Popovic & Ors v Tanasijevic & Ors (No 4) No. Scgrg-96-279 Judgment No. S351
[1999] SASC 351
•24 August 1999
POPOVIC & ORS v TANASIJEVIC & ORS (NO 4)
[1999] SASC 351
OLSSON J
Introduction
Following publication of my reasons for decision in Popovic & Ors v Tanasijevic & Ors (No 3) [1999] SASC 339 I duly entertained submissions from counsel concerning the detailed basis of the defendants’ contention of no case to answer. Inter alia, this has enabled me to obtain a full appreciation of the nature of that contention and the issues arising in relation to it, in manner contemplated by the above reasons. I am thus in a position, properly, to determine whether it is appropriate, in the circumstances, to entertain a no case submission or to categorise it, for the purpose of coming to a conclusion as to whether the defendants ought to be put to their election not to call oral evidence, in the event that the application should be entertained.
In the reasons for decision previously published by me (Popovic & Ors v Tanasijevic & Ors [1999] SASC 300, Popovic & Ors v Tanasijevic & Ors (No 2) [1999] SASC 334) I have already given a broad outline of the nature of the present proceedings and their procedural development to this time. Against that background I therefore proceed, directly, to a consideration of the issues now sought to be agitated by Mr Ross-Smith, of counsel for the defendants.
As I have indicated in my earlier reasons, a primary argument advanced by Mr Ross-Smith is to the effect that this action, which was commenced on 31 January 1996, cannot succeed, on any possible view of the facts or law, because none of the three plaintiffs has any standing to obtain the relief sought. As the situation of each of the three plaintiffs is different it is necessary to consider what is put against them in turn.
He also seeks to mount other challenges, to which I shall come in due course.
I will therefore commence with a review of relevant aspects of the evidence as it stands on closure of the plaintiffs’ case.
Relevant Historical Background
Over a period of some decades a significant number of persons migrated from the Balkans region and settled in South Australia. Within the community they formed in this State they have established a series of bodies designed to address their cultural, religious, welfare, sporting and other general needs. The evidence to date suggests that, dependent on definition, this community totals at least about 2500 persons. It may be substantially larger. I note that this number may not be reflective of all Serbians living in South Australia who were either born in Serbia or have parents of Serbian extraction. As was pointed out in evidence there are people who may have declared themselves to be Serbian, for example, where they may not, themselves, have Serbian forebears, but have married a person of Serbian background.
On 15 July 1976 a body known as the Serbian Community of South Australia Incorporated (the “SCSA”) was incorporated pursuant to the provisions of the Associations Incorporation Act 1956, as amended to that time. I will, collectively, refer to that statute and the later statute (of the same name) which replaced it, as “the Act”.
Article 2 of the Constitution of the SCSA, as adopted, dealt with membership. It stipulated that its initial membership was to be composed of:-
“a Religious,
b National,
c Cultural & Educational,
d Humanitarian,
e Sporting.
......... Organisations which are voluntarily affiliated with the formation of this Community.
The affiliated organisations are as follows:
1...... Free Serbian Orthodox church “St. Sava” Mary Street Hindmarsh Inc.
2 Jugoslav Ex-Servicemen’s Association “Draza Mihailovic”
3 Serbian National Defence Council “Govilo Princip”,
4 Serbian Cultural Club “St. Sava”,
5 Serbian Sisters Association “Kraljica Marija”,
6 Serbian Ex-Servicemen’s Association,
7 Serbian Folklor Group “Oplenac” and
8 Serbian Chess Club.”
Furthermore, Article 7 provided that every Serbian organisation “with the same aim as this Community is eligible to be a member of the Community”. Future Serbian organisations brought into existence as well as individual Serbians, could, by written application become members of the SCSA. Quite clearly a number of such organisations were admitted to membership over time and paid membership fees, although the relevant detailed documentation concerning their actual admission was not forthcoming.
The Constitution went on to specify the objects of the SCSA in these terms:-
“The Object and Task of this Community is as follows:
1...... To establish, maintain and promote brotherly relationships with member organizations and through them all Serbians in S. Australia.
2To establish, maintain and promote brotherly relationship with other Serbian organizations outside S. Australia whose objects and task are the same as ours.
3...... To establish, maintain and promote good relationships with other Ethnic groups in S. Australia
4To establish, maintain and promote good relationships with Government Institutions and bodies in S. Australia.
5...... To promote Serbian culture and Traditions,
6To help and promote welfare of Serbian Youths,
7...... To help new comers to S. Australia to integrate into the Community.
8To help aged and incapacitated people.”
The committee of management was constituted of representative members of each of the affiliated organisations referred to in Article 2. There was to be a President, Vice-President, Administrative Secretary, Secretary-General or Public Liaison Officer, Treasurer and three other members. The drafting of Article 5 is by no means clear as to whether any organisation admitted to membership subsequent to 15 July 1976 was, automatically, entitled to representation on the Committee. On balance I consider that it was not, because of the specification of the numbers of committee members. It seems to me that the words in brackets at the end of Article 5 (namely “One member of each affiliated organisation shall be on the Committee”) essentially relate to the founding organisations referred to in Article 2. This too would suggest that the Committee was to be representative of its affiliates.
It is common ground that the SCSA was intended to act as an umbrella organisation for all Serbian Clubs and bodies in this State. Its original Constitution and Rules have not been changed and, so far as I can determine, it has therefore never had any members other than such groups.
During 1986 it was apparently suggested to the SCSA by the Office of the Commissioner for the Ageing that it might well consider purchasing the “Norwood Nursing Home”, which was owned by a company known as “Airlie Pty Ltd” (“Airlie”).
Negotiations in relation to the purchase of the Norwood Nursing Home took place over a period of time. It was finally agreed that the purchase would be a joint venture between the Hungarian Caritas Association (“Caritas”) and the SCSA in light of the fact that significant federal grants became available to make the proposal a practical reality.
As part of the negotiation process a steering committee was established which equally reflected the Serbian and Hungarian interests. The evidence establishes that Messrs Bukva, Tanasijevic and Jovicevic as well as Ms Radmila Turner represented the Serbian interests on the steering committee. Moreover, Ms Helena Jasinksi, a solicitor, provided legal representation as to the purchase on behalf of the Serbian interests. The Hungarians were separately represented (exhibit D2).
While the above negotiations were taking place, on 3 November 1986, a new entity was incorporated under the provisions of the Act. (By that time the 1956 statute had been replaced by the more comprehensive enactment of 1985.) This was the defendant Serbian Community Welfare Association of South Australia Incorporated (the “SCWA”). Messrs Bukva, Tanasijevic and Jovicevic gave instructions to Ms Helena Jasinski to draft the Constitution and Rules (T217). Although Radmila Turner had been involved in the purchase of the Norwood Nursing Home, she gave evidence to the effect that she had no involvement in the establishment of the SCWA or any instructions given to Ms Jasinski. The only dealing she said she had with Ms Jasinski was with the Norwood Nursing Home. (T399)
The initial Constitution and Rules of the SCWA, as registered, stipulated in Article 4, that its membership was to comprise those persons who were the committee of the SCSA. It was also provided that the SCWA was to be “an affiliate” of the SCSA.
It followed that, in practical terms, the various bodies who were members of the former also controlled the latter, by virtue of their appointments to what the management committee of both the SCSA and the SCWA. This was brought about by Article 8 of the original rules of the SCWA, which stipulated that the members of the committee of the SCWA should be comprised of the President, Vice-President, Administrative Secretary, Secretary General (ie the Public Liaison Officer), Treasurer and four committee members who hold the same office in the SCSA. (There appears to have been some inconsistency here, because the Constitution and Rules of the lastmentioned body only provided for three, and not four, ordinary members.) It is obvious that, at least in de facto terms, the SCWA was intended, in effect, to be a subsidiary or agency of the SCSA.
Moreover, the Constitution and Rules of the SCWA specifically spoke of, inter alia, the purchase of the Norwood Nursing Home. This objective and purpose of the SCWA was contained in Article 2 clause (n). Within that clause it was mentioned that there was a possibility of entering into a joint arrangement, on an equal basis, with Caritas.
On 20 November 1986 the Constitution and Rules of the SCWA were amended in a number of fairly formal respects, as appears from Exhibit P2. These amendments were duly registered. No issue has been raised concerning them.
As at 3 November 1986, the office bearers of the committees of management of both corporate entities are said to have been:-
President - Vladan Tanasijevic
Vice-President - Ljubo Bukva
Public Liaison Officer - Rade Jovicevic
Treasurer - Velastimir Mladenovic
[There is no present evidence as to whether there were any other members of the Committee in office at that time.]
The evidence establishes that, over time, the SCWA acquired the shares of Airlie in concert with Caritas and thus an interest in the Norwood Nursing Home. Each purchased 50% of the issued shares in Airlie. At a later stage the SCWA separately developed a second aged care facility at Pennington with the aid of federal grants. It purchased a site from the Housing Trust at 19 Windsor Avenue Pennington and, thereafter, built and operated what is known as the Pennington Aged Care Village (the “Pennington Village”). This enterprise got under way (at least as to initial planning and funding) in about mid 1990 and the Pennington Village commenced operations some time in March 1993.
A document within exhibit P5 bearing a handwritten date 24/10/1991, represents that, as at such date, the Committee of the SCWA included, or consisted, of:-
President Vladan Tanasijevic
Vice-President Andrija Mladenovic
General Secretary Nenad Pusonjic
Administrative Secretary Ratka Rakic
Treasurer Wendy Pusonjic
However, it is far from clear, on the evidence, as to how, it is said, those persons came into office. The evidence of various witnesses gives rise to the prima facie inference that, at least on a number of occasions, Tanasijevic simply assumed control of the corporate undertaking and tended, informally, to co-opt persons to various offices. The evidence of Radmila Turner is instructive in that regard. She says that she was initially requested to form part of the steering committee related to the consummation and implementation the purchase from Airlie; and was then, informally, “accepted” as a member of the committee of the SCWA. It is her evidence that Tanasijevic told her that she was on the committee, although she said that she was “positive” that she was never elected at any meeting of the SCWA (T400).
Evidence bearing on Status of Plaintiffs
The first plaintiff Popovic is currently holding office as caretaker president of the SCWA, pursuant to an interlocutory order of this court.
According to the evidence led on behalf of the plaintiffs, his initial involvement with any management activities of the SCWA appears to have been as a consequence of the defendant Tanasijevic inviting him, some time in 1991, to join what was originally known as the “board of directors” for the then proposed construction and operation of the Pennington Village. This seems to have been an informal group, not provided for in the Constitution and Rules of the SCWA, which accepted responsibility for the day-to-day management of the construction of the Pennington Village and, subsequently, its later operations. It was later re-titled the “Management Committee” of the Pennington Village at its meeting held on 23 January 1993, shortly prior to the opening of the facility. This remained a quite separate body from the general committee of management of the SCWA, although there was an overlap of membership.
The present state of evidence touching on both the membership of the SCWA and its committee of management is, to say the least, both confusing and difficult to assess. Whatever else may be said, it must be concluded that the general records of the SCWA and its administration have left much to be desired. A series of important questions can only be resolved by resort to oral evidence, some of it obviously quite contentious.
As at the present time the purported membership records of the SCWA, as produced in evidence, require careful assessment as to their provenance and authenticity.
Exhibit P33 purports to be a file of membership applications which appears to have been brought into existence by the defendant Tanasijevic. One of the documents on it is a member application form bearing Popovic’s name and a date 15 May 1991, but which is otherwise incomplete and unsigned. It is set out on letterhead which, on the evidence, could not possibly have come into existence before about early 1993.
Equally mysterious is the provenance of exhibit P35. This purports to be a Xerox copy of what is titled the “Members Register Book” of the SCWA. As I understand the evidence the original, of which exhibit P35 purports to be a copy, was produced to an inspector from the Corporate Affairs Commission some time in 1994. The witness Ristivojevic, the Administrator of the Pennington Village, testified that she recollects the return of the document by the Commission to her office. She then handed it, together with other material, to Nenad Pusonjic, who requested her to do so. Pusonjic was a member and the general secretary of the general committee of management of the SCWA, at the time.
Ristivojevic’s evidence was to the effect that the original of exhibit P35 seemed to be brand-new in appearance, notwithstanding that it was said to contain records extending back to the inception of the SCWA. She also said that all of the entries appeared to have been made in the same ink and were in the same handwriting. The book exhibited the appearance to her, at that stage, of having recently been written up.
Be that as it may, Exhibit P35 purports to show that Popovic was recorded as a member of the SCWA for the years 1992 to 1994 inclusive. As emerges from the exhibit, the record does not extend beyond the year 1994.
Confusion appears to be worse confounded by the fact that the document P76, which was referred to in the course of evidence, purports to be a membership fee record of payment spanning the years from 1991 to 1996 and contains entries only related to corporate organisations. However, it may well be that this document in fact relates to the SCSA rather than the SCWA.
Nevertheless the evidence as a whole, as it currently stands, indicates that, at least from 1992, Popovic has, at all times, been generally recognised as a member of the SCWA, without challenge.
The document forming portion of exhibit P5 and bearing the date 24/10/1991 previously referred to, purports to list Popovic as a member of the board of directors for the Pennington Village. However, he is not listed as a committee member of the SCWA. The latter committee is said, at that time, to have consisted of the defendant Tanasijevic, Andrija Mladenovic, Nenad Pusonjic, Ratka Rakic and Wendy Pusonjic.
Critical to the ultimate resolution of the issues between the parties is a consideration of two sets of minutes. They are expressed in almost identical terms and purport to evidence the conduct of two meetings, both said to have commenced at 3.00 pm on 30 October 1993 at the Pennington Aged Care Village and to have concluded at 4:30 pm on the same day. These two documents comprise exhibits P11 and P12 respectively.
Exhibit P11 purports to comprise minutes of a meeting of the committee of the SCWA, whilst exhibit P12 purports to evidence a meeting of the members of that Association. Each meeting was said to have "passed" quite important identical amendments to the Constitution and Rules of the Association related to its membership and committee of management.
In the course of his evidence concerning the two alleged meetings Popovic testified that, on the occasion in question, a meeting was held and that he attended it. It was, he said, his understanding, at the time, that the gathering was intended to be a combined meeting of the SCWA committee and the management committee of the Pennington Village. He told the court that no prior notice of the meeting was received by him and that he was simply requested verbally by the defendant Tanasijevic to attend. He confirmed that, as recorded by the minutes, Ratka Rakic was absent. However, he had no memory of Wendy Pusonjic being present but was not certain of that fact. The witness Radmila Turner was adamant that Wendy Pusonjic was not, in fact, present.
The evidence of the witness Ristivojevic, as to the convening of the meeting of 30 October 1993, is to the effect that, a couple of days prior to that date, Tanasijevic and Nikola Jovanovic came to see her at her office to book a room at the Pennington Village as the venue for the meeting. They told her that she would not be required to attend and take minutes, as she normally did for all meetings, because what was proposed was merely an informal meeting to discuss possible amendments to the Constitution of the SCWA. She testified that both Tanasijevic and Jovanovic said that no minutes would be taken at all (T1146). She asserts that she did not see either of the purported minutes comprising exhibits P11 and P12 until shortly prior to the trial of this action. Nor did she see the document purporting to constitute the amended Constitution (exhibit P50) until about the same time.
The documentation tendered in evidence purports to indicate that, at some stage, Popovic did, apparently, become a member of the general committee of management of the SCWA. For example, exhibit P15, which includes a copy of the financial statements for the SCWA tabled at its 1993 Annual General Meeting records that he was a member of the committee as at 30 June 1993.
Exhibit P14, which seems to be a copy of the minutes of the management committee meeting held on 9 June 1994, also shows Popovic as being a member of the committee of the SCWA as at that time. If it be accepted that Popovic did lawfully become a member of the management committee of the SCWA, then nothing has been placed before me to indicate that he subsequently ceased to have that membership prior to the initiation of the present proceedings. Popovic himself has no memory of becoming a member of the management committee of the SCWA.
It is also important, for present purposes, to trace the nexus between Popovic and the SCSA. Unlike the records pertaining to the SCWA, those related to the SCSA indicate that it has not, at any time, purported to admit other than corporate members which are organisations within the Serbian community. It follows that Popovic has never been listed as a member of that body.
However, he presently claims to be the President of the committee of management of the SCSA. It is said that he has held this office since 10 December 1995.
The evidence bearing on the composition, over time, of the committee of management of that body is not without its difficulties. That placed before me to date suggests that, at times, the management and activities of the SCSA became almost dormant, particularly after the incorporation of the SCWA. The witness Ardalich, the Secretary of the Serbian Australian Senior Citizen Club Inc (the “SCC”), asserted that, for a time, the SCSA actually refused to accept membership subscriptions and did not collect them.
Given that situation, there seems little reason to question the membership records in relation to the SCSA. These appear to have been maintained in an appropriate manner. There is a clear, ongoing record of payment of relevant membership fees.
Popovic contends that he has, at all material times, been a delegate of the SCC to attend meetings of the SCSA since it was accepted as a member of the latter body. Exhibit D12 indicates that the SCC was incorporated in mid 1983. Evidence has been given that membership fees were paid by it to the SCSA regularly from 1986 up to the present time, save in respect of the year 1993.
It was put to Popovic, in cross examination, that, as at 24 October 1991, when what was described as an extraordinary Annual General Meeting of the SCSA had been convened, he was shown in the relevant documentation to be a member of the management committee of that body. In that regard he was referred to the documentation comprising MFI D20. Whilst I did not take him to deny his status as of that time, he had no present recollection of actually attending the meeting.
What is clear is that, over a considerable period of time, up to at least late 1995, the defendant Tanasijevic held office, or purported to hold office, as President of the SCSA. The evidence suggests that, for some period prior to late 1995, Annual General meetings of that body had not been convened in accordance with its Constitution and Rules. So it was that a group of delegates of the members of the Association demanded, by requisition, that the defendant Tanasijevic convene an Annual General Meeting by no later than 11 November 1995. He did not to comply with this request, with the result that the requisitioning group, itself, purported to convene and conduct an Annual General Meeting of the SCSA on 3 December 1995. As they clearly did not have power to do so I do not linger to consider what occurred at that meeting.
However, the evidence indicates that the defendant Tanasijevic then convened what he described, in exhibit P43, as “the Annual General Meeting” of the members of the SCSA, held on 10 December 1995. A letter of invitation was sent to the members on 20 November 1995 (exhibit P45).
According to the minutes of the meeting (exhibit P44) (which, inaptly, refer in their title to “A SPECIAL GENERAL MEETING”, although they refer to minutes from the previous AGM not being presented), a somewhat heated discussion took place, although the precise reason for the contention does not appear.
The minutes record that the then pre-existing committee was “dissolved” and re-placed by a new committee, of which Popovic was the President. No doubt issues will arise as to the validity of what then transpired. However, the fact remains that, since that time, Popovic has purported to hold office as President of the SCSA and no steps have been taken to effect a legal challenge to that situation.
I pause here to note that Article 8 of the Constitution of the SCSA, inter alia, provides that an Annual General Meeting shall be “composed of two members from each member organisation and other persons as members” and “be conducted by election chairman”. It also stipulates that “The Annual General Meeting disolves [sic] old and elects the new Committee.”
[It is a matter for argument as to whether, on the proper construction of that provision, it is intended that, on the holding of an Annual General Meeting, there is an automatic dissolution of the old committee, or whether some formal resolution is required.]
I next turn to the situation of the plaintiff Rade Jovicevic.
It is initially to be noted that, at the Annual General Meeting of the SCSA convened by Tanasijevic on 10 December 1995, the members present, having resolved to dissolve the former committee, then resolved, inter alia, to elect this plaintiff to the position of a vice-president of that body. He purported to hold that office without challenge, until he resigned from it about a year ago.
It is not entirely clear as to when Jovicevic first became involved in the affairs and activities of the SCSA, but it does appear that he was a delegate to it on behalf of the Serbian Folklorik Group Oplenac by no later than mid 1994. This group is recorded in the Constitution and Rules of the SCSA as a founding affiliated organisation and member.
In the course of his evidence, this plaintiff testified that he was also a delegate, at least at certain times, of the Serbian Orthodox Church, St Sava, at Woodville Park.
Jovicevic testified that he became general secretary of the SCSA some time in 1986, at which time he was involved as a delegate of the lastmentioned church. At that time the President was Tanasijevic, the vice-president was the witness Bukva, and the Treasurer Velastimir Mladenovic. Jovicevic resigned from his office in about March 1987.
This plaintiff confirmed that he was involved (together with Tanasijevic and Bukva) in giving instructions to Helena Jasinski for the preparation of the Constitution and Rules of the SCWA. It is his memory that, at the time of the giving of the instructions, he was still the secretary of the SCSA. He also understood that, upon the incorporation of the SCWA, he automatically became Secretary of the new body.
I have been unable to locate any documentary record indicating who authorised the incorporation of the SCWA or how the instructions for that event came about. Moreover a review of the evidence of Bukva and Jovicevic is relatively unenlightening on this topic. They do not appear ever to have been examined or cross examined as to this in truly definitive terms.
In the course of his evidence Jovicevic, in referring to the three men giving instructions to Helena Jasinski, said:-
“Q... Do you recall why the Welfare Association was created, was established.
A.When we look at constitution of Serbian Community of South Australia there wasn’t sufficient enough - didn’t encompass all the clubs and members that at time members of Association of Serbian Community, so instead of changing that rules we decided to create new rules. That was the reason probably third or fourth importance, but first was we needed an association which could be tax deductible and an association that could issue receipts to people. If I donate money to the Association I can claim on tax, and that was mainly objective why we decide to create new one.
HIS HONOUR
Q.You wanted to create a body which had, as a specific role, running the nursing home.
A...... Yes.
XN
Q...... Then, therefore, you and Mr Tanasijevic and Mr Bukva instructed Helena Jasinski to incorporate a new association, which turned out to be the Welfare Association.
A.Yes.”
He also testified:-
“Q... You’ve said that initially there were you and Mr Tanasijevic and around about that time Mr Bukva. Is it true that, for some time you were the only three that were actively pursuing this matter [i.e. the proposed joint venture with Caritas on behalf of the Serbian community].
A.Yes.”
It was the evidence of this witness, as to which he was not challenged, that Tanasijevic was the person who played the leading role in seeking to promote the joint venture and set up the SCWA as the vehicle to implement it. It was the latter who played the major role in the raising of necessary funds.
Jovicevic testified that Tanasijevic had told him that they needed to raise $90 000 if they wanted to purchase the Norwood Nursing Home (T169). This testimony is supported by the evidence given by Bukva (T354) and Turner (T402). Moreover, Turner gave evidence to the effect that they could only raise $55 000 and that they needed to borrow the balance from the Caritas - an amount that has since been repaid.
Jovicevic further said that, in the end, it became a matter of urgency to bring the SCWA into existence to enable the joint venture and the associated purchase of the Norwood Nursing Home to be consummated.
Jovicevic testified that his written English was not good at the time and that he communicated orally with Ms Jasinksi. She ultimately prepared the relevant documentation and he signed the necessary application and declaration. He claims that he did not read the papers as lodged, but relied on Ms Jasinski. She had previously explained the general effect of them.
It is not entirely clear as to who actually lodged the registration papers. In cross-examination Jovicevic said that he lodged them with the Corporate Affairs Commission (T217). On the other hand it can be inferred from Bukva’s evidence that it was Ms Jasinski’s role to lodge the documentation (T387).
The evidence of the witness Bukva was to much the same effect, save as to the question of lodgment.
Both of these witnesses aver that the Constitution and Rules did not express the instructions jointly agreed upon and given by Tanasijevic and themselves. Firstly, the members of the SCWA were to be those organisations for the time being members of the SCSA. Secondly, the committee of management of the former was, ex officio, to be the committee of management of the latter.
Bukva said that there were several meetings with Ms Jasinski and that one or more drafts were prepared by her, which she discussed with them. However, he testified that a good deal was left to her, because the instructors had little knowledge of what, technically, needed to be contained in the Constitution and Rules.
The precise status of the three instructors was never adverted to in either examination or cross examination of Jovicevic or Bukva. In absence of other evidence the prima facie inferences which may well arise, given the whole of the evidence currently before me, appear to me to be:-
the whole initiative related to the joint venture and the creation of the SCWA was that of Tanasijevic;
no “association” in fact existed prior to actual registration of the SCWA;
no potential members’ meeting of any type was held to form, or to resolve to form, the SCWA. It was the brain child of the triumvirate led by Tanasijevic and urgently brought into existence to enable the joint venture to proceed; and
the creation of the SCWA was not the product of any meeting of the members of the SCSA, nor of its committee of management. In instructing Ms Jasinski, the instructors did not purport to act either as delegates or agents of the SCSA, its members, or its committee of management. The instructors may well have acted of their own initiative.
These are not finally concluded views, but simply appear to be obvious possibilities for present purposes.
It is, of course, possible that any further evidence led may cast a quite different complexion on the situation. However, it cannot escape comment that no suggestions to the contrary of the above prima facie inferences were ever put to either Jovicevic or Bukva in cross examination.
These tentative inferences assume considerable importance in light of certain of the submissions now made by Mr Ross-Smith.
The procedure for incorporation under the Act is unusual. All that is required is lodgment with the Corporate Affairs Commission of an application exhibiting the rules of an association, together with, inter alia, a verifying statutory declaration. In the case of the SCWA the application and declaration were both completed and signed by Jovicevic on 24 October 1986 (see exhibit P2).
These simply aver that he was a person “duly authorised by the association to apply for incorporation ... ” of it; and that the SCWA “is considered to be an association within the meaning of the Act by virtue of s 18(1)(a) ... ” [ie that it was an association formed for a religious, charitable or benevolent purpose].
Unlike the situation upon formation of a limited company under the Corporations Law, which envisages the subscribing of the Memorandum and Articles by the founding shareholders, there is no similar requirement on registration of an Association. No one subscribes the relevant Constitution or Rules.
Additionally, the Corporations Law brings a corporation into existence by the actual act of incorporation. This is to be contrasted with the Act, which assumes the pre-existence of a relevant, informal body prior to incorporation. This then becomes incorporated on compliance with s 18 and s 19.
“Association” is simply defined in the statute “as including a society, club, institution or body”. Section 19(1) stipulates that the application must be made by a person duly authorised by the association (ie as a body already in existence) to do so.
In the instant case there is a total dearth of evidence as to how the necessary association was brought into existence prior to the application for incorporation, or whether, in fact, it was.
When Jovicevic ceased as secretary of both the SCSA and the SCWA in 1987 he handed over the minute records and other books, which had been maintained by him, to the incoming secretary, Nicola Jovanovic.
Jovicevic did not testify that he was a member of the SCWA post 1987, nor is he shown as being a member in any of the relevant documentation, including exhibit P35.
The evidence before me reveals that the 1993 Annual General Meeting of the SCWA was held on 14 August 1994. Despite the fact it was incorporated as long ago as 1986, this appears to have been the first Annual General Meeting ever convened by Tanasijevic, as its President. Jovicevic attended it as a delegate of the Serbian Folklorik Group Oplenac (a member of the SCWA), but says that he was unaware of any written notice of the meeting. He asserts that he was merely advised by Tanasijevic that it would be held.
It was his evidence that he spoke at the meeting concerning the method of altering the Constitution and Rules and the need for adequate notice to, and consideration by, the constituent organisations of the SCSA. He also questioned the attendance and participation in the meeting by persons who he did not consider to be members. Jovicevic testified that, when these issues were raised, Tanasijevic, as chairman, told him to leave the meeting. He in fact did so. As I understand the situation, it is alleged on behalf of the defendants that certain amendments to the Constitution and Rules of the SCWA were thereupon passed.
Although there is, presently, no evidence of its due distribution, exhibit P16, discovered by the defendants, purports to be a notice convening the 1994 Annual General Meeting of the SCWA. One of the items of business is to consider certain limited amendments to the Constitution and Rules. The amendments conferred power on its general management committee to form sub committees which, with the former’s consent, could open and operate separate bank accounts.
Notes to the proposed amendments indicated that they were designed to allow the sub-committees to independently look after specific projects (eg hostels). The purpose was to permit the Pennington Village to operate more flexibly. In a sense this was designed to regularise what had already actually occurred in relation to the day to day management of the Pennington Village.
The minutes of the second Annual General Meeting held on 14 November 1994 indicate that the amendments were duly passed (exhibit P17). However, neither the convening notice nor the minutes refer to any previous purported amendments to the Constitution or Rules on 30 October 1993, or purport to confirm them.
The minutes state that the then membership of the SCWA was 28 individual members and 10 organisations. They purport to record that 20 individual financial members actually attended, as did 8 delegates of member organisations and six proxy delegates.
How that membership can be aligned with what the defendants now aver was the duly amended membership rule in existence at that time is more than a little difficult to perceive. However, more of that later.
Jovicevic attended and took part in the Annual General Meeting of the SCSA said to have been held on 10 December 1995. At that meeting a resolution was passed appointing him as a vice-president of that Association.
As I understand the situation it is the plaintiffs’ case that, as of that time, he automatically became a member and vice-president of the SCWA by virtue of what is said to have been the continuing provisions of its original Constitution and Rules as at that time, if those rules do not fall to be rectified. He was permitted to attend and take part in the Annual General Meeting of the SCWA held on 21 December 1995 and adjourned over to 16 January 1996.
What occurred on the lastmentioned two dates is set out in some detail in the minutes relating to them, copies of which comprise P31 and D21 respectively.
Without doubt both the initial and the adjourned meetings were somewhat heated. Very real questions arise as to whether all those present and participating were, indeed, entitled, lawfully, to claim to be members of the SCWA.
On the first occasion Tanasijevic, who then claimed to be the then current President of the SCWA, declined to occupy the chair. Popovic was thereupon elected as chairman of the meeting. Discussion took place about the appointment of a Minute Secretary for the AGM. Mile Gostic, the Secretary of the SCWA, declined to be the Minute Secretary. It was then resolved that the witness Ristivojevic would fill the position for the meeting.
When the adjourned meeting resumed Tanasijevic sought to occupy the chair, whereupon those present disagreed and resolved that Popovic should continue to chair the meeting. Ristivojevic was confirmed as continuing Minute Secretary. Upon that resolution being passed Tanasijevic and other persons claiming to be current members of the management committee of the SCWA walked out of the meeting. Popovic thereupon occupied the chair and a series of resolutions were thereafter proposed and passed.
Amongst these was a resolution that a new committee be elected and the old committee “be dissolved”. The meeting also resolved to rescind the purported amendments to the Constitution and Rules of the Association asserted to have been made (or at least confirmed) on 14 November 1994, as to membership qualification. The meeting also purported to alter the membership rule to provide for each of the two main church bodies to appoint five delegates for the purpose and that such rules could only be subsequently amended at an AGM with a 95% majority.
According to the originally drafted Constitution and Rules of the SCWA, the management committee of the SCSA for the time being was, ex officio, the management committee of the SCWA and the members of the SCSA were to be members of the SCWA. Under the purported amendments alleged to have been made on 30 October 1993 it was provided that the members “of the Management Committee shall be elected by the members of the Association for a term of three (3) years at an Annual General Meeting”. These amendments contained no transitional provisions.
The minutes for the 1993 Annual General Meeting of the SCWA contain these items:-
“8. DISOLUTION [sic] OF THE COMMITTEE
The Chairman invited comments regarding the Committee. Since another AGM will be organised within the next couple of months, is there a need for this committee to be disolve [sic]. Mr Jovicevic moved a motion, seconded by Mr Marjan that this committee continue until the next, 1994 AGM. This motion was carried forward by acclamation.
9. ELECTION OF THE NEW COMMITTEE
On behalf of the Committee, Mr Tanasijevic accepted the nomination. The same committee will continue to lead the Association until the next AGM, to be held sometimes in September 1994.”
The expression of these minutes is more consistent with the provisions of the Constitution and Rules as originally drafted, which reflected the scheme of the Constitution and Rules of the SCSA. At any event there is no reference to the three year terms stipulated in the alleged 1993 amendment. Indeed, what is recorded as having been said by Tanasijevic is quite inconsistent with such a situation.
The obvious inference to be drawn is that those persons previously in office (many, if not most, of them for a very lengthy period of time) merely continued.
The content of the minutes of the 1994 Annual General Meeting, held only some three months later, is even more curious. It was there recorded:-
“9. DISSOLUTION OF THE COMMITTEE
The Chairman warned that according to the Constitution, the AGM has power to dissolve the present committee and elect a new one. Officially, this Committee has been dissolved. CARRIED.
10. ELECTION OF THE NEW COMMITTEE
Mr Ljubomir Arsic moved (seconded by Mr M Ivanovic and Jankovic) that the former committee stand for re-election. Mr Tanasijevic accepted the nomination. Mr A Mladenovic (former vice-President) declined the offer stating that due to his business he can no longer participate at a committee level. The Chair proposed that the work done by Mr Andreja Mladenovic be recognised and documented in the Minutes. Those present approved and responded by ovation, honouring the work done by Mr Andreja Mladenovic to the Community.
Mr Pusonjic was elected to the position of the vice-President - unanimously; Mr M Gostich to the position of the Secretary - unanimously; Mrs Pusonjic to continue as the treasurer and Mr N Jovanovich to continue as the Association’s Public Officer - unanimously. Two other members were elected into the Committee, as follows: Mr Slobodan Stojanovic, Dr Dragan Grubor. CARRIED.
This Committee will continue to lead the Association until the next AGM. CARRIED.”
An obvious possible conclusion is that what was said by Tanasijevic was not only in discord with the alleged 1993 amendments, but also the provisions of the original Constitution and Rules of the SCWA.
Under the alleged 1993 amendment it was said that members of the management committee were to be elected at relevant Annual General Meetings for terms of three years. It was not open to an Annual General Meeting to dissolve an existing committee.
Under the original Constitution and Rules of the SCWA the committee of the SCSA was, ex officio, that of the SCWA for the the time being. The concept of dissolution was, of course, enshrined in the Constitution and Rules of that body - but at the instance of its Annual General Meetings.
It follows that it may well be that what occurred was, prima facie, invalid. The plaintiffs, in effect, contend that this is fairly indicative of what the other evidence to date strongly suggests - that Tanasijevic simply ran the two associations according to his own whim and with little regard to the relevant legal technicalities. No evidence to suggest otherwise has yet come to light.
The third plaintiff, the SCC (sometimes referred to as the “Serbian Pensioners Club, Kilkenny” ) appears, on the evidence, to have been brought into existence on 19 July 1983. Application for its incorporation, under the Act, was made on 21 June 1983. (See exhibit D12.)
The objects of the SCC were stated in quite brief terms. They read as follows:-
“(a).. To encourage and promote the knowledge and appreciation of music, art, and literature among members;
(b)To encourage members to participate in athletic games and sports in which human beings are the sole participants, and to promote such sports;
(c).... For such objects to provide accommodation and other facilities for the use of members; and
(d)To do such other things incidental to the above which the club may consider desirable for its purpose.”
Article 3 of the Constitution empowers the SCC to do all such acts and things as may be calculated to attain or assist in the attainment of its objects as it, in its discretion, may from time to time decide.
It may be said that such objects were rather curious for what was intended to be a pensioners’ club for persons over 55 years of age.
According to the witness Ardalich the SCC has, from 1986, been an affiliate and member of the SCSA. As already emerges, the documentary material tendered indicates that it has paid membership fees to that body in respect of all years from 1986 to date, except in respect of the year 1993.
Its membership with the SCWA is less clear.
Exhibit P15, which purports to be a copy of the minutes of the Annual General Meeting for 1993 of the SCWA (held on 14 August 1994) and signed by the defendant Tanasijevic records that:-
“Mr Tanasijevic called out the names of the full members and verified delegates from the member organisations ... ”
Appendix “A” to the minutes lists all of the organisations and persons concerned. These include the SCC.
As previously mentioned exhibit P17 purports to be a copy of the minutes of the second Annual General Meeting of the SCWA held on 14 November 1994. These record the membership as then consisting of 28 individuals and 10 organisations. An Appendix “A”, listing those attending or represented, is said to be attached. However, this is missing from the document in evidence and its absence is unaccounted for.
The purported “members register”, a copy of which comprises exhibit P35, contains no reference to the SCC, nor does the content of that register accord with Appendix “A” to exhibit P15, certified by Tanasijevic. This, coupled with the evidence of the witness Ristivojevic, tends to pose a very large question mark as to the provenance and authenticity of exhibit P35.
Curiously, the witness Ardalich was never definitively examined or cross-examined concerning the topic of the SCC membership of the SCWA. He merely said “We only know about the Serbian Community Association and for us this association and Serbian Community Association or Welfare Association are all the same” (T530). He had preceded that comment by saying, in response to a question as to who were the members of the SCWA, “All the Serbian national organisations including Sports Club Beograd and Serbian Orthodox Church, Hindmarsh” (T530).
All that can be concluded with confidence, at the close of the plaintiffs’ case, is that there is some positive evidence of the recognition by the SCWA, by no later than 14 August 1994, of the SCC as one of its members.
All of the various historical events to which I have referred (other than the making of caretaker appointment to which I have also mentioned) occurred prior to the institution of present proceedings as recited above.
Pleaded bases of the plaintiffs’ claim
The pleadings in the these proceedings are lengthy and convoluted. However, the essential thrust of them, as to the relief claimed, is clear. It may be summarised thus:-
the plaintiffs seek a range of declarations from the court, (pursuant to the provisions of s 31 of the Supreme Court Act 1935), touching on the following topics:-
(a) .. an alleged failure by the SCWA to hold Annual General Meetings, in contravention of its own Constitution and Rules and also s 39 of the Act;
(b) the purported conduct of alleged committee and members' meetings of the SCWA said to have been unconstitutional, invalid and of no lawful effect;
(c) .. the alleged payment of moneys by the SCWA to the defendant Tanasijevic and otherwise unlawfully and without proper authority;
(d) as to who have, at relevant times, been the lawfully appointed or elected officers or members of the management committee of the SCWA;
(e) .. a series of alleged failures by the SCWA and/or the defendants as its officers to comply with the provisions of various sections of the Act, and regulations made thereunder, including proper accounting records;
(f) as to what, in fact, are the provisions of the Constitution and Rules of the SCWA, whether the original provisions have ever lawfully been amended, and, if so, in what manner;
(g) .. an alleged failure by the SCWA to keep and maintain certain proper minutes of meetings and financial and other records; and
(h) as to who are, in law, the current members of the SCWA.
[The foregoing precis is but a very brief summation of what are quite extensive pleadings as to declarations, but it is sufficiently indicative, for present purposes, of the relevant relief sought. It should also be said that it is manifest that some relief of this type is obviously sought as "stand‑alone" declaratory relief, whilst other segments of it are apparently intended to found a basis for other, separate, substantive relief claimed].
they seek an order for rectification of certain provisions of the Constitution and Rules of the SCWA, so as to make them accord with what is said to have been the instructions given to Ms Jasinksi; and
finally, they seek the taking of proper accounts in relation to the financial transactions and dealings said to have taken place between the defendant Tanasijevic and a company associated with him and the SCWA. Further an order for payment by Tanasijevic to the SCWA of any amount due by him is sought.
All three plaintiffs jointly seek all heads of relief claimed.
The key bases of defendants’ no case submissions
It is against the foregoing recited background - which reflects but a fraction of the mass of evidence already placed before me - that the defendants now seek to make a submission of no case to answer as to the whole of the claims made by all plaintiffs. I nevertheless detected, in the submissions advanced by Mr Ross‑Smith, an implied alternative contention. In the event of a rejection of his global application, the submission of no case to answer should be upheld as to at least one or more plaintiffs and/or certain of the specific, separate heads of relief claimed.
It will be necessary, in due course, to reflect in some detail on the arguments advanced but, by way of introduction, it is useful to re-capitulate the key heads of the defence propositions.
At the risk of some over simplification, the propositions espoused by Mr Ross-Smith were as follows:-
as to the relief sought pursuant to s 61 of the Act, there is a fatal lacuna in the evidence to date, because none of the plaintiffs has been shown to have been a member of the SCWA at time of action brought, namely, 31 January 1996;
as to the various heads of declaratory relief, none of the plaintiffs had locus standi as at time of action brought, because none of them were the members of the SCWA. The basis for this proposition was that, on the authorities, a contractual relationship between a plaintiff and the association is a pre-requisite to a right to litigate most of the matters in issue;
to the extent that declaratory relief is sought as a basis for establishing any right of a plaintiff to status, whether as a member or otherwise, there is no evidence upon which locus standi could be established. Further the principle of “special interest” standing, in part relied upon by the plaintiffs, has no application or relevance outside the field of public administrative law;
the joinder by the SCC as a plaintiff in the present proceedings is patently ultra vires its Constitution and Rules and an abuse of process; and
the claim for rectification of the Constitution and Rules of the SCWA cannot possibly succeed, inter alia, because that Constitution and Rules constitute a contract between the founding members. All parties to the contract sought to be rectified are not before the court. As such a person or entity not a member has no right to seek rectification. [I must confess that I have, at times, been quite uncertain as to the precise argument which Mr Ross-Smith was seeking to promote in this regard. I initially took him to contend that all founding members of the SCWA would need to be parties joined in the action. However, he later seemed to resile from such a stance in favour of the proposition that the minimum requirement was that “all the others were before the court giving evidence that they, as well as the party (to the action seeking rectification), intended something different” (T1759).]
I will, in due course, address these issues in turn in some detail.
Principles related to submissions of No Case to Answer
It is important, in addressing the defence submissions, that the legal principles applicable be kept firmly in view. Strangely, there is not a great deal of comprehensive published authority on the topic. However, some fundamental concepts are well settled. They may be summarised in the following fashion:-
A judicial officer possesses a wide procedural discretion with regard to submissions of this type. Indeed, there is a discretion to refuse to entertain a submission of no case to answer at all (Residues Treatment & Trading Co Ltd & Anor v Southern Resources Ltd & Ors(1989) 52 SASR 54 at 60 (“Residues”) ). There are no rigid rules or closed classes of situation bearing on such an exercise of discretion. It is sufficient to say that a refusal to entertain such a submission may well be proper where the issues involved are complex and necessitate a major review of a large volume of evidence in a fashion which could cause major disruption of the trial process in the event of an unsuccessful application; a potential need, possibly, to conduct a later second review; and result in a disproportionate generation of legal costs.
A no case submission will not be entertained as to portion only of a specific cause of action (Telfer & Anor v Flinders Ranges Council & Ors [1999] SASC 42).
In some instances, where a single plaintiff propounds against a single defendant a series of quite discrete heads of claim which are not, at least in evidentiary terms, intertwined and interdependent on one another, it may be appropriate to entertain a no case to answer submission in respect of and to dispose of them separately. This occurred, for example, in Treharne v Geo. McEwin & Son Pty Ltd (1982) 44 ALR 543.
A no case submission will normally not be entertained where but one of several defendants seeks to advance it, in relation to some only of various causes of action pleaded against them. (James & Ors v Australia & New Zealand Banking Group Ltd & Ors (1986) 64 ALR 347 at 401.) The rationale for that principle is that, if an action proceeds in a situation where one defendant has been let out of the action, evidence may be called during the remainder of the case which could implicate the, by then, discharged defendant. (Hummerstone & Anor v Leary & Anor [1921] 2 KB 664 (“Hummerstone”)).
Likewise, it is generally inappropriate to accede to an application which, whilst advanced by all defendant parties, relates or has a potential for success as to only some of the various causes of action pleaded against them. Where, potentially, the action will, either inevitably or, on an appraisal of no case submissions made proceed against the defendants as to some issues, much the same rationale is applicable. As Perry J said in Residues at 72, this is particularly so where there is a common substratum of fact said by the plaintiffs underlining or attaching to all or most of the relief sought and the basis for it. Where all (or many) causes of action may, in the relevant sense, be inextricably interrelated in a fashion which renders a severance by holding no case to answer as to some is highly undesirable, if not hazardous. This remains so even where it is not asserted that there was necessarily some joint action of multiple defendants giving rise to a claim. (Hummerstone, Menzies v Australian Iron and SteelLtd & Hill (1952) 52 SR (NSW) 62.)
In cases where a claim to relief is based an alternative possible bases of claim, one of which may be susceptible of a no case submission, it is generally inappropriate to uphold a no case submission as to one limb. If a prima facie case is established as to one of several alternative bases, a plaintiff is entitled to call on a defendant for an answer to all branches of the claim. This is especially so where it is the defendant who asserts facts contrary to those raised in the prima facie case. (Preston v Dowell (1987) 45 SASR 111). By a parity of reasoning, it seems to me that, where there are multiple plaintiffs all prosecuting common claims to relief, it is quite inappropriate to accede to a no case submission as to only one of them where, if the action is to proceed against others, an ultimate resolution of contentious facts on the whole of the evidence led in the case may disclose a basis on which the case mounted against the party sought to be impugned could succeed.
I therefore approach my task in the instant case with those concepts well in mind.
The approach adopted
It is important to emphasize that it is not my task, at this stage, to make any positive concluded findings of fact as to contentious matters, even limited to a review of the plaintiffs’ case, as presented. Rather, my role, initially, is merely to determine what, on the submissions presented, is the proper categorisation of the defendants’ application and whether that should lead to a requirement for election on their part. It is only when that process is complete that, dependent on the situation as it develops, it may become necessary to proceed to settled findings on the current state of the evidence.
Therefore, what has already been recited by me and what follows should be construed in that light.
The s 61 claim
The relevant provisions of s 61 of the Act, for present purposes, are to be found in s 61(1). They read as follows:-
“61. (1) An application to the Supreme Court for an order under this section may be made by a member of an incorporated association or by a former member expelled from the association (provided that the application is made within six months of the expulsion), who believes -
(a).... that the affairs of the association are being conducted in a manner that is oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members, or in a manner that is contrary to the interests of the members as a whole; or
(b)that an act or omission, or a proposed act or omission, by or on behalf of the association was or would be oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members or was or would be contrary to the interests of the members as a whole; or
(c).... that the rules of the association contain provisions that are oppressive or unreasonable; or
(d)that the expulsion of the member was unreasonable or oppressive.”
It is beyond question that a pre-requisite to invoking the section is that the claimant party must be a member of the association. That was not in dispute.
As I understood the submissions of Mr Ross-Smith, on the plaintiffs’ case, it has not been shown that either Jovicevic or the SCC were, or could have been, members of the SCWA. He further sought to demonstrate that Popovic could only have been a member in the event that the Constitution and Rules of the SCWA were lawfully amended on 30 October 1993 - a situation which the plaintiffs themselves seek to deny as a key portion of their case.
Therefore he seeks to argue that, as a matter of law, this head of claim cannot be sustained on any view.
As I have earlier demonstrated in my recital of the evidence directly bearing on status aspects, these contentions constitute a gloss on the evidence which is clearly open to debate.
So far as Popovic is concerned, his status will ultimately fall to be determined on a resolution of what are, in fact, the true Rules of the SCWA.
I agree with Mr Ross-Smith that three possibilities present themselves, namely:-
the original Constitution and Rules of the SCWA, as registered, accurately reflect the intention of those who brought the entity into existence and have never since been altered; or
the Constitution and Rules do not accurately reflect that intention and may have to be rectified accordingly; or
the original Constitution and Rules accurately reflected the instructions given to Helena Jasinski but were lawfully amended on 30 October 1993, inter alia, as to membership.
At the appropriate time a specific finding will have to be made as to those propositions. However, that task necessarily involves a consideration and qualitative evaluation of a considerable mass of evidence and potentially complex questions of law. Much will depend on the inferences which ought to be drawn from the factual evidence and, to some extent, will give rise to a need to assess credibility of witnesses and an evaluation of the authenticity of certain documentary material.
Factual issues which will need to be addressed include:-
What inferences should be drawn concerning the manner in which the SCWA was brought into existence. Was this simply an initiative of the three instructors, or were they acting as delegates and/or agents of the member organisations of the SCSA or the management committee of that entity? Quite clearly a decision as to this based solely on the evidence led by the plaintiffs could be fundamentally different from that arising on the whole of any evidence ultimately led.
What instructions were in fact given to Ms Jasinski and to what extent, if at all, did the final version of the Constitution and Rules, as registered, not reflect those instructions?
What factual inferences and legal conclusions are to be drawn concerning the alleged meetings said to have been held on 30 October 1993? Were these validly convened meetings and what were their juristic nature? Did they result in any lawful amendment of the Constitution and Rules of the SCWA? Once again any evidence given on behalf of the defence could have a profound effect on these matters.
One only has to identify these aspects to reveal that, in their totality, they involve substantial, complex and inextricably interrelated issues of fact and law. Their ultimate resolution requires numerous qualitative assessments to be made of a large volume of evidence. All will need to be teased through before any final decision can be arrived at as to Popovic’s membership status.
Be that as it may, one commences with the initial proposition that, from the perspective of a prima facie case, as a matter of fact, Popovic has, as already appears, undoubtedly been recognised as a member, both by the SCWA itself and some or all of the personal defendants, since about 1992.
I next turn to the plaintiff Jovicevic.
In his case, much will depend upon a careful analysis of the factual evidence and the conclusions properly to be drawn in relation to the events of December 1995, against the background of the resolution of the issues pertaining to Popovic. The status of this plaintiff is dependent on:-
the answer to what were, in law, the true Constitution and Rules of the SCWA as at 10 December 1995;
whether he was validly appointed a Vice President of the SCSA on that date;
if so, whether that automatically conferred on him the status of a member of the SCWA and a Vice President of it; and
generally, findings of precisely what occurred at the SCWA meeting held on 2 December 1995 and adjourned to 16 January 1996 and the legal effect of the events of those dates.
Once again all of these matters involve a close qualitative analysis of what is already a large body of evidence, together with a consideration of complex legal questions. Indeed, the potential complexities in the case of Jovicevic are even greater than those touching on the situation of Popovic. Dependent on the outcome of such an exercise it is possible that Jovicevic could be held to have been a member of the SCWA by the critical date.
Finally, I come to the situation of the SCC. The evidence bearing on it is, to say the least, an aspect which will require careful consideration. My tentative view is that the evidence of Ardalich as to its status vis a vis the SCWA is equivocal. This is the more so as, in the end, it was not ultimately pursued, in either examination or cross examination, in a truly definitive manner.
A very large question mark hangs over the authenticity of the purported formal membership records of the SCWA. However, the one item of solid evidence is the formal record of membership in Appendix “A” of exhibit P15. That shows the permitted participation of Milinke Rakic in the SCWA Annual General Meeting held on 14 August 1994, as the SCC delegate. Further the SCC status as a member was recognised by Tanasijevic as chairman, as well as all of the other personal defendants, who were also present at that AGM.
Moreover, there can be no question that the SCC was a long standing member of the SCSA. Dependent on a resolution of the issue of what were the true provisions of the Constitution and Rules of the SCWA, there is a potential avenue by which the SCC could have been a member of the SCWA by virtue of its membership of the SCSA. True it is that, as Mr Ross-Smith, has pointed out, the statement of claim, in its present form, only avers membership by the lastmentioned route. However, I do not think that this ought to be a conclusive factor for present purposes. It still remains open to the plaintiffs to seek to amend to plead membership by an alternative route. The situation should, in the context of the application before me, be addressed on the widest evidentiary front.
The foregoing review of the status situation of the three plaintiffs abundantly illustrates the enormous complexity and interlocking nature of the factual and legal issues which arise in relation to the s 61 claim. Those issues depend, for their final resolution, on a major qualitative review of a great deal of evidence. The outcome could be very different if conducted a second time after evidence has been led by the defence. It is also, patently, a profitless and dangerous exercise (and one in conflict with the authorities) to attempt to address the situation of one plaintiff, separately and in isolation from the others.
As will be seen shortly, the inherent problem becomes compounded by the need to address the issues other than those merely stemming from the s 61 claim.
However, before I do so, there is one final point to be made concerning this aspect of the defence submission.
The situation concerning the s 61 claim cannot, by the wildest stretch of imagination, reasonably be categorised as a category 2 evidentiary hiatus situation of the nature adverted to in Popovic & Ors v Tanasijevic & Ors (No 2) (supra).
As I pointed out there, category 2 encompasses cases in which a reference to the evidence is required only to establish that there is an evidentiary hiatus or failure to adduce any evidence as to an essential element of a cause of action.
This is plainly not such a case. Category 2 is best illustrated by the facts in Barnes & Ors v Ranger Uranium Mines Pty Ltd (1993) 44 FCR 331. It was there stressed by von Doussa J that the action before him was foredoomed to failure because, on the admitted facts, no damage or loss could possibly be established by the claimant party. As proof of loss was an essential element of the relevant cause of action, the action would inevitably fail. In the event von Doussa J dealt with the matter on a strike out application. It could just as well have been dealt with in the same fashion on a no case submission.
That case was a clear evidentiary hiatus situation. There was no evidence at all bearing on an essential element of the cause of action.
That is not the instant case. The attack on the s 61 claim is solely based on the asserted lack of status as a member of the SCWA. The issue is not an evidentiary hiatus of the type contemplated. Rather, it is a question of the proper evaluation of a large body of evidence and the consequential application of principles of law to the facts as found.
This is a classic category 3 situation or, as to some aspects, possibly, a category 4 matter.
Declaratory relief
Mr Ross-Smith relied on a two pronged argument concerning the many heads of declaratory relief claimed.
First, he said that proof of the existence of a contractual relationship between a plaintiff and the SCWA was a pre-requisite to a right to litigate most of the matters in issue. However, he was constrained to concede that this was not to deny the ability of a claimant to resort to s 31 of the Supreme Court Act 1935 for the express purpose of seeking to establish a status of membership or some other right, which might well be a prelude to mounting a claim to declaratory or other relief.
The thrust of his argument was founded on the initial premise that the effect of s 23 of the Act was to create a contractual relationship between a registered association and its members. Thus, the common law does not entitle the plaintiffs to seek general common law relief against the SCWA. Rather, they are confined to remedies arising under the law of contract, or as expressly conferred by statute. This excludes common law rectification or any other remedy related to the internal affairs of the SCWA not constituting a breach of contract, save to the extent of the statutory s 61 remedy.
In this regard he invited attention to authorities such as Abbott v Sullivan & Ors [1952] 1 KB 189 and Byrne v Auckland Irish Society Inc [1979] 1 NZLR 351 (“Byrne”). He also sought to derive some comfort from Vowell v Steele & Anor [1985] VR 133 (“Vowell”) and Regina v National Joint Council for the Craft of Dental Technicians (Disputes Committee) & Ors; ex parte Neate & Anor [1953] 1 QB 704 (“Neate”).
The two latter authorities appear to be of little assistance for present purposes. Vowell directs attention to the ambit of operation of the judicial review process, having regard to the provisions of relevant legislation, whilst Neate focuses on the permissible ambit of prerogative relief.
The basic authorities upon which the defendants directly rely stem mainly from situations pertaining to what may loosely be described as the activities of domestic disciplinary or other tribunals or bodies. They are situations in which domestic sanctions are imposed, such as expulsion from Clubs, Societies and like entities. Typical of this type of scenario was the subject matter of Byrne. Vautier J, in that case, adopted what fell from Salmond J in Henderson v Kane & Ors and Pioneer Club [1924] NZLR 1073 at 1076 (“Henderson”):-
“The plaintiff in the present action, on becoming a member of the Pioneer Club, entered into a contract with the body corporate of that club by virtue of which she became entitled to the use of the club premises and the enjoyment of the other advantages of club-membership in accordance with the rules of the club and in consideration of an agreed annual contribution to the assets of the body corporate. The rules of the club, so far as they purport to define the rights and privileges, obligations, and liabilities which are incident to club-membership, constitute in their true legal nature and operation the terms of a binding contract between each individual member and the incorporated club itself. For any wrongful repudiation by the incorporated club of the obligations so incurred by it towards a member the remedy of that member includes, I think, an action for damages as for breach of contract”.
Byrne stands as authority for the proposition that common law processes are available to a member, or an expelled member, of a club or society to obtain proprietary or other declarations of right. A declaration that a resolution was invalid for want of natural justice, or otherwise, is one example.
As Salmond J pointed out in Henderson at 1075, care must be taken to correctly categorise the precise type of entity and the incidents attaching to membership of it. Regard also must be had to relevant statutory provisions which may be applicable. Significant differences in legal incidents can arise. In the report of Byrne it is by no means clear what were the precise relevant provisions of the incorporation statute, or the Constitution and Rules of the Club.
In this State there are marked differences between the provisions of the Act and the Corporations Law.
It is specifically provided by s 140(1) of the latter statute that:-
“140 (1) A company’s constitution (if any) and any replaceable rules that apply to the company have effect as a contract:
(a) between the company and each member; and
(b) between the company and each director and company secretary; and
(c) between a member and each other member;
under which each person agrees to observe and perform the constitution and rules so far as they apply to that person.”
Prior to 1985 the relevant provision merely stipulated that the memorandum and articles “bind the company and the members thereof to the same extent as if they respectively had been signed and sealed by each member and contained covenants on the part of each member to observe all the provisions ... ” of them.
Under the current provisions of the Corporations Law a statutory contract exists. However, under the former wording (which differs significantly from that of s 23 of the Act) it is clear that it may well be argued that this fell short of achieving the same result. This seems to have been accepted by the Court of Appeal in Oswald & Anor v Bailey & Ors (1987) 11 NSWLR 715, particularly having regard to the reasoning of Priestley JA at 736 et seq. He was disposed to regard verbiage of that type as “not making contracts between the company and members in any ordinary senses. It deems certain obligations to have been undertaken, by seal and covenant in certain very specific ways.”
There are a number of suasive and obvious reasons why s 140(1) of the Corporations Law should be expressed in its present fashion, particularly having regard to the commercial rights and responsibilities attaching to shareholders and their ultimate entitlement to share in any surplus on a winding up.
By way of contrast, the statutory environment created by the Act is quite different.
For example, incorporation under the Act is available only to a limited class of entities which, in essence, are of a domestic or non commercial nature. No shareholdings, with the concomitant rights normally attaching to them, are possible. On winding up, any surplus is not beneficially distributable to present or former members, save to the very restricted extent provided by s 43(1a). In many instances there would be no consideration passing either between the member and the association, or between members inter se.
As I have earlier pointed out, the founding members do not subscribe the Constitution and Rules. Section 23 merely provides that:-
“The rules of an incorporated association bind the association and all members of the association.”
It is immediately apparent that this provision differs very significantly in its expression from s 140(1) of the Corporations Law. Parliament must be taken to have adopted that course quite deliberately. My tentative view is that, at best, s 23 of the Act does no more than establish a regime of rights and obligations by statute, rather than by way of contract or deemed contract. In that regard the reasoning of Priestley JA is instructive.
I, of course, acknowledge that, in his ex tempore reasons in Markeas v Greek Orthodox Community (SASC, Debelle J, 5 August 1997, unreported) (“Markeas”), Debelle J seems to have assumed that the rules constituted a contract between the members and the relevant Association. It does not appear that this aspect was necessarily argued in detail before him and, in any event, his comments were plainly obiter. That case turned on the issue as to whether there was power, absent a formal determination of oppression by the Court, to order an amendment of rules to give affect to a settlement agreed by parties who were some only of the members of the relevant association.
With very great respect, as at present advised, I have problems with the proposition that the Constitution and Rules of an incorporated association under the Act bring about a contractual relationship between the members and the association, either of the nature of that envisaged by s 140(1) of the Corporations Law or otherwise. It follows that there may well be an essential fallacy in the thesis sought to be propounded by Mr Ross-Smith.
The second point to be made is that, in the case of an incorporated association under the Act, I am by no means persuaded that the concept of “special interest” giving rise to standing can, summarily, be put to one side as irrelevant, as Mr Ross-Smith sought to do.
Distilled to the essence his contention was that this concept, flowing from authorities such as Australian Conservation Foundation Inc v The Commonwealth of Australia & Ors (1980) 146 CLR 493, Onus & Anor v Alcoa of Australia Ltd (1981) 149 CLR 27, Ingram v The Commonwealth of Australia & Anor (1980) 54 ALJR 395 and Bateman’s Bay Local Aboriginal Land Council & Anor v Aboriginal Community Benefit Fund Pty Ltd & Anor (1998) 155 ALR 684 (“Bateman’s Bay”) was restricted in its application to fields of public administrative law, or the activities of bodies created by statute and/or administering public funds. It had no place in relation to a domestic entity, where relevant relationships stemmed from contract and/or discrete statutory prescription.
It is true that the concept of special interest standing derives from and generally arises in a traditional public law context. However, two questions arise.
In the modern context the line between what is a public law environment and a private or domestic law context is becoming increasingly blurred and more difficult to draw. In the instant case, the SCWA was incorporated as what is, technically, a private entity (as appears to have been the situation with the respondent in Bateman’s Bay). However, its activities have, as I understand the evidence to date, essentially been confined to the creation and conduct of facilities designed to provide essentially, a public, non-commercial, service, Moreover, I imply, this has occurred with the involvement of significant public capital and recurrent funding.
As in Bateman’s Bay it may well be argued that what is in issue here, in substance, is the public interest in the proper, lawful administration of an entity having substantial recourse to public revenues.
Further, as is pointed out by the Australian Law Reform Commission in its Report No 27 “Standing in Public Interest Litigation”:-
“... it must be emphasised that the phrase ‘public law’ is not a technical legal term. Australian law, unlike a number of European legal systems based on the civil law, is not formally divided into ‘public’ and ‘private’ law. By the same token, the proposition that questions of standing arise chiefly in “public law’ contexts is not a formal proposition of law ... ”
The point is elsewhere made in the report that there is no single thread connecting the “standing” cases to closed categories of case or cases where direct governmental agencies are involved. In some cases that circumstance certainly supplies a “public” element. As the Report says, “In others the public element resides in the fact that, irrespective of the identity of the parties, the issue at stake is important for the public at large ... In virtually all situations in which the law has been prepared to allow persons other than the possessors of private legal rights to invoke the concept of standing in order to take out legal proceedings, it has done so in recognition of the fact that the proceedings have a public element.”
I consider that these conclusions were amply justified by the applicable published authorities.
In the instant case a very real question to be addressed, on the evidence, is as to whether the funding and nature of operations of the SCWA has been such as to exhibit a sufficient public interest component.
Secondly, as I have demonstrated, this may well not, in fact, be a situation focusing on contractual relationships at all, in the relevant sense. It may well remain an open question, in the manner in which the law has been developing as to what relationship is sufficient to give rise to standing to bring suit to compel a body such as the SCWA to observe its constitutional rules, where that body has a clear, practical affiliate or subsidiary relationship with another body or bodies or persons, and has expressly been brought into existence to further their general social interest.
In the event there is no need, finally, to decide this issue at this point in time. I merely flag it for further consideration, if necessary, but refrain from expressing a final conclusion.
All that need, positively, be said at this juncture is that the primary status question as to the many of the declaratory relief aspects of the case also turns on the tangled skein of the membership status of the three plaintiffs vis a vis the SCWA. The same issues arise, as fall to be considered apropos the s 61 relief claim. Of course, insofar as the plaintiffs or any of them seek declarations of right with a view to establishing direct membership status, they clearly have standing to enliven the jurisdiction of the court, given that their several bases of claim, as traversed earlier in these reasons, can scarcely be said to be ephemeral.
The SCC ultra vires Submission
The submission advanced on behalf of the defendants in this regard is deceptively simple. It is to the effect that the institution of legal action is neither in fulfilment of a function set out in the Constitution of the SCC, nor is it reasonably incidental to the fulfilment of such a function (Clarke v The University of Melbourne [1978] VR 457).
However, it seems to me that such a bald contention really misconceives the true issue to be addressed.
The interest which the SCC seeks to protect by joining in these proceedings, arises in two alternative ways. The action is brought to protect its membership interests in the SCWA either by virtue of its membership of that entity, via its membership of the SCSA, and what are said to be the true format of the rules of the SCWA as sought to be rectified. Alternatively, it is seeking to protect its rights as a member directly accepted, as such, by the SCWA itself.
The primary question, therefore, is whether the Constitution and Rules of the SCC, fairly construed, are sufficiently wide as to permit lawful affiliation with and membership of the SCSA and/or membership of the SCWA. The SCSA is, of course, an “umbrella” organisation, the role of which is to promote the interests of all Serbian community organisations in this State. The SCWA exists to provide aged care facilities, with particular priority toward aged persons of Serbian extraction.
Two features are immediately apparent. The primary question cannot be addressed until some positive evidentiary findings and legal rulings are made both as to the vexed questions of the true form of the Constitution and Rules of the SCWA and also the possible direct membership status of the SCC, apropos the SCWA.
When those matters are resolved an interesting consideration will be whether, given the somewhat curiously expressed objects of the SCC for what is said to be a Senior Citizens’ or pensioners’ club, membership of the relevant organisations is reasonably incidental to the fulfilment of them. If the ultimate answer be in the affirmative, then there may well be a strong argument that the institution of legal proceedings to protect its membership rights is fairly incidental to its primary objects.
But the critical consideration in this regard is that, although the final issue of construction is, undoubtedly, a question of law, it cannot logically or conveniently be addressed until contentious issues of fact are first determined on the evidence.
A secondary argument proffered by Mr Ross-Smith is to the effect that, on the evidence, no valid authority ever existed for the joinder of the SCC in the present action and that, accordingly, the participation of the third plaintiff constitutes a patent abuse of process.
A consideration of this contention on the merits necessitates an evaluation of the evidence of Ardalich in light of the rules of the SCC, although it is fair to say that Mr Ross-Smith seems content to base his argument on taking the relevant evidence at face value.
However, questions arise as to the nature and extent of the authority of the management committee, by way of contrast with the members in general meeting (as to which it seems to me that there may well be a strong argument that Mr Ross-Smith has misconstrued the relevant rule); whether the evidence indicates that there was no valid initial resolution to participate; whether the subsequent general meetings of members (of which evidence was given) operated to cure any initial defect by ratification (as to which see Horsley’s, “Meetings, Procedure, Law and Practice”, 4th Edn at para 10.7); whether evidence of a recent specific “ratification” meeting is admissible; and, if it was, what was its effect.
In this lastmentioned regard I bear in mind that Mr Sallis, of counsel for the plaintiffs, has indicated that he closed his case on a misapprehension of the ambit and effect of a ruling which I gave concerning a proposed amendment of the statement of claim and that he may, therefore, seek to re-open it.
Rectification
I have already made the point that it appeared to me that Mr Ross-Smith shifted ground about this in the course of debate.
Initially he appeared to contend that all of the organisational members of the SCSA were contracting parties, who had to be before the court, either as parties or witnesses and that it was not possible to grant rectification if one only of the contracting parties was before the court.
He later said that, technically, all contracting parties had to be before the court, as parties, explaining what their intention was, although the defendants would not take such a technical point. At least all had to be involved as either parties or witnesses.
In his written submissions he argued that “the circumstances do not permit of the granting of rectification in that all the parties to the Agreement do not agree that the rules of the Welfare Association do not reflect the common intention possessed by the supposed founding members”.
He subsequently seemed to retreat to the situation that all contracting parties had to be parties in the proceedings. Mr Ross-Smith asserted that this was what had been held by Debelle J in Markeas.
It must at once be said that Debelle J did not so hold. The situation in that case was that, absent a specific finding of oppression under s 61 of the Act, it was not open to him to rectify or alter the rules, under the section. This could only be done in manner provided by the Constitution and Rules.
I consider it profitless, at this time, to pursue this aspect of the case in further detail because, as I have already illustrated, major evidentiary issues arise as to who were the parties who brought the SCWA into existence and what was their status or capacity in so doing. Moreover, the argument advanced pre‑supposes the existence of a contractual arrangement and application of the principles of rectification of a contract. On my earlier reasoning, these propositions are open to serious question. In any event, they do not arise and cannot legally be addressed, absent a qualitative assessment of a considerable body of evidence and the making of specific findings of fact.
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But a glance at the analysis which I have attempted instantly discloses that what is before me is a case of considerable complexity, with many factual and legal issues being inextricably intertwined. In its totality it constitutes a classic category 3 situation, as adverted to in the authorities.
I have come to the inescapable conclusion that it is quite inappropriate for me to proceed to final findings of fact and conclusions as to the matters argued before me unless the defendants first elect to call no evidence. If it were otherwise I would be placed in the highly undesirable situation of possibly, if not probably, having to make two successive qualitative assessments of evidence as to the relevant topics, in a manner which has, consistently, strongly been deplored in the applicable authorities. Additionally, it is highly undesirable and also inconsistent with published authority to consider some individual parties or causes of action in isolation at this juncture, in a situation of the above nature.
In all of the circumstances I propose to refrain from proceeding to any concluded findings of fact or law as to the no case submission, unless and until the defendants elect to call no evidence. If that election is made then, subject to any application by Mr Sallis to either reopen his case or further amend the pleadings, I will hear final addresses of counsel.
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