[2023] WASC 152
General information, not legal advice.
Supreme Court of WA
2023-05-16
Seaward J
Original judgment source is linked above.
(a) SAWA is an "incorporated association" within the meaning of that term as defined under the Associations Incorporation Act 2015 (WA);
>
> (b) SAWA and its members are subject to the rules contained in the document titled 'Constitution of the Sikh Association of Western Australia Inc (SAWA) [2018 Edition]' (Constitution);
>
> (c) SAWA's annual general meeting for the year ending 30 June 2022 was held on 24 September 2022;
>
> (d) At that annual general meeting, declaration of the election results and appointment of officer bearers of ExCo were made as follows: > > > (i) The plaintiff as President;
> >
> > (ii) The second defendant as Vice President;
> >
> > (iii) The thirteenth defendant as Secretary;
> >
> > (iv) The fourteenth defendant as Assistant Secretary;
> >
> > (v) The fifteenth defendant as Assistant Secretary;
> >
> > (vi) The third defendant as Treasurer;
> >
> > (vii) The fourth defendant as Assistant Treasurer;
> >
> > (viii) The sixteenth defendant as Assistant Treasurer; and
> >
> > (ix) The remaining defendants as committee members; > >
>
> (e) On 14 January 2023, the plaintiff was issued with a letter signed by the second to twelfth defendants on behalf of the ExCo and titled 'RE: SHOW CAUSE NOTICE IN ACCORDANCE WITH SAWA RULES 10.4(d)' (Show Cause Notice);
>
> (f) The Show Cause Notice detailed allegations made against the plaintiff and requested that the plaintiff "show cause within 14 days";
>
> (g) The plaintiff did not provide a written response to the Show Cause Notice within 14 days of its issue;
>
> (h) On 2 February 2023, a letter was sent by the second to twelfth defendants, on behalf of the ExCo, to the plaintiff notifying him that he had: '...failed to provide a satisfactory response, as required under rule 10.4(e) of the SAWA Constitution, and hence [he is] being removed immediately, on receipt of this email, as President of SAWA ExCo as well as a member of the SAWA ExCo in accordance with rule 10.4(d) of the SAWA Constitution'; and
>
> (i) On 7 February 2023, the plaintiff, by a letter from his solicitors, requested that the ExCo call a special general meeting (SGM) pursuant to rule 10.4(f)(i) of the Constitution.
2.7 A declaration that upon the President's request for a special general meeting (SGM) pursuant to clause 10.4(f) of the Constitution:
2.7.1 the first defendant's executive committee (ExCo) has an obligation to call an SGM to consider the proposed removal of the President from the office of President of the first defendant;
2.7.2 at the SGM referred to in Order 2.7.1 above, at least two thirds of all members of the first defendant present and voting at that SGM must vote in favour of the removal of the President from the office of President of the first defendant to give effect to that removal; and
2.7.3 until such time as the vote outlined in Order 2.7.2 above has passed, the President remains the President of the first defendant.
2.7A Further or in the alternative to Order 2.7 above, a declaration that, upon the ExCo considering that the member's response to a show cause notice issued to a President, in accordance with clause 10.4(d) of the Constitution, is not acceptable:
2.7A.1 any one or more members of the ExCo (including the President), aggrieved by the show cause notice or the President's response to the show cause notice, may request, pursuant to clause 10.4(f)(i) of the Constitution, that the ExCo call an SGM to consider the proposed removal of the President from the office of President of the first defendant;
2.7A.2 upon a request referred to in Order 2.7A.1 above, the ExCo has an obligation to call an SGM to consider the proposed removal of the President from the office of President of the first defendant;
2.7A.3 at the SGM referred to in Order 2.7A.2 above, at least two thirds of all members of the first defendant present and voting at that SGM must vote in favour of the removal of the President from the office of President of the first defendant to give effect to that removal; and
2.7A.4 until such time as the vote outlined in Order 2.7A.3 above has passed, the President remains the President of the first defendant.
2.8.1 the plaintiff has not been lawfully removed as President of the first defendant in accordance with the Constitution; and
2.8.2 the plaintiff remains President of the first defendant.
The rules of an incorporated association bind the association and the members of the association as if -
(a) they contained an agreement on the part of each member to be bound by and observe all the provisions of the rules; and
(b) that agreement were duly executed by each member.
(a) the question must be real and not theoretical;
>
> (b) the person raising the question must have a real interest to raise it; and
>
> (c) the person raising the question must be able to secure a proper contradictor, that is to say, someone presently existing who has a true interest to oppose the declaration sought.
[70] The principles to be applied in interpreting the rules of a voluntary association are, like the construction of a corporate constitution, similar to the principles applicable to the construction of commercial contracts.
[71] The principles of construction are modified to recognise that the rules are not those of a trading corporation, but a voluntary association. In Echunga Football Club Inc v Hills Football League Inc, Stanley J described the modification of the approach to construction as follows:
[T]he Court must recognise that this association is not a commercial operation established with a view to generating profits but rather is what may be described as a non-profit making sporting organisation. In this regard it is proper to recognise that the by-laws are drafted in an ad hoc and piecemeal fashion by laypersons rather than lawyers, couched in terms intelligible to them but which often lack the consistency, coherence, form and drafting that would be expected in a statute or commercial contract.
Accordingly, in my view, the Court must approach the construction of a particular by-law, when read in the context of the by-laws as a whole, with a degree of flexibility. This means that the courts should not make too much of infelicities of expression in the by-laws, nor be too quick to identify absurdity, illogicality or apparent inconsistencies. As French J (as he then was) said in the context of interpreting industrial awards, while fractured and illogical prose may be met by a generous and liberal approach to construction, the instrument must make sense according to its ordinary and grammatical language.
[72] As with the interpretation of a commercial contract, the terms are construed objectively; but the Court will consider not only the text and the ordinary meaning, but also the context and known surrounding circumstances. However, because of the public nature of the rules:
(a) great emphasis is to be placed on the text of the rules; and
(b) the ambit of the surrounding circumstances to which the Court may have regard, may be constrained.
[73] The surrounding circumstances to which the Court may have regard include:
(a) the making of amendments to the rules; and previous versions of the rules may be relevant; and
(b) 'established and well known and unquestioned practice in use in the association ... which are accepted by persons joining the association. ' (citations omitted)
The principles applicable to the construction of written contracts established by the High Court are well known. They were outlined in this Court in Black Box Control Pty Ltd v TerraVision Pty Ltd and in Sino Iron Pty Ltd v Mineralogy Pty Ltd. Those principles include the following:
(a) The construction of a contract involves a determination of the meaning of the words of the contract by reference to its text, context and purpose. The starting point for the proper construction of a clause is the language used in the clause. In particular, one starts by identifying the possible meanings that the words chosen by the parties can bear;
(b) The process of construction is objective. Ascertaining the meaning of terms in an instrument requires a determination of what a reasonable person would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract, and the commercial purpose or objects to be secured by the contract;
(c) The commercial purpose or objects sought to be secured by the contract will often be apparent from a consideration of the provisions of the contract read as a whole. Extrinsic evidence may nevertheless assist in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding of the genesis of the transaction, its background, the context and the market in which the parties are operating;
(d) The instrument must be read as a whole. A construction that makes the various parts of an instrument harmonious is preferable. If possible, each part of an instrument should be construed to have some operation; and
(e) The general principle applicable to the construction of commercial contracts is that they should be given a businesslike interpretation. Absent a contrary intention, the court approaches such contracts on the basis that the parties intended to produce a result which makes commercial sense. This requires that the construction placed on the term or terms in question is consistent with the commercial object of the agreement. However, it must also be borne in mind that business commonsense may be a topic on which minds may differ. (citations omitted)
(i) whether or not to suspend the member's membership and, if the decision is to suspend the membership, the period of suspension; or
>
> (ii) whether or not to expel the member from the Association.
(a) first, a 2/3rd majority of ExCo members must provide notice to the member complained about, detailing the conduct complained of and asking that member to show cause within 14 days why removal from ExCo should not be effected;
>
> (b) second, if the member presents a satisfactory response, the ExCo may terminate the action;
>
> (c) third, if the member's response is not acceptable, then the ExCo, if requested by the aggrieved member, must call an SGM to consider removal, and a 2/3rd majority of all members present and voting shall be required to effect the removal.
(a) the plaintiff did request an SGM within five days of receiving the ExCo's correspondence;
>
> (b) it always remains open to ExCo to call an SGM of its own volition in accordance with the procedure contained in rule 15; and
>
> (c) to the extent that rule 10.4 requires some form of implied term or rectification, it would be entirely inconsistent with the clause itself, and the Constitution as a whole, to allow the ExCo to unilaterally act to remove an office holder of the organisation. To the extent the rule needs to be remediated (which the plaintiff does not accept), the plaintiff says that the more logical and consistent reading is to allow for either the aggrieved member or the ExCo to call for an SGM. That interpretation would not derogate from the general scheme of the Constitution, placing office bearers' positions in the hands of the members; and
>
> (d) the court should not readily interfere with what is otherwise a plain reading of a clause in the Constitution on the basis of a theoretical or hypothetical illogicality.[41]
(a) on the recommendation of at least 2/3rd of the members of ExCo, the member in question is issued with a written notice detailing the conduct complained about and being asked to show cause within 14 days as to why removal should not be effected;
>
> (b) if the member presents a satisfactory response to that written notice, the ExCo may terminate the action; or
>
> (c) if the member's response is not satisfactory, then if a member of the 2/3rd of ExCo (being aggrieved by the member's response) requests, ExCo shall either call an SGM under rule 10.4(f)(i) where a vote will be held on whether the member issued with the written notice should be removed from office (for office holders) or appoint a committee to function in accordance with rule 8.2 (for non-office holders).
any one or more members of the ExCo (including the President), aggrieved by the show cause notice or the President's response to the show cause notice, may request, pursuant to clause 10.4(f)(i) of the Constitution, that the ExCo call an SGM to consider the proposed removal of the President from the office of President of the first defendant;
Disposition - construction of rule 10.4
(a) on the recommendation of at least 2/3rd of the members of ExCo, the member in question is issued with a written notice detailing the conduct complained about and being asked to show cause within 14 days as to why removal should not be effected;
>
> (b) if the member presents a satisfactory response to that written notice, the ExCo may terminate the action; or
>
> (c) if the member's response is not satisfactory, then if the aggrieved member (being a member of ExCo aggrieved by the response from the member to whom the written notice is issued) requests, ExCo shall either: > > > (i) call an SGM under rule 10.4(f)(i) where a vote will be held on whether the member issued with the show cause notice should be removed from office (for office holders); or
> >
> > (ii) appoint a commission to function in accordance with rule 8.2 (for non-office holders).
Parties' submissions regarding other discretionary matters raised by SAWA
(a) the plaintiff's alleged refusal to engage with ExCo and SAWA's trustees to resolve the dispute giving rise to these proceedings before commencing proceedings. In this regard SAWA relies on [8] and [9] of the affidavit of the second defendant; and
>
> (b) the plaintiff's alleged actions in blocking ExCo's access to SAWA facilities and information. In this regard SAWA relies on [19] and [22] of the second defendant's affidavit. SAWA says this is relevant because it has prevented, at least to date, the parties' dispute from being resolved by the means provided in clause 10.4(f)(i) of the Constitution (namely the holding of an SGM).
(a) admit the affidavit of the second defendant (previously marked MFI-1, now Exhibit 4) except for paragraphs [12], [20], [21] and [24] and attachments JKC-3, JKC-10, JKC-11 and JKC-13 which are to be deleted; and
>
> (b) admit the affidavit of Timothy Paul Lucas Drok (previously marked MFI-2, now Exhibit 5) except for paragraphs [5] and [13] and attachments TLPD-1 and TLPD-9 which are to be deleted.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
[3] Statement of Agreed Facts (Exhibit 3).
[4] Affidavit of Harbhajan Singh Bejawn sworn 17 March 2023 (Exhibit 1).
[8] Affidavit of Jaskiran Kaur Cheema sworn 13 April 2023 (previously marked MFI 1, now Exhibit 4).
[9] Affidavit of Timothy Paul Lucas Drok affirmed 27 April 2023 (previously marked MFI 2, now Exhibit 5).
[10] Affidavit of Prem Singh Judge, Amarjit Singh and Ranjit Singh sworn 10 March 2023 (Exhibit 2).
[12] Further Amended Originating Summons filed 28 April 2023.
[13] See, for example, Cameron v Hogan [1934] HCA 24; (1934) 51 CLR 358; Cockman v Gorman [2023] WASCA 44.
[14] Including Bagga v The Sikh Association of Western Australia Inc [2012] WASC 193 [13], in which Le Miere J concluded that the SAWA Constitution did give rise to legally enforceable duties under a contract or contracts.
[15] Forster v Jododex Australia Pty Ltd [1972] HCA 61; (1972) 127 CLR 421 (Forster v Jododex), 435 (Gibbs J).
[16] Forster v Jododex, 437 - 38 (Gibbs J).
[17] Setka v Carroll [2019] VSC 571 [70] - [73].
[18] Kavanagh v Pine Valley Pistol Incorporated [2020] WASAT 60 [16].
[19] Echunga Football Club Inc v Hills Football League Inc [2014] SASC 201 [16] - [19].
[20] Dawkins v State Secretary, Australian Labor Party (WA Branch) (No 2) [2022] WASC 117 [66].
[21] Kaur v Sikh Gurdwara Perth Inc [2017] WASC 117 [44].
[22] Electricity Generation and Retail Corporation v EIT Kwinana Partner Pty Ltd [2022] WASCA 3 [230].
[25] The rule also provides that the immediate past President should remain available (ex-officio) for a period of 2 months immediately following completion of their term, if required by ExCo.
[26] Clause 4.1 defines a 'GM' as being both an Annual General Meeting and Special General Meeting as will be specified on the notice calling the meeting.
[27] First defendant's submissions [15] - [18]; Plaintiff's submissions [17].
[28] Plaintiff's submissions [27] - [28]; First defendant's submissions [21].
[30] ts 84. The amendment to the originating summons which occurred during the hearing also removed the declarations originally sought in par 2.1 and 2.2 of the originating summons.
[31] Plaintiff's submissions [26] - [27].
[42] First defendant's submissions [25].
[43] First defendant's submissions [25].
[50] First defendant's submissions [25].
[52] First defendant's submissions [26].
[53] First defendant's submissions [26]; ts 62 - 63.
[54] First defendant's submissions [27].
[55] First defendant's submissions [28]; ts 60.
[56] First defendant's submissions [29].
[57] First defendant's submissions [29]; ts 60 - 61, 67 - 68.
[65] Bagga v The Sikh Association of Western Australia Inc [2012] WASC 193 [28].
[69] Rule 8.2(a) and 8.2(d)(iii).
[72] Bagga v The Sikh Association of Western Australia Inc [2012] WASC 193 [28].
[73] Although the Constitution rule numbering referred to by his Honour is different to the current Constitution, the wording of the old and new numbered clauses are the same.
[74] Bagga v The Sikh Association of Western Australia Inc [2012] WASC 193 [29] - [30].
[75] Bagga v The Sikh Association of Western Australia Inc [2012] WASC 193 [26] - [29, [31] - [32].
[76] First defendant's submissions [32] - [33].
[77] Kaur v Sikh Gurdwara Perth (Inc) [2017] WASC 270.
[79] Kaur v Sikh Gurdwara Perth (Inc) [2017] WASC 270 [75] - [78].
[80] Kaur v Sikh Gurdwara Perth (Inc) [2017] WASC 270 [79] - [82].
[84] First defendant's submissions [11], [32] - [33]; ts 33 - 34.
[85] Exhibit 1 [8] and attachment HSB-4.
[86] Barboutis v The Kart Centre Pty Ltd [No 2] [2020] WASCA 41 [7].
[87] Exhibit 4 [19], [22] and attachment JKC-9.
[88] Exhibit 5 attachment TPLD-11 [9] - [14].
[89] Exhibit 4 attachment JKC-15 pages 84 - 85.
[90] See Exhibit 4 [19] and [22]; Exhibit 2 [8] and [11] - [13]; ts 79 - 84.
(1934) 51 CLR 358
(1972) 127 CLR 421