Margaretic v Western Australian Trotting Association [No 3]
[2023] WASC 229
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: MARGARETIC -v- WESTERN AUSTRALIAN TROTTING ASSOCIATION [No 3] [2023] WASC 229
CORAM: KENNETH MARTIN J
HEARD: 26, 27, 28 APRIL & 1 MAY 2023
DELIVERED : 26 JUNE 2023
FILE NO/S: CIV 2373 of 2022
BETWEEN: DURO MARGARETIC
Plaintiff
AND
WESTERN AUSTRALIAN TROTTING ASSOCIATION
Defendant
Catchwords:
Contract - Action for breach - Common law damages not sought - Defendant association becomes body corporate in 1946 by dedicated State statute - Plaintiff is member of defendant - 372 other members of defendant with full voting rights - Proposal to sell off part of defendant's real property at Gloucester Park - Referendum requirement for any sale of defendant's land at Gloucester Park - Voting quorum and special majority of members vote requirements by defendant's by-laws for referendum to be conducted and be approved by members prior to disposition of any part of Gloucester Park land - Referendum conducted under by-laws by defendant - Schedule to by-laws concerning electoral procedures for the running of candidate elections and referendums - Referendum question approved by 235 members voting 'Yes' by medium either of electronic vote or postal vote - 34 members voting 'No' to referendum question by either medium - Plaintiff abstains from voting at referendum - Quorum requirement in by-laws met for two-thirds of eligible voting membership to vote - Further requirement for half of participant member voters to approve referendum question
Plaintiff claims contractual breach of personal contract rights with defendant association as member incorporating terms of by-laws plus the scheduled voting procedures to by-laws
Alleged breaches of members' contract by defendant in allowing a potential for double votes by members of association by using both postal and electronic voting system - Alleged failure to meet 'counterfoil' requirement said to be applicable to electronic voting system - Further alleged contractual breach by defendant by failing to provide 'balanced case' on referendum question in materials provided to voting members on referendum question
Declaratory and injunctive relief sought by plaintiff member seeking to invalidate referendum result based on alleged breaches of election procedure schedule
Legislation:
Associations Incorporation Act 1895 (WA)
Companies (Co-operative) Act 1943 (WA)
Companies Act 1943 (WA)
Companies Code 1982 (NSW)
Co-operatives Act 2009 (WA)
Corporations Act 2001 (Cth)
Western Australian Trotting Association Act 1946 (WA)Result:
Action dismissed
Category: B
Representation:
Counsel:
Plaintiff : B E S Lauri Defendant : A P Hershowitz Solicitors:
Plaintiff : Law One (WA) Pty Ltd Defendant : JDK Legal Services Cases referred to in decision:
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Harlowe's Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Co NL (1968 121 CLR 483
Jones v Money Mining NL (1995) ACSR 53
Kingemel Pty Ltd v Rosa Processing Pty Ltd [2022] WASC 7
Millar v Houghton Table Table Tennis and Sports Club Inc [2003] SASC 1; (2003) 225 LSJS 241
Pettit v South Australian Harness Racing Club Inc [2006] SASC 306; (2006) 95 SASR 543
Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459
Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396
Table of Contents
Introduction
Procedural background
The plaintiff's writ and statement of facts, issues and contentions
Five annexures to the reasons
The defendant's By‑laws and their Schedule 1
The need for a referendum to be held under the defendant's By‑laws
Schedule 1 voting procedures: elections and referendums
Adaptions and Adaptions
Schedule 1 clause 37
Overview of the plaintiff's suggested breach arguments
Counterfoils
Information
A balanced case
Alleged breach of Schedule 1 subclause 37(b)(vi)
The trial evidence
Plaintiff's evidence
Defendant's evidence
Uncontroversial facts
The plaintiff's counterfoil issue
The plaintiff's counterfoil breach arguments
Three extra facts
Three diversions now discarded
The lack of counterfoil in electronic voting challenges of the plaintiff
Evaluation of counterfoil breach challenge
The plaintiff's unbalanced case challenges
The absence of a balanced 'For' and 'Against' case in election package materials circulated to eligible voting members during the 2022 Referendum
Legal principles around the balanced case breach arguments
The plaintiff's suggested negatives to add to a balanced case
The plaintiff's factors suggested in support of a lack of a balanced 'Against' case in the 2022 Referendum
Plaintiff's suggested negatives for a balanced case
The floodplain
The proposed relocation of a new grandstand/theatre to the east
Reduced future patron capacity for Gloucester Park
Insufficient capacity for feature night patronage
A separated 'museum' enclave around the totalisator building and heritage entry gates
Instalment payments by Hesperia Property
Land to be used as security by Hesperia Property
The exclusive working relationship with Hesperia Projects in the period leading up to the redevelopment proposal being put to members
The existing Gloucester Park's racing tracks distance status quo under the redevelopment proposal
Not enough space for a grandstand/theatre at the east
Withdrawn conflict of interest allegation
Supposedly misleading artist's impressions and concept drawings used in the explanatory memorandum
Overall conclusions on the suggested lack of a balanced 'No case'
Rehabilitation orders if needed
Final conclusion
Annexure A
Annexure B
Annexure C
Annexure D
Annexure E
KENNETH MARTIN J:
Introduction
1The plaintiff's action against the defendant was commenced by writ on 23 December 2022. The writ displays an endorsed statement of claim seeking relief which does not explicitly identify the nature of the plaintiff's cause(s) of action sought to be raised against the defendant.
2Subsequently, however, it was made explicit by counsel for the plaintiff at the trial that the plaintiff's cause of action relied upon is a common law contract action for alleged breach of contract by the defendant.
3The plaintiff has been a member of the defendant since 2018 and remains a member. He had also been elected in October 2020 to the defendant's Committee (in effect, the defendant's board of management) - as defined under section 2 of the Western Australian Trotting Association Act 1946 (WA) ('WATA Act') and referred to therein as the 'Committee'. He was subsequently suspended from that Committee on 28 October 2021 - for reasons immaterial to this action. Later, he resigned from the Committee, at 15 August 2022.
4At the commencement of the trial there was the following exchange with counsel for the plaintiff (see ts 25 - 26):
KENNETH MARTIN J: Can I just ask you about the nature of your cause of action.
LAURI, MR: Yes.
KENNETH MARTIN J: It seems to me it's action for breach of contract by - - -
LAURI, MR: Yes, just that.
KENNETH MARTIN J: The defendant against its member, your client, Mr Margaretic - so it's effectively a common law action for contractual breach relief. You don't seek damages. You seek - - -
LAURI, MR: No.
KENNETH MARTIN J: - - - a declaration in terms of invalidity of the referendum, in effect, or referendum - - -
LAURI, MR: Yes.
KENNETH MARTIN J: - - - result and (b) permanent injunctive relief. So you're seeking equitable relief in relation to the common law breach of the by‑laws which, you say, are part [of] the contract between the defendant with its members, one of whom is the plaintiff.
LAURI, MR: That's correct, your Honour.
KENNETH MARTIN J: All right.
LAURI, MR: And the plaintiff - I'm glad your Honour has raised that because the plaintiff has fought this case and prepared it on the basis simply that it's a breach of contract. Gloucester Park is a jewel in the crown of the defendant's assets. It is, by far, the largest and most valuable of the defendant's assets. And that is probably why it is the one item of the defendant's real, personal property that the committee is not empowered to sell or dispose of without the approval [of] the members at referendum. The requirement for approval by the owners at a referendum is contained in clause 3.7 of the defendant's by‑laws. … Schedule 1 of the defendant's by‑laws deals with the procedure for election-standard referendums.
Procedural background
5This was an expedited trial. The plaintiff had sought urgent interlocutory relief against the defendant under a chamber summons filed 23 December 2022 (folio 3), seeking that the defendant be restrained from attempting or purporting to sell or otherwise dispose of any portion of the defendant's land at Gloucester Park, Nelson Crescent, East Perth, in the State of Western Australia ('Gloucester Park') ‑ unless such sale or disposition shall have been approved by a referendum conducted in accordance with by‑law 3.7 of the defendant's written by‑laws ('By‑laws').
6The plaintiff's interlocutory injunction application was served upon the defendant and was made returnable in chambers before me, initially, on 17 January 2023. At that time I accepted a limited undertaking offered to the court by the defendant - to the effect that the defendant would agree to give seven days clear written notice to the plaintiff through his solicitor of record - before entering or perfecting any dealings with any portion of the defendant's land at Gloucester Park. That undertaking as given by the defendant and received by the court, occurred under temporal circumstances whereby it was apparent that the defendant's envisaged sale dealing with a property development corporation, Hesperia Property Pty Ltd ('Hesperia Property'), would likely not reach a position to culminate, in any event, until the second half of 2023 - in relation to the proposed sale to Hesperia Property, on terms, of portions of the defendant's land at Gloucester Park.
7At the same time, given the importance of the matter to the parties and likely adverse repercussions of unresolved litigation subsisting beyond mid-2023 against the defendant's redevelopment plans as proposed with Hesperia Property, for what is an expensive and large scale redevelopment to upgrade the current aging facilities at Gloucester Park, an expedited trial of the plaintiff's grievances was warranted.
8Consequently, in mid-January 2023 I then fixed trial dates for a two‑day trial with a further hearing day held in reserve - for the end of April 2023. I also ordered the trial be conducted on the basis of exchanged affidavits and, subject to further order, that the usual civil action interlocutory requirements for pleadings and discovery, be dispensed with.
9Instead, I ordered that statements of facts, issues and legal contentions be exchanged as between the parties in the lead-up to the April 2023 trial. I set a strict timetable for the exchange of the affidavit materials - on a basis that all deponents were to be available for cross‑examination upon their affidavit(s) at the trial, unless notified by the counterparty that this was not required.
10The contractual breach cause of action, as is relied upon by the plaintiff, is made by reference to contended personal contractual obligations owed to him by the defendant. These are said to arise as between the plaintiff (in the capacity as member of the defendant) for the full content of the defendant's By‑laws to be complied with. The By‑laws are, in effect, the governing constitution of the defendant. The defendant itself is a unique body corporate (by reference to its own founding legislation). To establish personal contractual rights in his favour, analogy is sought to be drawn by the plaintiff, in effect, to rights of a shareholder held in that capacity against a proprietary, or a limited corporation, as personal contractual rights held with the corporation itself. Such member or shareholder rights are said to give rise to an expectation as to the adherence with or as to the observance of the corporation's constitution, or memorandum of association, vis-à-vis the shareholder. See, to that same end, the body of personal contractual rights to be held by a shareholder arising by subsection 140(1)(a) of the Corporations Act 2001 (Cth) ('Corporations Act').
11Here, the suggested personal contractual right analogy to a shareholder is somewhat less than perfect. There are no shareholders in this body corporate defendant, only persons who apply for, or who are accepted as members.
12This defendant, some years ago now, came to be uniquely constituted as a body corporate under the WATA Act. Prior to 1946, it had been an incorporated association, having been originally constituted under the Associations Incorporation Act 1895 (WA). As to the defendant's current body corporate status and existence, see subsections 3(3) and (4) of the WATA Act. Importantly, by reason of its unique legislative foundation, the defendant is not the more typically encountered incorporated association, more commonly seen under the regime of the Associations Incorporation Act 2015 (WA).
The plaintiff's writ and statement of facts, issues and contentions
13To focus a greater level of attention upon the character of the plaintiff's contended cause of action against the defendant as one of its members, it is necessary to see his founding endorsement of claim to his writ, filed 23 December 2022 (folio 1). This reads:
The Plaintiff's claims concern (a) the written by‑laws of the Defendant ('the By‑laws') and (b) the conduct of the Defendant (by itself, its officers, servants, agents or otherwise), occurring from and after 1 June 2022, in holding a referendum in respect of the sale of certain portions of the Defendant's land at Gloucester Park, Nelson Crescent, East Perth, in the State of Western Australia ('Gloucester Park'), being conduct in breach of the By‑laws and in breach of the Plaintiff's rights thereunder as a full member of the Defendant.
The Plaintiff's claims against the Defendant are for:
1.A declaration that the referendum held by the Defendant in the period from about 18 August 2022 to about 5 August 2022 in respect of the sale of certain portions of the Defendant's land at Gloucester Park was conducted in a manner in breach of the By‑laws and the result thereof which was announced by the Defendant on or about 6 October 2022 was invalid and void. (my emphasis in bold)
2.Interim and permanent injunctions restraining the Defendant (whether by itself, its officers, servants, agents or otherwise) from attempting or purporting to sell or otherwise dispose of any portion of the Defendant's land at Gloucester Park unless such sale or disposition shall have been approved pursuant to the provisions of By‑law 3.7 at a referendum conducted in accordance with the By‑laws at some date henceforth.
3.An order, in the nature of a mandatory injunction or otherwise, requiring the defendant forthwith to give all members of the Defendant written notice that the result of the referendum in respect of the sale of certain portions of the Defendant's land at Gloucester Park announced by the Defendant on or about 6 October 2022 was invalid and void. (my emphasis in bold)
4.…
5.…
14As very early preliminary observations towards that endorsement of claim of the plaintiff, I note:
(a)the express references to 'breach' (of the By‑laws and of the plaintiff's rights thereunder) to be observed (highlighted in bold above) in the opening paragraph of the endorsement of claim and in the relief under paragraph 1. That conforms with the formulation of the plaintiff's case as was explained by counsel - grounded on the basis of a common law contract action for breach and articulated by the plaintiff in the capacity of member of the defendant - alleging that the plaintiff holds personal contractual rights against the defendant - of expectation that the defendant would observe the provisions of its constitution (ie, here, it's By‑laws);
(b)the declaratory relief sought concerning the referendum conducted by the defendant in 2022 ('2022 Referendum') which is also seen as being expressly sought by reason of a suggested breach of the By‑laws by the defendant. The concluding phase of paragraph 1 also looks to contend that what otherwise had presented as an affirmative referendum outcome is sought to be declared (presumably, by reason of the breach) as, 'invalid and void' by the court;
(c)the wholly contractual edifice (ie, not by way of any public law remedy) by which a breach of the terms of the defendant's agreement with the plaintiff, as one of its members, is said to lead to a suggested condition of invalidity and voidness for the (otherwise) affirmative referendum outcome;
(d)the mandatory order relief sought by paragraph 3, seeking that the defendant's members all be notified of that condition of invalidity and voidness; and
(e)the permanent injunctive relief seen as sought by paragraph 2, seeking that any sale of parts of land at Gloucester Park, be stopped, unless, in effect, another referendum is held which approves the sale of land proposal.
Five annexures to the reasons
15To avoid cluttering the reasons unduly, I supplement them by five annexures - to hopefully facilitate a clearer understanding of the plaintiff's arguments.
16To that end, Annexure A to the reasons is a report dated 5 October 2022 of the 2022 Referendum's 'Returning Officer' (as defined in subclause 1(2) in Schedule 1 to the By‑laws). That report was made to the chief executive officer ('CEO') of the defendant - in the aftermath of the conducting of the 2022 Referendum. The report told the defendant that of 373 ballot papers that were provided to members to vote, either by post or electronically, that after eliminating 18 dual voters and also, 12 more informal ballot papers, that there were, in the end, 269 aggregate postal and electronic votes received, of which 235 had voted 'Yes' to the 2022 Referendum question and 34 had voted 'No'. That end result upon the 2022 Referendum question, satisfied the requirements of By‑laws 3.7(1)(a) and (b).
17Annexure B to the reasons is an annotated extract from out of the By‑laws - containing components that I have assembled as relevant for purposes of assessing and interpreting the By‑laws in overall context. As I will mention various By‑laws or Schedule 1 provisions along the way in these reasons, recourse to Annexure B will expose the full content of a provision referred to in its accompanying context.
18Annexure C to the reasons is an explanatory memorandum document prepared for the 2022 Referendum, which was provided by the defendant to both postal and electronic voters within their 'referendum packages' of materials received by members. This memorandum was despatched at the commencement of the 2022 Referendum process, at 18 August 2022.
19Of importance at the trial, as will be seen, particularly given the plaintiff's arguments, is section 5 of the explanatory memorandum
- presenting there under a heading, 'Reasons To Vote "Yes" And "No" At The Referendum'.20Annexure D to the reasons is a communication from the President of the defendant of 6 October 2022 to members - advising them of the affirmative outcome of the 2022 Referendum.
21Annexure E to the reasons are voting instructions for the 2022 Referendum, also sent out to members as part of their voting information pack.
The defendant's By‑laws and their Schedule 1
22Returning to the plaintiff's endorsement of claim and to his contended contractual breaches by the defendant of By‑laws under paragraph 1 thereof, it is important at the outset to observe upon what I assess is a key distinction - between the actual By‑laws themselves and Schedule 1 of those by‑laws, which schedule provides voting procedures for elections and referendums.
23As may now be better appreciated from viewing Annexure B to the reasons, the By‑laws span only as between By‑law 1.1 and By‑law 8.5. Schedule 1 follows.
The need for a referendum to be held under the defendant's By‑laws
24Of commencing significance to this trial is By‑law 3.7. It provides an as-expressed constraint against the Committee's power to otherwise sell and dispose of any part of the defendant's land at Gloucester Park -unless such a sale or disposal is first approved at a referendum conducted for that purpose with the eligible voting members of the defendant.
25Despite what is an obvious deficiency in the drafting clarity of this provision, readily observable within By‑law 3.7(1)(a), there was at the trial no disagreement as between the parties that, properly understood, the words of By‑law 3.7(1)(a) means that a referendum for the purpose of obtaining member approval for the disposition of any part of Gloucester Park first requires the voting participation by a minimum of two-thirds of the defendant's eligible voting members.
26There was also no disagreement at the trial that there were, at the time of the 2022 Referendum, some 373 eligible voting members of the defendant. This minimum of two-thirds of the defendant's eligible voting membership needed to participate by voting in the 2022 Referendum (ie, a minimum participation of 249 members voting, one way or the other).
27Prima facie then, an end result of 269 members of the defendant validly voting exceeded, and therefore satisfied, that minimum referendum voting participation requirement of the By‑laws.
28I would observe for completeness regarding the issue of referendum voting participation by eligible members, that the President's advice to members (see Annexure D) included a higher member participation figure of 281 votes. The President obviously had included for this participation threshold 12 'informal' ballot papers -otherwise rejected in the end count result (ie, the President adding in the informal votes for assessing overall member participation). By my interpretive assessment, the President's approach was the correct one towards the true construction of that minimum member participation requirement concerning By‑law 3.7(1)(a). The Returning Officer had not included those 12 informal votes in his assessing of the participation threshold in his report. But by either approach, that first By‑law requirement, by way of a required minimum voting participation by eligible members in the 2022 Referendum, was clearly met.
29Second, the parties at trial were also not in any dispute that, per force of By‑law 3.7(1)(b), properly understood, in order for a referendum question put to members to be validly passed, more than half the 373 eligible voting members of the defendant needed to cast a valid vote in the affirmative upon the 2022 Referendum question. Consequently, at least 187 members of the defendant needed to validly vote in the affirmative. That By‑law majority threshold requirement for a successful referendum result was also met - by the aggregate result of the (postal and electronic) affirmative votes received, of 237 affirmative votes (with 34 votes in the negative).
30Had there been no referendum conducted by the defendant, or had, say, the member participation and voting outcomes been otherwise than as are noted above, then the plaintiff's contract-based arguments concerning a breach of the By‑laws and a correlative breach of his personal rights as a member to expect the By‑laws to be faithfully observed by the defendant, would be understandable. That is especially the case because, as now seen, By‑law 3.7(1) expressly conditions and so, constrains the power of the Committee to sell off, or to dispose of any of its land at Gloucester Park - by regard to the required prior satisfaction of both those participation and voting majority outcome thresholds.
31But that is not the plaintiff's contract breach case, which is directed at Schedule 1 to the By‑laws, as to suggested breaches of those procedural provisions.
Schedule 1 voting procedures: elections and referendums
32Essentially, the plaintiff's breach of contract grievances (as will become more evident later in the reasons) do not concern alleged direct breaches of the By‑laws themselves. Rather, they raise aspects of alleged procedural non‑compliances by the defendant and its Returning Officer concerning various Schedule 1 provisions (to be found relevantly extracted as part of Annexure B to the reasons).
33I point out that By‑law 3.7, which imposes the referendum threshold pre‑requisite criteria as now seen, concludes with its observed reference to the obligation of the defendant's Committee to affirmatively do something, namely that:
(3)The Committee shall arrange for the referendum referred to in subclause (1) to be conducted in accordance with Schedule 1. (my emphasis in bold)
34Next, following By‑law 3.8 then says:
To the extent to which the provisions of Schedule 1 are capable of being applied with or without adaption in respect of referendums to be conducted by the Association, those provisions apply with or without adaption in respect of those referendums. (my emphasis in bold)
35Contextually, By‑law 3.7 and By‑law 3.8 reside within Part 3 Division 2 of the By‑laws - dealing there with issues concerning the functions and powers of the defendant's Committee.
36It is evident from the text of By‑law 3.8 that the By‑laws themselves envisage a level of permissible 'adaption' to what are voting procedure provisions assembled under Schedule 1 - framed first for the elections of candidates. An envisaged By‑law 3.8 adaption is to render those election procedures more suitable, as needed, to the conducting of a referendum, rather than to regulating an election as between rival candidates.
37Whilst not immediately evident from the terms of By‑law 3.8, subsequent scrutiny of the content of Schedule 1 to the By‑laws soon exposes why there was a need for the adaption to such voting procedures, when they are to be applied to regulate the modified, but obviously distinct, purpose of conducting a referendum. The observed components to Schedule 1 will be seen as being largely framed at procedurally conducting elections as between rival candidates, not for the conducting of a referendum of members.
38It is vital to appreciate what, in my assessment, is a key conceptual distinction as between a breach of a By‑law (ie, constitutional) provision, by contrast to the mere non-observance of a Schedule 1 voting procedure provision that is specified as being directed to what the defendant's Committee 'shall arrange' (see By‑law 3.7(3)).
39As we shall see, the plaintiff's alleged breach case in truth is focused at alleged breaches of the Schedule 1 voting procedure provisions, particularly by his regard to Schedule 1 subclause 37(k) - and to so-called 'counterfoil' requirements, applicable for elections between candidates and in postal ballots used in referendums - but not so compatible in a procedurally adapted referendum context of a first-time newly introduced electronic voting system for members.
40Towards subclause 37(b)(vi) of Schedule 1, it is also put by the plaintiff that eligible member voters in the 2022 Referendum were, wrongly, allowed the opportunity to vote more than once.
41Then, from out of Schedule 1 subclause 37(a)(ii), read with subclause 37(d)(ii), there emerges the plaintiff's third breach argument - that the required level of information that was to be provided to eligible voting members for the 2022 Referendum, was in fact, not provided. That was because, on the plaintiff's arguments, the 'Against' (or 'No') case upon the 2022 Referendum question in the document was not sufficiently 'balanced', in the information as was provided to members within their voting package materials, as received.
42There is then, a threshold question to be addressed at the trial concerning whether - accepting the plaintiff as a member of the defendant is ascertained to hold personal contractual rights against the defendant by reference to his expectation as to an observance by the defendant with its By‑laws - there is any contractual obligation, that extends essentially as a promise by the defendant made to members that it would meet all of the voting procedures seen as set down for conducting of elections and referendums under Schedule 1 of the By‑laws. To that object, the plaintiff no doubt would rely on By‑law 3.7(3).
43But By‑law 3.7(3) is only seen as expressed as a requirement for the arrangement of a referendum to be conducted by the Committee. In other words, as expressed, this is a specified obligation for the Committee. The By‑law does not, on its face, present as the conferral of any personal contractual right that would be enjoyed by members generally, as against the defendant. Instead, the By‑law only says what the Committee must do.
44Thus, if referendum voting procedure arrangements were ultimately conducted otherwise than strictly in accord with such Schedule 1 provisions, once they were adapted to referendums and then adapted to an electronic voting system, then, on the face of it, any such breach could possibly be a breach by the Committee vis-à-vis the defendant, but not, as I would asses that situation, a breach by the defendant vis-à-vis its members generally.
45A further plenary question arising is whether a substantial, but not perfect in every respect, conducting of a referendum in accord with those Schedule 1 voting procedures, as adapted for a referendum and adapted again to an electronic voting system, would amount to a sufficient compliance by the Committee with By‑law 3.7(3)?
Adaptions and Adaptions
46I return to the required adaption of the Schedule 1 provisions to referendums, seen to be envisaged under By‑law 3.8.
47Scrutiny of Schedule 1 towards those voting procedures immediately exposes the scope for adaptions to be made to Schedule 1 voting procedures as required, when conducting a referendum. That is by contrast to procedures for conducting an election as between rival nominated candidates seeking to be elected to the defendant's Committee.
48On close examination, the Schedule 1 procedures contain four divisions. Only the last of the divisions, Division 4, is seen as being specifically directed towards the procedures for the conducting of a referendum of Schedule 1. This is addressed in very brief fashion by clause 36.
49The earlier Schedule 1 Divisions 1 - 3, can be seen as directed heavily towards laying down procedures for conducting an election between rival candidates, seeking to be elected to the Committee.
50Provisions directed to procedures for the conducting of referendums are only specifically encountered at Division 4 in Schedule 1. Clause 36 directs the modification of provisions in Schedule 1, insofar as they would otherwise apply for conducting of an election between candidates - by contrast to the distinct scenario of conducting a referendum.
51It is also evident, by Schedule 1 subclause 36(c) that, as first drawn, it was envisaged at then that only a postal ballot procedure for the conducting of a referendum, using marked physical ballot papers, would be used. This is evident by the observed reference to a limited modification of earlier subclause 15(1) - towards the timing for a commencement of the issuing of ballot papers in a referendum and for the time and date and close of such a ballot.
52Hence, Schedule 1 clause 36 displays what is an attempt at the adaption of the earlier seen Schedule 1 electoral voting procedures otherwise applicable to an election between candidates, to a referendum - initially being only a referendum to be conducted only by postal ballot system.
53Schedule 1 clause 36 can therefore be assessed to present as in full alignment with the expressed need for adaption, stated under By‑law 3.8. Of course, such adaption(s) will be 'to the extent to which the provisions of Schedule 1 are capable of being applied'. The use of that phrase necessarily recognises that in certain respects, the procedural provisions of Schedule 1 might not, in the end, be capable of a wholesale importation and direct application to a referendum - since they are conceived from a starting position of their use as procedures in an election between candidates. They may, therefore, not all be relevant to be used as procedures for conducting a referendum. This suggests that the subject matter of Schedule 1 procedures are, as may be expected, fluid and adaptable arrangements providing procedures, as required - rather than by rigid codification of immutable obligations by Schedule 1.
54That clearly discernible measure of procedural adaptability and pragmatism as is expressly envisaged under By‑law 3.8 and, as later seen manifested under Schedule 1 clauses 36 and 37, is a policy pointer against the plaintiff's Schedule 1 breach arguments. Such detectable policy sentiments do not align well to what the plaintiff suggests is, in effect, personal contractual covenants made by the defendant in his favour (and to all the defendant's other members) as to a promised conducting by the defendant of referendums by immutable voting procedure requirements found under Schedule 1. For such electoral voting procedures, with the express need for them to be adapted to referendums, what is being alleged by the plaintiff in this action as his personal rights held contractually against the defendant, is unusual. It presents to me as a somewhat unrealistic approach to what are merely voting procedures assembled under Schedule 1. Schedule 1 only provides what is a to be adapted structure of procedures for their pragmatic deployment whilst conducting referendums. Schedule 1 should not be interpreted as a quasi 'Bill of Rights' for the individual members of the defendant to cavil over - upon their subjective concerns over procedural compliances around elections and referendums. Hence, I would not actually find any contract obligation or term to that end in the plaintiff's favour made out here - regarding his enforcement and compliance grievances over Schedule 1 provisions. They display a different (procedural) character to the substantive provisions of the defendant's By‑laws (constitution). From that platform the plaintiff's case is flawed at the outset, conceptually.
Schedule 1 clause 37
55Further levels of adaptions need to be made to those voting procedures for referendums - by reason of Schedule 1 clause 37.
56This clause was introduced into the By‑laws, in 2022. That was shortly prior to the conducting of the 2022 Referendum.
57The change was only recently introduced to facilitate any forthcoming future referendums being conducted wholly or partially, by using an electronic voting system, notwithstanding the existing physical regime - by postal voting for referendums.
58A new term 'electronic voting system' was then introduced - seen specifically defined at Schedule 1 subclause 37(a). See also definition amendments made to Schedule 1 subclause 1(2) for 'electronic voting system' and 'ballot paper', as follows:
'electronic voting system' means a voting platform or system determined by the Electoral Commissioner or Returning Officer (as the case may be) which facilitates eligible voters to remotely cast their vote in a referendum using a device with an Internet connection.
'ballot paper' includes a ballot paper issued via an electronic voting system.
59Importantly, the preface to the newly introduced Schedule 1 clause 37, again expressly envisaged necessary modifications to the existing election procedures, around this new (electronic) voting system. A newly introduced clause 37 preface, which must be read as applicable to all of the ensuing subclauses 37(a) - (n), now read from 2022:
The provisions of this Schedule shall apply to a referendum conducted by the Association by an electronic voting system (whether wholly by an electronic voting system or in part with a postal ballot) with the following modifications … (my emphasis in bold)
Overview of the plaintiff's suggested breach arguments
Counterfoils
60The first of the plaintiff's suggested breach arguments was directed towards a suggested violation of a counterfoil voting procedure requirement in Schedule 1.
61For the context of a physical vote, a counterfoil integrity provision requirement is a perfectly understandable and feasible requirement of voters within an in-person election between candidates, or under a postal ballot when used in a referendum.
62Relevantly to the election between candidates standing for election, a counterfoil requirement first presents under Schedule 1 subclauses 18(1) and (2).
63Adapting this counterfoil requirement from an election situation to a physical postal vote cast in a referendum, is relatively straightforward. Schedule 1 clause 36 essentially imports over like-counterfoil requirements to a postal vote system used in a referendum - without much adaption or modification being required to clause 18.
Information
64There is a need, however, for some greater levels of adaption away from the election of candidates information requirement under Schedule 1 clause 4, as regards adapted information to be provided to the Returning Officer for a referendum, arising under subclauses 36(a)(i) - (iv).
65Those provisions recognise a necessary distinction as between the election between rival candidates and the distinct task of answering (in the affirmative or negative) a referendum question or questions that are put to members.
66The clause 36 context, however, is clearly stated as being 'information' that is to be provided by the defendant 'to' its Returning Officer. That is so either for the election of candidates by Schedule 1 clause 4, or for a referendum when conducted by a postal vote regime by Schedule 1 subclause 36(a).
A balanced case
67A further component in the plaintiff's suggested breach grievances is built on a contended breach of Schedule 1 subclause 36(a)(ii) - over what he argues was the lack of a balanced 'For' and 'Against' case on the 2022 Referendum question (based on prevalent greater negative factors he contends were omitted in the 2022 Referendum information sent to members). That would be (if proved) a suggested breach of a Schedule 1 voting procedure provision, not a breach of a By‑law.
68As seen, the Schedule 1 subclause 36(a) adaption to be effected was, by reference to clause 4, an election procedure whereby the specified information is required to be provided by the defendant to the Returning Officer (not to members) concerning elections. Ostensibly, therefore, any suggested subclause 36(a)(ii) breach (if shown) is a breach of the defendant's as-specified document provision obligation to its Returning Officer, not to its members.
69I will return to the arguments made by the plaintiff concerning an alleged breach of the balanced case requirement in greater depth subsequently in the reasons. It is convenient, however, at this point to isolate and resolve another of the plaintiff's Schedule 1 breach arguments, grounded upon subclause 37(b)(vi).
Alleged breach of Schedule 1 subclause 37(b)(vi)
70Again, the entirety of Schedule 1 clause 37 will be found set out in Annexure B to the reasons - where it can, and should be, viewed there in its surrounding context.
71For present purposes, clause 37 as a recently added Division 4, Schedule 1 voting procedure provision reads (seen with its plenary chapeau) as follows:
37.The provisions of this Schedule shall apply to a referendum conducted by the Association by an electronic voting system (whether wholly by an electronic voting system or in part with a postal ballot) with the following modifications:
…
(b)General obligations of the Returning Officer.
If a referendum is to be conducted in whole or in part by an electronic voting system, the Returning Officer must ensure that the electronic voting system:
…
(v)does not allow a person to find out how a particular voter cast their vote;
(vi)does not allow a voter to vote more than once for any referendum; and
(vii)only allows a voter to vote in a referendum for which they are eligible to vote. (my emphasis in bold)
72Like many of the Schedule 1 clause 37 provisions, they are seen framed across various subparagraphs - as being directed towards something the Returning Officer either, 'must' (in this case), or may, or shall, do.
73Schedule 1 clause 37 envisaged from 2022 a procedural conducting of a referendum by using an electronic voting system either alone, or in conjunction with use of a postal ballot system.
74The plaintiff's expressed grievance is that there was in the 2022 Referendum, potential for an eligible voting member of the defendant to vote twice. That, he submits, was because voting members could vote electronically, but also were sent a physical voting pack to their postal address (which all but three members did receive) to potentially make a postal vote.
75Voting members received, if they had provided their email address to the defendant, an email communication about the 2022 Referendum question. This offered the eligible voting member an opportunity to alternately lodge, by a different medium, their vote in the 2022 Referendum through the medium of an electronic voting system.
76But this opportunity to vote more than once, both electronically and as well by post, was wrongly afforded, says the plaintiff. An opportunity for a member to vote more than once in the 2022 Referendum should not have been allowed by the procedures adopted.
77As articulated under the plaintiff's outline of submissions for the trial filed 14 April 2023 (folio 51), his grievance over this point is seen formulated as follows:
39.The conduct which is being prescribed by clause 37(b)(vi) is that of allowing voters to vote more than once - by any means - for a referendum. The Clause simply states '… to vote more than once for any referendum'. It does not state '… to vote more than once electronically for any referendum'. The mischief which Clause 37(b)(vi) is aimed at preventing is allowing a voter to vote more than once for a referendum. It would be no less a mischief to allow a voter to vote once electronically and once by post than to allow a voter to vote twice electronically. The opening passage of Clause 37(b) expressly contemplates a referendum being conducted partially electronically and partially by post.
…
41.… it is indisputable that 370 out of the 373 eligible voting members were allowed to vote more than once.
78For this challenge, I will first make an assumption favourable to the plaintiff - namely, that the voting procedure under Schedule 1 subclause 37(b)(vi), do form an aspect of what was a group of contractual promises to him by the defendant - upon for how the 2022 Referendum would be conducted (which premise, however, I have already rejected, as a matter of the proper construction of the By‑laws as a whole when read with the following Schedule 1).
79Even so, the plaintiff's Schedule 1 subclause 37(b)(vi) argument must still be dismissed on its demerits - purely as a matter of the proper interpretation of Schedule 1, read in context.
80Clause 37 in Schedule 1 was introduced in 2022, to facilitate as from then, future use of an electronic voting system (in whole or in part) in any referendum conducted by the defendant. It is manifest that the clause 37 provisions were specifically introduced to be applicable to, and to cater for, a use of electronic voting in whole or in part in the conducting of a referendum.
81The proper contextual interpretation of Schedule 1 subclause 37(b)(vi) should pay regard to the chapeau to clause 37. The chapeau mentions the electronic voting system twice.
82Schedule 1 subclause 37(b) then advances to specify what the Returning Officer 'must' ensure.
83Schedule 1 subclause 37(b)(vi) is thus exposed in context to be directed at what the Returning Officer must ensure for features of a deployed electronic voting system itself - in terms of its capabilities and its overall integrity - towards what is a newly introduced voting system not being abused by any recipient participant member voter when using that electronic voting system - to vote more than once.
84The evidence at the trial, as I explain later, is overwhelmingly that the 2022 as-introduced electronic voting system could not be engaged by a member to vote twice, electronically.
85Even the plaintiff appears to accept that to be so.
86Hence emerged what is a wider argument, directed at a suggested potential misuse of the postal and electronic voting system, when operating in conjunction, for a member to thereby potentially vote more than once using both mediums.
87However, that is not what the as-relied upon Schedule 1 subclause 37(b)(ii) actually says. As framed, that provision is solely directed at electronic voting. Hence, the breach that is contended for by the plaintiff across both systems, goes wider than subclause 37(b)(ii).
88At the trial, positive evidence was adduced from the defendant that the 'Election runner' software package as was utilised by the defendant for conducting the 2022 Referendum - did not allow a recipient electronic voter member to lodge more than one vote. To that end, see affidavit evidence sworn 3 March 2023 from the defendant's CEO, Mr Michael Terence Radley (exhibit 5) at paragraphs 111 and 112. Mr Radley says:
111.I undertook a test of Election Runner to see how ElectionRunner worked.
112.As part of that test, I set up an account with pretty much the questions we were going to put onto the system with a multiple choice question, the rules for voting and uploaded the explanatory memorandum. I launched the system with only me as a voter. I voted and once I had voted, I tried to get back into [sic] vote again. The system would not let me. It gave me a message saying 'you have already voted in this election'. ElectionRunner would not let me vote twice.
89I accept that evidence. It is not otherwise contradicted. To be clear, there is no evidence at all in the trial that any member ever lodged, or even attempted to lodge, more than one referendum vote by the electronic voting system option afforded.
90The true meaning of Schedule 1 subclause 37(b)(ii) applies to only an electronic voting system. It was not breached upon the facts adduced at trial.
91That, of course, is not to suggest it was ever permissible for the 2022 Referendum to be conducted upon the basis of any eligible voting member being permitted to vote more than once. It was not.
92The defendant's election package materials provided to members rendered it explicitly clear that an eligible voting member was only to vote once in the 2022 Referendum.
93Schedule 1 to the By‑laws, after what was added in 2022, envisaged that an eligible voting member may be given a choice, as between rendering either a postal vote (upon receipt of physical voting materials posted to their residential address), or by a vote cast through the electronic voting system.
94That choice as between a plurality of voting systems in the conducting of a referendum, was expressly envisaged by Schedule 1 clause 37.
95Furthermore, in the 2022 Referendum, it is plain that the 'one vote only per member' regime was scrupulously overseen and enforced to by the Returning Officer. That may be witnessed from the Returning Officer's report that is Annexure A to the reasons. Mr Gregory Rickie, as the appointed Returning Officer for the 2022 Referendum, ultimately detected, so as then to eliminate from the end count, what he termed, some 18 'dual' voters. These were 18 voters who, for whatever reasons, had initially voted electronically, but then subsequently, for reasons unexplained, had also attempted to submit a postal vote.
96But these later postal vote attempts were all detected. They were classified as a 'dual vote' by those 18 persons by Mr Rickie as the Returning Officer. He thereupon eliminated all such attempts at a dual (postal) vote from out of the count. The integrity of the 2022 Referendum result accordingly was not compromised, given a rejection of those 18 'dual' votes from the count by the Returning Officer.
97Essentially, however, the plaintiff's breach of contract argument raises a question of construction. It is grounded upon the alleged breach of Schedule 1 subclause 37(b)(vi). But that outcome is not textually supportable as a matter of the proper construction of the clause. It must be rejected. This Schedule 1 provision breach challenge, is too broad. Clause 37(b)(vi) as seen only deals with electronic voting. There were no multiple electronic votes cast by any member in the 2022 Referendum.
98That leaves two remaining breach arguments run by the plaintiff in this action, over an alleged 'counterfoil' non‑compliance (in a context of an electronic vote in that voting system) and then, a suggested breach by an insufficiently balanced 'No' case, being put to members.
99I move next then to explain the suggested counterfoil deficiency arguments in the electronic voting system context.
100To assist that task, however, it is convenient first to set down some more of what were the largely uncontroversial agreed body of facts at the trial as between the parties. That level of consensus upon the key facts, emerged as a result of the parties' exchange of their respective statements of facts, issues and legal contentions materials, prior to the trial commencing.
101I begin the fact assembly task by first explaining the diverse sources of evidence adduced in the trial.
The trial evidence
102As mentioned, this was an expedited trial conducted upon exchanged affidavit evidence. In the lead‑up to the trial, programming directions provided for the exchange of affidavit materials. As matters transpired at trial, only some of the exchanged materials were tendered to become trial exhibits.
Plaintiff's evidence
103For the plaintiff, affidavit evidence received as his case at trial comprised, first, the plaintiff's own affidavit (Mr Duro Margaretic) sworn 17 February 2023, with annexures DM1 to DM35 included. The plaintiff's affidavit became exhibit 3 in the trial.
104The plaintiff was subsequently cross-examined upon that affidavit evidence.
105Prior to receiving exhibit 3, there were a number of excisions necessarily made from out of his affidavit, resulting from legal admissibility objections taken on the part of the defendant, which were either accepted or, if not, were ruled upon and were, in the end, largely upheld by me in due course, as the trial proceeded.
106The post-ruling redactions required to components of the plaintiff's affidavit are to be observed by those black markings.
107Furthermore, I record that the penultimate sentence of his paragraph 60 which once read 'in the absence of an "Explanatory Memorandum", I could not see how I could make an informed vote' came later to be not read into evidence by counsel - as any part of the plaintiff's trial evidence.
108Also not read into evidence was the entirety of his former paragraph 61. The paragraph once raised a potential issue relating to whether voting members opting to use the electronic voting system could access the 2022 Referendum explanatory memorandum, or not.
109For a time the plaintiff's negative contention about that access capability for the electronic system loomed as a controversial trial issue of fact, disputed between the parties.
110However, as the trial began, that former position raised by the plaintiff over how he (and others) had not been able to access the explanatory memorandum electronically, came no longer to be pressed. The revision of position by the plaintiff emerged in the face of rival affidavit evidence from the defendant's CEO, Mr Radley. His evidence, as exchanged, was strongly to the contrary. In the end, Mr Radley's position came to be accepted factually, by the plaintiff.
111That will be my finding of fact made on this issue, if ever required and, in the end, as a position reached at the trial without controversy.
112If also relevant, I should say that I assessed the plaintiff, Mr Margaretic, as a witness who did endeavour to provide his evidence helpfully to the court. Clearly, he was very passionate and genuine over his opposing stance taken against the current redevelopment proposal for the redevelopment of Gloucester Park. However, my impression was that his passion for this cause has clouded the clarity of his recollection of events and so impacted adversely at times against the reliability of some of his evidence - in aspects well illustrated by that volte-face over the issue just mentioned, that is, over the 2022 Referendum explanatory memorandum not being provided under the electronic voting system. Because of this, I needed to be cautious about accepting some aspects of his evidence.
113Two further affidavits were read on behalf of the plaintiff as part of his case. These were:
(a)the affidavit of Timothy Stephen Blee sworn 16 February 2023, which with marked out with excisions became exhibit 2 in the trial. Mr Blee is a member of the defendant, but also a member of the Breeders, Owners, Trainers and Reins Persons Association. He was cross-examined. But, with respect, I assessed his evidence as essentially inconsequential to the end results; and
(b)the affidavit of Norman Champion sworn 15 February 2023, also with excisions, based on inadmissibility rulings made at trial. It became exhibit 4 at the trial. Mr Champion deposed at paragraph 11 to voting 'No' to the 2022 Referendum question '… because I could not agree to a proposal without having seen any scaled drawings or plans of the proposed redevelopment …'. Again, I did not, with respect, assess his evidence to be of utility towards the issues presenting for resolution in the trial.
114A further part of the plaintiff's evidence tendered at the trial was a letter from Racing and Wagering Western Australia ('RWWA') of 1 August 2022 to Mr Radley, as the CEO of the defendant - concerning RWWA's contribution to the defendant by grant funding towards racing infrastructure and associated works capped at a maximum of $24.7 million - on (multiple) conditions as identified by that communication. That RWWA letter was received as exhibit 6.
Defendant's evidence
115The defendant first adduced the affidavit of Ms Patricia May Swallow sworn 3 March 2023. Since 21 June 1993, Ms Swallow has been an assistant to the CEO of the defendant (namely, to Mr Radley). Ms Swallow's affidavit became exhibit 1. She was not required for cross‑examination. Her evidence can be fully accepted given an absence of any challenge to it.
116Second, for the defendant is the already-mentioned affidavit of its CEO, Mr Michael Terence Radley, sworn 3 March 2023. This affidavit became exhibit 5.
117There were also objection excisions to Mr Radley's affidavit, prior to it being received. These again are shown marked out by redactions in black. Mr Radley attended for cross-examination by counsel for the plaintiff. I say more about his evidence later.
118Third, was the affidavit of the defendant's Returning Officer for the 2022 Referendum, Mr Gregory John Rickie, sworn 3 March 2023. His became exhibit 8A. A redacted master list of voting members of the defendant created by Mr Rickie seen as annexure GJR7, is found at between pages 36 and 53 of his affidavit. This document was also produced in the trial in A3 and colour form - for purposes of assisting an understanding of its assembled contents. The A3 version of GJR7 became exhibit 8B in its own right.
119The significance of annexure GJR7, which is better viewed on the enlarged copy which is exhibit 8B, is exposed at the top of page 1 of a voting members list assembled by Mr Rickie. Working from the extreme left to right of the document displays various columns - recording whether and when Mr Rickie records a member as voting or not, their name, their voter identifier (relevantly, their name), their voter key (a unique numeral assigned to them for the conducting of the 2022 Referendum), their email address (if such an address had been provided to be held in the records of the defendant), a voter weighting (which in each instance was at the weight of one vote per voting member) and then, further information identifying whether the member's as-received vote was postal, or was made via the electronic voting system.
120Mr Rickie noted on annexure GJR7 14 instances when a 'dual' vote (as termed by him) was noticed by him and so, was recorded for the purpose of this further attempted vote then being rejected from the Mr Rickie's ultimate count.
121Subsequent weekly date columns seen in annexure GJR7, range between 26 August 2022 and 5 October 2022. They display Mr Rickie's markings made regularly and on an ongoing basis concerning relevant weekly periods, for which he would record when a postal vote was received.
122Essentially, Mr Rickie, on a regular basis, would clear out a dedicated Perth post office box, established to receive the postal votes as received in the 2022 Referendum. He would then mark up his evolving marked-up spreadsheet accordingly with the relevant information.
123Whilst credibility issues do not really present as a major factor in resolving key trial issues, my assessment, if ever thought necessary, was that all the trial witnesses who were cross‑examined attempted to give evidence frankly and honestly.
124From the perspective of voters in the 'No' or 'Not voting' camps who gave evidence, including the plaintiff, Mr Blee and Mr Champion, it was evident, as might be expected, that they were sincere and genuine in the negative position - they each held against the Hesperia Property proposal and concerning any selling off parts of Gloucester Park to facilitate redevelopment. Their subjective reasons as expressed for that opposition differed, as might also be expected.
125My assessment of Mr Radley was that his evidence in the main was reliable. That was so, albeit on some occasions he did manifest on unhelpful propensity to try to argue for the defendant's case by his responses, rather than to more directly respond factually, to answer questions put to him under cross-examination. Nonetheless, I still conclude that his evidence was, broadly speaking, reliable. I assessed the evidence of Mr Rickie to be wholly reliable. In particular, Mr Rickie presented at trial as someone who has held considerable past experience whilst acting as a returning officer, both for the defendant and in other electoral contexts.
126At points along the way in his cross-examination at trial, Mr Rickie was questioned over his understanding of, and his application of, various of the Schedule 1 provisions. That exercise in most respects was not helpful. That was especially so, given Mr Rickie is not a lawyer and did not profess to act as such towards undertaking an interpretation of such provisions. Mr Rickie did then express views as to meaning (without objection taken) in response to questions put to him in cross-examination - especially his interpretation of counterfoil requirements in Schedule 1 as being not applicable to the electronic voting system. Whether he was right or wrong about that interpretive view, my assessment is that Mr Rickie's evidence upon this issue was always genuine - there being a more than legitimate foundation within those Schedule 1 provisions for him to conclude that what are inherently physical features of a counterfoil process - do not transfer easily from a postal voting system across to an electronic voting system.
127It ought also to be appreciated towards Mr Rickie as the 2022 Referendum's appointed Returning Officer, arising out of Schedule 1 subclauses 37(f) and 37(k)(i), that a significant conceptual distinction is drawn between 'information' an electronic voting system requires be provided (juxtaposing to clause 18 applicable for a counterfoil), and a requirement for a counterfoil document itself. I will elaborate upon that distinction as between the provided 'information', and the mechanism by which such information is provided (physically or electronically), in due course. For present purposes I will now assemble below some further, uncontroversial facts.
Uncontroversial facts
128What follows set out below is a chronological assimilation of various facts taken out from the plaintiff's statement of facts, issues and legal contentions filed 20 February 2023 (folio 28) and then, out of the defendant's amended statement of facts, issues and legal contentions filed 21 March 2023 (folio 36) and, in particular, from paragraphs 40 - 42 therein.
129It is convenient to reassemble and to set out those facts below (adopting the plaintiff's numbering):
1.By the provisions of section 3 of the Western Australian Trotting Association Act 1946 ('the Act'), the Defendant was constituted a body corporate.
…
5.The Plaintiff has been a full member of the Defendant continuously since 2018 and is still a full member of the Defendant.
6.The Plaintiff was elected to the Committee in October 2020.
…
11.On 28 October 2021, the Committee suspended the Plaintiff as a member of the Committee for reasons unrelated to the referendum.
12.On 10 August 2022, the Defendant held an 'information session' at the Defendant's harness racing ground at Gloucester Park, East Perth ('Gloucester Park'), for the expressed purpose of informing the Defendant's members about the proposed redevelopment of Gloucester Park.
13.On 15 August 2022, the Defendant resigned from the Committee.
14.[With a qualification added by the Defendant under par 41 of its response as to facts - which I would accept.] The Defendant conducted a referendum ('the Referendum'), by a dual voting system, with voting opening at 8.30am on 18 August 2022 and closing at 5.00pm on 5 October 2022 ('the Voting Period'), on the following question:
'Does the Member approve the sale and disposal of the Land (being part of 'Gloucester Park') by the Association on terms not materially less favourable to the Association than those terms described in the Explanatory Memorandum?' ('the Referendum Question').
15.The land which was the subject of the proposed sale ('the Proposed Sale') comprised 2 portions of Gloucester Park, namely a western portion of 4.0508 hectares and a southern portion of 1.1517 hectares amounting to a total of 5.2025 hectares (collectively, 'the Land'), out of a total area of Gloucester Park of 14.3124 hectares, with the remaining 9.1099 hectares of Gloucester Park to be retained by the Defendant ('the Retained Land').
…
18.For the purpose of the Referendum, there were approximately 373 'eligible voting members', as defined in clause 3.7(2) of the By‑laws ('the Eligible Voting Members').
19.At approximately 8.35 am on 18 August 2022, the Defendant sent an email to approximately 370 of the Eligible Voting Members, inviting each of them to vote in the Referendum ('the Voting Email').
130I would note, in light of the trial evidence, that the word 'approximately', seen used in par 19 above, albeit agreed at the time, is redundant. My finding of fact on the trial evidence is that there were precisely 373 eligible voting members of the defendant for the 2022 Referendum.
131The uncontroversial facts continue:
…
22.Each Voting Email contained the name of an Eligible Voting Member and a 'Voter Key' number, but the Voting Email did not require or request the named Eligible Voting Member to insert his or her full name, address or an identifying number or any other information to verify the identity of the Eligible Voting Member.
23.The Voting Email contained a rectangular panel containing the inscription 'Click Here to Vote' ('the Voting Panel'). When anyone clicked on the Voting Panel, a screen displaying the Referendum Question emerged ('the Voting Screen').
…
27.The 'electionrunner' software, which was used by the Defendant to conduct the electronic voting in the Referendum, offered a choice to the Defendant as to whether to require the Eligible Voting Members to insert some form of voter identification or voter key in order to be permitted to vote in the Referendum or whether to permit anyone having access to the Voting Screen to vote in the Referendum.
132The point under agreed par 27 above is best illustrated by reference to scrutiny of a document found within the plaintiff's affidavit. I refer to annexure DM18 at page 167. See also the substantive content of the plaintiff's affidavit at paragraph 64. As exposed by annexure DM18, the Election Runner software contains a feature described as:
Enable Automatic Voter Login
When this setting is enabled, then voters will be automatically logged in to vote in your election upon clicking the link in the email they receive. If it is disabled, then voters will be required to enter their Voter Key manually.
133On the facts there is no dispute that the defendant, through Mr Radley, whilst he was setting up the Election Runner software that was to be used in the 2022 Referendum (in conjunction with an option for postal voting), decided that its automatic log-in setting feature, would not be disabled.
134Consequently, voters in the 2022 Referendum were not required, as they might otherwise have been had that automatic feature been disabled, to input their voter key, manually.
135As is seen from exhibit 8B, however, the same information for each eligible voter was already in the hands of, and was accessible by, the Returning Officer in the 2022 Referendum.
136The uncontroversial facts continue:
30.Each of the Explanatory Memorandum and the FAQ Document referred to an independent valuation of the Gloucester Park site by Jones Lang LaSalle Advisory Services Pty Ltd ('the JLL Valuation') and an independent review of the proposed Gloucester Park revitalisation project by KPMG ('the KPMG Review'), but neither the Explanatory Memorandum nor the FAQ Document annexed either the JLL Valuation or the KPMG Review or provided any details of the conclusions of either of those documents.
31.[As corrected by par 32 of the defendant's amended statement of facts, issues and contentions.] At approximately 1.30pm on 18 August 2022, the Defendant posted to approximately 373 Eligible Voting Members a 'Voting Information Pack' ('the Voting Information Pack') comprising:
(a)a document entitled 'Voting Instructions - Referendum 2022;' [this may be viewed as the first document within annexure 5 to these reasons, being annexure DM21 to Mr Margaretic's affidavit at page 170]
(b)a one page document comprising a ballot paper and a counterfoil which required the voter to complete his or her name and address and to sign his or her personal signature, with the initials of the Defendant's Returning Officer Gregory Rickie ('the Returning Officer') endorsed on the reverse side of the document;
(c)an envelope for the ballot paper;
(d)an envelope for the counterfoil;
(e)a replied paid envelope addressed to the Returning Officer; and
(f)the Explanatory Memorandum.
The plaintiff's counterfoil issue
137For a better grasp of the concept of a counterfoil - which underlies the second of the plaintiff's breach of contract challenges - it is useful, given subparagraph 31(b) above, to see what is a one-page document comprising the 2022 Referendum ballot paper alongside its counterfoil content (as a part of postal vote materials sent to eligible voting members). It can be found as the second document within Annexure E in these reasons. I have attached both page 171 and page 172 of annexure DM22, from the plaintiff's affidavit.
138From page 171 of the document it can be observed, at about halfway down the page, after the 'Yes' and 'No' boxes provided for completion, the horizontal line running across the page, followed underneath by a notation in bold:
After marking your vote, enclose the Ballot Paper (with counterfoil detached) in the envelope endorsed 'Ballot Paper' and seal the envelope.
139Immediately below those words. it will be further observed what is a broken horizontal line running across the same page and a depiction at the far left on that broken line of a pair of scissors.
140What presents then as the indication to the postal voter is for that voter to cut off the lower portion on the one-page ballot paper document at below the perforated line, at the heading in bold 'Counterfoil' and beneath it '(To be completed by the Voter, detached, and placed in the 'counterfoil envelope', then sealed). Below that notation provision is seen there for the entry of the 'name of voter', their 'address' and the 'personal signature of the voter', and then, a notation:
The sealed envelopes containing the 'Counterfoil' and the 'Ballot Paper' should then be placed in the Reply Paid envelope and POSTED to the Returning Officer, Post Office Box 6080, East Perth, 6892. Voting papers must be posted. (original emphasis)
141The reverse side of the ballot paper (page 172 of the plaintiff's affidavit) shows initials of the Returning Officer.
The plaintiff's counterfoil breach arguments
142With those facts assembled, I can move back then to the plaintiff's counterfoil arguments. They are, in effect, his expressed concerns over, in effect, a contended non‑observance of the counterfoil requirement under the electronic voting system option, as provided to eligible voting members in the 2022 Referendum.
143
That ultimately led to the plaintiff's contention as put in closing - that 146 'Yes' votes cast in the 2022 Referendum (or perhaps even all 160 electronic votes as were cast in total), must be invalidated and therefore, eliminated from the 2022 Referendum count. That is said to follow from failures to meet contended counterfoil requirements
- which are said to be fully applicable to both the electronic voting system and the postal voting system.
144The contended end result by the plaintiff based on suggested invalidly of those votes, is that the threshold under By‑law 3.7(1) was never met - on an elimination of the electronic votes by reason of the counterfoil deficiency.
145To better expose the plaintiff's invalidity arguments over those electronically lodged votes, it is necessary to examine the plaintiff's legal contentions under its statement of facts, issues and legal contentions, then, to see his outline of submissions for trial.
146At paragraph 41 of his statement of facts, issues and legal contentions, the plaintiff puts a counterfoil breach argument (bearing in mind that his contended cause of action is a remedy for breach of contract as a member of the defendant) as follows:
41.As a result of the Defendant's breaches of Schedule 1 By‑law 18(1) when read in conjunction with Schedule 1 By‑law 37(f) and Schedule 1 By‑law 24(1) when read in conjunction with Schedule 1 By‑law 37(k)(i) and (ii), in failing to provide a counterfoil for the electronic voting and in failing to require the input of any voter identification for the electronic voting, the votes of those Eligible Voting Members who voted electronically should be declared void.
Three extra facts
147Before proceeding too much further to reach the plaintiff's outline of submissions for trial (which mention no case authorities relied upon), it is convenient to record now, three more matters that agreed as between the parties for the purposes of the trial.
148They were articulated by counsel for the plaintiff during the opening of the plaintiff's case.
149The further facts bear particularly on the plaintiff's counterfoil compliance breach arguments concerning the electronic voting system option.
150As explained and recorded by the transcript at ts 67, these three facts were:
… one, there was no counterfoil of the type sent in the postal voting packs which accompanied the email received by members to vote electronically.
…
Secondly, for electronic voting, no information regarding the photo identification was required to be inputted.
…
And, thirdly, the email address supplied [for] Kerryn and Tara Brown to the defendant is the same email address. (my emphasis in bold)
Three diversions now discarded
151It is next convenient at this point to mention so as to dismiss them, three more issues which, as matters developed at the trial, had been disputes earlier raised by the plaintiff, but which, subsequently became irrelevant.
152These were first, as earlier explained, the plaintiff's former argument that member recipients of an email enabling them to vote via Election Runner, if they so chose, when they came to access the portal by clicking on a link provided by that email, could not then access the explanatory memorandum which was a part of the voting package materials provided to members by post (see Annexure C to the reasons).
153That former contention about electronic voters and an inaccessible explanatory memorandum for them was, as mentioned earlier by regard to the trial evidence, withdrawn at the trial. Certain paragraphs within the plaintiff's evidence which had once articulated that alleged absence of the explanatory memorandum, were no longer relied upon by the plaintiff.
154Mr Radley's affidavit evidence of course, was strongly to the contrary (see his affidavit at paragraphs 121 and 122) and which, as I have said, I accept on this point.
155 Second, there had been a suggestion for a time under the plaintiff's, Mr Margaretic's, evidence that a weighting facility, which is a feature available in the Election Runner software, may have been deployed - so that all members' votes were not equal as to a weight of one vote each. That rather faint suggestion was also not pressed in the end.
156Mr Radley's contrary evidence was that all members enjoyed only one vote - without any weighting. That evidence was clear. The early and faint suggestion to the contrary, must be rejected (see Mr Radley's affidavit at paragraph 146).
157The third redundant contention, once voiced by the plaintiff, was, in effect, something of a conflict of interest challenge - put by reference first, to the Senior Vice President of the defendant, Mr Kevin Jeavons (also a member of its Committee). His son, Mr Kyle Jeavons, was a co‑director of Hesperia Property - as referred to in the explanatory memorandum as Gloucester Park's 'development partner'. Mr Kyle Jeavons is also a director of Hesperia Projects Pty Ltd ('Hesperia Projects').
158For a time it looks to have been suggested by the plaintiff that members of the defendant ought to have been informed expressly of the involvement of Mr Kyle Jeavons and be told that he was the son of the Senior Vice President of the defendant (see paragraph 73 of the plaintiff's affidavit).
159However, there was in the end no submission pressed at the trial by the plaintiff that either Mr Kevin Jeavons, as the defendant's Senior Vice President, or that Mr Kyle Jeavons, as a director of Hesperia companies, had in any way acted improperly. The evidence was to the contrary. Mr Kevin Jeavons had always declared the connection to his son when anything concerning the redevelopment proposal was to be discussed by the Committee and also the defendant himself. No adverse submission in the end was made about this relationship for the purposes of this trial. I proceed on that basis.
160With those clarifications, I can turn back to the breach arguments, by which the plaintiff puts his counterfoil deficiency contentions - by an outline of submissions for trial (essentially reiterated by counsel for the plaintiff at trial during opening and closing submissions).
161The plaintiff's counterfoil breach argument essentially turns on the proper construction of Schedule 1 clause 37, concerning election procedures for referendums and their intersection with electronic voting system, if used in a referendum voting procedure.
The lack of counterfoil in electronic voting challenges of the plaintiff
162There was no argument over the applicability of a counterfoil requirement in respect of referendum ballot papers when physically cast by a postal vote.
163On the trial evidence, however, there can be no suggestion the requirements of clauses 18, 24(1) and 36 of Schedule 1 had not all been faithfully completed and complied with by the Returning Officer, in respect of all the postal votes received, counted and then accepted as valid, in the 2022 Referendum.
164Thus, the plaintiff's arguments concerning an alleged breach of counterfoil requirements are wholly directed at the votes cast in the 2022 Referendum under the electronic voting system - and which are now sought to be invalidated by reason of this alleged breach.
165The plaintiff's submissions essentially posit a fait accompli outcome in terms of counterfoil non-compliance as regards the electronic votes cast. That position came to be briefly expressed this way (at paragraph 26 of the plaintiff's outline of submissions for trial):
On the unchallenged evidence referred to … above, all of the electronic votes (which comprised the majority of all of the votes cast in the referendum - see the affidavit of Gregory John Rickie sworn on 3/03/23 ('Rickie's affidavit'), annexure 'GJR8' at p.55) were invalid.
Evaluation of counterfoil breach challenge
166There are multiple reasons underlying why I cannot in the end accept that argument or, indeed, its secondary invalidity premise - which is that if there ever was proved a counterfoil compliance breach, that the electronic votes cast in the 2022 Referendum must thereby be assessed (and be declared by this court) as being invalid. I respectfully must disagree.
167It is convenient to start with two dictionary definitions of the concept of a counterfoil. That noun is not seen as defined within the defendant's By‑laws, or within Schedule 1, concerning the electoral procedures.
168According to the Oxford English Dictionary the noun 'counterfoil' is to be understood as:
A complementary part of a bank cheque, official receipt, or the like, which registers the particulars of the principal part, and is retained by the person who gives out that part.
169The Macquarie Dictionary defines 'counterfoil' similarly, as a noun and:
A complementary part of a bank cheque, etc., which is retained by the issuer, and on which particulars are noted.
170Those dictionary meanings align well to a verification and integrity requirement applicable to the use of a physical ballot paper provided to postal voters. This may be viewed at the second page within Annexure E to these reasons, and the component of the ballot paper page as seen below the broken line and the scissors depicted at the extreme left (annexure DM22 at page 171 of the plaintiff's affidavit).
171The real difficulty, however, is over the feasibility of any wholesale importation of the counterfoil concept, which is inherently physical, across to a wholly non-physical environment - under an electronic voting system. That is simply not possible without some level of adaption or modification. As I indicated to counsel for the plaintiff during the course of our dialogue at the trial, the physical notion of a counterfoil being made directly applicable to a metaphysical world of electronic voting - smacks as being something akin to attempting to force 'a square peg into a round hole'.
263The plaintiff's challenge upon an alleged deficiency in the balanced case, is also elaborated upon under paragraphs 27 - 37 of the plaintiff's outline of submissions for trial. I do note what is said there upon this argument under the plaintiff's statement of facts, issues and legal contentions under paragraphs 32(a) - (n), 33 and 34.
264At paragraph 33 of the plaintiff's outline of submissions for trial, he says:
The factors which should be listed in the case for and against the referendum question are not necessarily factors which will ultimately prove decisive as to whether the proposed sales should proceed: they are merely factors which are relevant to the question as to whether the proposed sale should proceed and which should be taken into account in deciding that question. (my emphasis in bold)
265Again, I must respectfully disagree. That submission puts matters at a far too low threshold of materiality, on my assessment. Any omitted factor justifying challenge will need to be seen as capable of making a decisive difference to the 2022 Referendum eligible voter, if revealed - not just be, 'relevant'. There is no merits review of the case being conducted here, such as in the Administrative Appeals Tribunal, or at the State Administrative Tribunal.
266The plaintiff's statement above precedes his listing of eight factors across subparagraphs 34(a) ‑ (h) of his outline of submissions for trial.
267Before grappling with his suggested adverse factors, I render the following general observations.
268 First, on my assessment, there are necessarily elements of subjectivity inherent in reaching an assessment over whether or not the 'For' and 'Against' case is balanced, or otherwise. That was a decision for the defendant's Committee to take. Views of various members could well differ diversely.
269 Second, the question put by the 2022 Referendum question to 373 eligible voting members carries a potential for different points of view to be taken depending on a member's appetite for 'risk', and upon the weight to be afforded to the financial and aesthetic viability of a redevelopment proposal route as is proposed on the affirmative case put on the 2022 Referendum question.
270 Third, it should not to be assumed the defendant's voting members are ignorant upon historic and technical issues around the conducting of trotting and pacing races at Gloucester Park or, indeed, as to the current needs of the historic Gloucester Park precinct in the short term for its urgent upgrading, capital investment and redevelopment.
271 Fourth, it will be remembered that all members of the defendant were invited to attend at an open information session, convened just prior to the 2022 Referendum process being commenced. Members were given then an open opportunity then to attend and to ask questions. Whilst members had no legal obligation to attend or, indeed, were under no legal obligation to inform themselves about the pending redevelopment proposal, the Committee was entitled to expect its voting members would conduct themselves reasonably, and so to take up, if they could, reasonable opportunities provided, when provided to better inform themselves about the 2022 Referendum redevelopment proposal.
272 Fifth, advancing a large scale commercial redevelopment project proposal of the nature as was put to voting members here, by the Committee under the 2022 Referendum voting package materials - of its nature must necessarily proceed around a certain measure of member reliance upon the diligence, business acumen, experience and commercial judgments as made by the defendant's elected Committee members in advancing such a proposal. It would not be feasible or practicable for all 373 potential voting members of the defendant - to each individually descend to review the minute detail of all aspects of such a proposal to develop a fully formulated proposal. In other words, a certain measure of trust and confidence must necessarily be reposed by members in their elected board of management for this unique body corporate - to act in the best interests of the defendant and, in effect, to do their management jobs, competently. If that were not so, then the members should elect a different Committee, in whom they hold confidence, to attend to those governance tasks.
Plaintiff's suggested negatives for a balanced case
273By reference to paragraph 34 of the plaintiff's outline of submissions for trial, I will briefly address these items severally, below.
The floodplain
274 First, is the plaintiff's contention by subparagraph 34(a), that:
… the proposed theatre will be constructed on a flood plain, which could provide significant foundation engineering and construction challenges and which might limit the design parameters, specification and quality of the theatre construction…
275 Evaluation: On my assessment, this is a matter of engineering detail. It is evident from the explanatory memorandum that finalised engineering plans and construction implementation drawings are yet to be finalised. That is more than understandable given their likely cost. The proposal may still not proceed in the longer term, even with the 2022 Referendum result fully undisturbed.
276Multiple conditional factors as are identified within subsection 3.4, seen at page 11 of the explanatory memorandum, state clearly enough that there were still multiple conditional obstacles to be satisfied, before any full proposal implementation. Those conditions all need to be met before any proposed works, including those applicable to the constructing of a proposed new and repositioned grandstand/theatre, are to be implemented.
277Any future proposed repositioned theatre/grandstand located upon a 'flood plain' area that is to be located closer to the Swan River, might or might not, eventually prove problematic from an engineering and construction perspective. Yet it is notorious many buildings and structures have in the past been safely erected on, or close to, floodplains, both in Perth and indeed across Australia.
278For such circumstances, there is no material omission, as is suggested.
The proposed relocation of a new grandstand/theatre to the east
279 Second, by subparagraph 34(b) of the plaintiff's outline of submissions for trial, it is put that:
… it will be extremely difficult to accommodate the theatre alongside a finishing post situated at the end of a finishing straight on the eastern side of the track because of the increasingly narrow stretch of land bordering the eastern side of the track…
280 Evaluation: Again, there is no material omission or non‑disclosure around this suggested factor.
281The nature of the in-principle proposal put to members at the 2022 Referendum was essentially always at the embryonic concept stage - well prior to any actual construction of a grandstand/theatre. As is stated in the explanatory memorandum, at subsection 3.3 at page 7, in reference to the proposed concept works vis-à-vis Gloucester Park grandstand/theatre, the development of Gloucester Park grandstand/theatre will involve:
The construction of a 3 level facility of a high architectural standard, generally in line with concept imagery (see below).
282The plaintiff's heavy reliance upon extrapolations made by him -are taken from the explanatory memorandum's artists' impressions and concept imagery. They were the foundations for his attempts to work up negative arguments, grounded on suggested future building space constraints at the east and proximate to the Swan River. But I do not accept it was reliable or legitimate to extrapolate, as he has attempted, from what are mere artists' impressions and concept drawings. Nor do I accept it is legitimate to mount a case as is premised, to suggest likely ensuing construction difficulties and reduced space constraints.
283I do accept, of course, that these are concerns and arguments which the plaintiff, as a member of the defendant, was perfectly at liberty to raise, discuss and to share himself with his fellow members or, indeed, to raise directly as his concerns with the Committee, as he saw fit. But he goes too far by suggesting that there are material omissions about factors based on using only concept materials.
284The embryonic nature of the concept plans was made explicitly clear to members by the explanatory memorandum. It is not then a legitimate criticism to suggest there was a material omission to members by way of an omission to address the plaintiff's negative projections about future problems - not being communicated by the Committee in the explanatory materials given to members (see the plaintiff's projected extrapolations at pages 229 and 230 of his affidavit under his annexures DM29 and DM30).
Reduced future patron capacity for Gloucester Park
285 Third, the plaintiff contends at subparagraph 34(c) of his outline of submissions:
… the theatre will only be able to accommodate a total of approximately 1,500 patrons internally and on the external seating and that the overall public capacity of Gloucester Park will be reduced from its current capacity of approximately 20,000 patrons to approximately 4,000 patrons…
286 Evaluation: The observed factual assertion as to the current capacity of Gloucester Park, put at 20,000 patrons, was not proven at the trial, factually. To the contrary, Mr Radley, the defendant's CEO, under questioning, said that he had assessed Gloucester Park's present (attendance) capacity to be closer to a maximum of 8,000 patrons, being the peak level of attendances he had witnessed - but only at some (atypical to the more usual Gloucester Park Friday night pacing meetings) so‑called feature nights (such as Italian night or the New Year's Eve fireworks night, etc). I prefer the evidence of Mr Radley as more reliable on the capacity issue.
287More significantly, however, the selling off of components of the defendant's land at Gloucester Park under the 2022 Referendum redevelopment proposal (incorporating a proposed relocation of a viewing grandstand to the eastern side of the course), must obviously reduce the land held and so reduce to some degree any theoretical maximum number of attending patrons capable of attending at a meeting at Gloucester Park in the future - were the future land sale excisions in the proposal to be implemented. So much is, essentially, obvious.
288Again, on my assessment, this was not a material omission. The conclusion as to less space to accommodate patrons at a Gloucester Park meeting (by less post-sale land being held after the sales), was evident from the information the members received.
289As I have said, there is some level of expectation for members to inform themselves about the 2022 Referendum issues, generally. Whilst not legally obliged to acquaint themselves of facts and issues, those members who do not take up opportunities to be better informed, can hardly complain.
Insufficient capacity for feature night patronage
290 Fourth, subparagraph 34(d) of the plaintiff's outline of submissions contends by way of omission from a balanced 'No' case, that:
… the reduced public capacity of 4,000 patrons will be inadequate for feature nights, which currently attract 8,000 to 12,000 patrons and which, in former decades, attracted 20,000 to 25,000 patrons…
291 Evaluation: This suggested problem is similar to that just discussed. Again, the assumed figures relied upon by the plaintiff, particularly concerning 12,000 patrons attending feature nights, as he suggests, are not proved. The contrary evidence of Mr Radley, which I again prefer as more reliable on this issue, contests that figure, suggesting the biggest crowds Mr Radley has ever witnessed (at a feature night), over a long period as CEO of the defendant, was about 8,000.
292Likewise, a suggested level of higher attendance by the patrons of the past in 'former decades', is also contested by Mr Radley. Reliable crowd number counting, as he related in evidence, was not in place in former decades. Consequently, the suggested high numbers of attendance by patrons in the past, must be approached with caution. In this area, I again prefer Mr Radley's evidence over that of the plaintiff, as the more reliable.
293The plaintiff's own negative projections made concerning suggested inadequate future capacity in the proposed new theatre/grandstand, is not a fact. It is merely the plaintiff's negative future prediction. It does not constitute a material omission from the materials provided to members as a part of a suggested more balanced 'No' case.
A separated 'museum' enclave around the totalisator building and heritage entry gates
294 Fifth, the next factor suggested as a relevant 'No' case omission, as seen under par 34(e) of the plaintiff's outline of submissions for trial, was:
... the heritage listed Totalisator Building and entry gates will be located in an enclave which will be separated from the track and the other land to be retained by the Defendant by a strip of land to be sold to Hesperia Property Pty Ltd…
295 Evaluation: Again, the character of this criticism is essentially a matter of suggested location detail arising out of the plaintiff's assessments - based on what are currently concept drawings at this point.
296The plaintiff's methodology is not convincing.
297Towards asking whether, in the future, by reason of this proposed redevelopment, the old Totalisator Building and heritage entry gates to Gloucester Park will be 'cut‑off' from retained land, so as then to become an isolated heritage museum precinct, is a future site feature detail that has yet to be finally resolved upon.
298Were a separation layout to be thought problematic in the future, that would then be a matter for members and the Committee elected at the time, to address.
299There was no material omission towards this suggested factor.
Instalment payments by Hesperia Property
300 Sixth, the plaintiff complains that members were not told as to a required component of a balanced 'No' case that ought to have been put to them - that an amount of $10 million of the purchase price to be paid and received by the defendant from Hesperia Property was to be paid by instalments over a period of four years, rather than as one lump sum payment.
301 Evaluation: This, again, was a matter of financial detail for the Committee to address. It involves a business judgment made towards the overall commerciality of what are still highly conditional arrangements reached with Hesperia Property. The overall commerciality and security of those financial arrangements by their details is an issue members must necessarily entrust to an elected management Committee to resolve - no doubt with the inputs, as is witnessed in the trial evidence, of available specialist professional advice, as provided from time to time by the defendant's retained lawyers, property experts and by others.
302There is nothing in this (omission) criticism.
Land to be used as security by Hesperia Property
303 Seventh, allied to the above grievance is another contention that members were not told the redevelopment land that is proposed to be sold off to Hesperia Property from Gloucester Park is to be mortgaged to secure debt funding for Hesperia Property.
304 Evaluation: There was discussion with counsel of this issue during the plaintiff's opening at trial, by reference to my questions concerning the precise time at which registered titles would pass for land being disposed of by the defendant to Hesperia Property under the redevelopment proposal, if approved. This appears to be a fluid detail, presently.
305Again, this was another financial detail surrounding the overall redevelopment proposal to be resolved upon by the Committee. This issue was not required as a matter of financial detail, to be disclosed or elaborated upon as a part of a balanced 'No' case put to members.
The exclusive working relationship with Hesperia Projects in the period leading up to the redevelopment proposal being put to members
306 Eighth, this further criticism by the plaintiff contends, by subparagraph 34(h) of the plaintiff's outline of submissions for trial, that:
… for the period of at least 18 months preceding the commencement of the referendum, the Defendant had had an [sic] exclusive working agreement with Hesperia Projects Pty Ltd in respect of the potential redevelopment of Gloucester Park…
307 Evaluation: Again, this was another commercial business judgment and decision appropriate to be entrusted to the Committee. At the trial, there was no evidence adduced by the plaintiff as to any other eager and rival Gloucester Park development suitors - who had been spurned away by the Committee, inhibiting them from participating by putting forward a rival potential redevelopment, in lieu of that promoted by Hesperia Projects. Again, this all concerns issues of commercial business judgment and management not conducive to being second guessed externally in a courtroom years later.
308In this quarter, Mr Radley's affidavit relates at between paragraphs 21 and 29, a prior history across his decade-long tenure as CEO concerning unsuccessful past efforts over time to advance a redevelopment plan for the aging Gloucester Park facilities. This was from about 2014, including efforts that ultimately went nowhere with various entities including with Lendlease, later with a Chinese conglomerate, and later still another developer then known as 'Stellar'. None of them advanced.
309The plaintiff has not adduced evidence as to any alternatively interested 'Tyre Kickers', let alone some other credible alternate developer of repute who has been overlooked or denied an opportunity to 'pitch' to the Committee with some more attractive redevelopment proposals.
310Again, this feature is a matter of business judgment in respect of which the defendant's elected Committee obviously exercised its judgment and which is not lightly to be second-guessed now.
The existing Gloucester Park's racing tracks distance status quo under the redevelopment proposal
311 Ninth, the plaintiff at trial attempted to mount further negative-factor arguments, as I understood them, by his contended issue over the current shortish length of the Gloucester Park racing track (relative to other racing tracks), which length would not be increasing under this advocated redevelopment proposal with Hesperia Property.
312But, this track distance status quo is a point explicitly addressed under subsection 5.1 of the explanatory memorandum - see the second of the tabulated 'reasons to vote "No" to the question', ie, 'not able to increase track size: the track will remain as a half mile circuit as it has for the last 100 years'.
313The plaintiff's expressed grievance seems to be that a lot more should have been said, negatively, concerning suggested racing feature deficiencies in the current Gloucester Park track, whilst it remains as a 800 m circumference track under the redevelopment proposal, rather than the track being increased to, say, a longer 1,000 m circumference.
314An increased racing track distance is said by the plaintiff to be more in alignment with the circumferences of other harness racing tracks, as encountered around other parts of Australia.
315Around this omission argument some related and suggested problematic issues are also raised - such as the suggested greater stresses on the legs of racing horses whilst they are racing and so negotiating tighter turns on a smaller distance track, and then, a starting position bias, resulting from inside barrier draws on a smaller distance track, affording unfair winning advantages to horses that draw a barrier inside position that is close to the rails.
316 Evaluation: Again, there was no material non‑disclosure here. Indeed, quite the contrary.
317Voting members of the defendant who choose to voluntarily join what is an incorporated association dedicated to the promotion of harness racing and pacing - must be taken to have some level of insight towards the finer racing points of trotting and pacing courses for horses under this sphere of sporting endeavour.
318The explanatory memorandum clearly states that the track size of Gloucester Park would not increase under the new redevelopment proposal. That was the proposal. So, like it or reject it. Multiple sporting arenas encountered across different sports conducted around the world (eg, Geelong's home ground 'oval' of the uniquely shaped Kardinya Park as an AFL football ground), notoriously exhibit what are their own uniquely home ground idiosyncratic features - sometimes perceived as advantages, or otherwise. Sporting views may, and do, differ as between aficionados of a sport over whether that is a good thing or a bad thing. But that is not the point.
319There was no material misstatement or omission in this respect.
Not enough space for a grandstand/theatre at the east
320 Tenth, I dealt earlier with another suggested deficiency as advocated by the plaintiff - concerning an omission to state for the 'No' case that it would be extremely difficult to accommodate a new grandstand/theatre located on the eastern side of the track - due to the increasingly narrow character of the stretch of Gloucester Park bordering the eastern side of the track.
321 Evaluation: This criticism is not legitimately made. It has emerged from this plaintiff, with his engineering background, based on his own extrapolations reaching some negative space availability predictions for the redevelopment. But in the process he has, as seen, worked from the present bare artists' impression drawings and concept-only pictures - as provided to members in the explanatory memorandum. The methodology used by the plaintiff is unreliable. The omission criticism is likewise, illegitimate.
Withdrawn conflict of interest allegation
322 Eleventh, what had been, in effect, a conflict of interest and non-disclosure criticism concerning the Senior Vice President of the defendant around his son's, Mr Kyle Jeavons', involvement in the Hesperia Property redevelopment proposal came, essentially, to be withdrawn. It became, effectively, a dead issue at the trial.
Supposedly misleading artist's impressions and concept drawings used in the explanatory memorandum
323 Twelfth, at paragraph 33 of his outline of submissions for trial, the plaintiff raises a distinct complaint. This extends beyond the omission criticisms seen so far.
324It contends that the three artists' impressions of the theatre/grandstand seen in the explanatory memorandum, were positively misleading.
325 Evaluation: This criticism was recurrent at the trial, manifesting in a number of suggested negative-factor criticisms. But as I have already observed on a number of occasions already, it was unwarranted.
326This tier of criticism was erected by the plaintiff on what is a false premise, namely, that all his extrapolations made are from workings grounded merely upon the artists' impressions and on concept plans found in the explanatory memorandum.
327The plaintiff, of course, is at liberty to express all of his negative views to any fellow members and others who will listen. But his suggestion that those artists' impressions and concept drawings were misleading, on my assessment, remains unjustified. They were never a reliable foundation to extrapolate from.
Overall conclusions on the suggested lack of a balanced 'No case'
328At the end, upon my evaluation of each of the factors as suggested by the plaintiff, as being either omissions, or as positive misstatements underlying explanatory memorandum materials provided to members towards a 'No' case and thus, the suggested lack of a 'balanced case' as was put to members - my end assessment is that such criticisms must all be rejected.
329Even more fundamentally, however, I repeat that I do not accept that the plaintiff, as a member of the defendant, has shown the existence of any contractual term within the By‑laws, as some component of his personal contractual rights held with the defendant, promising him a balanced case would be presented in the 2022 Referendum. That contention (wrongly) aligns the Schedule 1 electoral procedures up to the same level of force as the By‑laws. But, the By‑laws merely say under By‑law 3.7(3) that the obligation of the Committee is:
The Committee shall arrange for the referendum referred to in subclause (1) to be conducted in accordance with Schedule 1.
330The plaintiff's '(un)balanced' contract grievances emanate breach contentions, from Schedule 1 subclause 36(a)(ii). However, that clause came to be inserted in lieu of a requirement under clause 4. It only provides for what the defendant 'shall provide' as 'the following information' to its Returning Officer.
331I do not assess the content of Schedule 1 to go any further by way of implication made towards subclause 36(a)(ii), to found a promised contractual right against the defendant to be held by all of its members, for them to receive a balanced 'For' and 'Against' case on a referendum question.
332I reject the attempted implication of such a term, as is suggested under paragraph 27 of the plaintiff's outline of submissions for trial. I could not, in any event, assess such a suggested implied term as meeting the ad hoc implication criteria to found such an implied contractual term (see BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266). The plaintiff's proposed implied term is not necessary or so obvious as to go without saying. That is especially so given the inherently subjective environment for an assessment to be made about whether or not a referendum case is balanced, or otherwise.
333Moreover, the reference to the balanced case in Schedule 1 subclause 36(a)(ii) may legitimately be read as only provision of a balanced case in a referendum - that is balanced in the eyes of the defendant (that is in the eyes of its Committee promoting a referendum question). That view is assisted, bearing in mind the preface to subclause 36(a), assessed in a context of what is said as to documents the defendant 'shall provide' as 'information to the Returning Officer'.
334Consequently, all aspects of the plaintiff's case, in the end, fail.
Rehabilitation orders if needed
335During the course of the trial, the defendant sought leave of the court to invoke, if necessary, by its amended chamber summons filed 1 May 2023 (folio 57), reliance upon either subsection 1322(4) of the Corporations Act or alternatively, upon a substantially equivalent provision allowing a court to address irregularities or invalidities in a context of corporate conduct under subsection 482O(6) of the Co‑operatives Act 2009 (WA) - which replaced the Companies Act 1943 (WA) (which was subsequently renamed as the Companies (Co‑operative) Act 1943 (WA)).
336Because I have not, in the end, reached any conclusion as to the invalidity of the 2022 Referendum result, or in the component votes as electronically lodged and challenged by the plaintiff, there does not arise an occasion to assess the criteria needed for an engagement with those provisions.
337But had I ever needed to, my further assessment would have been that by reference to the criteria under subsection 1322(4)(a) of the Corporations Act (or the equivalent provisions under the State legislation for co-operatives), that such orders by way of relief as sought by the defendant (if needed) would have been appropriate, in present circumstances.
338Since the defendant is a body corporate and not a co-operative entity, I would have proceeded on the basis it was a corporation to which section 1322 of the Corporations Act was applicable, if needed.
339The plaintiff suggested by his counsel at the closing of the trial that he desired the opportunity to adduce further evidence, if the defendant's rehabilitation summons application needed to be evaluated. I do struggle to see what genre of extra evidence that might be. Apparently, it related to voting fraud under electronic voting systems (see ts 424 - 425). However, the plaintiff has had ample opportunity to adduce any such extra evidence before the trial began. See generally Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396and my discussion and application of that High Court authority recently, in Kingemel Pty Ltd v Rosa Processing Pty Ltd [2022] WASC 7 at [83] - [87].
340Hence, it would have been my assessment, if it were ever necessary, that it was just and equitable under subsection 1322(6)(a)(iii) of the Corporations Act for rehabilitation orders, as are sought to be issued. That is so for circumstances where, I would assess that the defendant, particularly through its employees and agents, namely its CEO, Mr Radley, and its Returning Officer, Mr Rickie, and Mr Radley's assistant, Ms Swallow, at all times acted honestly and in good faith.
341Further to that provisional assessment, I would have also concluded that no substantial injustice has been caused either to the plaintiff or, indeed, to any other member of the defendant, from an order rehabilitating the 2022 Referendum result, were that order to be required.
342The voting quorum margin, and then, the majority vote margin required via By‑laws 3.7(1)(a) and (b), were affirmative margins on both that were significant in each instance. First, there was a 75% voting quorum (281 votes received from 373 eligible voting members). Second, there was a more than 50% affirmative result with 235 'Yes' votes. That was a 63% affirmative vote.
343Given such significant margins, the 2022 Referendum was carried, comfortably.
344I would provisionally assess as well that there would be unnecessary waste, delay and expense in holding a further referendum upon the same redevelopment proposal, given such healthy margins. Those results have assisted as well in leading me to support a rehabilitation order outcome under subsection 1322(4) of the Corporations Act - were that ever to be required.
345In the end, however, such restorative relief, is unnecessary.
Final conclusion
346First, the plaintiff's action must be dismissed. Second, prima facie, he must then be responsible for the defendant's taxed costs of the action and so for the costs of what turned out to be a four-day trial.
Annexure A
Annexure B
Annexure C
Annexure D
Annexure E
I certify that the preceding paragraphs comprise the reasons for decision of the Supreme Court of Western Australia.
PP
Associate to the Honourable Justice K Martin
26 JUNE 2023
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