First Plaintiff Second Plaintiff Third Plaintiff v First Defendant

The Act provided for staggered elections of members of the committee - Whether staggered elections could be reintroduced under the Act where they had previously fallen into abeyance - Held the Act did not provide a mechanism to reintroduce staggered elections - Aboriginal Lands Act 1970 (Vic), s 15.

PRACTICE AND PROCEDURE - Consideration of power to make declarations - Supreme Court (General Civil Procedure) Rules 2005, r 23.05.

1 The Framlingham Aboriginal Trust, the first defendant, was established by the Aboriginal Lands Act 1970 (Vic) (the Act). Under the Act, two so called Trusts were established; one to own and operate the former Lake Tyres Reserve and the second to own and operate the Framlingham Reserve, in the Parish of Purnim, near Warrnambool. Each Trust is subject to Ministerial supervision by the Office of Aboriginal Affairs Victoria ("OAAV") and receives State government funding for its activities. Although called a Trust, the Framlingham Aboriginal Trust is a body corporate incorporated pursuant to the Act, the members of which hold shares in the Trust much like in a company. I shall hereafter refer to the Framlingham Aboriginal Trust as the Trust.

2 Before May 2002, Geoff Clark had been the registered holder of 2000 shares in the Trust. In June 2009, Geoff Clark was declared bankrupt. Jeremy Clark, the second plaintiff, deposes in his affidavit of 13 February 2014 that on or about 1 May 2002, Geoff Clark transferred 1900 of those shares to him by instrument of transfer which was approved and registered pursuant to a resolution of the committee of the Trust on or about the same date, leaving Geoff Clark with 100 shares.

3 Jeremy Clark deposes that on or about August 2011, he executed a similar instrument of transfer to his brother Aaron Clark, the first plaintiff, of 900 shares in the Trust which had been transferred by Geoff Clark to Jeremy Clark in May 2002, leaving Jeremy Clark with 1000 shares.

4 The alleged transfer of these shares is being investigated by the trustee in bankruptcy of Geoff Clark. The trustee now asserts that Geoff Clark was the holder of the 2000 shares when he became bankrupt and the shares vested in the trustee pursuant to s 58(1) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act). Jeremy Clark and Geoff Clark were examined in the Federal Circuit Court about these share transactions in or about August 2013. After the alleged share transactions, Geoff Clark was left as the holder of 100 shares. I shall have more to say about the position of the trustee in due course. Tim Chatfield, the third plaintiff, is and has, since before 3 October 2011, been the registered holder of 500 shares in the Trust.

5 Under the Act, the Trust is administered by a committee of management. At all relevant times since 3 October 2011, Geoffrey (Possum) Clark-Ugle, the second defendant, has acted as chairman of the committee of management of the Trust. Mr Clark-Ugle has adopted the name of Possum to distinguish himself from Geoff Clark. Mr Clark-Ugle deposes that prior to 3 October 2011, the Trust was in disarray.

6 On 3 October 2011, a general meeting of the Trust was called and the committee of management was removed and replaced. Aaron Clark had been a member of the former committee and was removed from the committee at that general meeting. Mr Clark-Ugle was elected to the committee and to be chairman of the committee. Jeremy Clark was a former administrator of the Trust.

7 Subsequent to 3 October 2011, disputes arose among the members of the Trust as to the ownership of shares in the Trust. The register recorded that Geoff Clark owned 100 shares, Jeremy Clark his son owned 1000 shares, and Aaron Clark, also Geoff Clark's son, owned 900 shares. It was alleged that the entries in the share register were incorrect, that Aaron Clark and Jeremy Clark were not entitled to ownership of the shares registered in each of their names, and that the shares were actually owned by Geoff Clark.

8 As indicated above, Geoff Clark had been declared bankrupt in about June 2009. The trustee in bankruptcy of Geoff Clark's estate had indicated to the Trust that he was investigating whether Geoff Clark had owned the 2000 shares when he went bankrupt and that if so they were vested in the trustee pursuant to s 58(1) of the Bankruptcy Act.

9 Litigation ensued between members of the Trust. The litigation was settled in March 2013. One of the issues was whether Jeremy and Aaron Clark were entitled to be registered as members of the Trust. Under terms of settlement entered into to resolve the litigation the Trust agreed that subject to any claim the trustee in bankruptcy of Geoff Clark may have in relation to the shares of Geoff, Jeremy or Aaron Clark, the respective shareholdings of each of Geoff, Jeremy and Aaron were Geoff 100 shares, Jeremy 1000 and Aaron 900.

10 The Trust had been operating since 1970 or 1971. The Act provided for a seven member committee. The Act provided for a rotational system of elections whereby members of the committee served a three year term with elections conducted so that after an annual general meeting (the base general meeting), two members retired at the next annual general meeting after the base general meeting, two retired at the second annual general meeting held after the base general meeting and three retired at the third annual general meeting after the base general meeting. There was special provision for the staggering of the initial seven members. The parties are agreed that the rotational system fell into abeyance such that when the new committee was elected in 2011, nobody had any idea who was replacing which member whose term was to expire at which annual general meeting. Accordingly, at any particular annual general meeting, there would be two or three vacancies to fill.

11 In December 2013, the Trust held an annual general meeting. Prior to the meeting, the committee of management under the chairmanship of Mr Clark-Ugle, after taking legal advice, informed Aaron Clark that the ownership of the shares registered in his name was in dispute by reason of Geoff Clark's bankruptcy and that accordingly Aaron would not be able to nominate a person (including himself) for membership of the committee, attend the annual general meeting, or vote at the meeting on the election of members of the committee.

12 Also prior to the meeting, the committee also resolved that only two vacancies on the committee were to be filled despite the advice of the OAAV that there should be four vacancies. The committee also resolved that Aaron Clark's nomination of himself for the committee was invalid despite the Act permitting a shareholder to nominate him or herself and despite the Act permitting a non-member of the Trust to be elected to the committee.

13 Pursuant to the decision of the committee, Aaron Clark was denied entry to the annual general meeting. As a consequence, he and his supporters (who included shareholders) departed and the meeting proceeded without the presence of Aaron Clark and other members who had wanted to attend.

14 The plaintiffs contend that this conduct of the committee entitles the plaintiffs to seek relief under s 27 of the Act, and otherwise declarations. It will be necessary to explain in detail the provisions of s 27 later in these reasons.

15 In substance, the issues raised for consideration by the Court by the plaintiffs are as follows:

(a) did the defendants improperly determine that only two vacancies on the committee of management were open to be filled at the December 2013 annual general meeting;

(b) did the defendants improperly determine that only members of the committee of management, shareholders of the Trust and persons appointed by the chairman of the committee could attend the annual general meeting;

(c) did the defendants improperly decide that nominations of the two persons to join the committee of management should be in writing and close by 4 December 2013 (which date was extended to 9 December 2013 on about 29 November 2013);

(d) did the second defendant improperly determine that Aaron Clark was not entitled to nominate himself to be a member of the committee, to vote or to attend the annual general meeting;

(e) whether the committee of management appointed at the annual general meeting was validly appointed;

(f) if the plaintiffs are successful on any of the above issues, are the Court's powers under s 27 of the Act enlivened and should those powers be exercised; and

(g) if the Court's powers should be exercised, what orders should be made.

(a) the defendants improperly determined that only two vacancies on the committee of management were open to be filled at the annual general meeting;

(b) the defendants did not improperly determine that only members of the committee of management, shareholders of the Trust and persons appointed by the chairman of the committee could attend the annual general meeting;

(c) the defendants did not improperly decide that nominations of the two persons to join the committee of management should be in writing and close by 4 December 2013 (which date was extended to 9 December 2013 on about 29 November 2013);

(d) the second defendant improperly determined that Aaron Clark was not entitled to nominate himself to be a member of the committee, to vote or to attend the annual general meeting;

(e) the committee of management appointed at the annual general meeting was not properly appointed; and

(f) the Court's powers under s 27 of the Act have been enlivened and the powers of the Court should be exercised.

17 I now turn to the relevant facts. Save where indicated, the relevant facts I now set out are not in dispute between the parties.

18 In September 2010, the OAAV began conducting a review of the financial affairs and governance of the Trust. The Trust was receiving government funding and the OAAV was concerned that the Trust was not complying with its financial and governance obligations, particularly in relation to the funding it was receiving.

19 The review by the OAAV was completed in March 2011. One of the findings of the review was that the Trust had no audited financial accounts, minutes of meetings, or any other evidence of regular committee meetings, including agenda items and resolutions.

20 At the time of the review by the OAAV, the members of the committee of management were:

21 The committee of management was responsible for exercising the powers and functions of the Trust. As mentioned above, the Act provided for the committee to serve rotational terms so that at each annual general meeting some members' terms would expire whilst the terms of the other members would continue for a further one or two years. For some time past, the committee had not been observing this requirement. Section 15 of the Act provided as follows:

15 Committee of management

(1) Seven persons shall be elected at the first general meeting of a Trust to form a committee of management of the Trust, and of these -

(a) two shall be elected to hold office until the second annual general meeting;

(b) two shall be elected to hold office until the third annual general meeting; and

(c) three shall be elected to hold office until the fourth annual general meeting.

(2) The members of a Trust shall from time to time in general meeting as may be required elect a person to fill any vacancy in the committee of management.

(3) Any person elected to fill a vacancy arising by expiration of the term of office for which a member was elected shall hold office until the third annual general meeting following his or her election, and any person elected to fill a vacancy otherwise arising shall hold office for the balance of the term of office of the member he or she replaces.

(4) It shall not be necessary for a member of a committee of management of a Trust to be a member of the Trust.

(5) No person shall be disqualified from being elected as a member of a committee of management of a Trust by reason of the fact that he or she is an officer or employee of the Trust or is interested in a contract made by the Trust, but a member of a committee of management shall not vote or take part in any discussion on any matter affecting any contract in which he or she may be interested (other than a contract of service).

(6) The office of a member of a committee of management of a Trust shall become vacant if the member -

(a) becomes of unsound mind or otherwise incapable of acting;

(b) becomes bankrupt;

(c) resigns from office in writing addressed to the Chairperson of the Trust; or

(d) is removed from office by a resolution of which special notice is given passed at a general meeting of the Trust.

(7) A member of a committee of management shall be A member of a committee of management shall be eligible for re-election.

(8) The members of a committee of management of a Trust shall be entitled to receive such fees and travelling expenses (if any) as are from time to time fixed by resolution of the Trust passed in general meeting.

(9) A committee of management shall at its first meeting -

(a) elect one of its members to be Chairman of the Trust, and determine the period for which he is to hold office;

(b) appoint a Secretary of the Trust; and

(c) appoint some place to be the office of the Trust -

and thereafter make such elections determinations and appointments as often as may be required.

(10) A committee of management shall meet at least six times in each year.

(11) Three members of a committee of management shall constitute a quorum at any meeting.

(12) During a vacancy in the office of any member of a committee of management, the continuing members may (if there is a quorum) act as if the vacancy had not occurred.

(13) Subject to this Act, a question arising at any meeting of a committee of management shall be decided by a majority of votes of those present at the meeting, but where there is no majority, the Chairperson of the Trust or, if he or she is not present, the person chosen to preside at the meeting in his or her absence, shall have a second or casting vote.

22 On or about 21 August 2011, the OAAV held a meeting with the members of the Trust, including all members of the then committee of management, to discuss its findings following a review of the financial affairs. At the meeting, the OAAV asked the then committee of management to step down because of the serious problems the OAAV identified during its investigations, including allegations of criminal conduct by some members of the previous committee of management. All but one member of the previous committee of management refused to step down.

23 On 12 September 2011, Mr Clark-Ugle and various other members of the Trust requested the secretary of the Trust, Trudy Clark, to call a general meeting of the Trust. Shortly afterwards, a special notice of resolution from the Trust was sent to shareholders regarding a general meeting of the Trust to be held on 3 October 2011.

24 On 3 October 2011, a general meeting of the Trust was held (as opposed to an annual general meeting) and it was unanimously resolved at that meeting that the positions on the then committee of management held by Trudy Clark, Lionel Harradine, Maisie Davis and Aaron Clark all be declared vacant. Violet Mary Clark and Violet Jennifer Clark had resigned prior to this meeting, which left Brenda Chatfield as the only remaining member of the committee of management.

25 The shareholders elected people to fill the six vacant positions. As a result of the election held on 3 October 2011, the members of the committee of management were:

(a) Jim Berg, chairman, to fill the vacancy of Lionel Harradine for the balance of his term as chairman;

(b) Kyeema Penrith, secretary, to fill the vacancy of Trudy Clark for the balance of her term as secretary;

(c) Tim Chatfield to fill the vacancy of Maisie Davis for the balance of her term;

(d) Violet Mary Clark to fill the vacancy of Aaron Clark for the balance of his term;

(e) Shirley McGuinness (also known as Shirley Clark) to fill the first current vacancy for the balance of that term;

(f) Mr Clark-Ugle to fill the second current vacancy for the balance of that term; and

26 The new committee of management held its first meeting on 4 October 2011. On or shortly after 4 October 2011, the committee of management issued a letter to all shareholders of the Trust regarding the changes to the committee of management of the Trust, as well as providing a list of the shareholders recorded in the official share register of the Trust and recognised by the OAAV.

27 On 25 October 2011, the OAAV also issued letters to shareholders of the Trust regarding the changes to the committee of management and the Trust.

28 On 31 October 2011, the committee of management held its next meeting and Ian Hamm from the OAAV attended this meeting. One of the items discussed was the official share register of the Trust. The committee of management, including Tim Chatfield, unanimously agreed that the share register dated 8 June 2010, recognised by the OAAV, was a true and accurate account of the share register of the Trust.

29 After the meetings in August 2011 and October 2011, a number of allegations started arising in relation to the ownership of shares in the Trust. The allegations called into question the accuracy of the share register relied on by the OAAV, that is, the share register as at 8 June 2010. This included the shares owned by Geoff Clark. Geoff Clark alleged that he had transferred 1900 of his 2000 shares to his son, Jeremy Clark, but the 8 June 2010 register did not acknowledge this transfer. Jeremy Clark was registered as a shareholder from, at the latest, 1 September 2011.

30 On 28 October 2011, Veronica Harradine commenced proceedings in the Supreme Court of Victoria (Harradine proceedings) against the members of the new committee of management regarding her alleged ownership of shares in the Trust. As part of the Harradine proceedings, the committee of management began investigating the various allegations regarding ownership and transfer of shares.

31 On 12 February 2012, the new committee of management commenced proceedings against Kirrae Whurrong Community Inc (the Kirrae proceedings) to recover money that had been incorrectly or inappropriately transferred to that organisation by the Trust, while it was managed by the previous committee of management.

32 In the Harradine proceedings, the plaintiffs were Veronica Harradine and Trudy Clark. The defendants were Jim Berg, Fay Clark, Shirley McGuinness, Brenda Chatfield, Violet Clark and the Trust. The statement of claim of 16 December 2011 included an allegation that the defendants had asserted and claimed that the entries of Aaron Clark and Jeremy Clark in the register of members were invalid and incorrect. The defence and counterclaim contended that Geoff Clark became bankrupt on 1 June 2009 and that by reason of s 58(1)(a) of the Bankruptcy Act the shares held by Geoff Clark were vested in the trustee of his bankrupt estate. The defence and counterclaim alleged that Jeremy Clark acquired his shares from Geoff Clark during Geoff Clark's bankruptcy. The defendants relied upon the register as at 8 June 2010, which did not list Jeremy Clark as a shareholder. The defendants alleged that Jeremy Clark was listed as a shareholder as at 1 September 2011. Accordingly, the defendants alleged that Geoff Clark had no power to transfer the shares to Jeremy Clark and the purported transfer of shares by Jeremy to Aaron Clark was void and of no effect.

33 On 23 April 2013, the Trust, Mr Clark-Ugle and each of Aaron Clark, Jeremy Clark and Tim Chatfield, amongst others, executed a deed of settlement in the Kirrae and Harradine proceedings. The evidence does not disclose how Aaron Clark and Jeremy Clark came to execute the deed of settlement even though they were not parties to either proceeding or the connection between Geoff, Jeremy and Aaron Clark and the Harradine/Kirrae proceedings.

34 The issue concerning Geoff Clark's shareholding was resolved as between the signatories to the deed by clause 6 of the said deed which provided, so far as is relevant:

The parties to this deed acknowledge and agree that, in relation to the members of the Trust;

(c) subject to any claim that the trustee in bankruptcy of Geoffrey Wayne Clark may have in relation to the shares of Geoff, Jeremy or Aaron Clark, the respective shareholdings of each of Geoff, Jeremy and Aaron Clark are as follows: Geoff (100 shares); Jeremy (1,000 shares) and Aaron (900 shares).

35 At the time the deed was signed, Geoff Clark was a bankrupt. He remains a bankrupt. Daniel Juratowitch, the trustee of Geoff Clark's bankrupt estate, contacted the Trust as part of his investigations regarding the shares held by Geoff Clark. Mr Clark-Ugle deposes that as no record could be located of any transfer of shares before October 2011, Mr Juratowitch was disputing the alleged transfer of shares by Geoff Clark to Jeremy Clark. Mr Clark-Ugle does not depose as to the basis for his assertion about Mr Juratowitch's reasons for disputing the transfer to Jeremy Clark.

36 The Trust contacted Mr Juratowitch at the time the terms of the deed were being negotiated because of the dispute and Mr Juratowitch agreed to the term quoted above being included in the deed.

37 It was a further term of the settlement deed that a general meeting of the Trust was to be called within 28 days of the signing of the deed to consider the following resolutions:

(a) that the appointment of the present committee of management of the Trust made on 3 October 2011 be ratified; and

(b) that all decisions, resolutions and actions of the current committee since its appointment on 3 October 2011 be ratified.

38 On 1 May 2013, a notice of meeting was sent by registered post to all shareholders of the Trust, advising of the general meeting scheduled for 17 May 2013.

39 On 17 May 2013, the general meeting was held and the resolutions set out above were unanimously carried. Tim Chatfield attended this meeting, but Aaron Clark and Jeremy Clark did not. Tim Chatfield voted in favour of the resolutions.

40 Since October 2011, the new committee of management has been attempting to sort out and fix the financial and governance issues caused by the previous committee of management. The OAAV continues to monitor the Trust, including by providing assistance and advice on governance issues to make sure that the Trust is complying with its financial and governance obligations.

41 In 2012, the Trust did not hold an annual general meeting as was required under the Act.

42 On 20 May 2013, Tim Chatfield resigned from the committee of management citing time pressures as his reason for resigning.

43 On 25 July 2013, Jim Berg resigned from the committee of management during a meeting of the committee of management. The committee of management did not accept Mr Berg's resignation straight away and Kyeema Penrith tried to talk him out of his resignation, but he would not change his mind.

44 On 13 August 2013, the committee of management met and accepted the resignation of Jim Berg. A motion was unanimously carried that Mr Clark-Ugle be appointed the chairperson of the committee of management until the next annual general meeting.

45 On 22 November 2013, the committee of management met and discussed the length of members' terms on the committee of management. Various motions were carried in relation to determining each member's term. The committee of management also passed a motion to set the date of the annual general meeting required under the Act to be held before the end of the year.

46 The minutes of the meeting record a resolution about the committee members' terms of office in these terms:

3. Length of Committee Member Terms

As the current committee members were all installed at the same time there needs to be member term lengths agreed upon. The Act specifies that two members shall be elected to hold office until the second annual general meeting; two members shall be elected to hold office until the third annual general meeting, and; three members shall be elected to hold office until the fourth annual general meeting.

MOTION: that Geoffrey (Possum) Clark-Ugle, Brenda Chatfield and Kyeema Penrith be appointed until the fourth annual general meeting since and including the meeting at which they were elected.

that Shirley McGuiness and Violet Clark be appointed until the third annual general meeting and including the meeting at which they were elected.

47 On 26 November 2013, the committee of management met and carried resolutions that the share register of the Trust as at 26 November 2013 be accepted as the current, true and active record of the shareholdings in the Trust. The committee also resolved to find an independent person to run the election to be held at the annual general meeting.

48 On 26 November 2013, Mr Clark-Ugle , as chairman of the committee, sent a letter to members of the Trust enclosing a notice of an annual general meeting of the Trust to be held on 11 December 2013 and the following documents:

(a) an agenda for the annual general meeting of the Trust to be held on 11 December 2013;

(b) two nomination forms for election of members of the Trust committee of management; and

(c) a document headed "Framlingham Aboriginal Trust Register of Shareholders."

49 The enclosed register of shareholders recorded that Jeremy Clark was the registered holder of 1000 shares and Aaron Clark was the registered holder of 900 shares. Each entry also had noted "Shares in dispute, Cannot be exercised due to claims of ownership by Trustee in Bankruptcy." There was no evidence put before the Court as to who made this annotation and by what authority it was made.

50 The agenda recited under the heading "Election of Committee Members":

• three members appointed until the fourth annual general meeting including the one at which they were elected (these positions are currently filled);
• two members appointed until the third annual general meeting including the one at which they were elected (these positions are currently filled);
• two members appointed until the second annual general meeting including the one at which they were elected (these positions are currently vacant).

The election is for two positions until the next annual general meeting. Nominations were called on Wednesday November 26 and closed on Wednesday December 4. Information provided by nominees was distributed to shareholders prior to the annual general meeting.

An independent person will run the election.

51 On or about 26 November 2013, the Trust received an email from Jim Berg raising, amongst other things, concerns about the timing of the annual general meeting. Mr Clark-Ugle asked Bruce Campbell, the acting chief executive officer of the Trust, to contact the OAAV to discuss the election procedure with them and, following those discussions, Mr Clark-Ugle decided that the Trust needed to change the date of the annual general meeting and re-issue notices to all shareholders.

52 On 28 November 2013, the Trust sent a notice of general meeting (re-issued) to all shareholders, advising that the meeting date had been changed to 16 December 2013.

53 The letter to shareholders noted that the meeting could only be attended by committee members, shareholders and people appointed by the chairman to assist with the running of the meeting.

54 The agenda gave notice to the members of the Trust of the proposal by the committee to restore staggered terms for members of the committee. The agenda attached to the reissued notice of meeting recited amongst other things:

4. Election of Committee Members

The Committee was reformed at the previous general meeting. In the spirit of the Aboriginal Lands Act a proper cycle of staggered member vacancies and elections now needs to be re-established to support the Trust's good governance. The current Committee has determined that three current members are appointed for three 'periods' and will have two 'periods' remaining after this annual general meeting(a 'period' being the time from one annual general meeting to the next annual general meeting); and two current members are appointed for two 'periods' and will have one 'period' remaining after this annual general meeting.

Consequently the election at this meeting is for two members for three 'periods'. Nominations were called and then closed on Monday December 9. Information provided by nominees was distributed to shareholders prior to the annual general meeting.

An independent person will run the election.

55 On 29 November 2013, the Trust received a letter from Angela Singh, the executive director of the OAAV, regarding the annual general meeting. The letter said:

I refer to recent discussions between my office and your Acting CEO regarding the forthcoming annual general meeting for the Framlingham Aboriginal Trust (Trust), and the term of office of persons elected to fill vacancies that have arisen on the Committee of Management (CoM) for the Trust.

As you are aware, the Minister for Aboriginal Affairs is responsible for the administration of the Aboriginal Lands Act 1970 (AL Act) and is assisted by the Office of Aboriginal Affairs Victoria (OAAV) in this role. You have sought advice from OAAV on the terms of office of a person appointed to fill a vacancy on the CoM, as prescribed by the AL Act.

Subsection 15(3) is relevant to determining the period of appointment for members elected to fill a vacancy on the CoM. The person elected to fill the vacancy arising by the expiry of the term of office of a member of the CoM will hold office until the Third annual general meeting following the election of that person. If a vacancy arises for a reason other than expiry of a term of office, (if, for example, the person resigns, see section 15(6)), then the person elected to fill the vacancy will only hold office for the balance of the term of office of the vacating member.

I understand that members of the Trust will be requested to elect persons to fill vacancies on the CoM at the forthcoming AGM. Section 22(2) requires that the Secretary call the AGM. The Secretary is responsible for ensuring that the contents of the notice of AGM comply with legislative requirements and are correct and not misleading. The notice should include accurate information about the circumstances in which a vacancy has arisen (i.e. whether on expiry of a term or for other reasons) because this will determine the term of office for the person elected to fill that vacancy. Persons elected to replace members whose term of office has expired, will hold office until the third AGM following their election.

You may be assisted in carrying out your duties by obtaining legal advice regarding the information contained in the notice for the forthcoming 2013 AGM (including appointments to fill vacancies on the CoM and the terms of office for persons so appointed) to ensure that the AGM can proceed without challenge. On 6 September 2013 OAAV was advised by Framlingham Aboriginal Trust of the names of the members of the Committee of Management as required by sub-sections 23T(1) and 24AA(1)(b). That advice failed to identify the expiry of each member's term. Could you please provide that information at your earliest convenience.

56 Mr Clark-Ugle discussed the letter of 29 November 2013 with Bruce Campbell and asked him to respond to the letter.

57 On 30 November 2013, Bruce Campbell, by email, informed the OAAV that no records had been located describing the length of terms of committee members prior to 3 October 2011. Mr Campbell said:

This being the case the Committee resolved at its meeting dated 22 November 2013 to fix terms of office for current members in order to re-establish a staggered election of Committee members in the spirit of the Act. The following two motions were put and carried unanimously at this meeting:

"That Geoffrey (Possum) Clark-Ugle, Brenda Chatfield and Kyeema Penrith be appointed until the fourth annual general meeting since and including the meeting at which they were elected."

"That Shirley McGuiness and Violet Clark be appointed until the third annual general meeting since the meeting at which they were elected."

Consequent to these decisions, the annual general meeting of the Trust to be held on December 16, 2013 will elect members to fill two vacancies until the fourth annual general meeting since and including this meeting.

After this annual general meeting the Committee will comprise the following members with, in brackets, the anticipated years their positions will become vacant and open to election for three 'year' (annual general meeting to annual general meeting) terms:

Violet Clark (2014)

Shirley McGuiness (2014)

Geoffrey (Possum) Clark-Ugle (2015)

Brenda Chatfield (2015)

Kyeema Penrith (2015)

New member (2016)

New member (2016).

58 As will be seen below, the OAAV did not agree that these terms of office would meet the staggered term requirements of the Act.

59 On 1 December 2013, the Trust received a letter from Jim Berg and Tim Chatfield proposing a motion to be put to the annual general meeting for discussion that, amongst other matters, challenged the staggered terms proposed by the committee. The motion was in these terms:

The current Committee of Management of Framlingham Aboriginal Trust has demonstrated their failure to show good governance by not acting in the best interest of all shareholders and by not complying with the Act in regards to the AGM.

The Committee of Management:

1 has not provided all reports to shareholders with the papers for the AGM as required by the Act, and

2 has not set the length of terms of committee members at the time of their election as required per the Act, resulting in the agenda item for the AGM stating that there are only two (2) current vacancies for the committee, when there should be seven (7).

We wish to move a motion of no confidence in the Current Committee of Management.

60 On 2 December 2013, Mr Clark-Ugle asked Bruce Campbell to contact the OAAV to get advice in relation to the issues that had been raised by Jim Berg and Tim Chatfield regarding the validity of the calling of the annual general meeting.

61 By email dated 2 December 2013, Bruce Campbell wrote to Simon Holmes of the OAAV seeking advice as to whether the Trust had complied with the Act regarding documentation to be sent to Trust shareholders 14 days prior to the annual general meeting. The email does not refer to the motion proposed by Jim Berg and Tim Chatfield concerning the staggered terms.

62 Simon Holmes of the OAAV responded to Mr Campbell's email on 3 December 2013 referring to emails of 30 November 2013 and 2 December 2013.

The current committee members were appointed on 3 October 2011, two years ago. Some of these members were appointed for a full term of three years in order to fill vacancies arising on the expiry of the terms of the previous committee members whilst others were appointed for the balance of the terms resigning committee members. Given this is the first general meeting since those appointments, the staggered terms of the committee members would mean that there are four old committee of management vacancies to be filled at the annual general meeting, comprised of two committee members whose terms expired at the end of the 2012 financial year and a further two vacancies occurring at the end of the 2013 financial year. Elections at the forthcoming annual general meeting to fill these four vacancies would require appointing two members for a two year term and appointing another two members for a three year term. The remaining three positions would become vacant at the 2014 annual general meeting.

We understand that there remains some uncertainty due to bankruptcy proceedings, as to the status of 1900 shares purportedly transferred by Geoff Clark to Jeremy Clark and the subsequent purported transfer of 900 shares from Jeremy Clark to Aaron Clark. Our understanding is that the status of these shares may remain uncertain for another 6-12 months and could then be subject to court challenge once a decision is taken by the bankruptcy trustee. We understand that the bankruptcy trustee has or will advise FAT that until this matter has been resolved the Chair should exercise discretion as to the voting rights of Jeremy and Aaron Clark.

64 Mr Holmes went on to recommend that independent legal advice be sought on these matters. It can be seen, therefore, that the OAAV did not agree with the staggered terms proposed by the committee of management. In particular, the OAAV considered that at the proposed general meeting there were four vacancies to fill and that the terms of the remaining three members would expire in 2014.

65 On 3 December 2013, Kyeema Penrith, Bruce Campbell and Mr Clark-Ugle took legal advice from Ms Fran O'Brien QC, pro-bono counsel for the Trust, regarding the issues raised by Jim Berg and Tim Chatfield, and to ensure that the Trust had complied with its obligations in relation to the calling of the annual general meeting.

66 Mr Clark-Ugle says that the advice given to them by Ms O'Brien QC (which was not in writing) was that the Trust had complied with its obligations in relation to calling the annual general meeting and that the proposed election and re-introduction of the staggered terms was consistent with the intention of the Act. The precise terms of Ms O'Brien's advice were not tendered in evidence.

67 On 3 December 2013, Mr Clark-Ugle directed Kyeema Penrith to send a response to Jim Berg regarding the emails and letters from him. In relation to the staggered terms proposal the response said:

Jim you were not present at the first meeting of the Trust where positions were allocated by special resolution. We refer you to the special resolution attached below.

It is unknown what the balance of the terms of offices held in 2011 even if it could be said that any of the then office holders had held office in accordance with the [Act]. As you know there are no recent records despite independent and thorough searching of the records of the Trust upon the Committee taking up its role in October 2011.

The Committee upon advice have correctly approached this matter of the election on the basis that is proposed and for the reasons stated.

Second in accordance with the Act other positions have been allocated.

Accordingly the committee makes a second request that you withdraw your resolution as it is clearly misleading on this point.

68 During the period 3 December 2013 to 9 December 2013, the Trust received nomination forms completed by the following people:

(h) Shirley McGuinness, nominating Joanne McGuinness.

69 By a letter dated 9 December 2013, Mr Clark-Ugle was informed by Mr Juratowitch, the trustee of the bankrupt estate of Geoff Clark, that he did not intend to exercise the voting rights attached to the 100 shares previously held by Geoff Clark, and that he was still investigating the purported transfer by Geoff Clark to Jeremy Clark. The letter said as follows:

I refer to the Notice of annual general meeting dated 29 November 2013 in relation to the Framlingham Aboriginal Trust ("the Trust") and advise that I will not be attending the meeting to be held on 16 December 2013.

I note that the Trust share register which was provided with the meeting documentation shows the following:

1. The bankrupt is the holder of 100 shares in the Trust; and

2. The shareholding of Jeremy W Clark (1,000 shares) and Aaron M Clark (900 shares) are in dispute.

In respect of the 100 shares which are undisputedly held by the bankrupt, as Trustee of the bankrupt estate, I do not propose to exercise any votes in respect of these shares.

In respect of the balance of the 1,900 shares in dispute, I advise that my investigations are still continuing in respect of the purported transfer of shares by the bankrupt to Jeremy Clark (some of which were ultimately transferred to Aaron Clark).

If you have any queries, please contact Johan Ying of this office on (03) 8320 5628 or alternatively at jying@corcordis.com.au.

70 Subsequently, on 11 December 2013, Mr Clark-Ugle sent letters to Jeremy Clark and Aaron Clark regarding the dispute in relation to their shares and advising that, because of the dispute, no voting rights could be exercised in relation to those shares. The letter to Jeremy Clark stated as follows:

The Trustee in bankruptcy has advised us in writing that the shares in the Trust in your name are a matter of dispute with the trustee. As such the Trust is unable to recognise any entitlement on your part to nominate, vote or attend meetings of the Trust.

71 This letter does not accurately reflect what the trustee had written in his letter. The trustee made no mention that the shares in the name of Jeremy Clark were a matter of dispute with the trustee. No other evidence was tendered to support the existence of a dispute as opposed to the making of an investigation that might lead to a dispute.

72 On or about 11 December 2013, Mr Clark-Ugle went through the nomination forms received and reviewed each one to determine if they were valid or not. Mr Clark-Ugle then compiled the list of the nominations as follows:

INVALID due to being a current Committee member whose position is not becoming vacant at this election."

73 On 11 December 2013, a copy of the list of nominations was either sent by post or hand delivered to each shareholder entitled to vote at the annual general meeting.

74 On 11 December 2013, Mr Clark-Ugle as chairman of the committee wrote to Aaron Clark informing him that the trustee in bankruptcy had advised that the shares in the Trust in his name were a matter of dispute with the trustee and "as such the Trust is unable to recognise any entitlement on your part to nominate, vote or attend meetings of the Trust." As indicated above, this statement was not consistent with the letter sent by the trustee to the Trust.

75 On 12 December 2013, Bruce Campbell and Mr Clark-Ugle met with Russell Worland, the independent scrutineer, at the Lady Bay Resort to discuss what his requirements were, and anything he needed, to be able to conduct the election to be held at the annual general meeting.

76 On 13 December 2013, the Trust received a letter from Shayne Daley & Associates, the solicitors acting for Jeremy Clark and Aaron Clark. The letter protested the assertion by Mr Clark-Ugle in his letter of 11 December 2013 that Aaron and Jeremy Clark were not entitled to nominate, vote or attend meetings of the Trust. The letter went on to note that the writer had spoken with Nathan Bunt, the solicitor acting for the trustee in the bankruptcy of Geoff Clark and that Nathan Bunt had indicated that the trustee in bankruptcy had not yet formed the view as to whether he would further challenge the ownership of the shares transferred to Aaron and Jeremy Clark. Nathan Bunt agreed with Mr Daley that in order to challenge the ownership of those shares, the trustee would have to apply to a court for orders declaring the share transfers void or otherwise invalid.

77 On 16 December 2013, Kyeema Penrith and Mr Clark-Ugle arrived at the Lady Bay Resort, Warrnambool, at approximately 9.00am to start preparing for the annual general meeting that was to commence at 10.00am.

78 As they approached the hotel, there was a group of people standing near the main entrance. The people were Jim Berg, Geoff Clark, Aaron Clark, Shayne Daley (of Shayne Daley & Associates), Brenda Clarke (Chatfield), Tim Chatfield, Louise Wackett-Chatfield, Ronald Chatfield, Maisie Davis and Brian Davis. Mr Clark-Ugle gave instructions to a security guard and a list as to who was to be permitted to enter the meeting. The guard was instructed that if the person's name was not on the list, then they were not allowed into the meeting. The list contained the names of shareholders, Bruce Campbell the acting CEO, Russell Worland the returning officer, Felicity Melican the auditor and Fran O'Brien QC the legal adviser. Aaron and Jeremy Clark were not included on the list.

79 Aaron Clark deposes that when he arrived outside the Lady Bay Resort, a large group of Trust shareholders had gathered outside the hotel prior to the appointed meeting time. He deposes that this group comprised those who were opposed to the re-election of the incumbent committee. He deposes that he had known many of these people all of his life and it was clear to him that all of them were proposing to vote for candidates other than the incumbent committee members. Aaron Clark deposes that this group included Jim Berg, who he understood, had resigned from the committee because of concerns he held about the way the committee had been conducting Trust affairs and managing its finances and assets.

15. Inside the meeting room at the Lady Bay Resort were the remaining Trust shareholders and almost all of the then current Committee of the Trust. There was a security guard at the door of the meeting room. At this time some of those who were part of the group outside tried to enter the meeting room to discuss what was happening. Some of the Trust shareholders already inside the meeting room refused entry to some of these people.

16. Those outside the meeting then tallied the number of voting shares which they held between them. The view among those people was that they would only have a majority of votes at the meeting if I were allowed to vote my 900 shares. It was also clear to those outside that the Chairman and other incumbent Trust Committee members intended to exclude me from the meeting and from voting my shares.

17. Accordingly I approached the door of the meeting at about 10.00 am with my solicitor Shayne Daley. Also near the door at that time were Geoffrey (Possum) Clark-Ugle, Kyeema Penrith, the Trust secretary, and the security guard.

18. I attempted to enter the meeting. Kyeema Penrith then said to me that I was not allowed to enter the room as my name was not on the list of those entitled to attend.

19. I then asked to see the list. Kyeema then said to me that I was not a shareholder and the Trust had a letter from the Trustee in Bankruptcy stating that my shares were in dispute.

20. I then asked who was disputing my shares as I had already received notification of the meeting on the basis I was a shareholder.

21. I then introduced Shayne Daley to Kyeema. He then also asked Kyeema if I was being refused entry to the meeting. Kyeema said I was being excluded and the bankruptcy letter said so. Shayne Daley continued discussing the position of the trustee in bankruptcy but at this point Geoffrey (Possum) Clark-Ugle stepped in and said 'Well, I am the Chairman and I say he can't come in'. I took this last statement as a definitive refusal of my entry to the meeting.

22. Thereafter I returned to the group waiting outside. When I told them that I had been excluded from the meeting they agreed that there was no point in their trying to participate in the meeting without me and they all left.

23. I was upset by being excluded from the meeting. Never before in all my years of attending Trust meetings have I or any other member of the Framlingham community been excluded from a general meeting of the Trust. I am also aggrieved by the unwarranted action of the Committee in treating my shares in the Trust as being 'in dispute' so that I was unable to test in an election of Committee members the level of support which I enjoy among Trust shareholders. Quite independently of my shareholding, I consider that the refusal of my nomination was contrary to s 15(4) of the Aboriginal Lands Act 1970 (Cth) as explained in paragraph 29 of Jeremy Clark's affidavit.

81 According to Mr Clark-Ugle, at about 9.55am, he was inside the meeting room, waiting to start the annual general meeting, when he heard someone at the door getting angry and speaking loudly. He recognised the voice to be that of Aaron Clark.

82 As Mr Clark-Ugle approached Kyeema Penrith and the security guard he saw Geoff Clark and Aaron Clark. In substance, there were words exchanged between Mr Clark-Ugle and Geoff and Aaron Clark, and Aaron Clark was informed that he and Jeremy Clark were not entitled to enter the meeting because the shares that Aaron and Jeremy were registered as owning were being disputed by the trustee in bankruptcy.

83 The verbal altercation between Aaron Clark and Kyeema Penrith continued, and Mr Clark-Ugle informed Aaron Clark that he was the chairperson and that Aaron was not entitled to enter the annual general meeting. Eventually, Shayne Daley interrupted and said words to the following effect: "Stop Aaron, let's leave. That's all we needed to hear." Aaron continued to mouth off as he walked away from Kyeema Penrith and Mr Clark-Ugle. Kyeema Penrith then left to go into the meeting room.

84 Subsequently, at about 10.00am, Mr Clark-Ugle informed the meeting that he would like to start the meeting, and he asked Bruce Campbell to go outside and give a second call for members outside and advise them that the annual general meeting was just about to start.

85 Mr Campbell left the meeting room and went outside where he informed the members outside that "We will hold off from starting the annual general meeting until 10.30 so this gives the shareholders outside time to make their way into the room."

86 At 10.25am, Mr Clark-Ugle asked Bruce Campbell to go outside for a second time to give a final call for shareholders to come into the meeting. None of the shareholders from the group outside went into the meeting room.

87 Mr Clark-Ugle checked the attendance list that had been signed by everyone that had entered the meeting room and determined that they had a quorum for the annual general meeting.

88 The shareholders who made up the quorum were Violet Clark, Shirley McGuinness, Alice Ugle, Fay Clark and Mr Clark-Ugle. Brenda Chatfield, a resident of the reserve and a shareholder, was part of the group that chose not to go into the meeting. At 10.30am, Mr Clark-Ugle declared the annual general meeting open. He confirmed to the meeting that there was a quorum of shareholders present entitled to vote. The annual general meeting was then conducted in accordance with the agenda that had been sent to shareholders. The voting for the committee was carried out.

89 After the votes were counted, Russell Worland told the annual general meeting that the successful candidates in the election were Ronald Chatfield and Joanne McGuinness. As there was no other business, Mr Clark-Ugle declared the annual general meeting closed at 11.10am.

90 On 17 December 2013, Mr Clark-Ugle received letters from Ronald Chatfield (despite him having been just elected) and Brenda Chatfield resigning from their positions on the committee of management.

91 I have set out above the terms of the letter of the trustee to Mr Clark-Ugle of 9 December 2013. I have also set out the evidence of Shayne Daley concerning his conversation with Nathan Bunt, the solicitor for the trustee.

92 At the first directions hearing in this matter held on 23 February 2014, Mr Lhuede appeared as solicitor for the trustee in bankruptcy Mr Juratowitch. Mr Lhuede sought to clarify the trustee's position. Mr Lhuede submitted to the Court that Geoff Clark became bankrupt on 1 June 2009, and that he did not disclose any interest in any shareholding in the Trust at that time. He submitted that subsequent investigations revealed that the share register at 8 June 2010, that is after the date of the bankruptcy, disclosed Mr Clark as having 2000 shares registered in his name. Mr Lhuede submitted that a bit over one year later, the register showed that Geoff Clark owned 100 shares. Mr Lhuede submitted that the transfer after 1 June 2009 is void, not voidable, and it was the contention of the trustee that the 1900 shares in issue in this proceeding are in fact the property of the bankrupt estate. He submitted that the transfer was void as against the trustee.

93 Counsel for the plaintiffs thereupon informed the Court that this was the first time that the trustee had indicated an intention to bring proceedings, and that Geoff Clark was examined in June 2013 and the trustee to date had not brought proceedings.

94 By letter dated 19 May 2014, DLA Piper, the solicitors for the trustee, informed the solicitors for the defendants that they acted for the trustee and that their client claimed the 2000 shares previously held by Geoff Clark. DLA Piper also said that their client intended to issue an application in the Federal Court of Australia seeking declarations under the Bankruptcy Act that, inter alia, the 1900 shares transferred to Jeremy Clark have vested in the trustee pursuant to s 58(1) of the Bankruptcy Act. The solicitors stated that the Trust was thereby put on notice that ownership of those shares was claimed by their client and that their client requested that the Trust not permit any person to exercise any rights conferred by the 1900 shares contrary to their client's instructions until such time as the foreshadowed application had been heard and determined by the Federal Court.

95 The Court was informed at the hearing of this application that as at the date of the hearing before me (23 June 2014), the trustee had still not brought any proceedings to recover the shares transferred to Jeremy Clark despite his stated intention to do so.

96 The plaintiffs seek declarations and/or relief under s 27 of the Act. Section 27 provides:

Court may grant relief to persons aggrieved in certain circumstances

(1) A member of a Trust who complains that the affairs of the Trust are being conducted in a manner oppressive to one or more of the members (including himself or herself) may apply to the Supreme Court for an order under this section and, if the Court is of opinion that the affairs of the Trust are being so conducted and that it would be just and equitable to make an order under this section, the Court may make such order as the Court thinks fit whether for regulating the affairs of the Trust in future or for the purchase of the shares of any members by other members or by the Trust, or otherwise.

(2) Any person (whether a member of a Trust or not) who is aggrieved by anything which the Trust has done or failed to do in contravention of this Act may apply to the Supreme Court for an order under this section and, if the Court is of the opinion that the Trust has contravened this Act and that the person aggrieved has suffered injustice on that account, the Court may make such order as appears to the Court to be necessary to give proper relief to the person aggrieved.

97 The plaintiffs make several allegations of oppressive conduct or conduct in contravention of the Act regarding the conduct of the affairs of the Trust that allegedly enlivens the Court's jurisdiction under s 27 of the Act as follows:

(1) That the committee of management without any warrant in the Act or otherwise determined that three incumbent members of the committee should continue to hold office for a further two years from the 2013 annual general meeting without facing re-election;

(2) That the committee of management without any warrant in the Act or otherwise determined that two incumbent members of the committee should continue to hold office for a further term from the 2013 annual general meeting without facing re-election;

(3) That the committee of management without any warrant in the Act or otherwise determined that nominations for election for two positions on the committee should be in writing and should close at midnight on 4 December 2013 or alternatively 9 December 2013;

(4) That the committee of management, or alternatively the second defendant, without any warrant in the Act of otherwise determined that only shareholders and persons appointed by the chairman could attend the annual general meeting to be held on 16 December 2013; and

(5) That in contravention of s 15(4) of the Act and in breach of cl 6(c) of the deed of settlement, the second defendant, purporting to act as chairman of the Trust, or, alternatively, the committee of the Trust, determined that the first plaintiff be disqualified from nominating, voting or attending the annual general meeting to be held on 16 December 2013.

98 The plaintiffs' prayer for relief in their statement of claim sought declarations as well as relief under s 27:

1 A declaration that the purported annual general meeting of the Trust held on 16 December 2013 was contrary to the Act and was conducted in a manner oppressive to one or more of the members of the Trust (including the plaintiffs) and accordingly was null and void and of no effect.

2 A declaration that the election of all members at the purported annual general meeting of the Trust held on 16 December 2013 was null and void and of no effect and should be set aside.

3 A declaration that all incumbent members of the Committee other than those claimed to have been elected at the purported annual general meeting of 16 December no longer validly hold office and that their asserted tenure of office be set aside.

4 A declaration that, subject to any claim that the Trustee of the bankrupt estate of Geoffrey Wayne Clark may have in relation to the respective shareholdings of the first and second plaintiffs, each of the first and second plaintiffs is the legal and beneficial owner of 900 shares and 1,000 shares respectively in the Trust and is entitled to exercise all voting and other rights attaching to such shares.

5 Such orders, pursuant to s 27 of the Act as this Honourable Court thinks fit for the holding of a further annual general meeting of the Trust in place of the purported annual general meeting held on 16 December 2013 and for the conduct of elections for all seven offices of a member of the committee of management of the Trust including directions as to the calling of nominations for such election, the manner of voting and the conduct of the poll (if any).

99 At trial, the plaintiffs submitted an amended form of orders sought as follows:

IT BE DECLARED that:

1. The purported annual general meeting of the Framlingham Aboriginal Trust ("the Trust") held on 16 December 2013 ("the 2013 Meeting") was contrary to the Aboriginal Lands Act 1970 (Vic) ("the Act") and was conducted in a manner oppressive to one or more of the members of the Trust (including the plaintiffs) and accordingly was null and void and of no effect.

2. The second defendant and all other persons claiming to hold office as members of the committee of management of the Trust ("the Committee") including those persons purportedly elected or appointed as members of the Committee at or after the 2013 Meeting no longer validly hold office as members of the Committee and all seven positions as members of the Committee have become vacant.

3. Each of the first and second plaintiffs is a member of the Trust holding respectively 900 shares and 1,000 shares, subject to any rights in respect of such shares which the trustee of the bankrupt estate of Geoffrey Wayne Clark may have pursuant to the Bankruptcy Act 1966 and each of the first and second plaintiffs, is entitled to vote in the election directed by paragraph 5 of these Orders as the registered owner of that number of shares, and irrespective of such shareholding is entitled to nominate in the said election as a candidate for membership of the Committee.

AND IT IS ORDERED that;

4. There be an election to fill all seven positions as members of the Committee, such election to be conducted by an officer of the Department of Aboriginal Affairs ("the Returning Officer") to be nominated by the Secretary of the said Department.

5. The said election be conducted by the Returning Officer in accordance with the following directions:

(i) the Returning Officer shall fix a date for an annual general meeting of the Trust ("the annual general meeting") to be held in place of the 2013 Meeting at which shall be conducted the said election to fill all seven positions as members of the Trust, such date to be not more than 60 days after the date of this Order;

(ii) the Returning Officer shall give notice of the annual general meeting to each person shown on the Register of Members of the Trust as a shareholder by sending by post to each such person at his or her address shown in the said Register of Members a notice specifying the date of the annual general meeting fixed by the Returning Officer and advising that, pursuant to an Order of this Court, an election will be conducted at the annual general meeting for all seven positions on the Committee;

(iii) the Returning Officer shall advise in the notice referred to in (ii) above that nominations of persons seeking to be elected to positions on the Committee should be submitted in writing to the Returning Officer by a date to be fixed by the Returning Officer and specified in the said notice, being a date not less than seven days nor more than fourteen days before the date fixed for the annual general meeting;

(iv) the Returning Officer shall enclose with the notice described in (ii) and (iii) above a form of nomination for use by persons seeking to nominate candidates for election as members of the Committee;

(v) the Returning Officer shall publish in the "Warrnambool Standard" not less than 14 nor more than 21 days before the day fixed for the annual general meeting the notice described at (ii) above and the form of nomination described at (iv) above and shall advise in the said advertisement that nominations in the said form should be forwarded to the Returning Officer by the date fixed for the close of nominations in accordance with (iii) above;

(vi) in the event that more than seven nominations are received by the date fixed in accordance with (iii) above, the Returning Officer shall prepare and issue to each member of the Trust attending the annual general meeting in person and desiring to vote in the said election a ballot paper containing an instruction that the voter should strike out the name of each candidate for whom he or she does not wish to vote but so that at least one and not more than seven names remain not struck out;

(vii) the Returning Officer shall ensure that the ballot papers are marked by each voter and collected by the Returning Officer so as to constitute a secret ballot save that the identity of each voter shall be known to the Returning Officer for the purpose of conducting the poll described at (viii) below;

(viii) after collecting all completed ballot papers the Returning Officer shall count the poll allocating to each vote a weight equal to the number of shares in the Trust of which the member casting that vote is registered as the owner and shall declare the result of the poll.

6. (a) The seven persons declared elected by the Returning Officer in

accordance with paragraph 4(viii) of these Orders or, if no more than seven nominations are received in accordance with paragraph 4(iii) and 4(v) above, then the seven persons so nominated shall constitute the Committee as at and from the date of the annual general meeting and shall elect one of their number to be the Chairman of the Trust;

(b) The two persons receiving the lowest number of votes in the poll conducted by the Returning Officer shall hold office until the annual general meeting of the Trust to be held in 2015, the two persons receiving the next lowest number of votes shall hold office until the annual general meeting of the Trust to be held in 2016 and the three persons receiving the highest number of votes shall hold office until the annual general meeting to be held in 2017;

(c) In the event that no more than seven nominations are received by the Returning Officer in accordance with paragraphs 4(iii) and 4(v) of these Orders or in the event that sub-paragraph (b) above cannot be applied because of an equality of votes, the Returning Officer shall determine by lot the member or members to retire before a particular annual general meeting in accordance with sub-paragraph (b) above.

7. The directions contained in paragraph 5 of these Orders and the election conducted by the Returning Officer in accordance therewith shall be of full force and effect notwithstanding any contrary or inconsistent provision of the Act.

8. The defendants and each of them be restrained until the declaration of the poll directed by paragraph 5(viii) of these Orders or until further order from granting or terminating any lease or licence of or over any land of the Trust and from disposing of any assets of the Trust or disbursing any funds of the Trust except for meeting the ordinary recurrent expenses of the Trust.

9. The first defendant pay the plaintiffs' costs of these proceedings, including any reserved costs, such costs to be taxed in default of agreement.

10. Liberty be reserved to any party [and to the Minister for Aboriginal Affairs] to apply on not less than 48 hours' notice in writing to the other parties and the Minister.

100 It is not necessary to examine these claims for relief at this stage of these reasons, but these reasons will return to this issue in due course.

The plaintiffs' first and second complaints - decision concerning "staggered elections"

101 The new committee of management was elected in October 2011 (six of its members were elected on 3 October 2011, and one member continued her term of office). The meeting at which the new committee was elected was not an annual general meeting. An annual general meeting is one where the audited accounts are presented and the terms of office of members expire where their three year term has been completed. Under s 22(8) of the Act the Trust is required to hold an annual general meeting within six months after the end of each financial year. Accordingly, the new Committee ought to have called an annual general meeting in the period July to December 2011, but it failed to do so. Nor, contrary to the Act, was an annual general meeting held in 2012.

102 The defendants suggest that the failure of the committee to hold annual general meetings in 2011 and 2012 may be explained by the difficulties the new committee faced in trying to restore order to the financial affairs and governance of the Trust and the existence of the Harradine proceedings and the Kirrae proceedings. This may be so.

103 Aaron and Jeremy Clark were parties to the deed of settlement entered into in April 2013 by which they released the Trust in respect of "all actions, decisions and resolutions of the current committee of management of the Trust as elected on 3 October 2011."

104 Tim Chatfield was a member of the committee of management between 3 October 2011 and July 2013 and also attended the general meeting of the Trust held on 17 May 2013 at which "all decisions, resolutions and actions of the current committee of management of the Trust, since its appointment on the 3rd October 2011 [were] ratified" and he voted in favour of that resolution.

105 The substance of the plaintiffs' attack, however, does not relate to the failure to hold an annual general meeting in 2011 or 2012, but the alleged failure of the committee of management to observe s 15 of the Act, which is quoted above in relation to the 2013 annual general meeting.

106 Mr Clark-Ugle agreed in cross-examination that he was trying to resurrect the rotation of office that was provided by s 15(1) of the Act. That is clearly seen in the committee resolution of 22 November 2013 where it treats the 2011 general meeting as the first general meeting under s 15(1) and Mr Clark-Ugle, Brenda Chatfield and Kyeema Penrith were appointed until the fourth annual general meeting since and including the meeting at which they were elected. The fourth annual general meeting is referred to in s 15(1) but not elsewhere in s 15. Mr Clark-Ugle denied that he saw anything odd in giving himself a four year term as opposed to a three year term.

107 In my opinion, section 15(1) only had application at the first general meeting of the Trust. It had no application under the Act thereafter. By 2011, the provision had been spent.

108 The Act came into force on 7 December 1970. The Minister was to prepare a register of residents on each reserve. Section 7 of the Act provided that the Governor may, after receiving a certified copy of the register, by Order published in the Government Gazette, fix a day (called the appointed day) for the purposes of the Act. Under s 22(11) of the Act, the Minister was to call the first general meeting of a Trust for a date not being more than three months after the appointed day.

109 Under s 15(1), seven members were to be elected at the first general meeting of the Trust to form a committee of management. Of these, two were to hold office until the second annual general meeting, two until the third annual general meeting and four until the fourth annual general meeting.

110 Section 22(8) provides that a Trust shall hold an annual general meeting within six months after the end of each financial year but a Trust was not obliged to hold its first annual general meeting until that Trust had been in existence for a full financial year.

111 Under s 15(2), the members of a Trust should from time to time in general meeting as may be required, elect a person to fill a vacancy in the committee of management. Under s 15(3), any person elected to fill a vacancy arising by expiration of the term of office for which a member was elected, is to hold office until the third annual general meeting following his or her election, and any person elected to fill a vacancy, otherwise arising, is to hold office for the balance of the term of office of the member he or she replaces.

112 It can be seen therefore, that special terms were envisaged upon the election of the first seven members of the committee.

113 Evidence was not led as to the timing of the first general meeting or the first annual general meeting. The different treatment of the first seven members elected and those elected thereafter can be shown by the following theoretical example.

114 I will assume that the financial year was the normal one ending 30 June. If, for example, the first general meeting took place in May 1971 (when the first seven members were elected) and the first annual general meeting did not take place until December 1972 (the Trust was not obliged to hold its first annual general meeting until the Trust had been in existence for a full financial year), then the two members appointed for the shortest term would serve until the second annual general meeting that was due to be held in the six months after June 1973. Thus these two would probably serve approximately two and a half years. The three to serve the longest term would serve some four and a half years.

115 However, any person elected thereafter to fill a vacancy arising by expiration of the term of office (which expiration, under the Act, was to occur on the holding of an annual general meeting), was to be elected until the third annual general meeting following his or her election. This would be a term of approximately three years.

116 The course adopted by the committee was not to follow the procedure in s 15(2) and 15(3), but rather to seek to adopt s 15(1). However, s 15(1) could not be adopted as it was a once only arrangement that started the staggered election process. Under the staggered election process, the term of office of all subsequent members who were elected upon the vacancy arising by reason of the term of office expiring, were to be elected for approximately three years, being until the third annual general meeting following his or her election.

117 If, in November 2013, the committee had assumed that all the terms of office of the seven members had expired, then in accordance with s 15(3), all those elected to fill those vacancies would serve the approximate three year term.

118 In any event, there was no statutory basis for the committee, adopting for the 2013 annual general meeting, the procedure in s 15(1) as it only applied to the first general meeting. Thereafter all elections were governed by s 15(3).

119 The meeting held on 3 October 2011 was not an annual general meeting. It was a general meeting. This means no terms of office expired at the 2011 meeting. Thus, under s 15(3), the six elected to the committee were to hold office for the balance of the term of the member he or she replaced. The committee was unable to establish the balance of the terms of the six members replaced. Further, there was no evidence whether or not the committee was able to ascertain when and how the continuing member, Mrs Chatfield, was elected.

120 As indicated above, the new committee was not able to ascertain what terms the persons removed from office in 2011 were serving. At the meeting of the committee on 22 November 2013, the committee of five (two having resigned earlier in the year) resolved to reinstate the staggered term requirements of s 15 by determining that three members would serve until the fourth annual general meeting after the meeting at which there were elected. In the case of these three (Mr Clark-Ugle, Brenda Chatfield and Kyeema Penrith), having been elected in 2011, their term would expire in 2015.

121 The committee determined that the term of office of the other two members (Shirley McGuinness and Violet Clark) would expire in 2014, at the third annual general meeting after the meeting at which they were elected. Accordingly, the committee determined that at the annual general meeting to be held in December 2013, there would be only two vacancies. As discussed below, this was contrary to the view of the OAAV, which had contended that there should be four vacancies.

122 The plaintiffs contend that this decision of the committee was contrary to the Act. The plaintiffs say that even if the appointments of 3 October 2011 had achieved a valid reconstitution of the committee of management, which the plaintiffs dispute, the necessary rotation of offices would have required two of those members to retire at the end of 2011, a further two to retire at the end of 2012 and a final three to retire at the end of 2013. Thus the plaintiffs contend that all seven positions were vacant as at the 2013 annual general meeting.

123 The OAAV took a different view. The OAAV advised on 3 December 2013, that the current committee members were appointed on 3 October 2011, two years previously. The OAAV said that some of these members were appointed for a full term in order to fill vacancies arising on the expiry of the terms of previous committee members, whilst others were appointed for the balance of the terms of the committee members who were removed.

124 The OAAV advised that given the 2013 general meeting was the first general meeting since those appointments, the staggered terms of the committee members would mean that there were four committee of management vacancies to be filled at the annual general meeting in 2013. Two of those vacancies arose from committee members whose term was due to expire at the 2012 annual general meeting (which was not held). The remaining two vacancies arose from committee members whose term was due to expire at the 2013 annual general meeting.

125 The OAAV advised that elections at the proposed 2013 annual general meeting to fill these four vacancies would require appointing two members for a two year term (that is to replace the members whose terms finished in 2012) and two members for a term of three years (that is to replace the two members whose terms finished in 2013). The OAAV advised that the remaining three positions would become vacant at the 2014 annual general meeting. So, according to the OAAV, three of the committee members elected on 3 October 2011 were elected for full terms, and four were elected for the balance of existing terms (two expiring in 2012, and two expiring in 2013).

126 In my opinion, the advice of the OAAV was not in accordance with the Act. In this case, the meeting that replaced the committee in 2011 was a general meeting but not an annual general meeting. The sole purpose of the general meeting was to remove the existing committee members. The annual general meeting receives and considers the audited accounts. The term of office of committee members is until the relevant annual general meeting.

127 If s 15 had been properly observed prior to October 2011, then either two or three members' terms of office were due to expire at the 2011 annual general meeting, either two or three members' terms were due to expire at the 2012 annual general meeting, and two or three members' terms of office were to expire at the 2013 annual general meeting. Thus, under the Act, there would have been seven vacancies to be filled at the 2013 annual general meeting.

128 The seven successful candidates would all be filling a vacancy arising by the expiration of the term of office for which they were elected. That is, the term of office of the current members of the committee would have expired.

129 This leads to one of the problems with the Act. The Act assumes that it would be faithfully observed. Thus no provision was made for the situation where elections were not held in accordance with the Act and members of the committee purported to hold office in excess of the terms provided for in the Act.

130 Accordingly, at the annual general meeting in 2013, under s 15(3), each of the seven members elected to fill a vacancy arising by expiration of the term of office for which the member was elected, would be elected until the third annual general meeting. The Act makes no provision for reintroducing the staggered elections once the staggering has been lost through the Act not being observed.

131 In this case, whatever be the situation, there was no basis in the Act for electing two members of the committee to hold office until the annual general meeting in 2014, three to hold office until the 2015 annual general meeting and two until the 2016 annual general meeting.

132 There is another potential problem with the Act. The Act assumes and requires that an annual general meeting be held each year. The terms of office of the committee members are based on that assumption. The Act does not make provision for the situation, such as in 2011 or in 2012, when an annual general meeting was not held.

133 It is not necessary for me to decide whether calculations of terms of office should be made on the basis that an annual general meeting was held, where in fact one was not held.

134 These reasons will address the consequences of the conclusions I have reached when I consider the issue of relief below.

The plaintiffs' third complaint - the decision on nominations

135 The committee of management decided that the nominations for the election of the two persons to join the committee of management should be in writing and close a week before the annual general meeting was held. It is not suggested by the plaintiffs that this decision had any effect upon any member's rights. This may have required evidence that some person who may have been nominated for election for the committee of management (had nominations been dealt with in a manner other than that resolved by the committee of management - such as nominations at the annual general meeting itself) was denied the ability to be so nominated because of the resolution.

136 In my opinion, a written nomination process is appropriate. Members of the committee of management can only be elected by the members of the Trust acting in the general meeting, and in the present case, each member of the Trust was provided with a nomination form which they could complete to nominate a person for election as a member of the committee of management.

137 In my opinion, the complaint made about the form of nomination is not made out.

The plaintiffs' fourth complaint - the chairman's decision as to who could attend the annual general meeting

138 Accompanying the notice of the 2013 annual general meeting, the chairman enclosed a letter that said:

Please note that the meeting can only be attended by Committee members shareholders and people appointed by the Chairman to assist with the running of the meeting.

139 Meetings of the committee were held on 22 and 26 November 2013, where decisions were made about the conduct of the annual general meeting. On 26 November 2013, the committee agreed that Mr Clark-Ugle would run the annual general meeting.

140 The Act says nothing as to the rights of non-members of the Trust to attend the annual general meeting. At general law, the proper position is that the participation of non-members in a general meeting of a body ought be limited, so that they are unable to exercise influence in the conduct of the meeting, which, if excessive, may invalidate the meeting.[1]

141 In any event, I consider that the conduct of the committee and in particular Mr Clark-Ugle in denying Aaron Clark entry to the annual general meeting, whether he was a member or not, is a relevant consideration in assessing whether or not the affairs of the Trust are being conducted in an oppressive manner to the plaintiffs or one or more of them. The reasons consider this issue below.

The plaintiffs' fifth complaint - that Aaron Clark was not entitled to nominate, attend or vote

142 Mr Clark-Ugle informed Aaron Clark in writing on 11 December 2013 that he was disqualified from nominating, voting or attending the annual general meeting to be held on 16 December 2013. The letter said:

The Trustee in bankruptcy has advised us in writing that the shares in the Trust in your name are a matter of dispute with the Trustee. As such the Trust is unable to recognize any entitlement on your part to nominate, vote or attend meetings of the Trust.

143 The defendants now accept that Aaron Clark was entitled to be nominated for membership of the committee even if he was not a shareholder. Mr Clark-Ugle's letter was sent in response to Aaron Clark's delivery of a completed nomination form, nominating himself for election as a member of the committee. That nomination was rejected by Mr Clark-Ugle as chairman of the annual general meeting, on the basis that as the title to Aaron Clark's shares was in dispute, he would not be entitled to exercise rights in respect of them.

144 The defendants say that the letter was not intended to convey that Aaron Clark could not be nominated but rather that he, as a person whose shares were in dispute, could not nominate a candidate whether it be himself or another.

145 The plaintiffs contend that the chairman and the committee should have advised Aaron Clark that he could stand for election if another member nominated him. The plaintiffs contend that the chairman and the committee's failure to do so is relevant to the Court in considering whether s 27 has been enlivened and whether it should grant the relief sought. In short, it is alleged that the conduct is part of a continuing course of conduct to deny Aaron Clark his rights under the Trust.

146 I now turn to the issue of whether the defendants ought to have treated Aaron and Jeremy Clark as members of the Trust for the purposes of the holding of the annual general meeting in 2013.

147 Section 12(7) of the Act provides that only those persons whose names appear from time to time in the register of members as the owners of any shares shall be members of the Trust.

Entries in register of members

(1) Subject to the provisions of this section, the transfer of shares in a Trust shall be effected only by alteration of the register of members on production by the transferee of a proper instrument of transfer.

(2) The personal representative of a deceased member of a Trust may, on making application in writing and producing evidence of his or her appointment satisfactory to the Trust, have his or her name entered in the register of members as the owner of the shares of the deceased member.

(3) Except as required by law, no person shall be recognized by a Trust as holding any share upon any trust, and the Trust shall not be bound by or compelled to recognize (even when having notice thereof) any equitable contingent future or partial interest in any share or any other rights in respect of any share, except an absolute right as to the entirety thereof in the person registered as the owner thereof.

(4) Where a share is owned by a person known by the Trust to be an infant or under any other disability, the Trust shall mark the register accordingly.

Notwithstanding anything to the contrary in this Act -

(a) an infant member shall not be entitled to vote at any general meeting;

(b) where any member is by any rule of law disabled from dealing with his or her property, any vote ordinarily exercisable by the member at a general meeting shall not be exercised by the member, but any person who is for the time being authorized by law to control the property of the person so disabled may attend and exercise the vote in his or her place; ...

150 Section 58(1) of the Bankruptcy Act provides:

(1) Subject to this Act, where a debtor becomes a bankrupt:

(a) the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and

(b) after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee.

151 If the shares registered in Jeremy Clark's name actually vested in the trustee pursuant to s 58(1) of the Bankruptcy Act (either by agreement, court order or otherwise) then, in my opinion, s 23(5) would be enlivened. In such a case the member would have been disabled by law from exercising the rights incidental to ownership, including the right to vote.

152 It follows, therefore, that the fact of registration does not give an indisputable right to a person so recorded to exercise rights in respect of that registered shareholding. Jeremy and Aaron Clark were listed on the register in 2011. The 2013 deed of settlement was an agreement to maintain Aaron and Jeremy's entry in the register, but make it subject to any claims that the trustee may have. The deed provided that:

The parties to this deed acknowledge and agree that, in relation to the members of the Trust ... Subject to any claim that the Trustee in Bankruptcy of Geoffrey Wayne Clark may have in relation to the shares of Geoff, Jeremy or Aaron Clark, the respective shareholdings of each of Geoff, Jeremy and Aaron Clark are as follows: Geoff (100 shares); Jeremy (1,000 shares) and Aaron (900 shares).

153 By the deed, each of Aaron and Jeremy Clark (and the Trust) acknowledged that the rights of Aaron and Jeremy Clark as members of the Trust were subject to claims by Mr Juratowitch as Geoff Clark's trustee in bankruptcy. I will discuss below whether any actions by the trustee had, or have now, enlivened that agreement.

154 At the time the meeting was called and held, the register of members recorded that Aaron and Jeremy Clark were registered shareholders. At the time of the annual general meeting, the trustee in bankruptcy did not assert that the shares registered in the names of Aaron and Jeremy Clark had vested in him under s 58(1) of the Bankruptcy Act (although, as discussed below, he may have done so previously at the time the deed was executed). At the time of the annual general meeting, the trustee informed the Trust that his investigations were still continuing in respect of the purported transfer of shares by the bankrupt to Jeremy Clark (some of which were ultimately transferred to Aaron Clark). As mentioned above, as of May 2014, the trustee had not asserted a claim to the shares.

155 The trustee did not purport to exercise the votes attached to the shares registered in the names of Aaron and Jeremy Clark. In circumstances where the trustee was merely investigating whether the shares transferred to Jeremy Clark were the property of the trustee, it was not part of the functions of the Trust to resolve or adjudicate on a possible future dispute between Geoff Clark's trustee in bankruptcy and Jeremy Clark and Aaron Clark as to the ownership of the relevant shares. This is the function of a court (and not of this Court, because of the exclusive jurisdiction of the Federal Court and Federal Circuit Court in respect of bankruptcy).[2]

156 No authority was put forward by counsel for the defendants to suggest that the fact that the trustee was investigating a possible claim as to the ownership of those shares, disentitled the registered owners from exercising the rights that attached to registration.

157 Section 23(5) is only enlivened when "any member is by any rule of law disabled from dealing with his or her property" (my emphasis). In this instance, there was no suggestion by the trustee in bankruptcy that Aaron Clark and Jeremy Clark were disabled from dealing with the shares registered in their names. It is not sufficient to enliven the section that the registered member, by any rule of law, may be disabled from dealing with his or her property.

158 As mentioned above, if s 23(5) was enlivened then Aaron and Jeremy Clark would not have been entitled to exercise the votes attached to the shares, because those votes would have been exercisable by the trustee.

159 I turn now to the deed of settlement and the construction of the term that recognised the shareholding of Geoff Clark, Jeremy Clark and Aaron Clark. The recognition by the Trust (and the other parties to the deed) was expressed "Subject to any claim that the Trustee in bankruptcy of Geoffrey Wayne Clark have in relation to the shares of Geoff [Clark], Jeremy [Clark] or Aaron [Clark]..."

160 In my opinion, on its proper construction the proviso would be enlivened by the trustee having an established claim in relation to the shares. An established claim could arise by reason of the trustee establishing at law an entitlement under s 58(1) of the Bankruptcy Act or by establishing an entitlement by agreement or concession of the relevant parties. I do not consider, however, that the proviso would be enlivened by the trustee making a mere claim that was not substantiated or not yet substantiated. Such a construction would have defeated the purpose of the proviso.

161 As indicated above, the deed of settlement was entered into to settle a dispute that included allegations that Jeremy and Aaron Clark were not entitled to be registered as members as their shares had vested in the trustee in bankruptcy.

162 The defence and counterclaim in the Harradine proceeding alleged that as Geoff Clark was bankrupt at the time of the transfer to Jeremy Clark, the transfer was void and of no effect. Mr Clark-Ugle deposed that:

At the time the Deed was signed, Geoff Clark was (and still remains) a bankrupt, Daniel Juratowitch, the trustee of Geoffrey Clark's bankrupt estate, had contacted the Trust as part of his investigations regarding the shares held by Geoff Clark. As no record could be located of any transfer of shares before October 2012, Mr Juratowitch was disputing the alleged transfer of shares by Geoff Clark to Jeremy Clark. The Trust contracted Mr Juratowitch at the time the terms of the Deed were being negotiated because of the dispute and Mr Juratowitch agreed to the following term being included in the Deed.

163 There followed the term referred to above. Thus according to Mr Clark-Ugle at the time of the terms of settlement, Mr Juratowitch was disputing the alleged transfer of shares by Geoff Clark to Jeremy Clark. Clearly, it was not intended by the parties for the proviso to be activated by the claim then made by Mr Juratowitch. Dealing generally with the construction of commercial documents, the High Court said in Pacific Carriers Ltd v BNP Paribas:[3]

The ascertainment of the scope of the clause is a question of the construction of a contract. Its meaning is to be determined by what a reasonable person in the position of the parties would have understood it to mean, having regard to the text, surrounding circumstances, purpose and object of the transaction.[4]

164 This approach was confirmed by the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd,[5] where the Court said:

This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.[6]

165 The terms of settlement were not strictly a commercial contract, but, in my opinion, the principles of construction laid down by the High Court should be applied. In my view, a reasonable person in the position of the parties, having regard to the text, surrounding circumstances, purpose and object of the transaction, would have understood the proviso to refer to an established claim by the trustee. To interpret the clause as only requiring the mere assertion of a claim by the trustee, would deprive the proviso of any real purpose as it was strongly arguable that when executed the trustee had asserted a claim to the shares transferred to Jeremy Clark by Geoff Clark. In my opinion, the proviso was intended to be enlivened if and when the trustee had an established claim to the shares. In the meantime, Jeremy and Aaron were entitled to enjoy the rights attaching to the shares.

166 In those circumstances, where no established claim was made by the trustee that the shares had vested in him or that he was entitled to exercise the votes, there was no ground for denying the registered owners the full rights of entitlement. The ultimate fate of the shares may have been uncertain. But that state of uncertainty did not, under the Act or the terms of the deed, disentitle the registered owner from exercising the rights attached to the shares, to nominate, attend meetings and vote at meetings.

Has the Court's power under s 27(1) been enlivened?

167 The Court's jurisdiction to make orders under s 27(1) has two prerequisites:

(1) first, the Court must find that the affairs of the Trust are being conducted in a manner oppressive to one or more of the members; and

(2) second, the Court must consider that it would be just and equitable to make an order.

168 If those two prerequisites are satisfied, the Court then has a discretion to make a wide range of orders.

169 The wording of s 27(1) of the Act is very similar to that of s 186 of the Companies Act 1961 (Vic) (Companies Act), which was the section of that Act then dealing with the oppression of shareholders in a company. (The major difference is that s 27(1) of the Act does not contemplate the winding up of the Trust as a potential remedy.)

170 The form of wording in respect of the shareholder oppression provisions in corporations law was substantially amended in 1983, by adding to the word "oppressive"" the words "or unfairly prejudicial to or unfairly discriminatory against."[7] The amended wording is now found in s 232 of the Corporations Act 2001 (Cth). But no amendment has ever been made to s 27(1) of the Act.

171 This part of the reasons gratefully adopts the written submissions of counsel for the defendants.

172 The defendants contend that the cases interpreting s 186 of the Companies Act should be applied by the Court in this case. Several Cases have considered the meaning of s 186 of the Companies Act and its statutory equivalents in England as well as elsewhere in Australia. These authorities include two Victorian cases, which offer a useful summary of the applicable principles. These are Re Bright Pine Mills Pty Ltd[8] (a decision of the Full Court from 1963) and Re Tivoli Freeholds Ltd.[9]

173 In Tivoli, Menhennitt J summarised the principles as follows:

Whether or not a company is being conducted in a manner oppressive to certain shareholders depends upon all the circumstances and it is not possible to attempt a universal definition. However, in the kind of situation which arises in this case and having regard to the matters relied upon by the petitioner and the supporting members, the following elements are I think included in the matters postulated in the section and are also established by the authorities: -

Those alleging that the affairs of the company have been conducted in a manner oppressive to them must establish, as one element, conduct which the Court of Appeal has recently restated in the case of Re Jermyn Street Turkish Baths Ltd ..., as conduct which "is unfair or, to use the expression adopted by Viscount Simonds in Scottish Co-operative Wholesale Society Ltd v Meyer ..., 'burdensome, harsh and wrongful' to the other members of the company or some of them, and lacks that degree of probity which they are entitled to expect in the conduct of the company's affairs: see Scottish Co-operative Wholesale Society Ltd v Meyer and Re H. R. Harmer Ltd...".

It is to be noted that Buckley, LJ, delivering the judgment of the Court, appears to have stated lack of probity of the kind described as an element additional to the requirement that the conduct must be unfair or burdensome, harsh and wrongful. In Scottish Co-operative Wholesale Society Ltd v Meyer, Lord Keith stated the test as "lack of probity and fair dealing", using the word "and". However, in Lord Keith's judgment in Elder v Elder and Watson Limited, adopted by Jenkins, LJ, in the case of Re Harmer Ltd, Lord Keith said: "oppression involves, I think, at least an element of lack of probity or fair dealing to a member in the matter of his proprietary right as a shareholder." There it is put in the alternative. In the light of these statements, I deal with this petition on the basis that there may be cases in which either lack of probity or unfairness may be sufficient in itself to make conduct oppressive to a member...

(2) The oppression must be of the members as such, that is in their capacity as shareholders. It was so decided in Re H. R. Harmer Ltd, ..., in respect of the English equivalent provision, namely, s210, and the Full Court in Re Bright Pine Mills Pty Ltd, held that this consideration applies to s186(1) of the Victoria Companies Act: see also per Lord Keith in the passage cited above from Elder v Elder and Watson Ltd.

(3) It appears to follow from the last-mentioned concept and the reference in the section to the affairs of the company being conducted in a manner oppressive to members that there must be something adverse or detrimental to the members' financial interests as shareholders. In all the reported cases of which I am aware, where oppression has been found, this has been the fact and it was this aspect to which I understand Jacob, J, referred when he said in Re Broadcasting Station 2GB Pty Ltd, that, the word oppressive involves, among other things, that "some member or members have suffered in a pecuniary sense in their capacity of members (Scottish Co-operative Wholesale Society v Meyer) that is to say, their rights as members have been affected".

(4) The affairs of the company must be being conducted in a manner oppressive to some member or members when the petition is presented. This is involved in the expression "are being conducted": see Re Jermyn Street Turkish Baths Ltd ....

(5) Oppression may occur even although all the members of a company are treated equally: see, for example, Meyer's Case. The unfairness may arise, for example, by reason of an advantage to a parent company.

(6) So far as the alleged oppressors are concerned, it must also be established it seems to me that oppression results from "some overbearing act or attitude on the part of the oppressor": Re Jermyn Street Turkish Baths Ltd. In delivering the judgment of the Court of Appeal, Buckley, LJ, having defined aspects of oppression applicable to that case, then said: "We do not say that this is necessarily a comprehensive definition of the meaning of the word 'oppressive' in s210, for the affairs of life are so diverse that it is dangerous to attempt a universal definition. We think, however, that it may serve as a sufficient definition for the present purpose. Oppression must, we think, import that the oppressed are being constrained to submit to something which is unfair to them as the result of some overbearing act or attitude on the part of the oppressor."

Having stated that what had earlier been said was not necessarily a comprehensive definition, his Lordship appears to me to have then stated what is a universal element in the sentence beginning "Oppression must, we think, import". Again, whilst not stating it as a universal test, the Full Court in Re Bright Pine Mills Pty Ltd, applied the test that "conduct would be oppressive within the meaning of s186 if directors or shareholders holding a controlling power in the direction of the company's affairs were to pursue a course of conduct designed by them to advance their own interests or the interests of others of their choice to the detriment of the company or to the detriment of other shareholders". The concept of "some overbearing act or attitude" appears to me to be involved in Viscount Simonds's expression "burdensome, harsh and wrongful". To determine whether conduct is unfair it is necessary to examine it from the point of view of both the alleged oppressed and the alleged oppressor...

(7) It is a corollary of the element referred to in (6) above that "it was not intended by s186 or s94 to give jurisdiction to the Court (a jurisdiction the courts have always been loath to assume) to interfere with the internal management of a company by directors who in the exercise of the powers conferred upon them by the memorandum and articles of association are acting honestly and without any purpose of advancing the interest of themselves or others of their choice at the expense of the company or contrary to the interest of other shareholders" (per the Full Court in Re Bright Pine Mills Pty Ltd).

Buckley, J, as he then was, referred to the same aspect in Re Five Minute Car Wash Service Ltd when he said: "The mere fact that a member of a company has lost confidence in the manner in which the company's affairs are conducted does not lead to the conclusion that he is oppressed; nor can resentment at being outvoted; nor mere dissatisfaction with or disapproval of the conduct of the company's affairs, whether on grounds relating to policy or to efficiency, however well founded. Those who are alleging to have acted oppressively must be shown to have acted at least unfairly towards those who claim to have been oppressed.[10]

174 In Wayde v New South Wales Rugby League Ltd,[11] Brennan J specifically referred to the test for oppression under the original companies legislation as being confined to cases where the conduct was "burdensome, harsh and wrongful," citing the words of Viscount Simonds in Scottish Co-operative Wholesale Society Ltd v Meyer,[12] which were also cited with approval in Bright Pine and Tivoli, as the above extract from the latter case demonstrates.

175 Accepting for present purposes that the principles applied under s 186 of the Companies Act are applicable to s 27(1) of the Act, then the following principles are relevant for present purposes:

(a) It is necessary to have regard to all the circumstances;

(b) The conduct complained of must be burdensome, harsh and wrongful to other members of the Trust;

(c) The oppression must be of the members as such in their capacity as shareholders;

(d) There must be something adverse or detrimental to the members' interest in the Trust;

(e) The conduct complained of must be being conducted in a manner oppressive to some member or members when the application is made;

(f) The oppression must result from some overbearing act or attitude on the part of the oppressor; and

(g) The provision is not designed to interfere with the internal management of the Trust.

176 In my opinion, it is probable that the members of the committee were aware that they were keeping themselves on the committee longer than they were allowed to be on it, and they probably did so to advance their own interests. Further, the conduct of the defendants in excluding Aaron and Jeremy Clark from nominating, attending or voting at the annual general meeting was and is oppressive to Aaron and Jeremy Clark. I am satisfied that the oppression results from overbearing acts and attitudes on the part of the defendants. The conduct has had a detrimental effect on the interests of Aaron and Jeremy Clark in the governance of the Trust.

177 Having regard to the defendants' conduct as a whole in all the circumstances surrounding the administration of the Trust, I consider that their conduct has been burdensome, harsh and wrongful to Aaron Clark and Jeremy Clark. The defendants initially agreed to recognize their shareholding then reneged on the terms of settlement and denied them the benefits of their shareholding.

178 I am of the opinion that the affairs of the Trust are being conducted in a manner oppressive to one or more members of the Trust and that it would be just and equitable to make an order under s 27(1) of the Act. Accordingly, in my opinion, the Court's power to make such order as it thinks fit for regulating the affairs of the Trust in future is enlivened.

179 Under s 27(2) of the Act the Court's jurisdiction to make orders has two prerequisites:

(a) first, the Court must find that the Trust has contravened the Act; and

(b) second, the Court must consider that one or more of the plaintiffs is a person who has suffered injustice on account of that contravention.

If those two prerequisites are satisfied, the Court then has a discretion to make a wide range of orders.

180 The wording of s 27(2) appears not to be modelled upon any existing statute, nor to have been employed in other statutes subsequently. In Re Compaction Systems Pty Ltd,[13] the term "injustice" was considered in a similar context (being injustice to a member in the conduct of affairs of a company) in respect of the procedural irregularity provisions under s 366 of the Companies Act. There, Bowen CJ stated:

the word "injustice" in this provision requires the court to consider any real, and not merely insubstantial or theoretical, prejudice which will be suffered by, for example, a member.[14]

181 In my opinion, the defendants have denied Aaron Clark and Jeremy Clark the right to nominate, attend and vote in relation to the election of members of the committee of management. In doing so the Trust has contravened the Act. I am also of the opinion for the reasons given above, that Aaron Clark and Jeremy Clark have suffered injustice on that account. Accordingly, in my opinion, the Court's powers under s 27(2) have been enlivened. The Court may make such order as appears to the Court to be necessary to give proper relief to the persons aggrieved.

Has the Court's power to grant relief been enlivened?

182 The defendants submit that if I decide that Geoff Clark was wrongly prevented from attending and voting at the annual general meeting in 2013, the appropriate approach is for the Court to make declarations on the matter and let the parties avail themselves of the procedures provided under the Act.

183 The Secretary of the Trust is required to call a general meeting of the Trust if called upon to do so by a requisition in writing under the hands of not less than one-quarter of those members of the Trust who are not infants (s 22(3)). I was informed that there are currently 17 members of the Trust if Aaron and Jeremy Clark are included as members. Thus, a general meeting could be called on the requisition of five members.

184 The office of a member of the committee of management of the Trust shall become vacant if the member is removed from office by a resolution of which special notice is given and which is passed at a general meeting of the Trust. The quorum for a general meeting is one-half of the persons entitled to vote at the meeting who are residents of the reserve on the date the meeting was called in accordance with s 22(4). I was informed that currently six members reside on the reserve. On that basis, three members who reside on the reserve would be required to attend the meeting for a quorum. Thus, the plaintiffs, if they have the numbers, could call a general meeting and remove members of the committee.

185 In my opinion, the Court also has jurisdiction to make declarations as to the rights of the parties.[15] The jurisdiction to make a declaration is a very wide one. It has been said that the power, where it is a question of defining rights of two parties, is almost unlimited. The jurisdiction is limited only by the discretion of the Court: Forster v Jododex Aust Pty Ltd.[16]

It is neither possible nor desirable to fetter the broad discretion.... by laying down rules as to the manner of its exercise. The Court, however, applied the rules summarised by Lord Dunedin in The Russian Bank case[17] as being the general guide to be satisfied before the discretion is exercised in favour of making a declaration. "The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor..."[18]

187 The High Court then said, "Beyond that, however, little guidance can be given."[19]

188 In this case, the matter is real and not a theoretical question. The plaintiffs have a real interest in raising it. There is a proper contradictor in the defendants. There is utility in making the declaration and it is in the interests of the Trust and all its members to clarify the position, especially in view of the delay taken by the trustee in bankruptcy to purse the claim that he has now made that the shares have in fact vested in him under s 58(1) of the Bankruptcy Act.

189 Under s 27(1) the Court may make such order as the Court thinks fit for regulating the affairs of the Trust in the future or for the purchase of the shares of any member by other members or by the Trust or otherwise. Under s 27(2) the Court may make such order as appears to the Court to be necessary to give proper relief to the person aggrieved by the contravention of the Act.

190 In my opinion the proper way to rectify the injustice caused to the plaintiffs by the way the defendants held the annual general meeting in December 2013 is to hold fresh elections. The plaintiffs have sought orders that an election be held for all seven positions on the committee, at an annual general meeting to be conducted by an officer of the Department of Aboriginal Affairs to be nominated by the secretary of the Department. I consider that this is an appropriate course.

191 The plaintiffs have also put forward draft minutes of order providing for staggered elections to be re-introduced. I consider that it would be appropriate to do so to properly regulate the affairs of the Trust in the future despite s 15(1) having been spent. Such an order will permit the Trust to continue as it should have if the Act had been properly observed in the past.

192 I now turn to whether Aaron and Jeremy Clark are entitled to vote at a meeting prior to the resolution of the foreshadowed claim by the trustee.

193 Jeremy and Aaron Clark may become disentitled to exercise the rights of shareholders by virtue of s 23(5) of the Act or by virtue of the terms of the deed.

194 It is not necessary for me to determine the circumstances that must exist for s 23(5) of the Act to be enlivened. All that is necessary for me to decide, is that on the facts established in this case, s 23(5) has not been enlivened at the time of the hearing to disentitle Aaron Clark and Jeremy Clark from exercising the rights otherwise attached to the shares of which they are the registered holders. Of course, section 23(5) would apply if the trustee made a successful claim for the shares. As mentioned above, this is not a matter for this Court to resolve.

195 The trustee has now indicated that he proposes to take proceedings to establish the disputed shares are vested in him as the trustee under s 58(1) of the Bankruptcy Act. For the reasons given above, in my opinion, that statement does not activate the proviso in the deed, and accordingly Aaron and Jeremy Clark are entitled to exercise the rights attached to their registered holding. Nor, for the reasons given, does the statement enliven s 23(5) of the Act.

196 In my opinion, it is appropriate to make the declarations sought by the plaintiffs and also to provide for fresh elections as sought by the plaintiffs. I am minded therefore to make the orders proposed by the plaintiffs as set out above.

197 I do not consider it appropriate that this case should pass without me making some observations on the statutory election regime. It is obvious from these reasons that the election regime of the Trust is imprecise, problematic and unwieldy. Once the staggered election system is confused and starts to get out of order, there is no provision in the Act to revive it. The Trust has failed to get it right, it has had to seek legal advice and ask the OAAV for help. In my opinion, the OAAV also got it wrong. This does not bode well for the election regime. Also as mentioned, the Act assumes that it will be faithfully followed. As this case demonstrates, that assumption is misconceived.

198 This may be a matter that the Government may wish to consider.

[1] See A D Lang, Horsley's Meetings (LexisNexis Butterworths, 6th ed, 2010), [1.19], [8.7]; see also Lynch v Hodges (1963) 4 FLR 348.

[2] As to which see s 27 of the Bankruptcy Act.

[3] [2004] HCA 35; (2004) 218 CLR 451 (Pacific Carriers).

[5] (2004) 219 CLR 165; [2004] HCA 52 (Toll).

[7] In Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459, 470-1, Brennan J identified the reason for the amendment as reflecting the intention of the legislature "to provide a greater measure of curial protection to members of a company, especially if they be in a minority, than the protection afforded under earlier Companies Acts."

[8] [1969] VicRp 121; [1969] VR 1002 (Bright Pine).

[9] [1972] VicRp 51; [1972] VR 445 (Tivoli).

[10] Ibid_,_ 452-454 (citations omitted).

[11] [1985] HCA 68; (1985) 180 CLR 459, 470-471.

[12] [1959] AC 324, 342.

[13] [1976] 2 NSWLR 477.

[15] Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 23.05.

[16] [1972] HCA 61; (1972) 127 CLR 421 (Forster), 435 (Gibbs J with whom McTiernan, Walsh, Stephen and Mason JJ agreed on this issue); LexisNexis Butterworths, Civil Procedure: Victoria, vol 1 (at Service 280) [I 23.05.15].

[17] [1981] 2 AC 438, 448.

[19] See generally P W Young, Declaratory Orders (Butterworths, 2nd ed, 1984).