"(1) An association's constitution may contain an express restriction on, or a prohibition of, the association's exercise of any of its powers, but the exercise of a power by the association is not invalid merely because it is contrary to such a restriction or prohibition.
(2) An act of an association is not invalid merely because it is contrary to or beyond the association's objects."
32 The defendant submits that Associations Incorporation Act, s 20 means that the defendant's relevant exercise of its power to expel a member is not invalidated, merely because the defendant does not comply with particular prohibitions or restrictions in Rule 8.
33 But in my view, Associations Incorporation Act s 20 is not a strongly arguable answer to the plaintiffs' first contention for two reasons. First, it does not take account of cases such as Goodwin v Vietnam Veteran Motor Cycle Club Australia (2008) 74 NSWLR 224, at 232 paragraph [43], which require strict compliance with the rules of expulsion of members of such Associations, rules that may not readily be classified as containing a "restriction or prohibition". Secondly, the defendant's claimed use of Associations Incorporation Act s 20 does not give adequate emphasis to the word "merely" in the section, which shows that the provision is not designed to address all the possible circumstances that may produce invalidity.
34 The plaintiffs would at final hearing point to the absence of particularisation of the allegations in the petition. In response Mr Stomo has referred to the decision of Young J (as his Honour then was) in the The Bodalla Company Pty Limited v Registrar of Co-operative Societies, Supreme Court of NSW, 6 December 1988, (unreported) BC8801258. Mr Stomo submits that I should follow the approach taken by Young J in Bodalla and allow this meeting to proceed, even though there may have been breaches of the rules of the association in the calling of the meeting. In my view, in Bodalla Company Young J was not dealing with the situation, which obtains here with the particular rule that apply here. A deliberate structure appears to have been created in the defendant Association's rules in Rule 8.1 to 8.3 to require its Executive Committee to take preliminary steps before calling any general public meeting. Those preliminary steps involve considering the content of the complaint made, measuring it against the Rules and the interests of the Association. Then the structure requires the person complained about to be put in a position to exercise the right to respond to that complaint to the Executive Committee before having to deal with it in a public forum. Finally, before acting publicly the Executive Committee should be "satisfied that the facts alleged in the complaint have been proved": Rule 8.3. The rules in issue in Bodalla's case did not require any such preliminary consideration of a complaint by the Executive. In my view, the Bodalla case is not a complete answer to the plaintiffs' claim that it has an arguable case to require the defendant's Executive Committee to do its duty according to the Association's Rules before exposing the plaintiff's to an Executive Committee sanctioned public meeting.
(2) The 11 August Resolution convening a Special General Meeting
35 Another way that the plaintiffs' invoke Rule 8 is through the notice of meeting and the five resolutions proposed to be decided at the meeting. The decision to deal with the plaintiffs' expulsion as a group was taken in the Executive Committee resolution on 11 August 2010. Ms Lowe says that the proposal to consider all those resolutions at the same meeting is a contravention of Rule 8.4(a) of the Rules. In my view, it is strongly arguable that it is such a contravention. Rule 8.4 arguably achieves some important purposes in the management of expulsions from incorporated associations. Where such a Rule is adopted it ensures that expulsion from clubs cannot occur en masse. It arguably ensures that the position of individual members facing expulsion is not too simply identified with the position of other members also facing expulsion. The Rule means that the circumstances of each member are separately and seriously considered at a meeting considering expulsion. Rule 8.4 (a) also has the advantage of ensuring that members who wish to speak in favour of other members being proposed for expulsion can do so without being tainted at the same time by defending their own proposed expulsion. In my view, Rule 8.4(a) serves those objectives, which are important rights of members.
36 The resolutions proposed on 11 August for Sunday's meeting would quite arguably contravene Rule 8.4 (a) in several ways. Resolutions 3, 4 and 5 propose the expulsion of three persons, Ms Lowe, Dr Pun and Ms Wu, at the one meeting. Resolutions 1 and 2 propose the removal of Ms Lowe as the honorary secretary and Ms Wu as a member of the Executive Committee at the same meeting as the proposed expulsions. In my view both the proposal of multiple expulsion resolutions and the proposal of business relating to the Executive Committee and the secretaryship are other "business" that if conducted, in addition to a single expulsion, would arguably contravene Rule 8.4(a).
37 To overcome this problem the defendant indicated that it was prepared to undertake not to deal with resolutions 1 and 2 at this Special General Meeting. But it seems to me there are difficulties with that course. First, unless only one resolution was pressed, for example, resolution 4 against Ms Lowe, an arguable contravention of Rule 8.4 (a) would still remain. Secondly, the plaintiffs challenged the basis upon which such instructions were being given to take this course. Thirdly, the potential for interference with the orderly organisation and conduct of the meeting on Sunday and the confusion created for people who would come to this meeting, make it a difficult undertaking to accept. For those reasons, in my view, the proposed meeting would arguably be a contravention of clause 8.4(a). On this particular ground alone the plaintiff has a sufficiently strongly arguable case that, in my view, an injunction should go to restrain the holding of the meeting.
38 By this point in my oral reasons I had identified that the plaintiff's first and second contentions were a sufficient legal basis for restraining the Special General Meeting. The hearing had adjourned during the afternoon due to the press of other business in the Duty List. By the time the other duty matters were finished and the oral reasons were delivered it was after 7.30 pm. It was indicated that unless any further reasons were required that evening as it had been established that there was a serious question to be tried, the balance of my reasons could be published later. The parties agreed with this course. In short additional reasons I evaluated the plaintiffs' further arguments that there was a serious question to be tried. With the exception of the material below relating to the balance of convenience and the future management of the proceedings, what follows are those short additional reasons.
39 The plaintiffs sought to show that the Special General Meeting could not be held under the authority of the defendant's Rule 21, which allows 50 ordinary members or four member of the Executive Committee to requisition a Special General Meeting through the Hon. Secretary. The plaintiffs said that 50 ordinary members had not signed the petition and that Ms Lowe as the Hon. Secretary had not received it, so Rule 21 was not enlivened. But the defendant did not seek to propound a case based on calling Special General Meetings under Rule 21 and with some justification, as Rule 8 seems to be the appropriate template for meetings to consider the expulsion of members.
40 The plaintiffs also sought to show that the 11 August 2010 Executive Committee meeting that called the Special General Meeting on 12 September was itself invalidly constituted because the Hon. Secretary, Ms Lowe had been excluded from it as a result of the Executive Committee's challengeable resolutions of 3 July 2010, suspending her from her position. Ms Wu was also suspended from her role on the Executive Committee by the same meeting and the same consequence is said to flow from her suspension. It was said that the Rules do not allow for the suspension of a member of the Executive Committee as seems to have occurred on 3 July. Whilst the Rules do not expressly provide for that form of suspension it may be that Rule 8.3(c) is wide enough to authorise what happened here on 3 July. In any event the correct form of suspension seems to have been put in place on 11 August. This was another arguable issue available to the plaintiffs.