KEATING and CHAMPION LAKES CHRISTIAN CHURCH INC - [2024] WASAT 78

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: ASSOCIATIONS INCORPORATION ACT 2015 (WA)
CITATION:   KEATING and CHAMPION LAKES CHRISTIAN CHURCH INC [2024] WASAT 78
MEMBER:   MS C CONLEY, MEMBER
MR M BENTER, MEMBER

HEARD:   DETERMINED ON THE DOCUMENTS
DELIVERED          :   3 JULY 2024
PUBLISHED           :   31 JULY 2024
FILE NO/S:   CC 681 of 2023
BETWEEN:   MICHAEL GOODWIN KEATING
First Applicant
KERRY BUSBY
Second Applicant
LLOYD WILFRED IVATTS
Third Applicant
AND
CHAMPION LAKES CHRISTIAN CHURCH INC
First Respondent
AARON MILROY PRYCE
Second Respondent

Catchwords:

Incorporated association - Application under s 182 of the Associations Incorporation Act 2015 (WA) in respect of two disputes - Determination of three preliminary issues - Whether a special resolution of the association acts as a bar to proceedings in the Tribunal - Whether each of the disputes is a dispute for the purposes of the Act - Which dispute resolution process applies to the resolution of the disputes and the steps involved

Legislation:

Associations Incorporation Act 2015 (WA), s 21(1), s 21(2), s 22, s 22(3)(a), s 22(3)(c), s 28(1)(b), s 28(2)(a), s 28(2)(b)(i), s 29(1), s 93(1), s 94(4), s 121(2), s 129(b), s 130, s 182, s 182(1), s 182(2), s 182(3), s 201(2)(a), Sch 1, Div 1
State Administrative Tribunal Act 2004 (WA), s 15(1)

Result:

Preliminary issues determined

Category: B

Representation:

Counsel:

First Applicant	:	T Houweling
Second Applicant	:	T Houweling
Third Applicant	:	T Houweling
First Respondent	:	Mr S Mason
Second Respondent	:	In Person

Solicitors:

First Applicant	:	Cornerstone Legal
Second Applicant	:	Cornerstone Legal
Third Applicant	:	Cornerstone Legal
First Respondent	:	Corney & Lind Lawyers
Second Respondent	:	N/A

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

Dines and Geraldton Grammar School Incorporated [2017] WASAT 53
Harmer & Anor v PJD Group Pty Ltd [2017] QCAT 179
Kavanagh and Pine Valley Pistol Club Incorporated [2020] WASAT 11
Kavanagh and Pine Valley Pistol Club Incorporated [2020] WASAT 60
Kelmscott Senior Football Club (Inc) and Western Australian Amateur Football League (Inc) [2018] WASAT 6
Lauri v Shwe [2020] WASC 471
Sivanpathakumar and The Management Council of Saiva Maha Sabai of WA Inc [2022] WASAT 96
Smith and Murray Districts Carriage Driving Club Incorporated [2021] WASAT 44

REASONS FOR DECISION OF THE TRIBUNAL:

(These reasons for decision were delivered orally on 3 July 2024 and have been edited to correct grammatical errors and some infelicity of expression, without variation to the substance thereof.)

Introduction

Champion Lakes Christian Church Inc (Association), the first respondent, is an association incorporated under the Associations Incorporation Act 2015 (WA) (AI Act).
Pastor Aaron Pryce, the second respondent, is the Senior Minister and a member of the Association.
Mr Michael Keating, Mr Kerry Busby and Mr Lloyd Ivatts, the first, second and third applicants (applicants) respectively, are members of the Association.
On 12 May 2023, the applicants lodged an application with the Tribunal under s 182(2) of the AI Act (Application) seeking to have the following two disputes determined by the Tribunal:
(a)a dispute concerning the removal of the applicants from their respective offices of Elder of the Association (Dispute 1); and
(b)a dispute concerning the removal of the applicants from their respective offices of Executive Committee Members of the Association (Dispute 2).
At a directions hearing held on 7 March 2024 the Tribunal ordered that three preliminary issues were to be determined on the papers, unless otherwise ordered by the Tribunal.

Preliminary Issues to be determined

The preliminary issues to be determined are set out in the orders made on 7 March 2024 as follows:
(1)Does the special resolution, either itself or as part of a dispute resolution process, act as a bar to proceedings in the Tribunal (Issue 1)?

(2)Is each of Disputes 1 and 2 a dispute for the purposes of the AI Act (Issue 2)?
(3)Which dispute resolution process, namely the Association's process or the Model Rules under the AI Act, applies to the resolution of each of Disputes 1 and 2 (Issue 3)?; and
(a)what were the steps involved in the dispute resolution process in each case (Issue 3(a))?; and
(b)to the extent a Special General Meeting is part of the dispute resolution process, what rules apply to the convening and conduct of the Special General Meeting and the making of a special resolution (Issue 3(b))?

For the sake of clarity, the reference in Issue 1 to the special resolution is a reference to the resolution that was carried at the Special General Meeting of the Association on 26 March 2023 (March 2023 Special General Meeting).
Each of Dispute 1 and Dispute 2 were, in effect, identified by each party in their respective dispute schedules lodged with the Tribunal on 28 November 2023 and 12 December 2023.[1] In each case, the respective party made clear that each of the disputes was between the applicants and both:
(a)the second respondent in his capacity as the Senior Minister; and
(b)the Association itself.
[1] Applicants' Dispute Schedule lodged on 28 November 2023 and Respondents' Dispute Schedule lodged on 12 December 2023.
The applicants have also made it clear to the Tribunal that their allegations in respect of the Special General Meeting on 26 March 2023 are not a separate dispute. That is, they consider any issues in respect of the Special General Meeting to be encompassed in Dispute 1 and Dispute 2.

Legislative framework

The AI Act establishes a scheme for the incorporation of associations and makes provision for corporate governance, financial accountability and matters relating to the rules and membership of those incorporated associations.[2]
[2] See long title to the AI Act.
Section 182 of the AI Act provides:
(1)If a dispute cannot be resolved under the procedure provided for as required by Schedule 1 Division 1 item 18 —
(a)the incorporated association concerned; or
(b)a member of the association involved in the dispute,
may make an application to the State Administrative Tribunal to have the dispute determined by that Tribunal.
(2)Nothing in subsection (1) prevents the State Administrative Tribunal from exercising its powers to refer the dispute, or any aspect of it, for mediation.
(3)In a proceeding under subsection (1), the State Administrative Tribunal may make orders giving such relief as the Tribunal considers appropriate, including one or more of the following orders —
(a)an order giving directions for the observance of the rules of the incorporated association by any person who has an obligation to observe those rules;
(b)an order declaring and enforcing the rights and obligations of members of the incorporated association between themselves;
(c)an order declaring and enforcing the rights and obligations between the incorporated association and any member or members of the association.

Evidence and findings

Pursuant to orders made by the Tribunal, the parties on 22 January 2024 lodged a joint bundle of documents (Joint Documents) in respect of the Application.
For the purposes of determining the preliminary issues, and based on the documentary evidence before the Tribunal, we make the following findings of fact in respect of Disputes 1 and 2:
(a)in 2020, the applicants were appointed as Elders of the Association;
(b)effective from 4 April 2021, the second respondent was appointed as Senior Minister of the Association;[3]
[3] Joint Documents at pages 181 to 184.
(c)on 28 November 2021, the applicants were appointed as members of the Executive Committee of the Association;
(d)on 23 November 2022, the second respondent removed the applicants from their office as Elders for reasons of 'improper conduct, recalcitrance and incompatibility';[4]
[4] Joint Documents at page 247.
(e)on 23 November 2022, the second respondent wrote to the Executive Committee and notified them that he had removed the applicants from their office as members of the Executive Committee due to 'inaccurate allegations made against leadership, discipline and inefficiency';[5]
[5] Joint Documents at page 248.
(f)the applicants disputed their removal as Elders and members of the Executive Committee;
(g)on 26 March 2023 a Special General Meeting (March 2023 Special General Meeting) was convened by the Association to vote on the following:[6]
[6] Special General Meeting Notice and Agenda at Joint Documents at pages 394 and 395.
(i)'Should Senior Minister Aaron Pryce be Dismissed?' (Resolution 1).
(ii)'Should we pass a Special Resolution to proceed to take a vote, decided on a simple majority, on the constitution of the offices of the Elders and the Executive Committee?' (Resolution 2).
(iii)'Should the Elders and the Executive Committee be constituted by Party A [Aaron Pryce, Margaret Saunders, Sarah Stokes, Joy Smith, Gary Bowe and Wade Sanders] or Party B [Mike Keating, Lloyd Ivatts, Kerry Busby and Scott Melling]?' (Resolution 3).
(h)The results of the March 2023 Special General Meeting were that:
(i)Resolution 1 was not carried;
(ii)Resolution 2 was carried; and
(iii)Resolution 3 was carried in favour of Party A.

The submissions of the parties

The applicants' submissions filed on 18 April 2024 may be summarised as follows:
(a)Issue 1:
(i)the March 2023 Special General Meeting does not in and of itself act as a bar to the Tribunal's jurisdiction;
(ii)there is no legal basis for why the Tribunal is unable to deal with a dispute after a matter has proceeded to a Special General Meeting;
(iii)the March 2023 Special General Meeting did not have the effect of answering the questions which are the subject of the dispute, or by its resolutions deal with the dispute;
(iv)there is a question as to the legitimacy of the March 2023 Special General Meeting and it cannot now be used as a shield against the determination by the Tribunal of the disputes;
(v)the resolution of a dispute does not involve oppression as the Association must act in accordance with the requirements of the law and its Constitution;
(a)Issue 2:
(i)the disputes are about whether the second respondent had the power to remove the applicants from their office as both Elders and members of the Executive Committee;
(ii)the second respondent acted without power in purporting to remove the applicants as elders pursuant to clause 6.3(H); and
(iii)the second respondent acted without power in purporting to remove the applicants as members of the Executive Committee pursuant to clause 6.7.1(M).
(b)Issue 3, 3(a) and 3(b):
(i)clause 10 of the Champion Lakes Christian Church Constitution (CLCC Rules) apply supplemented by the AI Act; and
(ii)the process is as set out in the applicants' 'crisp statement filed in the Tribunal in December 2023' (which is understood to be a reference to the applicants' disputes schedule lodged with the Tribunal on 28 November 2023).
The respondents' submissions filed on 2 April 2024 and their reply filed on 24 April 2024 may be summarised as follows:
(a)Issue 1:
(i)following the resolution passed in the March 2023 Special General Meeting as a part of the Association's dispute resolution process, the disputes were resolved such that there is no dispute to be considered under s 182(1) of the AI Act;
(ii)further, or alternatively, the resolution passed in the March 2023 Special General Meeting is a bar to the matter being considered by the Tribunal as any such remedy by the Tribunal under s 182(3) of the AI Act would necessarily require it to abrogate or oppress members' rights exercised in the March 2023 Special General Meeting; and
(iii)the Supreme Court otherwise holds broad powers to provide discretionary relief.
(b)Issue 2:
(i)the disputes relate to a decision made under the CLCC Rules and to the adherence of the parties to the dispute resolution process in the CLCC Rules; and
(ii)the dispute has been resolved (as detailed in relation to Issue 3);
(c)Issue 3:
(i)the dispute resolution process in the CLCC Rules applies;
(ii)the requisite steps are set out in clause 10 of the CLCC Rules; and
(iii)the rules for convening and conducting Special General Meetings are contained in the CLCC Rules and the AI Act;
(iv)the Model Rules apply only in circumstances where the Association's rules fail to provide such a process; and
(v)the CLCC Rules do not stipulate that a Special General Meeting under Clause 10 is required to pass any resolution with the voting threshold of a Special Resolution (75%).

Determination of the Issues

Issue 1: Does the special resolution, either itself or as part of a dispute resolution process, act as a bar to proceedings in the Tribunal?

A matter arising under s 182 of the AI Act falls within the Tribunal's original jurisdiction as set out in s 15(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
In exercising its original jurisdiction, the Tribunal is to deal with the matter in accordance with the SAT Act and the AI Act. In Sivanpathakumar and The Management Council of Saiva Maha Sabai of WA Inc [2022] WASAT 96 (Sivanpathakumar) at [16] - [19] the Tribunal said:
16… there are three requirements which must be satisfied before an application can be made to the Tribunal under s 182(1) of the AI Act.
17The first requirement is that there must be a dispute for the purposes of s 182(1) of the AI Act.
18The second requirement is that there must be a dispute resolution procedure in the rules of an incorporated association which satisfies the requirements of Item 18 of Sch 1, Div 1 of the AI Act.
19The third requirement is that there must be a failure to resolve the dispute despite following that dispute resolution procedure.
In Kavanagh and Pine Valley Pistol Club Incorporated [2020] WASAT 11 (Kavanagh), the Tribunal considered the meaning of the words 'cannot be resolved under the procedure provided for as required by Sch 1 Div 1 Item 18'. The Tribunal held at [60] - [61] that:
60If each party to the dispute does everything that it is required to do under the dispute resolution procedure, but the dispute is not resolved then clearly it is open to each party to apply under s 182(1) of the AI Act to have the dispute determined by the Tribunal, provided the party applying is a member of the incorporated association or the party applying is the incorporated association.
61However, if a party to a dispute which falls within s 182(1) of the AI Act has done everything that it is required to do under the dispute resolution procedure in the rules of the incorporated association, but another party to the dispute has not done so and therefore it has not been possible for the dispute to be resolved under that procedure, in the Tribunal's view, it can be said that the dispute cannot be resolved under the dispute resolution procedure. Consequently, it will be open to that party to apply under s 182(1) of the AI Act to have the dispute determined by the Tribunal, provided the party is a member of the incorporated association or the party is the incorporated association.
Section 21(1) of the AI Act provides that the rules of an incorporated association are not of general application in the community but rather they are the rules which bind the association and the members of the association as if they contained an agreement on the part of each member to be bound by and observe all the provisions of the rules and as if that agreement were duly executed by each member. However, s 21(1) has effect only so far as the rules are consistent with the AI Act
It is a basic principle of Australian law that a person cannot contract out of compliance with legislation and that is stated in Harmer & Anor v PJD Group Pty Ltd [2017] QCAT 179 at [9] and [16].
An incorporated association cannot enact rules which are inconsistent with the AI Act.[7] Accordingly, an incorporated association cannot, by its rules, or by the making of a resolution, deprive the Tribunal of jurisdiction under s 182 of the AI Act.
[7] AI Act, s 21(2).
A resolution does not by itself act as a bar to proceedings in the Tribunal. This is because an incorporated association cannot deprive the Tribunal of the jurisdiction which is conferred under s 182 of the AI Act.
A resolution which is passed as part of a dispute resolution procedure does not necessarily act as a bar to proceedings in the Tribunal. This is because the Tribunal's jurisdiction is dependent on whether or not the dispute 'cannot be resolved under the procedure provided for as required by Sch 1 Div 1 Item 18'. It is for the Tribunal to determine, usually as a preliminary issue, whether or not the parties have complied with the dispute resolution procedure.
We have not made any findings about whether or not the dispute resolution procedure of the Association has been complied with by the parties. This is because the preliminary issues were limited to the issues set out above.
The Tribunal has previously taken the view that s 182 of the AI Act does not give the Tribunal jurisdiction to deal with the merits of a dispute but only gives the Tribunal jurisdiction to determine whether an incorporated association has complied with its rules in making a decision.[8]
[8] Kavanagh and Pine Valley Pistol Club Incorporated [2020] WASAT 60; and Smith and Murray Districts Carriage Driving Club Incorporated [2021] WASAT 44 at [20].
So, for example, in Kavanagh and Pine Valley Pistol Club Incorporated [2020] WASAT 60 (Kavanagh 2) and Smith and Murray Districts Carriage Driving Club Incorporated [2021] WASAT 44 (Smith) the Tribunal held that the incorporated associations were not entitled under the rules of each association to refuse the renewal of the applicants' memberships and the committees' decisions to decline the renewal of their memberships was void and of no effect. Further, the Tribunal in each case determined that the membership of the applicants should be renewed subject to payment of the subscription fee.
In Dines and Geraldton Grammar School Incorporated [2017] WASAT 53 (Dines) the Tribunal found that the respondent's decision to terminate the applicant's membership was invalid because of the failure of the respondent to afford the applicant natural justice.
By way of analogy with the decisions in Kavanagh2, Smith and Dines, if a resolution is not passed in accordance with the AI Act and/or the rules of an association, then the Tribunal might order that the resolution is void.
The respondents contend that the passing of Resolution 3 at the March 2023 Special General Meeting reflected the will of the members of the Association and that it would be oppressive for the applicants to be able to challenge the validity of the special resolution. We reject that contention. If the resolution was not passed in accordance with the AI Act and/or the CLCC Rules in circumstances in which the AI Act and/or the CLCC Rules bind the members, then no oppression arises. Further, where the circumstances involving the making of the special resolution involve a dispute under the AI Act then, subject to compliance with the relevant dispute resolution procedure as addressed above, the applicants are entitled to make an application to the Tribunal in respect of that dispute.

Issue 2: Is each of Disputes 1 and 2 a dispute for the purposes of the AI Act?

In Sivanpathakumar at [20] - [25] the Tribunal said:
20A dispute for the purposes of s 182(1) of the AI Act is a dispute under or relating to the rules of the incorporated association either between members, or between one or more members and the incorporated association.
21The term 'dispute' means 'argumentation; verbal contention; a debate or controversy; a quarrel'.
22The term 'under' imports a direct connection between the dispute and the rules of the incorporated association.
23The term 'relating to' is of wide import and requires that there be a degree of connection between the dispute and the rules of the incorporated association.
24An allegation that a particular rule in the rules of the incorporated association has been contravened in some way may give rise to a dispute between members, or between one or more members and the incorporated association. One example is where a rule has been completely ignored by the members or the incorporated association. Another example is where a rule has not been correctly followed by the members or the incorporated association.
25The expression 'rules of the incorporated association' means the rules of the incorporated association for the purposes of Pt 3 of the AI Act which are in force at the time of the dispute.

Is Dispute 1 a dispute under or relating to the rules of the Association?

Dispute 1 is a dispute concerning the removal of the applicants from their respective offices as Elders of the Association.
Clause 6.3(H) of the CLCC Rules provides that:
Elders shall:
…
(H)Hold position until they resign, or are removed from office by the Senior Minister or the other Elders, for failing to satisfy the qualifications of an Elder, teaching doctrines contrary to Scripture or detrimental to the Association, improper conduct, recalcitrance, incompatibility, or ineffective ministry resulting in material prejudice to the interests of the Association.
Clause 6 of the CLCC Rules says that only members of the Association can hold the offices of Senior Minister and Elders.
The applicants contend that:
(a)the second respondent was not able to remove them from their office as Elders in the manner that he undertook their removal; and
(b)the first respondent, among other things, failed to properly follow the dispute resolution process or conduct the March 2023 Special General Meeting in accordance with the CLCC Rules.

We find that Dispute 1 is:
(a)in respect of the contended actions of the second respondent, a dispute between members of the Association since the applicants and the second respondent are each members of the Association; and
(b)in respect of the contended actions of the Association, a dispute between members of the Association and the Association itself.
We also find that Dispute 1 is a dispute under or relating to the CLCC Rules since the applicants dispute whether the second respondent, as Senior Minister, had the power to remove them as Elders under clause 6.3(H) of the CLCC Rules and whether the Association then complied with the CLCC Rules in its subsequent actions up to and including the conduct of the March 2023 Special General Meeting.

Is Dispute 2 a dispute under or relating to the rules of the Association?

Dispute 2 is a dispute concerning the removal of the applicants as members of the Executive Committee.
Clause 6.7.1(M) of the CLCC Rules says that:
The Eldership, or in the absence of the Eldership, the Senior Minister, may remove a member of the Executive Committee for reasons of discipline, poor attendance, or inefficiency.
The applicants contend that:
(a)the second respondent was not able to remove them from their office as members of the Executive Committee in the manner that he undertook their removal; and
(b)the first respondent, among other things, failed to properly follow the dispute resolution process or conduct the March 2023 Special General Meeting in accordance with the CLCC Rules.
We find that Dispute 2 is:
(a)in respect of the contended actions of the second respondent, a dispute between members of the Association since the applicants and the second respondent are each members of the Association; and
(b)in respect of the contended actions of the Association, a dispute between members of the Association and the Association itself.
We also find that Dispute 2 is a dispute under or relating to the CLCC Rules since the applicants dispute whether the second respondent, as Senior Minister, had the power to remove them as Executive Committee members under clause 6.7.1(M) of the CLCC Rules and whether the Association then complied with the CLCC Rules in its subsequent actions up to and including the conduct of the March 2023 Special General Meeting.

Issue 3: Which dispute resolution process, namely the Association's process or the Model Rules under the AI Act, applies to the resolution of each of Disputes 1 and 2?

Section 22(3)(a) of the AI Act provides that the rules of an incorporated association must address each of the matters set out in Schedule 1, Division 1.
Section 201(2)(a) of the AI Act essentially provides that if the rules of an incorporated association do not comply with s 22 of the AI Act, then the Model Rules apply as the rules of the association to the extent that the association rules do not address a matter referred to in Schedule 1, Division 1.
In Sivanpathakumar at [29] - [31] the Tribunal said:
29Under s 26 of the AI Act, regulations are to be made prescribing model rules for incorporated associations (Model Rules). The Model Rules are set out in Sch 2 of the Association Incorporation Regulations 2016 (WA) (AI Regulations).
30In Kavanagh at [46] the Tribunal set out four situations in which the Model Rules apply to an incorporated association as follows:
•a proposed incorporated association can approve the Model Rules to be its rules at the time when it applies to be incorporated: s 28(1)(b) of the AI Act;
•the Model Rules will apply if the association does not have its own rules when it is incorporated: s 28(2)(a) of the AI Act;
•if an incorporated association has its own rules when it is incorporated, but those rules do not address all of the matters referred to in Sch 1, Div 1 of the AI Act then the Model Rules apply as the rules of the association to the extent necessary to ensure that all of those matters are addressed: s 28(2)(b)(i) of the AI Act; or
•if an incorporated association, which was already an incorporated association under the Repealed Act when the AI Act commenced on 1 July 2016, had rules which did not address all of the matters referred to in Sch 1, Div 1 of the AI Act and the incorporated association did not alter its rules within the three year transition period provided in s 198 of the AI Act to ensure that it addressed all of those matters, then after 1 July 2019 under s 201(2)(a) of the AI Act the Model Rules are deemed to apply to its rules to the extent that its rules do not address those matters.
31Accordingly, the dispute resolution procedure in the Model Rules will apply where the rules of an incorporated association do not make provision, or adequate provision, for a dispute resolution procedure.
In Lauri v Shwe [2020] WASC 471 at [28] - [29] Hill J held:
28Section 22 of the [AI] Act requires certain matters to be addressed in an association's rules. Under the express terms of the [AI] Act, as long as an association's constitution provides for the matters set out in sch 1, whether by adoption of the model rules or by its own constitution, s 201(2) is not enlivened. The underlying policy of the legislation is to ensure that certain matters which are fundamental to good corporate governance are part of every association's constitution; however, the [AI] Act otherwise allows an association to have its own idiosyncratic rules if it wishes to do so. That is, s 22 of the [AI] Act does not remove an association's right to draft its own constitution. As a consequence, a failure to adopt each of the terms of the model rules does not result in the model rules applying.
29In determining whether s 201(2) of the [AI] Act applies, it is necessary to consider the matters set out in sch 1 div 1 of the [AI] Act and not the proposed rules for those matters under the model rules.
In Kavanagh at [58] and [59], the Tribunal said:
58A dispute resolution procedure will always, necessarily, involve action to be taken by all parties to a dispute to attempt to resolve their dispute. For example, the dispute resolution procedure in the Model Rules provides that the parties to a dispute must attempt to resolve the dispute between themselves within 14 days after the dispute has come to the attention of each party. If that does not occur, then a formal grievance procedure may be commenced by any party to the dispute giving written notice to the secretary of the incorporated association. A meeting of the management committee must then be convened within 28 days. The parties must be given written notice of that meeting and they are entitled to attend the meeting and make submissions to the committee about the dispute, before the committee determines the dispute. If the dispute is between one or more members and the association, then a party to the dispute can elect that it not be determined by the committee and that a mediator be appointed. Also, in the situation where the committee determines the dispute, a party to the dispute can then request the appointment of a mediator. The parties to the dispute must participate in the mediation and attempt in good faith to settle the matter that is the subject of the dispute.
59Whilst item 18 of Sch 1 Div 1 of the AI Act only states that there must be a procedure 'dealing with' a dispute of the kind specified, it is hard to imagine a procedure which provides for a dispute to be dealt with in a manner which does not require the involvement of all parties to the dispute.
Clause 10 of the CLCC Rules is headed 'Grievances' and provides:
(A)Where any dispute or disagreement occurs between any of the members of the Association and the Senior Minister, or Elder, or Associate/Assistant Minister, or Executive Committee member, or member, the parties should make every effort to reconcile matters according to Matthew 18:15-20, Gal 6:1-2, and Eph. 4.
(B)The Eldership may request mediation and/or arbitration by an external party appropriately qualified and agreed to by both parties in the dispute.
(C)Any member of the Church may raise an issue in writing with the Elders, or in their absence, the Executive Committee, who will investigate the matter and report on their investigations to resolve the matter.
(D)Should there be general concern over an issue, a Special General Meeting shall be held within one month of the Executive Committee receiving a signed petition of 25% or more of the membership requesting such a meeting;
(E)The Act also provides that an application may be made to the State Administrative Tribunal to have a dispute determined if the dispute has not been resolved under the procedures provided for in these rules as a final course of action.
We make the following observations about clause 10 of the CLCC Rules:
(a)clause 10 is contained in the version of the CLCC Rules which was lodged with the Commissioner for Consumer Protection on 10 March 2022 and so that clause was in existence prior to each of Dispute 1 and Dispute 2 arising;
(b)in clause 10(A) of the CLCC Rules separate reference has been made to the Senior Minister, an Elder, an Associate/Assistant Minister, and an Executive Committee member. It is not clear to us why separate reference has been made to these office bearers since all of the persons appointed to these offices are members;
(c)clause 10(A) does not refer to a dispute between a member and the Association;
(d)clauses 10(B), 10(C) and 10(D) appear to be options within the dispute resolution procedure; and
(e)it is implicit that if a Special General Meeting is held under clause 10(D) then a resolution will be voted on by members of the Association.
In our view, clause 10 of the CLCC Rules contains 'a procedure for dealing with any dispute under or relating to the rules between members'. This is for three reasons.
First, we consider that the reference in clause 10(A) to 'any dispute or disagreement' which 'occurs between any of the members of the Association' is broad enough to capture a dispute under or relating to the rules between members.
Second, we consider that clause 10 contains a particular course or mode of action for dealing with a dispute between members which is evident in each of the paragraphs of that clause. Although that course or mode of action is not as prescriptive as the procedure contained in the Model Rules, and not every part of the procedure is mandatory, it is still a procedure. That procedure includes reconciliation, mediation, arbitration, investigation and the holding of a Special General Meeting.
Third, we consider that the course or mode of action requires the involvement of the parties to the dispute and may require the involvement of other members of the Association who may not be a party to the dispute.
For the reasons set out above, we find that the procedure set out in the CLCC Rules applies to each of Dispute 1 and Dispute 2, to the extent of any dispute between the applicants and the second respondent (noting that all are members of the Association).
However, each of Dispute 1 and Dispute 2 also include disputes between the applicants and the Association itself.
As the CLCC Rules do not contain a procedure for dealing with disputes under or relating to the rules between members and the Association, then the Model Rules apply to such disputes.

Issue 3(a): What were the steps involved in the dispute resolution process in each case?

In respect of the parts of Dispute 1 and Dispute 2 that constitute disputes between the applicants and the second respondent, we consider that the steps involved in the dispute resolution procedure set out in clause 10 of the CLCC Rules are as follows.
The first step is reconciliation. Clause 10(A) provides that the parties should make every effort to reconcile matters according to Matthew 18: 15-20; Galatians 6: 1-2 and Ephesians 4.
Matthew 18: 15-20 essentially provides that:
•If your brother sins against you, go and tell him his fault, between you and him alone;
•If he does not listen, take one or two others along with you, that every charge may be established by the evidence of two or three witnesses;
•If he refuses to listen to them, tell it to the church; and
•If he refuses to listen to the church, let him be to you as a gentile and a tax collector.
Galatians 6: 1-2 essentially provides that if anyone is caught in any transgression, you who are spiritual should restore him in a spirit of gentleness.
Ephesians 4 essentially provides that:
•Walk in a manner worthy of the calling to which you have been called with all humility and gentleness, with patience, bearing with another in love, eager to maintain the unity of the Spirit in the bond of peace.
In our view, clause 10(A) essentially contemplates that the parties to the dispute will take steps to resolve matters between themselves or with the assistance of the Church in a peaceful way.
The second step is mediation and/or arbitration under clause 10(B). It is a prerequisite to the holding of a mediation or arbitration that the mediation and/or arbitration has been requested by the Eldership. Further, the mediation and/or arbitration must be conducted by an external party appropriately qualified and agreed to by both parties in the dispute.
The third step is investigation and reporting under clause 10(C). It is a prerequisite to the exercise of the power to investigate in clause 10(C) that a member of the Church has raised an issue in writing with the Elders, or in their absence, the Executive Committee.
The fourth step is the holding of a special general meeting under clause 10(D). It is a prerequisite to the exercise of the power to hold a special general meeting that the Executive Committee receives a signed petition of 25% or more of the membership requesting a special general meeting.
The fifth step is the making of an application to the Tribunal. However, clause 10(E) can only be construed as recognising the right of an incorporated association, or a member of that incorporated association, to apply to the Tribunal under s 182(1) of the AI Act to have the dispute determined by that Tribunal if the dispute cannot be resolved under the dispute resolution procedure of that incorporated association. This is because the rules of an incorporated association cannot confer jurisdiction on the Tribunal.
In respect of the parts of Dispute 1 and Dispute 2 that constitute disputes between the applicants and the Association itself, the steps involved in the dispute resolution procedure in the Model Rules, as previously set out by the Tribunal in Sivanpathakumarat [48], are as follows:
(a)Step 1: Attempt to resolve the dispute between the parties
The parties to a dispute must attempt to resolve the dispute between themselves within 14 days after the dispute has come to the attention of each party.[9]
[9] Model Rules, rule 19.
(b)Step 2: Commencement of formal grievance procedure
If the parties are unable to resolve the dispute between themselves, then a formal grievance procedure may be started by any party to the dispute by giving written notice to the secretary of the incorporated association of the parties to the dispute and the matters that are the subject of the dispute.[10]
[10] Model Rules, rule 20(1).
(c)Step 3: Meeting of management committee to be convened
A meeting of the management committee must be convened to consider and determine the dispute within 28 days after the secretary has been given notice.[11]
[11] Model Rules, rule 20(2).
(d)Step 4: Notice of management committee meeting
The secretary must give the parties written notice of the management committee meeting at least seven days before the meeting is held. The notice must set out: when and where the committee meeting is to be held; and that the party, or the party's representative, may attend the meeting and will be given a reasonable opportunity to make written or oral, or both written and oral, submissions to the committee about the dispute.[12]
[12] Model Rules, rule 20(3) and rule 20(4).
(e)Step 5: Management committee meeting held to consider and determine dispute
At the management committee meeting at which a dispute is to be considered and determined, the management committee must: give each party or their representative an opportunity to make written or oral, or both written and oral, submissions; give due consideration to any submissions made; and determine the dispute.[13]
[13] Model Rules, rule 21(1).
However, if the dispute is between one or more members and the association, then any party to the dispute may give written notice to the secretary stating that the party does not agree to the dispute being determined by the management committee and requesting that a mediator be appointed in which case the management committee must not determine the dispute.[14]
[14] Model Rules, rule 20(5).
(f)Step 6: Written notice of determination of management committee
The management committee must give each party to the dispute written notice of the management committee's determination, and the reasons for the determination, within seven days after the committee meeting at which the determination is given.[15]
(g)Step 7: Request for appointment of mediator
A party to the dispute may make a written request to the Secretary, within 14 days after receiving notice of the management committee's determination, for the appointment of a mediator.[16]
(h)Step 8: Appointment of mediator
If a request has been made for the appointment of a mediator under r 20(5)(b) or r 21(3) of the Model Rules, the mediator must be chosen by agreement between the parties to the dispute but, if agreement cannot be reached, then the management committee must appoint the mediator.[17]
(i)Step 9: Mediation
The parties to the dispute must participate in the mediation and attempt in good faith to settle the matter that is the subject of the dispute.[18]

Issue 3(b): To the extent a Special General Meeting is part of the dispute resolution process, what rules apply to the convening and conduct of the Special General Meeting and the making of a special resolution?

[15] Model Rules, rule 21(2).

[16] Model Rules, rule 21(3).

[17] Model Rules, rule 23(1)(b) and rule 23(2).

[18] Model Rules, rule 24(1).

As noted above, clause 10(D) makes provision for the holding of a Special General Meeting.

Notice of Special General Meeting

The rules of an incorporated association must make provision for:
(a)the notification of members or classes of members of general meetings of the incorporated association and their rights to attend and vote at those meetings;[19] and
(b)the time within which, and manner in which, notices of general meetings and notices of motion are to be given, published or circulated.[20]
[19] AI Act, s 22(3)(a) and Sch 1, Div 1, item 8.
[20] AI Act, s 22(3)(a) and Sch 1, Div 1, item 9.

Clauses 4.6 and 5.3 of the CLCC Rules each provide that '[p]referably 28 days but not less than 7 days' notice shall be given to the members at the Sunday Meetings of the Association, newsletter, text message, website or direct mail of the intention to hold a Special General Meeting at a time and place nominated.'

Quorum

The rules of an incorporated association must make provision for the quorum at general meetings of members of the incorporated association.[21]
[21] AI Act, s 22(3)(a) and Sch 1, Div 1, item 7.
Clauses 4.7 and 5.4 of the CLCC Rules each provide:
The number of members attending any General Meeting shall be determined and accepted as the required quorum to conduct business with a minimum present of five percent (5%) of the current members.
It is noted that clause 4 of the CLCC Rules sets out the rules relating to membership of the Association and will assist in the determination of which persons are current members of the Association and, consequently, the number of persons who comprise 5% of the membership.

No other business to be conducted

Clauses 4.6(B) and 5.3(B) of the CLCC Rules provide that '[n]o other business other than set out in the notice of convening the meeting shall be transacted at the Special General Meeting'.

Voting rights

Clauses 4.9 and 5.6 make provision for voting rights of members which rights may be summarised as follows:
(a)every member has one vote;
(b)proxy voting is not permitted. However, a person may make an absentee vote by forwarding their vote in a sealed envelope to the Executive Committee prior to the general meeting;
(c)the Executive Committee has the final power to either accept or reject any absentee vote; and
(d)in the case of an equal number of votes, the Chair has the casting vote and it must be cast in the negative.

Voting procedure

The rules of an incorporated association must make provision for the procedure at general meetings of members of the incorporated association.[22]
[22] AI Act, s 22(3)(a) and Sch 1, Div 1, item 7.
Clauses 4.8 and 5.5 of the CLCC Rules each relevantly provide:
(A)A question arising at an Annual General Meeting or Special General Meeting shall be determined by the rules of Westminster parliamentary debate and will be settled by the raising of hands, and the declaration of the Chair that a resolution was either carried or lost. A simple majority of the gathered quorum will carry any normal motion.
(B)Any manner can be put to a written ballot subject to a successful motion to that effect.
(C)A simple majority will carry any resolution except those provided in 5.5(D).
(D)Amendments to the Constitution, the disposal/acquisition of the primary assets, and the ratification of the appointment of the Senior Minister and Elders require a 75% majority of the quorum.
Clause 4.8(E) says that the 'Senior Minister or their nominee shall chair the meeting' whereas clause 5.5(E) says that the 'Executive Committee operates along a governance model where the Senior Minister functions as the Chief Executive Officer and the Chair is independent from the ministry team where practical.'

Does a resolution at a Special General Meeting require the votes of not less than three-fourths of the members of the association who cast a vote at the meeting?

The primary question which arises in respect of the voting is whether the passing of a resolution by the Association at a Special General Meeting requires the votes of not less than three-fourths of the members of the Association who cast a vote at the meeting.
The rules of an incorporated association must, in addition to addressing each of the matters set out in Schedule 1 Division 1 and complying with any applicable requirement under Schedule 2 Division 2, 'be otherwise consistent with' the AI Act.[23] Further, s 21(1) of the AI Act by which the association and its members are bound by the rules of the association, has effect only so far as the rules are consistent with the AI Act.[24] The Commissioner may exempt an incorporated association from a requirement in Schedule 1.
[23] AI Act, s 22(3)(c).
[24] AI Act, s 21(2).
In s 3 of the AI Act, the term 'special resolution' means 'a resolution of an incorporated association passed in accordance with section 51'.
Section 51 of the AI Act provides:
(1)For the purposes of this Act, a resolution is a special resolution if it is passed —
(a)at a general meeting of an incorporated association; and
(b)by the votes of not less than three-fourths of the members of the association who cast a vote at the meeting.
(2)A person is taken to cast a vote at a general meeting as mentioned in subsection (1) if the person has a right under the rules of the association to vote on the resolution and —
(a)votes in person at the meeting; or
(b)where proxies or postal votes are allowed by the rules of the association, votes on the resolution by proxy or postal vote.
(3)Before the general meeting, written notice of —
(a)the proposed special resolution; and
(b)the time and place of the general meeting at which it is proposed to move the resolution, must be given, as required under the rules of the incorporated association, to each member of the association.
(4)The notice must set out the wording of the proposed special resolution.
(5)If notice is not given in accordance with subsections (3) and (4) the special resolution has no effect.
There are a number of provisions of the AI Act which require the passing of a special resolution for a specific purpose, namely:
(a)for the adoption of the Model Rules as the rules of the incorporated association;[25]
(b)for the alteration of the rules of the incorporated association;
(c)for the making of a decision for registration or incorporation as a prescribed body corporate;[26]
(d)for the amalgamation of incorporated associations;[27]
(e)for the winding up of an incorporated association;[28]
(f)for cancellation of incorporation under Div 1, Part 10;[29] and
(g)for cancellation of incorporation under Div 2, Part 10.[30]
[25] AI Act, s 29(1).
[26] AI Act, s 93(1).
[27] AI Act, s 94(4).
[28] AI Act, s 121(2).
[29] AI Act, s 129(b).
[30] AI Act, s 130.
For the purposes of the Model Rules, a 'special resolution' means 'a resolution passed by the members at a general meeting in accordance with section 51 of the [AI] Act.'[31]
[31] Model Rules, clause 2.
In our view, under the AI Act, it is only the matters we have referred to above in paragraph [82] which require a special resolution to be passed by the votes of not less than three-fourths of the members of the association who cast a vote at the meeting. Any other matter which is the subject of a resolution at a Special General Meeting must be passed in accordance with the rules of the association. No inconsistency arises with the AI Act if the rules of an association provide that a resolution in respect of matters, other than those matters referred to above in paragraph [82], is to be passed by a simple majority.
Therefore, a resolution at a Special General Meeting convened under clause 10(D) of the CLCC Rules must be passed by a simple majority as provided in clauses 4.8(C) and 5.5(C) of the CLCC Rules.

Conclusion

By reason of all the matters addressed above, the answers to the preliminary questions are as set out in the orders of the Tribunal.

Orders

The Tribunal orders:
1.The answers to the preliminary questions have been determined as follows:

Issue 1
Question: Does the special resolution, either itself or as part of a dispute resolution process, act as a bar to proceedings in the Tribunal?
Answer: The resolutions made at the Special General Meeting on 26 March 2023 do not act as a bar to proceedings in the Tribunal. It is for the Tribunal to determine whether or not the dispute resolution procedure of the Association has been complied with.
Issue 2
Question: Is each of Disputes 1 and 2 a dispute for the purposes of the AI Act?
Answer: Dispute 1 and Dispute 2 are disputes for the purposes of the AI Act in respect of both:
(i)those parts of the disputes that constitute disputes between the applicants and the second respondent; and
(ii)those parts of the disputes that constitute disputes between the applicants and the Association.

Issue 3
Question: Which dispute resolution process, namely the Association's process or the Model Rules under the AI Act, applies to the resolution of each of Disputes 1 and 2?
Answer:
In respect of those parts of Dispute 1 and Dispute 2 that constitute disputes between the applicants and the second respondent, the dispute resolution procedure set out in clause 10 of the CLCC Rules applies.
In respect of those parts of Dispute 1 and Dispute 2 that constitute disputes between the applicants and the Association itself, the dispute resolution procedure set out in the Model Rules applies.
Issue 3(a):
Question: What were the steps involved in the dispute resolution process in each case?
Answer:
In respect of those parts of Dispute 1 and Dispute 2 that constitute disputes between the applicants and the second respondent, the steps involved in the dispute resolution process are:
(a)Reconciliation: clause 10(A);
(b)Mediation and/or arbitration: clause 10(B);
(c)Investigation and reporting: clause 10(C);
(d)Special general meeting: clause 10(D); and
(e)The making of an application to the Tribunal: clause 10(E) and s 182(1) of the AI Act.

Issue 3(b)
Question: To the extent a Special General Meeting is part of the dispute resolution process, what rules apply to the convening and conduct of the Special General Meeting and the making of a special resolution?
Answer: In respect of those parts of Dispute 1 and Dispute 2 that constitute disputes between the applicants and the Association itself, the steps involved in the dispute resolution process are:
(f)Step 1: Attempt to resolve the dispute between the parties;
(g)Step 2: Commencement of formal grievance procedure;
(h)Step 3: Meeting of management committee to be convened;
(i)Step 4: Notice of management committee meeting;
(j)Step 5: Management committee meeting held to consider and determine dispute;
(k)Step 6: Written notice of determination of management committee;
(l)Step 7: Request for appointment of mediator;
(m)Step 8: Appointment of mediator; and
(n)Step 9: Mediation.

Issue 3(b):
Question: To the extent a Special General Meeting is part of the dispute resolution process, what rules apply to the convening and conduct of the Special General Meeting and the making of a special resolution?
Answer: To the extent a Special General Meeting is part of the dispute resolution process, the following rules apply to the convening and conduct of the Special General Meeting and the making of a resolution:
(o)Notice of Special General Meeting: clauses 4.6 and 5.3 of the CLCC Rules;
(p)Quorum: Clauses 4.7 and 5.4 of the CLCC Rules;
(q)Membership: Clauses 4.1 and 4.2 of the CLCC Rules;
(r)No other business to be conducted: clauses 4.6(B) and 5.3(B) of the CLCC Rules;
(s)Voting rights: Clauses 4.9 and 5.6; and
(t)Voting procedure: Clauses 4.8 and 5.5 of the CLCC Rules.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS C Conley, MEMBER
31 JULY 2024