Streeter v Voortman

[2010] SADC 103

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil: Interlocutory Application)

STREETER v VOORTMAN & ORS

[2010] SADC 103

Judgment of His Honour Judge Tilmouth

5 August 2010

ASSOCIATIONS AND CLUBS - JURISDICTION OF THE COURTS

A member of an Incorporated Association brought proceedings in an attempt to prevent the sale of real property of the Association, contrary to the wishes of its members.

Held: The proposed action is one invoking s 61 of the Associations Incorporations Act, over which the District Court has no jurisdiction.

District Court Act 1991 (SA) s 30, s 24(2); Associations Incorporations Act s 61, s 61(3); Magistrates Court Act 1991 (SA) s 3, s 19(1)(b); Murcia & Associates (a firm) v Grey (2001) 25 WAR 209; Millar v Houghton Table Tennis & Sports Club Inc (2003) 225 LSJS 241; [2003] SASC 1; Pettit v SA Harness Racing Club (2006) 95 SASR 543; [2006] SASC 306; Ex parte Delponte: Re Theiss Bros Pty Ltd [1965] NSWR 1468, referred to.

STREETER v VOORTMAN & ORS
[2010] SADC 103

The current proceeding

1. This application for interlocutory injunction seeks to restrain the sale of property comprising a church and land situated at 28 Hillier Road, Evanston in this State.  On the first return of the application, the defendants contested the jurisdiction of the court to make any order.  No question of the merits was entered into.  This judgment therefore deals solely with the threshold question of jurisdiction.

   Background

2. This simple statement of the issue masks a complex history.  That commences with the filing in November 2006 of proceedings in this Court by the owner of the subject property, the Christian Revival Crusade Gawler Incorporated (CRC Gawler).  The central issue raised therein was the validity of a purported Annual General Meeting of that body held on 22 October 2006.  This particular body forms part of and is affiliated with the Christian Revival Church, whose state governing body is the CRC Churches International South Australia Incorporated (CRC (SA)).  Both are incorporated under the Associations Incorporation Act 1985 (SA).

3. The current applicant was a third party in those proceedings.  The defendant Milne, was at all relevant times the Public Officer of CRC (SA).  The remaining two defendants are persons making up with Milne, what is described by Article IX of the constitution of CRC (Gawler), as the “Advisory Council” of CRC (Gawler).  All three are at the same time members of the State Executive of CRC (SA).

4. The original action was heard in October 2007.  In a judgment delivered in November 2007, I held the District Court had jurisdiction to try the action.[1]  I so ruled because the dispute concerned the construction of the respective constitutions of the two arms of the Church, and therefore fell within the ambit of the civil jurisdiction of the court over disputes in contracts, the fact that the Associations Incorporations Act vested not inconsiderable exclusive jurisdiction with the respect to disputes thereunder, generally in the Supreme Court: ss 24A, 41, 41A and 61.[2]  The court determined in those earlier proceedings that a purported AGM of 22 October 2006, proceeded in a manner and form unauthorised by the constitution of CRC Gawler and that the consequent attempt to appoint Board Members were invalid.[3]

   [1]    Christian Revival Crusade Inc v Milne & Ors: (2007) 252 LSJS 113, [2007] SADC 125

   [2]    Above at [9-30]

   [3]    Above at [103-110] and [139]

5. At the same time the court also observed:[4]

   [137] The court finds CRC Gawler affiliated with CRC (SA) by the act of acceptance of its constitution and charter and that the State Executive validly appointed an “Advisory Council” under Clause IX of the CRC Gawler constitution.  The first defendant Milne was validly appointed public officer thereof.

   [138] The proper role of the Advisory Council was however quite specific to circumstances incapable of resolution under the constitution and restricted to resolving the impasse involved, so that it did not confer the power of indeterminate intervention, or subrogate to CRC (SA) the powers and functions of the Church Board indefinitely.  Clause IX of the Gawler constitution provided no basis for direct closure of CRC Gawler even though that might be effected by alternative means.  Therefore the decision to close CRC Gawler was unauthorised, despite the fact that those involved genuinely believed they had the power to do so, and acted bona fide.  Furthermore, the Advisory Council and/or the State Executive in right of the CRC Gawler Church Board, are only entitled to authorise the sale of the land, once the obligations of disclosure, consultation and compliance with the due process provisions of the constitution are satisfied and the obligations of natural justice fulfilled.

   [4]    Above at [137-138]

6. In a second judgment delivered on 18 April 2008, the court declined to make declaratory orders as sought by CRC (SA) in the third party proceedings initiated by CRC (SA) against individual members of the Church.

   The injunction application

7. The court was told the three present defendants acting in their capacity as the Advisory Council, executed a contract for the sale of the subject land in December 2008, which is due to settle in late August 2010, subject to as yet unobtained development consent

8. It is evident that attempts to resolve outstanding issues have failed to achieve that end.  Judging from the scant material filed with the court, there remain ongoing disputes concerning the proposal to sell the land.  The short affidavit filed on behalf of the applicant suggests there has been no genuine attempt to resolve the continuing impasse and more significantly the proposed sale by the Advisory Council is “against the wishes of members in the mistaken belief that the advisory council has the power to do so notwithstanding the findings”, being those quoted above.

   The objection to jurisdiction

9. It is basic principle that the court has the power to grant relief to protect property pending the resolution of an underlying dispute, over which the court has jurisdiction in the first place: District Court Act 1991 (SA), s 30 and Murcia & Associates (a firm) v Grey.[5]  This present application does not invoke the contractual jurisdiction of the court as such.  What it really seeks is to have the court supervise the future conduct of the Advisory Council, especially with regard to the sale of the subject land.  As such it goes beyond the scope of the court’s jurisdiction.

   [5] (2001) 25 WAR 209 at [19]

10. Insofar as it is asserted that the proposed sale is contrary to the wishes of the members of CRC (Gawler), it can only be seen as a complaint against the governing body of the association.  This court does not have like jurisdiction to that enjoyed by the Supreme Court, particularly that vested by specific sections of the Associations Incorporations Act. Section 61 thereof provides:

    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.

    …..   

11. Not only does that provision vest jurisdiction to intervene in cases of oppressive or unreasonable conduct by an association against its members, it proceeds to confer wide powers of supervision, regulation and control over the affairs of the association: s 61(4). Although s 61(3) grants dual jurisdiction in the Magistrates Court, that is confined to a “minor statutory proceeding” as defined by s 3 of the Magistrates Court Act 1991 (SA), as to which it lacks the full range of powers available to the Supreme Court: s 61(6).

12. The previous reasons of the court reveal the underlying dispute centred upon procedural irregularities (or otherwise) in relation to the conduct of an Annual General Meeting, in conflict with the constitution of CRC (Gawler).  The parties were not the same parties in that aspect of the proceedings, as the parties in the current application.  The present dispute is something quite different.  It involves the capacity of an interim management body to sell Church property, against the wishes of some of its members.

13. The facts in Millar v Houghton Table Tennis & Sports Club Inc,[6] and the elucidation of principle by White J in Pettit v SA Harness Racing Club,[7] demonstrate that this situation is one quintessentially for resolution under s 61 of the Associations Incorporations Act.  That being so the conclusion is inevitable that the court lacks the jurisdiction to entertain the application.

    [6] (2003) 225 LSJS 241; [2003] SASC 1

    [7] (2006) 95 SASR 543; [2006] SASC 306 at [26]

    Procedural issues

14. The parties raised two subsidiary issues, the first formal, the second procedural.  The first is that the defendants maintain they are wrongfully named as parties, the proper defendant should be CRC (Gawler) as it is the registered title holder of the subject property.  That may be accepted, so there will be liberty to the applicant to amend accordingly, by adding CRC (Gawler) as defendant.  The defendant further maintained that none of the individual defendants were properly joined.  However as the body controlling the Gawler Church is effectively comprised of those three members, I am not presently disposed to strike them out as defendant parties.  That is something they may wish to pursue later.

15. As to the procedural issue, both parties were at one. They joined in maintaining that if the court concluded there was no jurisdiction to grant the injunction, it should transfer the application to the Supreme Court, so it might deal with it pursuant to s 61 of the Associations Incorporations Act. This court certainly has the jurisdiction to transfer proceedings to the Supreme Court under s 24(2) of the District Court Act 1991 (SA). As that seems to be applicable even when the court lacks jurisdiction to deal with the underlying proceedings, there will be an order accordingly: Ex parte Delponte: Re Theiss Bros Pty Ltd.[8]The value of the subject property and the fact that this application could hardly be described as a minor statutory proceeding, means that it is singularly inappropriate to transfer to the Magistrates Court pursuant to s 19(1)(b) of the Magistrates Court Act.

    [8] [1965] NSWR 1468

    Conclusion and orders

16. For the above reasons the court determines it has no jurisdiction to entertain the application for the within injunction. Mr Streeter has liberty to amend the application by adding or substituting Christian Revival Crusade Gawler Inc as defendant. The within proceedings are transferred to the Supreme Court pursuant to s 24(2) of the District Court Act.  The question of costs is reserved to a judge of the Supreme Court.