Kabir Ahmed & Ors v Ayubur Rahman Chowdhury & Ors

EX TEMPORE Judgment 1This is the Court's third judgment in these proceedings. In the principal judgment ( Kabir Ahmed & Ors v Ayubur Rahman Chowdhury & Ors [2011] NSWSC 893) the Court dismissed the defendants' motion, which claimed that these proceedings had been settled. In the second judgment (Ahmed v Chowdhury (No 2) [2011] NSWSC 954), the parties having agreed on holding fresh elections for the Executive Council of the Association at a general meeting, the parties were directed to approach the President of the Law Society of New South Wales to nominate a person suitable for appointment as a referee to determine who were the members of the Association for the purpose of such fresh elections.

Recent Directions 2After the second judgment the matter came back before the Court on 6 September 2011. At that time the President of the Law Society of New South Wales had nominated a potential referee, Mr John Emmett McDermott, a very experienced Sydney solicitor. But a problem emerged. Mr McDermott's fees for the reference could not be guaranteed. There were funds available in the possession of the fifth defendant, the Association. But it did not then seem prudent to deplete the Association's funds for the purpose of a reference, particularly in circumstances where the losing party may have to reimburse the Association. This in turn would put the Association to the expense of attempting to recover the funds, if they were not paid. 3So the Court decided to give directions, which it did on 8 September 2011. These directions were designed to bring the membership issues to determination. Both sides were required to:- (a) identify the persons that each side claimed to be members of the Association or eligible for membership of the Association as at the date of expiry of a notice which the Court directed to be sent to all persons that each side claimed to be members or eligible for membership of the Association by 5pm on Monday, 19 September 2011; (b) to set out the basis on which (by category where possible) those persons said to be eligible for membership; and (c) to provide information as to the date each such person applied for membership, the subscription fee paid and the class of membership for which the membership application was made. 4This was largely done in accordance with the Court's directions, except that the parties did not manage to define their differences by category of members. There turned out to be much disagreement about the status of individual applications for membership. This meant that the issues between the parties had become far less suitable for determination by the Court, and more suitable for determination by a referee. 5The detailed issues raised between the parties require consideration of the membership provisions of the Association. Membership of the Association is in one of two categories, ordinary membership and life membership: Constitution, clause 7. The important provisions of the Constitution defining membership qualifications and nomination (clauses 8 and 9) provide as follows:- "MEMBERSHIP QUALIFICATIONS 8. A person is entitled to be a member of the Centre is, but only if- (a) The person is a person referred to in section 15(1)(a), (b) or (c) of the Act and has not ceased to be a member of the Centre at any time after incorporation of the Centre under the Act; or (b) At least one of the person;s or nominee's parents is a descendent from Bangladesh; (c) The person is a Muslim aged 18 years or over who is willing to subscribe to the aims and objectives of the Centre; and (d) In the case of a member he/she: (i) has been nominated for the membership of the Centre as provided by rule 9; and ii. has been approved for membership of the Centre by the Executive Council of the Centre pr ay a General Meeting as provide by rule 9; and iii. has paid the Centre membership fee in terms of either entrance fee or annual subscription 9. A nomination of a person for membership of the Centre: (a) Shall be made by two members of the Centre in writing in the form set out in Appendix 1 to these rules and shall be lodged with the General Secretary of the Centre; (b) As soon as practicable after receiving a nomination for membership, the General Secretary shall refer the nomination to the Executive Council which shall then determine whether to approve or reject the nomination for membership. (c) Where the Executive Council determines to reject the nomindation for membership, it shall refer the nomination to the next General Meeting which shall determine whether to approve or to reject the nomindation. (d) Where the Executive Council or the General Meeting determines to approve a nomination for membership, the General Secretary shall: (i) within 28 days of such decision being made, notify the nominee of the approval; and (ii) request the nominee to pay within 14 days after the receipt by the nominee of the notification the sum payable under these rules by a member as entrance fee and/or annual subscription (non-refundable) of the Centre. (e) Notwithstanding rule 9(d)(ii) and rule 9(a) above, payment of the entrance fee or any outstanding annual subscription shall be made in accordance to rule 14. (f) The General Secretary shall enter the nominee's name in the register of members and, upon the name being so entered, the nominee becomes a member of the Centre. (g) Notwithstanding rule 9(f) above, the General Secretary shall be under no obligation to enter the nominees' name in the register of members should be the nominee and/or nomination fail to comply with rules 9(a) to 9(e), above. (h) Only those members whose names appear on the register of members shall be entitled to vote at any General Meeting. (i) Final eligible voters list will be prepared in accordance with rules 9(e) and 14(c) and will be made available to the Returning Officer 72 hours prior to the Annual General Meeting. No membership dispute shall be dealt with on the day of the Annual General Meeting. (j) The Centre will advise member(s) in writing in due time to renew their membership by the deadline as decided by the Executive Council. It is the member(s) responsibility to renew their membership and check the eligibility of the member(s) to vote with the General Secretary 7 days prior to the final membership list being prepared for the Returning Officer by the Centre." 6It is self evident from the terms of Clauses 8 and 9 that the Executive Council and the General Secretary have an essential role in perfecting and approving a person's application for membership of the Association. The present problem is that there is no agreement or acceptance among the parties as to who are the office bearers of the Association on its Executive Council. Thus not only can applications for membership not be completed but a register of members cannot be finalised (Constitution, clause 13) and membership fees are not being fully collected (Constitution, clause 14).