Kabir Ahmed & Ors v Ayubur Rahman Chowdhury & Ors

Judgment 1This matter has been before me several times this week to see if orders can be made to pursue the course outlined in my principal judgment, given on 10 August 2011 and the judgments since then. Events, matters and persons are referred to in this judgment the same way as they are in those previous judgments. This judgment should be read with all the prior judgments: Ahmed & Ors v Chowdhury & Ors [2011] NSWSC 893; Ahmed & Ors v Chowdhury & Ors (No 2) [2011] NSWSC 954; Ahmed & Ors v Chowdhury & Ors (No. 3) [2011] NSWSC 1597; Ahmed & Ors v Chowdhury & Ors (No. 4) [2012] NSWSC 348; and Ahmed & Ors v Chowdhury & Ors (No.5) [2012] NSWSC 411. 2The hypothesis behind the course the Court has taken at the request of the parties is described in the following terms in the principal judgment, Ahmed & Ors v Chowdhury & Ors [2011] NSWSC 893, at [61] - [62]:- "61.But there may be a faster solution to the parties' differences. The parties still have different views as to who constitutes the Executive Committee and other office holders of the Association. But the parties seem to be agreed that the Association must hold an annual general meeting by 31 August 2011, and their non binding consensus at the 19 June meeting seems to have provided for a form of peaceful co-existence before then. Yet before me the parties were said to be in dispute as to exactly who is authorised to call this annual general meeting. The holding of this meeting and the election of a new committee may assist in resolving some of the differences that now exist between these parties. 62.It may be possible for the parties, by agreement, or for the Court, as an adjunct to the grant of final relief to make directions for the calling of the annual general meeting by a neutral person who is not associated with either faction within the association. If that were to require some extension to the date for the holding of the annual general meeting then in the first instance the legislation authorises the Association's public officer to apply to extend the date for the holding of the annual general meeting: Associations Incorporation Act, s 26(3)." 3The main assumption behind the Court proceeding in this way, to have Mr McDermott appointed as a referee and to have the membership list determined, was to advance what the Court understood was an agreed position among the parties. Although not formally set out in consent orders, the parties' consensus seemed clear enough: that there should be an annual general meeting of the Association called by a neutral person, or at least a general meeting that would permit a new Executive Council to be elected. But in submissions made to the Court yesterday and earlier this week, Professor Chowdhury and Mr Ahmed have now both regrettably demonstrated to the Court there is no such agreement. More importantly, for the reasons I will shortly explain, there is apparently no agreement between them that the Association's Executive Council has been defectively appointed. Nor is there any clear agreement between the parties that there is any defect in the office of either the president or the general secretary, or any other member of the Executive Council. 4The parties are unrepresented on both sides. Although the Court has had the helpful assistance of Mr Ayoub and Mr Lee from time to time, from the firm of Mitry Lawyers. But the fact that the parties are unrepresented has perhaps meant that the parties do not fully appreciate that the Court cannot simply make orders under Corporations Act 2001 (Cth), s 1322(4) in this case, on its own whim. Recently, the Court of Appeal in Beck v LW Furniture Consolidated (Aust) Pty Limited [2012] NSWCA 76 re-emphasised that Corporations Act, s 1322(4), although a broad a remedial power, can still only be used in circumstances where, the Court has jurisdiction to validate an "act, matter or thing" because of a defect or invalidity by reason of a contravention of a provision of the Corporations Act or a contravention of the Association's Constitution. That has not yet been established before me. 5From what the parties had said to the Court about their mutual desire to hold an election and their recognition of the paralysis in the Executive Council and because of their mutual allegations of defective appointments to the Executive Council, the Court had thought this aspect of jurisdiction to make the orders was agreed and that attracting the Court's Corporations Act jurisdiction on a consensual basis would be straightforward. The assumptions that the Court has made for many months now is clear from all my judgments. But it is now not straightforward. The parties now say they do not agree about any of this. And it seems to me the Court now has only two obvious alternatives. One is to determine the question of whether or not there is a defect in the membership of the Executive Council, as an incident of which the Court could validate the holding of an election, despite a defectively appointed Executive Council. Alternatively, the Court could receive an agreed statement of fact to the effect that the parties acknowledge that there was to a defect in the appointment of the Executive Council or of an office holder. 6The Court could order an election in either of those circumstances. The first alternative involves a full trial. This is an alternative upon which I have never embarked. I originally encountered this case in the duty list in August last year. I continued with it, to try and assist the parties to resolve their differences using the provisions of the Corporations Act. But I cannot now, because of the requirements of other cases, embark on the role of being the judge at such a final hearing. I am told for example by Professor Chowdhury he wants to put on evidence and cross-examine in relation to the principal trial issues. And, the second alternative is also not open, as there is no agreement. Accordingly it seems to me that in the absence of clear agreement between the parties about the defect which would found jurisdiction under Corporations Act, s 1322(4), the matter must be remitted to the Registrar to make directions to prepare the matter for final hearing. 7I will therefore adjourn the matter for mention before the Registrar on a date to be fixed the week after next. 8I have also reviewed the questions of the costs of the interlocutory hearing that Mr Ahmed wanted to have determined. But I have indicated in my first judgment that those matters should remain undetermined, until a decision in the principal proceedings. I do not propose to change that position. 9The Court gave indications of the date to which the parties might work for holding an annual general meeting or a general meeting if the Court were to make final orders under Corporations Act, s 1322(4). But any reference to the proposed date of 27 May 2012 can now be eliminated and ignored as, for the reasons stated, the Court does not presently have the jurisdiction to make these orders. 10One consequential matters arises from these orders. Mr Moshiur Rahman Redoy Sheikh, the second defendant, had previously indicated to the Court that he wished to be released from the orders made on 15 December 2011 and continued on 1 March 2012. Those interlocutory orders were made for only a short period to assist in the orderly administration of the Association's pending the holding of a general meeting. Much of the structure of those orders relies upon Mr Sheikh's co-operation. In light of the orders made today the time has come for these orders to be dissolved. Orders to that effect will be made. Any further applications in this matter can be made to the Registrar in Equity or the Duty Judge. 11Accordingly, the Court orders:- (1)Adjourn the proceedings for directions to the Registrar in Equity on 7 May 2012; (2)Dissolve orders 3, 4, 5, 7, 9, 10, 11, 12, 13, 14, 15, 19(a) and 22 of the Court's orders made on 15 December 2011 and continued on 1 March 2012; (3)Note that the orders and acknowledgements recorded in orders 1, 2 and 8 of the orders made on 15 December 2011 continued on 1 March 2012; and (4)Note that orders 16, 17, 18, 19(b), 20 and 21 of the orders made on 15 December 2011 and continued on 1 March 2012 are now spent.