KAVANAGH and PINE VALLEY PISTOL CLUB INCORPORATED - [2020] WASAT 60

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: ASSOCIATIONS INCORPORATION ACT 2015 (WA)
CITATION:   KAVANAGH and PINE VALLEY PISTOL CLUB INCORPORATED [2020] WASAT 60
MEMBER:   MR D AITKEN, SENIOR MEMBER
HEARD:   DETERMINED ON THE DOCUMENTS
DELIVERED          :   3 JUNE 2020
FILE NO/S:   CC 1230 of 2019
BETWEEN:   PHILIP ANDREW KAVANAGH
First Applicant
COLIN JOHN ANDERSON
Second Applicant
PAUL HAGIANTONIOU
Third Applicant
AND
PINE VALLEY PISTOL CLUB INCORPORATED
Respondent

Catchwords:

Incorporated association - Proper construction of rules - Principles applicable to construction of rules of an incorporated association - Whether Tribunal should reject or omit words contained in rules

Legislation:

Associations Incorporation Act 1985 (SA), s 23(1)
Associations Incorporation Act 2015 (WA), s 3, s 21, s 30(3), s 30(4), s 30(6), s 182(1)
State Administrative Tribunal Act 2004 (WA), s 60(2)

Result:

Application successful

Category: B

Representation:

Counsel:

First Applicant	:	In Person
Second Applicant	:	In Person
Third Applicant	:	In Person
Respondent	:	Ms D Stefani (acting as agent)

Solicitors:

First Applicant	:	N/A
Second Applicant	:	N/A
Third Applicant	:	N/A
Respondent	:	N/A

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

Black Box Control Pty Ltd v TerraVision Pty Ltd [2016] WASCA 219
Echunga Football Club Inc v Hills Football League Inc [2014] SASC 201
Kavanagh and Pine Valley Pistol Club Incorporated [2020] WASAT 11
Tokio Marine & Nichido Fire Insurance Co Ltd v Hans Bo Kristian Holgerson trading as Holgerssons Complete Home Service [2019] WASCA 114

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

By an application dated 14 August 2019 (application) Mr Philip Andrew Kavanagh, Mr Colin John Anderson and Mr Paul Hagiantoniou (applicants) applied to the Tribunal under s 182(1) of the Associations Incorporation Act 2015 (WA) (AI Act) for the following orders against Pine Valley Pistol Club Incorporated (the Club):
1.That the decision made by the Committee of the [Club] [the Committee] on 19 June 2019 to decline to renew the memberships of the [Club] respectively held by [each of the applicants] is void and of no effect.
2.That the respective memberships of the [Club] held by the [applicants] be renewed subject to each of the [applicants] paying the subscription fee.
Accompanying the application were copies of the letter sent, in identical terms, to each of the applicants dated 23 June 2019 by Mr L Randall, President of the Club (the Club's letter to the applicants), which states as follows:
At the Committee meeting held on the 19 June 2019, club affiliations were presented for ratification.
At this meeting it was resolved to not accept your re-affiliation for the 2019-2020 membership year in accordance with the Pine Valley Club (sic) Constitution 2018. Rule 5 Section 6.
The current rules of the Club are the rules set out in the document titled 'Pine Valley Pistol Club (Inc) Constitution 2018' (Club's Rules), which accompanied the application. In these reasons, all references to rules are references to rules in the Club's Rules.
Rule 5(6) states as follows:
Membership is for 12 months and is renewable annually upon completion of a member's record form and payment of the applicable subscription.
The Management Committee reserves the right to not accept an application or renewal. The decision not to accept an application shall be communicated to the applicant within 10 days of the Committee's decision.
The grounds for the orders sought are stated in the application to be as follows:
1.The first sentence of [rule] 5(6) creates a right whereby an existing member is automatically entitled to have his or her membership renewed. An existing member's membership can only be terminated pursuant to [rules] 8 or 9 of the [Club's Rules]. The second sentence of [rule] 5(6) is inconsistent with the first sentence and is inconsistent with [rules] 8 and 9 of the [Club's Rules] (that deal with the circumstances in which the membership of an existing member can be terminated). The second sentence of [rule] 5(6) is also inconsistent with [rules] 5(1) (4) of the [Club's Rules] in that it purportedly creates a process whereby membership applications can be refused that is different to the process envisaged by [rules] 5(1) (4).
(Ground 1)
2.The second sentence of [rule] 5(6) refers to the Management Committee of the [Club]. The [Club's Rules do] not provide for a body known as the Management Committee.
(Ground 2)
3.The second sentence of [rule] 5(6) does not confer a power upon the Management Committee with respect to the non-renewal of membership it merely refers to the meaningless concept that this Committee reserves the right to not accept a membership application or renewal.
(Ground 3)
In Kavanagh and Pine Valley Pistol Club Incorporated [2020] WASAT 11 (Preliminary Issue Decision) the Tribunal considered, as a preliminary issue in this proceeding, whether it has jurisdiction to determine the dispute which is the subject of this application under s 182(1) of the AI Act, with regard to two questions. The first question was whether the applicants followed the dispute resolution procedure in the Club's Rules, which was answered in the affirmative. The second question was whether the applicants are members of the Club for the purposes of s 182(1) of the AI Act. The Tribunal decided that, for the reasons stated in [86] of the Preliminary Issue Decision, it is not possible to answer the second question (and hence the preliminary issue), until it makes a finding regarding the proper construction of rule 5(6).
In response to an order of the Tribunal, the Club filed a written response to the grounds stated in the application, addressing the specific points made in those grounds dated 24 February 2020 (the Club's response to the grounds of the application) and a copy of the minutes of the meeting of the Committee of the Club held on 19 June 2019 (the Committee Meeting Minutes).
The Tribunal then decided to determine the matter entirely on the documents, pursuant to s 60(2) of the State Administrative Tribunal Act 2004 (WA).
The documents which are before the Tribunal and which will be considered in determining the matter are:
•the application
•the Club's Rules
•the Club's letter to the applicants
•the Committee Meeting Minutes
•the Club's response to the grounds of the application
In the Committee Meeting Minutes, item 3.13 is headed 'Reaffiliations objection to the issuing of membership renewal invoices' and under that is stated 'Objections presented on members who have not acted in the best interests of the club' and under that motions are recorded as being passed that each of the applicants is to be advised that the Committee voted not to accept his reaffiliation to the Club.
The Club's response to the grounds of the application is as follows:
Response to Ground 1:
[The Club] does not believe that [rule] 5(6) of the [Club's Rules] can be dissected and only the first sentence applied as a form of argument. [Rule] 5(6), in its entirety has been officially recognised by [Department of Mines, Industry Regulation and Safety (DMIRS)] within [the Club's Rules] and the above [rule] is able to be enacted by the [Club] Committee in its entirety.
[The Club] believes that the term 'renewable' in the context of the [Club's Rules] is in the form of a contract between a person who must renew membership 'contract' which may be extended to the end of a new fixed period at the discretion of the Management Committee (sic). As clearly stated in the second sentence of [rule] 5(6). The Management Committee reserves the right not to accept a membership application or renewal.
When the entire [rule] is read, it is clear that the intention of the [rule] is that The (sic) Management Committee may decide not to accept a renewal. It is clear from the wording of [rule] 5(1) (4) that process relating to a refusal of membership under these [rules] relates to new applicants. In each of [rules] 5(2) - (4) the words applicant and application are used and not the words member or renewal.
[The Club] maintains that the processing of memberships and membership renewals falls within [rule] 5(6) and that as the [applicants] did not have their membership terminated, therefore [rules] 8 and 9 are not relevant to this matter and as such no dispute resolution was required.
[The Club] maintain[s] that the [rule] in question is for new applications. The [applicants] were renewing an existing membership and therefore [rules] 5(1) - (4) were not applicable.
Response to Ground 2:
[The Club is] of the opinion that this is an error in nomenclature only and that [rule] 9 (sic) Committee of Management clearly outlines the roles and responsibilities of a management committee. The [Club's Rules] in its current substantive form has been approved by DMIRS on a number of occasions (sic) post the enforcement of the [AI Act] and at no stage was wording of these [rules] questioned. Further to this, the [applicants] signified their acceptance of the [Club's Rules] each year that they applied for a renewal their membership.
Response to Ground 3:
[The Club] believe[s] that as an association, the renewal of memberships is a matter within the complete and exclusive purview of the association, [the Club] has a right to select it is members.

Issue to be determined

The issue to be determined in this matter is the proper construction of the Club's Rules, in particular rule 5(6).
The construction of the Club's Rules is to be undertaken in accordance with the principles applicable to the construction of the rules of an incorporated association under the AI Act.

The principles applicable to the construction of the rules of an incorporated association under the AI Act

To determine the principles applicable to the construction of the rules of an incorporated association under the AI Act, the starting point is to consider the provisions of the AI Act.
Section 21 of the AI Act provides as follows:
(1)The rules of an incorporated association bind the association and the members of the association as if
(a)they contained an agreement on the part of each member to be bound by and observe all the provisions of the rules; and
(b)that agreement were duly executed by each member.
(2)Subsection (1) has effect only so far as the rules are consistent with this Act.
(3)The application of this section extends to an association that is, or is deemed to be, an incorporated association immediately before the commencement of this section.
The rules of an incorporated association under the AI Act therefore have statutory force and should be taken to operate as if they are the terms of a contract between the members of the association themselves and between the members and the association.
In Echunga Football Club Inc v Hills Football League Inc [2014] SASC 201 (Echunga), after referring to s 23(1) of the Associations Incorporation Act 1985 (SA), which provides that '[t]he rules of an incorporated association bind the association and all members of the association', at [16] [19], Stanley J stated as follows (citations omitted):
[16]… The rules of an incorporated association represent the terms of the statutory contract between the members of the association inter se and between the members and the association. It is not a contract, however, which in all respects, attracts those principles which are applicable to contracts in general or to commercial contracts in particular. The rules of an incorporated association not only regulate the conduct of the association but also serve public purposes going beyond the mere delineation of the rights and obligations of the association’s members. The principles applicable to the construction of the rules of an incorporated association are akin to the principles applicable to the construction of a corporate constitution. Those principles are explained in Lion Nathan v Coopers Brewery by Finn J and approved on appeal. Those principles are an adaptation of the principles which govern the construction of commercial contracts. The adaption of those principles must recognise as well that the rules to be construed are not those of a financial or trading corporation but an incorporated voluntary sporting association. The need to modify those principles in these circumstances was recognised by Besanko J in Millar & Ors v Houghton Table Tennis & Sports Club Inc. I will come back to this.
[17]The principles applicable to the construction of contracts have been the subject of recent consideration by the High Court in Electricity Generation Corporation (Trading as Verve Energy) v Woodside Energy Ltd. French CJ, Hayne, Crennan and Kiefel JJ said that the meaning of the terms of a commercial contract are to be decided by what a reasonable business person would have understood those terms to mean. This requires consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding of the genesis of the transaction, the background, the context and the market in which the parties are operating.
[18]Those principles, however, must be modified for two reasons when a court is construing the rules of an incorporated association such as this. First, because the rules of an incorporated association have a public dimension. They serve a public purpose and third parties will rely upon them from time to time. They are not merely a private record of a private bargain, rather, the rules of an incorporated association have statutory force by reason of s 23 of the Associations Incorporation Act 1985 (SA). Secondly, the court must recognise that this association is not a commercial operation established with a view to generating profits but rather is what may be described as a non-profit making sporting organisation. In this regard it is proper to recognise that the by-laws are drafted in an ad hoc and piecemeal fashion by lay-persons rather than lawyers, couched in terms intelligible to them but which often lack the consistency, coherence, form and drafting that would be expected in a statute or commercial contract. Accordingly, in my view, the court must approach the construction of a particular by-law, when read in the context of the by-laws as a whole, with a degree of flexibility. This means that the courts should not make too much of infelicities of expression in the by-laws, nor be too quick to identify absurdity, illogicality or apparent inconsistencies. As French J (as he then was) said in the context of interpreting industrial awards, while fractured and illogical prose may be met by a generous and liberal approach to construction, the instrument must make sense according to its ordinary and grammatical language. Nonetheless, because of the public nature of the rules of an incorporated association, I consider it proper to place greaterstore by, what Kenny J in Lion Nathan calls, the constitutive text in construing the rules of an incorporated association as opposed to a private contract. This approach will constrain the ambit of the matters constituting surrounding circumstances to which a court has regard.
[19]This is because the rules of an incorporated association are a deemed contract, created by statute, without the normal elements of a contract having to be established. Its rules speak not only to its members but to third parties who might consider becoming members. Accordingly, it is important that the rules are capable of being construed by third parties by reference to the text of the rules. That is not to say that context is irrelevant to the construction of the rules of an incorporated association. A court can have regard to extrinsic material when construing the rules but, like a corporate constitution, the case for restraint in using such contextual considerations as the surrounding circumstances in the enactment of the rules as an aid to the construction of those rules remains cogent. Nonetheless, some “surrounding circumstances“, particularly those that are likely to be well-known, not just to the members of the association, but also to relevant third parties, are part of the contextual considerations to be weighed by a court in construing the rules of an incorporated association.
The Tribunal considers that those comments are applicable to the rules of an incorporated association under the AI Act (incorporated association) and will apply them to the construction of the Club's Rules in this matter.
The Tribunal draws from those comments the following salient points:
1)The rules of an incorporated association represent the terms of a statutory contract, firstly between the members of the association themselves and, secondly between the members and the association.
2)The principles applicable to the construction of the rules of an incorporated association are an adaptation of the principles which govern the construction of commercial contracts.
3)Those principles, however, must be modified, in the manner outlined below, when the Tribunal is construing the rules of an incorporated association, for two reasons. Firstly, the rules of an incorporated association have a public dimension. Secondly, an incorporated association is not a commercial operation established with a view to generating profits, but rather is what may be described as a non-profit making organisation.
4)The Tribunal must approach the construction of a particular rule of an incorporated association, when read in the context of the rules as a whole, with a degree of flexibility. This means that the Tribunal should not make too much of infelicities of expression in the rules of an incorporated association, nor be too quick to identify absurdity, illogicality or apparent inconsistencies.
5)The rules of an incorporated association are a deemed contract, created by statute, without the normal elements of a contract having to be established. The rules speak not only to the members of the incorporated association, but also to third parties who might consider becoming members. Accordingly, it is important that the rules are capable of being construed by third parties by reference to the text of the rules.
6)Some 'surrounding circumstances', particularly those that are likely to be well-known, not just to the members of the incorporated association, but also to relevant third parties, are part of the contextual considerations which can be weighed by the Tribunal in construing the rules of an incorporated association, but restraint ought to be exercised in doing so.

The relevant provisions of the Club's Rules

The relevant provisions of the Club's Rules, for the purpose of this proceeding, are rules 5, 7, 8 and 9, which are as follows.
Membership
5(1)        A person who wishes to join the club must-
(a)make application to the Committee in writing on the prescribed form.
(b)be proposed by two financial members
(c)All members must comply with all relevant State and Federal Firearms Legislation
(2)The Committee must consider each application made under sub-rule (1) at a Committee meeting and must at that meeting or the next Committee meeting accept or reject that application.
(3)An applicant whose application for membership of the Club is rejected under sub-rule (2) must, if he or she wishes to appeal against that decision, give notice to the Secretary of his or her intention to do so within a period of 14 days from the date he or she is advised of the rejection.
(4)When notice is given under sub-rule (3), the Club in a general meeting no later than the next annual general meeting, must either confirm or set aside the decision of the Committee to reject the application, after having afforded the applicant who gave that notice a reasonable opportunity to be heard by, or to make representations in writing to, the Club in the general meeting.
(5)There shall be the following classes of membership as defined by the Rules of the Club:
(i)Probationary
(ii)Full
(iii)Family
(iv)Social
(v)Associate
(vi)Junior/Sub Junior
(vii)Life (Honorary)
(viii)Patron
The criteria for entry to each class of membership shall, subject to Clause 9, be decided by the members at a general meeting, and membership of a class shall carry such rights and privileges as the Management Committee may from time to time determine.
(6)Membership is for 12 months and is renewable annually upon the completion of a member's record form and payment of the applicable subscription.
The Management Committee reserves the right to not accept a membership application or renewal. The decision to not accept an application shall be communicated to the applicant within 10 days of the Committee's decision.
(7)Probationary Membership
(i)A person who has not been a financial member for at least 24 months is deemed to be a probationary member.
(ii)During the probationary period the Club reserves the right to expel with prorata refund of annual subscription, less any outstanding levies, any probationary members who, in the opinion of the majority of the Management Committee is considered to be unsatisfactory. The Club further reserves the right to decline to publicly specify the reason for such action.
Subscriptions of members of the Club
7(1)        The members may from time to time at a general meeting determine the amount of the subscription to be paid by each member.
(2)Each member must pay to the Treasurer, annually on or before 1 July or such other date as the Committee from time to time determines, the amount of the subscription determined under sub-rule (1).
(3)Subject to sub-rule (4), a member whose subscription is not paid within 1 month after the relevant date fixed by or under sub-rule (2) ceases on the expiry of that period to be a member, unless the Committee decides otherwise.
(4)A person exercises all the rights and obligations of a member for the purposes of these rules if his or her subscription is paid on or before the relevant date fixed by or under sub-rule (2) or within 1 month thereafter, or such other time as the Committee allows.
(5)When imposing a levy the Committee shall state the purpose of the levy and the due date.
(6)If the levy is unpaid after the due date the Committee may declare all defaulting members un-financial.
Termination of membership of the Club
8Membership of the Club may be terminated upon-
(a)receipt by the Secretary of a notice in writing from a member of his or her resignation from the Club. Such person remains liable to pay to the Club the amount of any subscription due and payable by that person to the Club but unpaid at the date of termination;
or
(b)non-payment by a member of his or her subscription within one month of the date fixed by the Committee for subscriptions to be paid, unless the Committee decides otherwise in accordance with rule 7 (3);
or
(c)expulsion of a member in accordance with rule 9.
Suspension or expulsion of members of the Club
9(1)        If the Committee considers that a member should be suspended or expelled from membership of the Club because his or her conduct is detrimental to the interests of the Club, the Committee must communicate, either orally or in writing, to the member-
(a)Notice of the proposed suspension or expulsion and of the time, date and place of the Committee meeting at which the question of that suspension or expulsion will be decided; and
(b)particulars of that conduct, not less than 14 days before the date of the Committee meeting referred to in paragraph (a).
(2)At the Committee meeting referred to in a notice communicated under sub-rule (1), the Committee may, having afforded the member concerned a reasonable opportunity to be heard by, or to make representations in writing to, the Committee, suspend or expel or decline to suspend or expel that member from membership of the Club and must, forthwith after deciding whether or not to suspend or expel that member, communicate that decision in writing to that member.
(3)Subject to sub-rule (5), a member has his or her membership suspended or ceases to be a member 14 days after the day on which the decision to suspend or expel a member is communicated to him or her under sub-rule (2).
(4)A member who is suspended or expelled under sub-rule (2) must, if he or she wishes to appeal against that suspension or expulsion, give notice to the Secretary of his or her intention to do so within the period of 14 days referred to in sub-rule (3).
(5)When notice is given under sub-rule (4)-
(a)the Club in a general meeting, must either confirm or set aside the decision of the Committee to suspend or expel the member, after having afforded the member who gave that notice a reasonable opportunity to be heard by, or to make representations in writing to, the Club in the general meeting; and
(b)the member who gave that notice is not suspended or does not cease to be a member unless and until the decision of the Committee to suspend or expel him or her is confirmed under this sub-rule.

Reading rules 5, 7, 8 and 9 as a whole, but leaving to one side for the moment the second and third sentences of rule 5(6), the Tribunal notes that those rules provide as follows regarding membership of the Club:
1)A person who wishes to join the Club as a member must apply to the Committee, which must consider the application at a Committee meeting and either accept or reject that application: rule 5(1) and (2). If the membership application is rejected, the applicant may appeal against that decision, by giving notice to the Secretary within 14 days of being advised of the rejection and the appeal is considered by a general meeting of the Club: rule 5(3) and (4). A general meeting is defined in rule 2 as a meeting to which all members are invited.
2)There are eight classes of membership: rule 5(5). One of those classes of membership is 'probationary membership', which includes all persons who have 'not been a financial member for at least 24 months'. During the 'probationary period' a probationary member may be expelled if they are considered to be 'unsatisfactory' in the opinion of the Management Committee: rule 5(7).
3)Membership is for 12 months and is renewable annually upon the completion of a 'member's record form' and payment of the applicable subscription: rule 5(6), first sentence. The amount of the subscription is determined at a general meeting: rule 7(1). Each member must pay their subscription annually on or before 1 July or such other date as the Committee, from time to time, determines (payment date): rule 7(2). If a member does not pay their subscription within one month after the payment date, his or her membership ceases, unless the Committee decides otherwise: rule 7(3). If a member pays his or her subscription on or before the payment date, or within one month thereafter, or by such other time as the Committee allows, he or she continue as a member: rule 7(4).
4)Membership is terminated if a member gives the Secretary a written resignation from the Club, or does not pay his or her subscription within one month of the payment date, unless the Committee decides otherwise under rule 7(3): rule 8.
5)If the Committee considers that a member should be suspended or expelled from membership of the Club because his or her conduct is detrimental to the interests of the Club, it can initiate the process set out in rule 9(1) and (2), which involves the Committee giving notice of the proposed suspension or expulsion to the member and holding a meeting at which it can decide to suspend or expel the member from membership of the Club, after it has given the member the opportunity to be heard at to make written representations to it. If the member is suspended or expelled, that does not take effect until 14 days after the decision has been made and the member may appeal against that decision, by giving notice to the Secretary within 14 days of being advised of the decision, in which case the appeal is considered by a general meeting of the Club. If the member makes an appeal, the suspension or expulsion does not take effect until it is confirmed at that general meeting: rule 9(4) and (5).
It appears that all or part of rule 5(5), (6) and (7) may have been added to the Club's Rules at some time, because the term 'Management Committee' is contained in them, instead of the term 'Committee' which appears elsewhere in the Club's Rules, and is defined in rule 2.
Of particular significance in this proceeding is the second sentence of rule 5(6) which states: 'The Management Committee reserves the right to not accept a membership application or renewal'.

The parties' contentions regarding the second sentence of rule 5(6)

In Ground 1, the applicants contend that the second sentence of rule 5(6) is inconsistent with the other parts of the Club's Rules, namely:
•the first sentence of rule 5(6);
•rules 8 and 9; and
•rule 5(1) (4).
From that contention, the Tribunal infers that the applicants contend that the second sentence of rule 5(6) should be rejected, because it is inconsistent with those other parts of the Club's Rules.
In Ground 2, the applicants contend that the Club's Rules do not provide for a body known as the 'Management Committee', which is referred to in the second sentence of rule 5(6).
In Ground 3, the applicants contend that the second sentence does not 'confer a power' on the (Management) Committee and that it merely refers to the 'meaningless concept' that the Committee 'reserves the right' to not accept a membership application or renewal.
In response to Ground 1, the Club contends that rule 5(6) cannot be 'dissected' and the second sentence is part of it and has effect. The Club contends that the term 'renewable' in rule 5(6) indicates that a member has a contract with the Club for their membership for a fixed period, which can be extended to the end of a new fixed period at the discretion of the Committee. The Club contends that when the entire rule is read, it is clear that the intention is that the Committee may decide not to accept a renewal of a membership. The Club further contends that the applicants did not have their memberships terminated and, therefore, rules 8 and 9 are not relevant. The Club also contends that rule 5(1) (4) only relate to new applicants for membership, not to renewals of membership.
In response to Ground 2, the Club contends that the reference to the 'Management Committee' in rule 5(6) is simply 'an error in nomenclature'.
In response to Ground 3 the Club contends that 'the renewal of memberships is a matter within the complete and exclusive purview' of the Club, which has a right to select its members.

Determination

Ground 2 is easily dealt with. Applying the approach referred to in Echunga, the Tribunal has decided that it should not make too much of 'infelicities of expression' in the Club's Rules. Accordingly, the Tribunal finds that the reference to the 'Management Committee' in rule 5(6) is clearly intended to be a reference to the 'Committee', as defined in rule 2 of the Club's Rules and should be construed as such.
Part of Ground 1 is also easily dealt with. With regard to the contention of the applicants that the second sentence of rule 5(6) is inconsistent with rule 5(1) (4) in respect of applications for membership (emphasis added), the Tribunal has decided that there is no inconsistency between both the second and the third sentences of rule 5(6) and rule 5(1) (4). Rule 5(2) provides that the Committee is to accept or reject an application for membership, which is consistent with the second sentence of rule 5(6), which provides that the Committee has the right to not accept an application, which clearly is meant to be an application for membership (although it does not expressly state that). Rule 5(3) provides that an applicant, whose application for membership is rejected, may appeal against that decision by giving notice to the Secretary within 14 days of being advised of the rejection. However, rule 5(2) does not impose any express requirement on the Committee to advise the applicant of its decision to reject the application for membership. The third sentence of rule 5(6) requires the Committee to communicate that rejection to the applicant within 10 days of the Committee's decision, which fits in with rule 5(2) and (3).
The points made in the balance of Ground 1 and in Ground 3 in respect of renewals of membership (emphasis added) are not as easily dealt with and require the Tribunal to decide the proper construction of the second sentence in rule 5(6) with regard to the words 'or renewal' which are in that sentence.
In Tokio Marine & Nichido Fire Insurance Co Ltd v Hans Bo Kristian Holgerson trading as Holgerssons Complete Home Service [2019] WASCA 114 (Tokio), the Court of Appeal (Buss P, Beech JA, Pritchard JA) dealt with the construction of a commercial contract (a contract of insurance), including a question of whether the Court could be justified in omitting words contained in the contract, or treating them as superfluous.
As has been stated above, the principles applicable to the construction of the rules of an incorporated association are an adaptation of the principles which govern the construction of commercial contracts. Therefore, the Tribunal considers the following statements in Tokio to be pertinent to the construction of the Club's Rules and, in particular the second sentence in rule 5(6).
The Court, at [50](3) of Tokio, stated as follows:
In the process of the construction of a contract, the court will be justified in omitting words, or treating them as superfluous:
…
(b)if those words are inconsistent with, or repugnant to, the objective intention revealed by the contract as a whole.
The Court then stated at [51] of Tokio the general principles, applicable to the construction of contracts, which had emerged from the decisions of the High Court, and were outlined by the Court of Appeal in Black Box Control Pty Ltd v TerraVision Pty Ltd [2016]WASCA219.
One of those principles, which is relevant in this matter, is that:
[a]n instrument should be construed as a whole. A construction that makes the various parts of an instrument harmonious is preferable. If possible, each part of an instrument should be construed so as to have some operation.
By way of elucidation of that point, at [52] of Tokio, the Court stated as follows (citation omitted):
In Chapmans Ltd v Australian Stock Exchange Ltd, Lockhart and Hill JJ said, in a passage approved in many subsequent cases, as follows:
It is an elementary proposition that a contract will be read as a whole giving weight to all clauses of it, where possible, in an endeavour to give effect to the intention of the parties as reflected in the language which they have used. A court will strain against interpreting a contract so that a particular clause in it is nugatory or ineffective, particularly if a meaning can be given to it consonant with other provisions in a contract.
However, then, at [57] of Tokio, the Court stated as follows:
… words, even entire provisions, can be rejected or treated as superfluous if they are inconsistent with, or repugnant to, the objective intention or primary purpose revealed by consideration of the instrument as a whole[.]
When rules 5, 7, 8 and 9 are construed as a whole, in the Tribunal's view, the objective intention revealed by those rules regarding membership of the Club is that:
•If a person applies for membership of the Club and his or her application is rejected by the Committee, the person has a right of appeal against that decision, to a general meeting of the Club.
•If a person becomes a member of the Club, he or she is entitled to renew his or her membership annually by completing a 'member record form' and paying the applicable subscription by no later than one month after the payment date for the subscription.
•A person's membership of the Club is terminated if he or she gives a written resignation to the Secretary, or if he or she does not pay the annual subscription within one month of the payment date, unless the Committee decides otherwise.
•A person can be suspended or expelled from membership of the Club by the Committee if it believes that the member's conduct is detrimental to the interests of the Club. The member has a right of appeal against that decision, to a general meeting of the Club. It is not clear whether a probationary member who is expelled from membership of the Club under rule 5(7) has that right of appeal, but the Tribunal is not required to determine that question in this matter.
In the Tribunal's view, the words 'or renewal' in the second sentence of rule 5(6) are inconsistent with, or repugnant to, the objective intention of the Club's Rules regarding the membership of the Club revealed by consideration of the Club's Rules as a whole.
The second sentence of rule 5(6) can be given a meaning which is consonant with the other rules if the words 'or renewal' are rejected.
Therefore, the Tribunal has decided that, properly construed, the second sentence of rule 5(6) should be read as if the words 'or renewal' are omitted.
This construction of the second sentence of rule 5(6) makes the various rules which deal with membership harmonious.
If the Committee considers that the applicants should be expelled from membership of the Club, because their conduct is detrimental to the interests of the Club, it is open to the Committee to follow the process in rule 9 in that regard.
With regard to the contention of the Club that the Club's Rules in their entirety have been 'officially recognised' by DMIRS (which the Tribunal takes to be a reference to the Commissioner, as defined in s 3 of the AI Act), the Tribunal comments as follows. Section 30(6) of the AI Act provides that an alteration of the rules of an incorporated association does not take effect until s 30(3) of the AI Act is complied with. Section 30(3) of the AI Act provides that an incorporated association must lodge the 'required documents' with the Commissioner within one month after the passing of a special resolution altering its rules. Section 30(4) of the AI Act sets out the 'required documents', which are a notice of the special resolution, a certificate that the special resolution was passed and a consolidated copy of the rules, including all alterations pursuant to the special resolution. The effect of those provisions is that alterations to the rules of an incorporated association do not take effect until and unless the requirements of s 30(3) of the AI Act are met, but if those requirements are met the altered rules are still open to construction according to the principles referred to in these reasons.

Conclusion

The Tribunal has decided that the second sentence of rule 5(6) should be read as if the words 'or renewal' are omitted. Therefore the Committee was not entitled under rule 5(6) to refuse the renewal of the memberships of the applicants and the Committee's decision to decline to renew those memberships is void and of no effect.
Accordingly, the memberships of the applicants must be renewed, subject to each of them paying the subscription fee.
The preliminary question, which was the subject of the Preliminary Issue Decision, is answered in the affirmative. The Tribunal has jurisdiction to determine the dispute which is the subject of the application.
For the reasons given above, the Tribunal will therefore make the orders sought by the applicants.

Orders

The Tribunal will make the following orders:
1.The decision made by the Committee of the respondent, Pine Valley Pistol Club Incorporated (Club) on 19 June 2019 to decline to renew the memberships of the Club respectively held by each of the applicants is void and of no effect.
2.The respective memberships of the respondent, Pine Valley Pistol Club Incorporated held by the applicants be renewed subject to each of the applicants paying the subscription fee.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MR D AITKEN, SENIOR MEMBER
3 JUNE 2020