Lai v Tiao (No 2)

[2009] WASC 22

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   LAI -v- TIAO [No 2] [2009] WASC 22

CORAM:   JOHNSON J

HEARD:   19 ­ 23 & 26 NOVEMBER 2007, 22 FEBRUARY 2008

DELIVERED          :   12 FEBRUARY 2009

FILE NO/S:   CIV 1442 of 2005

BETWEEN:   SHENG CHIN LAI

Plaintiff

AND

CHENG CHIH TIAO
HUI PING WANG
First Defendants

AUSTRALIAN CHINESE CONFUCIUS­MENCIUS SAINT TAO CENTRE INC
Second Defendant

LEVEL HOLDINGS PTY LTD
Applicant for joinder

Catchwords:

Incorporated association - Failure to abide by constitution - Membership - Failure to keep and maintain records - Lack of quorum at board meeting - Failure to give proper notice of meeting - Effect of financial contributions to Association - Sale of association property without authorisation of board or membership

Legislation:

Associations Incorporation Act 1987 (WA)

Result:

Judgment for the plaintiff

Category:    B

Representation:

Counsel:

Plaintiff:     Mr K G Robson & Mr R W H Tan

First Defendants           :     Mr P G McGowan

Second Defendant         :     Mr P G McGowan

Applicant for joinder     :     Mr S D Pentony

Solicitors:

Plaintiff:     Tan & Tan

First Defendants           :     Butcher Paull & Calder

Second Defendant         :     Butcher Paull & Calder

Applicant for joinder     :     Hotchkin Hanly

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

Broadlands Finance Ltd v Gisborne Aero Club Inc (in liq) [1975] 2 NZLR 496

Garden Clubs of Australia Inc v Eyres [2002] NSWSC 801

Green v Page [1957] Tas SR 66

Popovic v Tanasijevic (No5) [2000] SASC 87

Popovic v Tanasijevic [2001] SASC 289

Table of Contents

Background
The issues
Incorporation of the Association under the Act
I-Kuan Tao worship groups
Affiliation of the association with other organisations
Management of the Association

Credibility
Contribution of assets

(i)          Evidence of the board members

(ii)         Documentary evidence

(iii)        The DVD evidence

(iv)         The letter of commitment

(v)          Conclusion

Meeting of 8 April 1996
Involvement of Lai and Chou in the Association following the 8 April meeting
The financial position and record keeping of the Association
The Level Holdings contract

(i)          The decision to enter into the Level Holdings contract

(ii)         The failure to advise all directors and members of the Association of the Level Holdings contract

Solicitor's letter
Meeting on 21 January with Eric Archer
Translation of the constitution
Letter of 1 February 2005
Membership and baptism

(i)          Foundation Members

(ii)         Ordinary Members

8 February 2005 board meeting
26 February 2005 members' meeting
Validity of the 26 February 2005 meeting
Subsequent events
Final conclusions

Questions

1. JOHNSON J:  This case is an object lesson in the importance of operating an incorporated association as a legal entity, separate and distinct from those who operate it, and in accordance with the association's constitution.  It also underscores the importance of maintaining proper records.  If the parties had adhered to these fundamental requirements it is unlikely that these proceedings would have been necessary.

2. The second defendant, the Australian Chinese Confucius‑Mencius Tao Centre Incorporated (the Association), is a religious and charitable organisation, the primary purpose of which is to provide a temple and other facilities…