John Richard Bryant v Hawkesbury Radio Communication Co-operative Society Limited

Background facts 3Hawkesbury Radio is registered as a co-operative under the Co-operatives Act 1992 (the Act) and was subject to the provisions of that Act at all material times. The activities and operation of Hawkesbury Radio are regulated by certain rules approved under the Act (the Rules). 4The objects of Hawkesbury Radio are set out in the Rules as being the provision, maintenance and operation of a public access community radio station in the Hawkesbury Shire for the broadcasting of material of an educational and general community interest. The objects also include the promotion of access and involvement of all sections of the community. 5Mr Paul Rasmussen is a director of Hawkesbury Radio, and at all relevant times was the Chairman of the Board of Directors. 6Hawkesbury Radio holds a community radio station broadcasting licence (SL 5943), issued by the Australian Communications and Media Authority. which entitles it to operate and broadcast continuously. 7Mr Bryant is a director of a company called John R Pty Ltd, which is described as an "online internet business" (T9/3). Mr Bryant was a member of Hawkesbury Radio from 2009 up to and including 16 July 2013. The records of Hawkesbury Radio seem to indicate that he applied to be a member on 25 August 2008, and such an application was approved on 8 October 2008, but nothing turns on this. At some point, Mr Bryant began presenting a one hour program each week (affidavit of Mr Rasmussen dated March 2014 at [16]). In response to a request I made on 18 June 2014, I was informed by email by counsel for the plaintiff, without objection, that this eventually became a four hour program. 8It is not necessary to set out the extensive and acrimonious disputes that arose between Mr Bryant and the Board of Hawkesbury Radio in great detail. However, briefly, an application was made by Mr Bryant in October 2010 to present, along with a Ms Linnah Hahn, a weekly Christian programme on the station. That application was rejected and this appears to have initiated conflict between the parties. 9Disputes also arose over the nomination of Mr Bryant for a position on the Board in 2011 and his ability to access membership records of Hawkesbury Radio. Various complaints were made by Mr Bryant to various public authorities such as the NSW Department of Fair Trading and the Australian Communications and Media Authority (ACMA). Extensive evidence was provided at the hearing as to various correspondence between the parties, with those authorities, local politicians and the media. However, for reasons to which I shall return, that evidence is largely irrelevant to the questions that arise for determination. 10In any event, the Board made a decision on 12 November 2012 by which Mr Bryant was suspended from broadcasting on or about 13 November 2012 indefinitely, pending investigation into his activities involving the station over the previous 18 months (CB38). Mr Bryant asserted he did not make "any public statements for eight months between my suspension and expulsion" (T16/30). Again nothing turns on this and indeed he never sought any relief in relation to the suspension of his program. 11By Rule 19, a member would cease to be a member of Hawkesbury Radio if expelled in accordance with the Rules. By Rule 20(a)(ii), a member could be expelled by special resolution to the effect that the member had been guilty of conduct detrimental to the co-operative. 12Rule 20 also required that written notice of such a resolution be provided at least 14 days before the date of the meeting, and that the member was given a reasonable opportunity to be heard: Rule 20(b). 13On or about 18 June 2013, Hawkesbury Radio forwarded correspondence to Mr Bryant (CB39) that advised a Special General Meeting would be convened on 16 July 2013 to consider the following resolution (the Resolution): That in accordance with Rule 20(a)(ii) of the co-operatives rules Mr John Bryant be expelled as a member of the co-operative. 14A document titled 'Notice of Special General Meeting' which set out, inter alia, the Resolution was also provided to him (CB40). 15On or about 11 July 2013, solicitors for Mr Bryant forwarded a letter to Hawkesbury Radio which noted that no particulars had been provided and that the proposed special resolution should be deferred indefinitely until such time as particulars had been provided (CB41). 16On or about 15 July 2013, Hawkesbury Radio forwarded correspondence dated 14 July 2013 to Mr Bryant purporting to particularise matters which were to be articulated in support of the Resolution (CB370). It is important to set out the relevant 'particulars' in full: In support of the Special Resolution your conduct as a member of the Co-operative over the previous eighteen months will be placed before the Members for their consideration. It will include the following: 1. A concerted, lengthy and deliberate media campaign with the intention to denigrate, misinform, mislead, distort and generally discredit the Board of Directors and the Governance of the Co-operative to the Community; 2. A concerted, lengthy and deliberate letter, email and blog site campaign with the intention to denigrate, mislead, misinform, distort and generally discredit the Board of Directors and the Governance of the Co-operative to the Members; 3. A concerted, lengthy and deliberate letter and email campaign with the intention to denigrate, mislead, misinform, distort and generally discredit the Board of Directors, the Governance of the Co-operative, the broadcast licence renewal application process, the Members Register, the Audited financial Statements and the non-compliance with certain requirements of the broadcast license requirements to the assessing Staff at the Department of Fair Trading (DoFT) and the Australian Media and Communications Authority (ACMA); 4. Letters to the local press and media deliberately misleading, distorting and misinforming the readers and the general public about the Governance and general affairs of the Co-operative; 5. Creating an impression in the minds of the community, general public and current and future sponsors of the Co-operative that the governance of the Co-operative and expenditures of Members funds was controlled by certain long standing Board Directors and that Members were being misled and deceived by these Directors for their own benefit; and 6. The misrepresentation of your position, standing and authority to obtain Board approval for a Religious Programme. The above matters will be of no surprise to you as they have been canvassed by yourself and by Members of the Board in emails, correspondence and in the local newspaper in considerable detail over the last 18 months. [my emphasis] 17On 16 July 2013, at the Special General Meeting, the Resolution was put before the members. 18The meeting was addressed by two members of the Board, a Mr Gavin Casburn and a Mr Michael Kear. Other members of Hawkesbury Radio also appear to have addressed the meeting. 19The defendant asserts that Mr Bryant did not take the opportunity to address the meeting, but did distribute a document entitled 'Statement to Special General Meeting of Hawkesbury Radio' (CB48). The document amongst other things reiterated many of Mr Bryant's complaints but also complained of the lack of particulars and a breach of the rules of natural justice. 20There was also some debate at the meeting about whether it could be recorded by Mr Bryant, but that again is not presently relevant. 21The Resolution was carried by the requisite two-thirds majority. It seems that some members cast proxy votes. Mr Bryant asserts he was unaware that this might occur, but the ability of members to cast a proxy vote was not under challenge in these proceedings. 22Mr Bryant asserts that the Resolution was void and ineffective as it was not a resolution to the effect that he was guilty of detrimental conduct, and that such a resolution was required as an antecedent to any motion to expel, and furthermore he was not given a reasonable opportunity to be heard in light of the purported particulars provided. 23Hawkesbury Radio asserts, in response to the entire claim, that Mr Bryant should have availed himself of alternative dispute resolution processes (as provided for in Rule 71), or in the alternative that any procedural irregularity is not invalidated pursuant to section 1322 of the Corporations Act (which applies to co-operatives pursuant to section 10 of the Act and clause 23 of the Co-operatives Regulation 2005). 24In his submissions, counsel for the defendant sought to rely on certain correspondence in relation to attempts to settle these proceedings. This was admitted as Exhibit D6 without objection on the basis it was limited to costs (T42/45-T43/40), and I have had no regard to it other than on that issue. 25On 10 December 2013, the solicitor for the defendant wrote a letter to the solicitor for the plaintiff which proposed resolution of the dispute on the basis that Mr Bryant be reinstated, a deed of settlement be signed including clauses concerning confidentiality and non-disparagement, the proceedings be dismissed and that each party would pay their own costs. 26On the same day, the plaintiff's solicitor replied that, inter alia, time would be needed to consider the proposed orders to resolve the matter. 27On 11 December, the defendant's solicitor again suggested a course to resolve the matter. This included the Board passing a resolution to settle the proceedings and that consent orders be made recording the agreement of the parties to reinstate Mr Bryant. 28On 19 December, the plaintiff replied to the letter of 11 December and rejected the offer of settlement, in part because it was viewed as unworkable. The letter suggested that "the Supreme Court will not necessarily make an order by consent declaring the first Special Resolution to be void" and set out an alternative scheme involving four resolutions to be passed without amendment, two by the membership at another Special General Meeting and two by the Board. I will return to these issues at greater length later in the judgment. 29On 1 January 2014, Mr Bryant sent an email with the subject line "Supreme Court action" and addressed to Hawkesbury Radio members (CB387). In cross-examination, Mr Bryant suggested that the email had been sent to "maybe, I'm guessing, 25, maybe 30" members (T44/27). In that email, Mr Bryant discloses the private attempts to settle the litigation and that Mr Rasmussen, as Chairman, had offered to overturn the expulsion Resolution passed at the Special General Meeting. Mr Bryant contrasts these private settlement negotiations with Mr Rasmussen's public statement that the station "is defending the court action" and the "station has no case to answer". I will also return to this email. 30On 7 January 2014, the solicitors for Hawkesbury Radio wrote a letter to the solicitors for the plaintiff. They noted that the 1 January email had come to their attention and suggested that such disclosure was inappropriate and not conducive to resolution of the dispute. 31On 13 January 2014, the solicitors for Mr Bryant suggesting that the 1 January email was written in response to statements by Mr Rasmussen which they regarded as misleading, and that Mr Rasmussen's conduct was not conducive to resolution of the dispute. 32On 15 January 2014, the solicitors for Hawkesbury Radio responded to the letter of 13 January and rejected the offer of 19 December 2013. 33In a letter dated 25 February 2014, the solicitors for Hawkesbury Radio suggested a mediation as a possible option in resolving the dispute. In a letter dated 26 February 2014, the solicitor for Mr Bryant rejected mediation as inappropriate because the Resolution "cannot be rescinded or revoked by (1) the executive committee of the defendant; (2) by the Mediator; (3) by the consent of the parties". 34When questioned, Mr Bryant gave evidence that "it has never been suggested to me to go to mediation". In response to a question as to whether his solicitors had discussed mediation, he replied "No. Look, it might have been mentioned at some brief stage, but I don't have any recollection" (T54/13-T54/18). Again I will return to this matter. 35There were no further attempts to resolve the proceedings prior to the hearing.

Legal principles - the substantive issues 36One preliminary issue is the justiciability of the issues raised by Mr Bryant, although neither party raised this at the hearing. I note that section 106 of the Act provides that the rules of a co-operative have the effect of a contract between the co-operative and each member, and I am satisfied that given those contractual obligations and in conjunction with section 90 of the Act that Mr Bryant has the requisite standing to bring these proceedings. Expulsion of course in these circumstances also has a potential impact on the reputation of Mr Bryant. In Carter v The New South Wales Netball Association [2004] NSWSC 737, Palmer J made it clear at [100]-[109] that damage to reputation is an interest attracting the protection of the rules of natural justice, citing Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 578. 37Section 70 of the Co-operatives Act 1992 sets out the circumstances in which membership ceases and applies to all co-operatives. A person ceases to be a member of a co-operative "if the member is expelled in accordance with the rules of the co-operative": section 70(1)(b). 38Section 90 concerns an application to the Court, and provides: 90 Application to Court (cf Vic Act s 89) (1) The Court may, on the application of a member or the co-operative, make an order declaring and enforcing: (a) the rights or obligations of members of the co-operative between themselves, or (b) the rights or obligations of the co-operative and any member between themselves. (2) An order may be made under this section whether or not a right of a proprietary nature is involved and whether or not the applicant has an interest in the property of the co-operative. (3) The Court may refuse to make an order on the application or may make an order for costs against a party, whether successful or not, if it is of the opinion that: (a) the issue raised in the application is trivial, or (b) having regard to the importance of the issue, the nature of the co-operative, any other available method of resolving the issue, the costs involved, lapse of time, acquiescence or any other relevant circumstance, it was unreasonable to make the application, or (c) the unreasonable or improper conduct of a party: (i) has been responsible for the making of the application, or (ii) has added to the cost of the proceedings. 39There are three points of principle for which it is necessary for me to deal with in relation to whether or not Mr Bryant is entitled to the relief sought. These are the form of the resolution and whether it sufficiently articulates the basis of the grounds for expulsion; whether an antecedent resolution that Mr Bryant had been guilty of conduct detrimental to the defendant was required; and whether Mr Bryant was given a reasonable opportunity to be heard. 40Reliance was placed by counsel for the plaintiff on the decision of the NSW Court of Appeal in Battle v Bundagen Co-operative Ltd (No 2) [2011] NSWCA 38 (Battle). 41In that case, a general meeting of the co-operative was held at which a special resolution was purportedly passed in the following terms: "That Chris Battle be expelled from Bundagen Co-operative Ltd". It is noted that the resolution itself did not identify the ground upon which Mr Battle was to be expelled, although the grounds for the special resolution did identify that it was directed towards expulsion on the basis of conduct detrimental to the co-operative. 42The Court found that the resolution itself was not authorised by the relevant rule of the co-operative because it did not identify whether Mr Battle was to be expelled on the grounds he had failed to discharge his obligations or that he had been found guilty of conduct detrimental to the co-operative: [49]-[50] per Hodgson JA, [89] per Sackville AJA, [86] per Campbell JA. 43The second and more substantial point arising from Battle is that the relevant rule of the co-operative required a two-stage process, namely the finding of guilt followed by a separate resolution expelling the member. 44In Battle, Hodgson JA observed at [64]-[66]: [64] The most substantial ground supporting denial of natural justice is that there was no separate finding of guilt, and thus that Mr Battle had no reasonable opportunity to address the meeting on penalty. Mr Doyle for Mr Battle submitted that it was established by Hall v New South Wales Trotting Club Ltd [1977] 1 NSWLR 378 that there must be a two-stage process, in which first the question of guilt is decided, and then there is a consideration of penalty in which the person found guilty has an opportunity to be heard; and that this principle had been applied in Forge v Australian Securities and Investment Commission [2004] NSWCA 448; (2004) 52 ACSR 1 at [418] - [425]. In Malone v Marr [1981] 2 NSWLR 894, Holland J applied Hall to a domestic tribunal, namely a committee of the North Sydney District Rugby League Football Club. [65] However, I note that in McClelland v Burning Palms Surf Life Saving Club [2002] NSWSC 470, decided before Forge, Campbell J at [125] considered there was "no rule of law to the effect that it is not possible for there to be a single hearing which addresses both questions of guilt, and on a contingent basis, questions of penalty", referring to Barnes v Australian Telecommunications Commission [1989] FCA 47; (1989) 25 FCR 283 at 290 - 291, a decision of Spender J. [66] I agree with Campbell J that there is no rule of law mandating a two-stage process in all circumstances. In cases like Hall and Forge, where there are both a substantial number of different findings on guilt that could be made, and also a considerable range of consequential penalties that could be imposed, it is generally the case that natural justice does require first a determination of what findings are made on guilt, and second an opportunity to be heard concerning the range of possible penalties. Otherwise, it is not possible for submissions concerning penalty to be appropriately focussed. However, in my opinion, if for example there were only two possibilities on guilt, that is, either guilty or not guilty on one charge, then it could be that submissions concerning penalty could be appropriately focussed in a single-stage hearing. And where, as in this case, there are only two possible results on "penalty", that is, expulsion or non-expulsion, again it may be that submissions concerning penalty could be sufficiently focussed in a single-stage hearing. 45Hodgson JA observed that it would generally be preferable to have a separate submission on penalty after a determination was made as to guilt, but this was not mandatory. His Honour noted that "where it is not necessary for me to make a finding in this case on the question of natural justice, I would prefer not to do so": at [67]. 46Sackville AJA was somewhat more forceful in the view that a two-stage process was required as part of a proper construction of the relevant rule of the co-operative: see [90]-[95]. 47Counsel for the defendant submits that there are numerous cases of expelled members seeking reinstatement because they had been expelled without a prior finding of guilt. In addition in Battle, other cases such as Hall v NSW Trotting Club [1977] 1 NSWLR 378 and Tsoukaris v Royal Motor Yacht Club [2012] NSWSC 1190 were mentioned. However, it was submitted that these cases may be distinguished on the basis that they dealt with disputed issues of fact, whereas the conduct of Mr Bryant is such (being public criticism of the station in his statements and letters to local media and regulatory authorities) that there was no need for a formal finding. He either was or was not responsible for the materials, and in almost all cases there appears to be little doubt he was. 48On the third point, a reasonable opportunity to be heard involves the right to present arguments in one's defence. This necessarily involves having a fair opportunity to know and consider what is alleged: Hall v NSW Trotting Club [1977] 1 NSWLR 378. 49In Kioa v West (1985) 159 CLR 550, at 584-585 Mason J said: The law has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention. ... The critical question in most cases is not whether the principles of natural justice apply. It is: what does the duty to act fairly require in the circumstances of the particular case? ... In this respect the expression "procedural fairness" more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, i.e, in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations. [my emphasis] 50In examining procedural fairness, one must also bear in mind the comments of Gleeson CJ in Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1 where, in discussing the manner in which procedural fairness cases are approached by the courts, His Honour observed at [37] that: Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice. 51It has been said that natural justice makes two demands before a person's legal rights are adversely affected or their "legitimate expectations dashed". First, an opportunity to show why adverse action should not be taken which must involve a sufficient opportunity to say everything that can be said in the person's favour; and secondly that the matter will be determined by a decision maker whose mind is open to persuasion or free from bias. 52If there has been a denial of natural justice this will amount to an error of law that deprives a tribunal or the decision maker of jurisdiction and renders the decision void. 53It is immaterial to pose the question whether observance of natural justice would have produced a different result. It is not the function of the court when such application is made to try the merits of the decision. In a case such as this where a person may be expelled from the co-operative it is plain, notwithstanding the consensual rules of such a body, that the principles of natural justice will clearly apply. 54Of course in the case of a body such as a co-operative procedures have to be honed and/or followed so that for example where the expulsion is or is not going to be the subject of debate at a special general meeting it is essential that there be a level playing field between all participants. That is, the accuser needs to articulate the conduct that it says warrants expulsion but it is plain that the accused must ordinarily be given a full and adequate opportunity to defend his or her position. 55It goes without saying that the person accused must know before the hearing and in sufficient detail the issues to be canvassed. That person must be told precisely when and where the hearing will take place and importantly have sufficient time to make enquiries and consider their position and prepare a response. 56Proper notice has to be given "not at the steps of the hearing room but in such time as would enable the person to reasonably and effectually prepare any case which he would seek to make": Re Mullen [1995] 2 Qd R 608 at 614. In any case involving some form of disciplinary action there must effectively be a charge alleging some act or omission defined in the Rules as misconduct and with which the nominated entity is authorised to deal. It is certainly not necessary for the notice to recite the Rules verbatim provided it is plain enough what rule is relied upon and a copy of it is reasonably accessible especially to the person accused: Byrne v Auckland Irish Society Inc [1979] 1 NZLR 351 at 358. 57However, a bare recitation of a rule in the absence of proper particulars will often not meet the requirement of natural justice: Robbins v Harness Racing Board [1984] 1 VR 641 at 645. This is because the person is entitled to know not only the rule that has been infringed but how it has been infringed. 58Generally speaking the broader the rule relied upon the greater the particularity and clarity needed for a proper notice and a fair hearing. Many rules of discipline simply refer to unprofessional conduct, improper behaviour or in this case conduct detrimental to the association. The allegation left at that level of course is meaningless without details being provided. 59For reasons which I will outline below, the first point in relation to the form of the resolution and the second in relation to the need for a two stage process are essentially academic in light of my view about whether Mr Bryant was given a reasonable opportunity to be heard and the provision of purported particulars. 60I should note in passing that counsel for the defendant largely abandoned the point regarding section 1322 of the Corporations Act at the trial (T84/37-T85/36). In any event, in my view the circumstances here suggest a substantive, rather than procedural, irregularity (see Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 194 FLR 322; 55 ACSR 185) that does not attract the application of the section.

Discussion and resolution of substantive issues 61In terms of the form of the Resolution (the first point), I am not convinced that similar circumstances apply in the present case as those set out in Battle. The Resolution here clearly identified the basis upon which it was proposed that Mr Bryant be expelled, namely Rule 20(a)(ii). That rule makes it abundantly clear that a member may be expelled by special resolution to the effect that the member has been guilty of conduct detrimental to the co-operative. Of course particulars will obviously be necessary to ensure procedural fairness, but the person is nonetheless placed on notice of precisely which rule is being invoked which in turn makes clear what the substance of the allegation is. 62There is no evidence the Rules were not readily accessible to all concerned. In my view, it is not necessary to set out the precise terms of that Rule when the nature of the resolution is clear to both Mr Bryant and those present at the Special General Meeting. 63On the second point, on the facts of this case it is really not possible in my view to come to a decided view as to whether a one or two stage process would be necessary in accordance with Battle. This is because the particulars are so inadequate that it is impossible to come to any conclusion, as Hodgson JA put it, as to whether Mr Bryant could be said to be guilty or not. 64Until it is clear what the precise allegations are, I do not think a Court is able to come to a view as to the appropriate process that should be followed. 65In cases like Hall and Forge v ASIC (2004) 52 ACSR 1, where different results on penalty might flow from which particular charges are made out, it may well be that a two stage process is mandatory. If there is a range of allegations (some of which may involve say dishonesty, others raising no higher than reckless behaviour), it is obvious that very different penalties may flow. 66Here, with proper particulars, authorship for example was not going to be in issue on many if not all of the communications that might be used to support a charge that Mr Bryant had acted to the detriment of the co-operative. The only substantive issue would arguably be their characterisation as such. Properly particularised, it is not inconceivable that a one stage approach may have been appropriate. 67The underlying assumption, it seems to me, in the debate over whether a one stage or two stage approach is appropriate, proceeds on the basis that one has been clearly informed of the charges so as to be able to predict substantively different penalties depending upon the findings of guilt. That quite simply had not happened by the date of the meeting. 68I would therefore refrain from coming to a decided view in this case, in the absence of Mr Bryant being given proper particulars, as to whether an antecedent resolution on guilt would have been necessary before any finding on penalty. 69On the third point in relation to natural justice, the so called particulars are not in my view really particulars at all. Particulars are intended to provide sufficient specificity of the claim or charge so that the person against whom allegations are made understands the nature of those allegations and thereby has an opportunity to consider what their response may be. 70The email of 15 July to Mr Bryant, as can be seen from [16] above, does no more (with the possible exception of paragraphs 3 and 6) than make high level allegations which in the absence of the precise conduct of the plaintiff which is to be relied upon are meaningless. It does not even purport to be exhaustive, as it begins with the words "it will include the following". 71Each of paragraphs 1, 2 and 3 starts with the formula "a concerted, lengthy and deliberate...campaign" and refers to the means by which the campaign was waged ("media", "letter, email and blog site", "letter and email" respectively). The campaign is then characterised, and again at a high level, as one in which the plaintiff intended to "denigrate, mislead, misinform, distort and generally discredit the Board of Directors and the Governance of the Co-Operative". Paragraph 4 refers to letters to the same effect. 72Paragraph 5 speaks of "creating an impression in the minds of the community, general public and current and future sponsors of the Co-operative that the Governance of the Co-Operative and expenditures of Members funds was controlled by certain long standing Board Directors and that Members were being misled and deceived by these Directors for their own benefit". 73In no case is there ever an attempt to point to one specific instance or communication. The so called particulars letter is in fact no better than the defendant in my view saying to the plaintiff: "You know what you have done". 74This kind of approach is wholly and obviously inadequate in terms of a discharging of the defendant's obligation to properly particularise the precise conduct relied upon. 75The need to provide sufficient detail of the events is required so the plaintiff can consider a number of important matters. Does he admit authorship of all materials or only some? Were any of the materials a specific communication made by him as a result of some conduct on the part of the defendant so that it should be seen in context? Does he agree with the manner in which it has been characterised? Did he have the alleged intention? He was entitled to be adequately placed in the position where he could address at least these matters and respond, if he chose. 76In the absence of such particulars as a minimum the plaintiff is really left guessing and that is clearly not in accordance with the principles of fairness that lie at the heart of procedural fairness. 77In those circumstances, I consider Mr Bryant was denied procedural fairness and it is appropriate to declare that the purported expulsion on 16 July 2013 of the plaintiff as a member of the defendant is void and of no effect.

Legal principles - costs 78It is necessary to deal with the question of costs. This issue was considered at the same time as the hearing of the substantive issues, and it is therefore appropriate for me to determine the issue in this judgment. I should observe that costs are a subject about which whole textbooks are written. This is understandable because in many cases they often equal, or perhaps even dwarf, the amount being contested. 79Under section 98 of the Civil Procedure Act 2005, subject to rules of court, costs are in the discretion of the Court: section 98(1)(a). Furthermore, the Court has full power to determine by whom, to whom and to what extent costs are to be paid: section 98(1)(b). 80It is clear that the exercise of the costs discretion is compensatory rather than punitive: Ohn v Walton (1995) 36 NSWLR 77 at 79 (per Gleeson CJ). 81In general terms, the exercise of the discretion in relation to costs depends upon matters of impression and evaluation: James v Surf Nominees Pty Ltd (No 2) [2005] NSWCA 296 (in relation to apportionment). The exercise of the Court's discretion as to costs ultimately requires an assessment of what is fair in all the circumstances: McLaughlin v Dungowan Manly Pty Ltd [2010] NSWSC 306 at [22] per Ward J. 82Under rule 42.1 of the Uniform Civil Procedure Rules 2005, the Court is to order that the costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs. It has been noted that the rule "speaks for itself. However, judicial exposition has noted that it means that a person seeking to displace its prima facie effect must show that there is something out of the ordinary in the case in order to justify the departure": Hastings Point Progress Association v Tweed Council [2010] NSWCA 39 at [18] (per Young JA). Clearly some greater justification is required to order costs against a successful party, as opposed to refraining from ordering that costs follow the event. 83In Oshlack v Richmond River Council (1998) 193 CLR 72, the High Court considered the exercise of a discretion not to award costs in relation to proceedings in the Land and Environment Court. Section 69(2) of the Land and Environment Court Act 1979 (NSW) provided that, subject to the rules and subject to any other act, costs of and incidental to proceedings were in the discretion of the Court and that the Court might determine by whom and to what extent costs were to be paid. Importantly, section 74(1)(e) authorised the making of rules with respect to the costs of proceedings in the Court, but no rules made thereunder were relied upon in argument on the appeal: see [19] (per Gaudron and Gummow JJ). 84Gaudron and Gummow JJ observed at [22] that the power conferred under section 69 of the Land and Environment Court Act "is to be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent". Whilst the legislative context in Oshlack is far removed from the present one it is plain that the relevant discretion is to be likewise exercised. 85McHugh J however observed at [67]-[69]: [67] The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation. [68] As a matter of policy, one beneficial by-product of this compensatory purpose may well be to instil in a party contemplating commencing, or defending, litigation a sober realisation of the potential financial expense involved. Large scale disregard of the principle of the usual order as to costs would inevitably lead to an increase in litigation with an increased, and often unnecessary, burden on the scarce resources of the publicly funded system of justice. [69] The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd, Devlin J formulated the relevant principle as follows: "No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct." "Misconduct" in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute. 86After quoting the above passage of McHugh J from Oshlack, Campbell JA in Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256 (with whom Macfarlan and Young JJA agreed) observed at [98]: Though McHugh J's judgment was a dissenting judgment, I did not see anything in the joint judgment of Gaudron and Gummow JJ or in the judgment of Kirby J (all three of whom made up the majority) that is to the contrary. Its statement of principle seems to me, with respect, to be correct as far as it goes. However, because it states when the court may properly depart from the usual order as to costs it still leaves a discretion as to whether, in any particular case that falls within the scope of the examples that McHugh J gives, it is appropriate for the court actually to depart from the usual order as to costs. Further, the list of examples that McHugh J gives does not purport to be an exhaustive listing of the circumstances in which an overall successful party ought not receive costs, or ought bear costs of the other side. Nor does his Honour seek to differentiate the sort of circumstances in which an overall successful party should not receive costs (with the effect that each side bears its own costs) from the circumstances in which the overall successful party should pay the costs of the loser. 87The lack of reliance placed on any rules in Oshlack is of some importance to the present case, in which the discretion encapsulated in section 98 of the Civil Procedure Act 2005 is subject to rule 42.1 of the Uniform Civil Procedure Rules 2005. Indeed, in Hastings Point Progress Association v Tweed Council [2010] NSWCA 39, Young JA observed: [22] Care must be taken in this area of the law of costs, when considering past authorities, to distinguish between cases under the former s 69 of the Land and Environment Court Act 1979, those under the general law as it existed before 2005 and those decided under the Civil Procedure Act 2005 and the UCPR: see Anderson v NSW Minister for Planning (No 2) [2008] NSWLEC 272; 163 LGERA 132. ... [24] Oshlack has been considered on over 40 occasions in reported cases. The actual decision depended on the terms of the cost provisions in the Land and Environment Court Act 1979, s 69(2) (legislation which contained no equivalent to UCPR Pt 42(1)) and only Kirby J considered the fact that the litigation might be classed as "public interest litigation" to be a relevant factor. However, despite this, in time it has come to be generally recognised that, in appropriate circumstances, the fact that litigation can properly be classed as "public interest litigation" may be a proper reason for making no order for costs despite the provisions of UCPR Pt 42(1). 88Of course, it should be noted that there is no suggestion that Mr Bryant was engaging in what could be described as 'public interest litigation' in the present case. 89Finally, it should be noted that in the passage quoted from McHugh J in Oshlack, citing Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873, there is a reference to misconduct taking the form of a party prosecuting the matter solely for the purpose of increasing the costs recoverable (although the case cited, being Hobbs v Marlowe [1978] AC 16, is an insurance case concerned with an increase in an amount claimed by the plaintiff in order to be awarded costs appropriate to that larger amount). There was some suggestion in the submissions of the defendant that Mr Bryant did not want reinstatement but his intention was to bankrupt the defendant and force it into liquidation (see defendant's final submissions at [47] and [54]). I will return to this point later. 90In final submissions, counsel for the plaintiff brought my attention to Ritter v Godfrey [1920] 2 KB 47. The headnote suggests that the defendant in that case wrote to the plaintiff "warmly repudiating" the action and was written "in a tone of levity and in somewhat insulting terms". The action was subsequently dismissed but the trial judge refused to give the defendant costs on the ground, mainly, of the attitude taken by him in the correspondence. 91The Court of Appeal however held the correspondence did not provide a basis for the exercise of the judicial discretion to refuse to award costs to the successful defendant. Atkin LJ came to the conclusion that although discourtesy or insulting language were not as uncommon as they might be, a plaintiff provoked to bring unfounded litigation was not entitled to have his feelings salved by escaping costs: at 63. 92Of course the circumstances in the present case are somewhat different as it is the successful plaintiff, Mr Bryant, who would have a reasonable expectation that costs would follow the event. 93In Dal Pont, The Law of Costs (2nd edition, 2009), the author makes it clear that the fact that an unsuccessful party would find it financially onerous to pay costs is not by itself a ground for the court not to make the usual order as to costs (see [8.28] and the cases discussed there), nor is the fact that the unsuccessful party is a voluntary association (see [8.30]). However the refusal to mediate or negotiate is regarded as a relevant factor (see [8.46]) and sits well with the statutory prescription to facilitate the just, quick and cheap resolution of the real issues in dispute: section 56, Civil Procedure Act 2005. 94Allsop P made the following observations in Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd and Ors [2008] NSWCA 243 in relation to a number of sections of the Civil Procedure Act: [160] Giving due weight to the realities of life in running a long and complex trial and the vicissitudes of the appreciation of the evidence given, it cannot be emphasised too strongly that it is the responsibility of the parties, through their legal representatives, to exercise a degree of co-operation to express the issues for trial before and during the trial. Such co-operation can now be taken as an essential aspect of modern civil procedure in the running of any civil litigation, including hard-fought commercial cases. The need for clarity, precision and openness as part of this co-operation has been emphasised in the context of ambush or surprise: White v Overland [2001] FCA 1333 at [4], expressly approved in Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116 (Heydon JA, with whom Mason P and Young CJ in Eq agreed); Glover v Australian Ultra Concrete Floors Pty Ltd [2003] NSWCA 80 at [59]-[60] (Ipp JA, with whom Sheller and Hodgson JJA agreed); Sutton v Erect Safe Scaffolding (Aust) Pty Ltd [2006] NSWCA 265 at [4] (Bryson JA with whom Basten JA agreed); and Hooker v Gilling [2007] NSWCA 99 at [52] (McColl JA, with whom Ipp and Basten JJA agreed). [161] The need for clarity, precision and openness in the conduct of litigation and the responsibility of parties and their legal representatives therefore flows most clearly from the statutory duty of a party and his, her or its legal representatives in civil proceedings to assist the court to further the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in dispute and to participate in the processes of the Court to that end: see Civil Procedure Act 2005 (NSW), 56. It may be that the provision no more than restates the proper approach of the modern law of procedure reflected in cases such as Nowlan v Marson Transport. It places the proper approach, however, on a firm statutory foundation. These principles can be seen to be reflected in the longstanding rules of pleading requiring any matter that may cause surprise to be pleaded. [162] An enhanced requirement of clarity and disclosure in modern civil litigation can be seen in Australia and England from at least the early 1990s: see the discussion of the "cards on the table" approach by Ipp J (as his Honour then was) in Boyes v Colins [2000] WASCA 344; 23 WAR 123 (with whom Pidgeon and Wallwork JJ agreed), citing Mercer v Chief Constable of the Lancashire Constabulary [1991] 1 WLR 367 and Khan v Armaguard Ltd [1994] 1 WLR 1204. Indeed, from the late 1970s and early 1980s, the Commercial List of this Court (in which List this hearing took place) has been sought to be run on the strict basis of the clear and full enunciation of issues for trial, in a way that has always demanded the fullest co-operation among parties and legal practitioners to delineate and illuminate the real issues in dispute. [163] The clear statutory duty to assist the Court, and, in a practical way, to co-operate to bring forward the real issues in dispute, encompasses the requirement to be clear and precise in the illumination of the issues for trial. The occasion for this is not merely pleading (using the word broadly to encompass the modern commercial list summons and defence), it extends to all aspects of the engagement in the Court's processes. For similar responsibilities in the conduct of references, see Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd [2008] NSWCA 228 at [55]-[56]. 95On several occasions in the Court of Appeal, His Honour had made similar comments: see Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 at [36]-[38]; Bi v Mourad [2010] NSWCA 17 at [47]; Richards v Cornford (No 3) [2010] NSWCA 134 at [98]-[110]. 96Of course, parties (although none here) may choose to make an offer of compromise under UCPR rule 20.26 or rely upon a Calderbank offer. Both types of offers are the subject of many decisions in this Court. Depending upon the outcome in the litigation serious costs consequences may follow. These species of offer play no part in the current case. 97However even in the absence of a rule 20.26 offer or a Calderbank offer, the Court is entitled to look at the conduct of the parties throughout the proceedings, including unsuccessful attempts made at settlement, in the exercise of a discretion on costs: Commonwealth of Australia v Gretton [2008] NSWCA 117 at [40]; Old v McInnes and Hodgkinson [2011] NSWCA 410 at [28]-[34]; Whitney v Dream Developments [2013] NSWCA 188 at [41]-[44]. 98Hence an offer which could be regarded as not genuine, or alternatively an unreasonable rejection of a proposal, could equally be taken into account in the exercise of the relevant discretion. 99In considering an offer, and in particular whether or not it can be regarded as reasonable the usual factors are relevant, namely the stage of the proceedings, any time provided for acceptance, the extent of the compromise, the offeree's prospects of success and the clarity of the offer: Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344. 100Offers that do not involve only monetary conditions warrant special attention. Where what was offered is not something sued for, or even with amendment available in the litigation, a Court is entitled to consider the reasonableness of such an offer.

Declarations by consent - appropriate or not 101Finally, it is also necessary to make a few observations about declaratory relief, as a question which arose in the context of the debate on costs was to the extent a court might or might not grant a declaration, especially when there had been no determination on the merits. 102As Young JA observed in Nicholls v Michael Wilson and Partners [2010] NSWCA 222 at [132], it is "clear that the court has very wide jurisdiction to make declaratory orders. It is also clear that the court, in its discretion, may determine that it is inappropriate to make a declaration... Because the matter is one of the exercise of discretion, special facts in a particular case may mean that the discretion is exercised other than in accordance with "principle"". 103In George Zoltan Ajkay v Hickey & Co Pty Ltd [2011] NSWSC 822, Pembroke J considered when a declaration may be made by consent in the absence of a hearing on the merits. His Honour observed at [7]-[11]: [7] Consent declarations without a hearing on the merits are a rarity. Courts will frequently not entertain them. I am only prepared to do so in this case because I have formed the view that it is clearly appropriate and justified. That is because I have already gained some familiarity with the issues through the process of case management in the Expedition List; I am confident in the good sense and sound judgment of both counsel who requested that I make the declaration; and I am satisfied that there are no possible competing property rights to the die other than those of the parties before me. [8] It is perhaps stating the obvious to say that the making of a declaration is a judicial act determining and pronouncing a legal right: Williams v Powell [1894] 1 WN 141. It follows that a declaration that is not based on the court's review of the evidence but on the admissions of the parties may not always be satisfactory or prudent. As an order of the court, a declaration binds the parties to the proceedings before it. But the impact of a declaration may not be confined to the parties. Where the declaration "will have effects on the community ... that extend far beyond the interests of the original plaintiff and defendant" (Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide City Corporation (1975) 33 LGRA 70 at 82), a declaration made based merely on the consent of the parties to the proceedings is inappropriate. [9] If the declaration sought is confined to the private rights between the parties such as (to use the example proffered by Keely and Beaumont JJ in BMI v Federated Clerks Union of Australia (1983) 51 ALR 401 at 413 - 414) the respective rights of the parties under a contract - it may be appropriate to make a declaration by consent. However, where there is a risk that a declaration will have a wider effect than the respective rights of those parties, it must be based on evidence considered by the court. [10] Declarations as to proprietary rights present additional problems. This case involves a contest over a proprietary right as between Mr Ajkay and Hickey. Although prima facie a proprietary right, unlike a contractual right, is enforceable against the world, a declaration as to a proprietary right will not be effective against a stranger to the proceedings. It can only operate between the parties to the declaration: Blair v Curran (1939) 62 CLR 464 at 531-532 (Dixon J). [11] As a matter of legal theory therefore, the declaration sought in this case will not prevent a third party from claiming ownership of the 412 Die and from bringing proceedings seeking a declaration to support their claim to ownership. However, there is no realistic prospect of this occurring and I do not foresee any possible future contest relating to the question of ownership. I am therefore content to make the declaration which both parties seek. [emphasis added]

Discussion on the issue of costs 104In this instance costs have a particular significance. There is evidence in this case that if the plaintiff obtains an award for costs, and seeks to enforce it, the defendant could be placed in an untenable position financially. On the other hand there is no evidence that the plaintiff would not have an ability to at least meet his own costs. 105The defendant in the course of the trial sought to attribute a financial motive to the plaintiff. As I understood it, the defendant submitted that the plaintiff correctly assessed his prospects of success in the litigation as a near certainty but resisted any reasonable attempts to settle so that costs would increase. 106It was then suggested that the plaintiff expected that costs would follow the event, and as the defendant was either impecunious or in such a precarious and fragile state (as far as liquid assets that could be used to satisfy a costs order, Mr Rasmussen gave evidence that "less than $20,000" was available at T57/36) the plaintiff would bankrupt the defendant and with some business associates would acquire the defendant from a liquidator or administrator (T42/31-T42/43, Defendant's Submissions at [47], [54]). Mr Bryant denied any such intention, but I consider there is some evidence to support this. 107He of course had previously already written to the Department of Fair Trading in August 2012 seeking an administrator be appointed (see Exhibit D2 at page 5 and T12/30), and gave evidence of his view that "there is quite a few very competent business people in membership who, if they were given positions of authority, could make a big difference at the station" (T49/26). 108In addition, or in the alternative, it is asserted the plaintiff behaved unreasonably in failing to settle early given the defendant's clear intention to settle and therefore unnecessarily protracted the litigation. 109The plaintiff disavows any such base motive and asserts his hand was forced in running the litigation to its conclusion, especially given the nature of the offers made by the defendant. I am by no means certain this is correct. The plaintiff on the other hand asserts that the defendant may have entered a submitting appearance, potentially save as to costs, or convened a meeting to rescind the resolution of its own accord. 110In my view, in the modern era and consistent with section 56 of the Civil Procedure Act parties have an obligation to constructively collaborate not just on the issues to be ventilated at trial but on the most efficient methods to do so. As has been otherwise said, litigation is not a game and the expense of the courts to the public is so great that their use must be made as efficient as is compatible with just conclusions: see Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116; [2001] NSWCA 346 per Heydon JA at [26] and White v Overland [2001] FCA 1333 per Allsop J at [4]. 111The plaintiff's stance at the meeting on 16 July was one of unsurprising and justifiable defiance. It was either based on legal advice or otherwise but nonetheless the plaintiff was perfectly entitled to make the point that he was not being afforded procedural fairness by reason of the fact that the allegation in the proposed resolution together with the so called particulars at the very least inadequately equipped him with sufficient detail of what he was expected to respond to. 112Although there is no evidence as to any detail it would appear that there was correspondence and discussion between the parties concerning the matter prior to the commencement of the proceedings in the Supreme Court that failed to resolve the matter. This is explicitly referred to in the letter of the plaintiff's solicitors to the defendant's solicitors of 10 December 2013. There is no evidence of what was or was not offered in an attempt to resolve the dispute. 113On any view, in the absence of some resolution of the dispute, it seems to me the plaintiff was at least justified in commencing proceedings in October 2013 seeking the relief that he did. 114Following the commencement of proceedings but prior to the second directions hearing in the matter (which was held on 11 December) the defendant's solicitors wrote to the plaintiff's solicitors. The first point made in the letter was that the plaintiff should have resorted to arbitration because it would provide a cheaper alternative dispute resolution and procedure, referring to various provisions of the Co-operatives Act, and then an offer was made in the following terms: 1. The plaintiff's membership to the Co-operative be reinstated; 2. Parties sign a deed of settlement including clauses concerning confidentiality and non-disparagement; 3. Proceedings dismissed; 4. Each party pay their own costs 115Given the defendant offered re-instatement (leaving aside how that was going to be achieved) it is a little difficult to see what was going to be confidential. Non-disparagement, of course, is a different matter altogether. Nonetheless, the defendant's intention to settle the proceedings was clear. 116On the same day the plaintiff's solicitors responded by pointing out that section 91 of Co-operatives Act which had been referred to by the defendant's solicitors had in fact been repealed, and that sections 89 and 90 had been enacted in its place which obliged the rules of the Co-operative to set up a grievance procedure (which indeed had not been done). 117The plaintiff's solicitors also made the point that the purported resolution was not made in conformity with the Rules, nor was the plaintiff given a reasonable opportunity to be heard at the Special General Meeting. Those points were already made clear from the statement of claim. 118The plaintiff's solicitors also pointed out that there was no mechanism under the Rules for dealing with a dispute concerning the invalidity of a purported resolution of a general meeting of members. In any event the plaintiff's solicitors sought time to consider the orders to resolve the matter and indicated that it could not give an answer before the proposed call over on 11 December. 119On 11 December the defendant's solicitors however in a letter purported to clarify and/or amplify the offer that was made on 10 December. It stated:

• My client's Board pass a resolution that the proceedings be settled on the terms outlined in my previous letter and enter into the deed of settlement and release,
• The parties agreement that the plaintiff be reinstated as a member be recorded in Consent Orders,
• The Consent Orders be made by the court,
• Your client sign the deed of settlement and release,
• The chairman of my client call for a meeting of the Board at which he would table a copy of the order and the deed of settlement and release then the Board would pass the following resolution: IT WAS RESOLVED: That in accordance with the order of the Supreme Court dated (?), Mr John Richard Bryant's membership of the company be reinstated.
• Following my client's resolution your client would provide his signed counterpart deed. 120The letter concluded by indicating that it was presumed that the plaintiff would follow the "usual practice" that any settlement agreement would be without admission of liability and would be recorded in the consent orders. 121The defendant was communicating to the plaintiff that the Board obviously wanted to settle and was prepared to ensure that the plaintiff be reinstated as a member of the Co-operative. Costs were not dealt with in this letter but the offer of each party bearing their own costs is clear from the letter of 10 December. 122The plaintiff's solicitor then responded on 19 December 2013 indicating that the proposed terms set out in 11 December letter were unacceptable. It made the point that the proposed resolution could not work because the Board did not have any power of authority to override the special resolution passed at the meeting of members on 16 July. That may be correct but it does not address the undoubted authority of the Board to settle the matter on terms which would have the same effect. 123The plaintiff's solicitors then asserted that the only way to rescind the special resolution was for another to be passed by a further meeting of members at a special general meeting to the effect that the prior resolution be rescinded. Whilst again correct, at one level it was not a particularly constructive observation and it was not the most obvious or practical way forward. 124The letter went on to say that in the understanding of the plaintiff's solicitors the Supreme Court would not necessarily make an order (I interpolate by consent or unopposed) declaring the resolution void. That was if I may say so a little simplistic. However the defendant was not invited to agree to a consent declaration or not oppose that form of relief sought. At this stage no defence had been filed. 125In any event, the letter made it clear that the plaintiff was seeking what were described as the "following outcomes". First he required the defendant to call a special general meeting by 31 January 2014 to put two resolutions. The first was that the meeting consider, and "if it thought fit", pass a resolution to the effect that the prior resolution passed on 16 July 2013 to expel Mr Bryant be rescinded "ab initio". Secondly a resolution be put to the meeting to consider and, "if it thought fit", to pass to the effect that the membership of Mr Bryant be reinstated and was to continue unbroken from 16 July. 126It was then proposed that the defendant call a meeting of directors and again for two resolutions to be put. The first resolution to consider and, "if the Board thought fit", to pass was a resolution that Mr Bryant be reinstated to his on air programme each Friday for the timeslot 12 noon to 4pm commencing 7 February 2014. The second resolution for the Board to consider and, "if thought fit", pass was that within seven days a memorandum be sent to all members of the Co-operative and published on the Co-operative's website advising that the purported expulsion of Mr Bryant was wrong and that Mr Bryant had been reinstated to his previous on air program for the time slot 12 noon to 4pm. The form of the memorandum was to be approved by the plaintiff in writing before distribution. 127Insofar as the plaintiff sought resolutions of either a special general meeting or the Board for him to be reinstated to his on air programme or that an approved memorandum would be circulated, this was not part of any relief sought in the statement of claim. Of course a declaration as sought if granted would have him in effect reinstated as a member. 128If all four of the motions were passed and the agreed memorandum circulated the plaintiff was in these circumstances content for the proceedings to be dismissed provided he got his costs. 129The offer precluded any amendments to the four resolutions, even ones which were reasonable in the circumstances (for example, a minor change of dates for Mr Bryant's on-air reinstatement or a slightly different timeslot). It was also made clear that if the resolutions were not passed, or if all or any of the resolutions were passed with one or more amendments, or if one or more of the resolutions were passed without amendment but others were either not passed or were passed with one or more amendments the proceedings would continue and there would be no settlement. It was also made clear that the plaintiff under no circumstances would consent to a confidentiality regime. 130However, if these measures were not implemented in full the plaintiff would continue with the litigation. 131This offer is elaborate, overreaching and in my view quite unreasonable. Leaving aside the defendant incurring expense in calling a meeting, it would only work if all resolutions were passed unamended and the memorandum agreed by the plaintiff circulated. 132This in my view was not a genuine attempt at a compromise. I regard the offer as time wasting and mischievous. It was intended in my view, especially if the outcomes sought by the plaintiff were not achieved, to expose the Chairman and others to adverse political consequences. As I have said, it was an overly elaborate and indeed unrealistic set of conditions which might not be achieved, not out of a lack of good faith by the defendant or its Board, but because members may not want the plaintiff back or because an amendment, however reasonable, was proposed. 133This offer had many possible twists and turns which might occur, all in the end for nothing. Obviously if the offer was agreed to, the Board, and perhaps in particular the Chairman, implicitly had to do what they could to ensure the passage of the resolutions. Although the resolutions exhibit a veneer of reasonableness it seems to me that is in reality purely cosmetic. The offer required the Board to take all the risks legally and politically and for the plaintiff to enjoy the power of veto. 134The extraordinary thing is that the one thing the plaintiff did not ask for was very simply a declaration by consent or for him to proceed unopposed in his application for a declaration. That was the most practical and efficient solution in my view. 135Before his offer was rejected and on 1 January 2014 Mr Bryant sent an email to approximately 25 or 30 members of Hawkesbury Radio. He did so because he had heard from a number of persons (unidentified in the email) who had allegedly attended the defendant's Christmas party that Mr Rasmussen had addressed the gathering indicating that the plaintiff was costing the station a lot of money, the station was defending the court action and the station had no case to answer. 136Mr Bryant asserted in the email that those statements were misleading for a number of reasons. First he asserted that Mr Rasmussen had been warned on a number of occasions that the process that had been undertaken at the meeting was unlawful and that therefore the costs incurred by the station were as a direct result of Mr Rasmussen and his fellow directors, not the plaintiff. 137Next Mr Bryant made the point that the public statements that the station was defending the action were confusing because Mr Rasmussen had made "private" attempts to settle the case. He went on to assert that the defendant had not filed any defence or documents as at the date of his email. He then referred to the fact that the defendant's solicitors had indicated in writing that they wished to settle and "would agree to the expulsion being rescinded". He pointed out that this was hardly consistent with defending the action and that "the truth" was that the defendant had already offered to settle the matter prior to the Christmas gathering. Again, as Mr Bryant put it, for the station to assert it had no case to answer was in effect untruthful because of its attempts to settle the matter. 138The email went on to assert that members had in effect been inaccurately informed as to the possible financial ramifications of the case and the members were invited to ask the chairman a number of questions to explain why, if he thought the station had no case to answer, Mr Rasmussen had "privately" offered to overturn the vote cast and further to ask questions about who would fund the costs if the defendant was unsuccessful. He also made the point that if the court found against the defendant the costs could reach tens of thousands of dollars and potentially bankrupt the station. He invited members who may have doubted what he was saying to contact him because he would be able to point members to "documentary evidence to confirm same". 139This was a most extraordinary email. First in my view it breached the joint confidentiality that protects parties privately communicating in an attempt to settle litigation. It was not a confidence Mr Bryant was able unilaterally to waive. Secondly it disclosed the substance of the offer, not just the fact of settlement discussions. However most importantly it did not disclose the fact that the plaintiff himself was also part of an attempt to "privately" settle by putting forward his proposal of 19 December. For Mr Bryant not to have disclosed the fact that he was himself party to a private communication in order to settle the matter whilst criticising the defendant for the same thing was both dishonourable and dishonest. More to the point it was it seems to me a blatant attempt to affect the relevant electorate in a misleading fashion should a fresh meeting be called as was his demand. 140On 7 January 2014, the solicitors for the defendant wrote to the plaintiff's solicitors in the following terms: It has come to my client's attention that your client has circulated an email to its members remarking on the offer and its terms and using the making of the offer as a platform to shrill his claim. In my view, such disclosure is inappropriate. Nor is it conducive to resolution of the dispute and suggests that your client is not genuinely interested in trying to resolve this matter. 141I regard this as an entirely appropriate response. 142However, on 13 January 2014, the solicitors for the plaintiff replied to this letter in the following terms: It is our client's view that it was inappropriate for Mr Rasmussen to address the members in the way that he did and to make statements about the court proceedings which our client considers to be misleading. Our client was concerned that Mr Rasmussen used the Christmas Party gathering as a forum to publicly air his views about the court proceedings. In those circumstances our client considered that a response was necessary. In the circumstances, it is our client's opinion that Mr Rasmussen's conduct demonstrates that he is not genuinely interested in resolving the matter. Our client is seeking the outcomes referred to in our email to you dated 19 December 2013. This matter can be speedily resolved if the Defendant agrees to the outcomes proposed in that email. We await your response. [emphasis added] 143That in my view was a disingenuous response. The so called offer of 19 December was by no means straightforward, and even if the defendant had accepted the proposed process that did not, in and of itself, settle the matter for the reasons I have already discussed. 144This letter in my view was a strategic response rather than a genuine attempt to grapple with the reality of the situation, especially given Mr Bryant's failure to disclose to members his own offer of 19 December. 145On 15 January 2014, the solicitors for the defendant replied as follows: I refer to your letter dated 13 January 2014. My client notes that your client was not in attendance at the Christmas party - unless he snuck in and hid somewhere in the room so he could secretly observe the party, or secretly, and without consent, recorded the party. At best, your client's claims are based on hearsay. Accordingly, your client is not in a position to attest to what was said at the party and there is no basis to his view as to the appropriateness or otherwise of what was said. Your client's understanding of what Mr Rasmussen said is erroneous and his subsequent email to Members and others, is misleading, deceptive, disingenuous and mischievous. Therefore, my client believes it is justified in thinking that your client is just using the party as an excuse for another opportunity to shrill his cause and to try to denigrate Mr Rasmussen and the Board to the Co-operative's Members and others. Our client was genuinely interested in trying to resolve this matter, on a without prejudice basis. That is why it was prepared to compromise its position and make the offer it did, which your client has uncompromisingly rejected. Unfortunately your client's email to Members suggests to my client that it cannot have confidence in your client's ability to keep discussions confidential nor his genuineness to enter into discussions, nor his genuineness to try to resolve the matter. It is regrettable that your client's actions in commencing and uncompromisingly pursuing his claim, in bombarding the Co-Operative's Members with emails, his letters to the local papers trying to bolster his cause and complaints to regulatory bodies will no doubt hurt both a local community radio station as well as your client's standing with the Co-operative's Members and the Hawkesbury community. Your client's actions leave my client with no alternative but to strenuously defend the matter. You [sic] client may well seek the outcomes articulated in your letter dated 19 December 2013, but they are rejected. [emphasis added] 146Again I consider these remarks were warranted. 147On 25 February 2014 the defendant's solicitors wrote to the plaintiffs solicitors in an attempt to sort out whether the affidavit evidence then sworn and served by the plaintiff was the full extent of the evidence in chief. A request was made for certain particulars and a further request was made for the production of certain documents which it was said had been referred to by the plaintiff in his affidavit but not reproduced as exhibits. 148Under the heading "Mediation" the defendant's solicitors expressed the view that the matter was appropriate for mediation. It said as follows: The defendant is a community radio station of limited means and financial resources. I assume the plaintiff is also a person of limited means and financial resources. The Court provides excellent mediation facilities and mediators which are provided at no cost to the parties. At the directions hearing the defendant intends to ask the court for an order that this matter be referred to a court appointed mediation. Please indicate whether the plaintiff consents or not. 149The letter attached some proposed short minutes of order. Paragraph 6 of the short minutes provided that by consent the court would refer the matter to mediation. 150On 26 February the plaintiff's solicitors responded indicating that there was no agreement to the proposed short minutes. In relation to mediation the position was put that the matter was not suitable for mediation because the Resolution which was the subject of the proceedings could not be rescinded by an executive committee of the defendant, the mediator or by the consent of the parties. It was said that the only way that it could be rescinded was by another special resolution or by a judge declaring the resolution being void. That was in my view both erroneous and unreasonable. 151The plaintiff recognised as I have said either with or without advice that he had a very strong case from the outset. The defendants clearly came to the same realisation. They made it abundantly plain from 10 December that it wanted to settle and to achieve the reinstatement of the plaintiff into his membership. They wanted however the proceedings dismissed and no order as to costs. In the circumstances and as a first offer whilst that might be expected the defendant could hardly have sustained that position. When the offer was further amplified on 11 December in my view it had not clearly been thought out precisely how the plaintiff's reinstatement could be lawfully and hence legitimately achieved by a resolution of the board but it nonetheless wanted to capitulate. 152The plaintiff then took eight days before he came back with an overreaching and unnecessarily complicated counter proposal. The most obvious way forward, which the plaintiff's solicitors clearly had given thought to but dismissed out of hand as potentially unavailable, was a consent order effectively by which the court would make a declaration rendering void the resolution of July 2013. Instead a proposal was put which bore very little if any relationship to the relief sought in the litigation. 153So far as the email of 1 January 2014 was concerned, either provoked by rage or otherwise the plaintiff had no entitlement whatsoever to breach as he did the joint privilege between himself and the defendant in relation to the confidential communications attempting to settle the matter. He did not seek the consent of the defendant and the only inference capable of being drawn is that he deliberately set out to humiliate and vilify the defendant for its inconsistent and indeed hypocritical position (as he saw it) that it had taken in the light of the statements apparently made by Mr Rasmussen at the Christmas party. It is no answer to say, as counsel for the plaintiff did, that "breach of privilege could not be assumed to be something understood by Mr Bryant" (T84/14). The plaintiff knew precisely what he was doing, he was disclosing the defendants "private" attempts to settle the court case. Not only was the communication entirely unjustified because of its unilateral breach of confidence but it only told half the story. I consider the email is a clear statement by the plaintiff to the effect that he did not wish to settle the proceedings. 154In February when the matter of mediation was raised, his solicitors responded by indicating that the case was not suitable for mediation. 155There was some suggestion in the plaintiff's evidence that he was not made aware of an offer for mediation being put by the defendant (T54/13). I must confess I do not accept that evidence as truthful, if that is what he was intending to say. I could not imagine in circumstances such as this that his solicitors would not have discussed all relevant matters with him, including the defendant's request for mediation. In any event, even if the matter was not explicitly discussed with them, the solicitors clearly believed that they had instructions to reject the proposal for mediation, as being consistent with his attitude generally namely not to genuinely attempt to settle. 156By indicating as they did in their letter of 26 February that the special resolution could only be rescinded by another special resolution or by a judge of the court, the letter only served to highlight the fact that the plaintiff made no real attempt to settle or put forward a suggestion that was either realistic or genuine. 157Whilst the system of justice administered by courts in this state is adversarial, in the modern era in my view parties have a distinct and clear obligation to cooperate with each other and the court to achieve a quick and inexpensive solution to their grievances including in my view good faith settlement discussions. 158The outright rejection of a mediation under the pretext that the matter was not a suitable vehicle for mediation was both erroneous and part of the rather blinkered attitude adopted by the plaintiff that nothing short of a full blown court hearing would suit him. 159When all of the factors I have considered, being the convoluted and unworkable settlement proposal of 19 December, the breach of the privilege attaching to settlement negotiations and the refusal to mediate, are taken in their totality that disentitles the plaintiff in my view to his costs. 160In my view the plaintiff focused primarily if not predominantly on his political agenda rather than a genuine attempt to resolve the dispute. 161In all the circumstances therefore I regard the appropriate order as each party bearing their own costs. 162I should note that given the exercise of my discretion under UCPR rule 42.1 to order otherwise than that costs should follow the event, it is not necessary to consider the application of section 90 of the Act to the present proceedings. 163I invite the parties to prepare short minutes of order to send to my Associate.

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