BACKGROUND
7 As the plaintiffs contended, the allegations of failure to account for the proceeds of sale of the company properties appear nowhere in the defendants' pleadings.
8 The defendants' further amended cross-claim dated 4 November 2011 pleads:
(a) that the company holds its assets on trust or is bound to apply them for the object of propagating the "ideals, the philosophy and practice of the religion known as Ananda Marga";
(b) that the religion has various rules and practices, including that monks and nuns must obey posting orders and the commands of the General Secretary of Ananda Marga Pracaraka Samgha (Central) ("AMPS Central");
(c) that on a proper construction of the company's memorandum and articles, persons not members of Ananda Marga in good standing shall not remain members, directors or secretary of the company;
(d) that company assets shall not be used contrary to the lawful directives of AMPS Central; and
(e) that directors shall not treat company assets as if beneficially owned by the company or to satisfy their personal wishes or financial interests.
9 The further amended cross-claim further alleges that various persons, including the second plaintiff, failed to obey posting orders, lost their spiritual titles in Ananda Marga and were thereby prohibited from acting as directors, members or secretary of the company, and, further, that other persons described as "supporting parties", having failed to comply with letters of the General Secretary, also lost standing under the rules and practices of Ananda Marga and, thus, were no longer qualified to hold office as a director or to be a member or secretary of the company.
10 The further amended cross-claim also pleads a conflict of interest in relation to the bringing and funding of the proceeding. Under the heading "Oppressive Conduct", the further amended cross-claim, in paragraph 31, states that if, and only if, the members of the company are those identified by the plaintiffs, do the defendants make the contentions that are pleaded in the succeeding paragraphs 32 to 38. Paragraphs 32 to 38 of the further amended cross-claim plead that the company was incorporated for the sole purpose of being the vehicle by which the Ananda Marga religion was expressed, promoted and organised in Australia, and that subscribers had the expectation that the company's affairs would be conducted consistently with the Ananda Marga religion's rules and practices.
11 The further amended cross-claim pleads that the company was required to give effect to the expectation notwithstanding the provision of the articles, and that by reason of the allegations in paragraphs 11 to 23 (which relate to disobedience of posting orders and non-compliance with letters of the General Secretary) the company was not conducted consistently with the rules and practices of the Ananda Marga religion so as to give effect to the expectation. The defendants plead that, in the premises, the company's conduct has been, and remains, oppressive, contrary to the interests of the members as a whole, and unfairly prejudicial or discriminatory to the defendants. By paragraph 38 of the further amended cross-claim, the defendants claim relief under s 233 of the Corporations Act 2001 (Cth) ("the Act") by reason of the above matters.
12 The defendants' pleaded oppression claim thus wholly coincides with the allegation of invalidity of the membership and office holding of the persons identified by the plaintiffs as members and directors. The oppression allegation does not come into play unless those persons are held to be valid members or officers, and the sole basis on which the oppression claim is pleaded is that such persons are members and directors, despite their alleged disobedience of posting orders, or non-compliance with the letters of the General Secretary.
13 The further amended cross-claim makes no allegation of breach of duty by directors constituted by misapplication, unauthorised treatment or dissipation of the company's assets, of failure to keep proper records or of withholding of records or information from other directors, contrary to general law or statutory obligations. No specific company properties or assets, or instances of withholding information or records, or failing properly to prepare accounts in relation thereto, or indeed, in relation to any other matter, is identified in the pleadings. Unsurprisingly, as the matters on which the oppression claim was alleged wholly coincided with the allegations in relation to ineligibility to maintain membership or office, the plaintiffs apparently sought no further and better particulars of the oppression obligations.
14 The further amended cross-claim (as alternatives to matters pleaded in the defence and preceding paragraphs of the cross-claim), on the basis of matters already pleaded in paragraphs 9 to 24, pleads (in paragraphs 39 to 42) that the second and third plaintiffs' control of the company would be contrary to the charitable object, and, if the plaintiffs obtain the relief they sought (or the defendants did not obtain certain relief sought in their prayer for relief), then the company would have ceased to apply its assets to the alleged charitable objects, and would no longer be a practical or appropriate vehicle for the same.
15 The relief that the defendants seek in their prayer for relief, the failure to obtain which would allegedly lead to a failure of the charitable objects, is as follows:
(a) paragraph A of the prayer for relief is relief sought in relation to membership;
(b) paragraph B of the prayer for relief is relief sought in relation to directors' holding of office;
(c) paragraph C(1) is alternative relief in relation to section 233 of the Act, being specifically, amendment of the register of members, modification of the company's constitution, or alternatively, winding up; and
(d) paragraph C(2) of the prayer for relief is, alternatively, an order under section 461(1)(k) of the Act, that the company by wound up under that alternative provision.
16 Thus, section 461(1)(k) of the Act appears only in the prayer for relief, and no allegations are independently directed at it. Nor, perforce, are there any relevant independent particulars, and the section 461(1)(k) relief depends wholly on the matters pleaded in relation to the other heads of relief.
17 The defendants' pleadings, which have been amended on more than one occasion in this longstanding matter, thus do not contain any allegations that particular plaintiffs, or any other person, has misappropriated or failed to account for company property generally, or in relation to particular assets, have withheld information, excluded parties, or have otherwise breached their judicial or statutory obligations. Save for the allegations in relation to the funding of the litigation, the relevance of which has fallen away, the characteristic indicia of oppressive conduct are not alleged.
18 In summary, on the basis of the pleadings, therefore, the defendants' essential claim relates to alleged breaches of the objects, membership and directors' status, as I have previously observed. Further, as I observed at the outset of the case, on the pleadings, the basis of the oppression claim wholly overlaps with and is constituted by the same allegations of material fact as support those primary claims, and oppression is an alternative which comes into contention only if the plaintiffs' claims in relation to membership and directors are upheld.
19 In the course of the opening, I indicated my apprehension that the defendants' alleged membership of the company, as advocated by the plaintiffs, in itself constituted the oppression and the failure of objects, and this was discussed at transcript page 24-25 and again more fully at transcript page 92. Mr Walters, at transcript page 92, stated that the defendants were shut out of management, referred to the properties sold in Western Australia, and stated that the defendants had not received an account of the proceeds, despite a dozen or so requests. Mr Walters stated that the defendants did not assert impropriety, but rather, lack of knowledge, despite those requests. When asked whether those bases of oppression were particularised, Mr Walters referred to the failure to obey posting orders and the question was not conclusively addressed.
20 Dr Tomar's witness statement, however, dated 23 February 2003, refers in paragraphs 240 to 244 to the land sales in Western Australia, and in paragraphs 232 to 236 to his request for information and financial records, and to documents received in response, which were asserted to be only or mostly summaries and general in nature. The defendants relied particularly on Dr Tomar's witness statement to support the submission that the matters were appropriately and adequately notified to the plaintiffs, and should be considered valid issues in the trial.
21 Senior counsel for the plaintiffs, however, submitted that the plaintiffs, as made clear in their written submissions, had consistently taken the view that the case they had to answer did not involve allegations of mismanagement of the company. The plaintiffs therefore did not file material in response to Dr Tomar's specific assertions, and did not cross-examine him on them, as they were not relevant to the pleaded case. The plaintiffs submitted that preparation to meet the complaints would require the examination of records, the calling of the company's auditors and solicitors, and the recall of Dr Tomar, and would constitute a sizeable exercise.