These proceedings concern the validity of a general meeting of the Islamic Association Western Suburbs Inc (IAWSS) held on 2 March 2014 by which the then members for the Executive Committee of IAWSS were removed (or purportedly removed) and several of the Defendants were appointed or elected (or purportedly appointed or elected) as the Executive Committee of IAWSS. After that meeting, the Plaintiffs approached the Court and sought and obtained, at a contested interlocutory hearing before Darke J on 14 March, interlocutory orders that, until specified dates, the Executive Council of IAWSS, as it was prior to 2 March 2014, continued to act in that capacity pending final determination of the proceedings. Those orders were subsequently continued by consent until further order.
Subsequently, a Statement of Claim was filed on 8 May 2014, a Defence was filed on 27 May 2014 and directions were made for the Defendants to file any Cross-Claim, which has not yet occurred. Various issues as to the Statement of Claim were raised by a letter dated 20 June 2014. It may be that, with hindsight, that letter would have preferably been drafted as a more orthodox request for particulars, to fill in gaps in the existing pleading, rather than taking the form, as it did, of a somewhat direct assertion of the inadequacies of the existing pleading. It is also regrettable, in hindsight, that the Plaintiffs did not provide further and fuller particulars of their case, at an earlier stage, although one might accept that doing that, in anticipation of the particulars that the Defendants might wish or accept, may have been a challenging task. There were attempts by the Defendants to obtain production of documents, initially by the exercise of rights under the IAWSS Constitution and subsequently by a notice to produce. It is not entirely clear, on the evidence before me, the extent to which those attempts met with success, and it is not necessary to address that matter at this point.
By notice of motion filed on 4 August 2014, the Defendants sought 17 orders, including an order that the Statement of Claim be struck out, which was subsequently extended in oral submissions to an order that it be struck out with no leave to replead; an order dissolving interlocutory relief given in the proceedings; orders for inspection of documents; orders restraining the use of funds of IAWSS on the conduct of the proceedings and other orders. Since the matter has only been listed for a day of argument, and the issues are numerous, I will deal with those issues sequentially, delivering separate judgments dealing with groups of issues as I have heard from counsel. Each party has read extensive affidavit evidence in the application, although much of that affidavit evidence appears to be relevant to the wider proceedings, and to some extent each party has read that evidence in anticipation of other matters that may arise and it has not been necessary to address it in this particular aspect of the application.
The first order sought by the Defendants was an order that the proceedings be transferred from the general Equity list, where they were commenced, to the Corporations List. That application was not opposed by the Plaintiffs, which indicated that their primary wish was for an earlier hearing date. Plainly, not all matters are appropriate for the Corporations List, which is a specialist list with particular features, and the Plaintiffs point out, with considerable force, that earlier proceedings in relation to IAWSS had been conducted in the general list. Nonetheless, it seems to me that the orders sought by the Plaintiffs should be made. First, the particular issue in these proceedings involves the validity of a resolution of IAWSS, which is an issue of a kind which this list is accustomed to deal with. Second, that issue arises in the context of the Associations Incorporations Act 2009 (NSW), and Practice Note SC Eq 4 Corporations List recognises that matters arising under that Act are allocated to this list, not least because that list adopts a model which has something in common with the regime arising under the Corporations Act 2001 (Cth). Third, the Defendants have foreshadowed reliance on s 1322 of the Corporations Act, as applied by the Associations Incorporations Act, and that is a matter as to which this List again has expertise. Fourth, although interlocutory relief has been in place in these proceedings for some time, and although one would ordinarily expect that proceedings would go to an earlier hearing date where such relief had been given, there has been some delay in bringing these matters to a hearing, and the matter will benefit from active case management, including regular directions listings before a judge. Fifth, so as the Plaintiffs have a concern for an early hearing date, the list has a capacity to allocate hearing dates in the period by which the matter would be ready for hearing, assuming that parties now exercise a significant degree of expedition. For these reasons, I will make the first order sought by the Defendants that the proceedings be transferred to this list.
Next, and more substantially, the Defendants seek an order that the Statement of Claim be struck out, initially on the basis that the Plaintiffs be directed to replead with one amendment and pleading certain matters with specificity within seven days although, as noted above, that submission was altered in oral submissions to seek to proceed on the basis that no leave to replead should be given, given the time which was said to have elapsed since issues in respect of the pleading were first raised. As I understand the submissions put by Mr Smallbone, who appears for the Defendants, this submission was based on rule 13.4 of the Uniform Civil Procedure Rules 2005 (NSW), which provides for summary dismissal on the basis that a claim disclosed no reasonable cause of action. At the least, Mr Smallbone's written submissions proceeded on the basis that the Statement of Claim disclosed no reasonable cause of action, which is the test adopted in an application under that rule. However, that the application involved a number of elements, including criticism of the level of particulars that had been provided by the Plaintiffs, and also turned on other aspects of the substantive argument of the legal issues raised in the proceedings.
Mr Smallbone properly accepted in the course of oral submissions that the legal issues that he had raised in the course of argument would not likely lead to summary dismissal of the Plaintiffs' claims if issues requiring factual determination would remain. An order for summary judgment deprives a party of its hearing on matters and proceedings may not be summarily dismissed unless a claim can properly be described as "so obviously untenable that it cannot possibly succeed", "manifestly groundless" or "so manifestly faulty that it does not admit of argument", and it is necessary for the Court to reach after a high level of satisfaction that the order should be made: Dey v Victorian Railways Commissioner [1949] HCA 1; (1949) 78 CLR 62 at 91; General Steel Industries Inc v Commissioner of Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129; Gillies v District Court (NSW) [2014] NSWCA 357 at [39].
In the present case, and without disrespect to the detailed submissions being put by Counsel, it does seems to me there are factual issues which have been pleaded and particularised which require determination although, as I note below, seems to me that the manner in which they were particularised was not entirely clear and further particulars are required in that regard. Those factual issues at least include the proposition that the requisition in issue, whether alone or combined with another document described as a petition, which was arguably to be read together with it, was not signed by 5 per cent of members as the relevant constitutional provision required in order to require a meeting of members to be called. The first basis for that proposition does not raise issues of any factual complexity, namely, that the requisition itself was signed only by Mr Bajwa, but primarily a legal issue of whether the two documents are to be read together, and of what is required to amount to a signature. A second, more complicated factual issue, is whether the requisition, read without the associated petition, if treated as signed by other persons named upon it, was signed by less than 5 per cent of members, which may depend on whether additional members had been admitted to IAWSS as the Plaintiffs contend, and possibly, on who was a member or a financial member at the relevant time, and a final issue, involving the greatest factual complexity, is whether the requisition read with the petition was signed by less than 5 per cent of the members, which also depends on who were members or financial members at the relevant time.
I noted above that it seems to me that further particulars must be provided. Mr Smallbone submits, with some force, that the Statement of Claim, as it presently stands, does not plead material facts, in the sense that paragraphs 14, 15 and 16, which involve key allegations as to the validity of the requisition, the meeting held pursuant to the requisition, and the resolutions passed by it are effectively conclusory statements based upon propositions of law and fact that are found in the particulars. Having said that, the courts have been less demanding in recent years, particularly in cases involving primarily legal issues, as to the extent to which facts, matters and circumstances must be pleaded within a Statement of Claim, and to be more inclined to ask a pragmatic question, namely, whether the pleading together with the particulars identifies the case that the other party has to meet. In the present case, guided by s 56 of the Civil Procedure Act, it seems to me that I should adopt a pragmatic approach and not require a repleading, for the sake of merely repleading matters already appearing in particulars so they appear in the text of the Statement of Claim.
The real question which I need to ask is whether the particulars, read in the context of the associated pleading, make it clear to the Defendants the case which they will have to meet. It seems to me, although I must say I had initially questioned this matter, that the particulars, read in the context of the matters known to the parties and argued before Darke J, generally make clear the logical sequence of steps raised by the Plaintiffs, namely, that the requisition was signed only by Mr Bajwa; that the petition is not to be treated as a requisition; that the petition did not comply with the requirements of a requisition; that the petition is not itself signed by not less than 5 per cent of members; that the petition read together with the requisition are not signed by not less than 5 per cent of members; and the meeting and the resolutions passed by it were not valid, for the same reasons, plus additional reasons which are particularised in respect of the notice period given in respect of the meeting.
There is, however, it seems to me, one area in which the particulars provided are significantly deficient which must be remedied, and I do not understand the Plaintiffs ultimately to have objected in providing further particulars in this regard. A key question in the case is whether the requisition, when read together with the petition, was signed by not less than 5 per cent of the members of IAWSS, whether the number of members previously determined by Pembroke J or the increased number of members said to have arisen by admission of further members. The present particulars identify a contention that the five per cent requirement was not satisfied, but do not identify who it is said should not be counted as a member, or should not be counted as a financial member, or the facts, matters and circumstances relied on for such an allegation. That does not seem to me to be merely a matter of evidence, or a matter which should be left to be deduced by the Defendants from the affidavits. As Mr Smallbone points out, it is critical to the just, quick and cheap resolution of the matters in dispute that the Defendants not be required to call each requisitionist to prove that he or she was a member or a financial member, and need only address the position of those persons whose status is genuinely disputed. That is necessary not only for the efficient conduct of the hearing, although that is important where court hearings are costly for the community and for the parties, but also so that the Defendants can prepare their evidence in a cost-effective manner. The Plaintiffs themselves need to be aware that the costs of this hearing will be substantially impacted by the number of witnesses who have to be called, and that such particulars have to be more rather than less illuminating, to avoid the risk that costs will be wasted in that regard. It seems to me that an order for further particulars should be made in that respect. Notwithstanding the criticisms which Mr Smallbone has made that this information could have been provided previously, it seems to me that it would not be consistent with s 56 of the Civil Procedure Act to strike out the relevant paragraphs on the basis that particulars could have been provided more promptly, where the deficiency can be addressed by ordering that they be provided now.
Mr Smallbone also has made detailed, and helpful, submissions as to some of the legal matters in issue. In particular, he characterises some of the construction points taken by the Plaintiffs as hopeless or inconsistent with the case law. Mr Cheshire, who appears for the Plaintiffs, has, sensibly in the circumstances, not sought to engage with the detail of that debate. It seems to me that, as Mr Smallbone essentially accepted in submissions, once it is accepted that further particulars should be provided, rather than the factual basis of the relevant paragraphs being struck out, the determination of the legal issues will not add substantially to the length of the hearing, and seeking to determine them now would not avoid the need for a hearing. I note that Mr Smallbone contends, with some force, that the reading of cl 26(4) of the Constitution for which the Defendants contend has support, both in the text of the clause, and in the case law, which had not been drawn to the attention of Darke J when he was granting interlocutory relief in respect of the application. I accept that at least some of the case law would support the construction for which Mr Smallbone contends. Having said that, it seems to me that that does not provide a basis for summary dismissal. As Mr Cheshire pointed out, in submissions, the fact that Darke J expressed a view that one contention may be the better position, and that Mr Smallbone has now articulated an argument which may be capable of supporting the contrary view, simply demonstrates that there is a real and genuine issue in dispute, rather than providing a basis for summary dismissal.
Mr Smallbone also raised a question as to the pleading of s 1322 of the Corporations Act. He submitted that the Plaintiffs bore the onus of negativing substantial injustice in respect of s 1322(2) of the Corporations Act. That submission seems to me to be supported by the case law to which Mr Smallbone refers, but there is a significant qualification to that proposition. Before s 1322(2) arises, there must be an irregularity which is properly characterised as a procedural irregularity, and it seems to me that the Defendants may well bear the onus of at least pleading that matter, before any evidentiary onus or legal onus shifts to the Plaintiffs to establish lack of substantial injustice. It is ultimately not necessary to determine that matter, because the parties have sensibly agreed to a regime which will allow s 1322 be raised by both of them, in a manner that provides proper particulars of each party's position. I did not understand Mr Smallbone to abandon the point that he raised as to s 1322. I should indicate that, without expressing a final view as to the issue, it seems to me that the onus does rest on the Defendants to plead that the relevant irregularity is a procedural irregularity, and that cannot simply be inferred from the Plaintiffs' pleading of events, and that the Plaintiffs would not be obliged to negative substantial injustice until that issue was raised.
In any event, it seems to me that the proposition that no reasonable cause of action is established has not been made good by the Defendants, at least so far as there is plainly a factual case available, albeit not fully particularised, that less than five per cent of members were party to the requisition, ranging from the very simple factual case that only Mr Bajwa signed the requisition itself to a much more complex case if the requisition and petition are read together. For these reasons, I do not consider that I can order that the Statement of Claim be summarily dismissed or that to do so would be conducive to the just, quick or cheap resolution of the matters in dispute.
Nonetheless, the Defendants have had a significant degree of success, so far as it seems to me that further particulars did need to be provided and will now be ordered to be provided. Turning to the form of those particulars, it seems to me that the Plaintiffs must particularise the facts, matters and circumstances on which they rely, and in particular that they must particularise the facts, matters and circumstances on which they rely to contend that identified persons were not members or financial members so that the five per cent requirement was not satisfied. I put that observation at a level of generality because any particulars that are ultimately provided by the Plaintiffs should be tested against that requirement, which seems to me to be dictated by the need for the just, quick and cheap resolution of the matters in dispute. Having said that, Mr Smallbone has sought significantly more detailed particulars, which Mr Cheshire has indicated that the Plaintiffs would use their best efforts to provide, while not necessarily accepting that all of them are proper requests for particulars or that all questions will be answered in precisely the terms that the Defendants seek. That approach may defer any debate as to the adequacy of any answers to the future, although that question will be determined by reference to whether the answers given are constructive, disclose the case which the Defendants have to meet, and are likely to allow the hearing to be conducted in a cheap and efficient manner. Because experienced counsel prefer to have an order made in the terms proposed in respect of the questions proposed by Mr Smallbone, I will make an order for provision of particulars in that manner.
I should add that the parties also, as I noted above, agreed a pragmatic approach by which I would grant leave to the Defendants to file and serve an amended defence which may raise any issue as to s 1322(2) of the Corporations Act and particularise the facts, matters and circumstances on which they rely to contend that any irregularity was a procedural irregularity for the purposes of that section. The questions asked by Mr Smallbone in turn contemplate that the Plaintiffs will then identify any substantial injustice which they contend arises. I will return, shortly, to confer with counsel as to the time that is likely to be required for the provision of particulars by the Plaintiffs.
The next issue which was addressed was the making of a representative order. The Defendants sought orders, respectively, that the Plaintiffs be appointed to represent those persons who contend that the meeting held on 2 March 2014 was not validly convened or held and certain associated matters and that the First to Seventh Defendants be appointed to represent those who contend to the contrary. The Defendants pointed out that the making of representative orders of that kind would have the advantage that, in circumstances where there has been a degree of division among members of the association, all parties with interest in this question would be bound by the result. The Plaintiffs were essentially neutral as to this question. I initially had a degree of concern as to the formulation of these orders, so far as they appeared to proceed on the premise that the members of the association could be neatly divided into two classes, so that everyone either supported or opposed the validity of the resolutions, no-one was neutral and no-one changed their mind.
However, Mr Smallbone fairly draws my attention to the judgment of Lindsay J in Ahmed v Chowdhury [2012] NSWSC 1452, where his Honour made representative orders in respect of a somewhat similar dispute in relation to an organisation incorporated under the Associations Incorporation Act. His Honour there fairly recognised that the orders he had made did not conform to perfection, and did not provide a perfect definition of the persons represented by the representative party, and that a more conventional form of representative order might have appointed one or other party to represent all members of the association other than his or her opponents. His Honour, plainly correctly, recognised that such an order would not be desirable in a dispute of this character, where views were divided amongst groups who held opposed views, since it could readily be misunderstood as endorsing one or other of those opposed views. It seems to me that, for the pragmatic reasons identified by Lindsay J in Ahmed v Chowdhury above, I should make similar orders of the kind that the Defendants seek. I agree with his Honour's description of those orders, as involving less than perfection, and I accept that they will involve some challenges of identification of who might fall within particular classes, but they have the advantage that at least those members of the association who do articulate a clear view on these issues will be bound by the outcome of the proceedings.
In the course of submissions, Mr Cheshire raised a possible alternative, possibly in addition to the provision of particulars, that the Plaintiff should be given an opportunity to file further evidence at this point, although acknowledging that that might involve some delay. It does not seem to me that I should make an order at this stage. It seems to me that such an order has the real risk that evidence will be filed in anticipation of the issues, which may in fact be clarified by the exchange of particulars between the parties. I should not assume that in a matter of this kind, where parties have limited resources, the proceedings will in fact be conducted, when particulars are provided, so as to expand to include all possible issues rather to contract to those which are sensibly the subject of dispute. Where there is a prospect that issues might contract rather than expand, it would be preferable that further evidence is not filed before that occurs. To the extent that any issue as to any further evidence arises, it should be addressed when it is clear what further matters are in issue that have not already been addressed by evidence. At that point it may also be necessary to deal with the matter, foreshadowed by Mr Smallbone in submissions, of any orders which have already been made requiring evidence to be led by particular dates.
Mr Smallbone similarly raised a question as to whether his client may wish to file the Cross-Claim, long foreshadowed but not yet filed, which appears to raise an issue under s 1322(4) of the Corporations Act. Again it seems to me that I should not make such an order at this stage. First, that cross-claim would foreshadow an issue which may or may not arise, depending upon the parties' respective positions as to s 1322(2) of the Corporations Act. Second, it is likely to lead to a debate which may or may not need to be resolved, as to whether such a cross-claim should be permitted at this point, given orders that have previously been made. It seems to me preferable that I not make orders which anticipate such a matter, again where there is at least a possibility that the case may contract rather than expand.
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Decision last updated: 23 February 2015