THE CONSTITUTION OF THE PROCEEDINGS
15Introduction. The constitution of the current proceedings has required attention more than once.
16Each of the parties who appeared at the final hearing has accepted that all parties to the proceedings are, and were at all material times, members of the BIC. In particular, there is no dispute that the first plaintiff has standing, as a member of the association and as its displaced General Secretary, to maintain the proceedings.
17It was not until 25 August 2011 that the BIC was joined as a party in the proceedings. That was done by an order made by a judge in the course of dealing with one of the several interlocutory disputes that has absorbed the attention of the Court and the parties alike. Eight interlocutory judgments have been delivered: [2011] NSWSC 893 (10 August 2011), [2011] NSWSC 954 (25 August 2011), [2011] NSWSC 1597 (15 December 2011), [2012] NSWSC 348 (13 April 2012), [2012] NSWSC 411 (23 April 2012), [2012] NSWS 416 (27 April 2012), 15 June 2012 and 28 June 2012.
18Joinder of the BIC as a party did not result in it assuming an active role in the proceedings. Its joinder was, at least, a necessary formality: Metyor Inc v Queensland Electronic Switching Pty Limited [2003] 1 QR 186 at [10]-[13], following Spokes v The Grosvenor and West End Railway Terminus Hotel Co Ltd [1897] 2 QB 124 at 128-129. It has not entered an appearance.
19The absence of any appearance can reasonably be assumed to have been a product of factional disputation between the first plaintiff and the first defendant as to their respective entitlements to represent the association.
20All parties who appeared at the final hearing agreed, and evidence before the Court confirms, that: (a) the membership of the BIC is, and was at all material times, much larger in numbers than those members named as parties in the amended summons; (b) the BIC's membership has varied over time, and it continues to do so; and (c) the first plaintiff and the first defendant are recognised in their community as the leaders of the two factions which have over previous years vied, and continue to vie, for control of the BIC.
21When the amended summons was called on for final hearing, the only appearance on the plaintiffs' side of the record was an appearance by, and on behalf of, the first plaintiff. There was no appearance by or on behalf of any of the second, third or fourth plaintiffs.
22The same position pertained when the hearing resumed after an adjournment. The only appearance on the plaintiffs' side of the record remained that of the first plaintiff.
23After the conclusion of the hearing (on 21 September and 17 October 2012), on notice to the active parties in the proceedings and without objection, the Court (on 13 November 2012) made orders to the following effect to regularise the constitution of the proceedings and, formally, to record that the object of the proceedings is to have all members of the BIC bound by the Court's determination as a means towards ending legal disputation within the BIC membership as to the Association's governance:
(a) ORDER that the first plaintiff be appointed to represent in these proceedings himself and all members of [the BIC] who contend that his displacement from the office of General Secretary of [the BIC] on or about 24 April 2011 was not authorised by law.
(b) ORDER that the first and third defendants jointly be appointed to represent in these proceedings themselves and all other members of [the BIC] not represented by the first plaintiff pursuant to [the first order].
(c) ORDER that the second, third and fourth plaintiffs be removed from the record of the proceedings as plaintiffs and that they respectively be joined in the proceedings, instead, as the sixth, seventh and eight defendants.
24These orders fall into two classes. The first two are "representative orders" designed to ensure that all members of the BIC are bound by the Court's determination. The third order is designed to ensure that the legal representatives of the first plaintiff (the only party now claiming relief in the proceedings) are not embarrassed by the presence, on the plaintiff's side of the record, of parties who might no longer be in the same interest as him.
25Representative Orders. The necessity for representative orders in these proceedings arose from five considerations. First, the fact that orders sought by the first plaintiff affect the whole membership of the BIC. He seeks, not only a declaration that his displacement as General Secretary was invalid, but also orders for the conduct of a fresh election for membership of the association's Executive Council. Secondly, the factionalism associated with the first plaintiff's displacement as General Secretary and the conduct of an election for the Executive Council on 17 June 2012 has been attended by the operation of two groups of people, each claiming to be the legitimate Executive Council of the BIC and characterising the other as a "shadow Executive Council". Thirdly, an object of determination of the proceedings is to bring resolution to this impasse, if not peace, to the whole membership of the BIC. Fourthly, it is important for that purpose to bind the whole membership to the Court's determination so that, subject to any appeal, this judgment will settle the BIC's constitutional crisis. Fifthly, the leadership roles assumed by the first plaintiff and the first defendant within their respective factions of the BIC community render their appointment as representative parties convenient for the fair determination of the controversial questions submitted to the Court for determination.
26In proceedings relating to the governance, and internal management, of a voluntary association, importance attaches to having before the Court, either in person or by representation, all who will be affected by the Court's determination: John v Rees [1990] Ch 345 at 371G. An absence of parties would not necessarily affect the jurisdiction of the Court to determine the proceedings (Australian Coal & Shale Employees' Federation (1937) 38 SR (NSW) 48 at 60-61), but it could lead to the institution of multiple, separate proceedings having a tendency to prolong disputation, not settle it down.
27The representative orders made in these proceedings were made upon an exercise of the equitable jurisdiction of the Court described by Megarry J in John v Rees [1970] Ch 345 at 369H- 374E (esp at 369H-370H, 371G-372A and 373H-374C) by reference to Lord Macnaughten's judgment in Duke of Bedford v Ellis [1901] AC1 at 8-11 and, ultimately, the judgments of Lord Elden in Adair v New River Co (1805) 11 Ves 429; 32 ER 1153 and, more especially, Cockburn v Thompson (1809) 16 Ves. Jun 321; 33 ER 1005.
28Sir Robert Megarry's judgment was cited with approval by the High Court of Australia in Carnie v Esanda Finance Corporation Limited (1995) 182 CLR 398 at 417. It was also followed in proceedings for the determination of a dispute between members of an unincorporated association in Clark v University of Melbourne [1978] VR 457 at 475-477 where, on appeal, the representative character of the proceedings was not the subject of adverse comment: Clark v University of Melbourne (No 2) [1979] VR 66 at 67.
29The High Court has acknowledged the existence, and equitable origins, of the non-statutory jurisdiction of the Court to make representative orders for the determination of disputes between a multiplicity of parties: eg, Templeton v Leviatan Pty Limited (1921) 30 CLR 34 at 75-78; Carnie (1995) 182 CLR 398 at 403, 408, 415-424 and 427-429; Wong v Silkfield Pty Limited (1999) 199 CLR 255 at 261-263 [13]-[17]; and Mobil Oil Australia Pty Limited v Victoria (2002) 211 CLR 1 at 21-22 [6] and 29-30 [33]-[34].
30Equity's flexibility in the joinder of parties was extended to proceedings in this Court generally upon enactment of legislation (including s 5 of the Law Reform (Law and Equity) Act 1972 (NSW)) that embraced the Judicature Act system of court administration adopted in England in 1875: Edge; Re Eco Panels Australasia Pty Limited (In Liq) [2007] FCA 30; 61 ACSR 139 at [6]-[13].
31The existence of the Court's equitable jurisdiction to make representative orders has not been affected by the repeal in 2011 of rules 7.4 and 7.5 of the Uniform Civil Procedure Rules 2005 (NSW) - an adaptation of Part 8 rule 13 of the Supreme Court Rules 1970 (NSW) - corresponding to the rule of court (R.S.C. Order 15 rule 12) considered by Megarry J in John v Rees.
32Rules 7.4 and 7.5 (after amendment in 2007 as noted in Jameson v Professional Investment Services Pty Limited (2009) 72 NSWLR 281 at 283-284 [3]-[5]) were repealed at the same time as more elaborate provisions relating to "Representative Proceedings" based upon similar provisions applicable to the Federal Court of Australia and the Supreme Court of Victoria (namely, Part 10, comprising ss 155 - 184, of the Civil Procedure Act 2005 (NSW)), came into operation; Courts and Crimes Legislation Further Amendment Act 2010 (NSW), No 135, Schedules 6.1 and 6.4; Civil Procedure Act s 4(1A), Part 10, and Schedule 6 Part 5 (paragraph 18). There is nothing in the Attorney-General's Second Reading Speech in support of the amending legislation (Hansard, 24 November 2010), the law reform reports to which the Attorney referred or the Explanatory Notes published with the Bill that became the Amending Act, to suggest that the enactment of "a comprehensive representative proceedings regime" was intended to deprive the Court of its traditional equity jurisdiction. In any event, the present proceedings do not fall within the definition of "representative proceedings" as defined by s 157 of the Civil Procedure Act, and they have not been conducted as proceedings governed by the procedures for which Part 10 of that Act provides. Those procedures are very different from those available in equity: Burns Philp & Co Ltd v Bhagat [1992] 1 VR 203 at 223. They are not what is required for a final, fair determination of these proceedings.
33The Uniform Civil Procedure Rules still include, in rule 7.6, a provision based upon the Supreme Court Rules 1970, Part 8 rule 14. It provides for a representative order to be made in proceedings concerning the administration of a deceased estate, property the subject of a trust, or the construction of "an Act, instrument or other document". The heading to the rule suggests that the expression "an Act, instrument or other document" is intended to refer, at least primarily, to legislation. That is an impression not wholly dispelled by resort to the definition of "instrument" in the Interpretation Act 1987 (NSW), s 3.
34Even if the word "document" were to be given an expansive construction by reference to the "Dictionary" incorporated in the Rules by UCPR rule 1.2, the language of UCPR rule 7.6 does not naturally lend itself to these proceedings. Although, at the heart of the proceedings, are questions relating to the construction of a constitution governed by the Associations Incorporation Act 2009, the subject matter of the proceedings concerns the operation of the constitution, not merely its construction.
35An examination of the Civil Procedure Act and the Uniform Civil Procedure Rules drives one back to the Court's equitable jurisdiction.
36Section 22 of the Supreme Court Act 1970 (NSW) preserves the jurisdiction of the court derived, by Imperial legislation, from the English Court of Chancery. Section 5(1) of the Civil Procedure Act provides that nothing in that Act, or the Uniform Civil Procedure Rules, limits the jurisdiction of the court.
37These provisions are, in themselves, sufficient support for the representative orders made in these proceedings. If I am wrong about that then the orders may nevertheless be justified, by reference to s 16 of the Civil Procedure Act, as "directions with respect to [an] aspect of practice or procedure for which rules of court or practice notes do not provide". The due administration of justice and the dictates of justice, in the present proceedings, require an application of equity's approach to representative orders.
38The representative order procedure available in equity is readily adaptable to procedures for the determination of the collective rights and liabilities of members of an association as between themselves: SJ Stoljar, "The Representative Action : An Equitable Post-Mortem" (1956) 3 University of W.A. Annual Law Review 479 at 483, 485, 486 and 499-500; HAJ Ford, Unincorporated Non-Profit Associations: Their Property and Their Liability (Oxford, 1959), pp 94-96; KL Fletcher, The Law Relating to Non-Profit Associations in Australia and New Zealand (Law Book Co, Sydney, 1986), pp 190-192. That is illustrated by both John v Rees and Clark v University of Melbourne.
39On any analysis of case law, it is necessary to bear in mind that the non-statutory "rules" relating to representative orders to be applied upon an exercise of equitable jurisdiction are rules of convenience adapted to particular facts for the due administration of justice: John v Rees [1970] Ch 345 at 370 EF; Campbells Cash & Carry Pty Limited v Fostiv Pty Limited (2006) 229 CLR 386 at 418 [44].
40Different types of proceedings have been treated differently, according to the requirements of the particular case. This was recognised by Young J in Carnie v Esanda Finance Corporation Limited (1996) 38 NSWLR 465 at 470B-472G on the return of those proceedings to this Court after publication of the High Court judgment reported at (1995) 182 CLR 398. Of the three types of case identified by his Honour, the present proceedings are closest to the third: a shareholder's action, with representative orders designed to avoid a multiplicity of suits.
41The following passage in Professor Ford's book, at pp 94-95, provides a general description of the nature of equity's jurisdiction:
"In equity there developed a procedure which has proved to be significant in litigation concerning associations. In the Court of Chancery there was a general approach more favourable to the growth of rules as to joinder of parties which would be less strict than those operating at common law. The Court of Chancery was for the most part a court of administration: unlike a common law court, which provided a forum for what was regarded as essentially a contest between persons, the Court of Chancery was more often concerned to do complete justice concerning a particular subject-matter. Whereas the normal common law action involved a relatively small number of persons, the higher-minded Chancellors delighted 'to do complete justice, and not by halves', were often faced with situations in which large numbers of persons had claims to property under the Court's administration. Chancery ordinarily required that all such persons should be before the Court as parties to the bill [ie, the Court's originating process] so that the disposition of the property could with justice be finally passed upon. But it was recognised that the general requirement about joinder could be dispensed with in a number of cases where it was impracticable to comply with it. ... In these cases the Court of Chancery would not insist on all the persons interested being made parties but would proceed to a decree without them, if it could be done without injury to the persons not actually before the Court. Full joinder was dispensed with when the Court was satisfied that the interested persons who had not been joined were virtually represented by persons who were joined. To constitute this representation it was necessary that there should be homogeneity of right between members of the class represented and the parties who claimed to represent them. [Emphasis added, but citation of authority omitted]".
42This is consistent with the following explanation found in Daniell's Chancery Practice (Stevens and Sons, London, 8th ed, 1914) at page 147 (omitting footnote references):
"It was the aim of the Court of Chancery to do complete justice by deciding upon and settling the rights of all persons interested in the subject of the suit, so as to make the performance of the order of the Court perfectly safe to those who were compelled to obey it, and to prevent future litigation. For this purpose, it was necessary that all persons materially interested in the subject should generally be made parties to the suit, either as plaintiffs or defendants.
The strict application of this rule in many cases created difficulties, which induced t he Court of Chancery to relax it; and it became the established practice of that Court to allow a plaintiff to sue on behalf of himself and of all the others of a numerous class of which he was one, and to make one of a numerous class (as the members of a joint-stock company) the only defendant as representing the others, on the allegations that they were too numerous to be all made parties."
43As explained in Ashburner's Principles of Equity (2nd ed, by Denis Browne, Butterworth & Co, 1933) at p 43:
"The desire of courts of equity to avoid a multiplication of suits led inevitably to a multiplication of parties. ... The difficulties which arose in equity from the necessity of bringing before the court all persons who had an interest in the matter in dispute were diminished by the introduction of representative suits. At common law, a plaintiff before the Judicature Act could not sue or be sued in a representative capacity unless he were already a legal representative of another, eg an executor or the public officer of a bank. In equity, where there was a common interest and a common grievance, a representative suit was allowed from an early time if the relief sought was in its nature beneficial to all whom the plaintiff proposed to represent. The rule was not confined to persons who had a beneficial proprietary interest. ... On the same principle, where the defendants were numerous, two or three of a class might always be made defendants to represent the interests of that class. [Emphasis added, but citation of authority omitted]".
44The equitable jurisdiction to make representative orders is thus governed by "considerations of justice and convenience", and the management of proceedings by the Court "to ensure fairness" in the conduct of litigation: Mobil Oil Australia Pty Limited v Victoria (2002) 211 CLR 1 at 21-22 [6].
45The standard of fairness required for the conduct of a representative action (in the context of the Supreme Court Rules 1970, Part 8 rule 14) was considered in Arakella Pty Limited v Paton (as Representative of the Unitholders of GNS Training Trust) (2004) 60 NSWLR 334 at 346-349 [51]-[65]. There Austin J, building upon an observation of Young J in Carnie at 38 NSWLR 472, emphasised the need for a representative party to act honestly and fairly, with independence of mind, to represent what he or she considers to be the interests of the represented group. That does not amount to a licence to make purely subjective judgements. A representative party does not necessarily have to consult represented parties, or to act at the direction of such parties, However, a representative party does need to bear in mind the importance attached by the court to ensuring, first, that the interests of parties in fact absent from the court room are fairly addressed and, secondly, that the court receives assistance from the representative party to ensure that all questions in dispute are fairly identified and fairly addressed.
46Given the presence of a contradictor at a hearing of proceedings in which a representative order has been made, the standard of fairness required of a representative party might not rise as high as that required of a party who seeks ex parte relief (as to which, see Thomas A Edison Limited v Bullock (1912) 15 CLR 679 and Garrard v Email Furniture Pty Limited (1993) 32 NSWLR 662) but a failure by a representative party to bring a material fact to the attention of the Court may undermine the efficacy of any judgment entered in the proceedings.
47A final judgment given in proceedings the subject of a representative order ordinarily binds all members of the class of persons purportedly represented by the representative party: KR Handley, Spencer Bower and Handley: Res Judicata (Lexis Nexis, London, 4th ed, 2009), para [9.20]; Carnie (1995) 182 CLR 398 at 423-424. However, a person purportedly represented pursuant to a representative order may be entitled to apply for joinder in the proceedings as a defendant (in aid of an application to set aside the judgment or to appeal) for the purpose of contending that the judgment does not apply to him or her because he or she does not fall within the class of represented parties; because of some special circumstance personal to him or her; or because it was obtained irregularly, illegally or against good faith: Commissioners of Sewers of the City of London v Gellatly (1876) 3 Ch D 610 at 616; UCPR rule 36.15(1). Cf, Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538-539.
48The conditions for the making of representative orders are found in these proceedings. The evidence before the Court is that the membership of the BIC is largely divided into two factions. One faction generally supports the first plaintiff. The other generally supports the first defendant. The factional divide has been defined, since at least 24 April 2011, by different views as to whether or not the first plaintiff was properly displaced from the office of General Secretary of the BIC on or about that date. That question can be dealt with fairly upon the contentions advanced by the first plaintiff, on the one hand, and the first and third defendants on the other.
49Their active participation in the proceedings, and the non-participation of other members of the BIC (including members personally joined as parties) in the proceedings, established their qualifications for the representative roles now formally conferred upon them by orders of the Court.
50The jurisdiction to make a representative order does not depend upon the consent, or even the knowledge, of persons who are to be represented by a party appointed to represent them: Carnie (1995) 182 CLR 398 at 429; Burns Philp & Co Ltd v Bhagat [1993] 1 VR 203 at 222-223.
51It is not necessary, for present purposes, to go beyond the Court's equitable jurisdiction to make representative orders as a convenient procedure for the fair determination of disputes between members of the BIC as to the status of the first plaintiff as General Secretary and associated questions as to the authority of members of the association who currently hold themselves out as constituting its Executive Council. For completeness, however, I notice that the jurisdiction in equity to make representative orders bears some similarity to the jurisdiction formerly arising on a Bill of Peace: Story, Commentaries on Equity Jurisprudence (1st English ed, 1884), ch 22 (paras 852-860, on pp 567-570); Halsburys Laws of England (1st ed, 1910) vol 13, para 68. Cf, Wong v Silkfield Pty Ltd (1999) 199 CLR 255 at 262 [15]. An object, under each head of jurisdiction, is to quell disputes and avoid a multiplicity of proceedings.
52Removal and Rejoinder of Parties. As foreshadowed during the course of the hearing, the intendment of the order made for redesignation of all but the first plaintiff as defendants is both to recognise that the first plaintiff is now the only party claiming relief in the proceedings, and to ensure that the conduct of the proceedings on behalf of the first plaintiff is not constrained by the presence on the same side of the record of co-plaintiffs who may, by their presence, impede conduct of the proceedings or embarrass the first plaintiff in his conduct of them: Goold & Porter Pty Ltd v Housing Commission [1974] VR 102 at 104; Uniform Civil Procedure Rules 2005 (NSW), rr 6.20 and 6.25.
53The remaining plaintiffs, now newly joined defendants, may have abandoned the proceedings, but it is not necessary for me to reach that conclusion. There is no evidence, one way or the other, as to whether they maintain their support for the first plaintiff. I infer that their stance is not unlike that of a defendant who enters a submitting appearance.
54The position on the plaintiffs' side of the record has its corollary on the defendants' side. The only active parties on the defendants' side are the first and third defendants, represented by the same counsel. Each of the second and fourth defendants appeared before the Court, in person, to announce his submission to orders of the Court, save as to costs.
55The form of Representative Orders. The inactive roles assumed in the proceedings by all parties other than the first plaintiff, the first defendant and the third defendant justify the generality of the terms of the representative orders made by the Court. There is no need to carve out of those orders separate roles for the parties who have chosen to assume an inactive role. The representative orders can operate fairly without any expression of exceptions.
56Ordinarily, the class of persons represented by a representative party should be defined, in the order appointing that party as a representative, by reference to "the effect of proceedings on the rights of a person and not ... the person's wish or lack of wish to assert rights": Trustees of the Roman Catholic Church for the Archdiocese of Sydney v Ellis (2007) 70 NSWLR 565 at 580 [63], citing Shepherd v Australia & New Zealand Banking Group Limited (1996) 20 ACSR 81 at 96 (lines 33-34).
57The orders made in these proceedings do not conform to that counsel of perfection. Nevertheless, the classes of represented parties are, collectively, defined by the totality of the membership of the BIC. The orders made in the proceedings recognise that there is a division of opinion within the membership of the association that turns upon different contentions about whether or not the first plaintiff was validly displaced from the office of General Secretary. That is, I apprehend, a touchstone for factional allegiance, although not all members who share the first plaintiff's opinion as to the validity of his displacement need regard themselves as within his, or any other, faction.
58A more conventional form of representative orders might have been one in which one of the first plaintiff or the first defendant was appointed to represent all members of the BIC other than his opponent. Procedurally, that would have achieved what can be achieved by the orders actually made. However, it would have been liable to be misunderstood by members of the association. Neither of the first plaintiff nor the first defendant stands alone.
59As in John v Rees [1970] Ch 345 at 373H, there is in these proceedings "a simple division of opinion between numerous members of a single body". In these proceedings, as distinct from those with which Megarry J dealt, a definition of the class of members represented by the first plaintiff, in particular, by reference to their support for him in relation to the core question before the Court does no injustice to any member of the BIC. It serves, rather than impedes, a fair presentation of competing arguments referable to that question or, just as importantly, the associated questions in dispute that follow on from its determination. The representative defendants (particularly the first defendant) are the first plaintiff's contradictors, not only in the conduct of these proceedings, but also in the conduct of the affairs of the BIC itself.