McClelland v Burning Palms Surf Life Saving Club

[2002] NSWSC 470

CITATION:	McClelland v Burning Palms Surf Life Saving Club [2002] NSWSC 470
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 5204/99
HEARING DATE(S):	6/5/02 - 8/5/02
JUDGMENT DATE:	12 June 2002
PARTIES :	Robert Francis McClelland (Plaintiff) Burning Palms Surf Life Saving Club (Defendant)
JUDGMENT OF:	Campbell J

COUNSEL :	W L Marler (Plaintiff) S Bell (Defendant)
SOLICITORS:	Coode & Corry (Plaintiff) Terrett Lawyers (Defendant)
CATCHWORDS:	ASSOCIATIONS AND CLUBS - incorporated associations - expulsion procedures - natural justice - relationship between association rules and natural justice - whether rules can exclude natural justice - locus standi of association member to seek court relief concerning expulsion resolution
LEGISLATION CITED:	Associations Incorporation Act 1984 Charitable Fundraising Act 1991 Commonwealth Conciliation and Arbitration Act 1904 Trade Practices Act 1974 (Cth)
CASES CITED:	Allinson v General Council of Medical Education and Registration (1894) 1 QB 750 Amos v Brunton (1897) 18 NSWR (Eq) 184 Australian Workers' Union v Bowen (No.2) (1948) 77 CLR 601 Balfour v Balfour [1919] 2 KB 571 Barnes v Australian Telecommunications Commission (1989) 25 FCR 283 Blackler v New Zealand Rugby Football League (Inc) [1968] NZLR 547 Bonsor v Musicians Union [1954] Ch 479 Broussard v Minister for Immigration, Local Government and Ethnic Affairs (1989) 21 FCR 472 Buckley v Tutty (1971) 125 CLR 353 Byrne v Kinematograph Renters Society Ltd [1958] 1 WLR 762 Calvin v Carr [1977] 2 NSWLR 308 Cameron v Hogan (1934) 51 CLR 358 Century Metals and Mining v Yeomans (1989) 40 FCR 564 Clisdell v Commissioner of Police (1993) 31 NSWLR 555 Colpits v Australian Telecommunications Commission (1986) 9 FCR 52 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 Dawkins v Antrobus (1881) 17 Ch D 615 Dickason v Edwards (1910) 10 CLR 243 Dixon v Australian Society of Accountants (1989) 95 FLR 231 Dorf Industries Pty Ltd v Toose (1994) 54 FCR 350 Edgar v Meade (1916) 23 CLR 29 Edwards v Society of Graphical and Allied Trades [1971] 1 Ch 354 Enderby Town Council Football Club Ltd v Football Association Ltd [1971] 1 Ch 591 Finnigan v New Zealand Rugby Football Inc [1985] 2 NZLR 159 Fisher v Keane [1879] 11 Ch 353 Forbes v New South Wales Trotting Club Ltd (1979) 143 CLR 242 Gaiman v National Association for Mental Health [1971] Ch 317 General Medical Council v Spakman [1943] AC 627 Hall v New South Wales Trotting Club Ltd [1977] 1 NSWLR 378 Harbottle Brown & Co Pty Ltd v Halstead [1968] 3 NSWR 493 Harrison v Hearn [1972] 1 NSWLR 428 Heatley v Tasmanian Racing & Gaming Commission (1977) 137 CLR 487 Hepples v Federal Commission of Taxation (1992) 173 CLR 492 Hornby v Narrandera Ex-Servicemen's Club Ltd [2001] NSWSC 235 John v Rees [1970] Ch 345 Kioa v West (1985) 159 CLR 550 Law v National Greyhound Racing Club Ltd [1983] 1 WLR 1302 Lee v The Showmen's Guild of Great Britain [1952] 2 QB 329 Luu v Renevier (1989) 91 ALR 39 Macksville & District Hospital v Mayze (1987) 10 NSWLR 708 Makin v Gallagher [1974] 2 NSWLR 559 Malone v Marr [1981] 2 NSWLR 894 McInnes v Onslow-Fane [1978] 1 WLR 1520 McKinnon v Grogan [1974] 1 NSWLR 295 McNab v Auburn Soccer Sports Club Ltd [1975] 1 NSWLR 54 Minister for Immigration and Ethnic Affairs v Teoh (1995) 128 ALR 353 Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475 National Companies and Securities Commission v The News Corporation Limited (1984) 156 CLR 296 Parkes Rural Distributors Pty Ltd v Glasson (1986) 7 NSWLR 332 Preston v Carmody (1993) 44 FCR 1 R v Blizzard; ex parte Downs [1993] 1 Qd R 151 R v British Broadcasting Corporation; ex parte Lavelle [1983] 1 WLR 23 R v The Commonwealth Conciliation and Arbitration Commission; ex parte The Angliss Group (1969) 122 CLR 546 R v Criminal Injuries Compensation Board; ex parte Lain [1967] 2 QB 864 R v Disciplinary Committee of the Jockey Club; ex parte Aga Khan [1993] 1 WLR 909 R v Marks; ex parte Australian Building and Construction Employees and Builders Labourers Federation (1981) 147 CLR 471 R v Panel on Takeovers and Mergers; ex parte Datafin Plc [1987] 1 QB 815 R v Panel on Takeovers and Mergers; ex parte Guinness Plc [1990] 1 QB 146 R v Visitors to the Inns of Court, ex parte Calder [1994] QB 1 R v Wilson; ex parte Robinson [1982] Qd R 642 Rigby v Connol (1880) 14 Ch D 482 Russell v Duke of Norfolk [1949] 1 All ER 109 South Australia v O'Shea (1987) 163 CLR 378 Stininato v Auckland Boxing Association (Inc) [1978] 1 NZLR 609 Stone v Law Society (NT) (1992) 108 FLR 332 Sullivan v Department of Transport (1978) 20 ALR 323 Thorborn v All Nations Club (1975) 1 ACLR 127 Twist v Randwick Municipal Council (1976) 136 CLR 106 University of Ceylon v Fernando [1960] 1 WLR 223 Typing Centre of New South Wales v Toose (NSW Supreme Court, Mathews J, 15 December 1988, unreported) Victoria v Master Builders Association of Victoria [1995] 2 VR 121 Whittle v Australian Miniature Pony Society Inc, (1995) 57 FCR 252 Wood v Woad [1874] LR 9 Ex 190
DECISION:	Expulsion resolution effective

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

12 June 2002

5204/99 ROBERT FRANCIS McCLELLAND v BURNING PALMS SURF LIFE SAVING CLUB

JUDGMENT

1 HIS HONOUR: Mr Robert McClelland first became a member of Burning Palms Surf Life Saving Club more than 40 years ago. From the time he joined, he was actively involved in carrying out beach patrols and in competitions between surf clubs. After 20 years or so his involvement in the more physically demanding activities of the Club was curtailed, but he continued to be involved in fundraising and in the administration of the Club. On 15 July 1995, a special general meeting of the Club resolved to expel him. In these proceedings, he contends that that expulsion was invalid, and seeks relief against it.

The Fundraising Activities

2 The Club regularly conducted fundraising activities at the Mortdale Hotel. There was a meat tray raffle, which was conducted weekly and drawn on a Thursday evening from February to December. There was an “instant party” raffle conducted annually, near Christmas. As well, there was a “Mug of the Week” activity which was conducted weekly, and drawn on each Tuesday evening from February to December.

3 The “Mug of the Week” is a lucky number competition. A person who participates in the “Mug of the Week” pays two dollars each week that the competition is running. There is a tally sheet in the form of a grid, where each participant in the competition has a row of the grid allocated to him or her, and there is a column for each week that the competition is run. When someone pays to participate in the competition, a mark is made in the square of the grid which relates to that person, and the week for which payment is made. Sometimes, participants in the “Mug of the Week” were behind in their contributions; sometimes, they paid in advance. The winner, each week, was decided by the spin of a chocolate wheel.

4 In the latter part of 1994 and the early part of 1995, the Club’s fundraising activities at the Mortdale Hotel were under the control of Mr Jack Ryan, who was then a Senior Vice President of the Club. Mr McClelland and Mr John Vaughan regularly assisted with fundraising at the Hotel. There was a table at the Hotel, at which Mr McClelland and Mr Vaughan frequently sat, as they collected the money. The usual practice was that as money was paid, an entry would be made on the tally sheet to record that it had been paid, and the money would be put into a moneybag, of which Mr McClelland retained custody. On a Thursday, Mr McClelland would give the contents of the moneybag to Mr Vaughan, for banking.

5 On a number of occasions – Mr McClelland estimates between eight and ten – he had borrowed money from the bag containing money collected for “Mug of the Week”. Mr McClelland explained this, in a letter which he wrote to Mr Jacobs (the Secretary of the Club) on 29 April 1995:

“It is no secret within the Club that my personal financial position has been difficult for some time. There have been a few times over the last couple of years when I did not have the ready cash to go to the pub. When those occasions have coincided with my fundraising activities for the Club I have borrowed from the kitty.
This has been done with the knowledge and concurrence of the other members involved in those fundraising activities – Jack Ryan, Steve Singleton, and in particular John Vaughan – monies so borrowed have been small, recorded and repaid, usually fairly promptly. Furthermore, these borrowings have been solely to maintain my presence and fundraising for the Club.”

6 Mr McClelland’s practice, when he made such a borrowing, was that he made a note on a drink coaster of the sum he had borrowed, and kept that drink coaster with the moneybag. In about April 1994 he had a conversation with Mr Ryan, in which Mr Ryan said words to the effect of:

“I know you have borrowed the Club’s money a couple of times. That’s between you and Rooster [John Vaughan]. Don’t lose track of it.”

7 Mr McClelland agreed. On most of the occasions when Mr McClelland borrowed money from the bag, he repaid it within a day or two. When he repaid the money, he tore up the coaster which recorded his borrowing. He says that, to the best of his knowledge, Mr Vaughan was aware of this practice.

8 In 1995, there was a period, starting in mid to late February of 1995, when Mr McClelland had become unemployed. He had made various borrowings from the “Mug of the Week” money at that time. He recorded his borrowings, in accordance with his usual practice, on a drink coaster, as a series of running totals. The drink coaster records “Bob owes”, and a column of dollar amounts, all except the last of which is crossed out. This column of numbers represented the progressive total of his borrowings from time to time. The crossed out entries record amounts of $20, $60, $90, $115, $130, and $150. The amount not crossed out records $170. The money which was borrowed was mainly used to purchase beer for Mr McClelland’s own consumption, while at the Hotel during the running of raffles.

9 At some time during March 1995, Mr Vaughan spoke to Mr McClelland about his borrowings from the kitty monies. Mr Vaughan knew that Mr McClelland was planning to go to Queensland at the time of the Australian National Surfing Championships, which were to be held in early April. Mr McClelland had told Mr Vaughan about the amount he had borrowed, and at first Mr Vaughan did not say anything about it. Then a couple of days later, he suggested that Mr McClelland should put a cheque in to cover the $170 while Mr McClelland was away,

“… so if anyone went crook he could say, “I have a cheque” and I said, “I can’t do that because I don’t have a cheque account anymore”.

It was on 27 March 1995 that Mr Vaughan asked Mr McClelland to put a cheque in.

10 There had been some disputes, the details of which were not explored in evidence, between Mr McClelland and the Club prior to this time. One of those disputes had resulted in the Club passing a resolution, on 18 January 1994, where it was resolved that Mr McClelland’s membership be suspended from the date of the meeting until 30 November 1995. Mr McClelland instituted an appeal against that resolution, and the appeal process had not run its course by April 1995.

11 As well, an article had appeared in the Leader newspaper which concerned, in some way, Mr McClelland and the Club. The Club had written a letter, on 27 March 1995 (it is not clear to whom) concerning that article. Both Mr Vaughan, and Mr McClelland, knew about that letter written by the Club. Mr McClelland showed Mr Vaughan a draft of a reply which Mr McClelland proposed to send, concerning the article. Mr Vaughan asked that Mr McClelland do nothing, including sending his reply, until he returned from the Australian Championships in Queensland, around 9 or 10 April 1995.

12 On Monday 3 April Mr McClelland gave to Mr Vaughan copies of some letters which Mr McClelland had written, notwithstanding Mr Vaughan’s request to do nothing, concerning the Leader article. Mr Vaughan did not read those letters at the time, but read them when he got home that evening. Mr Vaughan said, in a statutory declaration which he made in May 1995:

“I considered that his actions in not giving me, or anybody else, a chance to put things right concerning the Club’s letter negated any agreement we had and I saw no reason for giving him time to make things right with the “Mug” money. I told him on the phone I considered the money due now.”

13 The next morning, 4 April 1995, Mr McClelland phoned Mr Jacobs, who was then the Honorary Secretary of the Club. He told Mr Jacobs that he owed the “Mug of the Week” $170, and that Mr Vaughan had demanded that he pay it back before he went to Queensland. Mr McClelland told Mr Jacobs in any event the Club owed him money, for half the value of a surfboat trailer, a gas bottle, and a fire extinguisher. Mr McClelland told Mr Jacobs that he had to go to Queensland, and he needed what money he had for that. He explained that he was able to travel with a friend to get to Queensland, would stay at the Surf Club, but still needed money to be able to eat and drink. He said that the Club could wait until he got back.

14 Mr Jacobs says that he said to Mr McClelland, “Bob you cannot take the raffle money. It’s not right. And you know that the Club disputes your position on the other matters.” Mr McClelland says he cannot recollect Mr Jacobs saying, “You cannot take the money. It’s not right”. It seems to me more likely than not that Mr Jacobs did make such a statement. It was Mr Ryan and Mr Vaughan, not Mr Jacobs, who knew about Mr McClelland’s previous borrowings from the “Mug of the Week” money. The response which Mr Jacobs attributes to himself in evidence, is just the sort of response one would expect someone, told the story for the first time, to give. Mr Jacobs struck me in the witness box as being a cautious man, and the response he attributes to himself is consistent with that. Further, Mr McClelland does not actually deny that Mr Jacobs said those words.

15 On 11 April 1995, Mr McClelland gave the drink coaster, containing his record of borrowings, to Steve Singleton, the Assistant Treasurer of the Club.

16 On 14 April, Mr Vaughan wrote to the Committee of the Club, setting out his account of the circumstances concerning Mr McClelland’s borrowing. That letter raised some concerns besides the borrowing of $170. First, Mr Ryan recollected that he had had a conversation with Mr McClelland, about 10 days before, when Mr McClelland had said something about $200, and Queensland. Mr Vaughan’s letter continued:

“… I told him that I could not authorise or condone his use of Club money and that he should talk to Jack Ryan. I did not think about it any more until the matter of the $170 was raised.
The two amounts did not make sense as the second sum was smaller than the first and it seems unlikely that he would need less than he did 10 days before.”

17 Second, Mr Vaughan said that he had checked the bankings he had made, and found that up to March 2, the deposits appeared normal, but that the deposits for weeks commencing March 9 to 30 were below the average. Mr Vaughan reported that on 4 April, Steve Singleton,

“did a quick reconciliation and was of the opinion, since mid January, the banking could be in the vicinity of $700-plus short.
He has since done a detailed study and has confirmed that there is a substantial shortfall.”

18 Mr Vaughan also said, in this letter:

“I have since recalled two other incidents that Bob mentioned but I have no knowledge of whether these matters were resolved.

· Bob made a loan to a friend who was “a bit short” of $20. He said that he did not have spare cash himself at the time.

· He told me that he had collected $50 one Friday night and had mislaid it over the weekend.”

19 Mr Vaughan also said:

“At no time have I given permission for Bob McClelland to use “Mug” money for any purpose.”

20 On 18 April there was a committee meeting of the Club. Standing Orders were suspended to discuss the situation concerning the “Mug” money. A motion was passed.

“a.1) That letter be sent to R F McClelland requesting he attend a meeting of the Committee in accordance with Rules No’s. 15.1 & 15.3
a.2) That the letter be prepared by the honorary solicitor for the hearing.”

21 On 20 April Mr McClelland went to the Mortdale Hotel, and was told by Mr Ryan that he had been relieved of raffle duties. Mr Ryan mentioned something about improper use of Club funds. Mr McClelland said something like, “It’s going to look rather funny to the boys if I walk away right now.” Mr Ryan agreed, and they ran the raffles as usual.

22 On 29 April 1995 Mr McClelland wrote to Mr Jacobs. His letter contained a little over six pages of typed, single space text. He gave details of what he said were irregularities committed by other people in the Club concerning the handling of money. He referred to what he said were other errors, of Club officials, which had resulted in the Club paying too much for a surfboat, and losing a federal government grant to purchase premises. Concerning the borrowing of Mug money, he made the statement I have set out at paragraph 5 above. He continued:

“Under these circumstances I do not believe any court would find anything wrong with my actions and I challenge anyone who thinks otherwise to do something about it.
More recently, my position has worsened and I have advised those concerned that I would not be able to continue but that I would hold the fort until the Australian Championships after which others would have to take over.
It is a Pyrrhic victory for the committee to relieve me of these duties when I have already quit, and when you will be hard put to find a replacement who will give the service I have given. Nonetheless, I consider this action to be a gross and unwarranted insult and I demand and expect an immediate retraction and apology. It is poor thanks for 35 years and tens of thousands of dollars raised over those years.”

23 He went on to threaten defamation actions, accuse the committee of having a “hidden agenda” and give details of the claim which he said he had against the Club, for an amount $849.40, relating to the boat trailer, gas cylinder and fire extinguisher. He also mentioned some other matters of dispute which he had with the Club.

24 On 30 April, Mr McClelland wrote to the Department of Gaming and Racing. That Department administers the Charitable Fundraising Act 1991. The letter was not in evidence, but from the reply I infer that he informed the Department about his suspension from the Club, his borrowings from the raffle monies, and raised questions about the validity of the Rules of the Club.

25 On 1 May 1995, there was a further committee meeting of the Club. The minutes record the following:

“3.6 Assistant Treasurer advised an analysis of the “Tick Sheets” that record patrons payments for the “Mug of The Week” raffle. The shortfall in raffle money that amounted to $170 occurred in the period 24/1/95 to 11/4/95.
3.7 Further discussion was held on the action that may be undertaken and the timing to undertake this action. Secretary pointed out any action should be strictly in accordance with the rules. It is not in the clubs interest to undertake any action on this matter that is not entirely within our rules. The Rules 15 & 16 provide for the dealing with the discipline and for members to appeal, it is important that the timing as required by the rules is followed.
Moved J Vaughan/D McAlpine that any letters or resolution on this matter should be forwarded to Burning Palms legal adviser to ensure action is correct and strictly in accordance with Burning Palms rules ………..carried.

Moved J Vaughan/J Culbert that club members J Vaughan, S Singleton, D Jacobs, J Ryan and B Traynor submit to the club Statutory Declarations before any letters are sent to R F McClelland …………carried.
3.8 It was agreed by all present that this matter should be referred to the clubs honorary solicitor P Terrett and any subsequent correspondence. This will ensure that all correct procedures are strictly adhered to.”

26 On 3 May, the Department of Gaming and Racing wrote to Mr McClelland. The thrust of the letter was that the Department could not help him with most of the matters about which he had written on 30 April 1995. The Department did say, however:

“Nevertheless, your ‘borrowings’ from the raffle ‘kitty’ may contravene section 20(6) of the Charitable Fundraising Act which states in part that ‘any money received in the course of a fundraising appeal, before the deduction of any expenses, is to be paid immediately into an account at a bank or building society …”

27 Also on 3 May 1995, the Department wrote to the Club, enclosing a copy of the letter it had written to Mr McClelland. The covering letter to the Club said:

“I would draw your attention to references to the current reporting requirements on changes to your Club’s constitution, and also the need to bank the gross proceeds from a fundraising appeal without deduction into a bank or building society account.
Under the circumstances I would be grateful if you would advise the Department of the circumstances surrounding Mr McClelland’s ‘borrowings’ from the proceeds of fundraising raffles, and the controls and procedures applying to the conduct of such raffles.”

28 On 16 May 1995 there was a further committee meeting of the Club. Mr McClelland was given no notification that this meeting would be held, and did not attend it. At that meeting, Mr Jacobs tabled a Supplementary Agenda, and four statutory declarations. The Supplementary Agenda contained the following items:

“1. Consideration of the factual matters set out in the Statutory Declarations referred to in the Schedule to this Agenda, copies of which Statutory Declarations have been circulated with this Agenda, in relation to the involvement of R F McClelland in the “Mug of The Week” fundraising raffle at Mortdale Hotel.
2. Consideration of, and if thought fit, passing as Resolutions, Motions as follows:-
‘ That the actions of R F McClelland in having:-
(a) collected monies from patrons of Mortdale Hotel (“Raffle Monies”) in relation to the “Mug of the Week” fundraising raffle of Mortdale Hotel (“Raffle”) on behalf of Burning Palms Surf Life Saving Club; and
(b) failed, without proper reason, to account to the Club for Raffle Monies totalling approximately $170.00 collected by him on or between the following dates:
24 January 1995, 31 January 1995, 7 February 1995, 14 February 1995, 21 February 1995, 28 February 1995, 7 March 1995, 14 March 1995, 21 March 1995, 28 March 1995 and 4 April 1995.
be considered to be persistent and wilful actions prejudicial to the interest of the Club.
2. That R F McClelland be expelled from membership of the Club pursuant to rule 15.1 for having acted persistently and wilfully in a manner prejudicial to the interests of the Club.
3. That R F McClelland be advised of his expulsion of the Club pursuant to rule 15.1 and that he be advised of his right of appeal against the expulsion decision pursuant to rule 16.’
Schedule
Name of Declarant
John Kendall Vaughan
John George Ryan
Donald Charles Jacobs
Stephen David Singleton”

29 The four statutory declarations were from the four people named in the schedule to the agenda. Mr Vaughan’s statutory declaration was identical in text (apart from the formal parts appropriate to a statutory declaration) to his letter of 14 April 1995.

30 The statutory declaration of Mr Steve Singleton was in the following form:

“On Monday evening 3 April 1995, Robert McClelland told me something. He had just returned from a telephone conversation with John Vaughan when he stated:
“Rooster has just told me to pay back the money I borrowed from the Mug of the Week before I go to Queensland, …”
Robert also said something like I can’t do that now.
This was the first time that I was aware that Robert had “borrowed” money from the Surf Club takings on this occasion.
Robert had previously borrowed up to $50.00 to “see him through a couple of days” until he was paid. Although not strictly correct procedure and never authorised, this has been condoned.
On Tuesday morning 4 April 1995 I received a phone call from John Vaughan, where he told me something.
John said he was concerned about the money collected for the Mug of the Week. John indicated he believed that two amounts had not been offered for banking by Robert McClelland. The first amount of $200.00 which was due for banking about 23 March 1995 and the second amount was $170.00 which was due for banking 30 March 1995 and on 4 April 1995.
On the evening of 4 April 1995, I attended the Mortdale Hotel where I took possession of the records for the Mug of the Week and was given a list of amounts banked from January to April 1995 by John Vaughan.
In the presence of John Vaughan, I performed a preliminary reconciliation of the records to the banking. At this time I informed John that an amount exceeding $400.00 appeared to be unaccounted.
Later that evening I performed a detailed reconciliation and am satisfied that an amount of $739.00 has not been accounted for.
The reconciliation was performed using the following given data.
The records for the mug established a status as at 24 January 1995. From the same sheet it was possible to establish a status as at 4 April 1995, a list of amounts banked was extracted from the bank deposit slips. (see attached)
Given that John Vaughan can account for $370.00 as amounts mentioned by Robert McClelland, there is an unaccounted shortfall of $369.00
In a phone conversation with Donald Jacobs, on Wednesday 5 April 1995, Don indicated he had a conversation with Robert McClelland regarding the “loan of Mug Monies” on the previous day.
On Tuesday 11 April 1995 at approximately 6.00 PM at Mortdale Hotel, I spoke to Robert McClelland and advised him that I had performed a reconciliation of the Mug of the Week and the banking records of the club. I advised Robert McClelland that an amount of $739.00 could not be accounted for.
Robert McClelland admitted he had taken $170.00 over the period of the last several weeks, “to maintain my presence in the pub”.
Robert offered that he knew of one instance where $50.00 had been lost by him during a collection week.
Robert handed over cash amounting to $46.00 relating to the week collection up to 4 April 1995.
Robert had no explanation of other monies missing from the Mug of the Week.
I spoke to Don Jacobs on 12 April 1995 where he indicated he did not give permission or approval in any form to Robert McClelland in relation to the $170 “borrowed”.
On Thursday 13 April 1994 I spoke to Brad Traynor. He indicated that Mr McClelland had attempted to contact him on Tuesday 4 April 1995 without success. I advised Brad of the unaccounted funds from the Mug of the Week to an extent of approximately $730.
It is my opinion that Mr Robert McClelland did over a period of time take $170.00 without the authorisation of the Management Committee of the Burning Palms Surf Lifesaving Club.
I believe that the following scenarios could account for the remaining $434.00 which remains unaccounted:
1 Person or persons unknown have entered marks on the record without paying the appropriate fee on up to 185 occasions.
2 Monies collected were lost prior to being offered for banking.
3 Clerical Errors were made in recording payments on up to 185 occasions.
4 Monies were offered for banking but were not banked.
5 Monies collected by Robert McClelland are currently in his possession.
6 Monies collected by Robert McClelland were held by him for his use.
7 A combination of more than one of the above.
I brought the matter to the attention of the next available meeting of the Burning Palms Surf Lifesaving Club Management Committee on 18 April 1995.”

31 Mr Ryan’s statutory declaration said:

“… at no time did I, as Senior Vice President of Burning Palms Surf Life Saving Club and the Officer in charge of fundraising at the Mortdale Hotel give ROBERT McCLELLAND permission to use $170 or any other moneys of the Club’s funds which he collected for the “Mug of the Week” for his own use.
On the odd occasion, he may have mentioned that he had borrowed a small sum from these moneys, but I cannot remember any specific details of these instances.”

32 Mr Jacobs’ statutory declaration stated the following:

“On Tuesday 4 April, 1995 prior to departure to the Australian Titles R F McClelland rang me to ask the telephone number of B Traynor. During the discussion when he also advised there would be further letters sent to Sydney Branch. In addition, advised that he had taken $170 from the raffle money required to help pay expenses to go to the Australian Titles.
Also stated that the Club owed him half the value of a boat trailer, one fire extinguisher and a 20 kg gas bottle.”

33 The minutes of the committee meeting of 16 May 1995 record:

“The meeting discussed and considered the factual matters set out in the statutory declarations and the motions set out in the supplementary agenda. Following such consideration and discussions, motions were moved by J Ryan, seconded by D McAlpine and unanimously passed as resolutions by the meeting:
[there followed the text of the three motions contained in the Supplementary Agenda].

34 The minutes also noted, under the heading “General”, correspondence received and sent:

“10.11 Letter Dept. of Gaming and Racing dated 3/5/95 requesting the club advise on the borrowing from “the proceeds of fundraising raffles” and our controls and procedures that are in place to monitor conduct of the raffles.
10.12 Copy of letter dated 3/5/95 sent to Mr R F McClelland in answer to a letter that I assume was Mr R F McClelland’s letter of 29/4/95.
10.13 Letter dated 4/5/95 from J Vaughan setting out the history on the boat trailer that Mr R F McClelland claims the club owes an amount against.
10.16 Letter dated 19/4/95 J Vaughan’s answer to letter received from Mr R F McClelland of the 12/4/95.
10.17 It is noted letters from Mr R F McClelland dated 7/2/95, 2/4/95 and 29/4/95 acknowledged.“

35 Thus, Mr McClelland’s letter of 29 April 1995 was before that meeting.

36 By a letter dated 25 May, which Mr Jacobs actually signed on 27 May, Mr McClelland was informed as follows:

“On 16 May 1995 the Committee of Burning Palm Surf Lifesaving Club Inc (“Club”) passed certain resolutions concerning your membership of the Club.
The exact Resolutions passed by the Committee on that occasion concerning your membership are set out in the Schedule to this letter. In short, it was resolved that you be expelled from membership of the Club pursuant to Rule 15.1 of the Club’s Rules for having acted persistently and wilfully in a manner prejudicial to the interest of the Club.
Pursuant to Rule 15.3 we now give you written notice of the Resolutions passed by the Committee and the grounds upon which they are based.
Pursuant to Rule 15.3(b) you are entitled to address the Committee at a meeting to be held not earlier than fourteen (14) days and not later than twenty eight (28) days after service of this letter on you.
Please be advised that the Committee has scheduled a meeting on the date and at the place and time set out below at which you may address the Committee regarding the Resolutions which have been passed:
Date: 13 June 1995
Place: Meeting Room, St George Masonic Club Limited, 86 Roberts Avenue, Mortdale
Time: 8.00pm
In relation to the meeting, particulars of which are set out above we draw your attention to the following matters:-
1. You are not entitled to legal representation at the meeting;
2. You may attend and speak at the meeting; and
3. you may submit to the Committee at or prior to the date of that meeting written representations relating to the Resolutions which have been made.
Your attention is drawn to the provisions of Rules 15 and 16, a copy of which is enclosed with this letter.

37 A schedule to the letter set out the text to the resolutions which had been passed. A copy of Rules 15 and 16 was enclosed.

38 On 26 May 1995 the Club wrote to the Department of Gaming and Racing, replying to the Department’s letter of 3 May 1995. It stated the current procedures concerning the handling of money. Under the heading “McClelland ‘borrowings’”, the letter said:

“The so called “borrowings” by Mr McClelland were clearly unauthorised by the Club. They contravene the Club’s money handling procedures and it is the Club’s position that the “borrowings” amount to unlawful misappropriate of monies by Mr McClelland.
At a meeting of the Committee of the Club held on 16 May 1995 it was resolved that Mr McClelland be expelled from membership of the Club for having failed, without proper reason, to account to the Club for raffle monies apparently collected by him between 24 January 1995 and 4 April 1995. The Schedule to this letter sets out the Resolutions which were passed by the Committee on 16 May 1995 concerning Mr McClelland and his “borrowings”. Please let us know should you require any further information.
We have requested Mr McClelland to forthwith account to the Club for the $170.00 which, we believe, he has collected from the patrons of Mortdale Hotel in relation to the Club’s “Mug of the Week” fundraising raffle on behalf of the club but for which he has failed to account.”

39 On 4 June 1995 Mr McClelland wrote to Mr Jacobs. The first point he made was that the resolutions of 16 May were invalid because certain provisions of the model rules, under the Associations Incorporation Act 1984, had not been complied with. He reminded Mr Jacobs that for officers or members of an incorporated association to contravene a provision of the Act or regulations was a criminal offence. His letter continued:

“… Notwithstanding the above, I shall address your resolutions:
1. (a) I have indeed collected monies from the Patrons of the Mortdale Hotel; and elsewhere over the years, on behalf of the Club. Many thousands of dollars in fact which is a damn sight more than most of the Committee have done.
(b) To say that I have “failed to account to the Club for Raffle Monies totalling approximately $170” is, quite simply, false. I draw your attention to the Macquarie Dictionary:
“account – A verbal or written recital of particular transactions and events”
It is precisely because I have accounted to the Club for Raffle Monies totalling exactly $170 that you are aware that I have borrowed that amount.
There is nothing underhand or dishonest in my actions and to imply that there is, as the Committee has done in its resolutions, is an act of pure and unmitigated bastardry!
I draw your attention to my letter of 29 April and in particular:
“It is no secret within the Club that my personal financial position has been difficult for some time. There have been a few times over the last couple of years when I did not have the ready cash to go to the Pub. When those occasions have coincided with my fundraising activities for the Club I have borrowed from the kitty.
This has been done with the knowledge and concurrence of the other members involved in these fundraising activities – Jack Ryan, Steve Singleton and, in particular, John Vaughan – monies so borrowed have been small, recorded and repaid, usually fairly promptly. Furthermore, these borrowings have been solely to maintain my presence and fundraising for the Club.”
I do not accept that this action was, in any way, “prejudicial to the interests of the Club”. In fact the reverse was the case. I have collected substantial sums for the Club, which I would not otherwise have collected. Previous such borrowings have been repaid, as this would have been by now were it not for your actions. Also if you take into consideration the Club’s debt to me, the $170 was and is well and truly covered.
However, if you consider my action to be in some way improper, then what of Jack Ryan who is in charge of our activities at Mortdale Hotel and who was aware, although not in detail, of this practice; and what of John Vaughan who is responsible for taking and banking the monies collected and who was aware of both the practice and the details.
Surely, if I am guilty of any impropriety, then they with their greater responsibilities and authority are even more guilty. Is there any suggestion that they should be expelled? Of course not! And neither should there be, for them or me.
Again I refer you to my letter of 29 April:
“Your actions are petty, vindictive and grossly hypocritical . They are not about improper use of funds or a lousy $170. They are about punishing me for my letters of 2 April and yet some of your have the hide to accuse me of having a hidden agenda.
My agenda is not hidden; it is simply to clear my name, totally and absolutely, and you had better believe that it is going to happen, one way or another, preferably within Surf Life Saving but if not, then within the Courts.”
Your hypocrisy is compounded by the fact that the Club’s debt to me – spelt out in my letter of 29 April – is 5 times greater and substantially older than my debt to the Club.
The Committee should be ashamed and should apologise!”

40 On 7 June 1995, Santow J was the Equity Duty Judge. An Associate’s Record of Proceedings, relating to proceedings “R F McClelland v Burning Palms S L S C, Sydney Branch Surf Life Saving” records that Mr McClelland appeared in person that day, and that someone called A David appeared for one or other (or perhaps both) of the intended defendants. The matter occupied his Honour for 15 minutes, and resulted in a direction “I stand the matter down so that it should come before me at 10.00am on 14 June 1995”. It seems likely that his Honour was informed about the committee meeting being fixed for 13 June 1995, and took into account that whatever happened at that meeting might well affect what, if any, orders it might be appropriate to make. Mr McClelland says that Santow J directed him to “serve the documents in the meantime”.

41 On 13 June 1995 there was a further committee meeting of the Club, which Mr McClelland attended. The Club’s honorary solicitor, Mr Terrett, also attended. The minutes of that meeting record the following:

“R F McClelland-Expulsion Decision
The Chairman noted that R F McClelland been invited to attend the meeting in order to make oral representation concerning the decision made by the committee on the 16th May, 1995 that he be expelled from membership of the club. Mr R F McClelland arrived at 7:56pm and:-
a) made various statements concerning matters before Sydney Branch of SLSA; and
b) Read the contents of his letter to the Club dated 4 June, 1995.
The Chairman made a ruling that certain materials set out on pages 1, 2 & the first half of page 3 of R F McClelland’s letter of 4th June, 1995 were not relevant to the Committee’s present deliberations and would not be considered for the purpose. R F McClelland withdrew from the meeting at the Chairman’s request at 8-05pm (for approximately 7 minutes) and also during the meetings recess between 8-20pm and 8-25pm. After advising the Chairman that he had nothing further to add to his submissions R F McClelland withdrew permanently from the meeting at 8-50pm.

The meeting subsequently discussed the matters which had been raised by R F McClelland. Following such discussion it was moved by J Vaughan, seconded by D Jacobs and unanimously carried as Resolutions.
a) “That the Committee hereby confirm its decision passed at the Committee Meeting of 16th May, 1995 that R F McClelland be expelled from membership of the Club pursuant to Rule 15.1 for having acted persistently and wilfully in a manner prejudicial to the interests of the Club”; and
b) “That the Club Secretary be requested and directed to send R F McClelland a letter pursuant to Rule 15.5 advising R F McClelland of the Committee’s confirmation of the expulsion decision made on 16th May, 1995 and advising him of his rights of appeal to the members in general meeting pursuant to Rule 16.””

42 The portion of Mr McClelland’s letter of 4 June 1995 which the Chairman ruled not relevant, was the portion where Mr McClelland made allegations about failure to comply with provisions of the model rules, and the Associations Incorporations Act.

43 Mr McClelland accepted the proposition, in cross-examination, that when he received the letter from the Department dated 3 May, “it is very difficult to see how your borrowing from the kitty would not be in contravention of the Act”. As well, Mr McClelland had had a conversation with someone at the Department, before he received that letter, in which he was told that his borrowing was “maybe in contravention of the Act”.

44 At the committee meeting on 13 June, Mr McClelland read to the committee the whole of the portion of his letter of 4 June which I have earlier quoted (see paragraph 39). At that meeting, Mr Phillips, the then President of the Club, asked him whether he was going to repay the $170. Mr McClelland made quite clear that he would not repay it.

45 In cross-examination, Mr McClelland accepted that at the committee meeting held on 13 June he was asked whether he had anything further to say, and said that he had nothing further to say.

46 On 14 June 1995, Mr McClelland appeared, ex parte, before Santow J. He filed that day, a document called a Statement of Claim, which was really more akin to a summons – it stated the orders he sought, without alleging the basis on which those orders were sought. The orders were:

“1 An order that the defendant be restrained from holding its annual general meeting until such time as all the matters disputed between the plaintiff and the defendant are properly resolved.
2 An order that the defendant supply to the plaintiff copies of all and any allegations written or supply me with particulars of allegations verbally made against him and copies of all and any resolutions passed by the defendant pertaining to the plaintiff.
3 Such other orders as the court deems fit.”

47 His Honour made an order which, amongst other things, made clear that any appeal which Mr McClelland exercised should be dealt with in accordance with the requirements of natural justice.

48 On 19 June 1995, Mr Jacobs wrote to Mr McClelland, saying:

“This letter is to confirm that:-
1. On 16 May 1995 the Committee of Burning Palms Surf Lifesaving Club Inc (“ Club ” resolved that you be expelled from membership of the Club pursuant to Rule 15.1 of the Club’s Rules.
2. On 13 June 1995 the Committee of the Club heard your oral submissions and considered your written submission concerning its decision made on 16 May 1995.
3. After careful consideration the Committee decided, pursuant to Rule 15.4, to confirm its decision made on 16 May 1995. As a consequence your expulsion from membership of the Club has been confirmed.
You have a right of appeal against the Committee’s decision made on 16 May 1995 as confirmed on 13 June 1995. That appeal is to the members of the Club in general meeting and may be exercised pursuant to Rule 16.1.
A copy of Rule 16 of the Club’s Rules is attached for your ease of reference.”

49 On 25 June 1995, Mr McClelland wrote to Mr Jacobs saying: “I appeal against the committee’s decision of 16 May 1995.”

50 Mr Jacobs issued a notice calling a general meeting of the Club. The notice was in the following form:

“NOTICE OF GENERAL MEETING
Notice is hereby given of General Meeting of Burning Palms SLSC Inc to be held on Saturday 15 July, 1995 at 2pm at the St George Budapest Soccer Club, Regency Room 84 Victoria Ave, Mortdale.
BUSINESS
The meeting has been called pursuant to Rule 16 of the Club rules so that the members in General meeting can hear an appeal by Robert F McClelland against resolution of the Committee passed on 13 June, 1995 (pursuant to Rule 15.4) (“Expulsion Resolution”) confirming an earlier resolution of the Committee passed on 16 May, 1995. Details of the relevant resolutions are set out below for the reference of members.
The members present at the meeting will be asked:-
(a) to vote whether the Expulsion Resolution should be confirmed or revoked; and
(b) to vote for or against a Special Resolution in favour of confirmation of the Expulsion Resolution.
RESOLUTIONS PASSED BY THE COMMITTEE ON 16 MAY 1995
1. That the actions of R F McClelland in having:-
1.a) collected monies from patrons of Mortdale Hotel (RAFFLE MONIES) in the “Mug of The Week” fundraising raffle of Mortdale Hotel (RAFFLE) on behalf of Burning Palms Surf Life Saving Club; and
1.b) failed, without proper reason, to account to the Club for Raffle Monies totalling approximately $170.00 collected by him on or between the following dates:
24 January 1995, 31 January 1995, 7 February 1995, 14 February 1995, 21 February 1995, 28 February 1995, 7 March 1995, 14 March 1995, 21 March 1995, 28 March 1995 and 4 April 1995
be considered to be persistent and wilful actions prejudicial to the interests of the Club.
2. That R F McClelland be expelled from membership of the Club pursuant to Rule 15.1 for having acted persistently and wilfully in a manner prejudicial to the interests of the Club.
3. That R F McClelland be advised of his expulsion from the Club pursuant to Rule 15.1 and that he be advised of his right of appeal against the expulsion decision pursuant to Rule 16.
RESOLUTIONS PASSED BY THE COMMITTEE ON 13 June 1995
4. “That the Committee hereby confirm its decision passed at the Committee Meeting of 16th May, 1995 that R F McClelland be expelled from membership of the Club pursuant to Rule 15.1 for having acted persistently and wilfully in a manner prejudicial to the interests of the Club”; and
5. “That the Club Secretary be requested and directed to send R F McClelland a letter pursuant to Rule 15.5 advising R F McClelland of the Committees confirmation of the expulsion decision made on 16th May, 1995 and advising him of his rights of appeal to the members in general meeting pursuant to Rule 16.”
Notes :
1. Pursuant to Rule 16.2:
(a) this general meeting was required to be held within twenty-one (21) days after the Secretary received notice from R F McClelland against the Expulsion Decision. (Notice to this effect was received on 25 June, 1995); and
(b) all members were required to be given at least seven (7) days notice of the matter to be dealt with at the meeting.
2. For a resolution to be passed as a Special Resolution it is necessary, as a minimum, that it be proposed as a Special Resolution and that it be passed by a majority which comprises not less than three-quarters of the members who, being entitled to vote at the meeting, do actually vote at the meeting in favour of the Special Resolution.
3. Copies of Rules 15 and 16 are attached for your reference.”

51 Though the notice is undated, I would infer that it was given promptly after Mr McClelland’s letter dated 25 June 1995 exercising his right of appeal, was received.

52 On 14 July 1995, Mr McClelland appeared before Brownie J. Though a wider variety of claims were made, his Honour dealt only with those which needed to be resolved that day. These his Honour summarised as being a claim “to restrain the holding of the meeting tomorrow, or perhaps to restrain the passing of a resolution confirming the resolutions of the committee” and “the plaintiff’s claim that he be given documents in connection with that meeting tomorrow”. His Honour considered, and rejected, a submission that the rules of the Club were inconsistent with those required under the Associations Incorporation Act 1984. This was the only basis upon which the claim to restrain the holding of the meeting was made. His Honour then continued:

“Turning then to the question whether the plaintiff is entitled to be given any document in relation to tomorrow’s meeting, the evidence establishes that on 25 May the Club secretary wrote to the plaintiff giving him notice of the meeting of the committee to be held on 13 June, informing him in a schedule to that letter of the precise allegations made against him and setting out a procedure to be followed. Those allegations contained a considerable amount of detail, and there has been no complaint about that detail. He has also been given a letter dated 19 June, advising him of the resolution of the committee of 13 June, advising him of his appeal rights and enclosing copies of the relevant club rules. Presumably in response to that the plaintiff wrote to the Secretary of the Club on 25 June, in effect giving notice of appeal. The notice of the meeting convened for tomorrow repeats the same particulars of the allegations made against the plaintiff.
There is no question but that the plaintiff is entitled to be told of the allegations made against him. As I see it at the moment, the notices and letters to which I have referred do just that. The existing injunction granted by Santow J seems to be sufficient to mean that if there is any deficiency in those particulars, then the defendant should cure that deficiency. I do not know however what the supposed deficiency is. As I understand him, the plaintiff does not know either, but suspects or fears that or wonders whether there might be something he has not seen. If I am asked to rule as to whether any particular document should be made available to the plaintiff before tomorrow’s meeting I will deal with that application. For the moment, however, subject to that possibility, I decline to grant any interlocutory relief today.
I will adjourn the case to a date to be fixed.
(His Honour directed the plaintiff to advise the defendant of the precise document which the defendant had not produced yet and if there were any dispute, the matter to be mentioned at 2.30)”

53 At 12.45pm on 14 July Mr Jacobs gave Mr McClelland the Supplementary Agenda for the committee meeting of 16 May 1995. At about 7.30pm on 14 July, Mr Jacobs gave Mr McClelland copies of the four statutory declarations which were referred to in the Supplementary Agenda. Mr McClelland gave the following evidence:

“A. I received the statutory declarations in the pub the night before and I wasn’t exactly sober. I did try and read them that night and hence a lot of handwritten comments on one of them that I should not have put there. So I went over them again the next morning and I attended the local police station to seek some advice that might be available to me on a Saturday morning.”

54 The General Meeting took place on 15 July 1995. The minutes of the meeting are as follows:

“Minutes of The General Meeting held at St George Budapest Soccer Club, 84 Victoria Ave, Mortdale on Saturday 15 July 1995 at 2pm.
1 Attendance: As per the attendance sheet dated 15/7/95 (copy of which comprises Attachment No.1) with thirty four financial members in attendance.
2 Business of Meeting: As set out in the Notice of General Meeting referred to in Attachment No.2. No other business was discussed or presented to the meeting as required by the Rule 16.3 to hear the members appeal under discipline.
BUSINESS OF THE MEETING AS PER NOTICE
3.1 President opened the meeting and requested all members be seated and advised the nature of the meeting in referring to the Attachment No. 1. the Notice of General Meeting.
3.2 It was moved by G Phillips and seconded by R Daley that the resolutions as stated in the Notice of General Meeting for the 15 July 1995 be put to the meeting in accordance with Rule 16.
3.3 Scrutineers S Singleton and B Gray of Sydney Branch handed out ballot papers. The Chairman requested all financial members eligible to vote to mark papers in either yes or no box on the ballot paper, fold and pass to one of the scrutineers.
3.4 Votes result was: Resolution (a) was passed by the meeting in the affirmative.
Resolution (b) was passed in the affirmative as a Special Resolution by more than 75% of those present and voting.
3.23 J Ryan moved and was seconded by S Strange that a vote of thanks be recorded to the Secretary D Jacobs and our Legal adviser P Terrett …… carried by acclamation.
3.23 It was moved by G Phillips and seconded by C Fogwell that the meeting should now close at 16:18pm …… carried.

55 At the meeting on 15 July Mr McClelland read out portions which he chose from his letters of 29 April 1995 and 4 June 1995. He also read portions which he chose from the statutory declarations. The statutory declarations had not been made available to the members of the Club as a whole, though the committee members who were present on 16 May would, of course, have seen them. Mr McClelland accepts that he spoke for somewhere between 30 and 60 minutes at that meeting, “in bits and pieces”.

56 There was a time, in the meeting, when a member, Mr Keith Ebdon, asked Mr McClelland a question concerning repayment of the money. There are differing accounts in the evidence about the precise question which was asked. In his affidavit, Mr McClelland said that the question concerned whether he had repaid the $170. Mr Jacobs’ evidence is also that Mr Ebdon’s question concerned whether Mr McClelland had repaid the $170. Mr Miller likewise recollects that Mr Ebdon’s question was whether Mr McClelland had paid the money back. Mr Phillips’ recollection is that Mr Ebdon’s question was whether Mr McClelland would pay the money back. Having seen Mr Phillips cross-examined, I do not have a great deal of confidence in his recollection of details of that meeting. However, more importantly, in cross-examination Mr McClelland said that Mr Ebdon had asked “had I and was I going to repay”.

57 There is a consensus amongst these witness (apart from Mr McClelland) that the answer which Mr McClelland gave to Mr Ebdon’s question was “No”. Mr McClelland says that he did not say ”No” in response to that question, but in this respect I reject his evidence.

58 I am satisfied that at the meeting, Mr McClelland made the substance of his position concerning the $170 known, namely, that he had borrowed the money, had not repaid it, and was not going to repay it because he had a cross-claim against the Club for more than that amount. Mr Cane, a witness called by Mr McClelland, recollected Mr McClelland saying words to the effect of “No, I have a cross-claim against the Club”. As well, that was Mr McClelland’s actual position at the time, and there was no reason why he should not explain it to the meeting.

59 The meeting was one where there were some interjections and interruptions. Mr Jacobs described it as, “a lively and rather emotion-packed meeting”. There was an occasion when Mr Phillips spoke over Mr McClelland. There were some other topics, besides the $170, which arose during the course of the meeting. At one time Mr Strange (a Club member with whom Mr McClelland had a dispute going back to 1988) complained about Mr McClelland not having apologised to him about those matters. There was an interjection from someone who wondered aloud what sort of an act it was for Mr McClelland to write to the Department asking them to investigate the Club. Mr Ryan at one stage interrupted Mr McClelland by saying, “We are not a bloody bank!” When Mr McClelland was commenting on Mr Vaughan’s statutory declaration, Mr Vaughan interrupted asking, “Is Mr McClelland saying that I lied under oath.” However, I am not satisfied that there was such disruption at the meeting as to prevent Mr McClelland from communicating effectively the substance of what he wanted to say. Mr Bill Singleton (who was, in mid 1995, the President of the Sydney Branch of the Surf Life Saving Association of Australia, and who was not a member of the Club) attended the meeting to assist with the count of votes. While his recollection of his detail of the meeting had faded in some respects, he gave evidence that, “… he got a very good hearing, I thought.”

60 There was one Club member, Alan Nelson, who spoke at the meeting in support of Mr McClelland.

61 At the meeting, Mr McClelland referred to his recording the borrowings on the beer coaster, said that he had never made any secret of having taken the money, and that recording the borrowings on the beer coaster amounted to “accounting for” the money. Mr Terrett stated, while Mr McClelland was making his submission, that the coaster was not, legally, a proper account of the monies, and should not be considered by the members as Mr McClelland having accounted for the $170.

62 I have earlier mentioned that Mr Bill Singleton was present at the meeting, although not a member of the Club. He and Mr Bill Gray, the Deputy President of the Sydney Branch of the Surf Life Saving Association, had been asked to attend the meeting to supervise the conduct of the ballot. They followed a procedure where they distributed a piece of paper to each member present. Members were asked to mark on that ballot a “Yes” or a “No” to indicate how they voted. When the members had finished writing, Mr Singleton and Mr Gray collected the ballot papers, making sure that they received back the same number of pieces of paper as they had given out. They retired to the back of the hall, where they counted the votes. The procedure that they adopted was to work out, in advance, what number of votes was needed to pass the resolution by a three-quarters majority. They kept counting votes until the affirmative votes which they had counted exceeded that number. They did not count the remainder of the votes. All the votes which they counted were ones in favour of Mr McClelland being expelled. Some votes were cast in Mr McClelland’s favour, by Mr Nelson, Mr Miller, Mr Cane, and by Mr McClelland himself. Those votes were amongst the ballots which Mr Singleton and Mr Gray did not count, once the three-quarters threshold had been passed.

63 Soon after the 15 July meeting, Mr McClelland repaid the $170. He did this after approaching a chamber magistrate to seek some advice about his cross-claim against the Club, and being advised that it was ‘much simpler” if he repaid the money and made a claim of everything that was owed to him.

64 On 20 July 1995 Mr McClelland issued a statement of liquidated claim against the Club, from the Local Court at Sutherland. The claim related to $949.40, made up of the three items he had mentioned in his letter of 29 April 1995, together with an additional $100 being the value of a “Mug of the Week” prize which Mr McClelland said he was entitled to. That claim was settled on 13 September 1995, on the basis that the Club would supply Mr McClelland with two 10 pound gas cylinders, would pay the $46 cost of issuing the statement of liquidated claim, would pay $78 as the “Mug of the Week” prize, and an arrangement was entered into whereby Mr McClelland recognised the trailer as being the property of the Club, but the Club agreed to make it available for Mr McClelland’s use on reasonable notice to the boat captain.

65 On 25 July Mr McClelland initiated an appeal to the Sydney Branch of the Surf Life Saving Association, against the Club’s resolution of 15 July. It appears that nothing was done about any such appeal until November 1995, when Mr McClelland wrote again to the Branch. The Branch, fairly promptly, replied, contending that Mr McClelland had no right of appeal to the Branch. Sporadic disputation about this topic continued until March 1996.

“Further, the earlier cases should not be regarded as deciding that the presence of an appeal to another administrative body is an absolute answer to a departure from natural justice or the standard of fairness. The existence of such an appeal does not demonstrate in itself that the inferior tribunal is at liberty to deny a hearing. But if the right of appeal is exercised and the appellate authority acts fairly and does not depart from natural justice the appeal may then be said to have “cured” a defect in natural justice or fairness at the first instance. Certainly this view has been taken in a number of cases – notably by the Privy Council in De Verteuil v Knaggs [1918] AC 557; Pillai v Singapore City Council [1968] 1 WLR 1278, at 1286 and by the Supreme Court of Canada in Re Clark and Ontario Securities Commission (1966) 56 DLR (2d) 585 and King v University of Saskatchewan (1969) 6 DLR (3d) 120; cf Denton v Auckland City [1969] NZLR 256 and Leary v National Union of Vehicle Builders [1971] Ch 34 where the contrary view was taken. In this conflict of authority my preference is for the approach taken by the Privy Council and the Supreme Court of Canada: first, because the party affected has elected to treat the administrative decision as a valid, though erroneous decision, by appealing from it, in preference to asserting his right to a proper performance by the authority of its duty at first instance; and secondly, because in some cases the court will be compelled to take account of the public interest in the efficiency of the administrative process and the necessity for reasonably prompt despatch of public business and balance that interest against the countervailing interest of the individual in securing a fair hearing – in appropriate cases that balance will be achieved if the individual secures a fair hearing on his appeal.”

(See also Calvin v Carr [1980] AC 574; R v Marks; ex parte Australian Building and Construction Employees and Builders Labourers Federation (1981) 147 CLR 471 at 485; Preston v Carmody (1993) 44 FCR 1 at 14-18 per Wilcox J.)

154 It has been held that, to be able to effect a cure of any earlier defect in procedure, the appeal procedure must be a full re-hearing, at which the person charged has the opportunity to address all matters relevant to both guilt and penalty, and where the appeal body has full power to substitute its own view for that of the decision maker appealed against: Colpits v Australian Telecommunications Commission (1986) 9 FCR 52, at 65.

155 There are numerous authorities to the effect that a decision or recommendation which is beyond power, by reason of breach of rules of natural justice, is not totally void in the sense of being legally non-existent, but is, at least in some circumstances, capable of being appealed against, Calvin v Carr [1980] AC 574, Twist v Randwick Municipal Council (1976) 136 CLR 106 at 116, Forbes v New South Wales Trotting Club Ltd (1979) 143 CLR 242 at 277 per Aickin J (with whom Steven J agreed); Parkes Rural Distributors Pty Ltd v Glasson (1986) 7 NSWLR 332 at 336A-B, 338A-B per Glass JA with whom Samuels and Priestley JJA agreed; Macksville & District Hospital v Mayze (1987) 10 NSWLR 708 at 716-719 per Kirby P, 729D-730D per Mahoney JA (with whom Priestley JA agreed); Clisdell v Commissioner of Police (1993) 31 NSWLR 555.

156 However, the decision about whether the appeal to the meeting on 15 July cures any earlier defect in the proceedings does not depend on the direct application of the decisions in earlier cases. Whether the full opportunity which Mr McClelland was given to address the meeting on both guilt and penalty on 15 July cures any earlier defect, depends in part on his election to treat the earlier decision as a decision within the scope of the rules, by appealing against it, and in part upon the construction of the rules themselves. As well, section 18(3) of the Associations Incorporation Act (see paragraph 105 above) has the effect, it seems to me, that even if an association passes a resolution for expulsion in a way which is prohibited by its rules, that is not a sufficient reason for the expulsion to be invalid.

157 Clause 15.6 of the Rules makes clear that, if an appeal against a decision of the Committee under clause 15.4 is lodged, the decision of the Committee is to be of no effect unless and until a general meeting confirms the resolution. This shows, in my view, that the general meeting has full power to decide matters of both guilt and penalty. If an appeal is lodged, the rules themselves provide that there is no effective resolution of expulsion or suspension until that appeal is dealt with. As a matter of construction, and bearing in mind section 18(3) of the Act, it seems to me that the right of appeal to the general meeting is conferred in relation to not only valid decisions of the Committee under clause 15.4, but also in relation to purported decisions of the Committee under clause 15.4. If there had been a breach of natural justice in the decisions of the Committee, concerning some matter which the rules, properly construed, required to happen, those decisions would be, for that reason, defective decisions, but not (because of section 18(3)) invalid. Even though they were defective, they would be purported decisions of the Committee. When there is an appeal instituted, within the confines of the rules, against such a purported decision, and the General Meeting acting in accordance with the rules decides to confirm the expulsion, that expulsion is effective.

Laches

158 The defendant relied upon two factors, beyond mere delay, in submitting that a defence of laches should succeed. These were that the evidence of Mr Vaughan was not available to it, because of his illness, and that Mr Gray (the second scrutineer at the meeting on 15 July 1995) had died some years before the trial. Because I have come to the view that the expulsion was effective, the decision of the case does not require me to decide whether the plaintiff has engaged in laches of a type which would disentitle him to an order.

1 Suit dismissed.

2 Plaintiff to pay defendant’s costs.

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Last Modified: 06/17/2002