Koromako v Uluiviti
[2019] NZHC 1268
•6 June 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-1982
[2019] NZHC 1268
UNDER Incorporated Societies Act 1908 IN THE MATTER
of the Fiji Community Association of Auckland Inc
BETWEEN
RATU ISOA SOQOSOQO KOROMAKO, PENAIA DRIU SAMUSAMUVODRE, JOSALA KOROIWAQALEVU, JOHN KOTOISUVA and LIVIANA HIDE
First Plaintiffs/First Applicants
FIJI COMMUNITY ASSOCIATION OF AUCKLAND INC
Second Plaintiff/Second Applicant
AND
ADI ASENACA ULUIVITI
Defendant/Respondent
Hearing: 4 February 2019; further memorandum 11 February; further
evidence 13 February 2019
Counsel:
Appearance:
RS Pidgeon and GCK Sidnam for plaintiffs
AA Uluiviti, defendant in person
Judgment:
6 June 2019
JUDGMENT OF FITZGERALD J
[As to application for summary judgment]
This judgment was delivered by me on 6 June 2019 at 3 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar…………………………. Date……………………….…
Solicitors: Grant SCK Sidnam, Auckland To: A Uluivita, Auckland
Koromako v Uluiviti [2019] NZHC 1268 [6 June 2019]
CONTENTS
Introduction [1]
Factual background [7]
The June 2018 SGM [8]
The disputes remain unresolved [13]
Ms Uluiviti purports to call and conduct a meeting of the Executiv
Committee [16]
The three Executive Committee meetings which Ms Uluiviti is said to
have failed to attend [17]
Purported removal of Ms Uluiviti from Executive Committee [24] Ms Uluiviti continues to act as a member of the Executive Committee [26] The proceedings to date [28]
Plaintiffs’ submissions [33]
Ms Uluiviti’s submissions [39]
Summary judgment – the law [41]
Evaluation
Relevant aspects of the Constitution [43]
Was the meeting called by Ms Uluiviti on 26 June 2018 a valid ExecutiveCommittee meeting? [50]
Was the meeting held on 5 July 2018 a valid meeting of the Executive
Committee? [60]
Did Ms Uluiviti fail to attend the next two Executive Committee meetings? [66]
Was the termination of Ms Uluiviti’s membership of the Executive
Committee valid? [67]
Did Ms Uluiviti act in breach of contract by purporting to call an AGM? [68]
Conversion
Legal principles and plaintiffs’ submissions [80]
Discussion [83]
Result and concluding observations [89]
Costs [93]
Introduction
[1] This proceeding represents the latest round in an unfortunate dispute between two factions vying for control of the Fiji Community Association of Auckland Incorporated (FCAA).
[2] The first plaintiffs’ position is that at the time these proceedings were commenced in September 2018, they were the properly constituted members of the FCAA’s Executive Committee.1 As of 23 June 2018, Ms Uluiviti was the elected Vice President of the FCAA and thus under the FCAA Constitution, was also a member of the Executive Committee.
[3] The first plaintiffs say, however, that over the period July to August 2018, Ms Uluiviti failed without adequate explanation to attend three consecutive meetings of the Executive Committee. As a result, by operation of the FCAA’s Constitution, they say Ms Uluiviti automatically ceased to be an Executive Committee member. Despite her no longer being a member of the Executive Committee, the first plaintiffs say Ms Uluiviti nevertheless continued to act as though she was a Committee member, including by purporting to call an AGM in September 2018, and refusing to return property belonging to the FCAA (including the control of some of its online Xero accounts).
[4] The plaintiffs sue in breach of contract and conversion. They apply for summary judgment on both causes of action.2
[5] Ms Uluiviti says that she remained a validly appointed member of the FCAA Executive Committee at all times, and it is the first plaintiffs (and in particular, the President, Mr Koromako) who have acted improperly by, for example, barring her and others from meetings. She also says the members purporting to make up the Executive
1 I say “at the time these proceedings were commenced”, because at the end of the hearing, Mr Pidgeon, counsel for the plaintiffs, confirmed that an AGM of the FCAA was held on 8 December 2018 at which there was fresh elections for the Executive Committee. The Court does not have visibility, however, of the outcome of those elections, and thus whether the plaintiffs remain members of the Executive Committee.
2 Mr Pidgeon confirmed shortly before the hearing, however, that some aspects of the plaintiffs’ claims are not longer pursued on the summary judgment application. These are claims in relation to the return of the FCAA Facebook and Xero passwords, as well as the plaintiffs’ damages claims.
Committee at the three relevant meetings were not valid members of the Committee and the meetings were accordingly not quorate in any event. Ms Uluiviti says that as a result, she cannot be deemed not to have attended invalid Executive Committee meetings. On the second cause of action, she says that as elected Vice President and continuing member of the Executive Committee, any property belonging to the FCAA that was in her possession was validly held by her.
[6] For completeness, I note that Ms Uluiviti made a number of submissions challenging the purported termination of her and others’ membership of the FCAA. These matters do not, however, form any part of the plaintiffs’ claim for summary judgment or any of the other pleadings in this proceeding. They are not therefore issues for determination on the present application and I say nothing further about them.
Factual background
[7] The FCAA is an association which was established to support the Fijian community in Auckland by organising events, providing advice, and assisting its members with settling in New Zealand. Its main asset is the Bula Centre, an early childhood education centre. Disagreements over the management of the Bula Centre following an unfavourable report from the Ministry of Education lead to it being shut down. At least at the time of the hearing before me, the Bula Centre has a number of outstanding debts.
The June 2018 SGM
[8] The disagreements over the management of the Bula Centre, as well as of the FCAA more generally, lead to High Court litigation in 2017 between the two vying factions (the 2017 Litigation).3 That litigation was eventually settled and a deed of settlement signed by all parties. Relevantly, the deed of settlement provided that:
3 Proceeding CIV-2017-404-2265.
(a)A Special General Meeting (SGM) would be held in June 2018 for members to vote on new office holders to lead the FCAA until an AGM in September 2018.
(b)The offices to be available for election at the SGM would be:
(i)President, Vice President, Executive Treasurer and Secretary General;
(ii)Eight regional members;4 and
(iii)The Chairperson, Secretary and Treasurer of the “Bula Sub- Committee”.
(c)All individuals then holding offices of the FCAA, or membership of the Bula Sub-Committee, would stand down immediately before the SGM commenced.
(d)Proposed amendments to the Constitution were to be voted on.
(e)No party to the settlement deed would seek to challenge the outcome of the SGM, provided it was conducted materially in accordance with the agreed process.
(f)Contrary to usual Constitutional arrangements, no party would take the position of Immediate Past President on the Executive Committee.
(g)Following the SGM, the new Executive Committee would lead a reconciliation meeting in the traditional Fijian way at the earliest practicable time.
4 Being regions of the greater Auckland area.
[9] As can be seen, the deed of settlement envisaged a “clean slate” in an attempt to resolve the dispute between the two factions. Unfortunately, that was not to be the case.
[10] An SGM was duly held on 23 June 2018. The meeting was chaired by the Hon Tony Randerson QC. On any view, the elections were tight. The proposed amendments to the Constitution were narrowly defeated. Mr Koromako was elected President and Ms Uluiviti Vice President. Mr Kotoisuiva was elected Chairperson of the Bula Sub-Committee, with Ms Hide as Secretary and Mr Silassau as Treasurer of that Sub-Committee. Each of the successful candidates won by a two-vote majority. The votes for two remaining positions, Secretary General and Treasurer of the Executive Committee, were tied, so no candidates were elected and those positions remained vacant.5
[11] Mr Randerson provided a summary in the SGM minutes of the voting procedure. He made observations on the fact that while votes were generally cast in blocks, the votes were not uniform for a variety of reasons, and briefly commented on two issues:
(a)first, one person was observed putting three voting papers into the ballot box, but after inquiries by Mr Randerson, it was determined they were simply assisting older relatives to cast their votes; and
(b)second, two members who voted in the elections did not have marks on their wrists indicating they could vote (as the procedure required), but this was due to an oversight in the voter registration process.
[12]Mr Randerson concluded:
While no system is completely fool proof, I am satisfied the voting process and outcome was appropriate and accurate to the best of my knowledge.
5 There was no election held for regional members.
The disputes remain unresolved
[13] Disputes, unfortunately, arose almost immediately. Despite being a party to the settlement deed and agreeing not to challenge the SGM results unless it was not conducted materially in accordance with the agreed process (which, in light of Mr Randerson’s comments above, would appear difficult to sustain), Ms Uluiviti considered that there had been voting irregularities at the SGM. She alleged that at least two people had cast votes who were neither permanent residents or citizens of New Zealand (something which she said disqualified them from voting under the FCAA Constitution). She was also critical of Mr Koromako for what she described as dictatorial and bullying behaviour. In this proceeding, she also makes broad allegations that the voting was “rigged”. Irrespective of these matters however, there has been no formal (legal) challenge to the outcome of the 23 June 2018 SGM.
[14] Mr Koromako, in a series of emails shortly after the SGM, expressed concern that Ms Uluiviti (along with several others) had not handed over the keys to the Bula Centre, as well as property belonging to the Bula Centre in their possession. He informed her he would call an Executive Committee meeting soon and requested she “accept the results of the SGM and stop being obstructive.”
[15] On 28 June 2018, Mr Koromako arranged to have the locks changed at the Bula Centre in order to re-enter the premises. On 30 June, in a letter to all members of the FCAA, Ms Uluiviti criticised Mr Koromako for his “forcible” entry into the Bula Centre. She said the keys were in her possession and computers and other documents owned by the Centre had been in safe storage under her control since the Centre was shut down. She said that because she was an elected officer of the FCAA, there was no need for Mr Koromako to take such an extreme step.
Ms Uluiviti purports to call and conduct a meeting of the Executive Committee
[16] Ms Uluiviti has produced minutes of a meeting on 26 June 2018. Two people were present at the meeting; herself and Mr Voniani Nawaqavanua, described in the minutes as the Immediate Past President of the FCAA. Mr Koromako is listed as having given his apologies. The minutes record that in the absence of Mr Koromako’s
initiative to call a meeting at the earliest opportunity, Ms Uluiviti had called the meeting herself. The plaintiffs say this was not a valid Executive Committee meeting.
The three Executive Committee meetings which Ms Uluiviti is said to have failed to attend
[17] The plaintiffs have produced minutes which suggest that over the next few months, three meetings of the FCAA Executive Committee were held which Ms Uluiviti did not attend.
[18] The first was on 5 July 2018. In attendance was Mr Koromako (as elected President) and Mr Kotoisuva (as elected Chairperson of the Bula Sub-Committee).
[19] Shortly after the commencement of the meeting, Mr Koromako and Mr Kotoisuva appointed Penaia Samsamuvodre as an additional officer of the Committee pursuant to cl 9.9 of the Constitution. A Mr Prasad (an accountant) was also in attendance, but there is no suggestion he was or became a member of the Executive Committee. He had no voting rights.
[20] As the positions of Secretary General and Treasurer were vacant, those roles were filled by co-option pursuant to cl 9.8 of the Constitution. Ms Hide was co-opted as Secretary General and Mr Rasiga as Treasurer.
[21]Ms Uluiviti did not attend the meeting. The minutes record that:
[Mr Koromako] noted the message from Asenaca Uluiviti was not an apology but rather a refusal to attend the meeting. For the purpose of meeting records, her non-attendance is not to be recorded as an apology, but rather an absence.
[22] The second Executive Committee meeting was held on 2 August 2018. In attendance was Mr Koromako, Mr Kotoisuva, all three members appointed/co-opted at the previous meeting, and Mr Prasad (who again did not have voting rights). Ms Uluiviti did not attend the meeting, and the minutes again record her non- attendance as an absence rather than an apology.
[23] The third meeting was held on 28 August 2018. It was attended by the same people who attended the 2 August meeting. The minutes record the following in relation to Ms Uluiviti’s attendance:
… Asenaca Uluiviti had arrived into the meeting room before the start of the meeting. She was invited to stay for the meeting but refused to stay for the meeting saying “that I am not part of this group and would like to meet with him ([Mr Koromako]) only.” He advised the meeting that he agreed to meet her but only after the Executive Committee meeting at 8.00 pm. It is to be noted that she left the meeting room at this stage. Her leaving the meeting room is to be noted as a refusal to attend the Executive Committee when she had every opportunity to do so. For the purpose of meeting records, her non- attendance is not to be recorded as an apology but rather as a refusal to attend.
There was discussion held regarding her on-going refusal to attend Executive Committee meetings and in particular her non-attendance at the past two Executive Committee meetings and her clear refusal to attend the meeting today which made her non-attendance at three Executive Committee meetings. Reference was made to the provisions of clause 9.7 of the FCAA Constitution.
Purported removal of Ms Uluiviti from Executive Committee
[24] The Executive Committee passed a resolution at the 28 August 2018 meeting that as Ms Uluiviti had failed to attend three consecutive meetings without adequate explanation, her membership of the Executive Committee ceased. Mr Koromako was tasked with communicating this to her. On 1 September 2018, Mr Koromako wrote to Ms Uluiviti confirming her membership of the Executive Committee had ceased.
[25] The same day, Ms Uluiviti replied to Mr Koromako, saying her removal from the Executive Committee was invalid. She wrote that she had consistently tried to meet with Mr Koromako on his own since the SGM to discuss co-opting people into positions on the Executive Committee, but he had refused to do so. She also noted that she had notified him in writing of the reasons she had not attended the Executive Committee meetings, i.e. her position that those attending the meetings had been invalidly elected, such that the meetings themselves were invalid. She said she remained a member of the Executive Committee.
Ms Uluiviti continues to act as a member of the Executive Committee
[26] Also on 1 September 2018, Ms Uluiviti wrote to members of the FCAA giving notice of an AGM to be held on 22 September 2018. The plaintiffs say the notice was
invalidly given, and that in purporting to act this way, Ms Uluiviti was acting in breach of an implied term of the contract between the FCAA and each of its members, namely that members not a part of the Executive Committee will not seek or purport to exercise powers reserved to the Executive Committee.
[27] Mr Koromako sent another letter to Ms Uluiviti on 8 September 2018. He maintained that because she had not attended three Executive Committee meetings, she was no longer able to continue as Vice President and he had no separate obligation to meet with her as she had suggested. He asked she stop holding herself out as Vice President and requested she return property of the Bula Centre then in her possession.
The proceedings to date
[28] These proceedings were commenced on 17 September 2018. Their immediate purpose was to support an application for an interim injunction which was also filed that day. The application sought an order restraining the AGM Ms Uluiviti had called for 22 September 2018 and to compel the return of FCAA financial material (including its Xero log-in password) said to be in Ms Uluiviti’s possession.
[29] The matter came before Muir J. In a minute dated 19 September 2018, he disposed of the most urgent matters in the without notice application through a series of undertakings given by the parties:
(a)An undertaking from the plaintiffs that they would call an AGM on 3 November 2018 (this undertaking was later varied by Brewer J so the AGM would take place on 8 December 2018).6
(b)An undertaking from Ms Uluiviti, with reference to a schedule of property attached to the statement of claim (referred to as Schedule A), that she would deliver up all files and records referred to in that schedule under the heading “Accounts”, other than items 7 and 8, which she did not accept were within her possession or control.
6 The plaintiffs’ position was that they needed the financial materials and access to the Xero accounting system before they could prepare and finalise the financial documents which would need to be put before members at the AGM.
(c)In relation to items 7 and 8 on Schedule A, an undertaking from Ms Uluiviti that she would check the Bula Centre at which she believed these items were located.
(d)An undertaking from Ms Uluiviti that she would provide the Xero password to the plaintiffs’ solicitors by noon on 20 September 2018 (this undertaking was later varied by Palmer J when it became clear Ms Uluiviti did not in fact have the password).
(e)An undertaking from Ms Uluiviti that she would advise all those who had received her notice of a 22 September AGM, that the AGM would in fact be held on 3 November 2018 (the date then being canvassed by the first plaintiffs for an AGM).
[30] Muir J also highlighted the requirement in the deed of settlement that the new Executive Committee would hold a reconciliation meeting at the earliest practical time and encouraged the Executive Committee to do so.7
[31] The plaintiffs had also, it seems, called an SGM to be held on 24 November 2018. From the papers before me, its purpose is not entirely clear. Nevertheless, on the afternoon of Friday 23 November 2018, Ms Uluiviti applied for an interim injunction seeking to restrain the holding of the SGM the following day. Woolford J, in a minute dated 23 November 2018, declined to grant an injunction, noting that “if the Special General Meeting tomorrow makes any decision adverse to her interests then Ms Uluiviti has the ability to later challenge those decisions.”
[32] Ms Uluiviti later sought (by further memorandum) orders that any resolutions passed at the 24 November 2018 SGM were null and void. In a minute dated 29 November, Lang J indicated that if Ms Uluiviti wished to pursue such orders she would need to file an amended pleading. No such amended pleading was ever filed.
7 At least at the date of the hearing before me, no such reconciliation meeting had been held. While there was no formal claim before me in this context, I expressed the Court’s concern to Mr Pidgeon that the parties to the 2017 Litigation had resolved that litigation on the basis that, inter alia, a reconciliation meeting would be held at the earliest practical opportunity. I noted it was therefore incumbent on Mr Pidgeon’s clients to ensure they met their own obligations under the settlement deed in relation to a reconciliation meeting.
Plaintiffs’ submissions
[33] As noted above, the plaintiffs claim against Ms Uluiviti in both breach of contract and conversion.
[34] In their breach of contract claim, the plaintiffs allege Ms Uluiviti breached the FCAA Constitution by calling an AGM. They submit the Constitution was binding upon her as a contract between the FCAA and her as member.8 They further submit it is an implied term of that contract that non-Executive members will not endeavour to exercise powers vested in the Executive Committee. Given Ms Uluiviti’s failure to attend three consecutive Executive Committee meetings, the plaintiffs say she was no longer a member of the Executive Committee and thus not able to call a meeting of the FCAA, including an AGM.
[35]The statement of claim seeks relief on the first cause of action by way of:
(a)a permanent injunction restraining Ms Uluiviti from calling an AGM or other meeting of the FCAA;
(b)a declaration that the termination of Ms Uluiviti’s membership of the Executive Committee took effect from the close of the Executive Committee meeting on 28 August 2018;
(c)an order that Ms Uluiviti’s attempt to call an AGM for 22 September 2018 was invalid;
(d)damages (in an amount to be quantified); and
(e)costs.
[36] In their second cause of action (conversion), the plaintiffs allege Ms Uluiviti converted certain property of the Bula Centre by retaining possession of it after she
8 Citing in support of the proposition that the rules of an incorporated society constitute a contract between the society and its members: Strand v Bays Music Centre Inc [2013] NZHC 1870 at [35].
ceased to be an Executive Committee member.9 The property said to have been converted is listed in Schedule A to the plaintiffs’ statement of claim.
On this cause of action, the plaintiffs seek relief by way of:
(a)a permanent mandatory injunction that Ms Uluiviti return all items listed in Schedule A;
(b)a permanent mandatory injunction that Ms Uluiviti returns the FCAA Facebook and Xero log-in passwords;
(c)damages (in an amount to be quantified at trial); and
(d)costs.
[38] As noted, Mr Pidgeon confirmed at the hearing that neither the damages claims nor the claims in relation to Facebook and Xero were to be pursued on the summary judgment application. Summary judgment may be granted in relation to part of a claim only.10 Summary judgment may also be granted on liability only, with quantum to be determined at trial.11
Ms Uluiviti’s submissions
[39] Ms Uluiviti has filed fulsome submissions, most of which are unfortunately directed to events leading up to the 2017 Litigation, or addressing the broader dispute between her (and her supporters) and the first plaintiffs, and so of limited relevance to the issues I must determine.
[40] Nonetheless, she raises a number of points disputing that she ceased to be an Executive Committee member:
9 Citing the elements of conversion set out by Duffy J in Ferreira v Stockinger [2015] NZHC 2916 at [191].
10 McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR12.2.10] and the authorities cited therein.
11 High Court Rules 2016, r 12.3; McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR12.3.02] and the authorities cited therein.
(a)The Executive Committee who resolved she should no longer be a Committee member (or a general member of FCAA) were not lawfully elected so had no power to remove her.
(b)The Governance Board of the Bula Centre is not in fact a sub- committee of the FCAA Executive, so Mr Kotoisuva could not be a member of the Executive Committee. Thus, his and Mr Koromako’s co-option of other Committee members was also invalid.
(c)Even if the Executive Committee was validly appointed, they acted against the spirit of the deed of settlement by attempting a blanket termination of the membership of anyone who could challenge them at the upcoming AGM.
(d)She says she did not flatly refuse to attend Executive Committee meetings; rather, she wished to meet with the President first to discuss potential candidates to co-opt to the Committee who both parties to the earlier dispute might accept.
(e)Given she did not cease to be a member of the Executive Committee, she says she cannot be in breach of any contract between her and the FCAA by sending the notice to hold an AGM on 22 September 2018, nor have converted property belonging to the FCAA.
Summary judgment – the law
[41] A Court may give summary judgment against a defendant if the plaintiff satisfies the Court that the defendant has no defence to a cause of action in the statement of claim.12
[42] The principles relating to summary judgment are well settled and summarised in Krukziener v Hanover Finance Ltd:13
12 High Court Rules 2016, r 12.2(1).
13 Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162 at [26].
The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1; (1986) 1 PRNZ 183 (CA), at p 3; p 185. The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331; [1979] 3 WLR 373 (PC), at p 341; p 381. In
the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).
Evaluation
Relevant aspects of the Constitution
[43] Central to both causes of action is the legitimacy of, and attendance at, a number of FCAA Executive Committee meetings following the SGM. So those meetings can be considered in their proper context, it is necessary first to set out the relevant aspects of the FCAA Constitution.
[44] The FCAA’s Constitution provides that the Executive Committee shall comprise the following:
(a)President;
(b)Vice President;
(c)Immediate Past President;
(d)Secretary General;
(e)Executive Treasurer;
(f)A representative of each Sub-Committee;
(g)Eight Regional Members representing the following regions
(i)North Shore and Rodney Region – one member;
(ii)Waitakere Region – one member;
(iii)Auckland Region – two members;
(iv)Manukau Region – three members; and
(v)Papakura and Franklin Region – one member;
(h)A representative from each of the three Confederacies;
(i)Representatives of other Boards, Committees, Councils, Churches, Trusts or groups that either the Association or the Executive Committee in its own discretion has approved to be a member of the Executive Committee; and
(j)Not more than three co-opted members, who have specialised skills, may be appointed by the Executive Committee.
[45] Clause 9.7 addresses the consequences of a member of the Executive Committee missing three consecutive meetings:
A member of the Executive Committee who is absent from three consecutive Executive Committee meetings without an adequate explanation shall cease to be an Executive Committee member.
[46] Clauses 9.8 and 9.9 make further provision for membership of the Executive Committee:
9.8If any vacancy shall occur in the Executive Committee between Annual General Meetings, the Executive Committee may fill such vacancy by co-option. That co-opted member, who shall be a financial member, is deemed to have been elected by financial members at the most recent Annual General Meeting. If this causes dispute, then a special general meeting shall be called, in accordance with this constitution, for a by-election.
9.9Additional Officers: The Executive Committee may appoint other officers in addition to those already provided for and shall prescribe them the duties of all such officers, and may from time to time have
the right to remove any such officers. The appointed officers need not be members of the Association.
[47]Clause 9.10 governs the term of various offices:
(a)All positions on the Executive Committee, except the President, shall be for a period from the date of his or her election to the next Annual General Meeting.
(b)The President’s term of office shall be for two (2) years from the date of election to office when it shall be obligatory for him or her to vacate the position, but he or she may stand for re-election following the term of office of the succeeding President.
(c)The Immediate Past President may hold the office until the retirement of the Current President.
(d)If a vacancy occurs in the office of:
(i)President – the Vice President shall hold the office of the President until the next Annual General Meeting.
(ii)Vice President – the Executive Committee may nominate one of the eight General Members to the Vice President position until the next Annual General Meeting.
(iii)Immediate Past President – the position shall remain vacant until retirement of the current President. But the Executive Committee may co-opt a member if it so desires to enable it to work more effectively.
[48] Clause 10 addresses sub-committees, and provides that each sub-committee shall comprise a Chairperson, Secretary and Treasurer.
[49]Clause 13 governs Executive Committee meetings:
13.1Regularity of Meetings: Executive Committee meetings shall be held not less than ten (10) times between the preceding and the next Annual General Meeting.
13.2Chair: the meetings shall be chaired by the President or in his/her absence by the Vice President or in his or her absence by the Second Vice President or in his or her absence by a member nominated by those who are presence present [sic].
13.3Quorum: The quorum of this meeting shall not be less than one half of the total membership of the Executive Committee.
13.4Inquorate: Where there is no quorum, the Executive Committee may hold an inquorate meeting. That meeting may only make
recommendations which are to be referred to the next Executive Meeting.
Was the meeting called by Ms Uluiviti on 26 June 2018 a valid Executive Committee meeting?
[50] As noted, Ms Uluiviti and Mr Nawaqavanua, said to be the FCAA’s Immediate Past President, attended the 26 June 2018 meeting.
[51] I make no observation or comment on whether Mr Nawaqavanua was the FCAA’s Immediate Past President.14 But cl 1.1(v) of the settlement deed, to which both Ms Uluiviti and Mr Nawaqavanua were parties, provided that (unless the new Executive Committee decided otherwise), no party to the deed would seek to take the position of Immediate Past President of the Executive Committee following the SGM.
[52] As Mr Nawaqavanua had not been elected to the Executive Committee at the 23 June 2018 SGM, and given cl 1.1(v) of the settlement deed, I do not consider Mr Nawaqavanua was a valid member of the Executive Committee for the purposes of the 26 June 2018 meeting. Ms Uluiviti submits that the FCAA’s Constitution cannot be altered other than in accordance with its terms. But cl 1.1(v) of the settlement deed does not purport to alter the Constitution; it simply reflects the dispute as to who was then the valid President of the FCAA and the agreement that no party would, going forward, suggest they held that position. That was obviously part of the desire for a “clean slate” approach. The effect of that agreement was, in my view, to leave the position of Immediate Past President vacant for the purposes of cl 9.8.
[53] It was accordingly not open to Mr Nawaqavanua to hold himself out as the Immediate Past President and form part of the Executive Committee at the 26 June 2018 meeting.
[54] On that basis, the only member of the Executive Committee present at the 26 July 2018 meeting was Ms Uluiviti. Mr Koromako and Mr Kotoisuva were also members of the Executive Committee (see [62] below) but were not present. Therefore, there was no quorum for that meeting.
14 That formed part of the 2017 Litigation which was resolved without the issue being formally determined.
[55] Ms Uluiviti suggests that the Bula Sub-Committee is not a sub-committee of the FCAA for the purposes of membership of the Executive Committee, and thus Mr Kotoisuva could not validly form a part of the Executive Committee. I disagree. The settlement deed clearly records the group of which Mr Kotoisuva is Chair as the “Bula Sub-Committee”. I note the counterclaim in the 2017 Litigation (to which Ms Uluiviti herself was a plaintiff) also pleads it as a sub-committee. The SGM minutes also refer to it as a sub-committee. I am therefore satisfied that, pursuant to cl 9.2(f) of the Constitution, Mr Kotoisuva, being the elected Chairperson of the Bula Sub-Committee, was able to form part of the Executive Committee.
[56] For completeness, even putting aside the quorum point, I do not consider it was open to Ms Uluiviti to call a meeting of the Executive Committee in any event. The Constitution does not expressly address who may call such a meeting. But cl 9.3 sets out the duties of the President, including to:
… preside at all meetings of the Association and Executive Committee. The President shall also be charged with the overall management and supervision of the affairs of the Association and Executive Committee.
[57] This would include, in my view, calling meetings of the Executive Committee. There are no mandated timeframes for calling such meetings, other than that cl 13.1 requires there to be at least 10 such meetings between AGMs.
[58] Ms Uluiviti as Vice President, is charged with carrying out the President’s duties “during the absence or inability of the President”.15 Even assuming for present purposes that delaying calling a meeting could fall within the concept of the President’s “inability” to exercise his or her powers (and I express no concluded view on that), the SGM was held on 23 June 2018. I do not consider not calling an Executive Committee meeting prior to 26 June 2018 meant Mr Koromako was “unable” to act, thus triggering Ms Uluiviti’s power to act in his stead.
[59] I therefore do not consider the meeting called by Ms Uluiviti on 26 June 2018 was a valid Executive Committee meeting.
15 Clause 9.3.
Was the meeting held on 5 July 2018 a valid meeting of the Executive Committee?
[60] Rule 9.2 envisages a range of persons comprising the Executive Committee. That includes the Secretary General and Executive Treasurer. Given the vote for those positions at the SGM had been tied, those positions remained vacant. No evidence was advanced on the application for summary judgment as to any other existing members of the Executive Committee as of 5 July 2018. For example, the settlement deed envisaged that eight regional members would be voted on at the SGM, but the minutes make it clear that there was no election for those positions. Further, the Executive Committee is to comprise a representative from each of the three Confederacies (being divisions or states in Fiji), namely Kubuna, Burebasaga and Tovata. There is no suggestion in the materials before me that those representatives were appointed and could have, but did not, attend the 5 July 2018 meeting.
[61] In addition, all those claiming to hold existing offices of the FCAA or membership of the Bula Sub-Committee had agreed in the deed of settlement to stand down prior to the 23 June 2018 SGM. Nor does Ms Uluiviti challenge any of the Executive Committee meetings on the basis there were other existing Committee members who were not present.16 Rather, her challenge is based on the suggestion the voting at the SGM was irregular and, as noted, that Mr Kotoisuva was not a valid member of the Committee.
[62] I accordingly proceed on the basis that immediately subsequent to the 23 June 2018 SGM, the only members of the Executive Committee were Mr Koromako, Ms Uluiviti and a representative of the Bula Sub-Committee. As Ms Uluiviti notes in her submissions, a quorum for an Executive Committee meeting would accordingly require two of the three to be in attendance. As Mr Koromako (as President) and Mr Kotoisuva (as representative of the Bula Sub-Committee) were present on 5 July 2018, I am satisfied that there was a quorum at the meeting. For that reason, it was open to Mr Koromako and Mr Kotoisuva to appoint further officers/co-opt members into vacant roles on the Executive Committee.
16 Other than the Immediate Past President.
[63] Ms Uluiviti says she did not attend the meeting as she repeatedly requested to meet Mr Koromako alone, to discuss co-option onto the Executive Committee. Ms Uluiviti also says she did not attend as she did not consider those attending to have been validly elected at the SGM, or that the meeting was quorate in the absence of either or both herself and Mr Nawaqavanua. For the reasons set out above, I do not accept the latter submission.
[64] For the same reasons, I also do not consider Ms Uluiviti was absent from the 5 July 2018 meeting with an “adequate explanation” for the purposes of cl 9.7. There was no lawful challenge to the SGM election results, and as noted, Mr Koromako and Mr Kotoisuva were able to validly form the Executive Committee on 5 July 2018. Further, those electing persons to roles on an incorporated body’s governing body will expect the elected person to attend the governing body’s meetings and present their points of view. Even if individual members of a governing body such as the Executive Committee have differing views and visions as to how the incorporated society should be run, they should nevertheless attend the governing body meetings to air those views and no doubt seek to persuade others that their views are correct – rather than decline to attend.
[65] Ms Uluiviti’s failure to attend the 5 July 2018 meeting “counts” therefore, for the purposes of cl 9.7 of the Constitution.
Did Ms Uluiviti fail to attend the next two Executive Committee meetings?
[66] The next two meetings were, for the reasons outlined above, valid meetings of the Executive Committee. Ms Uluiviti did not advance any further or different reasons for not attending those meetings. I therefore conclude she also failed to attend these two meetings without adequate explanation.
Was the termination of Ms Uluiviti’s membership of the Executive Committee valid?
[67] It follows that, by operation of cl 9.7 of the Constitution, Ms Uluiviti’s membership of the Executive Committee ceased at the conclusion of the 28 August 2018 meeting.
Did Ms Uluiviti act in breach of contract by purporting to call an AGM?
[68] While Ms Uluiviti suggests no contractual relationship exists between a society and its members, the authorities confirm a contractual relationship indeed exists.17 For example, in explaining the courts’ general diffidence in interfering by way of judicial review in the workings of incorporated societies, Hugh Williams J in Hopper v North Shore Aero Club Inc said the following:18
But the courts have been cautious about involving themselves in the management of incorporated societies. The reason for that is, first, that it is well established that the rules and constitution of an incorporated society are a binding contract between the society and its members and thus in the usual course of events remedy for breach of the constitution or associated rules is the same as for breach of contract: Byrne v The Auckland Irish Society Incorporated.
[69] I am therefore satisfied that the FCAA’s Constitution and associated rules give rise to a contract between the FCAA and its members.
[70] The next question is whether it is an implied term of this contract that members not on the Executive Committee will not seek to or purport to exercise powers which are reserved to the Executive Committee. Mr Pidgeon did not address in his submissions the basis upon which such a term should be implied, including relevant authorities on the test for implying a term. Ms Uluiviti also did not make any submissions on this issue.
[71] The test for implying a term into a contract has been the subject of two recent Court of Appeal decisions: Ward Equipment Ltd v Preston and The Malthouse Ltd v Rangatira Ltd.19 The Court in each case referred to recent developments in this area of the law in England, and noted that the Supreme Court in Mobil Oil New Zealand Ltd v Development Auckland Ltd left open whether those recent developments should be adopted here.20 The essential question is whether the implication of a term is a matter of contractual interpretation rather than implication (the latter governed by the
17 Finnigan v New Zealand Rugby Football Union Inc [1985] 2 NZLR 159.
18 Hopper v North Shore Aero Club Inc HC Auckland CIV-2005-404-2817, 6 December 2005 at [28], footnotes omitted. Upheld on appeal: Hopper v North Shore Aero Club Inc [2007] NZAR 354 at [10]-[11].
19 Ward Equipment Ltd v Preston [2017] NZCA 444; Malthouse Ltd v Rangatira Ltd [2018] NZCA 621.
20 Mobil Oil New Zealand Ltd v Development Auckland Ltd [2016] NZSC 89, [2017] 1 NZLR 48.
five conditions for implying a term as set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings). In both cases, and with the Supreme Court having left open whether New Zealand ought to follow the English developments on implied terms, the Court of Appeal applied the BP Refinery test, it being described by the majority in Ward as the “traditional and stricter” test.21
[72] The BP Refinery test’s five conditions are that the term is reasonable and equitable; it must be necessary to give business efficacy to the contract; it must be so obvious it “goes without saying”; it must be capable of clear expression; and it must not contradict any express terms of the contract.22
[73] I am satisfied the implication of the term referred to at [70] above meets the BP Refinery test. It is reasonable and equitable as between the FCAA and its members. It is necessary to give “business” efficacy to the contract and in my view, should go without saying. I say it meets these requirements given it is essential to the proper running and functioning of an incorporated society such as the FCAA that only those duly elected into a governance role and given consequent powers under the society’s constitution and associated rules, exercise those powers. In this case, members not on the Executive Committee purporting to exercise powers reserved to the Committee will no doubt create much confusion, dispute, tension and discord within the incorporated society – which has unfortunately proved to be the case with the FCAA. The term is also capable of clear expression and does not contradict any express terms.
[74] For completeness, I also note that in the counterclaim filed in the 2017 Litigation, to which Ms Uluiviti was a plaintiff, it was similarly pleaded that the FCAA’s Constitution constitutes a contract between the FCAA and its members, and that in claiming and purporting to exercise powers belonging to the Executive Committee, the counterclaim defendants breached their contract with the FCAA.
21 Ward Equipment Ltd v Preston, above n 19, at [47]. Kós P noted at [94] that, irrespective of which approach is taken, “the conditions nominated in BP Refinery – best viewed as guidelines – will remain a prominent part of analysis where the construction advanced by a litigant involves a sufficiently substantial change to the express contractual words as to trigger the implication of a term.”
22 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283.
[75] For the reasons set out at [60]-[67] above, I am also satisfied that as of the close of the 28 August 2018 meeting, Ms Uluiviti ceased to be a member of the Executive Committee. Given she was no longer a member of the Executive Committee, it was not open to Ms Uluiviti to purport to call an AGM. The giving of such notices is reserved to the Secretary General in any event,23 a position which had been filled by co-option at the 5 July 2018 meeting.
[76] Ms Uluiviti therefore acted in breach of the FCAA’s Constitution, and in particular, the implied term set out at [70] above. Her notice of 8 September 2017 purporting to call an AGM for 22 September 2018 was invalid for that reason.
[77] Turning to relief, as noted, the damages claim is not pursued by way of summary judgment. Given my finding above, I consider it appropriate to make a declaration and order as sought at (b) and (c) of the plaintiffs’ prayer for relief on this cause of action, which will provide the parties with some certainty.24 I accordingly make a declaration that:
(a)the termination of Ms Uluiviti’s role on the Executive Committee took effect as of the conclusion of the Executive Committee meeting held on 28 August 2018; and
(b)Ms Uluiviti’s notice purporting to call an AGM of the FCAA for 22 September 2018 was invalid and in breach of contract.
[78] I decline to grant summary judgment on the other relief sought. Given the way in which this proceeding has unfolded, and that the plaintiffs’ claim was primarily aimed at supporting its application for urgent interim relief, a permanent injunction is unnecessary. The various meetings being challenged have passed or not been held, meaning the question of a permanent injunction is essentially moot. Moreover, it is not known to the Court what Ms Uluiviti’s current role, if any, within the FCAA is, or what it might be as a result of future elections. It would be inappropriate to
23 Pursuant to cl 9.4 of the FCAA Constitution.
24 See the discussion of the jurisdiction to grant declaratory relief or orders in Matamu v Si’itia
[2016] NZHC 2516 at [68]-[73].
permanently restrain Ms Uluiviti from issuing notices, or calling meetings or AGMs of the FCAA, given this might in future be a perfectly proper exercise of her powers.
[79]I turn now to the conversion cause of action.
Conversion
Legal principles and plaintiffs’ submissions
[80]The plaintiffs rely on the statement of the elements of the tort of conversion in
Ferreira v Stockinger.25 These are that:
(a)the defendant’s conduct was inconsistent with the rights of the owner or another person entitled to possession;
(b)the conduct was deliberate; and
(c)the conduct was so extensive an encroachment on the owner’s rights as to exclude him from use and possession of the goods.
[81] The statement of claim simply pleads that Ms Uluiviti committed conversion by taking the items set out at Schedule A without the plaintiffs’ permission. The statement of claim goes on to plead various actions in relation to the FCAA’s Xero and Facebook accounts, including the formal requests said to have been made on behalf of the FCAA for delivery of these items. As noted, Mr Pidgeon confirmed that the claims regarding Facebook and Xero passwords are not pursued on the summary judgment application.26
[82] The plaintiffs’ evidence and submissions did not set out any analysis or roadmap to the application of these elements to each item of property set out in Schedule A.
25 Ferreira v Stockinger, above n 9, at [191].
26 It is also clear that as of sometime in mid-January 2019, the plaintiffs have had full access to the Xero accounts. It is also appears that for some time before this, Ms Uluiviti had taken steps to try to “unlock” the Xero account, but Xero would not permit such steps absent Court order. In the event, by around mid-January 2019, arrangements were able to be made with Xero which enabled access.
Discussion
[83] I am not prepared to enter summary judgment on the conversion cause of action. This is because of the way in which the claim is pleaded, the way the proceeding have progressed, the incremental delivery up by Ms Uluiviti of various items on Schedule A, and a lack of clarity as to what precisely remains outstanding and on which items the plaintiffs now seek summary judgment.27 These matters combined make it difficult to conclude that Ms Uluiviti has no arguable defence to the claim of conversion in respect of each item on Schedule A.
[84] There is disputed evidence as to precisely what Ms Uluiviti had (or still has) in her possession, including items 7 and 8 on Schedule A. When the matter first came before Muir J on 19 September 2018 and Ms Uluiviti appeared on a Pickwick basis, she acknowledged that she had at least those items on Schedule A under the heading “Accounts” in her possession or power, other than items 7 and 8. There is no clear evidence before the Court, however, as to the location of the other items on that Schedule (for example, two Samsung tablets and an office computer). Further, at the hearing before me, Ms Uluiviti did not accept that she had had all the items the subject of her undertaking in her possession or power in any event, stating that the matter was so rushed when she appeared on 19 September 2018 that she was not really sure what she had in her possession.28
[85] While it was inappropriate and unwise for Ms Uluiviti to give an undertaking to the Court based on Schedule A (in circumstances where she was not sure precisely what she did and did not have in her possession or power), that is a matter concerning the undertaking and not whether the plaintiffs have demonstrated on the current application that Ms Uluiviti has no arguable defence to the claim of conversion for each item on Schedule A.
[86] Ultimately, it is not possible for the Court to unravel and test the claim of conversion on the summary judgment application without there being a clear pleading
27 Mr Pidgeon filed a “schedule” of speaking notes for the hearing, in which it was noted that it was unclear what items, if any, Ms Uluiviti retained in her possession.
28 Ms Uluiviti’s undertaking was later varied for example, with reference to the Xero password which she later realised she did not have in her possession: see the Minute of Palmer J dated 25 September 2018.
setting out the facts necessary to establish the cause of action on each item; evidence confirming each of those pleaded facts; and submissions providing a roadmap to the Court as to why the facts satisfy the legal test for conversion.
[87] Further, the plaintiffs do not pursue the damages claim by way of summary judgment. Calculating and assessing the quantum of damages (assuming liability is proved) will require a clear picture to be presented on each item in Schedule A, including from what point Ms Uluiviti had the item in her possession; on what date the item was requested to be returned; and what losses the FCAA incurred as a result. In this way, the matters to be considered on both liability and damages are closely interconnected. The Court in Ghent v Brinkman commented on the undesirability of entering summary judgment on matters concerning liability when the same issues will have to be traversed in the context of damages.29
[88] The application for summary judgment on the conversion cause of action is accordingly declined.
Result and concluding observations
[89] Summary judgment is granted on the liability aspect of the plaintiffs’ first cause of action, breach of contract. There are declarations in accordance with [77] above.
[90] The question of damages and other relief on the breach of contract claim, and the cause of action in conversion, will need to proceed to trial.
[91] I make the following concluding observations. The claim appears to have been (not unreasonably) framed to support the plaintiffs’ urgent application for interim orders. Given the passage of time and events which have occurred in the interim,30 Mr Pidgeon will no doubt wish to review with his clients which aspects of the remaining claims, if any, are appropriately pursued to trial. At the very least, the pleadings will require amendment to reflect a more detailed and up to date position.
29 Ghent v Brinkman HC Wellington CP379/87, 11 September 1987.
30 Including that most (and perhaps all) the FCAA property that was in Ms Uluiviti’s possession has now been provided to the FCAA’s solicitors; and there has been a further AGM at which fresh elections were conducted.
[92] I direct that this matter be listed in the first available Duty Judge list 20 working days from the date of this judgment. Mr Pidgeon is to update the Court at that time on what extent the claim is to be progressed to trial, and propose any necessary timetabling orders in that regard.
Costs
[93] The FCAA has been partially successful on its application for summary judgment. In the event costs are sought and cannot be agreed, it may file a costs memorandum within 15 working days of the date of this judgment. Ms Uluiviti may file a response within a further five working days. No memorandum is to be longer than five pages in length.
[94]I will thereafter determine costs on the papers.
Fitzgerald J
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