Gould, in the matter of Mosman Returned Servicemen's Club Limited v Mosman Returned Servicemen's Club Limited

[2009] FCA 1592

FEDERAL COURT OF AUSTRALIA

Gould, in the matter of Mosman Returned Servicemen’s Club Limited v Mosman Returned Servicemen’s Club Limited [2009] FCA 1592

IN THE MATTER OF MOSMAN RETURNED SERVICEMEN'S CLUB LIMITED (ACN 000 613 785)

STEPHEN GEORGE GOULD v MOSMAN RETURNED SERVICEMEN'S CLUB LIMITED (ACN 000 613 785)

NSD 524 of 2009

LINDGREN J
15 DECEMBER 2009
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 524 of 2009

IN THE MATTER OF MOSMAN RETURNED SERVICEMEN'S CLUB LIMITED
(ACN 000 613 785)

BETWEEN:	STEPHEN GEORGE GOULD Plaintiff
AND:	MOSMAN RETURNED SERVICEMEN'S CLUB LIMITED (ACN 000 613 785)  Defendant

JUDGE:	LINDGREN J
DATE OF ORDER:	15 DECEMBER 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.        The proceeding be dismissed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 524 of 2009

IN THE MATTER OF MOSMAN RETURNED SERVICEMEN'S CLUB LIMITED
(ACN 000 613 785)

BETWEEN:	STEPHEN GEORGE GOULD Plaintiff
AND:	MOSMAN RETURNED SERVICEMEN'S CLUB LIMITED (ACN 000 613 785) Defendant

JUDGE:	LINDGREN J
DATE:	15 DECEMBER 2009
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. In this proceeding, which was commenced on 3 June 2009, the plaintiff, Mr Gould, has from time to time sought various forms of relief against the defendant, Mosman Returned Servicemen’s Club Limited (the Club), and against other persons such as directors of the Club who are not defendants. 

2. Mr Gould is not legally represented.  The Club filed a notice of appearance on 19 June 2009.  Its solicitors named in the notice were Pigott Stinson Lawyers.  Subsequently, on 31 July 2009, an amended notice of appearance was filed in which the Club submitted to any order of the Court save as to costs.

3. By the time of filing the amended notice of appearance, the solicitors mentioned had ceased to represent the Club in the proceeding.  Therefore, since that date, not only has Mr Gould been unrepresented, but so has the Club.  Apparently, the Club took this course in order to save legal costs.

4. I have no doubt that Mr Gould and certain other members of the Club feel very strongly that the existing board of directors is not serving the Club’s interests and should be removed and replaced.

5. The forms of relief that Mr Gould has sought from time to time have varied.  Numerous allegations have been made by Mr Gould in his affidavits and from the bar table.  These allegations include:

   ·that there has been intimidation of members who feel as Mr Gould does and who oppose the course of management of the Club that has been pursued by the board of directors;

   ·that the board of directors misled the members into adopting the Club’s present constitution, which tends to entrench the reign of the existing directors;

   ·that the board of directors is deliberately running down the business of the Club with a view to its ceasing to function effectively as a Club and becoming non-viable, so that the local council will be able to “come to the rescue” by permitting the land to be developed as shops (a director who is also a councillor and has held both positions for many years will then see a plan that he supports favouring developers come to fruition).

   ·that the board of directors has failed to allow the members to vote upon resolutions that have been proposed by members;

   ·that the board of directors has failed to respond to numerous questions relating to the financial statements of the Club.

6. At one stage of the proceeding, I arranged for the matter to be referred, under O 80 of the Federal Court Rules, to counsel to tender advice to Mr Gould, and I understand that Mr Gould did confer with counsel.

7. In the originating process filed on 3 June 2009, Mr Gould sought among other things an order directed to overcoming his suspension as a member of the Club.  He stated in the originating process that the object of the suspension was to prevent him from attending the Club’s annual general meeting on 31 May 2009.  In that particular respect, Mr Gould had some success, because, by consent, before a Deputy District Registrar, the Club agreed to reinstate him.  On 24 July 2009, the Deputy District Registrar noted that the parties had agreed that Mr Gould be reinstated to the rights and privileges of membership of the Club effective immediately, and that his birthday benefits of June 2009, as a member of the Club, were reinstated.

8. In view of the limited relief sought in the originating process, it may be thought that that would have been the end of the matter.  However, the originating process was amended to attack, in addition to other matters, the conduct of the annual general meeting that had been held on Sunday, 31 May 2009.  It appears that Mr Gould accepts that a notice of motion dated 13 May 2009, signed by two members of the Club, for dismissal of the Club’s directors and for the appointment of a “suitably qualified Administrator” by “Clubs NSW”, was not given 42 days prior to the annual general meeting as required by the Club’s constitution, so that the stance taken by the board that the motion could not be required to be considered at the annual general meeting was correct.  However, Mr Gould then attacked the adoption of the constitution itself and asserted that the board had planned to have the particular constitution adopted because it served its purposes.

9. Another aspect of the matter that deserves attention concerns s 249D of the Corporations Act 2001 (Cth). I pointed out to Mr Gould that that section requires the directors of a company to call and arrange to hold a general meeting on the request of, relevantly, at least 100 members who were entitled to vote at the general meeting. Indeed, throughout the proceeding, on many occasions I have stressed that, generally speaking, the complaints made by Mr Gould are matters for democratic resolution within the Club by its members.

10. Mr Gould did busy himself in obtaining signatures by members to a requisition for the holding of a general meeting, and apparently more than the 100 members signed.  The Club pointed out, however, that the terms of the resolutions proposed did not fall within the province of the members to pass, and so that particular effort by Mr Gould, which must have been considerable, came to naught.

11. Mr Gould has filed numerous notices of motion, an amended notice of motion and numerous affidavits.  He has sought adjournments on many occasions, which I have granted, with a view to his considering points that I have made at the hearings.  When the proceeding was last before the Court, I said to Mr Gould that the matter could not be allowed to continue indefinitely and that I would wish to bring it to a conclusion today, 15 December 2009.

12. The particular notice of motion that Mr Gould has filed returnable this morning seeks orders removing Kerry Mahon, Edward Arigho, Robert Maul and Dominic Lopez as, respectively, President, Vice-President, Treasurer and Director of the Club, and Jeff Vidler as Secretary, General Manager and CEO of the Club, and an order:

    That an Interim replacement Board is appointed immediately until new elections are held as soon as the accounts for the year are finalised and the Notices of the Annual General Meeting [AGM] are sent out by 31 March 2009 [sic] at the latest.

13. I told Mr Gould that the Court does not have a general power to remove directors or to appoint directors.  I explained that, in particular circumstances, the Court has a power to declare that a person who purports to hold office as a director does not, in fact, hold that office, and, in such a case, the Court could grant ancillary injunctive relief.  I also referred to powers that the Court would have as part and parcel of an oppression suit.

14. Mr Gould has sought a further adjournment today to the New Year, on this occasion for the purpose of allowing him to explore a “Review Report” of the Mosman Municipal Council of November 2005 headed “Local Government Reform Program – Promoting Better Practice”.  Apparently, his objective is to explore the question whether a particular councillor has a conflict of interest by being also a member of the board of directors of the Club.  Mr Gould has referred me to the annual report for 2003/2004 of the New South Wales Ombudsman which, at p 82, apparently refers to a conflict of interest touching that particular councillor.  Mr Gould has emphasised a passage in that report stating:

    This conduct was a serious breach of his obligations as a councillor, and raises serious questions about his fitness to hold the office of an elected member.

15. In the part of the report to which Mr Gould has referred, the identity of the councillor is not revealed, but, in any event, the particular complaint made at p 82 of the report seems to relate to circumstances other than those touching the Club.  The statement quoted does not of course refer to the individual’s fitness to hold office as “an elected member of the Club”.

16. I have no doubt that Mr Gould genuinely holds the views that the Club is mismanaged, and it may be that there is substance to his sense of grievance.  It may be that, if he had been legally represented and could articulate and support his complaints in proper form, the course of events would have been different.  For example, even today I emphasised that if he wishes to have motions considered at the next annual general meeting of the Club, as apparently he does, he needs to take legal advice in order to ensure that the resolutions proposed are prepared in proper form and in conformity with the Club’s constitution.  The division within the Club is such that it seems quite clear that if Mr Gould does not dot his i’s and cross his t’s, the board will not advance, for consideration by the general members, the resolutions that Mr Gould may propose.

17. The stance which the board of directors has taken is that they will comply with any order of the Court, and that if the Court should order them to convene a general meeting of members they will do so.  However, the Court is not at liberty to order the convening of a meeting unless there is a basis in law for it to do so.

18. Mr Gould has had ample opportunity, in the light of the numerous adjournments that have been granted at his request, to demonstrate a justiciable case, but, he has not done so.

19. There are two other matters that should be mentioned.

20. At one stage, Mr Gould asked that I transfer the proceeding to the Supreme Court of New South Wales.  I would have done that if there had been a cause of action within the jurisdiction of that Court and not within the jurisdiction of this Court, but none was demonstrated.

21. The other matter that should be mentioned for the sake of completeness is that at one stage Mr Gould asked that I disqualify myself for bias, but he said that he had decided not to pursue that particular motion.

22. While I have had sympathy with Mr Gould in view of his undoubted sincerity, I will not allow the proceeding to be adjourned yet again in circumstances in which the past record clearly suggests that events will not improve next time.

23. For the above reasons, the proceeding should be dismissed.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate:

Dated:        24 December 2009

The plaintiff appeared in person.
Dates of Hearing:	7 September, 25 September, 9 October, 26 October, 13 November, 15 December 2009
Date of Judgment:	15 December 2009