Thomson v Earlwood-Bardwell Park RSL

[1999] NSWSC 243

CITATION:	THOMSON v EARLWOOD-BARDWELL PARK R S L [1999] NSWSC 243
CURRENT JURISDICTION:	EQUITY
FILE NUMBER(S):	1392/99
HEARING DATE(S):	22 March 1999
JUDGMENT DATE:	25 March 1999
PARTIES :	WILLIAM THOMSON v EARLWOOD-BARDWELL PARK R S L CLUB LIMITED
JUDGMENT OF:	Bryson J at 1

COUNSEL :	PLAINTIFF: MR P COOK DEFENDANT: MR M ASHURST
SOLICITORS:	PLAINTIFF: COLIN W LOVE & CO DEFENDANT: MIDDLETONS MOORE & BEVANS
CATCHWORDS:	ASSOCIATIONS AND CLUBS; Expulsion Suspension and Disqualification; Registered Club incorporated under Companies legislation; procedural challenges to validity of decision by Club Board to suspend for 3 months member (President and Board Member) on charge of prejudicial conduct (sexual harassment of staff member); on the facts it was found that there was procedural fairness and the suspension was valid; information given to the Board by two staff members in the member's absence which went beyond the Particulars was not of importance and there was no basis for finding that the decision was based on information outside the Charge.
CASES CITED:	Calvin v Carr & Ors (1979) 1 NSWLR 1. Hurt v Rossall & Ors (1983) 42 ALR 252. Kanda v Government of The Federation of Malaya [1962] AC 322. McNab v Auburn Soccer Sports Club Ltd [1975] 1 NSWLR 54. McVeigh & Anor v Willarra Pty Limited & Ors (1984) 57 ALR 344. Samuel v St George Leagues Club Limited (unreported 20 October 1992). Shareef v Commissioner for Registration [1966] AC 47. University of Ceylon v Fernando [1960] 1 WLR 223. Australian Workers’ Union v Bowen No. 2 (1948) 77 CLR 601.
DECISION:	SEE PARAGRAPH 33

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
BRYSON J

Thursday 25 March 1999

1392/99 WILLIAM THOMSON v EARLWOOD-BARDWELL PARK R S L CLUB LIMITED

JUDGMENT

1 HIS HONOUR : The plaintiff claims a declaration that his suspension from the Club is null and void. The proceedings are serious because of the implications of the Board’s decision for the personal and social standing of Mr Thomson and indeed of the Board members who made the decision. Important as the conflict is, it is to be approached in a different way to decisions which affect the opportunity of an individual to earn a living, or significant property rights.
2 The Club was incorporated under companies legislation in 1972 and Mr Thomson has been a member since 1976. He was elected to the Board of Directors in 1993 and elected President in 1997, and still is. An election of officers including Board members and President is to be held in April 1999. The timetable for the Board election requires nominations by 4 April, ballot on 9, 10 and 11 April and declaration on 18 April, and the suspension will prevent Mr Thomson from participating. This enhances the significance of the suspension.
3 The Articles of Association deal with suspension in Article 11 which is in these terms:-
”If any Member shall refuse or neglect to comply with the provisions of the Memorandum and Articles of Association by-laws rules or regulations of the Club or if any Member shall in the opinion of the Board be guilty of conduct deemed by the Board to be unbecoming of a Member or prejudicial to the interest of the Club such Member may be suspended or expelled by resolution of the Board and such resolution need not state the grounds facts or opinions upon which it is based PROVIDED:

(a) That at least seven (7) days before the Meeting at which such

resolution is passed the member concerned shall have been notified in writing and requested to be present at the Meeting and that he shall at such Meeting and before such resolution is moved have an opportunity of giving in writing or orally any explanation or defence he may think fit.

(b) The Meeting shall be held within one (1) month of the date of
the alleged offence or the date on which the charge is laid.

(c) That any resolution under this Article requires for its passing
the affirmative vote of not less than a majority of the Members of the Board present at such Meeting and the decision of the Board shall be final.

(d) Any Member notified or any Member proposed to be notified
in accordance with Clause (a) above may immediately be suspended from all privileges of the Club until such time as the Meeting is held.”

4 Article 30 relates to election of the Board of Directors and paragraph (f) provides:-
“No person currently under suspension by the Board in accordance with these Articles shall be eligible to nominate, stand for or be elected to the Board of the Club.”
5 There are no express procedural requirements for consideration of suspension apart from those in Article 11. However Article 12 provides for suspension without formalities where a member does not pay a debt to the Club. The formalities expressly provided for in Article 11 were met; Mr Thomson had a little over 7 days notification in writing before the resolution was passed and he was given an opportunity of giving orally any explanation or defence he thought fit; the meeting was held within one month of the date on which the charge was laid and the decision was unanimous. Procedural fairness requires that more be done than is expressly set out in Article 11 and more was done. Mr Thomson was given notice of the particulars of the charges. The notice took the form that on 13 January he was allowed, in the presence of a Board member, to read through the statements of Mrs Head and Mr Redford on which the board acted, and to make notes as fully as he wished, to the extent that if he had wished he could have copied the statements out; but he was not allowed to make photocopies, because the Board restricted making and distributing photocopies. By a letter of 18 September which he received on 19 September he was given particulars of the charge, and the particulars referred to those statements; that is he had less than 7 days notice of the particulars, but Article 11 does not expressly require 7 days notice and his evidence shows that he had a full opportunity to understand the particulars and prepare for the hearing. His counsel made some complaint about his not being allowed to have a photocopy, but in view of the nature of the particulars, which are not difficult to understand, and of his opportunity to inspect the statements, and of his own knowledge of the events with which the statements dealt, that is not a complaint of substance. The most substantial basis of the plaintiff’s complaint in these proceedings relates to information given by Mrs Head and Mr Redford to the Board of Directors while Mr Thomson was not present.
6 Mrs Storn Head, who is employed by the Club as a casual bar and change box attendant, reported to the General Manager of the Club Mr Mulhall in a letter of 6 January 1999 on an event which she claimed constituted sexual harassment in the workplace; the complaint related to events at the Club on the evening of Sunday 3 January 1999 at 11.15pm when she claimed Mr Thomson touched her person inappropriately after speaking to her in the change box, and another event 10 or 15 minutes later when she alleged that he spoke and gestured to her with an indecent suggestion when she asked about her prospects of promotion. Mr Redford, who was the staff supervisor on duty at that time, made a report by letter to Mr Mulhall on 5 January 1999 about the events. These reports seem to show that only Mrs Head and Mr Thomson were directly witnesses of the central events.
7 On 12 January Mr Thomson was given a written request by the Board Secretary Mr Collier that Mr Thomson attend a special meeting of the Board on 13 January at 6.00pm. He attended, and was shown the statements of Mrs Head and Mr Redford. He was also permitted to inspect the statements in the company of a fellow director and make notes; and he did so. On 14 January he was given a letter from the Board Secretary informing him that on 13 January the Board had charged him with conduct prejudicial to the interests of the Club as in Article 11, and asking that he attend the hearing of charges on 21 January.
8 On 19 January he was given the letter dated 18 January notifying particulars of the conduct charged; in substance the particulars referred to details in the letters which he had seen on 13 January.
9 The substance of the charge of conduct prejudicial to the interest of the Club must have been clear from the circumstances as soon as Mr Thomson knew of the charge on 14 January. Mr Thomson acknowledged receiving the letter of 14 January and gave an assurance that he would attend as requested by a letter of 19 January; in that letter he made some contentions about the insufficiency of particulars, but on the same day after sending his letter he received the Club’s letter of 18 January with particulars.
10 Mr Thomson denied the substance of the charges to the Board at all times firmly and fully. He again denied them in his evidence before me, but there is no right of appeal from the Club Board to the Court, and the Court cannot review and decide whether the decisions made by the Board were correct or appropriate; the Court can decide only whether the decision was made lawfully.
11 All six Members of the Board other than Mr Thomson took part in the decision. The Chairman was Mr Goodfellow, who is the Vice-President. The meeting of the Board on 21 January took about six hours. Mr Thomson was not present at all times. He gave the Board his response to the charges clearly and distinctly, and denied the substance of what was charged about his behaviour. He was asked to leave; he said that he wished to hear the evidence but was told that he should leave. The Board then heard a statement from Mrs Head, who was accompanied by her father for moral support although he took no part. Mr Thomson was not present when that statement was made. By and large her statement restated matters earlier reported, but there was some further matter to which I will return. Mrs Head then left the meeting room and soon afterwards Mr Redford entered the meeting room and gave the Board information. Mr Redford’s information closely followed his earlier statement, with some further matters to which I will return. Mr Thomson was then called into the meeting room and he was permitted to ask Mrs Head questions which she answered. He was also permitted to ask questions of Mr Redford. He was then asked to leave the meeting room. The Board’s deliberations took place thereafter in his absence. After he had been told the substance of the Board’s decision he was given an opportunity to address on the penalty, and did so. (At one point he claimed that he had not had that opportunity, but in evidence he withdrew this complaint.)
12 The Board’s decision was recorded in the minute of the meeting of 21 January 1999 in this way:-
“After considerable deliberation, Mr Thomson was called back into the room and informed:-

‘On the balance of probability we, the Board, have found that you have acted improperly and in a manner not befitting your position as President of this Club.’ ”

13 The decision upholding the charge was unanimous. After some further proceedings in which Mr Thomson addressed the Board on the action they should take and was again asked to leave the room, the Board deliberated and made this resolution:-
“After deliberation it was moved by T Lewis, seconded R Collier that Mr W R Thomson be suspended from the Club for a period of three (3) months, commencing on 21st January 1999. Carried (3 votes for and 2 votes against).”
14 Correspondence notifying Mr Thomson of the decision departed slightly from the terms of the minute but not significantly; other correspondence may also have departed slightly, but the terms of the decision must be known from the Board minute, which has been confirmed.
15 The letter from the Board Secretary Mr Collier to Mr Thomson on 25 January told him:-
“It is the Board’s decision that you shall not enter upon the premises…for a period of three months from the date of this Special Meeting 21st January 1999.”

but went on to say that he could attend monthly Board meetings. The letter does not exactly state the terms of the decisions of 21 January 1999, but Mr Thomson had been told of those when they were made.

16 Some of the proceedings at the Board meeting were tape-recorded; the Board’s deliberations were not but Mr Thomson’s participation was tape-recorded, as was that of Mrs Head and Mr Redford. Exhibit 1 is a transcript of a record made on one tape-recorder machine; it is an imperfect record because some passages were inaudible. Another transcript exists, but it is incomplete; this was prepared with revision by two Board members. There are references to that transcript in evidence, but it was not itself tendered in evidence.
17 The view has long been established in this Division and was not disputed in this case that the Court has power to make declaratory orders establishing whether decisions of the directors of an incorporated club to expel or discipline a member are valid, and injunctions restraining action on invalid decisions. The view upon which the Court acts was stated by Needham J in McNab v Auburn Soccer Sports Club Ltd [1975] 1 NSWLR 54 at 58G to 59F, and has been acted on very often. The application of the requirement to observe natural justice in a particular case must be considered in view of the facts of the case, the events and their circumstances, and an appraisal must be made for the particular case of the fairness of the procedure actually followed. There is no established table of rules of fair procedure for this purpose, except for requirements which can be stated in outlines of the broadest kind. It is necessary to keep in view the nature of the tribunal, of the functions which it is exercising and of the interests which are affected by the outcome. Conclusions about what procedural fairness requires expressed in cases relating to decisions by statutory bodies in public administration, affecting entitlement to hold public office or valuable private rights, cannot be applied readily or directly to decisions relating to proceedings of a social or sporting club, which affect interests of a different kind, important in themselves but not of high economic value and not affecting a person’s livelihood. Decisions in clubs are made by voluntary officers without a regular or established course of procedure; disciplinary questions do not arise often enough for there to be an established course of procedure or any high degree of expertise in dealing with them, and there is a marked contrast with the situation of decisions by salaried public officers and tribunals which have powers under public law and are regularly resorted to. The different approach was expressed in the opinion of the Privy Council in Calvin v Carr & Ors (1979) 1 NSWLR 1 at 12 thus:-
“While flagrant cases of injustice, including corruption or bias, must always be firmly dealt with by the Courts, the tendency, in their Lordships’ opinion, in matters of domestic disputes should be to leave these to be settled by the agreed methods without requiring the formalities of judicial processes to be introduced.”
18 Judicial decisions about what formalities or procedures were required to meet the standard of fairness must be always be understood by reference to the subject matter with which they deal. In the opinion of the Privy Council in University of Ceylon v Fernando [1960] 1 WLR 223 at 231-233 their Lordships referred to an number of earlier judgments in which statements in general terms had been made, often accompanied by observations on the difficulty of making statements of universal application, and their Lordships expressed reservations as to the utility of general definition. The citations given however recurringly mention an opportunity to know what accusation was made and an opportunity to answer it. General statements do not usually include an opportunity to hear as it is given all the evidence or information upon which a decision is based, or to know all of it before being required to answer, or an opportunity to cross-examine all persons giving information. In particular circumstances these may be required but they are not generally essential for fair procedure.
19 In University ofCeylon v Fernando at 233-234 their Lordships regarded reception of information in the absence of the person affected, and the consequent absence of opportunity to cross-examine, as not involving any violation of the requirements of natural justice, and referred to an earlier judicial observation to the effect that the adjudicator was not bound to treat the matter as if it was a trial, but could obtain information in whatever way he thought best. A similar observation was made by Dixon J in Australian Workers’ Union v Bowen No. 2 (1948) 77 CLR 601 at 628:-
“It is important to keep steadily in mind that we are dealing with a domestic forum acting under rules resting upon a consensual basis. It is a Tribunal that has no rules of evidence and can inform itself in any way it chooses. Members may act upon their own knowledge and upon hearsay if they are satisfied of the truth of what they so learn and if they give the member with whom they are dealing a proper opportunity of answering the charge and defending himself. The tests applied to juries’ verdicts, namely, whether there was evidence enabling a reasonable man to find an affirmative or whether upon the evidence a finding was unreasonable, had no place in the examination of the validity of such a domestic tribunal’s decision.”

See too Hurt v Rossall & Ors (1983) 42 ALR 252 at 258 (Fox J) and McVeigh & Anor v Willarra Pty Limited & Ors (1984) 57 ALR 344 at 357 (an observation which goes somewhat further).

20 Counsel referred me to Kanda v Government of The Federation of Malaya [1962] AC 322 and the consideration of the question of a reasonable opportunity to be heard at pages 335 to 338. That was a strikingly strong case in the context of exercise by a public officer of a power to dismiss a police inspector, subject to a constitutional guarantee of a reasonable opportunity of being heard. The evidence in support of the finding that there had been a failure to afford a reasonable opportunity to be heard was very strong, as the adjudicating officer was furnished with a report of a Board of Inquiry which dealt in detail with the evidence of each witness, expressed views as to the credibility and weight of each, set out inquiries made apart from the evidence of witnesses and savagely condemned the police officer, saying that he was a villain, unscrupulous and prepared to go to any lengths. In the circumstances the confirmation by the Privy Council of the finding at first instance that the police officer had not been given a reasonable opportunity of being heard, and their Lordships’ strong statements cannot cause surprise. Shareef v Commissioner for Registration [1966] AC 47 was also a very strong case where a public officer exercising a statutory function did not disclose material on which he acted and which was at the heart of the case.
21 The substantial complaints on behalf of Mr Thomson in counsel’s opening address were:-
-that Mr Thomson was not properly given the opportunity to prepare his case because he was denied the opportunity to copy the statements and take advice on them.

-that the Board heard evidence in Mr Thomson’s absence and the opportunity to cross-examine was useless.
Counsel contended that the opportunity to be heard was so restricted as to be meaningless.
22 Some matters which are debated from time to time in cases about procedural fairness were not part of this case; there was no suggestion of bias or pre-judgment, there was no debate about inadequate time for preparation or inadequate particulars, and Mr Thomson was given and took opportunities to question Mrs Head and Mr Redford. Although some other matters of complaint were alluded to, the substantial matter debated related to information given to the Board by Mrs Head and Mr Redford in Mr Thomson’s absence which went beyond the information in the statements which were shown to him. The additional information did not relate to the substance of the charges; it related to other matters or to incidental matters.
23 The requirement of procedural fairness is not a requirement to reproduce court procedure, and in particular court procedure for the adduction of evidence by witnesses in which all evidence is given in the presence of or is fully available to the other party and open to challenge by cross-examination is not essential for procedural fairness. The nature of the proceedings and the nature of the matter being inquired into may make an opportunity to hear all evidence as it is given and to challenge by cross-examination everything that a witness has said a requirement for the procedure to be fair: but that is not necessarily or usually so. Mr Thomson had an opportunity to answer and state his position on the charge, he knew clearly what the charge was, he had a full opportunity to give his side of the story and it was considered with open minds. Kandar’s case and Shareef’s case were gross cases in which significantly and strongly expressed reports bearing directly on the subject to be decided were known to and considered by the adjudicator but were unknown to the party affected; with context of formal hearings before public officers and in one case of a constitutional guarantee. They do not establish general principles although the correctness of those decisions on their facts cannot be doubted. They do not establish principles with which the Board of Directors of a sporting or social club have a legal duty to conform.
24 The passage in the information given to the Board by Mrs Head in Mr Thomson’s absence of which complaint was made appears at pages 9 and 10 of the transcript Exhibit 2. It is not possible to follow it clearly but I will set it out:-
“MS HEAD: In the sense that (indistinct) stuff about his wife, stuff about his penis - I mean that’s not - I’m not worried about that (indistinct) at the time, so (indistinct). He has not suggested (indistinct). He has mentioned to me about (indistinct). Him and his wife.”
25 While no clear understanding can be formed of what Mrs Head then said, it appears that she told the Board that Mr Thomson had said something to her which was inappropriate for him to say about his wife, and also about his own person. It also seems that she may have said that she was not worried about, meaning did not complain about those statements. It seems possible that Mrs Head told the Board that the inappropriate statements were made on a different occasion, and not on the occasion complained about; that is possible but in no way clear.
26 The statement of Mr Redford recorded in Exhibit 2 and the subject of complaint appears at pages 14 and 15 in the terms:-
“MR REDFORD: I’d just prefer to put this in my own sense (indistinct). It was (indistinct). He was - what I would basically said is ‘baling people up’. At that point I was very embarrassed for the club, because (indistinct) somewhat distressed by the way he was acting, and that was only my concern - that I don’t feel it’s the way how a representative of this club should be. And it was just not a pretty thing to see. He was just rather embarrassing. His tone of voice - he was shouting (indistinct) shouting. And I felt out of control of the whole situation. Being a member of (indistinct) the situation and he was a very (indistinct) situation, yes. Towards the end of that of course after (indistinct) I took up - I had a conversation with Stone again and she made it quite clear that she was very embarrassed - somewhat distressed about it - and I certainly felt that (indistinct) and (indistinct).”
27 Mr Thomson in fact raised and challenged Mr Redford on the question whether Mr Thomson was affected by liquor at the time of the events; his counsel said that he stumbled on the fact that Mr Redford had dealt with this, but he did challenge it. The subject was only incidental; it was not suggested that to be in liquor is conduct prejudicial to the interests of the Club.
28 It seems that Mrs Head went into some further information in Mr Thomson’s absence which had not been set out in her earlier report. However it is not clear that this is so; and Mr Thomson as plaintiff bears the onus of proof that the proceedings were not fair. It is not really clear that anything was said which she complained about, or which the Board took as significant, or could take as significant for deciding the charge which they were considering. There is on the evidence no reason for thinking that the Board came to a decision on anything other than the matter of the charge which they were considering. A tribunal with a more formal procedure would have had ways to record that evidence was irrelevant or had no effect on the outcome, such as by rulings rejecting evidence or by express findings in disposing of facts. These means were not available to the Board of Directors. The mere fact that the information was given is not a reason to conclude that the Board treated as important or significant for their deliberations something which, so far as has been shown, was not. As reasonable people they should have disregarded it; and they probably did. The further information given by Mr Redford was an expansion in detail of some matters which he had dealt with in his written report. It went very little further beyond his earlier statements dealing with behaviour of Mr Thomson which was inappropriate and distracting to staff. I regard it as improbable that it had any significant impact on the outcome. The burden of the charge of prejudicial conduct was Mrs Head’s complaint about sexual groping and bawdy talk about her employment prospects: this if true was quite serious enough to concentrate minds.
29 There is no reason to suppose that the Board of Directors acted on any basis which was not charged, or decided adversely on some grounds relating to other behaviour or behaviour at other times.
30 Adapting words used by Powell J in Samuel v St George Leagues Club Limited (unreported 20 October 1992) at 22, it is a minimum of judicial fairness that the person affected be fairly apprised of what is alleged against him, and have a fair opportunity to bring forward material to correct or to controvert any allegation made against him. The additional material recorded in Exhibit 2 as given by Mrs Head and Mr Redford does not show that requirements of these kinds were not met.
31 Overall there are indications that the Board approached its task in an appropriate way. Nothing in the evidence could indicate bias, prejudgment or action on irrelevant considerations, and the Board took ample time for consideration and debate before reaching its conclusions. There are some indications that Mr Thomson took a combative attitude at some points, and the evidence shows that this was dealt with patiently. The nature of the complaint and the relationship between Mrs Head and Mr Redford as members of staff and Mr Thomson as President of the Club make it understandable that there were signs of strong feeling. The suggestion, which was alluded to but never made directly, to the effect that the decision or the choice of penalty was affected by the approach of Board elections in April so that Mr Thomson would be unable to stand for re-election if he was suspended, was not supported by any evidence, and any such influence on the decision can be dismissed from consideration.
32 In my opinion the Board’s resolutions of 21 January 1999 including the resolution suspending Mr Thomson for three months were effective.
33 ORDER:

The proceedings are dismissed with costs.

I hereby certify paragraphs 1-33 are the reasons for judgment of the Honourable Justice John Bryson. Dated 25 March 1999. (H D LEWIS) Associate.

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