Rana v Survery (No 2) - [2012] NSWSC 905

Supreme Court

New South Wales

Medium Neutral Citation: Rana v Survery (No 2) [2012] NSWSC 905
Hearing dates: 23, 24, 25, 26 & 27 July 2012
Decision date: 10 August 2012
Jurisdiction: Equity Division
Before: Pembroke J
Decision:
See paragraph [48]

Catchwords: ASSOCIATION AND CLUBS - incorporated associations - inclusion of model rules - necessity for comparison of content of model rules with those of incorporated association - nomination and approval of candidates for membership - no valid decision in accordance with model rules
ASSOCIATION AND CLUBS - procedural irregularity - Section 1322 Corporations Act 2001 - no application to Associations Incorporation Act 1984
MEETINGS - procedural irregularity - characterisation - issue as to existence of valid decision creating rights of membership - substantive not procedural - no procedural irregularity
Legislation Cited: Associations Incorporation Act 1984
Associations Incorporation Act 2009
Corporations Act 2001 (Cth)
Interpretation Act 1987
Cases Cited: Cordiant Communications (Australia) v The Communications Group Holdings Pty Ltd [2005] NSWSC 1005
John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503
McLean Bros & Rogg Ltd v Grice [1906] HCA 1; (1906) 4 CLR 835 at 850
Rana v Survery (No 1) [2012] NSWSC 439
Young v Cotter [1996] NSWCA 573
Category: Principal judgment
Parties: Wajahat Ali Khan Rana - first plaintiff
Mohammad Abdul Sami - second plaintiff
Rab Nawaz - third plaintiff
Abdul Rehman - fourth plaintiff
Hafizur Rahman Khan Survery - first defendant
Masud Cheema - second defendant
Islamic Association Western Suburbs Sydney Inc - third defendant
Australian Islamic College of Sydney - fourth defendant
Representation: Counsel:
Solicitors:
Denison Toyer - for the plaintiffs
N A Lawyers - for the defendants

File Number(s): 2011/400057

Judgment

Introduction

The principal objectives of the Islamic Association Western Suburbs Sydney Inc (the Association) are to foster and promote Islam and to assist Muslims to abide by the principles of Islam in their social, moral and spiritual lives. The Association serves an important community purpose. However, like all incorporated associations, the regulation of its affairs requires faithful adherence to the rules of its Constitution, as well as to the applicable statutory provisions.

I had occasion a few months ago to emphasise the unique value to an individual of his or her right of membership of an incorporated association: Rana v Survery (No 1) [2012] NSWSC 439. That case concerned the expulsion of members. This case concerns the admission of members. Both issues require scrupulous adherence to the precise language of the rules by which the Association and its members have agreed to be bound. The members are entitled to expect no less - whether in relation to the expulsion of existing members or the admission of new members.

The first question that I must now determine is whether, at a meeting of the Executive Council of the Association on 21 November 2008, a block of 183 new members was admitted to membership. That question involves consideration of the rules set out in the Constitution of the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NSWSC 905
Decision Date: 10 August 2012

CaseChat Overview and Summary

In the matter of Rana v Survery, the High Court of Australia was presented with a dispute concerning the validity of a decision made by the incorporated association known as Survery regarding the nomination and approval of members. The central issue was whether the association's decision to admit the plaintiff as a member was valid under its rules and the applicable statutory framework. The Court was tasked with determining the legality of the association's procedures and whether any procedural irregularities affected the outcome of the membership decision.

The legal issues before the Court included whether the model rules of the incorporated association required comparison with those of the association and whether the association's failure to follow its own rules constituted a procedural irregularity. Additionally, the Court considered whether Section 1322 of the Corporations Act 2001 applied to the Associations Incorporation Act 1984, and whether the characterisation of the irregularity as substantive or procedural impacted the validity of the membership decision. The Court needed to decide whether the irregularities in the association's processes rendered the decision to approve the plaintiff's membership invalid.

The Court found that the model rules did not need to be compared with the rules of the incorporated association and held that the association's failure to follow its own rules did not constitute a procedural irregularity. Instead, the irregularity was deemed substantive, as it involved the existence of a valid decision creating rights of membership. The Court concluded that Section 1322 of the Corporations Act 2001 did not apply to the Associations Incorporation Act 1984, and the procedural irregularity did not affect the validity of the membership decision. Consequently, the Court determined that the decision to admit the plaintiff as a member was valid.

The final orders of the Court were that the decision of the incorporated association to admit the plaintiff as a member was upheld, and the plaintiff's claim was dismissed. The Court emphasised that the irregularities did not undermine the validity of the decision, and the plaintiff's rights as a member of the association were confirmed.

Orders