Rothfield v Thoroughbred Racehorse Owners Association Inc
[2005] VSC 515
•21 December 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
PRACTICE COURT
No. 10015 of 2005
| JOHN ROTHFIELD & ANOR | Plaintiff |
| v | |
| THOROUGHBRED RACEHORSE OWNERS ASSOCIATION INCORPORATED & ANOR | Defendant |
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JUDGE: | Bongiorno J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 20 & 21 December 2005 | |
DATE OF JUDGMENT: | 21 December 2005 | |
CASE MAY BE CITED AS: | Rothfield & Anor v Thoroughbred Racehorse Owners Association Incorporated & Anor | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 515 | |
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Incorporated association – membership – disputed entitlement to membership – interlocutory injunction – balance of convenience.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S. O’Bryan SC with Mr P. Heath | Banks & Associates |
| For the Defendants | Mr H. Borenstein SC with Mr T. D. Cordiner | Maurice Blackburn Cashman |
HIS HONOUR:
This is an application for an interlocutory injunction concerning the membership of the plaintiffs in an organisation known as the Thoroughbred Racehorse Owners Association Incorporated. The plaintiffs are members of the committee of that organisation. The question of the validity of their membership has been called into question by other members of the committee who claim they are not entitled to be regarded as members. A meeting was called for yesterday to review their status as members of TROA and their eligibility for membership of the committee because of an opinion obtained from a firm of chartered accountants that they were not financial members at the time of their appointment to the committee. Yesterday I restrained the defendants from taking any step at that meeting affecting the plaintiff's membership of the organisation pending the resolution of this application.
The plaintiffs became members of TROA (if they did in fact become members) following an invitation to become involved in the organisation from one Peter Jakovski, who was the then chief executive officer. They accepted the invitation and their names were added to the register of members, although it is common ground they never signed application forms for membership or paid entrance fees or subscriptions. They subsequently became members of the committee and apparently acted as such for most of this current year, without objection from fellow committee members or members generally. Significantly they were re-elected to the committee in September by a vote of the general membership of the organisation.
Mr Borenstein SC, for the defendants, argued by reference to various of the association's rules that the plaintiffs were clearly not valid members of the association and never had been. However correct that position may be on a full analysis of all the rules and all other available evidence, the fact that the plaintiffs were included on the first defendant's register of members, they have acted as committee members for the best part of a year and were re-elected to the committee by the general membership, raises at least a serious question to be tried as to whether they are now members. Such question cannot be decided on this application. Questions of estoppel or unconscionability may arise on a proper consideration of all the facts, but cannot be decided at this stage. Thus, subject to the balance of convenience being in favour of the grant of an interlocutory injunction, such an injunction should go.
Mr Borenstein says the balance of convenience favours no injunction, as such an injunction would prevent the committee reviewing, in a proper way, the question as to whether the plaintiffs are eligible to be committee members. In any event, he says, the rules provide for a dispute resolution mechanism which should have been adopted.
The affidavit material establishes that on Friday of this week, a special general meeting of the organisation has been called to move for a spill of the entire committee and its replacement with a new committee, which would include the plaintiffs.
Mr Borenstein submitted that that meeting will be convened in ignorance of the true situation as to the plaintiff's qualification to be committee members if the meeting is indeed valid, as he submits it is not.
The question of the validity of that meeting is only peripherally before this court, and nothing I say should be taken as passing upon its true validity. But assuming it is valid for the purposes of this application, it is a general meeting of the organisation so that its decision, whatever it is, will be a democratic one. The organisation was content to have the plaintiffs as members and committee members for the whole of this year. The balance of convenience favours their remaining being accepted as members at least until this proceeding or any other competent proceeding declares that they are not. There will be an interlocutory injunction. Mr Borenstein wished to be heard on the form of the injunction.
MR BORENSTEIN: Only in the way in which I indicated to Your Honour before lunch, that is that the prohibition on removal from the register should be confined to the reason that they were not properly admitted to membership.
HIS HONOUR: Yes. Mr Borenstein makes the submission, which he has just enunciated. In the circumstances, I consider it appropriate that the injunction go in the form suggested by the plaintiffs, that the defendants be restrained from taking any action in respect of the membership of the plaintiffs until this proceeding is determined. Accordingly - - -
MR BORENSTEIN: I'm sorry, will Your Honour reserve liberty to apply?
HIS HONOUR: Yes, of course. Accordingly, there will be an injunction, an interlocutory injunction that until the trial of this proceeding or further order of this court, the defendants - it does not need both defendants,
Mr O'Bryan, does it? It is the - - -
MR O'BRYAN: As I said yesterday, we do seek that, Your Honour, on an interlocutory basis because at the end of the day, the second defendant is leading the charge. He signed the notice, he's the one you saw from the evidence put this into the hands of the auditors, and they wrote back to him. He's the chairman of the board who controls the majority, and so in fact if anything, Your Honour, we would submit that we're a bit light on. We could've joined the majority of the committee who are behind this but with problems of service and timing, we didn't. We'd submit it's appropriate that there be an injunction against the second defendant.
HIS HONOUR: Do you want to say anything, Mr Borenstein?
MR BORENSTEIN: No.
HIS HONOUR: Yes. The first and second defendants be restrained from taking any steps to: (a) suspend the membership of the plaintiffs and the first defendant;
(b) expel the plaintiffs from the first defendant;
(c) remove the names or cause the removal of the names of the first and second plaintiffs - or the plaintiffs from the first defendant's register of members.
(2) There will be liberty to the parties to apply on notice.
(3) Reserve costs.
Now, what about directions? Are there any directions required, Mr O'Bryan?
MR BORENSTEIN: Your Honour, before we go to the directions, the draft order contains an undertaking, Your Honour.
HIS HONOUR: Yes, I was about to get to the undertaking as to damages. All of this is of course predicated on the basis that the plaintiffs will give the appropriate undertaking.
MR O'BRYAN: Of course, Your Honour, and we don't seek directions at this stage. Is it appropriate to refer the matter to the Listing Master for directions because probably early next year we should be trying to get a speedy hearing or something expedited.
HIS HONOUR: Very well. I will simply reserve liberty to apply and order that the matter be referred to the listing master on a date to be - I suppose to be determined by the plaintiffs.
MR O'BRYAN: Yes, or - - -
HIS HONOUR: There is no point in sending it over there - - -
MR O'BRYAN: No, Your Honour.
HIS HONOUR: - - - until you are ready and give notice to the defendants.
MR O'BRYAN: If Your Honour pleases.
HIS HONOUR: On a date to be selected by the plaintiffs on notice to the defendants, on 14 days' notice to the defendants.
I will reserve the costs and I will order that this order be drawn up by the solicitors for the plaintiffs and signed by a judge, pursuant to rule 60.04.
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