procedural. Rectification order removing document N4710169 (the 2014 Constitution) from the Register; appointment of four named persons as joint and several receivers with powers limited to processing...
Key principles
Where a document purporting to be an association's constitution was lodged on the Register accompanied by statements that the Court finds to be false, the Court should rectify...
Where there is a real and substantial risk that a proposed members' meeting and election will be invalid because there is no committee validly able to conduct it, the Court may...
In the circumstances of this case, orders appointing community members as joint and several receivers with powers narrowly confined to membership enrolment and the conduct of a...
Issues before the court
Whether the constitution recorded on the Register in July 2014 (the 2014 Constitution) validly became the Association's constitution despite...
Whether the de facto committee members (elected under processes said to follow the 2014 Constitution) validly hold office despite departures from...
Whether the Court should appoint receivers to take control of membership enrolment and to conduct an election, or allow the proposed 12 July 2020...
Plain English Summary
The Court found the constitution lodged on the register in 2014 was supported by false statements and should be removed from the Register. Because past elections had been run under that invalid constitution and an imminent election was organised on that basis, the Court concluded there was a real risk the election would be invalid and that there was no valid committee to run a lawful election. To secure a clear outcome and avoid later reruns, the Court appointed four community members as receivers with narrowly defined powers to enrol members, maintain the register, receive nominations and run a special meeting and election. Other substantive questions about the legal effect of registration and the validity of past office-holders were left for later determination.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
How clauses 14 and 15 of the 2008 Model Rules should be construed: whether office-bearers must be separately nominated and directly elected.
Cited legislation
7 cited instruments linked from this judgment.
Deep Dive
2,097 words · generated 24/06/2026
What happened
ACSA (the Afghan Community Support Association of NSW Inc) is an incorporated association which operates a mosque and associated services in Blacktown. It was incorporated in April 2008 and, because no bespoke constitution was specified on incorporation, the association was governed by the default model rules then prescribed in Schedule 1 to the Associations Incorporation Regulation 1999 (NSW) (the "2008 Model Rules"). In July 2014, a new instrument was lodged with Fair Trading NSW and recorded on the Register as the association's constitution (the "2014 Constitution"). The form lodged with Fair Trading asserted that a special resolution adopting the 2014 Constitution had been passed at a 29 June 2014 meeting and identified a particular person as the public officer.
Plaintiffs (current members of the Afghan community) alleged those statements were false, that the 2014 Constitution was never validly adopted, and that elections held since 2014 had therefore been invalid. The "active defendants" were persons who had, or said they had, been elected or were acting as the committee under the processes based on the 2014 Constitution.
An election had been announced for 12 July 2020 under processes and nomination forms reflecting the 2014 Constitution. On urgent application by plaintiffs, Parker J heard the matter on 9–10 July 2020. The Court was asked to make a series of orders including declaring the 2014 Constitution invalid, restraining the 12 July election, declaring offices vacant, and appointing a receiver to bring the register of members into order and conduct a fresh election.
The Court made two principal interlocutory orders. First, on 9 July it ordered the Register of Incorporated Associations to be rectified to remove the document recording the 2014 Constitution (document N4710169). Second, on 10 July it appointed four named community members as joint and several receivers with narrowly defined powers to process membership applications, maintain the register, receive nominations and conduct a special general meeting (scheduled for 2 August 2020, or 9 August if the receivers preferred) to elect a new committee. The receivers were to report to the Court by 10 August 2020, their reasonable costs were to be borne by the Association, and there was liberty to apply.
Why the court decided this way
Two factual legal predicates drove the decision.
The registration of the 2014 Constitution was supported by statements that the Court and the parties (in their pleadings) accepted were false. The plaintiffs produced affidavit evidence (for example, from Mr Ebrahimi) that at the 29 June 2014 meeting no resolution in the terms asserted on the lodgement form had been passed. The active defendants' pleaded defence admitted the falsity of those statements. Against that background the Court concluded that the document should be removed from the Register: "It should never have been lodged and registered in the first place." (Association's Constitution: 5). The Court did not feel it necessary to resolve, on this interlocutory application, whether s 14(1) of the Associations Incorporation Act 2009 gives registered changes an indefeasible status comparable to Torrens title; the Court preferred to rectify the Register given the admitted falsity and the need for immediate corrective relief (Association's Constitution: 4-5; Appointment of receiver: 19).
There was an imminent election organised under processes and paperwork that reflected the invalid 2014 Constitution (for example the nomination forms did not permit candidates to nominate for a particular office-bearer position and imposed requirements not found in the 2008 Model Rules). The Court found a "real likelihood" that the scheduled 12 July election would be invalid, and that the processes then in train could not be remediated at the door of the meeting in a way that would guarantee a valid outcome (Appointment of receiver: 21-24). Given that, and given there was no clear, valid committee properly able to conduct the election under the default rules, the Court held it was appropriate and proportionate to appoint receivers with limited powers to bring the register into order and to conduct a properly run election. The appointment was tailored: the receivers' powers were confined to membership and electoral functions (Orders: 2-6). The Court deliberately left open the more difficult legal questions about the ultimate validity of prior elections and the full effect of statutory provisions such as s 14(1), s 28(4) and the Corporations Act s 1322(2) (Appointment of receiver: 19-23).
The decision balanced two competing considerations. On the one hand courts are generally reluctant to overturn members' democracy and interfere with meetings (counsel for the active defendants invoked Countouris v Kallos in that vein). On the other hand, where there is a real risk that an imminent election will produce an invalid result, the Court will act to prevent the risk of later repeated litigation and uncertainty. The limited, community-based receivership was a pragmatic remedy designed to secure clarity with minimum cultural and financial intrusion (Appointment of receiver: 25-28).
Before and after state of the law
Before this decision:
Associations incorporated under the AIA 1984/AIA 2009 are governed by whatever constitution was lodged on incorporation or, failing that, by the model rules prescribed by regulation (Schedule 1 to the 1999 Regulation).
There was legal uncertainty about the effect of registration of changes under s 14(1) of the AIA 2009, whether registration confers a form of indefeasibility or whether the Register is merely evidentiary and subject to rectification.
After this interlocutory decision:
The Court exercised its equitable powers to rectify the Register where a document was lodged with false statements; the decision illustrates the Court's willingness to remove a registered constitution that should not have been on the Register (Orders: 1).
The judgment demonstrates that where governance is in doubt and a credible risk exists that an imminent members' meeting will produce an invalid result, the Court may appoint non-professional community receivers with narrowly defined electoral powers to ensure a valid election (Orders: 2-6).
The decision does not finally resolve the legal question of whether s 14(1) renders registered constitutions indefeasible; nor does it finally determine whether s 28(4) or Corporations Act s 1322(2) validates de facto committee acts when defects are pleaded. Those questions were left open for final hearing (Appointment of receiver: 19-23).
Therefore, the ruling is a practical, interlocutory application of equitable supervisory jurisdiction to associations' governance problems rather than a pronouncement settling statutory principle in the abstract.
Key passages with plain-English translation
"It should never have been lodged and registered in the first place." (Association's Constitution: 5).
Plain English: The document that was recorded as the 2014 Constitution was put on the Register based on false assertions; because of that, it was wrongly on the Register and had to be removed.
"But on the evidence before me, I considered that there was (at the lowest) a real likelihood that the proposed election on 12 July would turn out to be invalid." (Appointment of receiver: 24).
Plain English: Given the nomination forms, announcement and procedures all followed the invalid 2014 Constitution, the Court thought it plausible the election would not meet the legal requirements and might later be declared void.
"I emphasise that for the purposes of determining the plaintiffs' application for the appointment of a receiver, I did not need to, and did not, decide the questions about what the terms of the 2008 Model Rules require and whether the de facto committee members remain in office." (Appointment of receiver: 23).
Plain English: The Court made the interim receivership order without deciding the big legal questions about the correct interpretation of the model rules or whether the current committee really hold office. Those will be for later litigation.
"I thought that the better view of the interpretation of clauses 14 and 15 of the 2008 Model Rules is that they do indeed provide for the separate nomination and separate direct election of each of the office bearers of the Association." (Appointment of receiver: 9).
Plain English: The Court's current view is that each officer (president, secretary, treasurer, vice-president) must be nominated for and elected to their specific office directly, not chosen by the committee after a general election of committee members.
What fact patterns trigger this precedent
This decision is instructive where:
A constitution or other governance instrument for an incorporated association has been lodged on a public Register but there is credible evidence that the accompanying statements of fact (for example, that a special resolution was passed or that a particular person was public officer) are false.
Elections or governance processes have been conducted under an instrument that is alleged to be invalid, and an imminent members' meeting or election is being organised on that basis.
There is no clear, valid committee or responsible officer with uncontested authority to conduct a lawful election under the association's governing rules.
There is real risk that allowing the meeting to proceed will produce an outcome that will later be declared invalid, causing uncertainty and the need to re-run the process.
Under those circumstances a court may rectify the Register and appoint receivers with narrowly defined powers to secure a valid election and resolve the membership/committee question promptly and fairly.
How later courts have treated it
As this is an interlocutory 2020 judgment of the NSW Supreme Court, subsequent treatment would need to be sourced from later reported decisions and citators. The immediate effect of the orders was practical: removal of the 2014 Constitution and a receivership to conduct an election. The judgment carefully reserves major legal questions (the legal effect of s 14(1); the scope of statutory validation provisions; and the final construction of the model rules) for final hearing. Consequently, lower courts and practitioners should treat the case as persuasive authority for the proposition that the Court will intervene where there is a real likelihood of an invalid election and no valid committee to run it, rather than as a definitive statement on the statutory questions which were left open.
Practitioners should watch for any appeal or subsequent decision that addresses the left open issues, notably:
Whether registration under s 14(1) can create a form of indefeasibility for a constitution recorded on the Register;
The limits of statutory validation (AIA s 28(4) and Corporations Act s 1322) where offices have been vacated or where defects go to the substance of appointment rather than procedure;
Definitive construction of clauses 14 and 15 in the model rules on nominations and election of office-bearers.
Still-open questions
This interlocutory decision expressly leaves several legal issues unresolved:
The legal effect of registration under AIA 2009 s 14(1): does registration create an indefeasible legal status for the registered constitution, or is the Register merely evidentiary and amenable to rectification where the registered instrument was improperly lodged? The Court declined to resolve this on the urgent application (Association's Constitution: 4-5; Appointment of receiver: 19).
The scope and limits of statutory validation: can AIA s 28(4) and Corporations Act s 1322(2) validate the tenure and acts of de facto committee members where elections were conducted under an invalid constitution and where office, by the model rules, may have been vacated? The Court identified authority that limits such validation (Morris v Kanssen; Grant) and left the question open for final determination (Appointment of receiver: 20-23).
The definitive interpretation of clauses 14 and 15 of the 2008 Model Rules: although the judge indicated a provisional view that the rules require separate nomination and direct election for each office-bearer, this was not a final determination and may be revisited on fuller argument (Appointment of receiver: 9).
The appropriate bounds of equitable intervention in associations' internal governance where cultural, religious and community sensitivities exist: the judgment balanced those sensitivities against the need for legal certainty, but future cases may further develop the proportionality analysis, especially where community-appointed receivers are proposed.
Practical takeaways for advisers:
Where a constitution is alleged to have been improperly lodged with the regulator, clients should act quickly to seek rectification or, conversely, to consolidate any apparent title while litigation is pending; the Register can be rectified where lodged instruments were supported by false statements.
If an election is imminent and organised under flawed procedures, an urgent interlocutory application for equitable relief (including appointment of a receiver with narrow powers) can be effective to prevent the risk of an invalid election and subsequent re-litigation.
Careful pleadings and early documentary evidence (minutes, lodgement forms, nomination forms and communications) are critical: the Court relied heavily on such material in assessing likelihood of invalidity and in shaping the limited receivership remedy.
Judgment (5 paragraphs)
[1]
Issued 16 July 2020
Last Thursday and Friday, 9 and 10 July 2020, I made orders following an urgent hearing in these proceedings. This judgment sets out my reasons for those orders.
The proceedings concern the affairs of an incorporated association called the Afghan Community Support Association of NSW Inc. I will refer to it as "ACSA" or "the Association".
The Association owns land at Blacktown which is the location of a mosque used by members of Sydney's Afghan community. The mosque was built in about 2012 and since then has been operated by the Association. The Association also provides associated funeral services.
The Association was incorporated in April 2008. It replaced an earlier association (incorporated in 1987) which appears to have performed a similar function but had been struck off the Register of Incorporated Associations. I will refer to this as the "Former Association". The evidence does not identify why the Former Association was struck off.
The plaintiffs are individual members of the Afghan community concerned at the way in which the Association is being run. In particular they allege that ACSA's current committee of management do not validly hold office and they have no lawful power to direct ACSA's affairs. This is because, so the plaintiffs allege, the Association has since 2014 been operating under a purported constitution which was never validly adopted. As a consequence, all of the elections held since then have been invalid.
The proceedings were commenced in November 2019. At that time the Association was named as the first defendant and Fair Trading NSW ("FTNSW") was, for reasons which will appear in due course, named as the second defendant. Since then a further nine individual defendants have been joined. The plaintiffs identified them as the persons who had purportedly been elected, or were purportedly acting, as the Association's committee of management.
The proceedings first came before me in the Applications List on 27 March this year for determination of an application to have the proceedings summarily dismissed. It became apparent in the course of the hearing that, although amendments to the Statement of Claim were required, summary dismissal would not be justified. I kept the matter before me and made directions for the purpose of identifying the issues in the proceedings, and the parties' respective positions on those issues.
This process was a protracted one, involving a number of further directions hearings, and the joinder of the additional defendants to whom I have already referred. On 2 June, the plaintiffs filed their Amended Statement of Claim. On 3 July, solicitors acting for the third, fourth, seventh, eighth and ninth defendants provided their proposed defence, subject to verification. The defence was verified and filed on 9 July. I will refer to these individuals as the "active defendants".
The solicitors currently acting for the active defendants initially acted for ACSA as first defendant. But although they remain on the record as the solicitors for the first defendant, they have not taken an active position on its behalf. This is the proper course. In circumstances where there are effectively two groups contesting the issues in these proceedings, the appropriate course is for the Association to remain neutral and abide the outcome. FTNSW filed a submitting appearance and has taken no part in the proceedings.
The active defendants (and perhaps others associated with them) remain in practical control of the Association's affairs. On about 18 May, it was announced through the Association's website that an election would be held for its committee of management on Sunday 12 July. As will be seen, the proposed election was to be conducted by, or under the control of, the active defendants or their associates.
At the time the election was announced, the pleadings had not been closed. On Monday 6 July, after the active defendants' defence had been served in draft (see above), the plaintiffs filed a notice of motion which, among other things, sought orders prohibiting the holding of the election. The hearing of the application took place before me on the afternoon of 9 July, on an urgent basis.
At the hearing, the plaintiffs sought final orders concerning the constitution of the Association. They also sought the appointment of a receiver to take control of it, to bring the register of members into order and in due course to conduct a fresh election.
[2]
Association's Constitution
When the Association was incorporated in April 2008, the applicable legislation was the Associations Incorporation Act 1984 (NSW) ("AIA 1984"). The Association's constitution became (by default, no other constitution having been specified in the application for incorporation) the model rules in the form then prescribed in Schedule 1 to the Associations Incorporation Regulation 1999 (NSW). I will refer to these as the "2008 Model Rules".
Later the AIA 1984 was repealed and replaced by the Associations Incorporation Act 2009 (NSW) ("AIA 2009"). This did not affect the constitution of the Association, which remained governed by the 2008 Model Rules.
In July 2014, a new document was recorded by FTNSW on the Register of Incorporated Associations as the constitution of the Association. I will refer to this document as the "2014 Constitution". The document was recorded on the Register following its lodgement, purportedly on behalf of the Association, on about 9 July 2014.
The 2014 Constitution was lodged with FTNSW as an annexure to a form apparently signed by Mohammed Sharif Amin, who was described in it as the Public Officer of the Association. The form stated that a special resolution was passed at a general meeting of the members of the Association on 29 June 2014 which adopted the 2014 Constitution as the new constitution of the Association.
In their Statement of Claim, the plaintiffs allege that Mr Amin was not in fact the Public Officer of the Association when the form was lodged and that the 2014 Constitution was not in fact adopted by the Association at the June 2014 general meeting. The latter allegation was supported at the hearing before me by evidence from one of the plaintiffs, Abdul Quddus Ebrahimi. In his affidavit, Mr Ebrahimi stated that he was present at the meeting on 29 June 2014 and no resolution in the terms stated in the form lodged by Mr Amin was passed on that occasion.
The active defendants' defence admitted that Mr Amin was not the public officer of the Association and that the 2014 Constitution was not adopted by the Association. On the face of it, it was therefore common ground between the plaintiffs and the active defendants that the 2014 Constitution was invalid. But the active defendants' defence raised two points by way of qualification, or potential qualification.
[3]
Appointment of receiver
AIA 2009, s 28, relevantly provides:
Committee to be established
(1) An association must establish a committee to manage its affairs.
Note An association's registration is liable to be cancelled if it does not comply with this subsection.
(2) The committee must include 3 or more members, each of whom is aged 18 years or more and at least 3 of whom are ordinarily resident in Australia.
Note An association's registration is liable to be cancelled if its committee does not comply with this subsection.
(3) The committee may exercise such of the association's powers as are not required by this Act or its constitution to be exercised by the association in general meeting.
The 2008 Model Rules dealt in clauses 14 and 15 with the establishment, and subsequent election, of the Association's committee of management. Those clauses provided:
14 Constitution and membership
(1) Subject in the case of the first members of the committee to section 21 of the Act, the committee is to consist of:
(a) the office-bearers of the association, and
(b) 3 ordinary members,
each of whom is to be elected at the annual general meeting of the association under rule 15.
(2) The office-bearers of the association are to be:
(a) the president,
(b) the vice-president,
(c) the treasurer, and
(d) the secretary.
(3) Each member of the committee is, subject to these rules, to hold office until the conclusion of the annual general meeting following the date of the member's election, but is eligible for re-election.
(4) In the event of a casual vacancy occurring in the membership of the committee, the committee may appoint a member of the association to fill the vacancy and the member so appointed is to hold office, subject to these rules, until the conclusion of the annual general meeting next following the date of the appointment.
15 Election of members
(1) Nominations of candidates for election as office-bearers of the association or as ordinary members of the committee:
(a) must be made in writing, signed by 2 members of the association and accompanied by the written consent of the candidate (which may be endorsed on the form of the nomination), and
(b) must be delivered to the secretary of the association at least 7 days before the date fixed for the holding of the annual general meeting at which the election is to take place.
(2) If insufficient nominations are received to fill all vacancies on the committee, the candidates nominated are taken to be elected and further nominations are to be received at the annual general meeting.
(3) If insufficient further nominations are received, any vacant positions remaining on the committee are taken to be casual vacancies.
(4) If the number of nominations received is equal to the number of vacancies to be filled, the persons nominated are taken to be elected.
(5) If the number of nominations received exceeds the number of vacancies to be filled, a ballot is to be held.
(6) The ballot for the election of office-bearers and ordinary members of the committee is to be conducted at the annual general meeting in such usual and proper manner as the committee may direct.
[4]
Orders
The orders made by the Court on 9 July 2020 were:
Order that the Register of Incorporated Associations maintained under s 98 of the Associations Incorporation Act 2009 (NSW) be rectified to remove document N4710169 from the register.
Direct these orders be taken out forthwith.
The orders made by the Court on 10 July 2020 were:
The following persons ("Receivers") are appointed as the joint and several receivers and managers of the assets and undertakings of the first defendant ("Association"), for the limited purpose of giving effect to these orders, such appointment to take effect with respect to each person on the filing of a written consent of that person to act as a receiver and manager:
(a) Anwar Mangal;
(b) Aslam Shinwari;
(c) Nasiba Akram; and
(d) Aziz Daqiq.
The Receivers are to have all the powers reasonably necessary to give effect to these orders, including the following powers under the constitution of the Association:
(a) the powers of the secretary and the committee under clause 3 of the constitution to process and accept applications for membership;
(b) the power of the public officer of the association under clause 7 of the constitution to maintain a register of members of the association;
(c) the powers of the secretary and the committee under clause 15 of the constitution:
(i) to receive nominations of candidates for election as office-bearers of the association or as ordinary members of the committee; and
(ii) to direct the manner in which the ballot for the election of office-bearers and ordinary members of the committee is to be conducted;
(d) the power of the committee under clause 25 of the constitution to convene a special general meeting (but only for the meeting required to be convened under these orders);
(e) the power of the secretary under clause 26 to give notice to members of a general meeting; and
(f) the power of the president under clause 28 to preside as chairperson at a general meeting.
Within seven days of the date of these orders, the Receivers are to cause a notice to be distributed to the members of the Association ("Notice") which includes the following matters:
(a) that the Supreme Court of New South Wales has appointed the Receivers to convene a special general meeting of the members of the Association in order to elect a new committee of management for the Association;
(b) that an election of the committee of management will take place on 2 August 2020 (or, should the Receivers see fit, 9 August 2020) at the Association's community hall at 14 Fifth Avenue, Blacktown, commencing at 9am and continuing until 5pm;
(c) that nominations for candidates for election as office-bearers of the association or as ordinary members of the committee must be received by the Receivers at least 7 days before the election is to be held;
(d) a copy of an appropriate form for the nomination of candidates for election as office-bearers of the association or as ordinary members of the committee, which:
(i) permits the candidates to specify the position for which they are nominated; and
(ii) requires the signature of 2 members of the association and the written consent of the candidate;
(e) an electronic address to which nomination forms may be returned.
[5]
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: 16 July 2020
Rectification order removing document N4710169 (the 2014 Constitution) from the Register; appointment of four named persons as joint and several receivers with powers limited to processing membership applications, maintaining the register, receiving nominations and running a special general meeting to elect a new committee on 2 (or 9) August 2020; receivers to report by 10 August 2020; receivers' costs payable from the Association's assets; liberty to apply.
The first point raised in the defence was based on AIA 2009 s 14(1). That section provides:
Effect of registration of change of name, objects, constitution or official address
(1) A change of name, objects, constitution or official address that is registered under this Division takes effect when it is registered.
The defence pleaded that, as a result of this provision, even if the 2014 Constitution was improperly lodged with FTNSW, for as long as it remained on the Register, it was effective as the constitution of the Association.
The second point raised in the defence concerned Mr Amin's position. The defence pleaded that he may have been guilty of an offence under the Crimes Act 1900 (NSW), s 307B. That enactment makes it a crime to knowingly provide false information to a public authority. The defence pleaded that as a matter of procedural fairness, Mr Amin ought to be joined as a defendant. Implicitly the defence appeared to be saying that the Court should not determine the validity of the 2014 Constitution unless that had happened.
At the hearing on 9 July, counsel for the plaintiffs pressed me to make final orders declaring the 2014 Constitution invalid. Counsel for the active defendants did not resist my dealing with the issue but drew attention to the two qualifying points made in the defence.
It is convenient to deal first with the point concerning Mr Amin. The question in these proceedings is simply whether the 2014 Constitution was in fact adopted by the Association. As the defence itself acknowledged, Mr Amin would not have been guilty of an offence unless (at least) the statements made in the form were knowingly incorrect. It was not necessary to make, and I have not made, any finding to that effect. In these circumstances, there was no need to join Mr Amin.
The point raised in the defence concerning the effect of s 14(1), is contested. Counsel for the plaintiffs submitted that the section did not have the effect that a constitution recorded on the Register is in some way indefeasible, like title to land under Torrens legislation.
I did not find it necessary to decide this question at the hearing. Even if the defendants' contention is correct, it constituted no reason to maintain the 2014 Constitution on the Register. The consensus of the parties, as reflected in the pleadings, and as confirmed by the evidence, was that the statements in the form which accompanied the 2014 Constitution were false. It should never have been lodged and registered in the first place. For these reasons, at the end of the hearing on 9 July I made an order that the 2014 Constitution be removed forthwith from the Register.
There were significant differences between the 2014 Constitution and the 2008 Model Rules. For present purposes, it is sufficient to identify four of them.
First, under the 2014 Constitution the management committee members were to hold office until the next annual general meeting, but such meetings were to be held, despite their name, only every three years. This contrasts with the one year tenure of committee members under the 2008 Model Rules.
Second, under the 2014 Constitution the office bearers were to be elected by the members of the committee once they had been elected. Under the 2008 Model Rules (so it was contended by the plaintiffs) the election of office bearers is direct.
The third difference concerned the number of committee members. One clause in the 2014 Constitution provided that the committee was to consist of at least four office bearers, and eight other members. Another clause provided that the number of committee members (including, it would seem, the office bearers) was to be nine. On any view the number was different from the seven prescribed by the 2008 Model Rules.
The fourth difference was that the 2014 Constitution provided for the election of the committee to take place "under" a supervisory group of members. The supervisory group was to be selected by the existing committee three months prior to the election, and its makeup notified to the public. It was to consist of at least ten members "elected from the community". The precise role of the supervisory group was not clearly specified but it included signing off on the election ballot paper. The Constitution also provided that the result of the vote should be "announced" by the supervisory group "and their decision is final". All of this contrasts with the provisions of the 2008 Model Rules, which provide in general for the existing committee to be responsible for the conduct of the election of the new committee, and the secretary to be responsible for certain functions such as receiving nominations.
The plaintiffs' Statement of Claim pleads that in these and other respects the elections for the committee of the Association have been conducted in accordance with the 2014 Constitution, and not in accordance with the 2008 Model Rules. In particular, the plaintiffs allege that since 2014, there have only been two elections, one in 2014 (which was apparently the meeting of 28 June to which I have already referred) and one in July 2017. The plaintiffs allege that at each meeting a total of nine members of the committee were purportedly elected, and there was no direct election of office bearers, the office bearers being purportedly chosen by the committee following the purported election. The plaintiffs plead, as a consequence, that the purported elections were all invalid and the membership of the committee is, in law, vacant.
The plaintiffs' application in their notice of motion sought the appointment of a receiver to the Association, with specific conferrals of power, and directions, to ensure that the receiver could conduct an election. The powers and directions extended to ensuring that the register of members was complete and accurate, so as to permit all members of the Afghan community who wished to participate in the vote to do so.
The plaintiffs' proposed receiver was Guy Baxendale. Mr Baxendale is a registered liquidator whose firm is in the Central Business District of Sydney.
I have already referred to Mr Ebrahimi's evidence about the events of 2014. Mr Ebrahimi also gave evidence about the impending election. A copy of the election announcement of 18 May was annexed to his affidavit.
The announcement stated that anyone who was a member of the Association was entitled to be elected or appointed as a committee member. It provided an email address where interested members could obtain nomination forms, stating that the nomination needed to be signed by two other members.
The announcement went on to state that an election supervisory group would be appointed to "take control of the election process and the counting of votes". The announcement invited nominations from interested members to join the group, and indicated that nomination forms could be obtained from the email address to which I have already referred.
The announcement stated that nominations for election to the committee and for the election supervisory group were due fourteen days prior to the election, and therefore had to be lodged by 26 June. I note in passing that under the 2014 Constitution the supervisory group was to be appointed at least three months in advance of the election.
Mr Ebrahimi also annexed to his affidavit copies of the nomination forms both for election to the committee and appointment to the election supervisory group nomination form. Both forms required, among other things, that the person nominating must state that he or she had read and understood "the constitution". As foreshadowed in the announcement, the form for election to the committee contained space for the signature of the candidate and for two sponsoring members of the Association.
The nomination forms were sent to Mr Ebrahimi on 10 June by Mansur Mansuri. Mr Mansuri is one of the active defendants, and is the de facto secretary of the Association. In his covering email, Mr Mansuri stated that if Mr Ebrahimi wished to nominate, he must first become a member of the Association. It seems that the records of the Association did not show Mr Ebrahimi as a member. Mr Ebrahimi in his affidavit stated that he had been a member of the Association "since 1987" (the date of incorporation of the Former Association) and had never resigned nor been expelled.
In support of the application, an affidavit was also read from the eighth plaintiff, Dr Mohammad Aymal. He was likewise advised by Mr Mansuri that should he wish to nominate for the election he would need to be a member. His affidavit stated that he had been a member of the Association since 2001 (this must also be a reference to the Former Association) and had never resigned or been expelled.
The defence of the active defendants states that in 2014 and 2017 there were general meetings of the Association at which committee elections were held. The defence admits that there were no other committee elections. It alleges, however, that at the annual general meeting for the year ended 30 June 2018, which took place in February 2019, a number of individuals were elected to the committee, or as office bearers. Among the individuals allegedly elected was Mr Mansuri, as secretary. The defence pleads that even if the committee members purportedly elected in 2017 no longer hold office, those elected in February 2019 do.
The defence admits that both in 2014 and 2017 a committee of nine was elected, and that the office bearers were chosen by the committee members rather than being elected directly. On the latter point, however, the defence alleges that in both the 2014 and 2017 elections the candidates campaigned on "tickets" which specified the offices that the candidates would fill, and the offices were in fact filled by the elected candidates after the elections.
The defence pleads that despite any invalidity of the 2014 Constitution, and despite the admitted (or otherwise established) divergences between the way in which the elections were conducted and the 2018 Model Rules, the existing de facto committee members and office bearers continue to hold office. I take it that the defendants' contention is that non-compliance does not necessarily result in invalidity: compare Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [93]. In addition the defence calls in aid statutory provisions.
First, the defence relies upon AIA 2009, s 28(4). That provides:
(4) A committee member's acts are valid despite any defect in his or her appointment.
Next the defence relies on the Corporations Act 2001 (Cth), s 1322, which the AIA makes applicable to incorporated associations: AIA 2009, s 96; Associations Incorporation Regulation 2016 (NSW), r 18. In particular s 1322(2), provides that a "procedural irregularity" does not invalidate a "proceeding under the Act", which, in its application to incorporated associations, means a "proceeding under" the AIA.
The defence alleges that the constitution of the Former Association contained provisions similar to the 2014 Constitution, and in particular a provision for the committee to hold office for three years. The defence alleges that the practice of conducting elections every three years goes back to the time of the Former Association, the suggestion being, that the effect of the default provisions in the AIA were not appreciated when the Association was registered as a replacement following the Former Association's deregistration. The defence goes on to allege that some of the plaintiffs were themselves involved in the conduct of past elections, including as members of the supervisory group.
The defence pleads that s 28(4) and s 1322(2) overcome any defects in the election of the existing de facto committee of management. The defence also pleads laches or acquiescence as an answer to the plaintiffs' claims.
In opposition to the plaintiffs' application, an affidavit dated 9 July was read from Mr Mansuri. Mr Mansuri was born in Afghanistan and came to Australia in 2000. He worked as a volunteer on the building of the mosque.
Mr Mansuri was one of the committee members purportedly elected at the 2014 election general meeting, and again at the 2017 election general meeting. He stated that he was elected as secretary (in place of the previous secretary, who wished to retire from that role) at the annual general meeting, held in February 2019.
Mr Mansuri gave evidence about the way in which the Association operates. He stated that the Association has no paid employees, and all of its activities and administration, including by its committee members, are undertaken on a voluntary basis.
According to Mr Mansuri, the main languages spoken in Afghanistan are Farsi and Pashto. Farsi is spoken by about three-quarters of Afghans and Pashto by about one quarter, although many Pashto speakers also speak Farsi. According to Mr Mansuri, the same pattern exists in the Afghan community in Australia, with the addition that many of the younger members of the community also speak English. The activities and administration of the Association involve a mixture of Farsi, Pashto and English.
Mr Mansuri stated that he, and, he believed, his colleagues, had been unaware of the requirements of the 2018 Model Rules until recently. His evidence was that the procedure laid down in the 2014 Constitution had been followed, at least in general terms.
Mr Mansuri stated that prior to the election general meeting in 2017, he became aware that the Association had no register of members. Prior to that date, the assumption had been that anyone who was a member of the Afghan community would be entitled to vote. Presumably members of the community were well enough known to each other for there to be no dispute about this. Mr Mansuri stated that for the purposes of the 2017 meeting members were enrolled and this was used as the basis for the Association's register of members.
Mr Mansuri stated that a great deal of effort had been spent on preparing for the election scheduled for 12 July. The supervising body had been selected and briefed; and a Covid-19 plan had been prepared and special arrangements had been made to allow the meeting to take place in compliance with the current social distancing requirements.
Mr Mansuri stated that in his opinion the appointment of Mr Baxendale as receiver would be unsatisfactory. Obviously the cost would be unwelcome. Anyone in charge of the Association's affairs also needed to be able to speak Farsi (and ideally Pashto), and to have some standing in the Afghan community. Mr Mansuri added that in his opinion the community would not accept someone who is not a Muslim being in control of a mosque and in particular being in control of the burial of Muslims.
Counsel for the plaintiffs contended that the current de facto committee was not elected in accordance with the 2008 Model Rules. In any event, even if the 2017 election had been valid, the committee members' tenure would have ended at the next annual general meeting, in February 2019. The committee of the Association was therefore vacant and a receiver needed to be appointed to fill the vacuum and conduct an election.
Counsel submitted that the proposed election on 12 July was not a solution. In order to conduct the election action needed to be taken by the Association. Under the 2008 Model Rules such action had to be taken by the committee on the Association's behalf, but there was no validly elected committee. Any election conducted under the auspices of the de facto committee would be invalid for that reason alone. Furthermore, the evidence showed that the intended election would not be conducted in compliance with the 2018 Model Rules.
Counsel for the active defendants did not dispute that an election was necessary. Counsel also accepted that, at least once the 2014 Constitution was removed from the Register, the election would need to be conducted in compliance with the 2008 Model Rules. But counsel contended that the de facto committee were still in office, or at least Mr Mansuri was. There was therefore sufficient power in the de facto committee, or Mr Mansuri, to conduct the election. In any event, the 12 July election would meet the requirements of the 2018 Model Rules and the committee which would emerge from it would hold valid office.
In support of these contentions, counsel submitted that on its true construction, cl 14 of the 2008 Model Rules does not require direct election of the office bearers, and, even if it does, cl 15 does not require nominations to specify the office for which a candidate is nominating. Counsel also submitted that all of the defects in the 2017 election, and any defect in the proposed election on 12 July, would be overcome by s 28(4) and s 1322(2). Counsel also referred to s 1322(4), which is also referred to in the defence, but that provision requires a validating order to be made by the Court, and no formal application for such an order, which would, I think, require the filing of a cross-claim, has been made. Counsel did not develop the pleaded laches and acquiescence defences as answers to the plaintiffs' application.
Counsel also advanced discretionary reasons for refusing the plaintiffs' application. Counsel referred to the decision of Young CJ in Eq in Countouris v Kallos [2008] NSWSC 840, to the effect that, in the case of a company, a court is usually reluctant to interfere with the exercise of shareholders' rights in general meeting. Counsel submitted that members' democracy is at least as important for an incorporated association. He pointed out that in the present case the preparation for the 12 July meeting was well advanced and the application had only been made at a late stage. Counsel submitted that I should not impose the cost and cultural difficulties associated with a receivership on the Association and should instead let the meeting go ahead so that democracy could prevail.
I accept that in general the Court is reluctant to interfere with members' democracy. But in circumstances where the plaintiffs were alleging that the whole election would be invalid, I needed to balance the Court's reluctance to interfere against the risk that the plaintiffs' contention would ultimately be vindicated and the whole election process would have to be re-run later.
There is no doubt that under the 2008 Model Rules it is the existing committee which is collectively responsible for the conduct of the election of the new committee, although the secretary is responsible for receiving the candidates' nominations. Therefore even if Mr Mansuri validly held office as secretary, the election process would not be saved unless the rest of the committee were also validly in office.
The path to that conclusion is not an easy one. The Court would have to accept that the registration of the 2014 Constitution had some sort of indefeasible effect while it remained on the Register. The alternative, and arguably preferable, views are that the Register is purely evidentiary; or that, once an order is made rectifying the Register, that order operates ab initio: compare Akierman Holdings Pty Ltd v Akerman [2019] NSWSC 1486 at [244]-[245] and [327].
Alternatively, the Court would have to accept that s 28(4) or s 1322(2) kept the committee members purportedly elected in 2017 in office, even if their initial election was invalid, and despite the apparently automatic vacation of office at the following annual general meeting. In this regard, it should be noted that the Corporations Act equivalent of AIA s 28(4), s 201M, does not apparently apply where a director's office is vacated and the director is not thereafter purportedly reappointed: Morris v Kanssen [1946] AC 459 at 471 and also Grant v John Grant & Sons Pty Ltd (1980) 82 CLR 1 (Kitto J). Whether these and other contraventions of the 2008 Model Rules could be described as merely "procedural" defects in the holding of office by the de facto committee members is also debatable, to say the least.
I am not sure that it is possible simply to pass over these matters for the purposes of counsel's alternative argument that the election on 12 July would comply with the 2008 Model Rules. But in any event I consider that doubtful. By the time the application came on for hearing, the time for nominations specified in the announcement for nominations had already closed. The terms of the announcement and the nomination forms reflected the understanding that the 2014 Constitution would be applicable. In particular they did not permit a candidate to nominate for election as an office bearer. They also imposed a requirement, not found in the 2008 Model Rules, for each nomination to be supported by two existing members. Indeed it appears that persons who consider themselves to be members and wish to participate had not been recorded on the register at all.
I was not satisfied that these problems could be solved by allowing members of the community to join before or at the meeting, and by ensuring that there was a separate ballot for the election of office bearers at that meeting, as counsel for the active defendants suggested. The possibility that, had the 2008 Model Rules been complied with, there might have been other nominations or the vote might have turned out differently, could not be excluded.
I emphasise that for the purposes of determining the plaintiffs' application for the appointment of a receiver, I did not need to, and did not, decide the questions about what the terms of the 2008 Model Rules require and whether the de facto committee members remain in office. Those questions remain open for final determination in due course.
But on the evidence before me, I considered that there was (at the lowest) a real likelihood that the proposed election on 12 July would turn out to be invalid. I considered that the risk was sufficiently substantial to justify replacing that process with an election conducted by a receiver. In my view, frustrating as that may have been for members of the community, it was a price worth paying to ensure that, whatever the membership of the committee which ultimately emerges, there will be no doubt as to their ability to take the affairs of the Association forward.
Having reached these conclusions, I was keen to avoid the cost and possible cultural difficulties involved in appointing the plaintiffs' nominated receiver, Mr Baxendale. I suggested that there might be a member of the community with sufficient standing who would be acceptable to both sides for appointment as receiver to conduct the election. I adjourned the proceedings to the following day to see whether this was possible.
At the resumed hearing on 10 July, I was informed that the plaintiffs and the active defendants had agreed a group of four members of the community to act collectively as the Receivers for the purpose of conducting an election. Counsel for the active defendants presented some proposed orders providing for their appointment. The proposed orders also provided for the powers of the Association required to update the register of members and to conduct the election to be conferred on the receivers.
The orders also provided for an election timetable. The receivers were to send out a notification within seven days (that is, by 10 July 2020) of the orders the Court had made. The receivers would call for and accept nominations, and then conduct the election on Sunday 2 August 2020.
Counsel for the plaintiffs did not fully accept the proposed orders. There were four areas of dispute.
(1) Counsel pressed for declarations that the offices were vacant.
(2) Counsel also pressed for orders restraining the purported members of the committee and officers of the Association from conducting the election which had been proposed for 12 July.
(3) Counsel submitted that the receivers should have power not only to conduct the election but also power over all of the property of the Association. In particular, counsel stated that the Association operates a website, and raised the possibility that it could otherwise be used for partisan purposes in the course of the campaign.
(4) Counsel argued that the timetable in the proposed orders was too short. Instead, counsel suggested the receivers should consider for themselves how long it would be necessary to take the steps required to conduct the election and when it could best be conducted. The orders could then provide for the election to be held on a date fixed by the receivers, or, alternatively, the Court could fix the date.
As to counsel's first point, I was not prepared to make a declaration of vacancy at this point. As I have already stated, it was not necessary for me to come to any final conclusion on the invalidity questions posed and they remain open for further argument in due course.
Nor did I think it necessary to make an order restraining the individual defendants from conducting the election on 12 July. It was quite clear from the attitude of counsel for the active defendants that they accepted that as a result of the Court's decision to appoint receivers the proposed election on 12 July would not go ahead.
As to counsel's third point, if a professional receiver is appointed to a body corporate, the orders would usually provide for him or her to have control over all of the body's property. But I was concerned that the four receivers who had been agreed upon by the parties were not professionals and might well have taken on the position on the understanding that all they would be required to do was to conduct the election.
The parties are to be commended on their agreement to have the Receivers conduct the election, and the receivers are to be commended for accepting the task of doing so in the interests of the community. I did not think it appropriate to burden them further with tasks associated with the administration of the Association's property unless it was really necessary to do so.
For these reasons, I was prepared to allow the active defendants to remain in effective control of the Association's property until the election is held. But it is important that everybody understands that this is only a temporary expedient.
As I see things at the moment, the active defendants may well lack the legal power to act as the committee of management. All of the steps they have taken with respect to the management and administration of the Association's property, and any further steps which they take between now and the election, will be subject to scrutiny. Restraint will be necessary and the active defendants will need to be careful not to take any action which might be partisan or otherwise controversial. They should see themselves as occupying caretaker roles.
There will also be liberty to apply so that if any issue does arise (for example, with respect to the use of the Association's website in the election), it will be open to the plaintiffs to move at short notice for orders and to bring the matter back before the Court. If the de facto committee do behave in a partisan fashion, the Court will not require much persuasion to put the affairs of the Association in the hands of an independent receiver, despite the cost and despite the cultural and religious difficulties which that may cause.
As to the fourth point, I thought it desirable to have a timetable for the receivers so as to give them something to work towards. But should the receivers consider that they need more time to conduct the election or to conduct any preliminary steps, they will be able to use the liberty to apply to approach the Court for an extension. The first order of business for the receivers upon appointment will obviously be to decide whether the timetable which has been set is feasible.
Finally, I should record that, on the arguments presented before me, I thought that the better view of the interpretation of clauses 14 and 15 of the 2008 Model Rules is that they do indeed provide for the separate nomination and separate direct election of each of the office bearers of the Association. It will of course be open to members of the community to organise themselves into groups and form tickets, but the nomination must be for one office or another, and it must also be open to individuals, whether aligned with a ticket or not, to nominate for any of those specified positions. I have not decided this issue finally, and it is conceivable that I might ultimately change my mind. But in the meantime that is the basis on which the receivers should proceed.
The Notice is to be distributed to members by:
(a) ordinary post or email, to the address specified in respect of each member in the register of members maintained by the Association; and
(b) in a sponsored post on each of the Association's various social media outlets.
The Receivers are to do all things as are necessary in order to convene the meeting referred to in the Notice and cause it to be run in an orderly manner, subject to compliance with the COVID-19 plan that was approved in respect of the election that was scheduled for 12 July 2020, or an alternative COVID-19 plan that is approved by the appropriate authorities.
The Receivers are to report to the Court on the outcome of the meeting referred to in the Notice on or before 10 August 2020.
The Receivers' reasonable costs and expenses of giving effect to these orders are to be borne out of the assets of the Association.
The parties and the Receivers have liberty to apply on 24 hours' notice or such shorter notice as the Court allows.
The matter be adjourned until 4pm on 11 August 2020.