Sandhu v Riverland Singh Society Inc - [2009] SADC 15

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
SANDHU & ORS v RIVERLAND SINGH SOCIETY INC
[2009] SADC 15
Reasons for Decision of Her Honour Judge McIntyre
19 February 2009
ASSOCIATIONS AND CLUBS - GENERAL MATTERS
The applicants sought a review of two decisions in the Magistrates' Court Minor Civil Jurisdiction -The first decision related to declarations concerning the fixing of a membership fee in a meeting of the Respondent Society held on 1 March 2002 and the election of certain committee members of the Society held in October 2005 - The second decision related to the costs orders made by the learned Magistrate.
Held - Application for review dismissed - orders of the learned Magistrate affirmed.
Magistrates Court Act 1991 s38(6), s38(7) and s38(8); Associations Incorporation Act 1985 (SA) s61, s61(15), referred to.
Fox v Percy (2003) 214 CLR 118; CSR Ltd v Della Maddalena (2006) 80 ALJR 458; Devries v Australian National Railway Commission (1993) 177 CLR 472; Millar & Ors v Houghton Table Tennis & Sports Club Inc (2003) 225 LSJS 241; Popovic v Tanasijevic [2001] SASC 289; JN Taylor Holdings Ltd v Bond (1993) 59 SASR 432 ; Commissioner for Consumer Affairs v Gyam Pty Ltd [2000] SASC 409, considered.

SANDHU & ORS v RIVERLAND SINGH SOCIETY INC
[2009] SADC 15
Introduction

Somewhat paradoxically, in view of the objects of the Society, this is the latest battle in a long running dispute between two groups within the Riverland Singh Society Incorporated (“the Society”).
By application dated 24 July 2008, the Applicants sought a review by this Court of two Magistrate’s decisions in a minor civil claim under s38 (6) and (7) of the Magistrates Court Act 1991 (“the MCA”). The hearing before the learned Magistrate took place over 16 days. His decision on the substantive issues was delivered on 24 June 2008 (“principal decision”). His decision on the issue of costs was delivered on 4 July 2008 (“costs decision”).
The Applicants, who were the plaintiffs in the Magistrate’s Court, seek a review of part of the principal decision and the whole of the costs decision.
Specifically they seek a review of the learned Magistrate’s conclusions concerning two key events. The first event was a meeting of the Society held on 1 March 2002. The second was a series of events leading to the election of certain committee members of the Society held in October 2005. The Applicants seek declarations that certain conduct of the Respondents in relation to the meeting and the elections was oppressive or unreasonable.
The Applicants also appeal the costs decision wherein the learned Magistrate awarded the Respondents their costs at 75% of the Supreme Court scale. The Applicants contend that, as the action was a minor civil action, costs could only be awarded on the Magistrates Court scale of costs applicable to such actions.
The Nature of the Appeal
Section 38(6) of the MCA provides that the District Court may, on the application of a party dissatisfied with a judgment given in a minor civil action, review the matter. The decision of the District Court on such review is final and not subject to appeal.[1] The procedural rules applicable to a review are set out in s38 (7) of the MCA. The District Court may inform itself as it thinks fit and is not bound by the rules of evidence. In hearing and determining the review the court must act according with equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
[1] s38(8) Magistrates Court Act 1991
Neither party requested that I rehear the evidence taken before the Magistrate. Neither party sought to adduce any additional evidence. I must therefore consider the evidence that was lead at trial and conduct a review of the trial and the reasons for decision[2].
[2] Fox v. Percy (2003) 214 CLR 118; CSR Ltd. v Della Maddalena (2006) 80 ALJR 458
The learned Magistrate heard evidence and submissions over 16 days. As indicated above I did not hear the evidence of any of the parties. What was said about the matter before me was put by way of submissions to enable me to better understand the evidence given before the Magistrate and his reasons.
The Magistrate was provided with two contrasting accounts of the events of 1 March 2002 and the elections of October 2005. The Magistrate, as part of his task, had to decide by reference to all of the evidence before him which of the parties’ accounts he accepted as being the more credible and likely to be accurate. Ordinarily an appellate court including, in my view, a court of review such as in the present case, will recognise the advantages the tribunal at first instance has in hearing and seeing the witnesses give their evidence. In general, a finding of fact by a trial judge based on the credibility of a witness may only be set aside upon appeal when incontrovertible facts or uncontested testimony demonstrate that the judge’s conclusions are erroneous or where it is concluded that the decision of the trial judge was glaringly improbable or contrary to compelling inferences in the case.[3]
[3] Fox v Percy see note 2 above and Devries v Australian National Railway Commission (1993) 177 CLR 472
I will bear these principles in mind as I consider the various matters put to me by counsel for the parties.
Background
The Applicants sought relief of various forms pursuant to s61 of the Associations Incorporation Act 1985 (SA) (“the AIA”).
Section 61 of the AIA provides relevantly:
61—Oppressive or unreasonable acts
(1)     A member or former member of an incorporated association may apply to the Supreme Court or the Magistrates Court for an order under this section on the ground that the association has engaged, or proposes to engage, in conduct that is oppressive or unreasonable.
…..
(4)    The Court hearing a proceeding under this section may, if satisfied that the association has engaged, or proposes to engage, in conduct that is oppressive or unreasonable, make one or more of the following orders:
(a)an order for regulating the conduct of the association's affairs in the future;
(b)     an order directing the association to institute, prosecute, defend or   discontinue specified proceedings, or authorising a member of the   association to institute, prosecute, defend or discontinue specified   proceedings in the name and on behalf of the association;
(c) an order restraining a person from engaging in specified conduct or from doing a specified act or thing;
(d)     an order requiring a person to do a specified act or thing;
(e)     an order for the alteration of the rules of the association;
(f) an order that a former member be reinstated as a member of the        association;
(g) any other order that is, in the opinion of the Court, necessary to remedy any default, or to resolve any dispute.
…..
(13)    If an order under this section makes any alteration to the rules of an                   association, then, despite anything in any other provision of this Act but              subject to the provisions of the order, the association does not have power,             without the permission of the Court that made the order, to make any further         alteration to the rules inconsistent with the provisions of the order but,          subject to this section, the alteration has effect as if it had been duly made by              resolution of the association.
…..
(15) For the purposes of this section—
(a)     an association has engaged, or proposes to engage, in conduct that is                   oppressive or unreasonable if—
(i)      it has taken action, or proposes to take action, to expel a   member from the association in circumstances in which the   action was, or would be, oppressive or unreasonable; or
(ii)      it has engaged, or proposes to engage, in conduct that was, or   would be, oppressive or unfairly prejudicial to, or unfairly   discriminatory against, a member or was, or would be, contrary   to the interests of the members as a whole; or
(iii)     the rules of the association contain, or are proposed to be   altered so that they will contain, provisions that are oppressive   or unreasonable;
(b)     a reference to engaging in conduct includes a reference to refusing or                  failing to take action.
The Applicant group complained that a range of conduct by the Respondents was oppressive or unreasonable within the meaning of s61. This conduct is summarised in paragraph 37 of the learned Magistrate’s reasons for the principal decision. The Applicants sought relief as set out in paragraph 7 of the reasons.
Much of the conduct complained of is not relevant for present purposes. As indicated above, it is only the learned Magistrate’s conclusions concerning the meeting on 1 March 2002 and the elections of October 2005 that is the subject of the review.
There is no suggestion from either party that the Magistrate’s summary of the background to this matter did not accurately represent the history of the schism within the Society and the events in question. Accordingly I adopt the learned Magistrate’s chronology of events set out in Part 6 of his principal reasons in so far as it is relevant to this review. I specifically refer to his summary of the events surrounding the meeting on 1 March 2002[4] and the October 2005 elections.[5]
[4] Principal Reasons paragraphs 100 – 103
[5] Principal Reasons: paragraphs 112 – 117
It further appears from the submissions before me that the parties agree that the learned Magistrate accurately summarised their respective positions in relation to the events in question.
March 2002 Meeting
The grounds of appeal relating to this meeting are as follows:
2.1 The Learned Magistrate erred in the principal judgment in holding that:
2.1.1 there was no evidence to support an implied term or a legitimate expectation by the Applicants that the membership fee of the first respondent (Society) would remain fixed at $25 in accordance with the terms of settlement of the first action;
2.2.2 the Rules of the Society permitted the reduction of the membership fee from $25 to $5 in the way relied upon by the Respondents at the meeting of 1 March 2002;
2.1.3 the Society had not acted unreasonably or oppressively within the meaning of Section 61 of the Associations Incorporation Act 1985 (SA) in reducing the membership fee of the Society from $25 to $5 at the meeting of 1 March 2002.
I will deal with each ground of review in turn.
Implied term or legitimate expectation
The meeting of 1 March 2002 reduced the membership fee from $25 to $5. The applicants contend that this was in breach of an implied term of a settlement agreement reached in the Magistrates Court on 16 August 2001 in proceedings between substantially the same parties. The settlement is recorded in a document entitled “Draft Orders”.[6] The learned Magistrate dealt with this issue at paragraphs 88 – 95 and 227 – 223 of his Reasons.
[6] Exhibit P1 tab 17
It is common ground that the settlement terms do not specifically state that there was an agreement that the membership fee would remain fixed at $25. Having carefully considered the transcript it is apparent that there was also no evidence before the learned Magistrate that there was either an oral or written representation made by any of the Respondents that the amount of the membership fee would not be changed in the future. The learned Magistrate found, and I agree with his findings, that the Respondents did not consider that this agreement fixed the membership fee at $25 for anything other than the time taken to resolve the issue of the election of a committee.
The high point of the Applicants’ case on this issue is the evidence of Mr Adjit Singh Nijjar. It was his view that the settlement agreement meant that the membership fees would go up but would not be less than $25 in future.[7] He agreed that no-one ever promised the parties to the settlement agreement that the membership fee would not be changed.[8] Mr Nijjar is not however a party to the present proceedings. Even if his evidence was accepted and was capable of establishing a legitimate expectation, which I consider it does not, there is no evidence that such expectation was held by any of the Applicants. I further do not consider that his evidence establishes, even if accepted, that there was an implied term of the settlement that the membership fee would not be reduced.
[7] Transcript p138
[8] Transcript p139
In any event I have carefully considered all of the matters put to me together with the transcript and it is my view that the Magistrate did not err in making this finding.
Rules of Society
The key findings of the learned Magistrate in relation to this issue are at paragraphs 286 – 289 and 292 – 293 of his Reasons. Again I have carefully considered the submissions put to me in relation to this issue together with the evidence. It is my view that the learned Magistrate’s findings were correct.
The meeting on 1 March 2002 was a Special General Meeting called at the request of Mr Nijjar and other supporters of the Applicants. The minutes of the meeting were tendered at trial.[9] The meeting was called to discuss a specific issue. Following a vote on that issue Mr Nijjar and the Applicants’ supporters left the building. At that point the meeting had not been closed. Oral notice was then given of a motion by Manjeet Singh, not a party to these proceedings, for further issues to be considered. That motion was passed by a majority of Society members at the meeting. Mr Manjeet Singh then gave oral notice of a motion to reduce the membership fee from $25 to $5. The motion was seconded. Two members of the Society addressed the meeting on the motion. The motion was passed by a majority of the Society members present. This procedure was in accordance with Rules 23C, 24A and 24D of the Society’s constitution.[10]
[9] Exhibit P1 tab 19
[10] Exhibit P1 tab 1
The Applicants say that Rule 16A requires that the fee be fixed “by the committee” and “approved by a special or Annual General Meeting of the Society”.[11] The learned Magistrate considered this submission and rejected it as “an unduly technical argument”.[12] I consider that this characterisation was appropriate. It is my view that it would be a remarkable interpretation if the Rule prohibited the membership of the Society voting and fixing the amount of membership fees in general meeting solely on the basis that the committee had not fixed them first. This is particularly the case given that members of the committee were present at the meeting and voting in favour of the motion.
[11] Outline of Argument para 33
[12] Reasons para 288-9
Reduction of membership fee
The Applicants say, in the alternative that the conduct of the Respondents then on the committee was oppressive or unreasonable even if the motion to reduce the membership fee was, as I have found, properly moved, accepted, voted on, defeated and implemented according to the Rules, taking into account the history of the schism and the circumstances of the settlement.[13]
[13] Applicants Outline para 36
It was said in argument for the Applicants that the committee should have alerted the membership as a whole to the settlement agreement referred to above prior to the taking a vote on this issue. This overlooks the fact that the Respondents were not conducting the meeting. In any event I have referred to the learned Magistrate’s finding, with which I agree, that the Respondents did not hold the same view of the terms of the settlement agreement as the Applicants now contend.
This must also be considered under the provisions of s61(15) of the AIA. The learned Magistrate did not consider that the conduct of the Society in reducing the membership fee from $25 to $5 was oppressive or unfairly discriminatory against a member or contrary to the interests of the members as a whole. The reduction in membership fees applied equally to all members and was made in accordance with the vote of a majority of members. Further it was not a decision taken by the Respondents only; rather it was the result of a vote of the whole membership.[14] The majority clearly favoured the membership fee remaining at $5.[15] I also note that the Applicants could have, at any stage in the more than 6 years since this vote, sought to increase the fees but have not done so.
[14] Millar & Ors v Houghton Table Tennis and Sports Club Inc. (2003) 225 LSJS 241 at 120 and Popovic v Tanasijevic [2001] SASC 289
[15] Reasons para127-129
October 2005 elections
The ground of appeal relating to these elections is as follows:
2.1.4 the nominations of the Second, Third, Fourth and Fifth Respondents for positions as office bearers on the Management Committee of the Society for the Annual General Meeting of the Society held on 22 October 2005 were completed and given to the Seventh respondent on 17 October 2005.
The notice calling for committee nominations for the October 2005 elections is dated 30 September 2005.[16] The positions available were Chair, Secretary, Treasurer and Member.
[16] Exhibit P1 tab 20 Book of Translations tab 9
Nominations were required to be submitted to the then secretary, Mr Saroop Singh Johal, on or before 5 pm on 18 October 2005. There were 8 nomination forms submitted for the elections.[17] Four nominations were received from the Applicants and four from the Respondents. The uncontentious facts relating to the elections are set out at paragraphs 112 – 117 of the learned Magistrate’s reasons.
[17] Exhibit P1 tab 21 Book of Translations tab 10
The Applicants’ complaint was, and remains, that on a proper assessment of the evidence it should be found that the Second, Third, Fourth and Fifth Respondents did not nominate prior to the specified time but in fact completed their nominations after the time had expired and backdated them to 17 October 2005.
The learned Magistrate recognised that this was an issue where credit was a most important consideration.[18] He concluded that the four nomination forms completed by the relevant Respondents were completed and given to the then secretary on 17 October 2005.[19] He stated that the primary reason for his conclusion was his firm conviction that the evidence of the Respondents represented the truth.[20] This is consistent with the findings the learned Magistrate made concerning credibility and demeanour of the various witnesses.
[18] Reasons para 192
[19] Reasons para 198
[20] Reasons para 199
I have carefully considered the transcript and specifically the portion of transcript to which I was directed by counsel for the parties. I have also taken into account the parties’ written submissions. I remind myself of the matters outlined above concerning the advantage the Magistrate had in hearing and seeing all of the witnesses give their evidence. The applicants were not able to point to any incontrovertible facts or uncontested testimony which demonstrated that the conclusions of the Magistrate were erroneous. Further, I do not consider that his findings were glaringly improbable or contrary to compelling inferences. It is my view that the findings made by the Magistrate were open to him on the evidence and indeed I agree with his findings.
Remedies Sought
Whilst it is not strictly necessary to comment on this in view of my rejection of the Applicants’ case on the substantive issues I note that the remedies sought were in some respects different to the relief sought at the hearing. It is my view that the declarations at least in relation to the issue of the membership fee would have no utility and should therefore be refused on discretionary grounds.[21]
[21] JN Taylor Holdings Ltd v Bond (1993) 59 SASR 432
Costs

The grounds of appeal in relation to this issue is as follows:
2.2 The Learned Magistrate erred in the judgment as to costs in holding that:
2.2.1 he had a discretion to order that costs be taxed on a Scale other than the Magistrates’ Court Scale appropriate for a Minor Civil Action;
2.2.2 in the alternative, even if there was such a discretion, then the Learned Magistrate erred in fixing costs by reference to the Supreme Court Scale rather than the Magistrates’ Court Scale.
The Magistrate awarded costs on the Supreme Court scale based on the discretion afforded by s37 of the MCA. The Applicants contend that s37 is subject to the MCA and the Magistrates Court Rules (“MCR”) and specifically to MCR 106(2), which provides that in a minor civil action, costs must be awarded in accordance with the relevant scale in the third schedule.
Section 61(3) of the AIA provides that an action in the Magistrates Court is a minor statutory proceeding. Under s3 of the MCA a minor statutory proceeding is a minor civil action. It is therefore submitted that MCR 106(2) limits the discretion under s37 of the MCA and that costs must be awarded pursuant to that Rule.
I have carefully considered the reasons of the learned Magistrate and I agree with them. It was his view that nothing in s38 limits the discretion provided by s37. The discretion provided by section 37 applies in a minor civil action, an action of that nature being “a civil proceeding of the court”. I am fortified in this conclusion by the decision of Olsson, J in Commissioner for Consumer Affairs v Gyam Pty Ltd.[22]
[22] [2000] SASC 409 at para 23
In any event, as the learned Magistrate pointed out, MCR 106(6) provides that where there is no scale of costs applicable to an action or proceeding the Court may fix the appropriate scale of costs on the application of the successful party. The scale of costs provided for in Rule 106 deals with monetary claims. This is not a monetary claim. Accordingly there is no applicable scale of costs and it is for the Court to fix the appropriate scale.
I note that applicants do not challenge the learned Magistrates’ exercise of the discretion.
Conclusion
In summary therefore I dismiss the application for review and I affirm the judgments and orders made by the learned Magistrate dated 24 June 2008 and 4 July 2008.