Dusica Moromilov v Sreta Dragicevic
[2013] ACTSC 91
•17 May 2013
DUSICA MOROMILOV V SRETA DRAGICEVIC
[2013] ACTSC 91 (17 May 2013)
ASSOCIATIONS AND CLUBS – Incorporated Associations – meetings – whether to hold a meeting at a particular venue – injunction sought – application dismissed
ASSOCIATIONS AND CLUBS – Incorporated Associations – jurisdiction of the Court to intervene in internal affairs of association – principles for court intervention
ASSOCIATIONS AND CLUBS – Incorporated Associations – meetings – power to call meeting – provisions in constitution
ASSOCIATIONS AND CLUBS – Incorporated Associations – membership – inadequate records – renewal of membership
Associations Incorporation Act 1991 (ACT), ss 22, 48, 49, 131
Associations Incorporation Act 1858 (SA)
Associations Incorporation Act 1985 (SA), s 23(1)
Evidence Act 2011 (ACT), s 69
Australian Capital Territory Rugby League (ACTRL) Inc v ACT Leagues Club Ltd (1992) 107 FLR 303
Bagga v The Sikh Association of Western Australia Inc [2012] WASC 193
Bateman v Fairfax Media Publications Pty Ltd [2013] ACTSC 72
Cameron v Hogan (1934) 51 CLR 358
Chifuntwe v Gardiner [2012] ACTSC 136
Dixon v Australian Society of Accountants (1989) 95 FLR 231
Dragosavljevic v Serbian Orthodox Church St Knez Lazar Incorporated [2002] ACTSC 19
Eltham v Municipality of Clarence (1957) 7 LGRA 303
Greene v McIver (2012) 263 FLR 450
Islamic Council of South Australia Inc v Australian Federation of Islamic Councils Inc [2009] NSWSC 211
Maher v Carpenter (2012) 60 MVR 240
McKenzie v McKenzie [1971] P 33
Millar v Houghton Table Tennis & Sports Club Inc [2003] SASC 1
Navarro v Spanish-Australian Club of Canberra ACT Inc (1987) 87 FLR 390
Pettit v South Australian Harness Racing Club Inc (2006) 95 SASR 543
Royal Mutual Benefit Building Society v Sharman [1963] 1 WLR 581
Schagen v The Queen (1993) 8 WAR 410
Serbian Cultural Club “St Sava” Inc v Radovanov [2012] ACTSC 60
Vesic v Serbian Cultural Club St Sava Inc [2002] ACTSC 119
Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459
Wishart v Foster (1961) 4 FLR 72
Young v Ladies Imperial Club Ltd [1920] 2 KB 523
No. SC 741 of 2011
Judge: Refshauge J
Supreme Court of the ACT
Date: 17 May 2013
IN THE SUPREME COURT OF THE )
) No. SC 741 of 2011
AUSTRALIAN CAPITAL TERRITORY )
DUSICA MOROMILOV
Plaintiff
v
SRETA DRAGICEVIC
Defendant
ORDER
Judge: Refshauge J
Date: 28 October 2011
Place: Canberra
THE COURT ORDERS THAT:
The application is dismissed.
The plaintiff pay the defendant’s costs.
This matter arose out of one of the various disputes that have leaked into the courts from amongst members and others involved in the Serbian Cultural Club St Sava Inc, (the Club). See, for example, Dragosavljevic v Serbian Orthodox Church St Knez Lazar Incorporated [2002] ACTSC 19; Vesic v Serbian Cultural Club St Sava Inc [2002] ACTSC 119; Serbian Cultural Club “St Sava” Inc v Radovanov [2012] ACTSC 60. In the latter judgment, Master Harper referred (at [5]) to “five sets of proceedings in this Court, five related proceedings in the Court of Appeal and one proceeding in the High Court of Australia”.
On 28 October 2011, I refused to make an injunction that the plaintiff, Mrs Dusica Moromilov, had sought to restrain the holding of the Annual General Meeting of the Club scheduled for 30 October 2011 and other orders. In dismissing the application, I said I would deliver my reasons later. These are those reasons.
The proceedings
Mrs Moromilov filed an originating application dated 26 October 2011 which was listed to be heard on 28 October 2011. It sought the following orders:
1.An order that the Annual General Meeting of the Serbian Cultural Club St Sava Incorporation – Reg. No. A00455, scheduled for 30th October, 2011, commencing at 3 p.m.; be rescheduled to be held at the Club premises in Mawson, A.C.T. and NOT at the Farrer Church Hall, A.C.T., as decided and advertised by the President Sreta Dragicevic.
2.An order that the members who submitted their membership renewals together with their subscription monies, in December, 2010, be processed and provided with updated membership ID cards prior to the holding of the AGM.
3.An order that all property removed from the Club premises without authorization, be returned immediately.
4.Any other orders that the Court considers appropriate.
The defendant filed a Notice of Intention to Respond and was represented at the hearing by Mr B Meagher SC.
Mrs Moromilov was unrepresented but a Ms Patricia Orton sought to assist her. This was said to be both to assist her understanding of the proceedings and because “she needs support sometimes.” Mr Meagher made no submissions on this issue.
Ms Orton was not an admitted legal practitioner. It is not appropriate except in quite exceptional circumstances for a person who is not an admitted legal practitioner to represent a party in proceedings, as noted by Malcolm CJ in Schagen v The Queen (1993) 8 WAR 410 at 412.
I did, however, permit Ms Orton to act in effect as a McKenzie’s friend (McKenzie v McKenzie [1971] P 33) to assist Mrs Moromilov but not to make submissions, examine witnesses or otherwise address the court.
Both parties filed affidavits. This is the proper manner of proceeding in an interlocutory application so that notice of the case to be made is given. There is not much opportunity, unlike for a final hearing, for that to be ascertained prior to the hearing of such applications. Ordinarily it is rare to permit cross-examination: see Bateman v Fairfax Media Publications Pty Ltd [2013] ACTSC 72 at [17]-[18]. There was, however, some oral evidence adduced in addition. This requires leave and is sparingly given. This, however, was in effect a final hearing as the meeting which was sought to be restrained was to take place two days after the hearing. Further, Mr Meagher did not oppose the additional oral evidence being adduced so long as he had the opportunity to adduce answering oral evidence, which I granted. In the circumstances it was appropriate to permit the oral evidence to be adduced.
The parties
Mrs Dusica Moromilov
Mrs Moromilov deposed that she was a life member of the Club, having paid $10 for membership renewal fees on 14 November 2010.
Mr Dragicevic said in his affidavit, however, that he had no records showing that Mrs Moromilov was a life member of the Club. He said that when he was elected, along with other members of the Committee of the Club, they did not receive “a complete or orderly set of records”. It appears they received three lists of members, copies of which were annexed to his affidavit. Mrs Moromilov did not appear on any of them.
Mrs Moromilov annexed to her affidavit a certificate which identified that on 27 January 1996, she had been awarded life membership of the Club. It was signed on behalf of the Committee by Mr Stevan Radovanov.
Mr Radovanov is one of the persons who has appeared in earlier litigation. In Justice Crispin’s decision in Vesic v Serbian Cultural Club St Sava Inc, he described (at [7]), the evidence before him as to the background to the proceedings that his Honour was considering:
During the course of these proceedings it quickly became apparent that there were substantial issues as to the control and management of both Associations. Extensive affidavits were filed relating to the formation of the two Associations. Mr Radovanov deposed to the fact that the Serbian associations and organisations in Canberra are split into three hostile groups and are all independent of each other. He said that in 1963 the Serbian community had been split and a Free Serbian Orthodox Church had been formed in opposition to what he described as the ‘communist controlled’ Serbian Orthodox Church. In the mid 1970’s, he and a small group had in turn split from the Free Serbian Orthodox Church because they believed that it had departed from their traditional beliefs and formed the Club and the Church with an independent priest. Both Associations apparently flourished for some time but the priest died in 1995 and was not replaced. It appears that the congregation dwindled and services were not maintained. The Church premises were leased to another Christian church. The Club also experienced difficulties. Trading became unprofitable and debts mounted. Mr Radovanov apparently advanced some money to both organisations but their fortunes were not revived.
Mr Dragicevic said in his evidence that:
Mr Radovanov was a person who attempted to control the Serbian Club in a period up to 2003 and who was displaced by Court Orders and the appointment of an Administrator at the end of that period. The present committee of the Club is reluctant to accept the validity of documents purporting to emanate from that period.
...
As a result of the above matters, the present committee of the Club does not recognise Mrs Dusica Moromilov as a member of the Club.
The certificate attached to Mrs Moromilov’s affidavit appears to be a business record of the Club and, therefore, is admissible under s 69 of the Evidence Act 2011 (ACT). No objection was taken to its admission.
While I accept that there may be an issue about whether it is an authentic document, the challenge, as set out in the affidavit of Mr Dragicevic, does not really go that far; doubts about the acceptability of a document does not really mean that it is not authentic.
On the evidence, I am not in a position to make a finding about whether Mrs Moromilov is a member of the Club. In the circumstances, I was prepared to accept, but only for the purposes of the hearing before me, that she was a member. This, however, is not a final finding and I expressly decline to find affirmatively that she is – or, indeed, that she is not – a member of the Club.
Mr Sreta Dragicevic
Mr Sreta Dragicevic deposed that he is the President of the Club. In the originating application, Mrs Moromilov described Mr Dragicevic as President of the Club. Nothing in her affidavit challenged that. In cross-examination of him, it was not suggested he was other than the President. I accept that he is the President of the Club.
Nevertheless, the Club is incorporated under the Associations Incorporation Act 1991 (ACT) and thus, of course, under s 22, the Club is an entity separate from its members. The President does not represent the Club, as an incorporated association, in any relevant sense.
It seems to me, then, that Mrs Moromilov has sued the wrong party. It may be that, were I minded to have directed by injunction the restraint of the holding of the Annual General Meeting or require it be held at another location, I would need to have, and may well have been able to have, permitted the Club to be substituted for Mr Dragicevic as the relevant party.
It would be undesirable for this error by Mrs Moromilov, unrepresented as she was, to have caused the application to fail on that ground if it could be resolved without injustice to any other person.
In the circumstances, however, that issue does not arise.
The facts
Notwithstanding that my decision effectively ended these proceedings and that I permitted some oral evidence and cross-examination, this is still effectively an interlocutory application. Accordingly, though I can make some findings of fact, as I must do, these findings must of necessity be provisional and dependent on whether, in a full trial, other evidence may show any of the facts I find to be otherwise than as I find them.
Both parties accept that the Serbian community in Canberra, and perhaps more widely, is divided. The division in Canberra appears to be primarily related to religious allegiances and grouped around the two churches described by Mrs Moromilov as follows:
6)The Serbian Orthodox Church in Farrer, A.C.T. is under the jurisdiction of Bishop Irinej Dobrijevic, Serbian Orthodox Bishop for Australia and New Zealand.
7)The Free Serbian Orthodox Church, St George in Forrest, A.C.T., is a totally independent Church, and is under the Old Calendar Orthodox Church of Greece, Diocese for Australia Inc. It is under the Bishop of Greece.
8)The Serbian Cultural Club St Sava Inc. is an independent cultural and social association consisting of financial members from all sectors of the Serbian community in the A.C.T. and throughout Australia.
The Serbian Cultural Club St Sava Inc
Mr Dragicevic asserted that the Club is a secular organisation and he considers it ought to be free from religious or political disputes. That is, while an admirable aspiration, one which is very hard to achieve where passions run high, as frequently occurs where there are strongly held religious or political differences.
Apparently many persons who considered themselves members of the Club were not invited to the Annual General Meeting on 19 September 2010. On the evidence, it is not possible to say whether, because of lack of notice to members, that meeting was invalid.
A failure to give such notice in accordance with the constitution (which only required that a notice be sent by prepaid post to each member at the member’s address appearing in the register of members) would likely render the meeting invalid: Young v Ladies Imperial Club Ltd [1920] 2 KB 523 at 527; Eltham v Municipality of Clarence (1957) 7 LGRA 303 at 307-8; Royal Mutual Benefit Building Society v Sharman [1963] 1 WLR 581 at 584.
The validity of that meeting, however, is not before me and, beyond mere assertion, there is no evidence on which I could find that it was not validly convened.
Another meeting, however, was purportedly convened on 12 December 2010 at which those persons who considered themselves members but who had not been invited to the September meeting attended and completed applications for membership and membership renewals.
It also appears that on 24 July 2011, a number of persons were purportedly elected to the Committee, presumably at a meeting which was suggested to have been an Annual General Meeting. Mr Dragicevic says that he and other members were not invited to that meeting. Consistent with the requirement for notice above, it would, therefore, not have been a valid meeting of the Club.
It is clear to me, at least for the purpose of these proceedings, that those persons purportedly constituting an “alternative Committee” were not properly elected. Apart from the invalidity of the meeting, I note that Mrs Moromilov was purportedly elected Secretary and a Mr Milos Mikic, President, yet in these very proceedings, Mrs Moromilov is asserting that Mr Dragicevic is President.
Membership applications of 12 December 2010
In any event, apparently forty-seven persons at the meeting on 12 December 2010 completed application forms for membership or renewal of membership. They then sent the applications, together with two cheques totalling $470 (being $10 per each membership or renewal to the Club); one for $130 for thirteen new members and the other for $340 for the thirty-four renewals.
The Committee which had been elected on 19 September 2010, of which Mr Dragicevic was President, considered the applications. It declined to approve the nominations for new members. That it had power to do under the constitution. It then returned all the applications with a letter stating that:
The Serbian Cultural Club is not able to process these group application forms and payments that you have sent.
The Serbian Cultural Club is not able to accept group bank cheque payments and group application forms.
...
Each individual may apply and forward these forms on an individual basis to the Serbian Cultural Club...
After received, the applications will be processed and the applicant will be advised of outcomes and any payments required.
Mr Dragicevic explained the reasons for this approach:
The reason the membership renewals were rejected was because the committee was unwilling to engage in sectarian politics and to accept a large ‘block’ of members from a particular segment of the community which appeared to have the intention of seeking to improperly control the affairs of the Club.
He said that he had personally inspected the forms, as one would expect from a member of the Committee considering the forms, and found:
a.Many of the forms appeared to have been filled out by the same hand, and
b.Some of the forms did not seem to be correctly signed, and
c.Most of the forms seem to have been renewal forms filled out by persons who had not previously been members of the Serbian Club, and
d.All of the forms were supported by one cheque, which was not divisible should any member of the group have been rejected on an individual basis.
He further said that, despite the invitation to those applicants to apply individually, none did so. That may be relevant to their bona fides.
Calling of the Club’s Annual General Meeting
The constitution of the Club provides:
22.Annual General Meetings – calling of and business at
(1)The annual general meeting of the association shall, subject to the Act, be convened on such date and at such place and time as the committee thinks fit.
Mr Dragicevic said that the Committee met and resolved to call the Annual General Meeting the subject of these proceedings.
As a result, notice of the Annual General Meeting was given under the hand of the Secretary who had been so elected on 19 September 2010. As required by the constitution, it specified the place, date and time of the meeting and, by setting out the agenda, the business proposed to be transacted. It seems to me to have been a valid notice. See, for example, Wishart v Foster (1961) 4 FLR 72 at 74.
It specified that the meeting would be held at the Church Hall “St Sava”, Lambrigg Street, Farrer. Mrs Moromilov says that:
9)Attendance at the Club AGM at the Church in Farrer, A.C.T. may pose discomfort and difficulties regarding religious affiliation.
10)Holding the Club meeting at the Farrer Church may hinder a large number of Club members from exercising and fulfilling their membership rights to the Serbian Cultural Club St Save Inc. Association. Reg. No. A00455.
Mrs Moromilov’s alternative was:
11) The Serbian Cultural Club is located at 5 Heard Street, Mawson, A.C.T. and is available to conduct the Annual General Meeting of its incorporated association, as it has in the past, held all its AGM and other functions at these premises, since 1980.
Mr Dragicevic said in his affidavit:
14.The current Club premises at 5 Heard Street Mawson is in a severely decrepit state and the entrance has been closed by temporary boarding. The state of this building has gradually occurred as a result of neglect and the lack of a maintenance program over the previous years. The building is not covered by public liability insurance, does not have adequate fire safety protection and has defective plumbing and electrical connections. It is unsuitable for use as a public venue.
15.Because of the state of the Club building, an alternative venue was chosen to hold the AGM. This venue is the Hall associated with the Serbian Orthodox Church in Farrer, which is located approximately 1 kilometre from the Serbian Club premises. The Farrer Hall is a publicly available premises, which has been hired for the occasion and all persons attending the AGM are entitled to access that premises.
Oral evidence was given by Mrs Lilian Vesic who was called by Mrs Moromilov. She said that she was a member of the Club and had been so since it was incorporated in 1976. She was elected as a member of the Committee of the Club on 19 September 2010.
Mrs Vesic said that she had attended all meetings of the Committee of the Club of which she was aware. She said she was at a meeting of the Committee when it was decided that the Annual General Meeting for 2011 was scheduled to be held on 23 October 2011. She said there was no mention of a venue discussed at the meeting.
She said that she first knew about the Annual General Meeting being held in Farrer on 30 October 2011 when she received notice of the meeting. She says she made some inquiries and was told, it appears by Mr Dragicevic’s wife, not a member of the Committee, that the Public Officer had decided this.
She said she received numerous telephone calls and emails from members of the Club seeking information about why it was changed. It was not clear to me how members, other than, of course, Committee members, would have known that the meeting was originally scheduled for 23 October 2011 and, therefore, that there had been a change.
Mrs Vesic denied in cross-examination that there were any meetings of the Committee that were notified as such that she had not attended.
She also agreed that she had attended at least one meeting where the Committee discussed holding the Annual General Meeting; this was to be held on 23 October 2011. She denied that there had been a discussion about holding the meeting in the Farrer Church Hall; indeed, she said that there was no mention of venue. She said she was not aware of any other meetings to discuss the venue.
Mrs Vesic also said that she had not been told that the date had to be changed because the hall was not available on 23 October 2011.
Mr Dragicevic then gave evidence. He said the Committee meeting to discuss the calling of the Annual General Meeting was held in late August 2011. He also said there was more than one meeting. At the first meeting, one Committee member was absent. At the second, the same member and Mrs Vesic were both absent.
He said that the date suggested was 23 October 2011. He said the Committee also discussed the possibility of holding it on 30 October 2011 if the hall was not free on 23 October 2011. He said that all other previous regular meetings were held in the Farrer hall with the approval of the Committee.
Mr Dragicevic said that the Committee meeting had been held in the Farrer hall. He confirmed that the reasons the Annual General Meeting was to be held in the Farrer hall were set out in his affidavit.
He said that, at the end of the meeting, the decision was taken to hold the Annual General Meeting on 30 October 2011 if the hall was not available on 23 October 2011. After the meeting, he asked the Priest and the President of the hall, who advised that the 23 October 2011 date was not available for the hall was already booked and so the date was confirmed, in accordance with the decision of the Committee, for 30 October 2011.
Mr Dragicevic said, when asked in cross-examination why the meeting venue had not been set as the Austrian Club, next to the Club, that it was “because of the conditions there [at Farrer Hall]” and that they had held fifteen to twenty meetings in the Farrer hall.
He also said that the decision was recorded in the Minutes of the Meeting at which Mrs Vesic was present. He did not attach a copy of the Minutes because he did not think that it was necessary. Given that all the evidence about the calling of the meeting was only adduced at the hearing, that is not unreasonable.
Consideration
As often happens in urgent matters, especially where one or more of the parties are unrepresented and, additionally, the difficulty is exacerbated by language difficulties, there were a number of issues raised which make for some complications.
The essence of what Mrs Moromilov was seeking was that the Annual General Meeting not be held in the Church Hall at Farrer. Her concern obviously was that this was close to or part of a group, namely the Farrer Church, with whom she clearly has religious and political differences.
Jurisdiction of the Court over disputes within voluntary associations
There is no doubt, however, that the jurisdiction of the Court to intervene in disputes within voluntary associations such as the Club is limited. That has been clear at least since the High Court decided Cameron v Hogan (1934) 51 CLR 358. In that case, Rich, Dixon, Evatt and McTiernan JJ said (at 378):
The policy of the law is against interference in the affairs of voluntary associations which do not confer upon members civil rights susceptible of private enjoyment.
In the same case, Starke J said (at 383-4):
Has [the plaintiff], however, any redress in a Court of law for such unauthorized act? It may be unlawful in the sense that it is void (Graham v Sinclair [(1918) 25 CLR 102 at 107]). But to give him a right of relief at law or in equity, [the plaintiff] must establish some breach of contract with him, or some interference with his proprietary rights or interests. As a general rule, the Courts do not interfere in the contentions or quarrels of political parties, or, indeed, in the internal affairs of any voluntary association, society or club.
As Margaret Wilson J said of Cameron v Hogan in Greene v McIver (2012) 263 FLR 450 at 457; [36]:
The scope of that decision has been explored in many cases since. It is now tolerably clear that Courts will intervene in the affairs of voluntary associations in some circumstances, including:
(a)where there has been a breach of contract;
(b)where a proprietary right has been infringed;
(c)where someone’s livelihood or reputation is at stake.
There is much judicial discussion of when the constitution of a voluntary association constitutes a contract between the members such that a breach of the constitution would amount to a breach of contract for the purposes of such judicial intervention. That has exercised this Court in decisions such as Navarro v Spanish-Australian Club of Canberra ACT Inc (1987) 87 FLR 390; Australian Capital Territory Rugby League (ACTRL) Inc v ACT Leagues Club Ltd (1992) 107 FLR 303.
There has also been a move away from that strict approach, as evidenced by decisions in this Court such as Dixon v Australian Society of Accountants (1989) 95 FLR 231.
I am, however, relieved of the need to investigate that issue further for the legislation under which the Club is incorporated, the Associations Incorporation Act 1991 (ACT) (the Associations Act), resolves this issue.
Despite being incorporated in 1976, the Club effectively was deemed to be incorporated under the Associations Act by virtue of s 131. It is appropriate to set out that provision as it has since been repealed. It provided:
131.Associations incorporated under repealed Act
Unless the contrary intention appears in this Act, this Act shall be taken to apply in relation to an association incorporated under the repealed Act as if the association had been incorporated under this Act.
What is important is that under the Associations Act, the relations of members and the Court’s jurisdiction are set out in ss 48 and 49 as follows:
48. Relationship between association and members
The rules of an incorporated association are taken to bind the association and its members from time to time as if the rules had been signed and sealed by each member and contained covenants on the part of each member to observe all the rules.
49.Court’s jurisdiction
A member of an incorporated association who is deprived by a decision of the association of a right conferred on the member, as a member, by the rules of the association, may apply to the court for an order to vary or set aside the decision.
This has done much to avoid the technical considerations that otherwise faced courts dealing with disputes within voluntary associations, as observed by Brereton J in Islamic Council of South Australia Inc v Australian Federation of Islamic Councils Inc [2009] NSWSC 211 at [34] and Le Miere J in Bagga v The Sikh Association of Western Australia Inc [2012] WASC 193 at [9].
The approach to the Court’s jurisdiction has been comprehensively considered by Besanko J in Millar v Houghton Table Tennis & Sports Club Inc [2003] SASC 1. In that jurisdiction which, incidentally was the first Australian jurisdiction to enact legislation to incorporate voluntary associations with the Associations Incorporation Act 1858 (SA), s 23(1) of the current Associations Incorporation Act 1985 (SA) is similar but not identical to s 48 of the Associations Act.
His Honour set out three overarching considerations as follows (at [114]-[116]:
(a)A court may decline to grant relief because a member does not have standing to complain about the particular breach;
(b)A court will decline relief if the breach constitutes no more than an irregularity; and
(c)The remedies of declaration and injunction are discretionary, must be exercised by reference to well-established principles.
In Pettit v South Australian Harness Racing Club Inc (2006) 95 SASR 543, White J has helpfully summarised the principles by which the court will approach the question of the exercise of its jurisdiction as follows (at 548; [26]):
1. The constitution of an association binds the association and all of its members. This means that the Committee was bound to apply the relevant provisions of the Club’s constitution in its consideration of the membership applications.
2. The requirement that an exercise of an association’s powers be for the benefit of the members as a whole is to exclude their exercise for ‘ulterior special and particular advantages’, that is, it negatives ‘purposes foreign to the association’s operations, affairs and organizations’.
3. Other than in the limited circumstances of the kind outlined in the majority judgment in [Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459 at 466], the courts are not concerned in applications of the present kind with reviewing the underlying merits of the management committee’s decision. The courts do not substitute their discretion for the discretion exercised in good faith by an association’s committee.
There is no appeal on merits from management decisions to courts of law: nor will courts of law assume to act as a kind of supervisory board over decisions within the powers of management honestly arrived at [Howard Smith Ltd v Ampol Petroleum Ltd [1974] 1 NSWLR 68 at 74].
4. Conduct by a committee of an association will be contrary to the interests of the members as a whole if no committee, acting reasonably, could have engaged in that conduct.
5. Conduct may be contrary to the interests of the members as a whole even though a committee does not act in bad faith. In Wayde, Brennan J said [at 472]:
[I]f the directors exercise a power — albeit in good faith and for a purpose within the power — so as to impose a disadvantage, disability or burden on a member that, according to ordinary standards of reasonableness and fair dealing is unfair, the court may intervene ...
6. In order to succeed, it is not necessary for an applicant to show that any decision of the association was invalid.
7. However, proof of invalidity or non-compliance with an association’s rules may indicate that a decision is contrary to the interests of the members as a whole. This is because of the importance which the law attaches to adherence to the provisions of an association’s constitution. So much is apparent in the following passage in the judgment of Olsson J in Popovic v Tanasijevic (No 5) [(2000) 34 ACSR 1 at [505]]:
Conduct complained of must be unjustly detrimental to either individual members specifically or, alternatively, members as a whole. It is not necessary to prove lack of bona fides, but conduct beyond power or in breach of statutory, legal or financial duty may well amount to oppression. The very provisions of s 61(7) reveal the importance which the legislature attaches to the proper adherence to the provisions of the constitution and rules of an incorporated association. This is because a failure to observe such provisions has the effect of depriving members of their right, as members, to have the affairs of the entity conducted in accordance with its constitution and rules.
[most citations omitted]
Did the Club comply with its constitution in convening the meeting?
Having carefully considered the evidence, I was and remain satisfied that the Committee set the date, place and time of the Annual General Meeting.
Unfortunately, as I noted earlier, Mr Dragicevic did not produce the minutes of the Committee meetings at which the matter was discussed (at [54]). Neither did Mrs Moromilov, either directly or through Mrs Vesic. Although Mr Dragicevic would have easier access to them, he was not given any notice that they would be required and that this would be in issue. The matter was raised for the first time in oral evidence at the hearing. No doubt Mrs Vesic, as a member of the Committee, would also have had access to the Minutes and probably a copy.
Given Mr Dragicevic’s evidence that he had spoken to the relevant authorities about the availability of the hall immediately after the meeting, I find it inconceivable that the subject was not discussed at the meeting. It was also consistent with the fact that more than fifteen meetings had been held at that hall. Neither of these assertions were challenged.
Accordingly, I am satisfied that the Club complied with its constitution so far as convening the meeting was concerned.
Was there an imposition of a disadvantage which is unfair?
As noted, it is not the role of the Court to reconsider the merits of a decision of the Committee of a voluntary association. If, however, a decision imposes a disadvantage that, according to ordinary standards of reasonableness and fair dealing, is unfair, then the Court may intervene.
It was this which caused me to pause most. Mrs Moromilov says that the location of the Annual General Meeting may pose difficulties and prevent her attendance because of the dispute with the Church at Farrer with which the hall is associated.
I accept that the Committee had valid reasons for not holding the meeting in the Mawson premises. Indeed, Mrs Vesic gave no evidence that would suggest it was suitable or that it had been discussed at the Committee meeting.
The evidence of Mrs Moromilov was simply that attendance at the Farrer hall “may pose discomfort and difficulties regarding religious affiliations”. This, she said “may hinder a large number of Club members...” from attending. I have added relevant emphasis.
She does not say that she cannot attend nor that she will not attend because of these concerns. She did not produce any evidence to show that anyone else will actually be dissuaded from attending. Mrs Vesic did not give that evidence.
I can conclude that it may have been appropriate for the Committee to have chosen a more neutral venue for the meeting, but I have no jurisdiction to review the merits of the Committee’s decision unless the standard set out by Brennan J in Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459 at 472 is made out. I was not satisfied on the evidence that it reached this level and I remain of that view.
Mrs Moromilov as an unrepresented litigant
As Mrs Moromilov was unrepresented, though assisted by Ms Orton, it is incumbent upon me to ensure that she is not disadvantaged by that fact. This is difficult and I addressed some of those difficulties in Maher v Carpenter (2012) 60 MVR 240 at 246-7; [39]-[42]. I there noted that this obligation required me to consider at least, whether there were any rights of the unrepresented litigant had in connection with the issue raised by him or her. This must, of course, be limited so as not to be unfair to the other party. As I put it in Chifuntwe v Gardiner [2012] ACTSC 136 at [68]:
It is, of course, important for the court to see that any reasonable point of appeal that is apparently available to him is identified. This does not require the Court to ‘hunt’ for such a point, but merely to ensure that the rights of an unrepresented litigant are respected where to do so would not be unfair to the respondent.
Was the meeting invalid due to improper dealings with membership applications?
In this context, Mrs Moromilov referred to the applications that were made by forty-seven people associated with her. If their applications had been improperly dealt with, then that may affect the validity of the Annual General Meeting.
The issue of membership applications was also dealt with in Millar v Houghton Table Tennis & Sports Club Inc and Pettit v South Australian Harness Racing Club Inc. In the latter case, White J summarised the principles as follows (at 549-550; [26]):
8. The power to accept or reject membership applications must be exercised in good faith.
9. The power to accept or reject membership applications must be exercised having regard to the objects of the association.
10. A refusal of applications for membership without regard to the association’s objects may well be a decision which no reasonable committee could reach.
11.It is not for this Court to determine as a matter of objective fact whether or not the membership applications are bona fide applications.
12. An association may have many reasons for rejecting membership applications. It may determine that the aims and aspirations of an applicant are not consistent with the objects of the association. Even if the aims and aspirations of an applicant are consistent with the objects of the association, the application may be refused because, for example, the association does not have the ability to cater for an influx of members
[citations omitted]
The constitution of the Club sets out in its “Preamble” the following:
The objectives of the Association are:
·To promote the knowledge of the history of the Serbian people and the practice of Serbian Culture Traditions and Customs;
·To establish and maintain a clubhouse for the benefit of members and guests generally;
·To organise and take part in sporting and other recreational activities for the benefit of the members and their friends;
The Association shall not be involved in, develop, aspire with or to, promote or otherwise be associated with any political or sectarian organisation, group or party.
It appears to me that the Committee has, under the constitution, apparently unfettered power to decide whether or not to approve or reject a nomination of a new member. The only fetter is that imposed by law and that is limited to what I have set out above (at [81]).
The reasons given by Mr Dragicevic in his affidavit for rejecting the applications (quoted at [33]-[34]) seem to me to be relevant to these objectives and the non-partisan nature to which the Club aspires.
However, those are not the reasons stated in the letter of rejection from the Club (see [32]), and I find the reasons given in the letter less persuasive. It was, however, not suggested to Mr Dragicevic that he or other members of the Committee had not genuinely held the view expressed in Mr Dragicevic’s affidavit when rejecting the applications.
The only relevance of this to the present application, however, is that, were there to be people who should have been accepted as members and who, therefore, should have been given notice, the validity of the Annual General Meeting may have been in such doubt that, despite not initially being raised by Mrs Moromilov, it may have required consideration of whether an injunction should be granted.
Of the forty-seven applications, thirteen were applications to join by new members. I do not consider that the thirteen applications by new members were rejected for reasons that no reasonable Committee could reach having regard to the objects of the Club.
Thus the balance of the applications was thirty-four applications for renewal.
Applications for renewal are in a different category. There is no occasion for the Committee under the constitution to consider them. If the person is a member and pays the subscription payable for renewal, then the payment must be accepted by the Club and the person remains a member. Indeed, they can only cease to be a member if they are expelled in accordance with the rules, or they die, resign or fail to renew their membership. The constitution gives the Committee no power to refuse to accept the annual subscription and, thereby, somehow to refuse to renew the person’s membership.
That the Committee purported to do this was something of a problem, for it had no power to do so.
That one cheque for the renewal applications was tendered cannot be a valid reason for not accepting the renewal applications. Mr Dragicevic suggested that, as the “cheque ... was not divisible”, it would have created a challenge if one applicant were rejected. There was, however, one cheque for new applicants ($130) and one for renewals ($340). Since the renewals could not be rejected, that reason did not stand up.
On the other hand, the records of the Club are in such bad shape that it cannot be assumed that a person who asserts that they are a member indeed is a member. If a person who asserts they are a member is not really a member, a refund would then be required. The problem with a single cheque is that it is not at all clear to whom the refund should be paid. Has one person paid the lot or should the individual applicant or applicants separately receive the refund? This was entirely unclear and the evidence of Mrs Moromilov did not assist.
Nevertheless, in the end, this did not justify an injunction especially in the terms sought by Mrs Moromilov. An inspection of the documents filed showed that a majority of those who had applied for a renewal of their membership already appeared in one of the three lists of members, and thus was necessarily a member.
The evidence was that notice of the Annual General Meeting had been sent to all the people whose names appeared on any one of the three lists. That so many of the names of the renewal applicants appeared on one of these three lists shows that the Committee had been making a genuine effort to ensure that all persons who may have some reasonable claim to membership received notice of the Annual General Meeting. Had none appeared in any of the lists, that may have justified a different inference.
Given the state of the records of the Club, I am not satisfied, in the absence of other evidence, that the renewal applicants whose names did not appear on any of the lists were already members of the Club and were entitled to a renewal.
Conclusions
In the circumstances, it did not seem to me that the above justified the granting of an injunction and so I dismissed the application to restrain the holding of the Annual General Meeting unless it was held at a different venue. That is not to say that, if there is other evidence about the various membership applicants and their membership, the meeting might not turn out later to be invalid through failure to give them notice. I make no finding of this.
In any event, so far as the application for an order relating to the processing of the applications for membership, this was not pressed. I was not asked to make that order.
So far as return of property was concerned, there was no evidence to support any such order. There was no basis for making that order.
Accordingly, I dismissed the application with costs.
I certify that the preceding ninety-nine (99) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.
Associate:
Date: 2013
Counsel for the plaintiff: Self-represented
Solicitor for the plaintiff: Self-represented
Counsel for the defendant: Mr B Meagher SC
Solicitor for the defendant: O’Connor Harris
Date of hearing: 28 October 2011
Date of judgment: 17 May 2013
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