Re Islamic Association Western Suburbs Sydney Inc
[2015] NSWSC 638
•27 May 2015
|
New South Wales |
Case Name: | Khan v Khan; Re Islamic Association Western Suburbs Sydney Inc |
Medium Neutral Citation: | [2015] NSWSC 638 |
Hearing Date(s): | 14 – 17 and 28 April 2015 |
Decision Date: | 27 May 2015 |
Jurisdiction: | Equity Division - Corporations List |
Before: | Black J |
Decision: | Held that 2 March meeting of shareholders of incorporated association was invalid. Cross-claim seeking validation of meeting dismissed. Defendants to pay the Plaintiffs’ costs as agreed or assessed. Parties to bring in agreed short minutes of order within 14 days. |
Catchwords: | CORPORATIONS – Management and administration – Meetings – Where several members of executive council of incorporated association were removed by members at special general meeting – Where requisition and petition were relied on to support calling of the meeting – Whether meeting convened in accordance with association’s constitution – Whether 5% of members requisitioned the meeting – Whether the requisition was to be read together with petition. |
Legislation Cited: | - Associations Incorporation Act 2009 (NSW) ss 96, 97 |
Cases Cited: | - Adams v Adhesives Pty Ltd (1932) 32 SR (NSW) 398 |
Category: | Principal judgment |
Parties: | Aijaz Ahmed Khan (First Plaintiff) |
Representation: | Counsel: |
File Number(s): | 2014/71246 |
JUDGMENT
These proceedings concern the validity of a special general meeting of the Islamic Association Western Suburbs Inc (“Association”) held on 2 March 2014 (“2 March meeting”) by which the Plaintiffs, several members for the Executive Council of the Association, were removed (or purportedly removed) and the First – Seventh Defendants were elected (or purportedly elected) as the Executive Council of the Association. (I will, for brevity, refer to the First – Seventh Defendants by the abbreviation “Defendants” and will not include the Eighth Defendant, the Association, within that abbreviation.) The validity of that meeting in turn depends, in part, on whether sufficient members of the association had validly requisitioned the calling of that meeting by a document dated 6 January 2014 which purportedly requisitioned a special general meeting of the Association (“Requisition”) (Ex D7, 2/574), whether in itself or read together with a petition (“Petition”) (Ex D7, 2/577) signed by a number of members of the Association.
The Plaintiffs proceed on their Amended Summons filed on 10 March 2014 and a Statement of Claim filed on 5 May 2014. By that Amended Summons, the Plaintiffs seek a declaration that the 2 March meeting was not held in accordance with the Association’s constitution and was unlawful, and a declaration that the Executive Council remains as it was prior to that date. They also seek an order that the Defendants be restrained from acting or purporting to act for or on behalf of the Association or representing to any person or organisation that they are officers or authorised representatives of the Association. The Defendants filed a Defence on 27 May 2014 and also filed a Cross–claim seeking relief under s 1322(4) of the Corporations Act 2001 (Cth), as applied to the Association by the Associations Incorporation Act 2009 (NSW). A multitude of issues are in dispute between the Plaintiffs on the one hand and the Defendants on the other. I address only those issues in this judgment which are necessary to reach a determination of the matters that are ultimately required to be determined by this judgment.
The Court has made a representative order in the proceedings, by which the Plaintiffs were appointed to represent those persons who contend that the meeting held on 2 March 2014 was not validly convened or held and the First to Seventh Defendants were appointed to represent those who contend to the contrary. Those orders reflected the approach adopted in Ahmed v Chowdhury [2012] NSWSC 1452, where Lindsay J made representative orders in respect of a somewhat similar dispute in relation to an organisation incorporated under the Associations Incorporation Act 2009.
Factual background
These proceedings are the most recent of several proceedings concerning the Association, which is the eighth defendant in the proceedings. In his decision in Islamic Association of Western Suburbs Sydney Inc v Survery [2008] NSWSC 77 at [2], Hamilton J noted that, even at that time, now six years ago, the controversy over the Association’s affairs had already continued “over many years” and that the validity of meetings as far back as 1983 was disputed and the form of the Association’s constitution was also in controversy. In further proceedings involving the Association in 2012 ([2012] NSWSC 905), Pembroke J made orders determining the then membership of the Association. His Honour referred (at [1]) to the objectives of the Association to which I have referred above and also rightly noted that:
“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.”
An appeal against that decision was subsequently brought and dismissed ([2013] NSWCA 234).
The Association was incorporated under the Associations Incorporation Act 1984 (NSW) (rep) and the successor to that Act, the Associations Incorporation Act 2009 commenced on 1 July 2010. The Association is involved in the promotion of aspects of the Islamic faith and its principal activity is the conduct of a mosque and the evidence indicates that the Association controls substantial assets. The primary objective of the Association is set out under the heading “Objectives” in its constitution (Ex D7, 1/142) as follows:
“The aim of the [Association] is to foster and promote Islam and to assist Muslims to abide by the principles of Islam in regard to their social, moral and spiritual way of life and to organise instructions in certain languages and cultures as determined by the members from time to time.”
Clause 2 under the heading “Objectives” in the constitution in turn sets out various things which the Association will endeavour to undertake.
I should now refer to other relevant terms of the Association’s constitution. Clause 2 under the heading “Rules” in the Association’s constitution identifies three categories of members of the Association, being full members, association members and honorary members and cl 3 provides for foundation members (Ex D7, 1/143). Clause 6 provides that a person ceases to be a member of the Association in several cases including, in cl 6(1)(d), that:
“Full members of [the Association] will lose their membership upon defaulting membership fees for five (3) consecutive years [sic].” (Ex D7, 1/144)
That clause has significance in these proceedings, to which I will refer below.
Clause 12 provides for the powers of a committee described as the Executive Council of the Association which, inter alia, has the power to control and manage the Association’s affairs, to exercise such functions as may be exercised by the Association, other than those that are required by the constitution to be exercised in general meeting, and to perform such things as appear to it to be necessary or desirable for the proper management of the Association’s affairs (Ex D7, 1/146). Clause 17(1) of the Association’s constitution in turn provides that the office of a member of the Executive Council shall become vacant in specified circumstances including, in cl 17(1)(g):
“Upon a resolution being passed by a two-thirds majority of members present at a properly constituted General Meeting specially called for the purpose, to remove him/her from office.” (Ex D7, 1/147).
Clause 26 of the Association’s constitution in turn permits the calling of special general meetings, which are general meetings of the Association other than annual general meetings. By cl 26(1), the Executive Council may, whenever it thinks fit, convene a special general meeting of the Association. Clause 26(2) provides that the Executive Council shall, on the requisition in writing of not less than 5% of the total number of members convene a special general meeting of the Association. Clause 26(3) provides that a requisition of members for a special general meeting:
(a) shall state the purpose or purposes of the meeting,
(b) be signed by the members making the requisition,
(c) shall be lodged with [the] secretary of the executive council and,
(d) may consist of several documents in a similar form, each signed by one or more of the members making the requisition.
Clause 26(4) provides that, if the Executive Council fails to convene a special general meeting to be held within one month after the date on which a requisition of members is lodged with the secretary, any one or more of the members who made the requisition may convene a special general meeting to be held not later than three months after that date. Clause 26(5) provides that a special general meeting convened as referred to in cl 26(4) shall be convened as nearly as is practicable in the same manner as general meetings are convened by the Executive Council and any member who thereby incurs expense is entitled to be reimbursed by the Association for any expense so incurred.
Clause 27 of the Association’s constitution provides that, except where the nature of the business proposed to be dealt with at a general meeting requires a special resolution, the secretary must give notice of the meeting, sent by pre-paid post at least 14 days fixed before the holding of the meeting. Where the nature of the business proposed to be dealt with at a general meeting requires a special resolution, the secretary must give 21 days’ notice before the date fixed for the holding of the general meeting. No business other than that specified in the notice convening a general meeting may be transacted at the meeting.
I now turn to the facts that gave rise to this application. An election of the Executive Council of the Association took place on 10 November 2013 and the Plaintiffs were elected as the Executive Council at that time. Persons associated with the Defendants did not stand at that election, although contradictory evidence was led in this application as to whether that reflected their belief that they would not be elected or a wish (that has plainly not come to pass) to restore harmony to the Association. It is not necessary to determine that dispute for the purposes of this judgment.
The Plaintiffs initially contended that, on or about 16 November 2013, and immediately after they were elected as Executive Council, 77 persons were admitted as members of the Association at a meeting of the Executive Council. The Plaintiffs ultimately did not seek to rely on the admission of those persons in these proceedings.
Issues arose in respect of the affairs of the Association in late 2013, including the resignation of the Imam who had long been associated with the mosque operated by the Association, which appears to have reflected differences with the Executive Council. It appears that the dispute that arose in late 2013, and culminated in the calling of the 2 March meeting, was at least associated with the resignation of the Imam who had previously undertaken responsibilities in respect of the Mosque operated by the Association. It appears that at least some members of the Association and of the local community were distressed by the circumstances in which the Imam had ceased his involvement with the mosque and I accept that was at least an immediate contributor to the steps which followed, albeit that it may have combined with other concerns that had previously existed (Bajwa T157–159, 161). I accept that matter may also have prompted interests associated with the Defendants to seek, in the Requisition and the Petition, to dissolve the Executive Council, and in the final outcome of the meeting held on 2 March to remove several of its members. It does not seem to me that that can be fairly characterised, as Mr Cheshire seeks to characterise it, as being no more than a faction out of power taking an opportunity to seek to replace the Executive Council that had been elected in November 2013 and was then in power. That characterisation seems to me to give too little weight to the fact that there is no reason to think that the concerns held by the Defendants, and members of the community associated with them, were not genuinely held.
A meeting took place in late December 2013, involving both members and non-members of the Association, to consider calling a special general meeting of the Association. Mr Cheshire, who appeared for the Plaintiffs, put substantial weight on the involvement of persons who were not members of the Association in that meeting and later events. I do not consider that matter has any significance, because a proper requisition, made by a sufficient number of members of the Association, would not be invalidated merely because non-members of the Association held the same view as those members who had requisitioned the meeting, or had provided support or practical assistance to the requisitionists in calling the meeting. It also seems to me that any reference to whether persons were members of the Association needs to have regard to the fact that the Executive Council had control over the admission of members to the Association, and there is at least some evidence that suggests that the Plaintiffs were not inclined to admit persons to membership of the Association if they considered that those persons were not supportive of their management of the Association.
The Plaintiffs point out that Mr Haji Ibrahim was significantly involved in preparation of the relevant documents to requisition a special meeting of the Association following the meeting in late December 2013. Mr Cheshire emphasises the fact that Mr Haji Ibrahim was not called by the Plaintiffs to give evidence, although he was available (Mahmood Zahid T202). (Although Mr Zahid’s name was stated in his affidavit as Zahid Mahmood, he confirmed in cross-examination that his first name was Mahmood and his surname was Zahid. I will refer to him by his correct name in this judgment.) However, it does not seem to me that any particular issue in respect of the validity of the Requisition or Petition depended upon any matter to which Mr Ibrahim’s evidence was likely to be of particular relevance, so that any inference that his evidence would not have assisted the Defendants is of little significance.
Drafts of the Requisition were prepared in early January 2014 (Ex D1 and D2) and Counsel accepted that the documents shown to the signatories to the Petition were substantially in accordance with the contents of Ex D2. The persons who signed the Petition generally gave evidence in cross-examination that they were shown the Requisition (implicitly, in the draft form that it then existed) at the time they signed the Petition. Evidence of Mr Bajwa, who was an (or the) ultimate signatory to the Requisition, in cross-examination that the Requisition was not typed until 6 January 2014 (T165) seems to have been mistaken to that extent. It appears that Mr Haji Ibrahim prepared the Requisition and Petition in hand and gave them to Mr Zahid, who was not a member of the Association, who arranged for them initially to be typed by his son, although he was later involved in finalising the Requisition (Zahid T193–197). Mr Zahid then gave the Requisition and the Petition to Mr Bajwa (T163). Other persons, including non-members of the Association, were involved in obtaining signatures to the Petition. Mr Mahmood determined which names were to be entered on the last page of the Requisition, by identifying persons who had signed the Petition who he believed were foundation members of the Association and inserting their names into the Requisition before it was given to Mr Bajwa to be signed (Zahid T195). Mr Bajwa then sent the Requisition and the Petition to the Secretary of the Association. I will set out the terms of the Requisition and the Petition below, in dealing with the Plaintiffs’ attack on their validity.
The Executive Council of the Association discussed the Requisition at a meeting on 21 January 2014 (Ex D7, 1/276) as follows:
“Discussion: Requisition from Afzal Bajwa was received to call a S[pecial] G[eneral] M[eeting]. This was discussed in the meeting and the members found several flaws the requisition [sic]. Firstly, the Petition was signed by non-members and non-financial members. Secondly some of the points raised in the letter were not according to the [Association] constitution. According to the [Association] constitution it has empowered the E[xecutive] C[ouncil] members to make decision regarding employment of all staff for [Association].
Conclusion: All the E[xecutive] C[ouncil] members agreed that [Association] members have the right to call SGM to decide if the E[xecutive] C[ouncil] decision was constitutionally valid or invalid. The secretary of the Association to declare the quorum, and the President to chair the SGM meeting, not otherwise as stated in the requisition. The Secretary to write to Afzal Bajwa and advise him to correct the Requisition and re-submit. If Afzal Bajwa fails to do this, then [Association] will call for a SGM. This was unanimously approved by all E[xecutive] C[ouncil] members.”
I note, for completeness, that the Executive Council also discussed requests from Mr Bajwa and others for an up to date membership list of the Association and agreed that that list was “very confidential” and that “no one has the constitutional right to have this confidential information” and only members have the right to make arrangements with the secretary and view the list in person. That approach points to the difficulty, also addressed in the Defendants’ evidence, which the Defendants experienced in obtaining meaningful access to the Association’s member register, if it maintains one in proper form, to which I will refer further below.
By letter dated 21 January 2014, which it appears was not posted until late January, the Association’s secretary advised Mr Bajwa of matters that “need to be clarified” in respect of the Requisition. The Secretary pointed out that the first purpose identified for the special general meeting, to decide the Imam’s employment, was addressed to a matter which the Executive Council had power to decide under the Association’s constitution. He referred to the third and fourth stated purposes, relating to the dissolution of the Executive Council and updating of the Association’s constitution, and noted that there was a procedure in the Association’s constitution for the suggested changes to the constitution. He also took issue with the approach in the Requisition to the quorum and chairperson of the meeting, and expressed the view that some of the persons who signed the Requisition were not members, and identified several persons named in the Requisition and the Petition who were said to be not members or not financial members of the Association.
It appears a further meeting of interests associated with the Defendants took place on 24 January 2014 and was attended by both members and non-members (Shahzad Khan T142). I have indicated above why it seems to me that the fact of non-members’ involvement in that meeting is of limited significance.
On 29 January 2014, the Defendants gave notice (“First Notice”) (Ex D7, 1/280) for a special general members’ meeting which was to take place on 16 February 2014 at a specified location, the agenda items for which included:
“3. Discuss and resolve the employment matter of Imam Dr Shabbir Ahmed.
4. Review of the recent action of the Executive Council that resulted in unrest and disharmony among the members and the community. And to dissolve the Executive Council.
5. Appointment of the Interim Committee to run the affairs of the [A]ssociation till election to be held within three months from the date of this S[pecial] G[eneral] M[eeting].”
The third and fourth items referred to broadly corresponded to the first and second items noted in the Requisition, as set out below.
By letter dated 2 February 2014, the secretary of the Association referred to a conversation between him and Mr Bajwa on 26 January 2014, in which the secretary says he advised Mr Bajwa of errors in the Requisition. That letter stated that:
“I spoke to you on Sunday 26th January 2014 and advised you verbally on these flaws and errors and you asked me to send this via post, which I did.
Despite of [sic] the advice and discussion you have called a SGM of the [Association] for 16 February 2014 which is unconstitutional. [The Association] will challenge any decision taken by the members on 16 February 2014, since the SGM DOES NOT FULFIL REQUIREMENTS OF [ASSOCIATION] CONSTITUTION [sic]. You and the members who called for the SGM will be liable for all costs incurred.
We will call a SGM as soon as you re-submit the amended requisition. Can you respond to my letter of 21 January within 72 hours of receiving this letter: Failure to your response with correct requisition according to [Association] constitution, the E[xecutive] C[ouncil] will have no choice but to call a SGM ourselves.”
On 4 February 2014, the Defendants issued a further notice dated 4 February 2014 (“Second Notice”) (Ex D7, 1/281) which stated that the special general meeting to be held on 16 February 2014 had been “postponed” to 2 March 2014 “due to revised agenda and additional notice required for the meeting.” The revised agenda now contained the following items:
“2 To remove the following persons from the office of the Executive Council as per clause 17[(1)]g of the constitution of the [Association] [A list of the names of the Plaintiffs, who then constituted some but not all of the members of the Executive Council, followed].
3 To appoint replacements of the removed members of the Executive Council.”
At that point, what was sought at the 2 March meeting departed from what was sought by the Requisition, the Petition and the First Notice (as the reference to a “revised agenda” acknowledged) so that the employment status of the Imam was no longer to be considered, the Executive Council was no longer to be “dissolved” or all of its members removed, an interim committee was no longer to be appointed, and now only some of the members of the then Executive Council were to be removed and replaced. I will return to the significance of those matters below.
By his response dated 6 February 2014 (Ex D7, 2/620), Mr Bajwa responded that the Secretary’s objections were “not valid and acceptable” for several reasons, including the Association’s failure to provide access to membership records and lists, the existence of protests against the Executive Council’s actions, a complaint that the letter dated 21 January 2014 had not been posted until 29 January 2014 and that the Executive Council had not held the special general meeting within one month of the Requisition and concluded:
“Members have already called the meeting in exercise of their right per the constitution clause 26(4), you are therefore, urged to be at the meeting on 2 March 2014, as per amended notice already posted to you and members.”
On 14 February 2014, the Plaintiffs, as the then Executive Council of the Association, determined to hold a special general meeting to take place on a later date than that convened by the Defendants, 23 March 2014. They sent notices of that meeting on about 24 February 2014. The agenda for that meeting included, for each member of the Executive Council:
“Whether pursuant to clause 17[(1)](g) of the constitution [the Executive Council member] be removed from office.”
Further correspondence as to the validity of the 2 March meeting followed between the secretary of the Association and the Association's solicitors on the one hand and Mr Bajwa on the other. By letter dated 24 February 2014, the solicitors acting for the Association, presumably on the instructions of the Plaintiffs or the Executive Council, identified several matters alleged to have the result that the Requisition and Petition were invalid, including that various persons were not members of the Association due to non-payment of membership fees; that the proposed dissolution of the Executive Council was not in accordance with cl 17(1)(g) of the Constitution; that the Requisition failed to identify a purpose of removing each of the members of the Executive Council from office, for the purposes of cl 17(1)(g) of the Constitution; and that the Petition did not make explicit reference to a resolution for removal from office of each member of the Executive Council (Ex D7, 2/638). The Association’s solicitors also expressed the view that:
“In the absence of a valid “requisition”, any notice, issued pursuant to cl 26(4) of the Constitution (calling of a special general meeting) would be invalid.”
That letter also identified suggested defects in the First Notice and indicated that:
“We are instructed that the Executive Council will not recognise the meeting of 2 March 2014 as a “special general members meeting” of the [Association] as it is contrary to the constitution of the [Association] and is accordingly unlawful.”
The Plaintiffs, being some but not all of the members of the Association’s Executive Council were purportedly removed from the Executive Council and replaced by the First to Seventh Defendants at the 2 March meeting, which was attended by 111 persons (Ex D7, 1/288). Separate resolutions for removal of each of the Plaintiffs from the Executive Council of the Association were passed at that meeting, purportedly pursuant to cl 17(1)(g) of the Association’s constitution, in each case specifying the reasons for removal. I set out, by way of example, the reasons given for Mr Aijaz Khan’s removal from the Executive Council (Ex D7, 1/297), namely that he was alleged to have:
“(1) Caused unrest and anxiety amongst the members of [the Association] and community by various actions, some of which are appended below.
(2) Disregarded and refused to address the serious concerns of the members and community, which lead to a very serious and major conflict between the community and the Executive Council resulting in demonstrations, confrontations and some incidents of violence between the E[xecutive] C[ouncil] members and community for many weeks.
(3) Attempted to exclude members from the membership register without any procedure and valid reasons.
(4) Failed to responds [sic] to many requests and reminders from members to provide access to membership and [A]ssociation’s financial record [sic].
(5) Delayed beyond the time allowed by the [Association] constitution, the response to the requisition dated 06 Jan 14 for SGM including verbal requests by many members to call SGM, since 5 Dec 2013.
(6) Being member of previous E[xecutive] C[ouncil]s caused actions to remove members from the membership register and misused and misrepresented the office of treasurer.
(7) Being member of Australian Islamic College of Sydney Board caused [Association] lose control of the College which was created by [Association] and was real asset and main source of earning for the [Association] and Rooty Hill Mosque.
(8) Being disrespectful to the IMAM, (Dr Shabir Ahmed), creating hostile atmosphere against him, reprimanding in a derogatory manner ignoring the dedicated 23 years services of IMAM to the community which consequently resulted in the resignation under duress by the IMAM (Dr Shabir Ahmed).
(9) Rushing into accepting the resignation with immediate effect, disregarding Imam’s request to carry on his employment till March 2014.
(10) Did not provide membership and financial records to the members for the purpose of conducting SGM on 2 March 2014.”
Many of those matters were also recorded in the reasons for the removal of other Plaintiffs from the Executive Council, in various combinations. It is not appropriate, given the nature of this application, to seek to determine the factual accuracy of the allegations put against the Plaintiffs and relied upon as supporting their removal from the Executive Council. It is important to note, however, that these allegations were of a serious character. As I will note below, it seems to me that the character of the allegations, by which the resolutions for the Plaintiffs’ removal were supported, potentially gives rise to significant injustice to them if the meetings were not properly convened or the resolutions not properly passed, but are nonetheless allowed to stand.
After that meeting, the Defendants approached the Court and sought and obtained, at a contested interlocutory hearing before Darke J on 14 March 2014 (Khan v Khan [2014] NSWSC 342), interlocutory orders that, until specified dates, the Executive Council of the Association, as it was prior to 2 March 2014, continue to act in that capacity pending final determination of these proceedings. Those orders were subsequently continued by consent until further order. The Plaintiffs have, since 14 March 2014, remained in office pursuant to those orders.
At the further meeting convened by the Plaintiffs and held on 23 March 2014, attended by 187 persons, the resolutions for removal of the Plaintiffs that had had purportedly been passed at the 2 March meeting were again put and defeated. That would, of course, be of little relevance if they had effectively been passed at the 2 March meeting.
The Plaintiffs submit that the Association is split between two factions and has been in that position for many years. I am satisfied that at least the present position is that a significant number of members support the Plaintiffs and a significant number of other members, and other persons who would be members but for the Executive Council’s refusal of their applications for membership, do not. That appears to have been the position at least since the election immediately after the judgment of Pembroke J (Bajwa T157–159, 162, Abdul Khan T277–278; Mohammad Sami T332–335]. That matter seems to me to undermine the reliance by Mr Smallbone, who appears for the Defendants, on community opinion to emphasise the merit of the Defendants’ position. I accept that the Defendants are genuinely dissatisfied with the Plaintiffs’ stewardship of the Association and may well have good reason for that dissatisfaction. The evidence led in these proceedings as to the manner in which the Association’s records are held and the evidence that decisions as to who is admitted to membership of the Association are made in a manner that seems to promote the position of those presently in control of the Association are matters that might well support such dissatisfaction. Beyond that, it should be emphasised that the Court’s role is to determine the validity of the Requisition and the Petition (so far as it is relied on to support the Requisition) and the 2 March meeting and whether they should be validated, and not any question of who would be “better” to run the Association, which is a matter to be decided by its members in accordance with its constitution and not by the Court. Any concern as to the Defendants’ conduct in managing the Association cannot be addressed by treating an otherwise invalid requisition or meeting as though it were valid, unless the conditions for validation under s 1322 of the Corporations Act are satisfied. The matters to which Mr Smallbone refers would be of greater relevance if an application were made by one or more members of the Association for its winding up on just and equitable grounds.
Mr Smallbone submits that the removal of the Plaintiffs and the appointment of the Defendants at the meeting of 2 March 2014 “was the expression of democratic governance, through the appropriate organ of the Association” and that any attempt to “frustrate or defeat” the rights and powers of members would tend to pervert the Association and that “[n]o narrow or technical approach should be taken to the validity or validation on attempts to invoke constitutional mechanisms for the exercise of democratic decision-making” and
“the Court should be astute to defeat attempts to frustrate such rights and powers and put down attempts to defeat democratic governance of incorporated associations”.
It seems to me that there are several difficulties with approaching the matter on so broad a basis. The first is that, as Mr Cheshire pointed out and as I will note below, the two meetings of the Association organised by the Plaintiffs and the Defendants respectively reached opposite results. The second is that the manner in which the will of members of the Association is to be expressed is confined by its constitution and the Associations Incorporation Act 2009. Third, Mr Smallbone’s submission tends to assume that the meeting on 2 March in fact expressed the will of the Association, which is a question to be determined, in part, by the regularity of the means invoked for that meeting.
I accept that, as Mr Cheshire points out, there is no reason to treat the 2 March meeting as any more or less expressive of the will of the Association’s members than the meeting of 23 March 2014. I accept that, as Mr Cheshire also points out, that meeting expressed the will of the persons associated with the Defendants since the persons associated with the Plaintiffs largely did not attend it. The meeting of 23 March 2014 similarly expressed the will of the persons associated with the Plaintiffs, so far as persons associated with the Defendants withdrew from it before the vote was taken. That proposition is relevant, however, only so far as it reinforces the fact that the Court should simply seek to determine the validity of the Requisition, the Petition (so far as it is relied on to support the Requisition), the 2 March meeting and the application for validation of them, in accordance with legal principle, rather than making any assumption that any potential outcome is more conducive to reflecting the views of the Association’s members or the local community, which views are plainly deeply divided.
Affidavit evidence
The parties read voluminous affidavit evidence, although some of that evidence was primarily relevant to the earlier interlocutory application heard and determined by Darke J, and of doubtful relevance in a final hearing, and other evidence was directed to the question of the admission of 77 members to the Association in November 2013, which was ultimately not relied upon by the Plaintiffs. Many of the witnesses who gave affidavit evidence were cross-examined. I will refer to several of those affidavits at this point without seeking to be comprehensive.
The Plaintiffs relied on affidavits of the First Plaintiff, Mr Aijaz Khan, dated 5 March 2014, 13 March 2014, 30 March 2014, 12 August 2014 and 3 December 2014, Mr Khan is or was (depending on the outcome of the proceedings) the President of the Association. Mr Khan set out information as to the background to the Association and the properties owned by it, and referred to correspondence preceding the 2 March meeting in his affidavit dated 5 March 2014. Mr Khan’s affidavit dated 13 March 2014 sets out evidence as to the experience of the Plaintiffs which was not relevant to this application, which does not involve any assessment by the Court as to who ought to be in control of the Association, as distinct from the validity of the Requisition and 2 March meeting. Mr Khan’s affidavit dated 20 March 2014 dealt with the practice for receipt of membership fees and the manner in which annual general meetings of the Association are held. Mr Khan’s affidavit dated 12 August 2014 related to events concerning meetings of the Association’s Executive Council on 15 November 2013 and 21 January 2014. Mr Khan’s further affidavit dated 3 December 2014 related to, inter alia, the barring of several persons from the Mosque. That matter was of limited relevance to this application.
The Plaintiffs also relied on affidavits of the Third Plaintiff, Mr Nasib Mohammad, dated 6 March 2014, 31 March 2014 and 4 December 2014. Mr Mohammad is or was (depending on the outcome of these proceedings) the secretary of the Association. Mr Mohammad’s affidavit dated 6 March 2014 was directed to seeking to identify the current membership of the Association and identifying persons who had signed the Requisition who he contended were not members of the Association. Mr Mohammad’s affidavit dated 31 March 2014 was directed to the conduct of the meeting called by the Plaintiffs on 23 March 2014 and was of limited relevance since the validity of that meeting is not in issue in the proceedings, other than to indicate the extent of division within the Association. Mr Mohammad’s third affidavit dated 4 December 2014 responded to an affidavit of Mr Sohail Shamim dated 28 November 2014, relied on by the Defendants, relating to the financial status of several members of the Association.
The Plaintiffs rely on an affidavit of Mr Mohammed Arif dated 6 March 2014 to establish that he had not received the First Notice or the Second Notice for the special general members meetings of the Association. As I will note below, it seems to me that Mr Arif’s evidence reflected the particular circumstance that his address was not correctly recorded in the records of the Association that were made available to the Defendants. The Plaintiffs also rely on the affidavit of the Fifth Plaintiff, Mr Mohammed Malak, dated 6 March 2014 to establish that several notices of the relevant meetings were sent to him, in the same envelope, addressed to members of his family and, implicitly, that separate notices were not sent to those family members. Those family members were not, however, called to give evidence to that effect. Several other affidavits were read by the Plaintiffs on voir dire, but not, in the event, in the substantive proceedings.
The Defendants in turn relied on in the order of 40 affidavits from a large number of witnesses, many of whom were cross-examined. The Defendants relied on the affidavit of the First Defendant, Mr Shahzad Khan dated 13 March 2014, parts of which were not pressed, and other parts of which related to the calling and conduct of the 2 March meeting. Mr Khan also gave evidence of his background and the contribution which he sought to make to the Association, having been elected, or purportedly elected, as its new president at the 2 March meeting, after the purported removal of Mr Aijaz Khan as its former president. Mr Shahzad Khan’s further affidavit dated 21 August 2014 referred to the difficulties experienced by the Defendants in obtaining access to minutes and other documents of the Association and to the Association’s purchase of properties using interest bearing loans in 2013, which is plainly a matter with which he and other persons associated with the Defendants disagree. However, I should again record that the role of the Court in this application is not to determine the prudence or otherwise of the manner in which the Association is presently being managed, but to determine the validity of the Requisition, the Petition and the 2 March meeting and whether any deficiency in that regard should be validated.
The Defendants relied on an affidavit of the Second Defendant, Mr Sohail Shamim, dated 20 August 2014 which referred to his having read an earlier version of the Requisition and agreed with the Petition, and having been involved in visiting others and asking them to sign the Petition, and also himself signing the Petition. Mr Shamim’s second affidavit dated 28 November 2014 referred to his having paid membership fees for the Association, by giving the amount to Mr Chaudhry, to have it deposited in the bank account of the Association on his behalf; to his having been permitted to attend the annual general meeting on 2 November 2014, after he was initially told that he could not because his membership fees were in arrears; and to his observation that at least one other person was not permitted to enter the annual general meeting on the basis of arrears in membership fees. He also refers to various invoices and other documents relating to membership of the Association. Mr Shamim’s further affidavit dated 3 February 2015 deals with the circumstances in which he asked others to sign the Petition and refers to his and Mr Siddique’s signature of the Second Notice. By his affidavit dated 15 April 2015, Mr Shamim also referred to dealings with the records of the Association which are primarily relevant to the issue of the 77 members, which, as I noted above, is no longer relied upon by the Plaintiffs.
The Defendants read an affidavit of the Third Defendant, Mr Mohammad Siddique, dated 13 March 2014 relating to his willingness to perform the duties of secretary of the Association, the position to which he was elected, or purportedly elected, at the 2 March meeting. By his further affidavit dated 15 April 2015, Mr Siddique led evidence relating to the Association’s records which was primarily relevant to the issue of the admission of the 77 members in November 2013, which is now not relied on by the Plaintiffs. Mr Siddique also gives evidence of his payment of four years of membership fees at the special general meeting on 2 March 2014, the deposit of the relevant funds to the Association’s bank account, and the subsequent refusal to renew his membership by the Executive Council under the Plaintiffs’ control.
The affidavit of the Sixth Defendant, Mr Mahmood Khan, dated 3 February 2015 deals with his attendance at the meeting in December 2013 to which I referred above, and a conversation with Mr Aijaz Khan concerning the position of the Imam, and to a discussion concerning the requisition with Mr Zahid and Mr Bajwa in January 2014, and to his signature of the “requisition” for the meeting, although Mr Zahid had signed, by hand, the Petition rather than the Requisition. The Defendants also read an affidavit of the Seventh Defendant, Mr Nizam Ali dated 13 March 2014. Mr Ali was elected, or purportedly elected, as treasurer of the Association at the 2 March meeting and referred, in evidence admitted as to his state of mind, to concerns which he holds in respect of the conduct of the Plaintiffs in the affairs of the Association.
The Defendants read affidavits of Mr Bajwa dated 3 February 2015 and 9 April 2015. Mr Bajwa’s first affidavit related to the circumstances in which the Requisition was made and the First Notice and Second Notice were signed and issued. Mr Bajwa’s further affidavit dated 9 April 2015 provided further detail as to his receipt of a draft of the Requisition and the Petition from Mr Zahid, discussions about the draft Requisition and Petition with several persons who signed the Petition, and his attempts to access the Association’s membership register. Mr Bajwa’s evidence in cross-examination was that, notwithstanding the reference to dissolution of the Executive Council in the Requisition, it was not the requisitionists’ intention to remove all members of the Executive Council, but only those who were “making the problem” (T179). Mr Bajwa did not accept that that approach was directed only to the removal of those persons who were not in the Defendants’ camp, but characterised the removal as directed to those who are “not doing the good job” (T180). Where, as I have noted, the Association was divided between persons who took different views, an evaluation of that matter was, of course, likely to reflect those differing views. I will refer below to the evidence of others who signed the Petition who did not share Mr Bajwa’s understanding of its intent.
By his affidavits dated 3 February 2015 and 2 April 2015, Mr Mahmood Zahid gave evidence as to his concern as to the Imam’s resignation, the meeting in late December 2013 to which I referred above and his efforts in arranging for several persons to sign the Petition (to which he referred in his affidavit as “the requisition”), and for several persons to sign the Second Notice, and of his dealings with Mr Bajwa and others, in relation to the Requisition, the Petition and the First Notice and Second Notice. By his affidavit dated 13 March 2014, Mr Shakir Chaudhry also gave evidence of steps which had been taken to give notice, initially for the first proposed special general meeting on 16 February 2014 and subsequently for the special general meeting on 2 March 2014. By his affidavit dated 14 March 2014, Mr Mohammad Abdul Sami referred to earlier disputes in respect of the Association and to the expulsion of members of the Association. I again note that the role of the Court, in this application, is not to determine wider issues as to whether the Association is managed in a proper manner, although those issues would very likely arise if an application for the winding up of the Association were brought.
Other evidence led by the Defendants related to the issue as to the purported admission of 77 members to the Association in November 2013, on which the Plaintiffs no longer rely, and difficulties in obtaining access to membership lists and records of the Association. The Defendants read the affidavit of Mr Saeed Chaudhry dated 8 April 2015. Mr Chaudhry was elected, or purportedly elected, as a member of the Executive Council on 10 November 2013 and addressed the circumstances of the suggested admission of 77 members of the Association at a meeting of the Executive Council on 15 November 2013. By his affidavit dated 13 March 2014, Mr Mazhar Idris also gave evidence as to the meeting of the Executive Council on 15 November 2013, dealing with the issue of the admission of the 77 members, and of unsuccessful attempts to obtain minutes of Executive Council meetings and other records of the Association from its secretary. By her affidavit dated 13 March 2014, Mrs Sumrah Shahbaz also referred to unsuccessful attempts to obtain access to the membership lists and financial records of the Association and to her husband’s unsuccessful attempt to be reinstated as a member of the Association. By her further affidavits dated 3 February 2015 and 2 April 2015, Mrs Shahbaz expanded on that evidence and also referred to her signature of the Petition on 5 January 2014 and of the notice of general meeting on 4 February 2014.
Other affidavits relied on by the Defendants related to the circumstances in which the Petition was signed by a number of signatories. By his affidavit dated 31 January 2015, Mr Mohammad Ur Haq gave evidence of having been provided with the Requisition (which would then have been in draft form) by Mrs Tahseen Chaudhry and that he, his wife and his children signed the Petition. By his affidavit dated 31 January 2015, Mr Ehsan Ul Haq similarly gave evidence of being shown the Requisition (which would then have been in draft form) and the Petition and signing the Petition because he “wanted the Association to be run correctly in accordance with its constitution and the needs of the community”. By his affidavit dated 2 February 2015, Mr Abdul Rehman Khan gave evidence of his signature of the Petition, and of having been shown the first part of the Requisition, the letter to the Association’s secretary, in early January 2014. By his affidavit dated 31 January 2015, Professor Mahmood Nagrial also refers to having been shown the Requisition (as noted above, then in draft form) and Petition in early January 2014 and having signed the Petition as he wanted a special general meeting to be called. Mr Mohammad Ayub Khan, by his affidavit dated 31 January 2015, refers to having been given the Requisition (again, then in an earlier draft form) and the Petition on 4 January 2015 and to he and his wife having signed the Petition. Mr Namul Wakil, by his affidavit dated 31 January 2015, also refers to having been shown the Requisition (again, then in draft form) and the Petition on 4 January 2014 and to having signed the Petition and to his understanding that, by signing his name on the Petition, his approval of the letter and his support for calling a special general meeting would be confirmed. By his affidavit dated 31 January 2015, Mr Mohammad Akram refers to a conversation with Mr Zahid concerning problems in the Association, to having been shown the Requisition and the Petition and to having signed the Petition on about 4 January 2014. The letter referred to would again have been a draft of the Requisition.
The Defendants also relied on several other affidavits of witnesses who were not required for cross-examination. I have also had regard to those affidavits but no useful purpose would be served by summarising them.
Whether the Requisition was valid
I now turn to the Plaintiffs’ attack on the validity of the Requisition. The Requisition stated, inter alia, that:
“Take notice that we the undersigned Foundation Members (more than five per cent of [the] Association) in compliance with the provisions stipulated in clause 26 of the Constitution of the Association, hereby ask you to call a Special General Meeting of All the members of the Association to consider the following.”
Several matters were then set out under the heading “The Purpose” including:
“1. The SGM to decide the employment of the Imam of the Rooty Hill [mosque] …
2. The SGM to decide and take the necessary actions including dissolution of the current Executive Council and appoint an Interim Committee. The SGM of the members have the powers to dissolve the Executive Council of the [Association] if in the opinion of the SGM of members the Executive Council has failed to carry out the functions and duties of the Association in accordance with the objectives of the Association as enshrined in the constitution of [the Association] refer to PART II FOUNDATIONZ [sic] MEMBERS Clause 6(a).”
The reference to clause 6(a) in the latter paragraph does not seem to be relevant, since that clause refers to a person ceasing to be a member of the Association on his or her death. The Requisition also stated that the proposed “Interim Committee” would take over the day-to-day management of the Association’s affairs and, within the next six months, would call a special general meeting to pass a revised and updated constitution and then make arrangements for the election of a new Executive Council of the Association.
A heading “The Agenda“ in turn set out a series of proposed resolutions, including resolution 5.2, which made clear that what was contemplated was not the removal of individual members of the Executive Council, whether all or some of them, and their replacement by new members but something different, namely:
“5.2 That the current Executive Council be dissolved.
5.3 That a Care Taker Shuraa shall be appointed. …
5.5 This Meeting authorizes the Care Taker Shuraa, to carry out a drive and recruit new members.”
What ultimately occurred at the meeting on 2 March, to which I will refer below, seems to me to have been different, in substance, from any dissolution of the Executive Council (even if that were within the power of a general meeting) and appointment of an Interim Committee or “Care Taker Shuraa”. I will return to the significance of that difference below.
The last page of the body of the Requisition was signed in handwriting by Mr Bajwa and stated that Mr Bajwa had signed the Requisition “for and on behalf of” 20 named persons who were identified as members of the Association. The Plaintiffs contend that four of those persons were not members of the Association and another six of them were not “financial”, in the sense that their annual subscriptions to the Association were not current. That list is said to be continued in an “attached list Annexure A”, which is not attached, and the last page of the body of the requisition refers to Annexure B which is the Petition, to which I will refer further below.
The Plaintiffs plead that there was no valid requisition requiring the convening of the 2 March meeting under clause 26 of the Association’s constitution (Statement of Claim [14]). That contention is particularised by reference to numerous overlapping matters. In dealing with this and other allegations of invalidity in this application, I proceed on the basis, recognised at least since Isle of Wight Railway Co v Tahourdin (1884) LR 25 Ch D 320 and Fruit & Vegetable Growers Association Ltd v Kekewich [1912] 2 Ch 52 at 57 that the Court “ought not to be astute to discover and give effect to objections raised against efforts made by shareholders to call a meeting of the company to consider its own affairs". In NRMA Ltd v Snodgrass [2001] NSWCA 312; (2001) 52 NSWLR 383 at [22], the Court of Appeal referred to Isle of Wight Railway Co v Tahourdin above and also emphasised the need for “curial restraint in construing notices of meeting and in precluding members from exercising such limited powers as they possess as regards company governance”, and referred to the possibility that ambiguities in a requisitionist’s notice of meeting can be debated and modified. It seems to me that the same or greater restraint should be exercised in dealing with objections to a meeting called by members of an incorporated association.
Whether the Requisition was signed by 5% of members of the Association
The first and second particulars of the Plaintiffs’ attack on the Requisition are that it was not a requisition of not less than 5% of the total number of members of the Association and the Requisition was signed only by Mr Bajwa. Mr Cheshire also submits that the facts that Mr Mahmood Zahid inserted members’ names on the Requisition without reference to them and that the Requisition was signed (in handwriting) only by Mr Bajwa means that it is not a valid Requisition under cl 26.
The Defendants respond to the submission that only Mr Bajwa signed the Requisition by submitting that Mr Bajwa’s signature under the 20 names referred to in the Requisition, prefaced by the words “for and on behalf of the members”, is sufficient signature for each of them. The Defendants rely on case law as to the circumstances in which the printed name of a person may be treated as a person’s signature, if that person or his or her agent has expressly or impliedly represented that that name can be treated as a signature: Leeman v Stocks [1951] Ch 941; Kation Pty Ltd v Lamru Pty Ltd [2011] NSWSC 219 at [34]ff. Mr Smallbone refers to the “authenticated signature fiction”, which was described by White J in Kation Pty Ltd v Lamru Pty Ltd above at [34] as having the effect that:
“Where a person’s name or initial is written on or printed on a document, whether it is at the beginning, end or in the body of the document, that name or initial may be treated as the person’s signature if the person or his agent has expressly, or impliedly represented, that the name can be treated as a signature so as to give what has been called ‘authenticated expression to the contract’”.
This principle was initially directed to the effect of the Statute of Frauds 1677 (Imp) that a contract for the sale or other disposition of an interest in land is unenforceable, unless the agreement or memorandum or note thereof is in writing, signed by the party to be charged, or by some other person lawfully authorised by the party to be charged. The concept of “signature” for the purposes of that legislation has been held to permit the signature by an agent who has the requisite authority to sign the document: Thomson v McInnes (1911) 12 CLR 562 at 573. The same principles are applied to s 54A of the Conveyancing Act 1919 (NSW) and, in Kation Pty Ltd v Lamru Pty Ltd above at [30], White J noted that it was arguable that those principles also applied by analogy to s 54(4) of the Limitation Act 1969 (NSW). In Stuart v Hishon [2013] NSWSC 766 at [17], Harrison J referred to that observation with apparent approval.
However, it seems to me that a requisition of a meeting, which must be signed by 5% of the members of a company or association, raises very different issues to that arising under s 54A of the Conveyancing Act or under the Limitation Act. It can scarcely be contemplated that, if a requisition contained the printed names of 50, 100 or 500 members of a company or association, and required the calling of a meeting within a relatively short time period, a company or association should have to make individual inquiries to determine whether each of those persons had authorised the application of his or her name to the document, in printed form, by an agent. The application of the “authenticated signature fiction”, as formulated in Leeman v Stocks above, may also contemplate that extrinsic evidence would be admissible to determine the authority of the agent who signed the document, although White J reserved the position in that regard in Kation Pty Ltd v Lamru Pty Ltd above at [37]. By contrast, the Court will ordinarily not have regard to extrinsic evidence to determine the validity of a requisition: Re Carlton Football Club Ltd; Gratton v Carlton Football Club Ltd [2004] VSC 379; (2004) 51 ACSR 29 at [10].
I do not consider that the “authenticated signature fiction” should be extended beyond the kind of documents which were in issue in the cases to which I have referred above, generally contractual documents, to apply to a requisition to convene a general meeting of a company or an incorporated association. In the latter context, the existence of a handwritten signature will be important in allowing a company or incorporated association to verify that the requisitionist in fact supports the convening of the meeting, which would otherwise not be apparent from a printed list of names, where the company or incorporated association would ordinarily not have ready access to any authority given by the persons identified by printed names for the application of their names. The approach for which Mr Smallbone contends, in respect of printed signatures on a requisition, has the difficulty that it would require the Association in the first instance, and ultimately the Court, to determine the validity of the entity that received a requisition, if the relevant authorities were not provided to that entity at the same time as the requisition, by reference to extrinsic evidence or assertions as to the circumstances in which those authorities were given. The use of extrinsic evidence for that purpose would be contrary to the approach of determining that matter on the face of the relevant requisition that was preferred in Re Carlton Football Club Ltd; Gratton v Carlton Football Club Ltd above. This finding has the consequences that the Requisition was signed only by Mr Bajwa, unless it can be read together with the Petition, and that the Requisition was not valid unless it can be either read together with the Petition or validated under s 1322 of the Corporations Act.
The next issue is whether the Requisition, read without the Petition, was signed by less than 5 per cent of members. On the finding that I have reached above, the Requisition was plainly signed by less than 5 per cent of members, since it was signed only by Mr Bajwa. I should nonetheless address the position if the other names printed in the Requisition were treated as signatures, both because the parties devoted substantial attention to it and in case an appellate court takes a different view as to the effect of the printed names on the Requisition.
The findings that I have reached above indicated that several of the relevant matters could properly be characterised as of a procedural nature for the purposes of s 1322(6)(a)(i) of the Corporations Act. I am also satisfied that members of the Association, including the Plaintiffs, acted honestly within the meaning of s 1322(6)(a)(ii) of the Corporations Act, and that permits the potential application of s 1322(4). I note, for completeness, that I am not satisfied that it would be just and equitable, for the purposes of s 1322(6)(a)(iii), for an order to be made under s 1322(4), for the same reasons that I am not satisfied that validation of the Requisition and the meeting can occur without substantial injustice, for the purposes of s 1322(2) of the Corporations Act.
A matter may only be validated under s 1322(4) of the Corporations Act if no substantial injustice has been or is likely to be caused to any person: s 1322(6)(c); Holmes v Life Funds of Australia Ltd [1971] 1 NSWLR 860. Whether there is "substantial injustice" for the purposes of s 1322(6)(c) involves a weighing of the prejudice if the order is made against the prejudice suffered by, relevantly, other members of the Association if it is not made: Re Compaction Systems Pty Ltd & the Companies Act [1976] 2 NSWLR 477 at 493; Gangemi v Osborne [2009] VSCA 297. A meeting may be validated under this section, although notice of that meeting was not properly given, if that failure does not cause substantial injustice to any person: Holmes v Life Funds of Australia Ltd above. In an application under s 1322(4), the onus is on the Defendants, who seek to invoke the operation of the section, positively to establish that no substantial injustice has been or is likely to be caused to any person: Australian Hydrocarbons NL v Green above; Elderslie Finance Corporation Ltd v Australian Securities Commission (1993) 11 ACSR 157 at 160. I do not consider it necessary to deal with each of the deficiencies for which the Defendants seek validation seriatim. I am not satisfied, for the purpose of s 1322(6)(c) that no substantial injustice has been caused, or is likely to be caused, to any person, for the reasons noted above, in respect of the divergence between the purpose for which the relevant meeting was convened and what was done at the 2 March meeting. I am therefore not able to make an order under s 1322(4) of the Corporations Act.
I should add that, in some circumstances, a challenge to the validity of an election of office bearers of an incorporated entity may be able to be dismissed on discretionary grounds, despite a finding that the relevant election was effected by non-compliance with procedural requirements: Rivers v Bondi Junction-Waverley RSL Sub-Branch Ltd (1986) 5 NSWLR 362 at 373 – 374; Ahmed v Chowdhury above at [13]. I do not understand the Defendants to have submitted, in terms, that I should take that course, although many of the matters that would have been relevant to such a discretion have been canvassed in dealing with the applications under s 1322 of the Corporations Act. The matters which indicate that relief should not be granted under s 1322 of the Corporations Act also indicate that such relief should not be granted on a discretionary basis.
The Plaintiffs’ proposal in opening
In opening, the Plaintiffs submitted that the Court should make an order confirming their position at least on an interim basis, and also make an order for an election of members of the Executive Council. I do not propose to make such an order. First, Mr Smallbone made clear that the Defendants do not have confidence in either the process which would be adopted for an election or its fairness. So far as the process proposed by the Plaintiffs contemplates a committee involving representatives of each of the Plaintiffs and the Defendants, it seems to me that there is substantial force in Mr Smallbone’s submission that such a committee may well be deadlocked. Second, it seems to me that the offer made by the Plaintiffs, if it were to have any real weight, would have needed to have been made shortly after orders were made by Darke J, when it might have had real benefit in narrowing the differences between the parties, and the fact that it is made over a year later means that it now has much less advantage, particularly where the Plaintiffs’ term of office will in any event expire later this year.
Conclusion and orders
The outcome of these proceedings is in many respects unfortunate, and may provide little benefit to either of the parties, and the circumstances in which that has occurred is also regrettable. On the one hand, the Plaintiffs took several points as to the form of the Requisition and the Petition, at least some of which were of a somewhat technical character. On the other hand, the requisitionists were squarely placed on notice as to the issues as to the form of the Requisition and the Petition, at least by late January 2014, and could have withdrawn the Requisition and Petition at that point and requisitioned a new meeting in a manner that complied with the Association’s constitution. Had that course been taken, the costs involved in the interlocutory application before Darke J and in several days of hearing before me would have been avoided. The Plaintiffs’ offer to call a new election, made on the first day of this hearing, more than a year after the relevant events, could also have been made long before, and might then have had some utility in avoiding the continued disputes within the Association and the substantial costs which will have been incurred in these proceedings.
The result of these proceedings, and the history of disagreement and litigation surrounding the Association, leaves open the risk that ultimately a member or members may bring an application for the Association to be wound up, notwithstanding the benefits it could, absent dissention among its members, or does deliver to its members and the community. None of the underlying difficulties within the Association would have been avoided had the Court reached the opposite result in these proceedings, and simply substituted the Defendants, who do not have the confidence of the Plaintiffs and those who support them, for the Plaintiffs, who do not have the confidence of the Defendants and those who support them, as members of the Executive Council.
As I noted above, the Plaintiffs sought a declaration that the meeting of 2 March 2014, by which the First–Seventh Defendants were purportedly appointed or elected as office bearers of the Association was not a meeting held in accordance with the Association’s constitution and a declaration that the Executive Council remains as it was prior to 2 March 2014. I consider that a declaration should be made as to the invalidity of the 2 March meeting, for the reasons set out above. The current membership of the Executive Council follows from that declaration, at least so far as the matters raised in these proceedings are concerned, but I do not consider I should make a wider declaration in that respect. The Plaintiffs also seek an order that the Defendants be restrained from acting or purporting to act for or on behalf of the Association, or representing to any person or organisation that they are officers or authorised representatives of the Association. It seems to me that an order should not be granted in that form, so far as it is indeterminate in time and does not address the possibility that the First–Seventh Defendants might at some point be lawfully appointed as officers or representatives of the Association, although that did not occur on 2 March 2014. The Defendants’ Cross-Claim should be dismissed. The Defendants must pay the Plaintiffs’ costs of the proceedings, as agreed or as assessed.
The parties should bring in agreed short minutes of order to give effect to this judgment within 14 days.
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