background
6 The present applications must be understood in the context of the developments in the proceeding since its commencement in March 2010. Some of the background is set out in my reasons for judgment dated 3 June 2010 (Ananda Marga Pracaraka Samgha Ltd v Tomar [2010] FCA 565) at [10]-[14] and [18]-[23].
7 The first plaintiff, Ananda Marga Pracaraka Samgha Ltd ("the company"), is a company limited by guarantee which has, since its inception, operated as a vehicle for the operations and activities of adherents of the Ananda Marga religion.
8 The memorandum of the company originally stated that its objects include, inter alia:
a. To propagate the ideals, the philosophy and practice of ANANDA MARGA.
b. To carry out the objectives of the company through discourses, open addresses, personal contacts and through the medium of literature and such other means as may assist in the fulfilment of the objectives of the "the company".
c. To work for the development of a universal society and the welfare of all human beings through:
i. Social service.
ii. Relief work among suffering humanity.
iii. Primary, secondary and tertiary schools and pre-school facilities such as kindergartens and child-minding centres.
iv. Encouraging literacy and artistic faculties.
v. Homes for the aged and physically and mentally handicapped.
vi. Hospitals and other medial services.
vii. Spiritual, moral and cultural upliftment.
viii. Development of integrated human personalities embracing all spheres of life, social, individual and married.
ix. And such other means as may assist in the fulfilment of the above objectives.
d. To exert and expend all its resources for the purpose of expansion of the company, social services, and universal and world unity.
e. To provide all the above types of services without any form of discrimination based on race, religion or sex.
9 In 1992 the memorandum was amended to amend the objects as follows:
1. Clause 2(a) be amended by deleting the full stop after the words "Ananda Marga" and adding the words "which is an autonomous religion, faith and social system based upon the teachings of the Founder and Preceptor of Ananda Marga, Shri P.R. Sarkar, also known as Shrii Shrii Anandamurtii. The religious doctrine, faith, moral canons and creed of Ananda Marga being contained in the scriptures given by the Founder including but not limited to: The Supreme Command, Ananda Sutram, Guide to Human Conduct, Subhasita Samgraha and Ananda Marga Carva Carva I, II and III. The Articles of Faith, and religious doctrines of Ananda Marga are:
i. The belief in One, Infinite, Supreme Entity which in the Sanskrit language is referred to as Parama Purusa.
ii. The belief that through the twice daily practice of Ananda Marga meditation the Supreme, Infinite Being may be fully and personally realised by the individual.
iii. Meditation and hence realisation of the Supreme, Infinite Being is dependent upon the proper application of cardinal moral principles (Yama and Niyama) in the individual's life.
iv. It is a duty of the highest order to encourage all persons to practice Ananda Marga meditation and to follow a life of virtuous and righteous conduct.
v. Engaging in selfless, humanitarian service dedicated to the relief of human suffering whether it be physical, mental, or spiritual is indispensable in the individual's progress toward the realisation of the Supreme, Infinite Entity,"
2. Clause 2(c) be amended by deleting clause 2(c)(ix) and inserting after clause 2(c)(viii) the following words:
"(ix) Conducting the religious functions of Ananda Marga including collective meditation services, marriages, baby namings, funerals, and religious holidays.
(x) Providing for the training, ordination and ongoing maintenance of religious ministers of Ananda Marga for the purposes of instruction and guidance of members in the doctrines, faith, and practices of Ananda Marga.
(xi) And such other means as may assist in the fulfillment of the above objectives."
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4. That clause 3 be amended by adding at the end of the clause after the words "any share of profits he/she may receive in respect of such payment." the following words:
"Provided further that nothing herein shall prevent the company from fulfilling its fiduciary, equitable and legal duties and obligations in relation to property and any income therefrom that it holds as custodian trustee or otherwise on trust for any person, association, institution, venture or enterprise, whether incorporated or unincorporated."
…
10 It was common ground that the company has substantial assets and an annual income approaching $1 million. It conducts a substantial business enterprise, including a number of schools. It is in receipt of government grants and has considerable outgoings, including the payment of teachers' salaries, workers compensation, public liability insurance and mortgage payments.
11 Immediately prior to 20 March 2010, the company had five directors (Mr Pillay, Mr Pillai, Ms Nayak, Ms Alister and Mr Tomar). (There had previously been seven directors, one of whom had died and one of whom had retired.)
12 At a general meeting on 20 March 2010, called by Mr Tomar, resolutions were passed to remove Messrs Pillay and Pillai as directors. The company and Messrs Pillay and Pillai issued this proceeding on 39 March 2010. They challenge the validity of removal from office of Messrs Pillay and Pillai on a number of bases, including short notice, exclusion from the meeting of persons validly entitled to vote, failure to comply with the articles' requirement that the President preside at the meeting, and the attendance at and voting on the resolutions by a number of persons who were not valid members of the company. Considerable material in support of Messrs Pillay and Pillay's contentions has been filed.
13 On 31 March 2010, recognising that there was a serious question to be tried and that the balance of convenience favoured the maintenance of the status quo, I injoined the defendants from, inter alia, calling meetings, operating company bank accounts and dealing with company properties. The plaintiffs, including the company, also undertook to observe a number of similar restrictions.
14 The orders made on 31 March 2010 relevantly provided:
A. On the giving of the usual undertaking as to damages by the plaintiffs and upon the undertaking of the second and third plaintiffs
(i) not to amend or purport to amend the articles of the first plaintiff
(ii) not to deal with any of the properties listed in paragraph [3] of the affidavit of Devendhran Vadiveloo Pillay sworn 26 March 2010.
(iii) not to cause the first plaintiff to expend any funds other than in the ordinary course of business.
(iv) to notify the first and second defendants, on 24 hours notice in writing of any proposed expenditure in excess of $10,000.
(v) On a fortnightly basis provide to the auditor of the first plaintiff an account of all expenses and to provide on request to the auditor such information as is necessary.
THE COURT ORDERS THAT:
1. Until the hearing of the application or further order, the defendants and each of them shall not:
(a) Alter, or seek to alter, the memorandum or articles of association of the first plaintiff.
(b) Deal with any of the properties of the first plaintiff referred to in paragraph 3 of the affidavit of Devendharn Vadivelo Pillay sworn 26 March 2010.
(c) Convene or call any meeting of members of the first plaintiff.
(d) Convene or call any meeting of the committee of the first plaintiff.
(e) Expend the funds of the first plaintiff.
(f) Open, close or operate any bank account of the first plaintiff or deal or communicate with any bank of the first plaintiff concerning those accounts.
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15 Since those orders were made, a number of significant developments have occurred.
16 A mediation was conducted without resolving the dispute, although a further mediation is contemplated.
17 Pleadings were ordered and the parties' respective positions have crystallised. It is now apparent, from the pleadings and the further affidavits filed, that there is fundamental and farreaching dispute about the identity of the members and the directors of the company and the proper bases for determining those questions.
18 The plaintiffs contend that the current members of the company are:
Mr Pillay
Mr Pillai
Ms Nayak
Mr Tanner
Mr Largey
Mr Robins
Mr Tomar
Ms Alister
19 The plaintiffs contend that the current directors are:
Mr Pillay
Mr Pillai
Ms Nayak
Mr Tomar
Ms Alister
20 The defendants contend that the members are:
Mr Pfeiffer
Mr Tiwari
Mr Alister
Mr Dambiec
Mr Karlyle
Mr Deacon
Ms Deacon
Mr Towsey
Mr Parthy
Mr Tomar
Ms Alister
21 The defendants contend that the current directors are:
Mr Tomar
Ms Alister
22 The plaintiffs and defendants thus agree that Mr Tomar and Ms Alister are members of the company, but the identity of all other members of the company is a matter of dispute.
23 The parties also agree that Mr Tomar and Ms Alister are directors of the company. The plaintiffs contend that the there are currently five company directors: Mr Tomar, Ms Alister and Messrs Pillay, Pillai, and Ms Nayak. The defendants contend that Ms Nayak and Messrs Pillay and Pillai are neither members nor directors of the company. The defendants therefore contend that there are only two directors at present (Ms Alister and Mr Tomar).
24 The plaintiffs contend that membership of the company depends on compliance with the procedures specified in the provisions of the company's articles dealing with membership, which prescribe steps include making application (article 4), acceptance by the board (article 5) and payment of a subscription (articles 6, 7 and 8).
25 The plaintiffs submit that the persons they identify as members of the company have complied with the relevant requirements prescribed in the articles. They have filed affidavits to that effect.
26 The defendants contend that the acquisition or loss of company membership does not depend on the express provisions of the company's articles dealing with membership. They submit that rather, on proper construction, the articles include implied conditions, terms and requirements, necessary to give effect to unwritten conventions of the company according to which strict compliance with the membership provisions of the articles is not required. Rather, membership of the company is also conferred by belonging to various company subcommittees, as the persons the defendants identify as members had done. The defendants also relied, in that context, on estoppel by convention.
27 The defendants further submit that the articles, when properly construed in accordance with the company's objects, implicitly require all members, directors and the secretary to be practitioners of Ananda Marga in good standing, who are obedient to the directions of a specified central Ananda Marga religious authority based outside Australia.
28 On that basis, the defendants allege the plaintiffs' identified members are not members or have lost their status as such because, inter alia, they have disobeyed various "posting orders" (orders of the valid central authority based in India requiring them to transfer geographically). In consequence, the relevant members have lost their religious titles and good standing. The defendants have filed affidavits in support of their contentions. They concede, however, that the identity of the valid central authority is a matter of international dispute amongst Ananda Marga adherents.
29 While the identity of the directors of the company is in dispute, the identity of the members is the fundamental determinant of that question, as once the members are recognised, they may proceed to elect or remove the office bearers.
30 Under the articles, the power to manage the company resides with the board collectively: article 39. The board may decide issues by a majority vote: article 44.
31 In consequence, no single director would have power to manage the company's affairs or commit it to contracts, the incurring of liabilities or the disposition of property, unless such authority was delegated by the board: see Ford's Principles of Corporations Law at [13.080]. Mr Pillay was, prior to 20 March 2010, the sole executive director.
32 Since the making of the 31 March 2010 orders, the issues in dispute have multiplied. It was common ground that the 31 March 2010 orders are now inadequate for the effective management of the company and the preservation of its business pending the hearing and determination of the proceeding.
33 The present application was triggered by the activities of the second defendant, Ms Alister, and others, to which Mr Pillay deposed in detail and to which Ms Alister and Mr Tiwari have responded. In essence, as set out below, Mr Pillay deposed that Ms Alister, a director of the company, has, without the knowledge or concurrence of the board, taken steps to obtain a copy of the company seal, which she initially provided to Mr Tiwari (a disputed member), in order to divert mail directed to the company from the company's street address and registered P.O Box situated at its Registered Office; has caused the diversion of hits or visits directed to the company's websites to other websites; has falsely represented to the public and possible attendees of the company's midyear and annual festival that its midyear festival and 2011 festival had been cancelled, instead directing possible attendees to festivals she has organised; has retained, without the consent of and despite Mr Pillay's requests, the company's contact list built up over years, containing contact details for, inter alia, potential attendees at the company's festival, which produces income for the company; has executed a lease to Mr Tiwari on the company's behalf; and has used the company's trade mark, registered in respect of festivals, in respect of the alternative festival she has organised.
34 Ms Alister, while disputing some aspects of the allegations, does not deny that she has engaged in the activities, but denies that they were intended to compete with or injure the company. Ms Alister explained or justified her conduct by reference to her authority as a director and her opinion that, in the uncertainty posed by the current dispute, her actions were necessary for the company's benefit. Further, by the letter of the defendants' solicitor dated 23 November 2010, Ms Alister proffered some undertakings on behalf of all the defendants in relation to some of the above activities and produced a document described as the company's contact list. The plaintiffs dispute the adequacy of that document.