Kabir Ahmed & Ors v Ayubur Rahman Chowdhury & Ors

Judgment 1This is the Court's second 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. This judgment should be read with the principal judgment. Persons, events and things are referred to in the same way in both judgments. 2After the dismissal of the defendants' motion the parties attempted to formulate orders to resolve or at least reduce their disputes through the holding of an Annual General Meeting at which a new Executive Council of the Association would be elected. As the Court observed in the principal judgment ( Kabir Ahmed & Ors v Ayubur Rahman Chowdhury & Ors [2011] NSWSC 893 at [61]) this course appears likely to provide the most practical near term solution to the current deadlock within the Association. 3But the parties have been unable to agree upon a form of orders which will allow an Annual General Meeting of the Association to be held. So the Court has formulated orders to bring order to the affairs of the Association. From the principal judgment the Court is familiar with the issues between the parties. The Court must seek to give effect to the overriding purpose of facilitating the just, quick and cheap resolution of these proceedings: Civil Procedure Act, s 56. The more efficient course to fulfil this purpose here is for the Court now to consider granting remedies to resolve issues of final relief that remain among the parties. The Court's orders were made earlier today. I indicated then that I would publish my reasons for making orders in this form later. These are my reasons. 4The principal obstacle to holding an Annual General Meeting of the Association to validly elect a new Executive Council that will be accepted by all sides within the Association, is the inability of the parties to these proceedings to agree on what persons have been approved as members of the Association in accordance with its Constitution. The procedure provided for under clause 9 of the Constitution, involving as it does approval by the Executive Committee of the candidates for membership, has become paralysed by disputes about who presently constitutes the Executive Committee. There are other disputes but they need not be detailed in these reasons. 5The Court has ample power to resolve this problem through the operation of Corporations Act 2001, s 1322, which applies to the Association by the operation of Associations Incorporation Act 2009, s 96 and Associations Incorporation Regulation 2010, Regulation 16. The Court can make orders and declarations validating a procedural irregularity in a disputed electoral process or one which may be defective because of issues about the qualifications of the officers involved: Corporations Act , s 1322(4). 6But before the Court can make such orders the Association itself must be made a party to these proceedings, so that it will be bound by the orders made. Also there must be some objective determination of what persons would be members or eligible for membership of the Association, in the absence of other issues, including issues about the validity of the appointment of persons on the Executive Council. 7The Uniform Civil Procedure Rules , r 20.14 allow the Court to appoint a referee to determine the question of membership or eligibility for membership of the Association. This is an appropriate case for the exercise of the Court's power to refer this question to a referee. But the parties presently cannot agree upon a person for the Court to appoint as the referee. The parties initially disagreed about whether the proposed referee should be an accountant or a solicitor. But after argument on the issue, the insistence by one party that an accountant be appointed was abandoned. So the initial orders the Court will now make set up a mechanism for a neutral person, the President of the Law Society New South Wales to nominate a suitably qualified solicitor, who the Court could then appoint as referee. Once the Law Society President's nomination has occurred the matter will then come back before the Court on 6 September 2011. Then the Court can appoint that person as the referee. Once those orders are made, he or she will then embark on the task of ascertaining the membership or the eligibility for membership of the Association. 8The orders providing for the first stage of this process up to 6 September 2011 are set out below. With those orders is a "Schedule A", which sets out the form of the further orders which the Court presently proposes to make on 6 September 2011 appointing the referee. Of course both the referee and the parties may wish to vary the form of these orders. If the Schedule A orders are made they will take the matter through to 5 October, when the Court should be presented with the referee's report, containing a final set of persons eligible for membership of the Association. 9It is at that point, on 5 October 2011 that the Court will then consider the making of detailed orders for the calling of an Annual General Meeting and the holding of elections for the Executive Council of the Association. It is presently reasonable to anticipate that upon the implementation of those orders the Association's Annual General Meeting will be held and a fresh Executive Council elected in either October or November of this year. There may be residual matters of final relief and questions of costs that will need to be debated before the Court after that. 10There are two supplementary matters. The first is the question of mediation. In the orders today I have not made an order for mediation under the Civil Procedure Act , s 26 because it is not appropriate at this time. Mediation now would create an unnecessary burden for the parties and the principal officers of the Association, who will be fully involved in assisting the referee in determining the identity of the Association's membership. Second, once the steps outlined in these reasons take place, many of the procedural differences between the parties should be resolved and a mediation may not then be necessary. 11The other supplementary issue is the question of costs. On behalf of the plaintiffs, the successful applicants on the Motion, Mr Mitry seeks an order for costs. Mr Condon for the defendants, the unsuccessful respondents to the Motion, resists such an order. In my view it is appropriate to reserve costs at this stage. There are questions as to whether the plaintiffs should have the whole of their costs of the Motion because, as Mr Condon claims, the plaintiffs required an adjournment on the first day of the hearing of the Motion to put on further evidence. Moreover, Mr Condon submits that the plaintiffs were ultimately successful on the Motion on the basis of evidence which largely emerged in cross-examination of the plaintiffs' witnesses, rather than through their previously served affidavits. It seems to me that in these circumstances the question is best decided when the Court is considering costs orders at the end of the proceedings, after all other issues have been resolved. For that reason in the orders made today I have reserved the costs of the Motion. 12Accordingly, the Court makes the following orders:-