Graham v Sinclair - [1918] HCA 40

SINCLAIR AND OTHERS

RESPONDENTS. DEFENDANTS,

ON APPEAL FROM THE SUPREME COURT OF Club-Expulsion of member-Proprietary club-Company conducting club-Cause

of action-Action for tort---Resolution expelling member without hearing-Void act of directors. SYDNEY,

A company had been formed for the purpose of establishing and conducting August 14.

a club for nurses, and accordingly established and conducted such a club. The directors of the company, without hearing the plaintiff and notwithstanding her request to be heard, purported by resolution to suspend her from member- ship of the club, and, by their direction, the secretary of the company informed the plaintiff of the suspension, and stated that she could no longer be accom- modated at the club. The plaintiff brought an action against the directors personally to recover damages, alleging that they had wrongfully suspended and expelled her from the club.

Held, that as the plaintiff was not afforded an opportunity of defending herself, the resolution of the directors was a void act, and did not affect her rights as a member of the club, and that as there was no evidence of active resistance by the directors to the exercise by the plaintiff of her rights as a member of the club, the plaintiff was properly nonsuited.

Decision of the Supreme Court of New South Wales: Graham v. Sinclair, 18 S.R. (N.S.W.), 75, affirmed.

APPEAL from the Supreme Court of New South Wales.

An action was brought in the Supreme Court by Ellen Graham against Russell Sinclair, Eric Sinclair, Mabel Newill, Alice Watson

25 CLR 103

and George C. Smith, in which the plaintiff by her declaration H. C. alleged that she was a duly qualified nurse and a member and shareholder of the Nurses' Club Ltd., and lawfully entitled to have and enjoy all the privileges of membership and all business advantages in her calling of nurse and all professional benefits which arose or might arise from time to time in the usual course from regular membership of the Nurses' Club Ltd.; that the defendants purport- ing to act as directors of the Club illegally contriving well knowing the premises did wrongfully and maliciously suspend and expel the plaintiff from the aforesaid Club and cause her name to be removed from the list of members thereby depriving the plaintiff of all benefits rights privileges and advantages which she had by member- ship thereof and further wrongfully prevented her from entering on the Club's premises whereby the plaintiff has suffered much loss and has been prevented from following in the usual way her lawful business in her profession of a nurse and her standing and position have been affected and damaged and the plaintiff has lost all the privileges benefits professional and business advantages which she gained or may gain as a member of the Nurses' Club Ltd." The plaintiff claimed £1,000 damages.

By their defence the defendants pleaded not guilty, and for a second plea said that " it was a term of membership of the said Club that every…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1918] HCA 40
Decision Date: 14 August 1918

CaseChat Overview and Summary

The High Court of Australia heard an appeal from the Supreme Court of New South Wales concerning a dispute between Ellen Graham, a member and shareholder of Nurses' Club Ltd., and the directors of the company, Russell Sinclair and others. Ms. Graham alleged that the directors had wrongfully and maliciously suspended and expelled her from the club, thereby depriving her of the benefits and privileges of membership and preventing her from entering the club premises, causing her significant loss. The directors pleaded not guilty and asserted that the suspension was carried out in accordance with the club's rules, which allowed the committee to suspend a member and refer the matter to the directors for confirmation.

The central legal issues before the High Court were whether the directors' resolution to suspend Ms. Graham, made without affording her an opportunity to be heard, constituted a void act, and if so, whether this void act, coupled with the subsequent communication to Ms. Graham, amounted to an actionable tort against the directors personally. The court was required to determine if the directors' actions constituted an unlawful interference with Ms. Graham's contractual rights as a member of the club, for which they could be held personally liable in damages.

The High Court affirmed the decision of the Supreme Court, holding that the directors' resolution to suspend Ms. Graham was a void act because she was not given an opportunity to defend herself, despite her request to do so. However, the court found that this void resolution, and the subsequent letters informing Ms. Graham of her suspension, did not constitute an active interference or an actionable wrong by the directors personally. The court reasoned that the club was a proprietary club owned by the company, and any breach of contract for membership would lie against the company, not the individual directors. As there was no evidence of active resistance by the directors to Ms. Graham's exercise of her rights, the plaintiff was properly nonsuited.

Consequently, the appeal was dismissed, and the decision of the Supreme Court of New South Wales was affirmed.

Orders