meeting because it did not take place in September, as required by r 38 of the 1957 Rules.
116 To this the defendant admits there was non-compliance with r 38, but says that such non-compliance did not result in the meeting (and any resolutions passed at it) being invalid, and further, that if it was not a valid AGM then it had effect as a Special General Meeting duly convened by the committee.
117 Whether or not a time limitation in the rules of a voluntary incorporated association is mandatory (non-compliance with which will result in invalidity) or merely directory (in which circumstance non-compliance will not result in invalidity) depends upon the language and intent of the rules themselves.
118 Green v Page [1957] Tas SR 66 was a case in point. Coincidentally, the Rules of the Tasmanian Lawn Tennis Association also stipulated that the AGM of that Association should be held in September. The AGM was in fact held in November. The committee then elected subsequently decided the meeting was unconstitutional and that the elections were void. Members brought an action for a declaration that the November meeting
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- and elections had been valid. Burbury CJ pointed out that the basic issue in the action involved only whether on the true construction of the relevant part of the Constitution an AGM could only be validly held in September.
119 In Tanasijevic Williams J thought that the appellant's arguments upon the first three grounds in that case could each be disposed of by reference to the judgment of Burbury CJ in Green v Page and extensively quoted a number of passages from that case, then concluding simply that in his opinion the reasoning there set out disposed of the appellant's arguments on the first three grounds of appeal.
120 I also consider with respect that the reasoning of Burbury CJ in Green v Page gives the answer to the plaintiff's complaints in this case about the date of the AGM.
121 Burbury CJ said (at 76):
" Upon the principles laid down in Cameron v Hogan it is, I think clear that the rules of the Tasmanian Lawn Tennis Association do not confer upon any member a contractual right as against the executive committee or other members to insist upon compliance with them. If, therefore, the claims in the present action are to be treated as claims to enforce compliance with the rules of the Association or for relief against alleged breaches of the rules upon a contractual basis, the plaintiffs must fail.
I also think it is clear that if a proprietary or pecuniary interest is a prerequisite to the plaintiffs' right to bring the present action the plaintiffs must fail."
122 Then at 77 his Honour said:
" Nor would the court have jurisdiction to entertain the present action if the issues between the parties merely involved questions of irregularities in internal management which could be resolved by a general meeting of the members. In the case of irregularities in procedure laid down by the rules of an organisation for convening meetings and in conducting meetings the court refuses to interfere at the instance of individual members of the organisation. This is in accordance with the rule in Foss v Harbottle (1843) 2 Hare 461. The basis of the rule was explained by the Court of Appeal in Cotter v
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- National Union of Seamen [1929] 2 Ch 58. Romer J (as he then was) said:
'In my opinion, if the thing complained of is a thing which in substance the majority of the company are entitled to do, or if something has been done irregularly which the majority of the company are entitled to do regularly, or if something has been done illegally which the majority of the company are entitled to do legally, there can be no use in having a litigation about it, the ultimate end of which is only that a meeting has to be called and then ultimately the majority gets its wishes.' (57)
See also Edwards v Halliwell [1950] 2 All ER 1064 and Solicitor-General v Wylde (1945) 46 SR (NSW) 83, at p 96 per Jordan CJ. But if the issue is one not of mere irregularity in internal management but of an ultra vires act then there is no room for the application of the rule in Foss v Harbottle (60) and the court will pronounce upon the validity of the act (Stevens v Keogh (1946) 72 CLR 1, at p 13 per Latham CJ),
The plaintiffs are therefore not entitled to relief in the present action, if:-
(1) the granting of such relief involves enforcement against the defendants of the detailed rules of the Association upon the footing that they are contractually bound by them; or -
(2) the action is of a nature requiring the plaintiffs to establish a proprietary or pecuniary interest to found a claim for relief; or -
(3) the issues involve mere irregularity in internal management not requiring the determination whether any act is ultra vires.
In my opinion, the action does not fall within any of these three categories."
123 Then at 78 – 80:
"The attack made by the defendants upon the validity of the election of the plaintiffs Sherry and Walch as officers of the
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- Association involves the contention that the members of the Association at the annual general meeting held in November acted ultra vires upon the ground that under the constituent document of the Association (i.e. the 'Articles of Constitution') no annual general meeting could be legally held except in the month of September. The refusal of the defendants to recognise the validity of the election and their insistence that the defendants Murtagh and Harvey still hold the offices of secretary and treasurer respectively has brought about a deadlock which cannot be resolved by the members. It cannot be so resolved because the dispute involves a determination whether the members acted within their powers. Short of an amendment of the constituent document there is no machinery by which the present dispute could be resolved except by the determination of a court or other independent tribunal. But par 12 of the Constitution only permits amendment with the concurrence of two-thirds of the members present at a general meeting, and it cannot be assumed that the requisite majority will be obtained. In my opinion, therefore, the rules in Foss v Harbottle (1843) 2 Hare 461 does not apply so as to disentitle the plaintiffs to relief.
The determination of the basic issue in this action involves only the construction of par 15 of the Constitution of the Association, i.e. whether upon its true construction an annual general meeting can only validly be held in September. To construe the Constitution for the purpose of determining whether the election of the officers of the Association was an ultra vires act is not to enforce the rules upon a contractual basis. The decision of the House of Lords in Braithwaite's Case [1922] 2 AC 440 is in point. ...
Lord Buckmaster said:
'To construe a rule is not directly to enforce any agreement between the members, and I am unable to see any reason why the words of the statute should be so extended as to exclude a trade union itself or any of its members from obtaining the advantage of having obscure words construed by a wholly independent and impartial tribunal' [1922] 2 AC 440, at p 451.
And Lord Wrenbury said:
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- 'Adopting the language of Lord Macnaghten in Yorkshire Miners' Association v Howden [1922] 2 AC 440, at p 469, and adapting it to the present case: "The object of the litigation was to obtain an authoritative decision that the action of the union which was challenged by the plaintiff was not authorised by the rules." ' [1905] AC 256, at pp 264, 265.
- For these reasons I think the decision in Cameron v Hogan (1934) 51 CLR 358 is distinguishable and does not prevent the court passing upon the validity of the election of the two officers of the Association by construing r 15 of the Constitution of the Association and making at least a declaration of right.
The jurisdiction of the court under O XXVII, r 5, (corresponding to the English O XXV, r 5) to make a declaration of right is discretionary. In Hanson v Radcliffe Urban Council [1972] 2 Ch 490, at p 507, Lord Sterndale, M.R. said:-
'In my opinion, under Order XXV, r 5, the power of the Court to make a declaration, where it is a question of defining the rights of two parties, is almost unlimited; I might say only limited by its own discretion. The discretion should of course be exercised judicially, but it seems to me that the discretion is very wide.' "
" There is no magic in the title 'Constitution' frequently given to the rules of a voluntary association. There is a disposition to consider the provision of a 'Constitution' as stating a code of fundamental rights and to characterise the slightest departure from them as 'unconstitutional' and 'invalid'. But a provision in a document of this kind is to be construed in accordance with the same principles of construction adopted by the courts in problems of interpretation of statutes and documents. A provision in a 'Constitution' of this kind prescribing the time for performance of some act has no greater force or different legal effect that a similar provision in an ordinary contract or statute. In the case of contracts not coming within well defined
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- exceptions, stipulations as to time are not to be regarded as of the essence of the contract unless the contract itself so provides or unless from the nature of the contract or the surrounding circumstances it appears that that was the intention of the parties (Halsbury's Laws of England, 3rd edn., Vol. 8, p 164). Provisions in statutes prescribing that certain things are to be done within a certain time may be mandatory or directory according to their nature (Halsbury's Laws of England, 2nd Edn., Vol. 31, p 530). R v Loxdale (1758) 1 Burr. 445 is a case in point. That was a case where by the statute 43 Eliz., c.2 it was provided that overseers of a parish should be nominated 'yearly in Easter week'. The Court of King's Bench held that this provision was merely directory. Lord Mansfield CJ. said:-
'There is a known distinction between circumstances which are of the essence of a thing required to be done by an act of parliament, and clauses merely directory. The precise time, in many cases, is NOT of the essence." (1758) 1 Burr. 445, at p 447.
Even if the provisions in r 15 as to the holding of the annual general meeting in September were construed as mandatory it by no means follows that an annual general meeting held in November must be treated as having been invalidly convened and unable legally to do any business. Assuming that there was a legal duty on the committee to convene the meeting in September and it failed to do so in September that duty did not cease to exist because it had not been performed within the prescribed time. (See Milne v The Attorney-General for Tasmania (1956) 95 CLR 460, at p 476.) If otherwise it were a proper case the court would grant mandamus to compel the performance of the duty after the expiration of the time (R v Sparrow (1740) 2 Strange 1123). But as the members of an association would ordinarily have the remedy in their own hands by convening a general meeting to instruct the committee to call the annual general meeting the court would not grant mandamus.
The contention that no annual general meeting could validly be held except in the month of September does not bear analysis. If under the 'Constitution' office bearers are only elected for a year it would mean that if no new office bearers were elected before the end of September in a given year there
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- could be no office bearers legally elected until the following September. If on the other hand the 'Constitution' means that office bearers once elected hold office until their successors are elected then the committee could perpetuate itself against the will of the members until such time as it could by resolution of the members be compelled to convene an annual general meeting in a month of September. To interpret 5 15 as making the holding of the annual general meeting in September as a condition precedent to validity of the meeting might therefore produce either an indefinite interregnum of office bearers or an indefinite self-perpetuation of office bearers. Unless the Rules clearly compelled an interpretation leading to such absurd consequences the court would not so construe them. But there is in my opinion clearly nothing in the Rules which requires the provision as to the time of the meeting to be construed as mandatory or as essential to the validity of the meeting."
125 Finally, his Honour returned to the fundamental issue of the intervention of the courts in the internal disputes of voluntary associations. At 83 he said:
" Lest it be thought by litigiously-minded members of clubs and associations that the court will readily intervene in their internecine warfare, I desire to emphasise the limitations upon the court's jurisdiction. The general rule is that the court will not intervene in the domestic affairs of clubs and other voluntary associations, but will leave the members to settle their own disputes. In the present case the court is only intervening because the deadlock reached in the management and control of the affairs of the Tasmanian Law Tennis Association is such that it cannot be resolved by the members. It can only be resolved by a judicial determination upon the question whether the meeting of members held on 17 November 1956 acted within its powers in electing office bearers at that meeting."
126 The third argument advanced by the plaintiff in support of his proposition that the 1997 Constitution was not validly adopted was that the General Meeting on 28 August 1997 was not validly convened because the notice of it did not comply with r 52 of the 1957 Rules. That rule required any proposed addition, alteration or amendment to the Rules to be included in the notice convening the meeting.
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127 In cross-examination, Mr Graham effectively conceded that the secretary's letter of 12 August 1997 (Exhibit P2) did not comply with that requirement. The only mention of the new Constitution was that:
"A draft copy of our new Constitution will be available as will the copies of our financial statements for the 1996/97 season."
128 I agree the notice was clearly inadequate. Strict compliance with the rule would have required the enclosure of a copy of the proposed new Constitution and notification of the proposal to adopt it at the meeting. Indeed, it is arguable that the way in which the letter was expressed in this regard could have been potentially misleading. On one view it could be said the reference to "our new Constitution" implied it had already been adopted and was in force. There was no express indication in the letter that the members attending the AGM would be called upon to vote upon a proposal to adopt it. However I think that argument is met by the description of the document as "a draft copy" – which could only mean it was not a final nor currently operative document.
129 To properly comply with the rule therefore, the notice should have expressly advised of the proposal to adopt a new Constitution at the meeting and a copy of that Constitution should have been enclosed with it.
130 The published newspaper advertisement is in not quite the same category as the secretary's letter. The advertisement expressly stated "ratifications [sic] to be made to new Constitution" and that the Constitution could be viewed by telephoning the number given. Again, technically strict compliance with r 52 would have required the text of the proposed new Constitution to be set out in the advertisement. But rules such as these are to be construed as imposing reasonable requirements and it would in my view be unreasonable to require the committee to publish in a paid newspaper advertisement a document of 25 sometimes lengthy clauses and which (in the book of papers for the court) runs to 15 pages. In my opinion the content of the newspaper advertisement was sufficient for the purpose. But more needs to be considered.
131 At common law, notice of a general meeting must be given to all the members (Campbell v Higgins (1957) 3 FLR 317; Higgins v Nicol (1971) 18 FLR 343). Halsbury's Laws of Australia, vol 28 [435-180] states that a notice of meeting published in a newspaper or placed on a notice board is not sufficient; Mansfield v New South Wales Leagues Bowling Club Ltd (1963) 80 WN (NSW) 1407 and McLure v Mitchell (1974) 6 ALR 471, 489 are cited as authority for that proposition.
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132 Mansfield concerned a general meeting of shareholders of an incorporated company which was held as an Annual General Meeting and at which the directors were elected. A notice was placed in an entrance foyer to the company premises, announcements were made over the company public address system and an item was placed in the (unofficial) company journal. The Articles of Association required (inter alia) that notice convening a general meeting had to be given to every member entitled to attend. Such notice had to be in writing and given to the member personally or sent by post to the member's registered address. McLelland CJ in Equity held (1411) that the Articles had not been complied with in substantial respects, the meeting was not properly convened and itself did not comply with the Articles and the failures were not unimportant. The meeting was invalid for want of proper notice.
133 In McLure there was a raft of deliberate deficiencies and shortcomings in the calling of meetings of members. As Joske J explained (490):
"The Union was supposed to be carried on in such a way that it was under the control of its members. In fact it has been so conducted that members have not been able to exercise any control. The respondent Mitchell appeared able to obtain a quorum when it suited him to have a meeting."
134 There the relevant rule provided that ordinary meetings should be held at such intervals as may be decided but branches must meet at least once every three months; the Annual General Meeting "shall be a summoned meeting" held in August.
135 Joske J referred (at 489) to the distinction between ordinary meetings and "summoned" meetings. As his Honour explained, notice of meeting should be given in such a way as to enable it to come to the attention of every member. In the case of a summoned meeting however there must be notice summoning each and every member to attend at a specified place, date and time for a specified purpose. It is a call to each and all members, bearing the mark of authority and so should be issued under the name of the Secretary or other proper officer. His Honour said it would not be a summoned meeting if notification were merely placed on a notice board or in a journal or newspaper.
136 In my opinion neither Mansfield nor McLure is authority for the general proposition that a notice published in a newspaper or placed on a notice board will not be sufficient notice of a General (or Special)
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- Meeting of a voluntary association in any circumstances. It must always depend on the circumstances, including the extent to which the rules of the particular association make provision for notice of meetings, the nature of the association, the size and extent of the membership and the practices routinely followed by the association for the notification and holding of meetings.
137 In Campbell v Higgins the Commonwealth Industrial Court (Spicer CJ, Dunphy and Morgan JJ) was concerned with the Vehicles Builders Employees Federation of Australia. That had branches (and sub-branches) in four States. The Victorian branch alone had in excess of 10,000 members. The applicants had been fined and suspended from office at a special general meeting held on 27 April 1955. The rules were silent about the specification of notice for either ordinary or special meetings. However the rules did require that four "summoned" meetings be held each year, notice of which was to be given by advertisement in the daily press. The court held that by analogy, notice by advertisement alone in the press could be sufficient for an ordinary or special meeting, but then added that (327):
"We are of the opinion that, where there is a union with a large metropolitan membership and with sub-branches established in country towns and in a neighbouring State, notice by advertisement in the press of any meeting, whether ordinary or special, must be advertisement which provides sufficient time for members to attend such meeting if they so desire and in newspapers which they might be expected to see. The terms of the notice of a special meeting should contain sufficient information as to the business to be conducted thereat."
138 In that case the only specific notice of the special meeting of 27 April was an advertisement which appeared in the "Age" Newspaper on the morning of that day. Not only was that inadequate as being too short a time, but it was unlikely that the very large majority of the members most vitally interested in the particular matter would have seen it at all. The consequence of those circumstances was that the meeting was invalid. The court quoted the following passage from "Law and Procedure at Meetings" 3rd ed, by P E Joske, at p 18 (ibid 327):
" 'Where the rules of an association prescribe no method of summoning meetings, meetings should be summoned in some such way as will bring notice of them to every member'. At p 19 the author goes on: 'In the case of special meetings notice
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- thereof given at an ordinary meeting and not coming to the notice of all members is insufficient and the meeting will be rendered invalid' and again 'Where a meeting of a body has to be convened for a particular purpose every member of that body ought to have notice of that meeting. Failure to give notice of such meeting to any person entitled to be present at it, will, unless such person happens to be present, invalidate the meeting and any resolutions passed at it.' "
139 There was a similar result in Higgins v Nicol in which the only notification of the impugned meeting was two newspaper advertisements published on the day of the meeting. That was held to be insufficient notice and the proceedings at the meeting were accordingly held to be null and void (see Spicer CJ at 351).
140 In Winter v McAdam (1957) 1 FLR 210 the Commonwealth Industrial Court held (at 211) that where the rules of an organisation made no provisions for notice of special meetings:
"Notice should be given in such a manner as may reasonably be expected to come to the attention of members concerned, and in such time as to give those members a reasonable opportunity of attending the meeting."
141 To return to the instant case the 1957 Rules do not contain any rule authorising the giving of a notice of meeting by publication in a newspaper. Although those Rules do not expressly set out how notice of a general meeting is to be given, they do in my view necessarily imply that notice shall be given by way of written notification to each member. Rule 40 refers to notice of special business being given "in the circular letter convening the meeting". Rule 44 states that no business shall be entered upon by any special general meeting except that "set forth in the notice convening the meeting". Rule 52 itself requires notice of a proposed alteration to the Rules to be "included in the notice convening the meeting". These provisions are consonant with the common law requirement which requires notice of a general meeting to be given to each member and also indicate that such notice is to be in writing. Accordingly, while there is no reason the calling of a general meeting of members of the Club should not be publicised by way of newspaper advertisement – and no doubt there may often (if not usually) be good reasons why that should be done – such publication does not constitute notice of a meeting as required by r 52 of the 1957 Rules: that must be
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- given by "circular letter" to each member and which includes notification of the alteration proposed.
142 That brings me to consider the effect of the non-compliance with r 52.
143 It has not been pleaded nor suggested that the Secretary's letter of 12 August 1997 did not go to all members. It certainly was sent to the plaintiff, who at the time was living in Melbourne. The letter did refer to the business to be dealt with at the meeting, including (even though with a certain lack of clarity) the issue of the "draft" new Constitution. I consider that notice given on 12 August of a local meeting to be held on 28 August was reasonable notice.
144 Although there is no evidence of the actual size of the membership of the Club, it is in terms associated with the Town of Esperance and that immediate locality. Notwithstanding the publication of the advertisement in the local newspaper on three occasions (7, 14 and 21 August 1997) did not constitute compliance with r 52, that could reasonably be expected to have brought the planned meeting – and the proposed "ratification" of the new Constitution – to the attention of members in and around the town.
145 In the circumstances it seems to me the failure to comply with r 52 was not so substantial nor significant as to result in the invalidity of the meeting.
146 The final argument advanced by the plaintiff against the validity of the meeting on 28 August 1997 was that the resolution to adopt the 1997 Constitution was not passed by a two-thirds majority of members present and voting. That, too, is a requirement of r 52 of the 1957 Rules.
147 The onus is on the plaintiff to prove that assertion on the balance of probabilities as a matter of fact. He has not done so. The minutes of the meeting show only that the motion was moved, seconded and carried. The numbers voting for and against it are not shown. The plaintiff was not present at the meeting. Mr Graham was present, and his evidence was that according to his recollection the vote in favour of the motion was unanimous. I accept that evidence. A reading of the minutes of the committee meetings generally suggests that if anyone had opposed the motion it is likely that fact would have been recorded. The absence of such a record tends to reinforce Mr Graham's recollection.
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Resolution refusing the plaintiff membership
148 At par 11.1 of his amended statement of claim the plaintiff pleads that he was wrongfully refused membership of the club on 4 September 1997 because the refusal was pursuant to the new constitution which had not been validly adopted by reason of the matters to which I have already referred above. He pleads further in the alternative that if the 1997 Constitution was validly adopted, it was not effective until 15 December 1997 because of s 17 of the Act and further again, that the defendant had no power to refuse the plaintiff membership pursuant to r 15(b)(v) of the 1997 Constitution.
149 For the reasons I have already given above, I find the resolution adopting the 1997 Constitution was not invalid by virtue of the matters complained of by the plaintiff. As it happens, that is of no moment here because the defendant admits that by virtue of s 17 of the Act, the 1997 Constitution did not become operative until 15 December 1997 and hence the committee had no power under it to refuse the plaintiff membership on 4 September 1997.
150 Notwithstanding that the membership resolution was expressly adopted in purported reliance upon r 15(b)(v) of the 1997 Constitution, the defendant now contends that was valid and effective in any event under r 49 of the 1957 Rules. The assertion is that the Committee was satisfied the plaintiff had imputed improper motives to members of the Committee in the exercise or performance of their duty and so was entitled to refuse his application for membership.
151 At this point it is necessary to say something about what has consistently been referred to by the parties as the decision refusing the plaintiff membership of the club.
152 The evidence is that he was a financial member for the financial year 1996/97 and had indeed been a member of the Committee for at least part of that year. There was no document put into evidence which was said to be his application for membership for 1997/98. The minutes of the meeting of 4 September 1997 simply note that the plaintiff "… has sent in his membership for this season". Given the lack of precision evident in the language of the club's minutes generally, it is not at all clear what this means. The motion itself was that "… this membership be refused".
153 In the circumstances I think it plain the committee was not dealing with a formal application for membership proposed by one member and seconded by another and on which the committee was required to vote,
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- under r 3 of the 1957 Rules. The plaintiff had clearly gone through that process on initially joining the club and had become an ordinary member pursuant to r 4 of the 1957 Rules. He was, accordingly, still a member of the club. He had not ceased to be a member for non-payment of subscription (r 10 of the 1957 Rules). It is apparent he had paid his membership subscription for the 1997/98 year, because the secretary made specific reference to that, and returned his $35 with her letter of 25 September 1997.
154 The position therefore was that as at 4 September 1997 the plaintiff was still a financial ordinary member of the club. The resolution "refusing" his membership was a punishment of expulsion.
155 Several questions arise. The first is whether in the circumstances, an act done purportedly in reliance upon a power which does not authorise it, can be supported under another.
156 In Brown v West (1990) 169 CLR 195 at 203 the High Court held that the validity of the Remuneration Tribunal's determinations regarding Parliamentary postal allowances was unaffected by mistaking the source of the power to make them (see Moore v Attorney General for the Irish Free State & Ors [1935] AC 484 at 498; R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 at 487).
157 The defendant relies upon the "settled principle that an act purporting to be done under one statutory power may be supported under another statutory power" (per Fullager J in Lockwood v The Commonwealth (1954) 90 CLR 177) and the observation of Brennan J in Johns v The Australian Securities Commission (1993) 178 CLR 408, who, after stating that he regarded an error as to the source of authority for doing an act as immaterial said (426):
"When a power is exercised, a mistake in the source of the power works no invalidity. Validity depends simply on whether a relevant power existed."
158 The principle, whilst broadly stated, is subject to some qualifications. These were usefully set out by Black CJ in Mercantile Mutual Life Insurance Company Ltd & Anor v Australian Securities Commission & Ors (1993) 112 ALR 463 at 466:
"There must of course be limits to the general principle that an act purporting to be done under one statutory power may be supported under another statutory power. The suggested other
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- source of power may, for example, be seen to be unavailable because its exercise depends upon the fulfilment of some condition precedent peculiar to it and that event has not yet occurred: see Saatchi at FCR 23 per Wilcox J and R v Bevan; Ex parte Elias and Gordon (1942) 66 C:R 452 at 587 per Williams J. There may also be cases in which the matters to which a decision-maker would be bound to have regard in exercising the other source of power differ materially from the matters relevant to the exercise of the assumed source of power with the result that the other source of power cannot be relied upon to support the decision. Similarly, matters may be taken into account in the purported exercise of a power that would invalidate the attempted exercise of a power derived from another source because, in the context of the other source, they were irrelevant matters. Moreover, for reasons of this nature, where the effect of the exercise of the power upon third parties may differ according to the source of the power, the exercise of the power may not be supportable as a valid exercise of power derived from another source."
159 In Mercantile Mutual the relevant instrument of the ASC was expressed to have effect pursuant to a statutory provision which did not actually exist. The Full Court of the Federal Court held there was a different statutory provision which did authorise it. Black CJ pointed out that the ASC was under no statutory obligation to specify the source of the power and no consequence attached to the specification of one which did not in fact exist. The circumstances relevant to the proper exercise of the power were exactly the same whether the source was that supposed by the ASC or that which actually existed.
160 I accept that no consequence flowed in the present case from the mere specification that the committee was relying upon a power in a constitution which was not yet in operation. Whether r 49 of the 1957 Rules afforded the committee a source of power for resolving to expel the plaintiff depends upon whether the requirements of that rule were met.
161 I emphasise that in the determination of this question, I am not concerned with the merits of the decision made by the committee; whether I agree with it or not has no bearing. Nor am I required to consider whether or not the plaintiff was afforded natural justice in relation to this decision. That has not been pleaded and counsel for the defendant made it clear during trial that quite different considerations would have applied
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- and a different approach been taken had the plaintiff's application been for certiorari to quash the decision on the ground of denial of natural justice.
162 The evidence does show that as at 4 September 1997, members of the committee were aware of, and concerned about, the fact that over a lengthy period the plaintiff had made what the committee believed were untrue accusations that some of them were taking wrongful pecuniary advantage of their positions and that he had imputed they were guilty of improper practices in their capacity as committee members, to achieve financial advantage for themselves (see in particular Mr Graham's evidence at t 147-149, 184). But this was not the only ground upon which the committee acted. The defendant in fact pleads several other specific factors influenced the decision. Paragraph 11(e)(iii) of the defendant's re-amended defence included the following:
"(b) the Plaintiff wished to prevent the Defendant from allowing bookmakers and horse trainers from holding Committee positions within the Club despite approval of the new constitution by the membership of the Defendant at its 1997 Annual General Meeting and despite the fact that no such prohibition is contained in the constitution of the WA Turf Club;
(c) the Plaintiff did not attend the Defendant's 1997 Annual General Meeting held on 28 August 1997 (either personally or by representative) to speak against the motion to adopt the new constitution;
(d) the Plaintiff had not taken an active role in the Defendant club's affairs for some time having moved interstate;
(e) when the Plaintiff served on the Defendant club's committee in August of 1996 he was that time a license (sic) horse trainer of the WA Turf Club;
(f) by reason of the foregoing the Defendant's committee concluded that there were irreconcilable differences between the Plaintiff and the Defendant and consequently it was undesirable that he continue as a member of the Defendant Club."
163 It is difficult to see how agitation by a member of an organisation urging a change in the constitution or rules of the organisation, without more, could ever constitute conduct sufficient to attract any "punishment",
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- much less expulsion. On the face of it, such conduct would appear to be no more than the exercise of democratic rights and freedom of expression. However as I read it in the context of the evidence in this case, par 11(e)(iii)(b) of the re-amended defence is really a plea that the plaintiff's conduct went well beyond that. Be that as it may, neither that factor nor any of the others listed above had any relevance at all to the issue whether the plaintiff had imputed improper motives to any member of the committee. Nor was the conclusion that there were "irreconcilable differences" between the plaintiff and the defendant such that it was "consequently undesirable" that he continue as a member of the Club, one which could justify the committee imposing a punishment upon him by expulsion or otherwise, under r 49. The defendant's expressly admitted reliance upon these factors which were irrelevant to the exercise of its power under r 49 invalidates the decision to expel the plaintiff.
164 The plaintiff's final ground of attack upon the validity of the membership resolution was that the plaintiff had not committed any act which could have rendered him unfit to continue as a member and that the resolution was carried in bad faith and was therefore ultra vires.
165 As I have already observed, a finding by the committee that it was satisfied he had imputed improper motives to any member of it, would have given rise to the power bestowed by r 49. Given there was some evidence upon which the committee could have reached that satisfaction, it is not for me to substitute my opinion for that of the committee.
166 The onus of proving the resolution was carried in bad faith was on the plaintiff. He has not discharged it. There is no evidence of bad faith on the part of the committee nor any member of it. Mr Graham's evidence is to the contrary.
Plaintiff's claim to relief
167 Paragraphs 12.2 and 12.3(c) seek orders which would effectively be in the nature of mandatory injunctions. They are not declaratory relief within the scope of s 25(6) of the Supreme Court Act 1935 (WA) nor O 18 r 16 SCR. In any event, such orders should not be made as a matter of discretion. There are other considerations to which the Committee might have regard were the plaintiff now to apply for membership of the Club - considerations which are not before me.
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168 I have already observed that declaratory relief is discretionary (Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247, 257, 260).
169 I have found above that the 1997 Constitution was validly adopted. Paragraph 10 of the plaintiff's amended statement of claim accordingly fails.
170 The plaintiff has succeeded on his claim that the refusal of his membership application (more accurately, his expulsion from the Club) was not a valid exercise of the power given by r 49 of the 1957 Rules.
171 Nonetheless, although the plaintiff became a committee member in August 1996, he only ever attended two committee meetings. In fact he had moved to Melbourne in about September 1996 and has lived in Singapore since mid-2000. He has not taken an active role in the Club's affairs since late 1996. The plaintiff continues to maintain that members of the committee have "hijacked" the Club to serve their own pecuniary interests although he has proffered no evidence of that. The defendant holds to the position that there are "irreconcilable differences" between the plaintiff and it and that it is undesirable that he should be a member. If the declaration were made there would be nothing to prevent the committee now acting under r 15(b)(v) of the 1997 Constitution to expel him from membership. The making of a declaration under those circumstances would be futile. Furthermore, it is not the policy of the courts to grant relief by way of declaration where such a declaration would be merely embarrassing and serve no purpose (per Dwyer J in White-Gourley & Anor v Goonan & Ors (1935) 37 WALR 99, 106). I decline to make the declaration sought.
172 That leaves the plaintiff's claim for a declaration that the 1997 Constitution was not operative as at 4 September 1997. There is an ongoing dispute between the plaintiff and the Club about what should be in the Club Constitution, but the declaration sought would not resolve that.
173 The dispute is between the plaintiff and the committee which has the management of the Club and apparently has the support of the members. (In his evidence the plaintiff said there were some members of the Club who agreed with him, but they wished to remain anonymous. His assertion of that therefore stands by itself and I am not prepared to give any weight to it.) The Club believes the 1997 Constitution applies and has been operating under it – at least since 15 December 1997. Apart
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- from the plaintiff's claims, there appears to be no dispute or uncertainty about the applicable Rules, and the Club appears to be operating effectively. This is therefore not a case in which there is an internal dispute which has paralysed the Club or which has caused uncertainty or chaos in its operations, as in Tanasijevic.
174 In any event, as I have found, the resolution adopting the 1997 Constitution was not invalid for the reasons claimed by the plaintiff.
175 The defendant accepts that the 1997 Constitution was not operative as at 4 September 1997. It accepts that it did not become operative until 15 December 1997. There is therefore no extant dispute which the declaration sought would resolve. I decline to make it.
176 The plaintiff's action will be dismissed.
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