Wolfe v Sydney Bush Walkers Inc

[2018] NSWSC 1032

Supreme Court

New South Wales

Medium Neutral Citation:	Wolfe v Sydney Bush Walkers Inc [2018] NSWSC 1032
Hearing dates:	27 June 2018
Decision date:	04 July 2018
Jurisdiction:	Equity - Commercial Arbitration List
Before:	Stevenson J
Decision:	Summons to be dismissed with costs
Catchwords:	ASSOCIATIONS AND CLUBS - constitution – where constitution provides that disputes are to be referred to arbitration – whether matter raised by member was a dispute within the meaning of the constitution – proper construction of the constitution
Legislation Cited:	Associations Incorporation Act 2009 (NSW) Commercial Arbitration Act 1984 (NSW) Commercial Arbitration Act 2010 (NSW) Community Justice Centres Act 1983 (NSW)
Cases Cited:	Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192; (2006) 157 FCR 45 McDonald v Dennys Lascelles Ltd [1933] HCA 25; (1933) 48 CLR 457
Texts Cited:	N C Seddon, R Bigwood and M P Ellinghaus, Cheshire & Fifoot: Law of Contract (10th ed, 2012)
Category:	Principal judgment
Parties:	Ian Wolfe (Plaintiff) Sydney Bush Walkers Inc (Defendant)
Representation:	Counsel: A Byrne (Plaintiff) G Carolan (Defendant)   Solicitors:    Somerville Legal (Plaintiff) Gilchrist Connell (Defendant)
File Number(s):	SC 2017/359666

Judgment

1. This case is an unhappy example of a falling out between members of a recreational club that has led, quite unnecessarily, to legal processes out of all proportion to the issues at hand.

2. The Sydney Bush Walking Club was established in 1927 for the purpose of promoting bush walking, social activity amongst its members and a regard for the preservation of wildlife and “the great outdoors” in Australia.

3. The defendant, Sydney Bush Walkers Inc, is the successor to the Sydney Bush Walking Club. It is an association incorporated pursuant to the Associations Incorporation Act 2009 (NSW). I shall refer to it at as “the Club”.

4. The plaintiff, Mr Ian Wolfe, became a member of the Club in 1978. In 2011 and 2012 he was the president of the Club.

5. On 10 January 2018 a meeting of the Club’s members purported to expel Mr Wolfe from the Club. There is a dispute as to whether that purported expulsion had legal effect.

6. Mr Wolfe seeks an order pursuant to s 11(3)(b) of the Commercial Arbitration Act 2010 (NSW) that a different dispute be referred to arbitration.

7. That dispute does not relate to any act or omission affecting his rights as a member of the Club. Rather it relates to whether Mr Wolfe’s successor as president, Mr Leigh McClintock, was afforded the time specified in the Club’s constitution to make submissions in reply to a complaint made by Mr Wolfe. That complaint related to the manner in which Mr McClintock dealt with a complaint made by yet another member of the Club, Mr Kenn Clacher, that his work had been plagiarised by a further member of the Club (not Mr Wolfe) in a book recording the Club’s history. As best as I can understand the terms of Mr Wolfe’s complaint, it relates to the terms of an apology (“the Apology”) that Mr McClintock recommended the Club make to Mr Clacher. The Club made the Apology in its February 2014 newsletter. I set it out below (at [40]).

8. In that regard, Mr Wolfe relies upon cl 10 of the Club’s constitution, which provides:

“10.   Resolution of disputes

(1)   A dispute between a member and another member (in their capacity as members) of the association, or a dispute between a member or members and the association, are to be referred to a community justice centre for mediation under the Community Justice Centres Act 1983 [(NSW)].

(2)   If a dispute is not resolved by mediation within 3 months of the referral to a community justice centre, the dispute is to be referred to arbitration.

(3)   The Commercial Arbitration Act 1984 [(NSW)] applies to any such dispute referred to arbitration.”

9. In his List Statement, Mr Wolfe alleges:

“3. On 30 January 2014, [Mr Wolfe] lodged a formal complaint against another member [i.e. Mr McClintock] of the Club to the Club’s Committee pursuant to section 11(1)(b) of the Constitution in relation to the Apology (‘the Complaint’).

4.   On 5 February 2014, the Club’s Committee dealt with the Complaint at a committee meeting and concluded that ‘there were no grounds for this complaint under Part 11’. Contrary to section 11(3), the Committee did not conduct the mandatory constitutional step of serving a notice of the complaint on the member concerned [again, Mr McClintock], allowing 14 days for the member concerned to make submissions to the committee (‘the Contravention’).

5.   On 14 February 2014, [Mr Wolfe] lodged a formal Dispute with the 2013 Committee in relation to the Contravention (‘the Dispute’).”

Decision

10. The dispute agitated by Mr Wolfe on 14 February 2014 is not “the Dispute” now sought to be referred to arbitration.

11. The dispute sought to be referred to arbitration concerns procedural rights that have been waived by the party to whose benefit they accrued.

12. In any event, the Dispute is not a “dispute” within the meaning of cl 10(1) of the Club’s constitution. It is not capable of reference to arbitration.

13. The proceedings should be dismissed with costs.

Circumstances leading to the Dispute

14. Whilst Mr Wolfe was president in 2011, the Club’s committee commissioned a Club history to be written by a number of members, including Mr Clacher. The book was to be entitled “The Intervening Years”. It was a successor to an earlier book published in 1987 entitled “The First Sixty Years”.

15. Mr Wolfe deposes:

“In the course of writing the History, one of the sub authors, Kenn Clacher, withdrew from the project and the 2011/12 Committee appointed a replacement.

As the History was nearing publication, Mr Clacher alleged plagiarism”.

16. The nature of Mr Clacher’s complaint is revealed by the following statement of Mr McClintock at a meeting of the Club’s committee on 15 January 2014:

“As some of you are aware, Kenn was initially involved in the drafting of sections of the Club’s written history, ‘The Intervening Years’, but became involved in a dispute with Ian Wolfe regarding the editing process. Kenn then requested that his contributions to ‘The Intervening Years’ be withdrawn from the project altogether. Since then, Kenn’s section was re-written and Kenn has complained that the re-written section amounts to plagiarism. Kenn has sought an apology from the Club for the alleged plagiarism and for his grievances about the editing process”.

17. In his affidavit, Mr McClintock said:

“On 15 March 2013, I attended a mediation with Kenn [Clacher] and Ian [Wolfe]. It was clear from Kenn’s attitude and language that he was very angry. Kenn had prepared a list of grievances and demands, which included payment of damages of $30,000 and publication of an apology acknowledging his complaints, including the admission that there had been plagiarism…”.

18. Later in 2013 Mr McClintock negotiated the terms of the Apology with Mr Clacher. Mr Clacher was prepared to accept the Apology to resolve the issue of the alleged plagiarism of his work.

19. Mr McClintock said that:

“In early November 2013, I reached an in-principle agreement with [Mr Clacher] as to the wording of the apology. I then sought the Club’s committee approval of the wording”.

20. On 15 January 2014, the Club’s committee resolved to approve the Apology wording and to publish the Apology in the Club’s February 2014 newsletter.

21. On 30 January 2014 Mr Wolfe sent an email to the secretary of the Club entitled:

“Lodgement of a formal Complaint in respect of Leigh McClintock’s actions”.

22. This is “the Complaint” referred to in Mr Wolfe’s List Statement. It is hard to follow but is expressed in these terms:

“On the basis of the limited information available to Leigh [McClintock, he] appears to have:

A) formed assumptions and conclusions which are based on partial research and partial recollection of past events (not withstanding that he has indicated on a number of occasions, both verbally and in writing, that he did not pay close attention at the time to the issues around [The Intervening Years] History, as he hoped that the issues would be resolved)

B) as per standard courteous behaviour, not validated his impressions with the person concerned prior to proceeding

C) communicated materially incorrect and unsubstantiated negative assertions to the Committee, the Honorary Solicitor and others (? ie David Trinder). This is despite having been presented with the source material detailing the timeline of the facts, comprehensive analysis documents and a request to advise if anything has been inadvertently omitted or if a different interpretation was held. Leigh [McClintock] has not replied to this with any specific facts, rather unsubstantiated generalisations which are contrary to the hard facts.

D) on the basis of the above, he sort [sic] to have the Committee carry out, in the name of the Club, a series of inappropriate actions

E) not conducted appropriate corrective action when the limitations of the process he had adopted have been communicated to him in a discrete and professional manner. Rather, engaged in disseminating more false assertions to the Committee.

I trust that the Committee will appreciate that any person on the receiving end of the above would understandably be quite offended, angry and insistent that matters be corrected as soon as possible. I have not gone that far, but I am very disappointed and perplexed with Leigh [McClintock’s] actions.”

23. According to the List Statement, the complaint was made pursuant to s 11(1)(b) of the Club’s constitution.

24. Clause 11 of the constitution provides:

“11. Disciplining of members

(1)   A complaint may be made to the committee by any person that a member of the association:

(a)   has refused or neglected to comply with a provision or provisions of this constitution, or

(b)   has wilfully acted in a manner prejudicial to the interests of the association.

(2)   The committee may refuse to deal with a complaint if it considers the complaint to be trivial or vexatious in nature.

(3)   If the committee decides to deal with the complaint, the committee:

(a)   must cause notice of the complaint to be served on the member concerned, and

(b)   must give the member at least 14 days from the time the notice is served within which to make submissions to the committee in connection with the complaint, and

(c)   must take into consideration any submissions made by the member in connection with the complaint.”

25. The Club’s committee dealt with Mr Wolfe’s 30 January 2014 complaint at a meeting on 5 February 2014.

26. The committee did not formally serve notice of Mr Wolfe’s complaint on Mr McClintock, nor give him 14 days to make submissions in response, as required by cl 11(3) of the constitution.

27. However, this was of no concern to Mr McClintock. He knew of the complaint. He was present at the 5 February 2014 meeting.

28. According to Mr John Flint, a committee member, Mr McClintock said:

“Ian [Wolfe’s] complaint is outrageous. I do not have anything else to say about it. I will leave you to determine it without my being present”.

29. In his affidavit Mr McClintock said:

“The January 2014 Complaint was added to the agenda of the Committee meeting scheduled on 5 February 2014. That gave me around a week to consider the January 2014 Complaint and provide the Committee with any response that I wanted to make. I decided that I did not need any more time to react or respond to the January 2014 Complaint and there was no reason why it could not be dealt with immediately. In fact, after considering the January 2014 Complaint, I didn’t feel that it was necessary to respond at all since the Committee was already very familiar with the issues that Ian [Wolfe] had raised.

…

I attended a meeting of the Club’s committee on 5 February 2014 at the Kirribilli Neighbourhood Centre. During that meeting, an item for discussion and determination was Ian [Wolfe’s] January 2014 Complaint. I said words to the effect of ‘Alright I can’t be here for this part of the discussion’ and then I absented myself from the meeting prior to the discussion and determination of the January 2014 Complaint.”

30. By reason of s 26 of the Associations Incorporation Act, the Club’s constitution binds its members “to the same extent as if it were a contract between them under which they agree to observe its provisions”.

31. Accordingly, the constitution must be construed “as if it were a contract”. If a provision in the constitution is for the benefit of a particular member, compliance with it can be waived by that member (for example in N C Seddon, R Bigwood and M P Ellinghaus, Cheshire & Fifoot: Law of Contract (10th ed, 2012) at 20.13).

32. The requirements of cl 11(3) of the constitution are for the benefit of the member who is the subject of a complaint. It provides that the committee must give that member notice of the complaint and 14 days in which to make submissions to the committee. The clause does not provide the person making the complaint with any benefit.

33. In the circumstances, the clause provides benefits to Mr McClintock which he could waive it he wanted to.

34. It is clear that Mr McClintock had notice of the complaint.

35. The evidence of Mr Flint and Mr McClintock makes clear that Mr McClintock did waive compliance by the committee of its obligation under cl 10(3)(b) to give him formal notice of Mr Wolfe’s complaint and 14 days to make submissions in respect of it.

36. The committee considered Mr Wolfe’s complaint. Mr McClintock left the meeting for this part of the committee’s deliberations.

37. The committee considered whether Mr Wolfe’s complaint established that “the President’s actions had been ‘prejudicial’ to the interests to the association [for the purposes of cl 11(1)(b) of the constitution] in negotiating a public apology to Ken Clacher and others”.

38. The committee concluded there were no grounds for Mr Wolfe’s complaint.

39. The minutes record:

“…the Committee has unanimously supported the President in both the approach of negotiating this, and the form and wording of the apology, as the Committee considers that this path is in the best interests of the club as it provides the best chance of a solution to the problems related to the publication process of ‘The Intervening Years’, and based on the Committee’s knowledge and understanding of the issue. This is counter to any assertion in the complaint that this path is ‘prejudicial to the interests of the association’.”

40. The Club published the Apology in its 2014 February newsletter. It read:

“In March 2012 the [Club] published the first edition of The Intervening Years. This book extended the history of the Club that had first been published in 1987, entitled The First Sixty Years, to cover the period 1987 to 2011. Through its Committee, the [Club] acknowledges that before publishing the book it did not adequately consult with the lead authors, Tom Wenman and Kenn Clacher, and did not ensure that they were in all respects satisfied with it. The [Club] unreservedly apologies to Mr Wenman and Mr Clacher for this omission.

In December 2012 the [Club] published a second edition of The Intervening Years. The Club regrets that much of Mr Clacher’s material was used in this second edition without permission or acknowledgment. It acknowledges that its undertaking of the second edition was a clumsy attempt to fix the problems of the first edition, and regrets the additional hurt caused to Mr Clacher.

Many people other than Mr Clacher and Mr Wenman also contributed to the book. The [Club] regrets that because of the length of time taken to settle on a universally acceptable text, none of the contributors have yet had the satisfaction of seeing the fruits of their wok.

The [Club] requests that members delete or destroy all copies of the first or second edition of The Intervening Years that they may have downloaded or otherwise obtained. The Committee will continue to work with the authors in an effort to finalise and publish the history in a form worthy of the Club.”

41. That led Mr Wolfe to lodge the “formal Dispute with the 2013 committee in relation to the Contravention” referred to in his List Statement.

42. Again, Mr Wolfe’s email is hard to follow but was in the following terms:

“a)   With Leigh McLintock [sic], based on the limited information available to me, for:

a. Slandering myself by passing to the Committee:

i. False, incomplete and misleading information in his email of 12/1/2014 (ie contrary to the prior facts at his disposal, and as had additionally been alerted to him, in respect of the timeliness of my advice to the Committee and the briefing of the Hon Solicitor etc)

ii. Materially misrepresenting my approach to this matter in his minuted comments to the Committee at the Jan 2014 Committee meeting

b.   Failing to take timely corrective action, or to substantiate his allegations, within a requested an reasonable time period, thus necessitating very distasteful follow on actions (which should have been unnecessary)

c.   Passing false, incomplete and misleading information to the Committee in respect of the facts and issues accompanying the Dispute raised by K Clacher (KC) concerning the Intervening Years (IY) History

d.   Presenting to the Committee for approval for publishing, text which he had been formally alerted to, contained numerous false, incomplete and misleading statements which would have materially demeaned a number of Club Members (Michael Keats and David Trinder and the 2012 Committee Members etc)

e.   By the above actions materially abusing the position of President of SBW to the detriment of the Committee, affected Members and the Club as a whole

b)   With the Members of the Committee who, as at the forth coming March 2014 Committee Meeting, continue to vote for;

a.   The Complaint lodged on 30/1/2014 not being heard

b.   The publishing of text of the statement (concerning [The Intervening Years] and [Mr Clacher]) tabled at the Jan 2014 meeting (or any variant of this text that contains false, incomplete and misleading statements)”.

43. The first part of the complaint (pars (a) a to e) comprised allegations against Mr McClintock that he defamed Mr Wolfe, provided misleading information to the committee and abused his position as president.

44. The second part of the complaint (pars (b) a and b) was directed against the Committee. It alleged that the Committee had not, or perhaps would not, hear Mr Wolfe’s 30 January 2014 complaint. It also alleged the “text of the statement” (presumably the Apology) was misleading.

45. However Mr Wolfe did not agitate what he now contends to be the failure of the Club’s committee to “conduct the mandatory constitutional step” of giving Mr McClintock notice of Mr Wolfe’s complaint of 30 January 2014 and 14 days to make submissions about it.

46. On 5 September 2017 Mr Wolfe’s solicitors wrote to the Club:

“The orders we are seeking from the arbitrator are as follows:

1.   Declaration that the complaint made to by Ian Wolfe on 30 January 2014 (‘the Complaint’) was a complaint to which the provisions of paragraph 11 (1) of the Constitution of Sydney Bush Walkers Incorporated (‘the Constitution’) apply.

2. Declaration that the Complaint has not been dealt with pursuant to paragraph 11 (3) of the Constitution.

3.   Declaration that the purported resolution dated 5 February 2014 by the committee of Sydney Bush Walkers Incorporated relating to the Complaint was invalid.

4. Order, by way of specific performance, that the committee of Sydney Bush Walkers Incorporated deal with the Complaint in accordance with the procedure set out in paragraph 11 (3) of the Constitution.

5.   Order that Sydney Bush Walkers Incorporated pay the costs of the arbitration.”

47. That letter misapprehends the dispute Mr Wolfe agitated in his 14 February 2014 email. It may be what Mr Wolfe had in mind. But what is now sought is reference to arbitration of the dispute Mr Wolfe in fact made on 14 February 2014; not a dispute he then meant to raise; and not one his lawyers later understood to have arisen from his 14 February 2014 email.

47. For those reasons alone, the proceedings should be dismissed.

The proper construction of cl 10

49. The matter can also be resolved by reference to the proper construction of cl 10 of the Club’s constitution.

50. Clause 10 refers to “a dispute” between a member of the Club with another member or between a member (or members) and the Club itself.

51. The constitution does not define what “a dispute” is.

52. But a reasonable person in the position of the Club or its members would not think that any dispute, no matter how trivial or how remote from the complainant’s interests, could be dealt with under cl 10.

53. As Mr Carolan, who appeared for the Club, pointed out, cl 13 of the constitution entrusts the control and management of the affairs of the Club to its committee.

54. If any decision or act of the committee could be referred to mediation, and arbitration if necessary, the capacity of the committee to “control and manage the affairs of the” Club would be hamstrung.

55. To take an extreme example, could it be supposed that if the committee proposed there be a Club picnic on a particular day, that a member who disagreed with the allocated day could “dispute” the committee’s decision and invoke the mechanism of cl 10 to have the matter referred to mediation and then, if the matter could not be resolved at mediation, to arbitration? Surely not.

56. In my opinion, Mr Carolan was correct to submit that, in its context, the word “dispute” in cl 10 should be read as meaning a dispute which impinges, in a real and practical way, on the interests of the disputant, as a member of the Club.

57. Any failure by the committee to give Mr McClintock notice and adequate time to respond did not impinge on Mr Wolfe’s interests as a Club member. The only rights impinged on would have been those of Mr McClintock. And he waived them.

58. The fact that the committee dismissed Mr Wolfe’s complaint takes the matter no further.

Did the Club admit there is a “dispute”?

59. For some time, the Club acted as if it understood that the dispute raised in Mr Wolfe’s 14 February 2014 email should be dealt with under cl 10 of the constitution.

60. Thus on 1 July 2016 Mr Wolfe and representatives of the Club attended a mediation at a Community Justice Centre, as contemplated by cl 10(1) of the constitution. The matter did not settle at the mediation.

61. Later on 9 November 2016 Mr Flint who was then the president of the Club, wrote to Mr Wolfe saying that the Club’s committee had resolved “to finalise this matter through arbitration” and accepted Mr Wolfe’s earlier suggestion that Mr Steve Lancken be appointed as the arbitrator.

62. The following year on 12 July 2017 the solicitor for the Club wrote to Mr Wolfe’s solicitors saying that:

“Last year my client indicated that it might be willing to agree to Mr Wolfe’s demand for arbitration. However, since that time, Mr Wolfe has failed to provide satisfactory details of the nature of his claim…

My client will not agree to participate in a vague, costly, time-consuming arbitration simply because a member has demanded it.”

63. On 21 September 2017 Mr Robert Carter, then the vice president of the Club, responded:

“Further to my response below please be advised that the Club agrees to proceed to Arbitration as scoped in your items 1-4 of your correspondence dated 5/9/17 and further agrees to the appointment of Mr Lancken as Arbitrator. Please be advised that the Club will be seeking that your client pay the costs associated with arbitration.”

64. On 8 October 2017 Mr Lancken, the proposed arbitrator, wrote to Mr Wolfe and Mr Carter seeking to appoint a time for preliminary hearing. Mr Lancken said:

“Once confirmed and I understand Mr Wolfe’s framing of the dispute I will provide an agenda for that meeting”.

65. That the meeting did not take place. A short time later, on 28 November 2017, Mr Wolfe commenced these proceedings.

66. Mr Byrne, who appeared for Mr Wolfe, submits that the Club’s agreement to “proceed to Arbitration” amounted to an admission by the Club that there was a “dispute” between Mr Wolfe and the Club for the purposes of cl 10 of the Club’s constitution.

67. I do not accept that submission. The question of whether what Mr Wolfe agitated in his 14 February 2014 email is a “dispute” for the purposes of cl 10 of the constitution is a question of law involving the construction both of his email and of the constitution. I do not consider that the Club’s conduct amounts to an admission in relation to those matters.

68. Mr Byrne did not submit that any question of waiver arose by reason of the Club’s conduct.

The significance of the purported expulsion of Mr Wolfe

69. In view of these conclusions, it is not necessary for me to consider whether, as the Club contends, a separate reason for dismissing Mr Wolfe’s claim is that he no longer has standing to raise a dispute under cl 10 of the constitution by reason of the fact that he is no longer a member of the Club.

70. That question would require consideration of, first, the proper construction of cl 5 of the constitution. That clause provides that, relevantly, a right that a person has by reason of being a member of the Club “terminates on cessation of the person’s membership”. The issue is whether the effect of that clause is to deprive a Club member of a right that has accrued prior to cessation of that person’s membership: see McDonald v Dennys Lascelles Ltd [1933] HCA 25; (1933) 48 CLR 457 at 477.

71. The question would also require consideration of the doctrine of “separability” or “severability” whereby arbitration clauses are considered to be agreements independent from the main contract (for example, Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192; (2006) 157 FCR 45 at 219(ff) (Allsop J) and s 16(2) of the Commercial Arbitration Act 2010).

72. The question would also invite consideration of the question of whether or not Mr Wolfe has been validly expelled from the Club. Mr Wolfe contends that the resolution of the general meeting of members of Club to expel him was not valid because the notice sent to members of the general meeting did not comply with the requirements of the constitution.

73. The fact that argument ranged so widely reflects the extent to which perspective has been lost in these proceedings.

Conclusion

74. For those reasons my conclusions are as I have set out at [10] to [12] above.

75. The proceedings should be dismissed with costs.

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Decision last updated: 04 July 2018