Khmer Buddhist Assn of SA Inc & Ors v Ngon Nop & Ors

[2005] SADC 40

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

KHMER BUDDHIST ASSN OF SA INC & ORS v NGON NOP & ORS

Judgment of His Honour Judge Lee

4 May 2005

ASSOCIATIONS AND CLUBS - GENERAL MATTERS - RULES AND MEETINGS

Building of incorporated association destroyed by fire – insurer agreed to indemnify association for part at least of its loss – two groups in dispute about whether any and which persons are lawfully in control of association – in the end, validity of resolution purportedly passed at special general meeting only issue for determination – right of second to eighth plaintiffs to manage association and receive insurance monies upheld.

Associations Incorporation Act 1985 s.24(2), referred to.

KHMER BUDDHIST ASSN OF SA INC & ORS v NGON NOP & ORS
[2005] SADC 40

1. On 8 November 2003, a building owned by the first plaintiff (“the Association”) was destroyed by fire.  QBE Mercantile Mutual Limited, the insurer of the building, has agreed to indemnify the Association for part at least of its loss.  By interpleader summons, the insurer seeks a determination as to whom the money should be paid.

2. Two groups are in dispute about whether any and which persons are lawfully in control of the Association.  The first group comprises the second to the eighth plaintiffs.  The second group comprises the first to the seventh defendants.  The first group claims to be the current members of the board of management of the Association.  The second group claims that the Association has had no members at all since 30 June 2001.  For convenience, I will describe the groups respectively as the plaintiffs and the defendants.

3. The dispute dates back to 1996. On 25 March 2000, in consequence of orders made by Mulligan J in proceedings in the Supreme Court, persons who had registered for the purpose elected a board of management under the supervision of the Electoral Commissioner. On 26 August 2000, at a special general meeting of registered members, a new Constitution was adopted. Clause 4.1.7 provided:

   “Those people who were registered to vote in the election, which took place on 25 March 2000, are deemed to have paid the joining fee and membership fee for the current membership year ending on 30 June 2001.”

4. By amendments to their points of defence at the commencement of the trial, the defendants have identified the legality of a meeting held on 29 January 2001 as the only issue that I now need to decide.

5. The plaintiffs called five persons who told me that they attended the meeting in question, and that they did so following receipt of a notice which set forth the terms of a motion that was proposed.  They were satisfactory witnesses, and the defendants did not produce any evidence to contradict them.  In the result, I am satisfied of the following facts to the requisite degree of proof.

6. A special general meeting of members was called by the secretary following a resolution of the board of management in December 2000 in compliance with clauses 8.1 and 8.2 of the Constitution. The meeting was to be held on 29 January 2001. At least 14 days notice of the meeting and of the business to be transacted at the meeting was given in compliance with clauses 8.3 and 14.2. At least 60 members of the Association attended the meeting, and formed a quorum in compliance with clause 9.1. At the meeting, a resolution approved by at least three fifths of the persons present was passed in compliance with clause 20. The purpose and effect of the resolution was to extend the deeming provision of clause 4.1.7 from 30 June 2001 to 30 June 2002.

7. At an annual general meeting of the Association held on 29 September 2001, a new board of management was elected. At an annual general meeting held on 29 September 2002, the Constitution was amended in various respects. A document which purported to be the amended Constitution was presented to the Corporate Affairs and Compliance Branch of the Office of Consumer and Business Affairs on 29 May 2003 for registration. The document did not, however, record the amendment that was made to clause 4.1.7 on 29 January 2001. The document reproduced that clause in its original form.

8. Notwithstanding the submission of counsel for the defendants, I do not attach any significance to the failure. Strictly speaking, the amendment passed on 29 January 2001 should have been reflected in the document presented to the Corporate Affairs Commission. I do not know why it was not. Section 24(2) of the Associations Incorporation Act 1985 requires an incorporated association to register an alteration to rules within one month, with a maximum penalty of $1,250 in the event of a breach. Perhaps it was an oversight. Oversights of this kind sometimes happen, especially in voluntary organisations. Perhaps the omission was intended. After all, as a transitional provision, clause 4.1.7 had become of historical interest only. Either way, as I hold, the failure does not mean that the amendment was never passed.

9. Counsel for the defendants also relied upon the absence of minutes or any other documentary record of the meeting.  Again I do not attach any significance to that.  I accept the evidence of witnesses that records of the Association were destroyed in the fire.

10. In the result, I am prepared to make orders which will establish the right of the second to eighth plaintiffs to manage the Association as its lawfully elected board of management, and to receive the insurance monies on behalf of the Association.  I will hear counsel on the precise form that the orders should take.