Aijaz Ahmed Khan v Shahzad Khan

Judgment - ex tempore (REVISED) 1The plaintiffs in this matter were until recently the members of the Executive Council of the Islamic Association Western Suburbs Sydney Inc ("the Association"). The first to seventh defendants claim to now constitute the Executive Council. The Association itself is the eighth defendant. There is a live controversy between the two groups as to who constitutes the lawful Executive Council. That question essentially depends upon the interpretation of the constitution of the Association and the application of those constitutional provisions to recent events involving the requisitioning and convening of meetings. 2Given the hour, I shall not do any more than provide brief reasons for the conclusions to which I have come. It is necessary, however, to make reference to some of the provisions of the constitution before turning to the particular facts of the case. 3The constitution provides for Special General Meetings. These are general meetings of the Association other than Annual General Meetings. By rule 26(1) of the constitution, the Executive Council of the body may, whenever it thinks fit, convene a Special General Meeting of the Association. Rule 26(2) provides that the Executive Council shall, on the requisition in writing of not less than 5 per cent of the total number of members convene a Special General Meeting of the Association. Rule 26(3) then provides that a requisition of members for a Special General Meeting: - "(a) shall state the purpose or purposes of the meeting, (b) be signed by the members making the requisition, (c) shall be lodged with the secretary of the executive council and, (d) may consist of several documents in a similar form, each signed by one or more of the members making the requisition." 4Rule 26(4) provides that if the Executive Council fails to convene a Special General Meeting to be held within one (1) month after the date on which a requisition of members is lodged with the secretary, any one or more of the members who made the requisition may convene a Special General Meeting to be held not later than three (3) months after that date. 5Rule 26(5) provides that a Special General Meeting convened as referred to in clause (4) shall be convened as nearly as is practicable in the same manner as General Meetings are convened by the Executive Council and any member who thereby incurs expense is entitled to be reimbursed by the Association for any expense so incurred. 6It is clear that only financial members of the Association are entitled to vote at any general meeting. It is also made clear by rule 17(g) of the constitution that the office of a member of the Executive Council shall become vacant upon a resolution being passed by a two-thirds majority of members present at a properly constituted General Meeting specially called for the purpose to remove him/her from office. 7Apart from members losing their status as financial members and thus their entitlement to vote, full members of the Association lose their membership upon default in the payment of membership fees for either five or three consecutive years. I say either five or three because the relevant rule of the constitution, rule 6(1)(d), is contradictory and mentions both five and three years. 8On 6 January 2014, a letter was sent to the secretary of the Association on the subject of "Requisition to call a Special General Meeting of IAWSS". The letter was signed by a Mr Bajwa. The letter, which I shall call the requisition, included the following: "Take notice that we the undersigned Foundation Member (more than five per cent of IAWSS Association) in compliance with the provisions stipulated in clause 26 of the Constitution of the Association, hereby ask you to call a Special General Meeting of All the members of the Association to consider the following." 9Under the subheading "The Purpose" a number of matters were specified including: "2. The SGM to decide and take the necessary actions including dissolution of the current Executive Council and appoint an Interim Committee." 10The requisition further provided for the Interim Committee to take over the day-to-day management of the affairs of the Association and for the Interim Committee within the next six months to call a Special General Meeting to pass a revised and updated constitution, and thereafter make arrangements for the election of a new Executive Council of the Association. 11Under the subheading "The Signatories" it is stated that signed copies of the members' list is attached, and it is noted that more than five per cent have signed the petition and the requisition. 12Under the subheading "The Agenda" are a series of proposed resolutions. These include resolution 5.2, which provides that the current Executive Council be dissolved. 13On the last page of the body of the requisition there is a list of 20 persons who are said to be members. This is disputed by the plaintiffs who say that four are not members (and a further six are not financial). The list is said to be continued in an "attached list Annexure A" although there does not appear to be any such document. The last page of the body of the requisition also refers to Annexure B which is a petition signed by local community members. 14This petition expresses some dissatisfaction with the way that the Association's affairs have been conducted, and calls for a Special General Meeting or for the resignation of the Executive Council. The petition consists of numerous pages. There are numerous signatories, many of whom may be members of the Association. 15On 21 January 2014, the secretary of the Association acknowledged receipt of the requisition. In his letter the secretary referred to various inadequacies that were perceived in the requisition, which was said to be not in accordance with the constitution of the Association. 16On 29 January 2014, the defendants issued a Notice for Special General Members' Meeting. The meeting referred to in the notice was to take place on Sunday 16 February 2014 at the Erskine Park Community Hall. One of the items on the agenda was item 4, which is in these terms: "Review of the recent action of the Executive Council that resulted in unrest and disharmony among the members and the community. And to dissolve the Executive Council." 17On 2 February 2014, the secretary of the Association sent another letter in relation to the requisition. The letter refers to a conversation which apparently occurred between the secretary of the Association and Mr Bajwa on 26 January 2014 when the latter was advised verbally of various flaws and errors in the way that the requisition was advanced. The letter included the following statements: "Despite the advice and discussion you have called a SGM of the IAWSS for 16 February 2014 which is unconstitutional. IAWSS will challenge any decision taken by the members on 16 February 2014, since the SGM does not fulfil the requirements of the IAWSS constitution. You and the members who called for the SGM will be liable for all costs incurred. We will call a SGM as soon as you re-submit the amended requisition. Can you respond to my letter of 21 January within 72 hours of receiving this letter: Failure to your response with correct requisition according to IAWSS constitution, the EC will have no choice but to call a SGM ourselves." 18On 4 February 2014, a further Notice of Special General Members' Meeting was issued. The notice stated that the Special General Meeting to be held on 16 February 2014 had been postponed to Sunday 2 March 2014 "due to revised agenda and additional notice required for the meeting." 19The agenda now contained item 2 as follows: "To remove the following persons from the office of the Executive Council as per clause 17g of the constitution of the IAWSS." 20There followed the names of the plaintiffs who then constituted the Executive Council. 21On 6 February 2014, Mr Bajwa sent a letter to the secretary of the Association in response to the secretary's letters referred to earlier. Mr Bajwa indicated that the secretary's objections were not valid and acceptable for various reasons, including that members have made requests for access to the membership records and lists which requests are said to have been denied. There was also reference to many protests which had occurred in relation to the actions of the current Executive Council. 22The letter concluded with an exhortation "for the secretary to be at the meeting to be held on 2 March 2014 as per the amended notice already posted to you and members." 23In fact the notices of the meetings which were sent in relation to both the proposed February meeting and the proposed March meeting had been sent to the persons who appear on a list which was apparently settled in the context of earlier litigation involving the Association in 2012. This list identified the then membership of the Association. 24On about 14 February 2014, the plaintiffs, as the then Executive Council, agreed to hold a Special General Meeting to take place on 23 March 2014. It is apparent that the plaintiffs continued to not recognise the validity of the proposed Special General Meeting to be held on 2 March 2014. 25On about 24 February 2014, notices were sent out at the behest of the plaintiffs in respect of the Special General Meeting to be held on 23 March 2014. The agenda included items which, in respect of each member of the Executive Council, were as follows: "Whether pursuant to clause 17(g) of the constitution [the executive council member] be removed from office." 26The plaintiffs commenced these proceedings by Summons filed on 7 March 2014 in the Duty List. The matter has come on today for hearing of the application for interlocutory relief, namely, an interlocutory order that the Executive Council of the Association, as it was prior to 2 March 2014, continue to act in that capacity pending final determination of the proceedings. 27As that prayer for relief indicates, the meeting which was held on 2 March 2014 resolved to remove the existing Executive Council and elect a new Executive Council which consists of the first seven defendants. 28I have been assisted with lengthy and helpful submissions by both Mr Cheshire for the plaintiff and Mr Rajalingam for the defendants in the Duty List today. 29Mr Cheshire submits that the plaintiffs have a very strong prima facie case that the purported requisitioning and subsequent holding of the meeting of 2 March 2014 was invalid as it was contrary to the Association's constitution. He made a number of submissions in that respect. 30The first submission he made was that the convening of a Special General Meeting by the requisitioners occurred contrary to rule 26(4) because it occurred within one month of the requisition itself. Rule 26(4) provides that if the Executive Council fails to convene a Special General Meeting to be held within one month after the date on which a requisition for a meeting is lodged, then any one or more of the requisitioning members may convene a Special General Meeting to be held not later than three months after that date. 31In this case, the requisition was made on 6 January 2014. Accordingly, if the executive council fails to "convene a Special General Meeting to be held" within one month after that date, that is 6 January 2014, then the requisitioning members may convene a Special General Meeting. 32There is a question of construction arising under rule 26(4). It was submitted on behalf of the defendants that by the time the defendants issued their notice on 29 January 2014, the plaintiffs had already failed to convene a Special General Meeting for the purpose of rule 26(4). It was submitted that having regard to the notice requirements of rule 27, the Executive Council had by that time failed to convene a Special General Meeting to be held within one month of 6 January 2014 (being the date of requisition). 33However, in my opinion, the better construction of rule 26(4) is that the Executive Council has one month from the date of requisition in order to convene a Special General Meeting. That is to say, there is one month before the right of a requisitioning party to itself convene a meeting arises. There is no doubt that the language of rule 26(4) has its difficulties, and the construction advanced by the defendants is clearly available. Nevertheless, given the notice requirements of rule 27, which in the case of general meetings requiring special resolutions, provides for at least 21 days' notice before the date fixed for the holding of the general meeting, it would provide only a very short time for the Executive Council to act in order to not give rise to the rights of requisitioning members to themselves convene a Special General Meeting. Viewed in the context of rule 26 as a whole, which provides essentially for the Executive Council to be the body which controls the convening of Special General Meetings, I think that the construction which gives them one month in which to act is the better one. 34In any event, on an application such as this, it is not necessary to reach a definitive conclusion as to the proper construction of the provision. It is sufficient to say, in my opinion, that there is at least a serious question to be tried in this case as to whether the purported calling of a meeting prior to the expiration of one month from the date of requisition gives rise to the conclusion that the calling of such meeting was invalid. 35Mr Cheshire made numerous other points in relation to the validity of the actions taken by the defendants. One such point was that the requisition was not supported by five per cent of the membership. Depending upon which approach is taken to the size of the membership, five per cent would require either 15 or 18 members to requisition a Special General Meeting under rule 26. That is not an issue upon which it has been possible, in the limited time which was available to the Court in the Duty List, to adequately consider let alone reach any definitive conclusions. I put it aside for the time being. 36Mr Cheshire also made the point that the notices sent to the members on the list which had been settled in the earlier litigation in 2012 was problematic because, obviously enough, the membership's composition had changed since 2012. There was evidence that supported that conclusion. 37Mr Rajalingam countered with the submission that the defendants had experienced difficulty in obtaining access to the official membership list and that, in fact, the defendants had made every effort possible to make known amongst the membership, and the community from which the membership is drawn, that a Special General Meeting was to be held on 2 March 2014. Again, it is not possible to reach any definitive conclusions on this issue in the context of this application. 38Mr Cheshire also made the point that the requisition was not signed by anyone, apart from Mr Bajwa, and this was contrary to rules 26(2) and 26(3). There is undoubtedly an issue about this. Reading the requisition as a whole, which I think is the appropriate way to approach the question, it is perhaps arguable that it should be treated as having been signed by all of those who signed the petition which was attached to it. It is true, as Mr Cheshire submitted, that the petition is something different from a requisition of a meeting. Nevertheless, the terms of the petition, whilst not formally adopting the language of the requisition, plainly call for a Special General Meeting to be held. Again, I think that a serious question to be tried arises as to whether the requisition is invalid by reason of not being signed in a manner consistent with rules 26(2) and 26(3). 39There is also a serious question to be tried concerning the next point raised by Mr Cheshire, namely, that the notice of meeting dated 29 January 2014 does not follow rule 17(g) which envisages that individual members of the Executive Council will be the subject of separate motions for their removal. This difficulty was sought to be overcome by the later notice, which was sent out on 4 February 2014. 40Overall, I conclude that there are a number of serious questions to be tried which are raised on the material before the Court. There is a prima facie case for invalidity in respect of the manner in which the meeting of 2 March 2014 was convened, and in respect of the meeting itself, in the sense discussed in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1, as explained by Gummow and Hayne JJ in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; [2006] HCA 46 at [65]. 41I turn now to the balance of convenience. Mr Cheshire submitted that the real dispute is essentially who should be on the Executive Council. He submitted that that question is to be put before a meeting which is to be held on Sunday week, 23 March 2014. He submits that insofar as there is a status quo in this case, it is the plaintiffs who should be regarded as forming the status quo. There was no dispute that they were duly elected as recently as November 2013, whereas the election of the defendants on 2 March 2014 is very much in contest. 42Mr Cheshire also submitted that the plaintiffs have greater experience and ability to run the affairs of the Association. He pointed to some evidence which provides support to that submission, although Mr Rajalingam was able to point to some other evidence which suggested that the defendants would have the ability to run the affairs of the Association with competence. I therefore do not think that this factor weighs heavily one way or the other. 43Mr Cheshire urged that the Court should reinstate the plaintiffs to the Executive Council before the 23 March 2014 meeting, because such meeting can, in practical terms, only proceed if the plaintiffs, who have called for such meeting and are the subject of the resolutions to be discussed, are reinstated and in control of the process. It is their positions which will be the subject of debate at that meeting, and Mr Cheshire has made it plain on behalf of the plaintiffs that they would abide by whatever result is reached as a consequence of the voting at that meeting. 44Mr Rajalingam made submissions on the balance of convenience to the effect that there may be some detrimental consequences if the former Executive Council is reinstated. These consequences were described as consisting of a likelihood of dissatisfaction and, indeed, protest in the community, and an accentuation of disharmony which is directly contrary to the stated aims of the Association. Mr Rajalingam also submitted that the defendants have been in control since 2 March 2014 and that there has been stability since that time. However, it seems to me that whilst there may well be some veneer of stability, in reality there is a significant rift within the Association at the moment, and these proceedings merely exemplify that. 45Ultimately, it seems to me that the best solution in the short term to the situation in which the Association finds itself, is for the plaintiffs to be allowed to resume their positions on the Executive Council on an interim basis, at least until the meeting scheduled to take place on 23 March 2014 can be held. 46I have little doubt that the members of the Association, or many members of the Association, hold firm views about the Association and the direction in which it should go. I also assume that the members of the Association have respect and affection for the Association or, more particularly, for the aims of the Association, and want it to be a successful organisation pursuing those aims. 47The initial aim of the defendants was to have the Executive Council convene a meeting at which the position of the Executive Council members could be debated and considered, and, if necessary, the positions on the Executive Council altered. That result is in prospect with the holding of the meeting on 23 March 2014, albeit it has not happened quite as quickly as the requisitioners would have liked. Nonetheless, the meeting of 23 March 2014 provides, not only to the defendants and those who support the defendants, but also to all of the members of the Association, the opportunity to consider the question of the Executive Council and to take whatever action they see fit in accordance with the constitution of the Association. As Mr Rajalingam noted in the course of his submissions, there is no suggestion that the meeting of 23 March 2014 should be considered to be invalid in any way. 48For these reasons, I propose to make an order substantially to the effect of the interlocutory order sought by the plaintiffs in paragraph 4 of their Amended Summons. That paragraph seeks an interlocutory order which would have effect pending final determination of the proceedings. I do not think I will make an order in those terms, but rather make an order to the effect that the plaintiffs be recognised as the Executive Council of the Association up to and including a date not long after the holding of the meeting of 23 March 2014. 49I will make an order that up to and including 1 April 2014, the Executive Council of the Islamic Association Western Suburbs Inc be constituted as it was prior to 2 March 2014.