Shree Sanatan Dharm Sabha of NSW Inc v Mani

[2006] NSWSC 657

CITATION:	Shree Sanatan Dharm Sabha of NSW Inc v Mani [2006] NSWSC 657
HEARING DATE(S):	11/05/06
JURISDICTION:	Equity Division
JUDGMENT OF:	Young CJ in Eq
EX TEMPORE JUDGMENT DATE:	05/11/2006
DECISION:	The Annual General Meeting of 3 July 2005 was validly convened and held, and the persons elected were properly elected. Defendants to pay plaintiff's costs of the proceedings.
CATCHWORDS:	ASSOCIATIONS [5]- Whether Annual General Meeting valid- Whether AGM appointed a properly constituted governing body- Notice of the meeting given by person other than elected secretary- Incomplete financial accounts- Meeting held to be valid.
LEGISLATION CITED:	Associations Incorporation Act 1984
PARTIES:	Shree Sanatan Dharm Sabha of New South Wales Incorporated (P) Satya Mani (D1) Rajendra Kumar Harakh (D2)
FILE NUMBER(S):	SC 1338/06
COUNSEL:	D A Smallbone (P) H Prakash (S) (D)
SOLICITORS:	Adams & Co Lawyers Pty Ltd (P) Hemant Prakash & Associates (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Thursday 11 May 2006

1338/06 – SHREE SANATAN DHARM SABHA OF NEW SOUTH WALES INCORPORATED v MANI

JUDGMENT

1 HIS HONOUR: The present dispute is over who is entitled to be on the governing body of the plaintiff which is a religious and cultural association whose aim is to propagate the Hindu religion. The plaintiff is incorporated under the Associations Incorporation Act 1984 and has been called the Sabha in evidence and I will adopt that title.

2 The present proceedings were commenced by summons, Sabha being the plaintiff, on 7 February 2006 because the first defendant, Mr Satya Mani, who claimed to be the secretary of the Sabha, and Mr Rajendra Harakh, who claimed to be the president, were in the process of convening a general meeting for February 2006. The matter came before his Honour Brereton J who granted an interlocutory injunction on 10 February 2006 [see NSWSC 96].

3 The matter comes on today before me by way of final hearing. It has to be noted that although a number of people would appear to be affected directly by this decision, there are only three parties to the litigation: the Sabha and the two officers whom I have named. That fact causes me some problems because the court does not affect people’s rights or obligations unless they have had a chance to be heard, but that is nullified in this case by the fact that it is fairly clear that the persons interested in the Sabha have a fair knowledge of what is going on in their association and that the two rival contentions have been fairly represented before me.

4 Under the Sabha’s constitution the annual general meetings are to be held within a period of six months after the expiration of the Sabha’s financial year. At all material years the financial year has ended on 30 June. This provision in the constitution is clearly mandated by s 26 of the Act. An annual general meeting of the Sabha was purportedly held on 3 June 2005. At that meeting Mr Gyan Singh was purportedly elected president and other persons were elected as office holders and committee members.

5 The plaintiff, for whom Mr Smallbone of counsel appears, seeks a declaration that those people on the 2005 committee were validly elected. The opposing group is represented by Mr Prakash, solicitor, who represents those defendants I have already named and others, many of whom were members of the committee elected in 2004.

6 The rival contentions appear to be:

(a) On the part of the plaintiff that the 2005 committee is the properly constituted governing body; and

(b) At least up until very recently that a committee appointed by the trustees of the Sabha on 18 August 2005 were the appropriate body. This contention, however, was discarded during the day and that is for very good reason.

7 The named defendants, however, seem to continue to contest the proceedings on the basis that the plaintiff has not proved its case, or perhaps that they have some vestige of rights, being the president and secretary of the 2004 committee.

8 The central issue before me is whether the purported annual general meeting of 3 July 2005 was validly convened and held.

9 The matters which were argued against it were that:

(a) The notice convening the meeting was not certified and circulated by the elected secretary as required by the constitution.

(b) That the resolution of the committee of the Sabha on 29 May 2005 to convene the annual general meeting was not a resolution of a properly constituted committee meeting and that that meeting also was not convened by the secretary.

(c) That the resolution of the committee on 29 May 2005 was, in any event, invalid because it was not a notified item of business.

(d) That the annual general meeting of 3 July 2005 was invalidated because:

(i) Nominations were not correctly received; and

(ii) The so-called accounts presented to the meeting did not comply with s 26(6) of the Act.

10 There were other criticisms made but the categories which I have nominated would, in broad brush, cover them all.

11 As to the first matter, that the 2004 annual general meeting had appointed Mr Satya Mani as secretary and Mr Harish Chand as assistant secretary in May 2005, there is some evidence that Mr Mani was on more than one occasion busy on business or family matters in Fiji and had expressly or impliedly delegated to the assistant secretary what he would normally be expected to do. Mr Chand has signed various documents, including the notice convening the annual general meeting which bears the date 3 June 2005, as the “Assistant Secretary/authorised by committee”. There is a very real difference, to my mind, between an assistant secretary and an acting secretary. An assistant secretary has no constitutional role to play in most organisations, though the constitution of particular organisations may confer specific powers on that person. However, an acting secretary is a person who, for all purposes, or all purposes except those specified in the resolution appointing him or her, has full powers to act as if he or she were the secretary.

12 Mr Smallbone put in his submissions that that distinction was rather artificial and that the assistant secretary is the secretary’s deputy and may act with the concurrence of the secretary and carry out all the duties that the secretary can carry out. I do not, with respect, think that is so, though it might be if the constitution sufficiently spells it out. I suspect this one does not.

13 However, during cross-examination of Mr Chand he constantly said, “I am the acting secretary”. Now, there is no actual minute that I have been shown appointing him acting secretary but he said in evidence he was the acting secretary. He was not cross-examined on that statement. It would seem that what he did was approved by the majority of the 2004 committee without the concurrence of either of the defendants and on the balance of probabilities he was the acting secretary. As acting secretary he was fully empowered to sign and convene the notice convening (a) the committee meeting of 29 May, and (b) the annual general meeting of 3 July.

14 The minutes of the meeting of 29 May indicate who was present and they say:

“To be noted president Mr Rajendra Harakh is not present. The committee appoints Mr K M Sharma to preside upon motion by Chand and seconded by Vinod. The secretary has informed legal adviser he is sick and unable to attend. The president was contacted by the legal adviser. He informed he will not attend and he has changed the outside lock and handed over the keys on Monday. As of right now he is in Westmead and unable to attend.”

15 The meeting then proceeded to discuss a vote of non-confidence in the then president and there was discussion on that matter. A lawyer, Mr Anil Singh, then spoke and appears to have calmed down the meeting and stated, as any wise lawyer would, “We should avoid at all costs to get into a legal battle, hence we should not take any such drastic action against the president which would cost the Sabha its hard-earned earnings.” He then set out various options and one of the options was that the annual general meeting should be convened.

16 The meeting then discussed that matter and a proposal was made that the annual general meeting be held on 3 July 2005 at 11am and the minutes noted “All in agreement”. It was that resolution that Mr Harish Chand carried out on 3 June.

17 However, another criticism of the notice of 3 June is that the last two paragraphs of the notice contain otiose material, in the eyes of Mr Prakash’s clients, and Mr Prakash submitted they were drafted in bad faith and designed to scare the members. I cannot quite agree with that.

18 In any event, the central point I have to decide today is whether the annual general meeting was properly convened. There is no evidence to suggest that anyone was elected by either of the last two paragraphs of the notice, so accordingly I put that issue to one side. However, it is put that when notice of the meeting of 29 May was given there was no specification that the business was to include a no-confidence motion against the president, or anything of that nature.

19 Mr Prakash points out that the constitution, when it is dealing with the notice of committee meetings, specifies, and I summarise cl 21 of the constitution, oral or written notice of a meeting shall be given by the secretary to each member of the committee at least seven days before the proposed meeting. The notice is to specify the general nature of the business to be transacted at the meeting and no business other than that business shall be transacted except business which the committee members present at the meeting and unanimously agree to treat as urgent business.

20 Now, one must not be too prissy about giving notice of meetings in small organisations. On the other hand, one must be careful that the members’ rights are all protected. It seems to me on the evidence that I have that the members of the committee were all informed of the general nature of the matters which were concerning the Sabha, and discussions were had as to what could be done about the matters that were concerning the Sabha. Even if I am wrong on that it would seem to me that the committee members present unanimously had agreed to the resolution and although they had not actually specified that it was urgent business, one can easily glean from the minutes that that is the way in which it was in fact treated.

21 Accordingly, I now move to the fourth problem, and that is that the nominations were not correctly received and the accounts presented did not comply with the Act.

22 So far as nominations for office are concerned, the notice that was given called for nominations to be made in writing and it called for them to be given to the assistant secretary at a particular address or delivered personally at the temple on Friday evenings. Mr Prakash complains that the constitution required them to be given to the secretary. It would seem from the evidence that the way in which the notice was drawn was in accordance with the normal custom of the Sabha. However, in any event, it does not seem to me that some defect in the method of calling for nominations bears upon the validity of the meeting. It may be that if there was some evidence - which there is not - that members had been prejudiced or somebody else had been precluded from standing because of a misleading statement in the notice of meeting, that the court would declare the election invalid but not the meeting. It would seem, in fact, that no more nominations were received and positions were filled, except in the case of the president where there was an election, and in any event, if there were not sufficient nominations there were provisions under r 16(2) for nominations to be called from the floor. I cannot see that if there was any irregularity - and I am not convinced there was - that the calling for nominations would invalidate the meeting.

23 The next matter is that the accounts presented did not comply with s 26(6) of the Act. The Act, as one would expect, requires the annual general meeting to consider a statement which is not misleading and gives a true and fair view of the income and expenditure of the association, its assets, liabilities and other matters. Mr Prakash points out the words in the section are that the committee “shall” submit to members such a statement. In the witness box the members of the 2005 committee said, “Well, you can only do the best you can. We were without vital books because the former officers retained them. We were without certain bank statements. We submitted what we had to the auditor and we got a note from the auditor that whilst he could not certify that the accounts were a true and correct record because of the missing material, they were in as good form as could reasonably be expected in the circumstances”.

24 Mr Prakash says that is not good enough. One has to actually present the accounts to comply with the Act but if one can’t do that, one can’t appoint an annual general meeting and one cannot, as this organisation purported to do, say, “Oh, well, we will deal with that later”. However, it is quite clear that one can, especially if time is running against one, call an annual general meeting, present the interim accounts and adjourn the meeting. If one can do that, as I am sure one can, then the matter does not go to the validity of the meeting.

25 Accordingly, in my view, the 3 July 2005 meeting was validly convened and held and the persons elected would have been properly elected. Therefore, I think it follows that the first three declarations in the summons should be made and I make those orders. I order that the defendants pay the plaintiff’s costs of the proceedings and I reserve further consideration of the matter generally.

26 The costs of the interlocutory application before Brereton J should be paid on the indemnity basis. The exhibits before Brereton J may be returned and the others can remain. These orders may be taken out forthwith.

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