Camenzuli v Hawke

Supreme Court of NSW|2022-02-24|Before: Ward CJ, Palmer J, Atkinson J, Brownie J

Background

The State Executive has resolved that the next State Council AGM will occur on 27 March 2022. This is after the time required by cl 9.4.1 of the NSW constitution (i.e., by three months after 30 November 2021). Annexed to Exhibit A (the agreed Statement of Facts) is a memorandum dated 17 February 2022 from the State President to State Executive members that explains that the AGM was not held within the prescribed time for reasons including: • The difficulty in obtaining a venue of sufficient size as a result of rolling bookings of those venues due to COVID-19 restrictions; • The deferred local government elections held last December; and • The uncertainty over the date for the recent State by-elections. The NSW Division had a tentative "hold" on February dates for the AGM with the International Convention Centre, but the ICC cancelled the "hold" in December as the Division could not confirm a booking until the by-election date was known.

Relevant provisions of the respective constitutions

The Federal constitution

The Federal constitution of the Liberal Party of Australia (Federal constitution) governs The Liberal Party of Australia, which is an unincorporated association.
Clause 5.1 of the Federal constitution provides that: The party consists of: (a) The Federal Council, the Federal Executive and the other committees and bodies established by or under this Federal constitution; and (b) the Divisions constituted under this Federal constitution.
Clause 5.2 of the Federal constitution, inter alia, empowers each Division to adopt its own constitution.
Clause 8.1 of the Federal constitution provides that: There shall be a Division of the Party in each State and the Australian Capital Territory consisting of the members of the Party resident in that State or Territory.
Clauses 8.2 and 8.3 confer upon the State Council of each Division, inter alia, the power to manage and control the affairs of that Division and to exercise all or any of the powers of the Party within the boundaries of each Division.
Clause 8.4 of the Federal constitution provides that: There shall be elected annually or biennially as determined by that Division a President, an Executive and such other office bearers and committees for the Division as may be provided for in the Divisional Constitution of the relevant Division.
Clause 8.5 of the Federal constitution provides that: Subject to this Federal constitution and to the control of the State Council of the Division, the management of the affairs of the Party in each Division is vested in the Executive of the Division.

State Council

Clause 9.4.1 of the NSW constitution provides that the State Council is required to hold its AGM (defined to be a "Biennial General Meeting" in cl 1.2.1(1)) at least once every odd year (by, at the latest, the end of February in the following year, that being three months after 30 November of the previous year).
As extracted above, cl 9.5.1(1) of the NSW constitution provides (adjacent to the heading "Biennial Elections") that: State Council office-bearers "shall hold office until the next AGM (unless they cease to hold office earlier in accordance with other provisions of this Constitution)". The office-bearers to be elected pursuant to this clause include the officer-bearers of the State Executive who sit on both the State Executive and the State Council (see items A1-A5 of cl 9.5.1 and items B1-B6 of cl 13.1).
There is no provision for the extension of the period by which an AGM may be held; nor for an extension of the term for which the elected office-bearers of State Council hold office.
Accordingly, cl 8.4 of the Federal constitution and cll 9.4.1 and 9.5.1(1) of the NSW constitution, read together, have the effect that the State Council must hold its AGM at least once every two years; that the office-bearers will be elected at each AGM; and that the office-bearers hold office "until the next AGM" at which time they must stand for re-election if they are to continue in office.

State Executive

The State Executive is comprised of (see cl 13.1.1) "Ex-Officio Members", who are not elected and hold office by virtue of holding other offices; and "Elected Members" (being the subset of the office-bearers elected at the AGM of State Council who also sit on State Executive).
Clause 13.2.3 confers on the State Executive the power to manage the affairs of the Division subject to the NSW constitution.
Clause 13.2.1 sets out the functions of State Executive, which include: to co-ordinate the activities of the Division into cohesive, strategic action plans; to prepare and direct State and Federal election campaigns within the Division; to be responsible for the financial affairs of the Division; and to assist Conferences in identifying quality candidates and informing preselectors as to the selection process.

Plaintiff's submissions

The plaintiff submits that, on the proper construction of the NSW constitution, no member of the State Executive will cease to hold office at the end of three months after 30 November 2021 by reason only of the fact that no State Council AGM will have occurred by that date.
The plaintiff points out that cl 9.5.1(1) of the NSW constitution provides that State Council office-bearers will hold office until the occurrence of one of two circumstances: the occurrence of the next AGM; or the office bearer ceasing to hold office earlier in accordance with other provisions of the NSW constitution.
As to those two events, the plaintiff points out that the State Executive has resolved that the next State Council AGM will occur (albeit late) on 27 March 2022 and that the NSW constitution does not contain any express provision which causes all of the elected office-bearers of the State Council to cease to hold office earlier than the next AGM of the State Council by reference to some external circumstance (such as when a State Council AGM does or does not take place).
The plaintiff emphasises, by way of contrast, that elsewhere in the NSW constitution there is a clause that makes express provision that certain elected delegates of other committees forming part of the NSW Division will cease to hold office as delegates if an AGM of that delegate's Branch is not held by a specified date, referring to Part D.2 of Appendix D to the NSW constitution. That clause provides that the term of Branch delegates to an FEC (Federal Electorate Conference), an SEC (State Electorate Conference), an LGC (Local Government Conference), the Young Liberal Council, the Women's Council or the State Council will expire if the applicable Branch has not held its AGM by 30 November in any year or before another date determined by the State Executive.
It is argued, from this, that the draftsperson of the NSW constitution thus plainly turned his or her mind to the situation where a particular AGM (in this case, an AGM of a Branch) is not held by the stipulated time (and has made express provision for what is to occur in that event, namely, that elected delegates will cease to hold office from that time). It is noted that no such provision has been made in respect of the elected office-bearers of the State Council if the State Council's AGM is not held by the requisite time. It is submitted that the inference to be drawn from this is that it reflects a deliberate choice on the part of the draftsperson of the NSW constitution not to leave a gap in the day-to-day management of the NSW Division by reason only of a failure to hold an AGM by the time stipulated by cl 9.4.1 of the NSW constitution.
Pausing here, the version of the NSW constitution in evidence before me is a consolidated version such that it is not apparent whether Part D.2 of Appendix D was drafted at the same time as cll 9.4.1 and 9.5.1. However, the plaintiff argues that this is not material; in effect arguing that if those clauses were drafted at different times there may be inferred at least a decision not to modify one by reference to the other.
The other point I note at this stage is that it is by no means clear that, if the State Executive's view is correct, day-to-day management of the NSW Division would be brought to a halt, insofar as the quorum provisions of the NSW constitution would not necessarily mean that no decision making could take place if the elected office-bearers were to cease to hold office because the AGM had not been held in time (since there would still remain the Ex-Officio members of the State Executive and those members of the State Council who were not elected office-bearers); though I accept that the plaintiff considers there may be room for dispute on this point.
In any event, the plaintiff's contention is that, applying ordinary principles of construction to the NSW constitution, those office-bearers of the State Council who comprise the elected members of the State Executive will continue in office until the next AGM is in fact held (even though no such AGM will occur before the end of three months of 30 November 2021). The plaintiff contends that there is no reason in principle, or on the authorities, to read the words of cl 9.5.1(1) as if it provided a third event in which State Council office-bearers are to cease to hold office, namely, the failure of the State Council to hold its AGM in the time required by cl 9.4.1.
Insofar as the advice received by the NSW Division (which seems to have precipitated this urgent proceeding) reaches a different conclusion by reference to the line of authority deriving from Re Consolidated Nickel Mines Ltd [1914] 1 Ch 883 (Consolidated Nickel), the plaintiff argues that this does not require or support a different result (and submits that, if it did, because Consolidated Nickel Mines has some broader application, then the decision is wrong as are the first instance decisions that have followed it - see T 20.7-10). It is noted that the advice provided to the NSW Division does not address the import of Part D.2 of Appendix D on the construction of cl 9.5.1. I consider Consolidated Nickel and the authorities that refer to it in due course below.
The plaintiff contends that there is a contrast to be drawn between the article considered in Consolidated Nickel (which mandated the retirement of specified numbers of directors at each ordinary meeting) and cl 9.5.1(1) of the NSW constitution (which does not in terms compel the retirement of the relevant office-bearers, but simply provides that they shall "hold office" until the date of the next AGM - thus setting the end date of their term as the date of the next AGM). The plaintiff also notes that Consolidated Nickel primarily determined the issue as a question of construction of the specific company's articles of association (and in that context contends that it is not binding as a matter of precedent on the determination of the present issue).
The plaintiff submits that subsequent authorities which have considered clauses in similar terms and have adopted a similar construction to that adopted in Consolidated Nickel (such as Cane v Jones [1980] 1 WLR 1451 (Cane v Jones) at 1455 per Wheeler QC (sitting as a deputy judge of the Chancery Division); In re Zinotty Properties [1984] 1 WLR 1249 (In re Zinotty Properties) at 1259-1260 per Davies J; Bay Marine v Clayton Properties (1984) 9 ACLR 780 (NSWSC) at 788 per Needham J) are of limited assistance in determining the proper construction of a term like cl 9.5.1(1) of the NSW constitution having regard to the different wording in the latter.
The plaintiff argues, in light of the fact that the article considered in Consolidated Nickel was adapted from a form of clause included in the model articles of association included in the former Companies Acts, that the reasoning in cases that have reached a similar conclusion are supportable on the basis that the parties to the instruments considered in subsequent cases should be understood to have intended for those clauses which adopt or adapt the model article considered in Consolidated Nickel to have the same meaning as that discussed in Consolidated Nickel, but that such cases do not control the proper construction of clauses that adopt a substantively different form.
So, for example, it is noted that in Club Flotilla (Pacific Palms) Ltd v Isherwood (1987) 12 ACLR 387 (NSWSC) (Club Flotilla), the relevant clause in a club's articles of association provided for office-bearers and committee members to "hold office until the conclusion of the next annual general meeting when they shall retire but they shall be eligible for re-election"; and that in Gosford Christian School Ltd v Totonjian (2006) 201 FLR 424; [2006] NSWSC 725 (Gosford Christian School) the relevant article in a private school's articles of association provided that a director "shall retire from office at the conclusion of the annual general meeting which shall elect the directors from the ensuing year". Reference is also made to Singh v Singh; Flora t/as Flora Constructions v Budget Demolition & Excavation Pty Ltd [2008] NSWSC 386 (Singh v Singh), where the relevant article of the incorporated association's articles of association provided that each member of the Executive Committee "shall hold office until the next annual general meeting when they shall retire".
In contrast, the plaintiff points to obiter dictum of Slattery J in Luen Fook Tong Incorporated v Lowe [2011] NSWSC 1004 (Luen Fook Tong), where the relevant clause did not mandate the retirement of committee members as a specific time but provided that each member "shall, subject to these rules, hold office until the conclusion of the annual general meeting following the date of the member's election but is eligible for re-election", in which his Honour indicated that had it been necessary to consider the issue he would have accepted the submission that Singh v Singh was distinguishable in that the association's rules in the case before him did not require the members of the committee to retire as was the case in Consolidated Nickel (see at [66]-[67]).

Submissions of the amicus curiae

The amicus curiae submits that the plaintiff's construction of cl 9.5.1(1) should be rejected; and that the proper construction of the words "the next AGM" in cl 9.5.1(1) is that elected office-bearers hold office until the earlier of (i) the latest time by which an AGM of State Council is required to be held pursuant to clause 9.4.1 and (ii) any AGM that is, in fact, validly held following the office-bearers' appointment within that period. (The plaintiff maintains that this involves the impermissible re-writing of cl 9.5.1 and does violence to the clause as drafted.) The amicus curiae maintains that the consequence of this is that where, as in the present case, no AGM is to be held within the period mandated by cl 9.4.1, the current office-bearers will cease to hold office at the expiry of that period (i.e., 28 February 2022). The amicus curiae puts forward the following reasons for that conclusion.
First, that the intention underlying cll 9.4.1 and 9.5.1 of the NSW constitution and cl 8.4 of the Federal constitution is to impose a maximum term on the offices held by the office-bearers of State Executive. It is submitted that, read together, those clauses contemplate that office-bearers will vacate office at the AGM following their appointment, which must be held within the time permitted by cl 9.4.1 (i.e., by the end of the February falling after the next odd-numbered year following their appointment); and it is noted that the requirement to hold an AGM by that time is mandatory and there is no power conferred on State Council to extend the date of an AGM beyond it. Thus, it is said that the NSW constitution was drafted with the clear intention that the relevant offices have a maximum term ending no later than the end of the February falling during the odd-numbered year following the office-bearers' appointment. The amicus curiae says that the plaintiff's proposed construction of cl 9.5.1 would permit office-bearers to remain in office for a period greater than the maximum term of office that was plainly intended to be conferred on them, and potentially for an indefinite duration; and that this is contrary to the intention underlying cll 9.4.1 and 9.5.1 of the NSW constitution and cl 8.4 of the Federal constitution.
Second, that if the plaintiff's proposed construction were accepted, the term of office of the office-bearers in the State Council and State Executive would be extended beyond the maximum term contemplated by the NSW constitution by reason of the State Council's own failure to comply with its obligation to hold an AGM within the time required by cl 9.4.1. It is submitted that any such construction of cl 9.5.1 would have the practical effect that office-bearers could cause or contribute to a failure of State Council to hold a meeting within the mandated time and thereby extend their terms of office beyond the maximum intended period. It is submitted that it is highly unlikely that this was the intention of the drafters of cl 9.5.1.
The amicus curiae says that, taken to its logical conclusion, the plaintiff's construction would permit office-bearers to remain in office by causing or contributing to State Council's failure to comply with the obligation to hold an AGM within the time required by cl 9.4.1 or at all; and in that scenario, the office-bearers could only be removed if a member were to seek mandatory injunctive relief requiring State Council to hold an AGM in accordance with cl 9.4.1. It is said that even if such an injunction were granted, on the plaintiff's construction the office-holders would remain in office until such time as the AGM was, in fact, held; and that, until that time, the office-bearers would be entitled to participate in the exercise by the State Council and the State Executive of the broad-ranging powers conferred on it by the NSW constitution including the power to manage the affairs of the NSW Division: cl 13.2.3. It is said that no interim injunction restraining them from doing so pending determination of the members' injunction application would be granted as the office-bearers would remain in office until the AGM in fact occurred. It is submitted that it is highly unlikely that this was intended to be the effect of the NSW constitution.
Pausing here, the plaintiff's response to the argument that his construction of cl 9.5.1 might permit office-bearers to remain in office in effect in perpetuity is that this could only be the case if 70% of the members agreed or acquiesced to that course (since it would be open to 30% of the members to requisition an AGM).
Third, that the alternative construction of the NSW constitution is that office-bearers cease to hold office on the last day upon which an AGM of State Council may validly be held. It is said that if, as will occur in the present case, no AGM has been held by that day, the office-bearers' offices will be vacated and the Ex-Officio Members would remain as the only members of State Executive; and that such a result is consistent with the intention underlying the NSW constitution that office-bearers within the State Council and the State Executive vacate office by, at the latest, the time within which the next AGM is required to be held. Further, it is noted that there would be no ability on the part of office-bearers to procure an extension of their term of office by causing State Council to fail to hold an AGM within the required time.
Fourth, the amicus curiae refers to the line of authority (adverted to above) to the effect that, where a corporate constitution provides that directors of a company cease to hold office by the time of a specified meeting, they are taken to cease to hold office at the last date upon which that meeting was permitted to be held under the constitution regardless of whether it was, in fact, held (citing Consolidated Nickel at 888-9; Morris v Kanssen [1946] AC 459 (Morris v Kanssen); In re Zinotty Properties; Club Flotilla; Singh v Singh), noting that this line of authority originated, in part, from Sargant J's reasoning in Consolidated Nickel (at 889) that "[t]he duty of the directors was to call a meeting in 1906 and 1907, and they cannot take advantage of their own default in that respect and say that they still remain directors". The amicus curiae effectively draws a parallel here with the failure of office-bearers to cause the AGM to be held within time.
The amicus curiae says that the plaintiff's attempt to distinguish these authorities by reference to the provision in the relevant articles or clauses in those cases for automatic retirement at the relevant meeting is misconceived. The amicus curiae says that the provision in cl 9.5.1(1) of the NSW constitution that the office-bearers shall hold office until the next AGM cannot sensibly be construed as meaning that office-bearers continue to hold office after the next AGM if they are not re-elected. Rather, it is said that the effect of cl 9.5.1(1) is that office-bearers automatically cease to hold office at "the next AGM", which must be held by the time prescribed by cl 9.4.1. It is submitted that this is effectively the same as retirement and that the plaintiff's submissions in this respect should be rejected. The amicus curiae says that, for the same reasons, the obiter dictum of Slattery J in Luen Fook Tong at [66]-[67] is incorrect and should not be followed.
Fifth, it is said that the plaintiff's heavy reliance on Part D.2 of Appendix D to the NSW constitution is misplaced. The amicus curiae notes that cl 7.5.2 of the NSW constitution provides that a Local Branch must hold its AGM in each even-numbered year by 31 October or such later date as is approved by the State Executive; that cl 7.5.3 provides that, if a Local Branch fails to hold its AGM by 30 November or such later date approved by the State Executive, the Local Branch is automatically dissolved on the following day in each instance; and that cl 7.6.1 provides that the Local Branch must, at its AGM, elect Delegates to State Council, the FEC, the SEC, the LGC, Young Liberal Council and Women's Council.
It is noted that, pursuant to cl 7.6.1, such Delegates shall hold office for a period of two years (in contrast to cl 9.5.1 which provides that office-bearers elected at the AGM of State Council "shall hold office until the next AGM").
Clause 7.8.1 of the NSW constitution incorporates the provisions of Appendix D relating to the expiration of the term of Delegates elected by Local Branches. Items 2 and 3 of Part D.1 of Appendix D provide for the term during which Delegates elected by Local Branches will be members of the bodies to which they have been appointed by the Local Branch (unless the Delegate otherwise ceases to hold office). It is noted that Item 1 of Part D.2 of Appendix D (upon which the plaintiff relies) applies to Branch Delegates to the bodies referred to above and provides that "[i]f the Branch has not held its AGM by 30 November in any year or before another date determined by State Executive, the delegate ceases from that date to be a delegate". It is said that this provision must be read in the context of the other provisions dealing with the term of office of a Delegate elected by a Local Branch.
The amicus curiae says that Item 1 of Part D.2 of Appendix D is a necessary aspect of the regime in the NSW constitution specifically dealing with Delegates elected at the AGM of a Local Branch. It is said to be necessary to the proper functioning of that regime because, absent item 1, such a Delegate would: hold office as Delegate of his or her Local Branch for the two year period following his or her election at a Branch AGM (cl 7.6.1); remain members of State Council for the two year period following the Branch AGM at which they were elected commencing on 1 November and concluding on 31 October (item 2(2) of Part D.1 of Appendix D); and remain members of the Young Liberal Council or Womens Council or the two year period following the Branch AGM at which they were elected commencing on 1 October and concluding on 30 September (item 2(3) of Part D.1 of Appendix D), as the case may be, notwithstanding that the relevant Local Branch had failed to hold its AGM at the required time and therefore ceased to exist on the following day by operation of cl 7.5.2.
It is said that because the time periods in the relevant provisions relating to the Branch Delegates are periods of two years rather than periods referable to the date at which the Branch AGM is required to be held, Item 1 of Part D.2 of Appendix D.2 is necessary to make clear that Delegates cease to hold office as Delegates or be members of the body to which they were appointed upon the failure of the relevant Local Branch to hold its AGM and do not remain in office for the remainder of their two year term while the Local Branch has ceased to exist.
It is thus submitted that, contrary to the plaintiff's submissions the inclusion of item 1 of Part D.2 of Appendix D.2 in respect of Delegates elected by Local Branches does not indicate an intention on the part of the draftperson(s) of the NSW constitution that an office-bearer sitting on State Council should remain in office notwithstanding that State Council failed to hold its AGM within the time required by cl 9.4.1. Rather, it is said that item 1 operates to avoid a situation where Delegates elected by Local Branches would remain Delegates of Local Branches and members of the various bodies after the relevant Local Branch had ceased to exist by operation of cl 7.5.2 and that it does not bear on the proper construction of cll 7.4.1 and 9.5.1(1).

Determination

At the outset, it is important to bear in mind the relevant principles of construction.
The principles applicable to the interpretation of private legal documents are well-known: meaning is to be determined by reference to text, context and purpose (see Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 (Mount Bruce Mining) at [46] per French CJ, Nettle and Gordon JJ). The Court cannot, under the guise of construction or interpretation, rewrite an instrument so as to give it an effect that may appear to be intended, but which the text of the instrument does not permit (see Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 at [23] per Allsop P (as the Chief Justice of the Federal Court then was)).
Context, in this sense, is understood to include the entire text of the document in question (see Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53 at 427 per McTiernan, Webb and Taylor JJ; Metropolitan Gas Co v Federated Gas Employees' Industrial Union (1925) 35 CLR 449; [1925] HCA 5 at 455 per Isaacs and Rich JJ). A private legal document is to be read as a whole: the task of construction is to construe the document in its entirety, rather than any disjointed or disembodied part thereof. It is only through such an holistic process of construction that the Court can be justified in the rejection of certain potential meanings, the transposition of certain words and phrases, or the supply of omitted words. This is of particular relevance here, vis-à-vis the meaning of "next AGM" in cl 9.5.1(1) of the NSW constitution.
The principles applicable to the construction of commercial contracts apply (more or less) equally to the interpretation of constitutions of companies and associations (see, for example, Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1; [2006] FCAFC 144 (Lion Nathan) at [45] per Weinberg J, [97] per Kenny J; Echunga Football Club Inc v Hills Football League Inc (2014) 121 SASR 449; [2014] SASC 201 at [16] per Stanley J). Regard is had, however, to the sui generis nature of a constitution, in particular the public nature of the document, upon which third parties are likely to rely (see Simon v HPM Industries Pty Ltd (1989) 15 ACLR 427 at 433 per Hodgson J (as his Honour then was); In the matter of Order of AHEPA NSW Inc [2019] NSWSC 1329 per Rees J at [130]ff). The nature of constitutions of corporations and associations thus calls for primacy to be given to the objective intention discernible from the text itself, to facilitate its interpretation by third parties and the general public (see HNA Irish Nominee Limited v Kinghorn [2010] FCAFC 57 at [42] per Keane CJ (as his Honour then was), Jacobson and Rares JJ). This calls for the paying of close attention to the text of the relevant constitution, understood in context.
In particular, in Lion Nathan, the Court emphasised the need for caution and restraint in the application to the construction of constitutions of the rules of construction for contracts (see Weinberg J at [56]-[58]; Kenny J at [123]-[124]; Lander J at [225]-[226], [239], [243]), having regard (among other things) to the public dimension of a company's constitution and that by its nature it is more likely to be read and relied upon by third parties. See also in this context, the decision of Brereton J, as his Honour then was, in In the matter of New South Wales Leagues' Club Ltd [2014] NSWSC 1610; and of Robb J in Johnston v Greens NSW [2019] NSWSC 215.
It is also relevant to consider the line of authority to which reference has been made in which cognate provisions to cl 9.5.1(1) have been considered (see, for example, Consolidated Nickel; Morris v Kanssen; In re Zinotty Properties; Club Flotilla; Gosford Christian School; Singh v Singh).
Consolidated Nickel concerned a company's articles of association which included an article (article 101) in the following terms: At the ordinary meeting in 1906 all the directors, and at the ordinary meeting in every subsequent year one-third of the directors for the time being respectively, or if their number is not a multiple of three, then the number nearest to one-third, but not exceeding one-third, shall retire from office. A retiring director shall retain office until the dissolution of the meeting at which his successor is elected.
Sargant J relevantly said (at 888): No ordinary meeting was held or called in 1906 or 1907, and the liquidator's contention is that all the directors vacated office on December 31, 1906, which was the last day on which a meeting of the company for that year could have been held. That contention appears to me to be well founded. A director on his appointment does not ordinarily step into an office which is perpetual unless terminated by some act, but into an office the holding of which is limited by the terms of the articles. The meaning of article 101 is that the holding of the office of the director was only to last until the end of 1906, or until the earlier date on which the ordinary meeting for that year was held. … The duty of the directors was to call a meeting in 1906 and 1907, and they cannot take advantage of their own default in that respect and say that they still remain director. [My emphasis]
The plaintiff accepts that it is a well-settled principle of construction that may properly be taken into account in cases such as the present that the Court ought not to adopt a construction that allows one to take advantage of one's own wrong (see T 17.28-34) (which was relevant in Consolidated Nickel as the directors had there lodged a proof in the winding up of the company on the basis that they were still directors when that was so only due to their own default in not calling an ordinary meeting as required by the company's articles). However, the plaintiff says that this principle is not applicable in the present case, as the duty to call an AGM is imposed on the State Council (see cl 9.4.1). It is said that it is not within the power of the State Executive to prevent an AGM of the State Council from taking place; that the power to call a meeting is conferred on three groups of people (including the members of the State Council itself as part of the State Executive); so that this is not a situation where (as was the case in Consolidated Nickel) there is any risk of the office-bearers taking advantage of their own wrong.
The plaintiff submits that the line of cases following Consolidated Nickel are defensible on the basis that they were construing clauses of a substantially similar kind but that no further principle is established by Consolidated Nickel than the ordinary established principle that one can take into account people taking advantage of their own wrong in terms of construction of documents of this kind (see T 18.8-19).
Further, in reply submissions, the plaintiff placed great emphasis on the limited utility of precedent in questions of construction (referring in this context to the academic discussion by Herzfeld and Prince, Interpretation (2nd ed, Lawbook Co, 2020) at [19.90]). While questions of construction are questions of law, it was said that they ultimately turn on the meaning of the particular document in issue (formed within a particular context, between particular parties). In such circumstances, the plaintiff submitted that judges ought to be wary of placing too great an emphasis on judicial precedent (referring to Grey v Pearson (1857) 6 HLC 61; (1857) 10 ER 1216 at 1235 per Lord Wensleydale; and Pedlar v Road Block Gold Mines of India Ltd [1905] 2 Ch 427 at 437 per Warrington J, as his Lordship then was).
I accept that I am not, in any traditional sense, bound by these decisions. They would of course be of relevance to the extent that the wording of the relevant clause might be said to have some received meaning in particular contexts.
What I have found of assistance in those cases, however, is the manner in which the conclusion was reached as to the meaning of cognate provisions. Relevantly, I note that in Gosford Christian School, Barrett J (as his Honour then was) accepted (at [36]) that on one interpretation the article requiring retirement of a director from office "at the conclusion of the annual general meeting" would mean that "there can be no retirement and hence no vacancy unless an annual general meeting takes place, since there can otherwise be no 'conclusion' of the annual general meeting and therefore no occasion for retirement and the creation of the resultant vacancy". However, his Honour considered that such a construction was out of line with authority (see at [37]- [40]), citing Consolidated Nickel and Club Flotilla. Similarly, in Singh v Singh at [70] his Honour held that under a provision "limiting tenure to the next annual general meeting and compelling retirement at that meeting" office holders are taken to have vacated office on the last day on which the annual general meeting could have been held and it made no difference that no meeting in fact was held. There the relevant article was worded as "shall hold office until the next annual general meeting when they shall retire". (The lack of a reference to compelling retirement was, of course, the basis for the obiter dictum of Slattery J in Luen Fook Tong at [64]-[67]).
I do not accept that the absence of words such as "when they shall retire" or the like (which appear in the cognate clauses considered in the cases that have followed the Consolidated Nickel line of authority) has any real or tangible effect on the meaning of the clause. Here, the relevant clause provides that the office-bearers "shall hold office until the next AGM". It is clear that, upon that event, the elected office-bearers shall cease to hold office (unless re-elected). Words such as "when they shall retire" do not to my mind bear upon the question the Court is here called upon to answer, namely whether, where no such AGM is held, the clause operates so as automatically to vacate the office of office-bearers. For that reason, I do not find the obiter dictum in Luen Fook Tong of assistance (and I would not have distinguished the decisions on the basis there contemplated).
Nor do I find the inclusion of the parenthetical words in cl 9.5.1(1) of assistance (cf the submissions made by the plaintiff to that effect - see T 19.18-50).
As to the emphasis placed by the plaintiff on the presence of Part D.2 in Schedule D of the NSW constitution (to support the proposition that, to read cl 9.5.1(1) as having the effect that office-bearers cease to hold office on the latest day that an AGM could properly be held is to rewrite the clause itself), I consider that they address different issues (and hence that the contextual support to be derived from Part D.2 is somewhat limited). To read the express provision for the termination of an office upon non-compliance with the requirement to hold an AGM by a given date as precluding the similar operation of cl 9.5.1(1) in the absence of equivalent express terms is to elide the context in which Part D.2 appears, which deals with the position of delegates with a tenure of a fixed term.
Perhaps more relevant by reference to Part D.2 is to note the distinction between a date and an event. The terms of cl 9.5.1(1) establish the earliest time at which an office bearer may cease to hold office (that is, a point in time prior to the AGM, in accordance with the constitution) and the latest time at which (if there is compliance with the requirement for the holding of an AGM) that an office-bearer may cease to hold office (that is, the "next AGM" which should at the latest be 3 months after 30 November). However, I consider that it is significant that the reference to the next "AGM" in cl 9.5.1(1) is to an event not a date. It is clear from the express terms of cl 9.5.1(1) that termination of office is catalysed by the occurrence of an event (being the "next AGM"), and not the arrival of a particular date (being the last date at which that AGM was required to be held).
Approaching the construction of the relevant clause by reference to its text and in the context of the NSW constitution as a whole, and having regard to the caution to be exercised in construing constitutions of this kind, I have concluded (with some hesitation) that the natural meaning of the words "until the next AGM" is premised on such an AGM occurring, such that if an AGM does not occur then the event on which the termination of office will happen has not arisen and the elected office-bearer continues in office until such time as an AGM is held. I have so concluded because I consider that the contrary construction requires an impermissible distortion of the text of the clause, and the substitution of the requirement that an event occur with the elapsing of the time within which that event was to occur, which is inconsistent with text of the constitution, and the "public element" that shapes the construction of instruments of this kind. The hesitation I have is that this is inconsistent with the interpretation that has been placed on cognate provisions in the line of authority following Consolidated Nickel. However, I consider that those decisions are explicable on the principle of construction that an approach not be adopted which would permit a person to rely on his or her own wrong and/or by reference to an inference that the use of words that have been interpreted in a particular context suggests that such a meaning was intended.
As to this principle, that one cannot take advantage of one's own wrongdoing (which underpinned the decision of Sargant J in Consolidated Nickel) I consider that it is not entirely apposite in the present context.
True it is that the use of the word "must" in cl 9.4.1 imposes an obligation upon the State Council to comply with the terms of that clause (see Grunwick Processing Laboratories Ltd v Advisory, Conciliation and Arbitration Service [1978] AC 655 at 690 per Lord Diplock, 698 per Lord Salmon). An AGM must be held, and the latest date at which that AGM may take place is three months after 30 November. By Appendix B to that constitution, at least 21 days' notice must be given in relation to an AGM of the State Council. No such notice has been given, and, noting today's date, there is no doubt that there has been no compliance with the requirements of cl 9.4.1.
However, In Consolidated Nickel, it was the directors who were empowered to call the annual general meeting pursuant to cl 62 of the constitution, and it was they (or one third thereof) whose retirement was mandated at that meeting pursuant to cl 101. The same was true in Gosford Christian School, in which case art 35 of the constitution provided for the mandatory retirement from office of the directors at the conclusion of the annual general meeting. Article 8 of that constitution provided that the annual general meeting would be held at such a time and place as prescribed by the board of directors. Similarly, in Luen Fook Tong, it was the Committee that was empowered by r 23(1) to call the annual general meeting, and it was the Committee members whose retirement was mandated at the conclusion of that meeting by r 13(3). This mutuality or reciprocity between those empowered to call the annual general meeting, and those retaining office subsequent to a default in so doing was also present in Club Flotilla; In re Zinotty Properties; and Cane v Jones.
Such reciprocity is absent here. The State Council is comprised of various Ex-Officio members and delegates. The Ex-Officio members of the State Council include all members of the State Executive, but also all members of the Legislative Assembly and Legislative Council who are members of the Division, and all members of the House of Representatives and the Senate who represent the State of New South Wales (see cl 9.1.1). The elected members of the State Executive include a subset of the elected office-bearers of the State Council. Pursuant to Appendix B, which sets out the requirements for constitutionally valid meetings, the President of the Division, the State Executive (by a motion carried at a meeting of the State Executive) and, where requisitioned, the President of the Division or, in default, the State Director may call an annual general meeting of the State Council (see B.5).
Clause 9.5.1 governs the election of members of the State Council to the position of office-bearer. Such positions include (inter alia) the President of the Division, Urban Vice-Presidents of the Division, Country and Regional Vice-Presidents of the Division, other representatives, and members of various committees. Not all members of the State Council are, or will become, office-bearers. So much is clear from cl 9.4.3(3), which deals with the selection of scrutineers for the election of office-bearers (who cannot be nominated in that election). Not all office-bearers are, or will become, members of the State Executive.
Thus, while some members of the State Council who are empowered to call an annual general meeting may be positioned so as to benefit from the failure to do so (being the President of the Division, or those members of the State Executive who were elected as office-bearers within the State Council) there is no reciprocity between the power to call an annual general meeting (and the failure to do so) and the benefits or advantages obtained by virtue of such default. The principle underpinning Consolidated Nickel and the cases that followed (being that, confronted with opposing constructional choices, the Court should prefer that construction which does not permit a director or member to take advantage of their own wrongdoing) is not applicable in this case. Therefore, the Consolidated Nickel line of authority is neither binding upon me, nor do I consider it to be persuasive, given the textual and contextual differences in the case at hand.

Conclusion

Accordingly, I have concluded that the declaratory relief sought in prayer 3 of the summons filed 21 February 2022 should be granted.

Orders

For the above reasons I make the following declaration: That, if an AGM of the State Council of the Liberal Party of Australia, New South Wales Division does not occur by 30 November in an odd year or such other date as the State Executive may determine within three months of 30 November in that odd year, no member of the State Executive ceases to hold office as such by reason only of that circumstance.
I make no order as to costs as the defendants have entered submitting appearances.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 February 2022

Electoral Act 1918(Cth)

s Flora Constructions v Budget Demolition & Excavation Pty Ltd [2008] NSWSC 386 Thornley v Heffernan (unreported, 25 July 1995, Supreme Court of New South Wales, Brownie J) Tucker v Macdonald [2001] QSC 296; Galt v Flegg [2003] QSC 290 Texts Cited: Herzfeld and Prince, Interpretation (2nd ed, Lawbook Co, 2020) Category: Principal judgment Parties: Matthew Louis Camenzuli (Plaintiff) Hon Alexander Hawke MP (First Defendant) Hon Philip Ruddock AO (Second Defendant) Hon John Olson AO (Third Defendant) Representation: Counsel: S Robertson and A Langshaw (Plaintiff) NM Bender (Amicus Curiae)

Justiciability

At the outset, I note that both the plaintiff and the amicus curiae contend that the dispute as to the construction of the NSW constitution is justiciable.
The potential issue as to justiciability arises by reference to Cameron v Hogan (1934) 51 CLR 358; [1934] HCA 24 where it was held that the then extant rules of the Australian Labor Party did not operate to create contractual rights and duties between members and/or the executive of the Australian Labor Party nor did they confer on members a proprietary interest in the assets of the Party; and hence that the Party's rules were not enforceable by Court action.
That decision was, however, distinguished in Baldwin v Everingham [1993] 1 Qd R 10, where Dowsett J granted declaratory relief as to the operation of the Federal constitution of the Liberal Party of Australia on the basis that political parties had been given statutory recognition by the Commonwealth Electoral Act 1918 (Cth) (at 18-20) and said (at 24) that there was a sufficient public interest in the enforcement of the rules of registered political parties. That decision has been followed in a number of subsequent decisions (see Clarke v Australian Labor Party (SA Branch) (1999) 74 SASR 109; Sharples v O'Shea (unreported, 18 August 1999, Supreme Court of Queensland, Atkinson J); Thornley v Heffernan (unreported, 25 July 1995, Supreme Court of New South Wales, Brownie J); Tucker v Macdonald [2001] QSC 296; Galt v Flegg [2003] QSC 290; Coleman v Liberal Party of New South Wales Division (No 2) (2007) 212 FLR 271; [2007] NSWSC 736 (Coleman (No 2)); Fennell v Brough [2008] QSC 166; Butler v Mulholland (No 2) [2013] VSC 662 (Butler v Mulholland); Barker v Australian Labor Party [2018] VSC 596.
The amicus curiae has noted that in two relatively recent decisions of the Supreme Court of Victoria (Setka v Carroll (2019) 58 VR 657; [2019] VSC 571 per Riordan J at [68] and [91] (Setka v Carroll); and Asmar v Albanese (No 4) [2021] VSC 672 per Ginnane J at [161] (Asmar v Albanese)) it has been held that disputes as to the operation of the constitutions of political parties are non-justiciable unless in the exercise of jurisdiction to protect the objects of an electoral statute (that limitation deriving from the decision of Robson J in Butler v Mulholland (see at [101]-[105])). It is submitted that the present dispute would fall within the narrower category of justiciable disputes considered in these cases on the basis that, given the broad management powers conferred on State Council and State Executive by cll 9.2.1 and 13.2.1-13.2.3 of the NSW constitution, the identity of the registered officer of the NSW Division of the Liberal Party is likely to be determined by one of those bodies; and therefore that the identity of the members of State Council and State Executive is likely to be an important issue for the proper functioning of the Electoral Act 2017 (NSW).
In this regard, it is noted that the Electoral Act 2017 (NSW) confers certain rights on the "registered officer" of a political power including: the right to apply for an amendment to the party's register (s 66); to request the cancellation of the party's registration (s 68); to nominate a person as a candidate for an election (s 83), and to apply for the registration of electoral material (s 199); and that the legislation also imposes on the registered officer of a party the obligation to furnish to the Electoral Commissioner an annual return as to the party's continued eligibility for registration (s 67).
Thus it is submitted that the preponderance of authority supports the proposition that disputes as to the operation of the constitutions of political parties are justiciable (emphasis being placed on Coleman (No 2) in which Palmer J held that a dispute as to the operation of the NSW constitution was justiciable); and, in any event, the present dispute appears to fall into the more limited category of justiciability postulated in Setka v Carroll and Asmar v Albanese (No 4).
The plaintiff supports the contention that the present dispute is justiciable. I agree.

At a glance

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Judgment (11 paragraphs)

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Cases Cited (33)

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