Re Walker;
[2003] WASC 252 (S)
RE WALKER; EX PARTE FREMANTLE ISLAMIC ASSOCIATION INCORPORATED [2003] WASC 252 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 252 (S) | |
| Case No: | CIV:1718/2003 | 2 DECEMBER 2003 & 22 MARCH 2004 | |
| Coram: | PULLIN J | 17/12/03 | |
| 22/03/04 | |||
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | FREMANTLE ISLAMIC ASSOCIATION INCORPORATED PATRICK JOHN WALKER, COMMISSIONER FOR FAIR TRADING |
Catchwords: | Practice and procedure Application by unsuccessful party for costs out of fund |
Legislation: | Nil |
Case References: | Nil Knight v F P Special Assets Ltd (1992) 174 CLR 178 W J Green & Co v Cooper & Oxley Constructions Co Pty Ltd (1993) 10 WAR 227 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
DECISION : 22 MARCH 2004 FILE NO/S : CIV 1718 of 2003 MATTER : Section 35 of the Associations Incorporation Act 1987
and
An application for a Writ of Prohibition against PATRICK JOHN WALKER, COMMISSIONER FOR FAIR TRADING
FREMANTLE ISLAMIC ASSOCIATION INCORPORATED
Applicant
AND
PATRICK JOHN WALKER, COMMISSIONER FOR FAIR TRADING
Respondent
(Page 2)
Catchwords:
Practice and procedure - Application by unsuccessful party for costs out of fund
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
Applicant : Mr M J Hawkins
Respondent : Mr D F Oliver
Solicitors:
Applicant : Naveen Pillay
Respondent : Department of Consumer & Employment Protection
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Knight v F P Special Assets Ltd (1992) 174 CLR 178
W J Green & Co v Cooper & Oxley Constructions Co Pty Ltd (1993) 10 WAR 227
(Page 3)
1 PULLIN J: This is an application, nominally by the applicant, that its costs be paid out of the funds held by the respondent. The application is made following the dismissal of the application to obtain an order quashing the respondent's decision to cancel the incorporation of the applicant, which occurred on 2 January 2003. As soon as that part of the history of this matter is stated, it is clear that it is not the applicant which is making the application for costs, because it no longer exists.
2 The person who has been instructing the solicitors for the cancelled association is Mohammed Ayiub Ali, the former president of the cancelled association. The respondent was prompted to take action to cancel the incorporation because it received a complaint about the conduct of the association. The information he was given in 2002 was that no annual general meeting had been convened since July 1999, despite the rules requiring such meetings on an annual basis.
3 Mr Pillay, in an affidavit filed in support of these proceedings and sworn 23 June 2003, said that he had been informed by Mr Ali that funds for a mosque had been collected by the association and that the association "lay dormant" while the president was overseas. In a letter dated 16 March 2003, the president said it was not true that the association had not been active because the executive committee, as he called it, had met regularly every Friday after Friday prayers.
4 It is to be observed that by clause 11 of the constitution, management is vested in the annual general meeting and a committee of management. The committee of management is elected by members. Whether Mr Ali meant to refer to the committee of management when he said that the executive committee met on Fridays, I do not know. I have not been shown the record of any proceedings of the executive committee. At no stage before I gave judgment in this application - that is, on the original application - did Mr Ali attempt to reveal who he claimed the committee members were, or how decisions were made for the association, or whether the proceedings had been authorised by a committee of management of the association.
5 The funds which are now held by the respondent total just over $24,000. They had been transferred to the respondent on 22 January 2003.
6 When I handed down my judgment on 20 January 2004, Mr Pillay foreshadowed an application for payment of costs out of the funds of the former incorporated body. An order was made that the applicant file and
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- serve any affidavits in support of that application within 28 days, and that the respondent file and serve any answering affidavits 14 days thereafter.
7 No affidavits were filed by Mr Ali before 19 March 2004. I am informed by Mr Hawkins, appearing as counsel for the applicant, that affidavits were filed last Friday, or at least faxed somewhere to the Court on Friday. They had not been seen by me before this hearing commenced, and had not been served on the respondent. I was told that one of the affidavits which is not even yet before me, stated that Mr Ali was in north Queensland. I assume that was by way of some explanation about why no affidavits or other information had been put forward in support of the application.
8 The other affidavit, a photocopy of which I have been shown and which is sworn by Naveen Chandra Pillay on 19 March 2004, says that he was instructed by Mr Ali and verily believes that the circumstances set out in the letter dated 16 March 2004, which was exhibited and which was addressed "To Whom It May Concern," were correct. The letter was signed by Mohammed A. Ali, "president", and says that prior to the cancellation of the Fremantle Islamic Association Inc, the office-bearers were as follows, and then he sets out the names of eight people, one being Mr Ali, as president; another being Mr Ismail Ahmed, as vice-president; Mr Guray Erok, as treasurer; Mr Zaheer Ali, as secretary; and four committee members.
9 The letter goes on to say that Mr Ali was authorised by the "said office bearers" to pursue the association's application for an order nisi for a writ of prohibition and declaration. The difficulty with this information is that it still does not say whether or not this collection of people are members of the committee of management, so it is not clear, after reading the affidavit and that letter, whether or not there was a committee of management or when, if there were such a committee, the members were elected and who those members were. So it is still not clear whether any collection of people constituting the former committee of management have authorised Mr Ali to take any of this action.
10 Strictly speaking, a decision of the former committee of management, if it ever existed, did not authorise the commencement of proceedings once the association was cancelled, but if there was a former committee of management and it resolved to bring the proceedings or authorised Mr Ali to do so, then that would be a highly material piece of information in the exercise of any discretion which the Court has.
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11 As it turns out, despite plenty of time being provided, it is no clearer today than it has been in the past that Mr Ali is acting with the authority of persons who were formerly properly in control of the incorporated body.
12 The Court does have authority in certain circumstances to make costs orders of the kind sought here, and that authority comes from s 37(1) of the Supreme Court Act, which provides that:
"Subject to the provisions of this Act and to the Rules of Court and to the express provisions of the Local Courts Act 1904, or any other Act, the costs of and incidental to all proceedings in the Supreme Court, including the administration of estates and trusts, shall be in the discretion of the Court or Judge, and the Court or Judge shall have full power to determine by whom or out of what estate, fund, or property, and to what extent such costs are to be paid."
13 There is also a provision in the Rules authorising payment of moneys out of funds, that being O 66 r 9, but I do not believe that provision applies because it relates to parties. Section 37 is the wider provision, and if any provision does apply, in my view it is that section which would assist the applicant in the application which is made today.
14 The "subject to" provision in s 37, of course, compels me to examine the provisions of the Associations Incorporation Act 1987. The relevant provisions are s 33, s 35 and s 36. Section 35 provides for the cancellation of the incorporation of an association. Section 36 provides that where there has been a cancellation, the property of the association vests in the Commissioner. Section 36 also provides that the Commissioner may give directions as he thinks just for or with respect to the payment of debts and liabilities of the association, the distribution of its property and the winding up of its affairs. Section 36(3) provides that s 33 applies to, and in respect of, the vesting, under s 36, of property of an incorporated association remaining after satisfaction of the debts and liabilities of the association and the payment of any amount under s 36(2) in the same way as that section applies to and in respect of the vesting of that property in a winding up of an incorporated association. Section 33 must therefore be examined. Section 33(1) identifies what is meant by the surplus property of an incorporated association. It is the reference to the property of the association remaining after satisfaction of debts and liabilities of the association and the costs, charges and expenses of the winding up of the association. Section 33(2) provides:
(Page 6)
- "Notwithstanding any Act or law to the contrary, it shall not be lawful for any part of the surplus property of an incorporated association to be distributed on the winding up of the association -
(a) among the members or former members of the association; …"
15 Now it is clear that the situation we have here is that Mr Ali has instructed solicitors. By doing so, he has incurred a debt to those solicitors. It is also clear that, on the material before me, it has not been established that he had any authority from the association to conduct litigation of this kind, and therefore Mr Ali could not claim that the legal expenses associated with this litigation were costs which would amount to a debt or liability of the association.
16 It was argued that the costs of this litigation might fit within the description of costs, charges and expenses of the winding up of the association. That was a submission made by Mr Hawkins, but I am afraid that I cannot agree with it. In my view, the costs, charges and expenses of the winding up of the association would not include litigation attempting to quash a decision of the respondent to cancel incorporation of the association.
17 What we have then is an attempt by Mr Ali to have some of the surplus property of the formerly incorporated association distributed to him for the purpose of discharging the costs of conducting this litigation. Unfortunately, Mr Ali is a former member of the association, and in my view that stands in the way of the attempt to gain an order of the kind which is sought here.
18 One can have some degree of sympathy with Mr Ali, who was, after all, attempting to save the applicant from the process of cancellation and winding up which is now well under way; but s 37 of the Supreme Court Act is clearly subject to the provisions of s 33 of the Associations Incorporation Act 1987, and that creates the problem which I have mentioned, which is that there is a prohibition on an order of the kind which is sought here, ie a distribution to a former member.
19 If I am wrong about that view of the legal position, then there is a question of whether or not I should exercise my discretion and make an order in favour of payment which would allow Mr Ali to discharge the costs that he has incurred in the conduct of the litigation. It is clear that every opportunity should be given to a former president to challenge a
(Page 7)
- decision of this kind, but steps could, of course, have been taken by Mr Ali before cancellation took place. The battle could have been fought while the association was still in existence, or in existence as an incorporated body.
20 This legislation - that is, the new Associations Incorporation Act 1987 - was introduced with the need for heightened accountability in mind. In the Second Reading Speech by the Attorney General on 11 June 1987 when the Associations Incorporation Bill was introduced, it was noted that there were major deficiencies in the then Act, including inadequate accountability of association executives to their own membership. The purpose or aim of the new Bill, and therefore of the new legislation, was to improve the accountability of associations to their members.
21 What has led to the cancellation in this case was lack of accountability which formed the foundation for this application. Taking into account that policy and the fact that Mr Ali has made no proper attempt to give particulars about who made the decision about the conduct of this litigation, I would exercise my discretion against the making of an order of the kind which is being sought in this case. I dismiss the application.
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