Khan v Khan; Re Islamic Association Western Suburbs Sydney Inc

[2015] NSWSC 843

Supreme Court

New South Wales

Medium Neutral Citation:	Khan v Khan; Re Islamic Association Western Suburbs Sydney Inc [2015] NSWSC 843
Hearing dates:	14 – 17 and 28 April 2015
Decision date:	29 June 2015
Jurisdiction:	Equity Division - Corporations List
Before:	Black J
Decision:	The meeting of 2 March 2014 and the appointment and removal of Executive Council be declared invalid. Cross-Claim is dismissed. Interlocutory orders on 14 March 2014 (continued 1 and 16 April 2014), 6 November 2014 and 5 December 2014 are discharged. First to Seventh Defendants pay the Plaintiffs’ costs.
Catchwords:	PROCEDURE – judgments and orders – enforcement of judgments and orders – where proposed final orders to extend interlocutory orders are in substance a stay application – whether to extend or discharge interlocutory orders.
Cases Cited:	Aquaqueen International Pty Ltd v Titan National Pty Ltd [2015] NSWCA 9
Category:	Consequential orders (other than Costs)
Parties:	Aijaz Ahmed Khan (First Plaintiff) Masud Akbar Cheema (Second Plaintiff) Nasib Mohammed (Third Plaintiff) Mohammad Yousuf (Fourth Plaintiff) Mohammed Sohaib Malak (Fifth Plaintiff) Shahab Uddin Siddiqui (Sixth Plaintiff) Mukhtar Qazi (Seventh Plaintiff) Shahzad Khan (First Defendant) Sohail Shamim (Second Defendant) Rafay Siddique (Third Defendant) Sammih Khan (Fourth Defendant) Zulfiqar Ali (Fifth Defendant) Mahmood Khan (Sixth Defendant) Nizam Ali (Seventh Defendant) Islamic Association Western Suburbs Sydney Inc (Eighth Defendant)
Representation:	Counsel: A P Cheshire (Plaintiffs) D A Smallbone (First to Seventh Defendants) Solicitors: Low Doherty & Stratford (Plaintiffs) Denison Toyer (First to Seventh Defendants)
File Number(s):	2014/71246

Judgment

1. On 27 May 2015 I delivered judgment ([2015] NSWSC 638) in respect of proceedings concerning the validity of a special general meeting of the Islamic Association Western Suburbs Inc (“Association”) held on 2 March 2014 by which the Plaintiffs, several members of the Executive Council of the Association, were removed, and the First – Seventh Defendants were purportedly elected as the Executive Council of the Association.

2. I summarised the outcome of the proceedings at paragraphs 131 – 133 of the Judgment. I observed that a declaration should be made as to the invalidity of the 2 March 2014 meeting and that the current membership of the Executive Council followed from that declaration, at least so far as the matters raised in the proceedings before me were concerned. I noted that the Defendants’ Cross-Claim should be dismissed and the Defendants should pay the Plaintiffs’ costs of the proceedings, as agreed or as assessed. I directed the parties to bring in agreed short minutes to give effect to that order.

3. The parties substantially agreed the terms of the orders to be made to give effect to the judgment. There was one difference between them as to a proposed order that interlocutory orders previously made on 14 March 2014 (and subsequently continued on later dates), 6 November 2014 and 5 November 2014 be discharged.

4. The Defendants sought to defer the operation of the the discharge of the interlocutory orders made on 6 November 2014 and 5 December 2014, which dealt with the ongoing provision by the Plaintiffs to the Defendants of records and information and imposed restraints on exercise of powers of the Plaintiffs, until 3 July 2015. The Defendants submitted that those interlocutory orders should continue for that further period in case the Defendants decided to appeal. The Plaintiffs responded that the interlocutory orders should be discharged immediately, on the basis that judgment was delivered on 27 May 2015 and the Defendants have had time to consider their position as to any appeal; the discharge of the orders would not cause irreparable damage even if an appeal was successful; and the Plaintiffs have already had restraints placed upon them during a significant part of the two year period for which they were elected to office, which will expire in late 2015.

5. It seems to me that the form of order sought by the Defendants amounts, in effect, to a stay of the orders that would follow from my judgment. The principles applicable to an application for a stay were recently summarised by McColl JA in Aquaqueen International Pty Ltd v Titan National Pty Ltd [2015] NSWCA 9 (at [42]-[46]) as follows:

“First, there is no automatic right to a stay of execution as, prima facie, the judgment appealed from is correct and the court should not deprive a party of the fruits of victory: Network Ten Pty Ltd v Rowe [2006] NSWCA 4.

Secondly, the court is not constrained by the outcome of an application for a stay at first instance: Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 (at 692) (“Alexander“).

Thirdly, the overriding principle to apply when determining an application for a stay is to ask what the interests of justice require: NSW Bar Association v Stevens [2003] NSWCA 95 (at [83]) per Spigelman CJ.

Fourthly, it is not necessary for the grant of a stay that special or exceptional circumstances should be made out. It is sufficient that the applicant for the stay demonstrates a reason or an appropriate case to warrant the exercise of discretion in his favour: Alexander (at 694). The onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties: Alexander (at 694).

Before a stay of a judgment pending appeal is granted it is necessary for the court to make a preliminary assessment about whether the appellant has an arguable case: Alexander (at 695). The applicant must show that there are serious questions for the determination of the appellate court: Kalifair Pty Ltd v Digi-Tech (Aust) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 (at [18]).

6. The Defendants have not sought to bring an application for such a stay, or sought to establish the basis for such a stay, whether by reference to the matters going to a seriously arguable case on appeal or the balance of convenience. In making that observation, I say nothing as to whether the Defendants could have established the basis for a stay, had they sought to do so, but only that they have not sought to do so. It seems to me that, absent a stay application and a determination of it on its merits, the Plaintiffs are entitled to the benefit of the judgment in their favour and should not be deprived of that benefit, even for a relatively short period, by framing the orders in a manner that gives effect to a stay of them, where no such stay has been sought and no basis for it has been established.

7. Accordingly, I make the following orders:

1.   The Court declares that the meeting of 2 March 2014, at which the Plaintiffs were purportedly removed and the First to Seventh Defendants were purportedly appointed or elected as members of the Executive Council of the Eighth Defendant, and all resolutions purportedly passed at it were invalid.

2.   The Cross-Claim is dismissed.

3.   The interlocutory orders made on 14 March 2014 (and subsequently continued on 1 April 2014 and 16 April 2014), 6 November 2014 and 5 December 2014 are discharged.

4.   The First to Seventh Defendants pay the Plaintiffs’ costs of the proceedings as agreed or assessed.

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Decision last updated: 07 July 2015