SMITH and MURRAY DISTRICTS CARRIAGE DRIVING CLUB INCORPORATED
[2021] WASAT 44
•4 MARCH 2021
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: ASSOCIATIONS INCORPORATION ACT 2015 (WA)
CITATION: SMITH and MURRAY DISTRICTS CARRIAGE DRIVING CLUB INCORPORATED [2021] WASAT 44
MEMBER: MS R PETRUCCI, MEMBER
HEARD: 4 MARCH 2021
DELIVERED : 4 MARCH 2021
PUBLISHED : 22 MARCH 2021
FILE NO/S: CC 110 of 2021
BETWEEN: JANET ANNE SMITH
Applicant
AND
MURRAY DISTRICTS CARRIAGE DRIVING CLUB INCORPORATED
Respondent
Catchwords:
Incorporated association - Proper construction of Club Rules - Membership of club
Legislation:
Associations Incorporation Act 2015 (WA), s 182
Result:
Application successful
Category: B
Representation:
Counsel:
| Applicant | : | In Person |
| Respondent | : | No appearance |
Solicitors:
| Applicant | : | N/A |
| Respondent | : | N/A |
Case(s) referred to in decision(s):
Kavanagh and Pine Valley Pistol Club Incorporated [2020] WASAT 11.
Kavanagh and Pine Valley Pistol Club Incorporated [2020] WASAT 60.
REASONS FOR DECISION OF THE TRIBUNAL:
(These reasons were delivered orally at the conclusion of the hearing. They have been edited for publication)
Introduction
The applicant, Ms Janet Anne Smith (Ms Smith) has applied to the Tribunal under s 182(1), of the Associations Incorporation Act 2015 (WA) (AI Act) for the following order against the Murray Districts Carriage Driving Club Incorporated (respondent or Club):
1.[Ms Smith] seeks an order declaring that she [Ms Smith] is still a member of the [Club] and that the [Club] be directed to accept her [Ms Smith's] renewal application and the requisite fee.
Accompanying the application to the Tribunal was a copy of the letter sent to Ms Smith dated 24 August 2020, by Mr Paul Tester, President of the Club which stated as follows:
The Murray Districts Carriage Driving Club, (MDCDC), is formally notifying you that under clause 6 of the Associations Incorporations Act 2015, your application for membership has been rejected by the committee.
Further accompanying the application was an email of 24 August 2020 from Mr Tester, which stated as follows:
MDCDC committee has decided not to accept your membership for the 2020/2021 membership period.
In addition, accompanying the application was an email of 17 September 2020 from Ms D Hunter on behalf of the Club, which stated, in part, as follows:
[Y]our membership as from 1 September 2020 was rejected in accordance with the Rules of the Murray Districts Carriage Driving Club Inc Associations Incorporations Act 2015 Part 3 - Members Division 1, clause 6, which states (1) the committee MUST consider each application for membership of the club and decide whether to accept or reject the application.
May I also draw to your attention in clause 6
(5)The committee may reject an application even if the applicant -
(a)is eligible under rule 4(1); and
(b)has applied under rule 5.
(6)The committee must notify the applicant of the committee's decision to accept or reject the application as soon as practical after making the decision.
(7)If the committee rejects the application, the committee is not required to give the applicant its reasons for doing so.
These rulings apply for all members.
You have already been given a full refund of your fees paid for the 2021/2021 membership application and are no longer deemed a member of the Murray Districts Carriage Driving Club Inc.
It is not in dispute that:
•the Club is an incorporated association under the AI Act; and
•the current rules of the Club are the rules set out in the document titled 'The Rules of Murray Districts Carriage Driving Club Inc' (Club's Rules) which accompanied the application.
Ms Smith contends that the Club failed to comply with the Club Rules, in particular rule 9(1), when it refused her application for renewal of her membership of the Club.
The Club opposed the order from Ms Smith. However, in an email dated 3 March 2021 at 11.24 am, Mr Tester stated that the committee has decided not to continue with this case and will accept Ms Smith's membership for the 2021 season.
For the reasons which will follow, the Tribunal concludes that Ms Smith is a member of the Club and will make the order sought.
Relevant facts
The following facts are uncontroversial, and the Tribunal makes these findings of fact:
1)Ms Smith became a 'single' member of the Club in or about January 2016. Ms Smith's membership changed to 'family' for the 2017/18 membership year and then back to 'single' for the 2019/20 membership year. During the 2019/20 membership year, Ms Smith changed her membership back to 'family'.
2)In or about August 2020, Ms Smith lodged with the Club a 'Membership Application/Renewal Form' as a 'single' member along with the requisite membership fee of $245.
3)On 24 August 2020, the Club decided not to accept Ms Smith's membership for the 2020/21 membership year.
4)On 25 August 2020, Ms Smith, by email to the MDCDC committee and various other persons, disputed the termination of her membership of the Club.
5)On 28 August 2020, Ms Smith lodged a revised 'Membership Application/Renewal Form as a 'family' member along with the requisite membership fee of $355.
6)On 17 September 2020, Ms Smith applied to participate in a dressage qualifier. On the same date by email to Ms Smith, Ms Hunter on behalf of the Club stated that her membership from 1 September 2020 was rejected.
7)On 23 September 2020, Ms Smith requested the appointment of a mediator to resolve the dispute about her membership of the Club.
8)On 29 January 2021, the dispute about Ms Smith's membership of the Club was mediated but without resolution.
Issue to be determined
The issue to be determined by the Tribunal in this case is whether Ms Smith is a member of the Club. In order to answer this question, the Tribunal will need to determine what is the proper construction of the Club Rules, in particular:
(a)rule 6, titled 'Dealing with membership applications'; and
(b)rule 9, titled, 'When membership ceases'.
Principles for the proper construction of the rules of an incorporated association under the AI Act
The interpretation of the Club's Rules is to be undertaken in accordance with the principles applicable to the construction of rules of an incorporated association under the AI Act. Those principles were set out by the Tribunal in Kavanagh and Pine Valley Pistol Club Incorporated [2020] WASAT 60 (Kavanagh) at [14] - [18]. The Tribunal will apply these principles.
It's useful to reproduce the salient points drawn by the Tribunal in Kavanagh at [19] as follows:
1)The rules of an incorporated association represent the terms of a statutory contract, firstly between the members of the association themselves and, secondly, between the members and the association.
2)The principles applicable to the construction of the rules of an incorporated association are an adaptation of the principles which govern the construction of commercial contracts.
3)Those principles, however, must be modified in the manner outlined when the Tribunal is construing the rules of an incorporated association for two reasons. Firstly, the rules of an incorporated association have a public dimension. Secondly, an incorporated association is not a commercial operation established with a view to generating profits but rather is what may be described as a non-profit-making organisation.
4)The Tribunal must approach the construction of a particular rule of an incorporated association when read in the context of the rules as a whole with a degree of flexibility. This means that the Tribunal should not make too much of infelicities and expression nor be too quick to identify absurdity, illogicality or apparent inconsistencies.
5)The rules of an incorporated association are a deemed contract created by statute without the normal elements of a contract having to be established. The rules speak not only to the members of the incorporated association but also to third parties who might consider becoming members. Accordingly, it is important that the rules are capable of being construed by some third parties by reference to the text of the rules.
6)Some surrounding circumstances, particularly those that are likely to be well known and not just to the members of the incorporated association but also to relevant third parties, are part of the contextual considerations which can be weighed by the Tribunal in construing the rules of an incorporated association, but restraint ought to be exercised in doing so.
The relevant provisions of the Club's Rules
The relevant provisions of the Club's Rules, for the purpose of this proceeding, are rules 5, 6, 7, 9, 12 and 15. They provide as follows:
5. Applying for Membership
(1)An application by a person for membership of the club and the ACDS:
(a)shall be made by the applicant in writing and be signed by the applicant in such form as the ACDS may, from time to time, approve;
(b)shall be lodged with the treasurer of the club; and
(c)shall be accompanied by payment of the membership fee applicable to each class of membership and due to the club and the annual membership subscription for the ACDS and the local branch; and
(d)when an application for membership receives a receipt from the club, they shall be deemed to be a member of the ACDS and the club until such time as the club determines the application in accordance with rule 5(2).
(2)As soon as practicable after receiving an application for membership, the treasurer of the club will refer the application to the management committee.
6.Dealing with membership applications
(1)The committee must consider each application for membership of the club and decide whether to accept or reject the application.
(2)Subject to subrule (3), the committee must consider applications in the order in which they are received by the club.
(3)The committee may delay its consideration of an application if the committee considers that any matter relating to the application needs to be clarified by the applicant or that the applicant needs to provide further information in support of the application.
(4)The committee must not accept an application unless the applicant -
(a)is eligible under rule 4(1) and
(b)has applied under rule 5.
(5)The committee may reject an application even if the applicant -
(a)is eligible under rule 4(1); and
(b)has applied under rule 5.
(6)The committee must notify the applicant of the committee's decision to accept or reject the application as soon as practicable after making the decision.
(7)If the committee rejects the application, the committee is not required to give the applicant its reasons for doing so.
(8)Upon admission to membership of the club, a member shall be deemed to have agreed to be bound by and strictly adhere to the rules and by-laws of the ACDS and club as amended from time to time.
7.Becoming a member
When the management committee of the club determines to approve an application for membership:
(1)the treasurer shall, as soon as practicable after acceptance of membership, notify the local grant treasurer;
(2)the applicant shall become a member of the club and the ACDS with effect from the date of that application of membership; and
(3)as soon as practicable after the acceptance of membership, the applicant's name will be entered into the register of members.
9.When membership ceases:
(1)A person ceases to be a member when any of the following takes place:-
(a)for a member who dies;
(b)the member resigns from the club under rule 10;
(c)the person is expelled from the club under rule 15;
(d)the person ceases to be a member under rule 12(4);
(e)the person ceases to be a member of the ACDS.
(2)The secretary must keep a record for at least one year after a person ceases to be a member from the date on which the person ceased to be a member.
12.Membership fees:
(1)The management committee must determine the annual subscription fee to be paid by each class of member, including the amount to be paid as levies to any other organisation which the club has decided to affiliate. The management committee shall make provision for a discount to be offered to members who subscribe as a family group;
(2)The fees determined under sub-rule (1) may be different for different classes of membership;
(3)A member must pay the annual membership fee to the treasurer, or another person authorised by the committee to accept payments, by the date determined by the committee.
(4)If a member has not paid the annual membership fee by 31 August the member ceases to be a member on the expiry of that period.
(5)If a person who has ceased to be a member under subrule (4) offers to pay the annual membership fee after the period referred to in that sub-rule has expired -
(a)the committee may, at its discretion, accept that payment, and
(b)if the payment is accepted, the person's membership is reinstated from the date payment is accepted.
15.Suspension or expulsion
(1)The committee may decide to suspend a member's membership or to expel a member from the club if -
(a)the member contravenes any of these rules; or
(b)the member acts detrimentally to the interests of the Club.
(2)The secretary must give the member written notice of the proposed suspension or expulsion at least 28 days before the committee meeting at which the proposal is to be considered by the committee.
(3)The notice given to the member must state:
(a)when and where the committee meeting is to be held; and
(b)the grounds on which the proposed suspension or expulsion is based; and
(c)that the member, or the member's representative may attend the meeting and will be given a reasonable opportunity to make written or oral (or both written and oral) submissions to the committee about the proposed suspension or expulsion.
(4)At the committee meeting, the committee must -
(a)give the member, or the member's representative, a reasonable opportunity to make written or oral (or both written and oral) submissions to the committee about the proposed suspension or expulsion; and
(b)give due consideration to any submissions so made; and
(c)decide -
(i)whether or not to suspend the member's membership and, if the decision is to suspend the membership, the period of suspension; or
(ii)whether or not to expel the member from the Club.
(5)A decision of the management committee to suspend the member's membership or to expel the member from the Club takes immediate effect.
(6)The management committee must give the member written notice of the committee's decision and the reasons for decision within seven days after the committee meeting at which the decision is made.
(7)A member whose membership is suspended or who is expelled from the Club may, within 14 days after receiving notice of the committee's decision under sub rule (6), give written notice to the secretary requesting the appointment of a mediator under rule 23.
(8)If notice is given under subrule (7), the member who give the notice and the committee are the parties to the mediation.
Applicant's case
Ms Smith disputes that her membership of the Club had ceased. According to Ms Smith, the Club has not complied with the Club's Rules, in particular 9(1), which provides that a member only ceases to be a member if they die, resign, are expelled or fail to pay the membership fee by 31 August or cease to be a member of the Australian Carriage Driving Society Incorporated (ACDS). Ms Smith's evidence is that none of these events have occurred in her case, and, therefore, she is still a member of the Club.
It is Ms Smith's position that she requested the dispute regarding her application as a member of the Club to be renewed for the relevant period to be referred to a mediator under the Club's Rules. On 29 January 2021, the parties participated in a mediation conference under rule 24, but, according to Ms Smith, they failed to resolve the dispute.
Club's case
The Club's position per the email of 3 March 2021 is that the MDCDC committee has decided not to continue with the case and will accept Ms Smith's membership for the 2021 season.
Consideration
A decision made by the management committee of an incorporated association under the rules of the incorporated association which affects a member of the body can give rise to a dispute between the member and the incorporated association. (Kavanagh at [44]).
Section 182(1) of the AI Act states that a 'member of the association involved in the dispute' may apply to the Tribunal (if a relevant dispute cannot be resolved under a relevant dispute resolution procedure).
The Tribunal in Kavanagh and Pine Valley Pistol Club Incorporated [2020] WASAT 11 stated at [86]:
However, in the Tribunal's view, an application can be made under section 182(1) of the AI Act if an incorporated association contends that the membership of a person who has been a member of the incorporated association has ceased but that person disputes that their membership has ceased because they contend that the incorporated association has not complied with its rules. In that situation, it will be necessary for the Tribunal to determine the issue of whether the rules, (properly constructed), have been complied with before the Tribunal can determine whether it has jurisdiction to deal with the dispute under section 182(1) of the AI Act. If the Tribunal determines that the incorporated association did not comply with its rules and that the membership of the person has not ceased, then it can make a declaration under section 182(3)(c) of the AI Act, declaring that the person is still a member of the incorporated association and that the decision to terminate their membership is void and to no effect. That being the case, the person will, in fact, have been a current member of the incorporated association when they made the application under section 182(1) of the AI Act.
Section 182 of the AI Act does not give the Tribunal jurisdiction to deal with the merits of whether a person's membership of an incorporated association should have been terminated. It only gives the Tribunal jurisdiction to determine whether an incorporated association has complied with its rules in making a decision to terminate the membership.
Section 182(3) of the AI Act provides as follows:
In a proceeding under subsection (1), the State Administrative Tribunal may make orders giving such relief as the Tribunal considers appropriate, including one or more of the following orders:
(a)an order giving directions for the observance of the rules of the incorporated association by a person who has an obligation to observe those rules;
(b)an order declaring and enforcing the rights and obligations of members of the incorporated association between themselves; and
(c)an order declaring and enforcing the rights and obligations between the incorporated association and any member or members of the association.
In the Tribunal's view, the reference in s 182(3)(b) of the AI Act to the rights and obligations of members of an incorporated association between themselves and the reference in s 182(3)(c) of the AI Act to the rights and obligations between an incorporated association and any member or members of it are references to the rights and obligations contained in the rules of the incorporated association.
Did the Club follow the Club's Rules?
It is Ms Smith's evidence that under rule 9(1), a member of the Club only ceases to be a member if he or she dies, resigns, is expelled, fails to pay his or her membership fee by 31 August or ceases to be a member of the ACDS. Ms Smith says none of these apply to her, and, therefore, the Club has no basis to reject her renewal of membership of the Club.
Ms Smith's position is that the Club failed to follow the Club's Rules in that if the Club wanted to terminate her membership of the Club, it was required to follow rule 15, which, amongst other things, required the secretary of the Club to give to her a written notice of her proposed expulsion or termination of the Club at least 28 days before the committee meeting at which the proposal is to be considered by the committee. Ms Smith says that the Club's failure to follow the Club's Rules means that the Club must reinstate her membership.
Ms Smith says unlike committee positions, the Club's Rules do not require members to retire their membership each year and apply again. In other words, only new members need to be approved by the committee.
The Club's position, previously, was that the committee decided not to grant Ms Smith membership of the Club and that the Club did not seek to expel Ms Smith from the Club.
The Club's position is that it no longer contests this case and will accept Ms Smith's membership for the 2021 year.
It is common cause that the Club did not issue a written notice under rule 15 to Ms Smith.
Reading rules 5, 6, 7, 8, 9, 12 and 15 as a whole, the Tribunal notes that those rules provide as follows regarding membership of the Club:
1)A person who wishes to join the Club must apply in writing, using such form as approved by the ACDS, to the Treasurer of the Club accompanied by the requisite fee. The person is deemed to be a member until the Club determines the application, (rule 5(1)(d)) The committee must consider the application for membership and either accept or reject it, (rule 6(1)). If the committee rejects the application, it is not required to give its reasons, (rule 6(7)). However, the committee must notify the person of its decision as soon as practicable after making the decision, (rule 6(5)).
2)When the committee approves the application for membership, the member's name is to be entered into the register of members, and the member becomes a member of the club and the ACDS with effect from the date of acceptance of the membership, (rule 7).
3)There are six classes of membership - (rule 8(1)) -including single membership and family membership.
4)The committee determines the annual subscription fee to be paid by each class of member, (rule 12(1)). The member must pay the annual membership fee to the treasurer or other authorised person by the date determined by the committee, (rule 12(3)). If the member has not paid the annual membership fee by 31 August, the member ceases to be a member – (rule 12(4)) - unless the committee, at its discretion, accepts the late payment, (rule 12(5)).
5)Membership is terminated when any of the following takes place, (rule 9(1)): death of the member, resignation of the member, the member is expelled from the club under (rule 15), the member ceases to be a member under (rule 12(4)) or the person ceases to be a member of the ACDS.
6)If the committee considers that a member should be suspended or expelled from membership because the member has contravened the rules or has acted detrimentally to the interests of the club, it can initiate the process set out in rules 15(2) to 15(4), which involve giving the member written notices of the grounds on which the proposed suspension or expulsion is based at least 28 days before the committee meeting to decide whether to suspend or to expel the member. The member or the member's representative may attend the committee meeting and make written and oral submissions to the committee about the proposed suspension or expulsion. The decision of the committee takes effect immediately, and the member must be given written notice of the decision, including the reasons for decision, within seven days of the decision being made, (rules 15(5) and 15(6)). Within 14 days of receiving the committee's decision, the member may give written notice to the secretary requesting the appointment of a mediator, (rule 15(7)).
The Tribunal notes that the terms 'Management Committee', 'management committee' and 'committee' are used interchangeably in rules 5, 6, 7, 12 and 15. Only the term 'committee' is defined in rule 1 of the Club's Rules. It is defined as 'the management committee of the Club'. Part 5 of the Club's Rules sets out the powers of the committee and the composition of the management committee. The Tribunal finds that the reference to 'Management Committee' and 'management committee' is intended to be a reference to 'committee' as defined in rule 1 of the Club's Rules and so should be construed as such.
In the Tribunal's view, rules 5, 6, 7, 12 and 15 of the Club's Rules, properly interpreted as a whole, provide as follows:
1)If a person applies for membership of the Club, the person is deemed a member of the Club and the ACDS until such time as the committee determined by the committee, (rule 5). If the committee rejects the application, the committee is not required to give the person its reason for doing so, (rule 6). It is not clear if the person has a right of appeal against that decision, however, the Tribunal is not required to determine that question in this proceeding.
2)If a person becomes a member of the Club, he or she only ceases to be a member of the Club when one of the specified events in rule 9(1) occurs, such as the death of the person, the expulsion of the member or the person ceases to be a member of the ACDS or where the member resigns membership in accordance with rule 10.
3)A person can be suspended or expelled from membership of the Club by the committee if it finds the member has contravened any of the Club Rules or the member has acted detrimentally to the interests of the Club, (rule 15). The member has a right of appeal against that decision to a committee meeting, (rule 15).
Ms Smith completed and lodged with the Club its 'Membership Application/Renewal' form before 31 August 2020 along with the requisite fee. This form is used by persons seeking to be a member as well as by members seeking to renew their membership of the Club. In this case, Ms Smith has been a member since about 2016 and was seeking to renew her membership. The Tribunal finds that the committee erroneously dealt with Ms Smith's form as that of a person seeking to be a member when she was already a member.
If the committee considers that Ms Smith should be expelled or suspended from membership because she has contravened any of the Club's Rules or that she has acted detrimentally to the interests of the Club, it is open for the committee to follow the process set out in rule 15.
Is Ms Smith a member of the Club for the purposes of s 182(1) of the AI Act?
As the Club failed to follow the Club's Rules to expel Ms Smith's membership, the only conclusion the Tribunal can reach is that Ms Smith is a member of the Club.
Conclusion
The Club is not entitled under the Club's Rules to refuse the renewal of membership of Ms Smith, and the committee's decision to decline her membership is void and of no effect. Accordingly, the membership of Ms Smith must be renewed subject to her paying the requisite subscription fee.
Finally, Ms Smith applied for her costs in this proceeding.
For these reasons, the Tribunal will make the following orders sought by Ms Smith.
Orders
The Tribunal orders:
1.The decision made by the committee of the respondent, Murray Districts Carriage Driving Club Inc (Club) on 24 August 2020 to decline to renew the membership of the Club held by the applicant, Janet Anne Smith, is void and of no effect.
2.The membership of the respondent, Murray Districts Carriage Driving Club Inc, held by the applicant, Janet Anne Smith, be renewed subject to the applicant, Janet Anne Smith, paying the subscription fee.
3.The applicant has liberty to apply for her costs of the proceeding by filing with the Tribunal and giving to the other party the following documents on or before 18 March 2021:
(a)a schedule of the costs claimed in sufficient detail to enable the Tribunal to assess and fix any costs which might be awarded, together with any supporting documents upon which the applicant wishes to rely; and
(b)written submissions addressing the basis upon which it is contended costs should be awarded and the quantum of costs claimed.
4.If the applicant makes an application for costs, the respondent may file with the Tribunal and give to the applicant written submissions opposing the application on or before 1 April 2021.
5.If the applicant makes an application for costs, subject to any further order, the Tribunal will determine the application on the documents after 6 April 2021, and will fix the amount of any costs awarded.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS R PETRUCCI, MEMBER
22 MARCH 2021
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