plaintiff. Declaration: the 2 March 2014 meeting was not held in accordance with the Association's constitution and is invalid; Defendants' cross-claim for validation under s 1322 dismissed; Defendants to pay...
Key principles
The 2 March 2014 special general meeting was invalid because the written Requisition purporting to requisition that meeting was not validly signed by the requisite members under...
A printed list of names on a requisition cannot be equated to valid signatures for the purposes of cl 26 where there is no handwritten signature or clear authority on the face of...
Deficiencies in form or notice relating to a requisition or meeting which are procedural may be saved by s 1322(2) of the Corporations Act (as applied by the Associations...
Clause 26(4) of the Association's constitution should be read as requiring that the Executive Council have one month from lodgement of a requisition in which to convene and hold...
Issues before the court
Was the Requisition dated 6 January 2014 validly signed by not less than 5% of members as required by cl 26(2)-(3) of the Association's constitution?
Plain English Summary
Black J held the 2 March 2014 special general meeting of the Islamic Association Western Suburbs Sydney Inc invalid. The written Requisition did not, on its face, carry the signatures required by the Association's constitution and the separate Petition could not be read as if it were the same document. Although many defects were procedural and could be saved by s 1322 of the Corporations Act, the Court refused to validate the meeting because the action taken at the meeting (removing some but not all councillors) departed materially from the purpose shown in the Requisition/Petition (dissolution/interim committee), causing substantial injustice. The Defendants' cross-claim to validate the meeting was dismissed and the Defendants were ordered to pay the Plaintiffs' costs.
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Could the Petition be read together with the Requisition so that the Petition's signatories supply the signatures required by cl 26?
Were the defects in the Requisition/Petition procedural irregularities capable of validation under s 1322(2) of the Corporations Act (as applied)?
Did cl 26(4) permit the requisitioning members to convene and give notice of the 2 March meeting before one month had elapsed from lodgement of the...
This is a governance dispute within the Islamic Association Western Suburbs Sydney Inc, decided by Black J in the Supreme Court of New South Wales. After Executive Council elections on 10 November 2013, the Plaintiffs were the sitting Executive Council. A Requisition dated 6 January 2014 and a separate Petition were circulated by persons associated with the Defendants seeking a special general meeting (SGM). Notices were issued for an SGM on 16 February and later for 2 March 2014. At the 2 March meeting, attended by 111 persons, resolutions were passed removing several of the Plaintiffs from the Executive Council and electing the First to Seventh Defendants in their place. The Plaintiffs commenced proceedings seeking declarations the 2 March meeting was invalid and injunctive relief; the Defendants counterclaimed under s 1322 of the Corporations Act seeking validation of the meeting (as applied to incorporated associations). The Court was asked to determine whether the Requisition (6 January) was valid, alone or read with the Petition, whether the 2 March meeting had been convened in accordance with the constitution, whether defects were procedural and capable of validation under s 1322, and the effect of timing under cl 26(4) of the constitution. The Court declared the 2 March meeting invalid, dismissed the Defendants' cross-claim for validation, and ordered the Defendants to pay the Plaintiffs' costs (final orders delivered 27 May 2015).
(For the Court's initial framing of the proceedings see the opening paragraphs of the judgment where the issues are described.)
Why the court decided this way
The decision turned on three interconnected foundations.
The Requisition's formal validity: cl 26(2)-(3) required a requisition to be in writing, state purposes, and be signed by the requisitioning members. The Requisition submitted bore only a handwritten signature of Mr Bajwa and a printed list of other named persons described as 'for and on behalf of'. The Court rejected the attempt to treat the printed list or a separate Petition as equivalent to handwritten signatures on the requisition. Black J refused to extend the 'authenticated signature fiction' (cases like Leeman and Kation) to presume the printed names amounted to signatures for requisition purposes, because requisitions play a distinct administrative role where associations must be able to verify signatures on the face of the instrument. In short, the Requisition on its face did not show the handwriting/signatures required to satisfy cl 26 (see the Court's extensive discussion limiting the authenticated signature fiction).
The Petition could not be read as the Requisition: The Petition was a multi-page document expressing broad grievances and calling for an SGM; it cross-referenced the Requisition and stated that its signatories had signed both, but it did not identify particular resolutions and was not drafted 'in a similar form' to the Requisition as required by cl 26(3)(d). The Court found the Petition and Requisition were separate in time and substance; while the Petition evidenced support for calling a meeting, it was not a like-form requisition and could not be treated as supplying signatures absent the explicit formalities required by the constitution.
Substantive mismatch and s 1322: The Defendants relied on s 1322 to validate procedural defects. The Court accepted s 1322 is to be given broad operation (Weinstock v Beck), and many defects were procedural in character. But s 1322(2) will not validate a procedural irregularity if it has caused or may cause substantial injustice. The dispositive injustice here was the divergence between the Requisition/Petition's stated or reasonably inferred purposes (dissolution of the Executive Council, appointment of an interim committee, or general reform) and what occurred at the 2 March meeting (selective removal of some councillors and replacement within the same executive structure). Many of the Petition signatories understood the meeting to be directed at broader reform or dissolution, not selective removals. Validating a meeting that effectuated a materially different substantive outcome would cause substantial injustice, particularly given the serious allegations made against the Plaintiffs at the 2 March meeting. For that reason, the Court refused to validate under s 1322 and declared the meeting invalid.
A subsidiary construction point: clause 26(4). The Court read the one-month period as applying to when the meeting must be held (not merely when it must be convened). That construction means the Executive Council has a month from lodging of the requisition in which to convene and hold the meeting; only on actual failure by the Executive Council to do so within that month could requisitionists validly convene.
Before and after state of the law
Before:
The decision drew on established strands of authority:
The Isle of Wight and Fruit & Vegetable Growers line: courts should not be astute to defeat members' efforts to call meetings; interpret notices sensibly and give members a chance to exercise governance rights.
The authenticated-signature line (Leeman; Kation) where printed names may in limited contract contexts be treated as signatures.
s 1322 jurisprudence (Cordiant Communications, Holmes, Australian Hydrocarbons, Weinstock): s 1322 can validate irregularities unless substantial injustice is shown.
This decision clarifies:
The authenticated-signature principle is limited and should not be extended to requisitions for meetings of associations where the association relies on on-face verification of handwriting/authority in short timeframes; the practical verification need of associations distinguishes requisitions from many contracts.
s 1322 remains powerful, but its operation is constrained where the substantive result of a meeting departs from the meeting purpose that induced members to requisition or support it: validation cannot be used to ratify a substantive switch that would cause substantial injustice.
Regarding timing of member-convened meetings under a clause like cl 26(4), the Court favoured a construction that gives the Executive Council the full month to convene and hold a meeting before members may step in.
Key passages with plain-English translation
On signatures and 'authenticated signature fiction':
Court: "I do not consider that the 'authenticated signature fiction' should be extended ... to apply to a requisition..."
Plain English: The rule that printed names can sometimes count as signatures in contract law should not be used to treat a printed list of names as equivalent to valid member-signatures on a requisition for a meeting. For associations, the requirement of written signatures is practical and necessary.
On the Petition vs Requisition:
Court: "The Petition and the Requisition were objectively intended to be read together, but were not a single document, and were also not similar documents."
Plain English: Although the Petition and Requisition related to the same campaign, they were different documents; the Petition's signatures could not be automatically counted as signatures on the Requisition required by the constitution.
On s 1322 and substantial injustice:
Court: "Neither the Requisition nor the Petition identified, either plainly or at all, a purpose of the meeting as removing some but not all of the members of the Executive Council ... That difficulty was avoided at the 2 March meeting, but only by departing from the purposes stated ... substantial injustice would result ..."
Plain English: The meeting actually did something materially different from what was advertised in the documents used to get people to sign. That is unfair in a way s 1322 cannot cure.
On timing under cl 26(4):
Court: One month relates to a meeting 'to be held', meaning the Executive Council has a month to act before the right of members to convene arises.
Plain English: Members cannot pre-emptively call the meeting before the association has had its (one-month) chance to hold it themselves.
What fact patterns trigger this precedent
This judgment will be persuasive and directly applicable where:
An incorporated association's members rely on a written requisition to call a special general meeting and the requisition lacks clear handwritten/member signatures but there exists a separate petition with multiple signatures; and the association's constitution requires written signatures on a requisition.
The material business later transacted at the meeting departs from the stated purposes on which members were induced to sign the requisition/petition, particularly where the departure is substantive (not merely procedural).
Requisitionists attempt to convene a meeting before the constitution's stipulated one-month period (or equivalent) has expired.
A party seeks to validate defects under s 1322(2)/(4) where the alleged defect is procedural but the meeting's substantive effect differs from the requisition’s stated purpose.
In short, look to this authority where the formal sufficiency of requisitions, the meaning of 'signature' on constitutional instruments, the scope of s 1322 and the timing for members to convene meetings arise together.
How later courts have treated it
(As at this judgment date, follow-up appellate or later treatments are not in this decision text. Practitioners should search for subsequent NSWCA or High Court consideration that endorse or distinguish Black J's treatment of the authenticated-signature issue and of s 1322 where substantive departure exists. The judgment explicitly aligns with Weinstock v Beck's wide construction of s 1322 while confirming its limits where injustice arises.) Practically, courts will balance member democracy against the protective function of procedural formalities and the statutory validation power; this judgment emphasises that statutory validation is not an automatic cure for substantive mismatch between stated meeting purpose and the actual business done.
Still-open questions
The boundary of the 'authenticated signature fiction': Black J declined to apply it to requisitions for SGMs in an incorporated association. Appellate courts may be asked to refine whether any circumstances exist where printed lists or agent signatures could satisfy constitutionally specified requisition signatures, particularly where extrinsic evidence demonstrates clear authority and contemporaneous reliance by the association has occurred.
Relationship between Petition and Requisition in marginal cases: Black J treated the Petition and Requisition as separate where they were drafted and finalised at different times. But how similar in form must separate documents be under a given constitution before they can be aggregated? A closer factual matrix (drafts circulated simultaneously; contemporaneous cross-signing; explicit adoption language) might produce a different result.
The precise content threshold for 'substantial injustice' under s 1322(2)/(6)(c): This case refused validation because the substantive outcome departed from election of an interim committee to selective removals. How large a departure and how likely to mislead must be shown before validation is defeated? Future cases will refine the quantum and kinds of prejudice sufficient to sustain "substantial injustice" in different factual contexts.
Construction of timing clauses like cl 26(4): Black J preferred a construction requiring the meeting to be held within one month. Where constitutions adopt different phrasing or incorporate specific notice periods that mathematically compress time available, courts may need to resolve tension between practicalities and textual meaning.
Remedy scope where procedural defects are validated but unfairness remains: The judgment illustrates the court's unwillingness to 'replace' democratic outcomes where process defects and substantive injustice overlap. Questions remain about proportional remedies, partial validation, quashing particular resolutions, or ordering re-elections, where the defect is less stark than here.
Practical takeaway for practitioners: Ensure requisitions strictly comply with constitutionally required formalities on their face (handwritten/authentic signatures where required), be careful when relying on separate petitions, and if proposing to change the substance of business after collecting support, secure fresh requisitioning authority or equivalent consent. If defects exist, consider early rectification before members act and before litigation becomes necessary; s 1322 is powerful but not a panacea where members have been substantively misled.
Judgment (17 paragraphs)
[1]
nc v Survery [2008] NSWSC 77
- Isle of Wight Railway Co v Tahourdin (1884) LR 25 Ch D 320
- Kation Pty Ltd v Lamru Pty Ltd [2011] NSWSC 219
- Khan v Khan [2014] NSWSC 342
- Leeman v Stocks [1951] Ch 941
- Link Agricultural Pty Ltd v Shanahan [1998] VSCA 3; 1 VR 466
- Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd [2006] FCAFC 144; (2006) 59 ACSR 444
- National Australia Bank v Market Holdings Pty Ltd (in liq) [2001] NSWSC 253; (2001) 37 ACSR 629
- NRMA Ltd v Snodgrass [2001] NSWCA 312; (2001) 52 NSWLR 383
- Re Carlton Football Club Ltd; Gratton v Carlton Football Club Ltd [2004] VSC 379; (2004) 51 ACSR 29
- Re Compaction Systems Pty Ltd & the Companies Act [1976] 2 NSWLR 477
- Rivers v Bondi Junction-Waverley RSL Sub-Branch Ltd (1986) 5 NSWLR 362
- Stuart v Hishon [2013] NSWSC 766
- Super John Pty Ltd v Futuris Rural Pty Ltd [1999] NSWSC 627; (1999) 32 ACSR 398
- Thomson v McInnes (1911) 12 CLR 562
- Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396
Category: Principal judgment
Parties: Aijaz Ahmed Khan (First Plaintiff)
Masud Akbar Cheema (Second Plaintiff)
Nasib Mohammed (Third Plaintiff)
Mohammad Yousuf (Fourth Plaintiff)
Mohammed Sohaib Malak (Fifth Plaintiff)
Shahab Uddin Siddiqui (Sixth Plaintiff)
Mukhtar Qazi (Seventh Plaintiff)
Shahzad Khan (First Defendant)
Sohail Shamim (Second Defendant)
Rafay Siddique (Third Defendant)
Sammih Khan (Fourth Defendant)
Zulfiqar Ali (Fifth Defendant)
Mahmood Khan (Sixth Defendant)
Nizam Ali (Seventh Defendant)
Islamic Association Western Suburbs Sydney Inc (Eighth Defendant)
Representation: Counsel:
A P Cheshire (Plaintiffs)
D A Smallbone (First to Seventh Defendants)
These proceedings concern the validity of a special general meeting of the Islamic Association Western Suburbs Inc ("Association") held on 2 March 2014 ("2 March meeting") by which the Plaintiffs, several members for the Executive Council of the Association, were removed (or purportedly removed) and the First - Seventh Defendants were elected (or purportedly elected) as the Executive Council of the Association. (I will, for brevity, refer to the First - Seventh Defendants by the abbreviation "Defendants" and will not include the Eighth Defendant, the Association, within that abbreviation.) The validity of that meeting in turn depends, in part, on whether sufficient members of the association had validly requisitioned the calling of that meeting by a document dated 6 January 2014 which purportedly requisitioned a special general meeting of the Association ("Requisition") (Ex D7, 2/574), whether in itself or read together with a petition ("Petition") (Ex D7, 2/577) signed by a number of members of the Association.
The Plaintiffs proceed on their Amended Summons filed on 10 March 2014 and a Statement of Claim filed on 5 May 2014. By that Amended Summons, the Plaintiffs seek a declaration that the 2 March meeting was not held in accordance with the Association's constitution and was unlawful, and a declaration that the Executive Council remains as it was prior to that date. They also seek an order that the Defendants be restrained from acting or purporting to act for or on behalf of the Association or representing to any person or organisation that they are officers or authorised representatives of the Association. The Defendants filed a Defence on 27 May 2014 and also filed a Cross-claim seeking relief under s 1322(4) of the Corporations Act 2001 (Cth), as applied to the Association by the Associations Incorporation Act 2009 (NSW). A multitude of issues are in dispute between the Plaintiffs on the one hand and the Defendants on the other. I address only those issues in this judgment which are necessary to reach a determination of the matters that are ultimately required to be determined by this judgment.
The Court has made a representative order in the proceedings, by which the Plaintiffs were appointed to represent those persons who contend that the meeting held on 2 March 2014 was not validly convened or held and the First to Seventh Defendants were appointed to represent those who contend to the contrary. Those orders reflected the approach adopted in Ahmed v Chowdhury [2012] NSWSC 1452, where Lindsay J made representative orders in respect of a somewhat similar dispute in relation to an organisation incorporated under the Associations Incorporation Act 2009.
[4]
Factual background
These proceedings are the most recent of several proceedings concerning the Association, which is the eighth defendant in the proceedings. In his decision in Islamic Association of Western Suburbs Sydney Inc v Survery [2008] NSWSC 77 at [2], Hamilton J noted that, even at that time, now six years ago, the controversy over the Association's affairs had already continued "over many years" and that the validity of meetings as far back as 1983 was disputed and the form of the Association's constitution was also in controversy. In further proceedings involving the Association in 2012 ([2012] NSWSC 905), Pembroke J made orders determining the then membership of the Association. His Honour referred (at [1]) to the objectives of the Association to which I have referred above and also rightly noted that:
"The Association serves an important community purpose. However, like all incorporated associations, the regulation of its affairs requires faithful adherence to the rules of its Constitution, as well as to the applicable statutory provisions."
An appeal against that decision was subsequently brought and dismissed ([2013] NSWCA 234).
The Association was incorporated under the Associations Incorporation Act 1984 (NSW) (rep) and the successor to that Act, the Associations Incorporation Act 2009 commenced on 1 July 2010. The Association is involved in the promotion of aspects of the Islamic faith and its principal activity is the conduct of a mosque and the evidence indicates that the Association controls substantial assets. The primary objective of the Association is set out under the heading "Objectives" in its constitution (Ex D7, 1/142) as follows:
"The aim of the [Association] is to foster and promote Islam and to assist Muslims to abide by the principles of Islam in regard to their social, moral and spiritual way of life and to organise instructions in certain languages and cultures as determined by the members from time to time."
Clause 2 under the heading "Objectives" in the constitution in turn sets out various things which the Association will endeavour to undertake.
I should now refer to other relevant terms of the Association's constitution. Clause 2 under the heading "Rules" in the Association's constitution identifies three categories of members of the Association, being full members, association members and honorary members and cl 3 provides for foundation members (Ex D7, 1/143). Clause 6 provides that a person ceases to be a member of the Association in several cases including, in cl 6(1)(d), that:
"Full members of [the Association] will lose their membership upon defaulting membership fees for five (3) consecutive years [sic]." (Ex D7, 1/144)
That clause has significance in these proceedings, to which I will refer below.
[5]
Affidavit evidence
The parties read voluminous affidavit evidence, although some of that evidence was primarily relevant to the earlier interlocutory application heard and determined by Darke J, and of doubtful relevance in a final hearing, and other evidence was directed to the question of the admission of 77 members to the Association in November 2013, which was ultimately not relied upon by the Plaintiffs. Many of the witnesses who gave affidavit evidence were cross-examined. I will refer to several of those affidavits at this point without seeking to be comprehensive.
The Plaintiffs relied on affidavits of the First Plaintiff, Mr Aijaz Khan, dated 5 March 2014, 13 March 2014, 30 March 2014, 12 August 2014 and 3 December 2014, Mr Khan is or was (depending on the outcome of the proceedings) the President of the Association. Mr Khan set out information as to the background to the Association and the properties owned by it, and referred to correspondence preceding the 2 March meeting in his affidavit dated 5 March 2014. Mr Khan's affidavit dated 13 March 2014 sets out evidence as to the experience of the Plaintiffs which was not relevant to this application, which does not involve any assessment by the Court as to who ought to be in control of the Association, as distinct from the validity of the Requisition and 2 March meeting. Mr Khan's affidavit dated 20 March 2014 dealt with the practice for receipt of membership fees and the manner in which annual general meetings of the Association are held. Mr Khan's affidavit dated 12 August 2014 related to events concerning meetings of the Association's Executive Council on 15 November 2013 and 21 January 2014. Mr Khan's further affidavit dated 3 December 2014 related to, inter alia, the barring of several persons from the Mosque. That matter was of limited relevance to this application.
The Plaintiffs also relied on affidavits of the Third Plaintiff, Mr Nasib Mohammad, dated 6 March 2014, 31 March 2014 and 4 December 2014. Mr Mohammad is or was (depending on the outcome of these proceedings) the secretary of the Association. Mr Mohammad's affidavit dated 6 March 2014 was directed to seeking to identify the current membership of the Association and identifying persons who had signed the Requisition who he contended were not members of the Association. Mr Mohammad's affidavit dated 31 March 2014 was directed to the conduct of the meeting called by the Plaintiffs on 23 March 2014 and was of limited relevance since the validity of that meeting is not in issue in the proceedings, other than to indicate the extent of division within the Association. Mr Mohammad's third affidavit dated 4 December 2014 responded to an affidavit of Mr Sohail Shamim dated 28 November 2014, relied on by the Defendants, relating to the financial status of several members of the Association.
[6]
Whether the Requisition was valid
I now turn to the Plaintiffs' attack on the validity of the Requisition. The Requisition stated, inter alia, that:
"Take notice that we the undersigned Foundation Members (more than five per cent of [the] Association) in compliance with the provisions stipulated in clause 26 of the Constitution of the Association, hereby ask you to call a Special General Meeting of All the members of the Association to consider the following."
Several matters were then set out under the heading "The Purpose" including:
"1. The SGM to decide the employment of the Imam of the Rooty Hill [mosque] …
2. The SGM to decide and take the necessary actions including dissolution of the current Executive Council and appoint an Interim Committee. The SGM of the members have the powers to dissolve the Executive Council of the [Association] if in the opinion of the SGM of members the Executive Council has failed to carry out the functions and duties of the Association in accordance with the objectives of the Association as enshrined in the constitution of [the Association] refer to PART II FOUNDATIONZ [sic] MEMBERS Clause 6(a)."
The reference to clause 6(a) in the latter paragraph does not seem to be relevant, since that clause refers to a person ceasing to be a member of the Association on his or her death. The Requisition also stated that the proposed "Interim Committee" would take over the day-to-day management of the Association's affairs and, within the next six months, would call a special general meeting to pass a revised and updated constitution and then make arrangements for the election of a new Executive Council of the Association.
A heading "The Agenda" in turn set out a series of proposed resolutions, including resolution 5.2, which made clear that what was contemplated was not the removal of individual members of the Executive Council, whether all or some of them, and their replacement by new members but something different, namely:
"5.2 That the current Executive Council be dissolved.
5.3 That a Care Taker Shuraa shall be appointed. …
5.5 This Meeting authorizes the Care Taker Shuraa, to carry out a drive and recruit new members."
What ultimately occurred at the meeting on 2 March, to which I will refer below, seems to me to have been different, in substance, from any dissolution of the Executive Council (even if that were within the power of a general meeting) and appointment of an Interim Committee or "Care Taker Shuraa". I will return to the significance of that difference below.
[7]
Whether the Requisition was signed by 5% of members of the Association
The first and second particulars of the Plaintiffs' attack on the Requisition are that it was not a requisition of not less than 5% of the total number of members of the Association and the Requisition was signed only by Mr Bajwa. Mr Cheshire also submits that the facts that Mr Mahmood Zahid inserted members' names on the Requisition without reference to them and that the Requisition was signed (in handwriting) only by Mr Bajwa means that it is not a valid Requisition under cl 26.
The Defendants respond to the submission that only Mr Bajwa signed the Requisition by submitting that Mr Bajwa's signature under the 20 names referred to in the Requisition, prefaced by the words "for and on behalf of the members", is sufficient signature for each of them. The Defendants rely on case law as to the circumstances in which the printed name of a person may be treated as a person's signature, if that person or his or her agent has expressly or impliedly represented that that name can be treated as a signature: Leeman v Stocks [1951] Ch 941; Kation Pty Ltd v Lamru Pty Ltd [2011] NSWSC 219 at [34]ff. Mr Smallbone refers to the "authenticated signature fiction", which was described by White J in Kation Pty Ltd v Lamru Pty Ltd above at [34] as having the effect that:
"Where a person's name or initial is written on or printed on a document, whether it is at the beginning, end or in the body of the document, that name or initial may be treated as the person's signature if the person or his agent has expressly, or impliedly represented, that the name can be treated as a signature so as to give what has been called 'authenticated expression to the contract'".
This principle was initially directed to the effect of the Statute of Frauds 1677 (Imp) that a contract for the sale or other disposition of an interest in land is unenforceable, unless the agreement or memorandum or note thereof is in writing, signed by the party to be charged, or by some other person lawfully authorised by the party to be charged. The concept of "signature" for the purposes of that legislation has been held to permit the signature by an agent who has the requisite authority to sign the document: Thomson v McInnes (1911) 12 CLR 562 at 573. The same principles are applied to s 54A of the Conveyancing Act 1919 (NSW) and, in Kation Pty Ltd v Lamru Pty Ltd above at [30], White J noted that it was arguable that those principles also applied by analogy to s 54(4) of the Limitation Act 1969 (NSW). In Stuart v Hishon [2013] NSWSC 766 at [17], Harrison J referred to that observation with apparent approval.
[8]
The validity of the Requisition read together with the Petition
The next particulars of the Plaintiffs' attack on the Requisition are that the Petition was not a requisition but a petition (Statement of Claim [14], particular (c)); the Petition did not requisition the convening of a special general meeting by the Executive Council (Statement of Claim [14], particular (d)); and the Petition did not state the purpose of the special general meeting to be called (Statement of Claim particular (e)). The Plaintiffs also particularise their attack on the Requisition on the basis that the Petition did not form part of the Requisition since it was not in a similar form to the Requisition (Statement of Claim [14] (particular (g)).
I have set out the requirements for a requisition under cl 26 of the Association's constitution in paragraph 8 above. The Petition is in several pages with many signatories. It identifies concerns as to the conduct of the Association's affairs and calls for a special general meeting of the Association or for the resignation of the Executive Council, stating that:
"We the members of the [Association]
This Petition and the Requisition are in pursuant (in compliance) [sic] with the provisions of Clause 26 of the Constitution of the [Association]. We immediately request you to call A SPECIAL GENERAL MEETING (SGM) OF THE [ASSOCIATION].
We the undersigned, have signed both This Petition and The Requisition, as we are not happy in the way and manner the affairs of the Association … have been conducted without consultation of the members.
We are seriously concenred [sic] that there is a lack of transparency of the [Association's] affairs and financial transparency and accountability. We need open forum. The system needs REFORM the sooner the better in the administration and management of the Association. Time has come for a CHANGE, therefore we CALL A SGM - Special General Meeting or the Executive Committee [sic] should resign for with [sic]."
It should be noted that the Petition clearly indicates that the signatories seek to requisition a special general meeting under cl 26 of the Association's constitution although it also refers, in the last sentence, to the signatories calling a special general meeting (which may also have been intended as a reference to requiring the Executive Council to do so) and, in the alternative, to the resignation of the Executive Council. The Petition does not, however, specifically identify any particular resolution or resolutions that is or are to be put to the special general meeting.
[9]
Whether defects in the Petition were procedural irregularities
The Defendants rely on s 1322(2) of the Corporations Act to seek to validate several deficiencies in the Requisition and the Petition, if they are established, relevantly, that the Petition did not itself take effect as a requisition or as requisitions in similar form (Amended Defence [18]); that the Requisition and Petition are separate instruments and do not take effect together as a requisition or requisitions (Amended Defence [19]); that the signatures to the Petition did not take effect as signatures of the Requisition (Amended Defence [20]); that the Requisition and Petition, taken together or separately, were not signed by at least 5% of the total number of members of the Association (Amended Defence [21]); that the Requisition and the Petition did not comprise documents in a similar form, so that their lack of similarity deprived them of a sufficient number of signatures (Amended Defence [22]); and that the Petition did not state, or did not sufficiently state, the purpose of the special general meeting (Amended Defence [23]).
The Plaintiffs respond to the Defendants' characterisation of these matters as procedural irregularities, by paragraph 2 of their Reply dated 2 December 2014, by pleading that a substantial injustice has been caused or may be caused and cannot be remedied by any order of the Court. They rely, in that regard, on the cumulative effect of the matters pleaded in the Statement of Claim and other matters relating to the timing and circumstances in which the Requisition, Petition and resolutions passed at the 2 March meeting occurred. They also seek to deploy the effect on the Plaintiffs' reputation in the community if they are removed from elected positions as members of the Executive Council before their two year term has expired and against their wishes. Mr Cheshire in turn submits that the relevant deficiencies were not procedural irregularities or, so far as they were procedural irregularities, caused or may cause substantial injustice and no order ought to be made validating the resolutions at the meeting on 2 March for the removal of the Plaintiffs. It should be recognised, of course, that s 1322(2) of the Corporations Act automatically validates a procedural irregularity unless the Court is satisfied of the relevant matters, and does not require an order of the Court in that regard.
[10]
Whether the 2 March meeting was valid
It is not strictly necessary to determine this question since I have held above that the Requisition was not signed by a sufficient number of members of the Association, the Petition did not adequately state the purpose of the meeting neither are validated under s 1322(2) of the Corporations Act where what was done at the 2 March meeting did not conform either to what was sought by the Requisition or the Petition. However, I deal with this issue below against the contingency that an appellate court may take a different view.
The Plaintiffs plead that the 2 March meeting was not a valid meeting under cl 26(4) of the Association's constitution (Statement of Claim [16]). The first matter particularised is that there had been no valid requisition under cl 26(2)-(3) of the Association's constitution, relying on the matters raised in respect of the Requisition. I have addressed those matters above and I accept that submission.
The next particularised matter relied on for the allegation of invalidity of the 2 March meeting is that one month had not elapsed from when the Requisition and Petition were lodged with the secretary of the Association before the purported calling of a special general meeting under the First Notice or the Second Notice. The Defendants do not now rely on the First Notice in respect of the meeting proposed to be called on 16 February. So far as the Second Notice is concerned, the Requisition was made on 6 January 2014 and cl 26(4) of the Constitution directs attention to whether the Executive Council had failed to "convene a special general meeting to be held" within one month after that date, which would then permit the requisitioning members to convene the special general meeting. The Plaintiffs submit that the requisitioning and holding of the 2 March meeting was contrary to the Association's constitution and invalid because, first, the meeting was convened contrary to cl 26(4) of the Association's constitution because that was done within one month of the Requisition. The Defendants respond that cl 26(4) of the Association's constitution permits them to give notice upon the Executive Council's failure to give notice, and submit that they were entitled to give that notice from 21 January 2014 when the Executive Council determined not to convene the meeting requested by the Plaintiffs, or otherwise at the latest time at which it would have been possible to convene a meeting to be held on or before 6 February 2014.
[11]
Whether notice of the 2 March meeting was given to all members of the Association
The next matter particularised in support of the Plaintiffs' allegation of invalidity of the 2 March meeting is that notice was not given to all members of the Association, and in particular was not given to all of the persons named in Annexure A to the orders made by Pembroke J in September 2012. A second contention that notice was not given to the 77 persons alleged to have been admitted as members on 16 November 2013 must be taken to have been abandoned, since the Plaintiffs did not press the claim for the admission of those members at the hearing.
It is by no means clear which members of the Association are alleged not to have been given notice of the meeting, apart from the 77 persons, and it may be that issue arises in respect of only one member, so far as admissible evidence goes. Mr Malak's affidavit addressed this issue, but only parts of it were admitted, and those parts indicated that he had received notice of the 2 March meeting (Mohammed Malak 6.3.2014 [3]). Those parts of his affidavit referring to other persons who he claimed did not receive notice were not admissible and were not admitted. Mr Mohammed Arif's affidavit (6.3.2014) indicates that he did not receive notice of the 2 March meeting but, as Mr Smallbone points out, he does not say that the meeting did not come to his attention and that would have been highly unlikely since he was the Association's Assistant Secretary. There is evidence that notice of the 2 March meeting was posted to Mr Arif's address stated in the version of the Association's membership list that was available to those who requisitioned the meeting (Mahmood Zahid 2.4.2014 [21]). Mr Arif's evidence was that there was an error in his address in that register, which had been corrected, although he did not know when that correction was made (Mohammed Arif T109-T110). Although several lists of members that are in evidence give a current address for Mr Arif, there is no evidence that they were available to the Defendants, or indeed that they existed prior to the meeting on 23 March 2014 called by the Executive Council.
Mr Smallbone points out that cl 41(1) of the Association's constitution permits notice of a meeting to be served personally or by post to the member at the member's address shown in the register of members. In this case, the requisitionists sent notice to the address stated for Mr Arif in that version of the membership list which was available to them. However, there is difficulty in identifying the address of Mr Arif contained in the Association's register of members for the purposes of that clause. The original of the Association's register of members was not in evidence and there is no evidence as to what has happened to it. As Mr Smallbone points out, there is evidence that several of the Plaintiffs have maintained personal records, involving additions and subtractions from the list of members of the Association as determined by Pembroke J, including attendance lists prepared for particular meetings. Those lists do not, however, constitute the register of members for the purposes of the Association's constitution. It is not clear that the Association had any single membership list to which cl 41(1) of its constitution could apply.
[12]
The purpose of the 2 March meeting
Next, the Plaintiffs contend that the 2 March meeting was not specifically called for the purpose of removing each of them from the Executive Council since the First Notice set out other business to be transacted; sought the dissolution of the Executive Council rather than their removal; and, so far as it sought their removal, it did so collectively rather than individually. The Plaintiffs submit that those defects were not cured by the Second Notice, which constituted notice of a postponement rather than a fresh notice, and would not remedy the deficiencies with the First Notice and, in particular, that the First Notice called a special general meeting to deal with business other than the removal of members of the Executive Council, contrary to cl 17(1)(g) of the Constitution, and called for the dissolution of the Executive Council rather than removal of each of its members in a manner that was not authorised by cl 17(1)(g) of the Constitution.
The Defendants acknowledge that those who requisitioned the 16 February meeting did not have the capacity, at general law, to recall that meeting once it had been convened. They submit, however, that the Plaintiffs contend that the First Notice was invalid and ineffective to convene that meeting and that the Defendants have not contested that proposition, so that the first meeting had not in law been convened. They submit that the reference in the Second Notice to the "postponement" of the existing meeting rather than the convening of a new meeting is "a mere matter of verbiage". They point out that the Second Notice expressly referred to a revised agenda and additional notice required for the 2 March meeting, which were matters on which the Plaintiffs had relied to contest the validity of the First Notice. It seems to me that the Second Notice is, in substance, the convening of a further meeting, and the reference to postponement of the earlier meeting can be disregarded. However, as I have pointed out above, the Second Notice was not supported by the Requisition, read on its own or with the Petition, since it was convened to take different steps from those which the Requisition and the Petition contemplated.
The Defendants contend that, if the Second Notice in respect of the 2 March meeting was not valid, because it did not constitute a fresh notice convening that meeting, that also was a procedural irregularity and was a defect of notice in respect of the convening of the relevant meeting (Amended Defence [29]). The Plaintiffs submit that most of the persons named on the Requisition were told that the meeting would be called to discuss matters rather than to remove the Executive Council or particular members of it. As I have noted above, it seems to me that, to the extent the Requisition contemplated the dissolution of the Executive Council and its replacement by an interim committee, it did not contemplate that some only of the members of the Executive Council were to be removed and then replaced by the Plaintiffs. Mr Cheshire points out that the First Notice did not correspond with that understanding of most of those who had signed the Petition, and the Second Notice did not correspond with the understanding of any of the persons who had signed the Petition, so far as it was directed only to the removal of several members of the Executive Council. As I have noted above, the 2 March meeting departed from what was contemplated by those who had signed the Petition, not only because the nature of the resolution which was passed was different, but also because, as Mr Cheshire points out, the matters which those who signed the Petition wished to have addressed, including discussion of the Imam's position or the other issues that had concerned them, were no longer to be addressed at that meeting. I do not consider the 2 March meeting, to the extent it was called by the First Notice, can be validated for these reasons, and those set out above in indicating why the Requisition and the Petition (so far as it failed to specify the purpose of the meeting) could not be validated.
[13]
Appointment to casual vacancies
The Plaintiffs also plead that the resolutions by which they were purportedly removed from the Executive Council were not valid (Statement of Claim [16]) relying on the matters noted above, and the additional contention that the remaining members of the Executive Council, after their removal, were not given the opportunity of appointing other members of the Executive Council and that there was no power in the general meeting to appoint members to the Executive Council. It does not seem to me that those matters address the validity of the Plaintiffs' removal from office, although they are relevant to the validity of the First to Seventh Defendants' appointment to office.
The Defendants respond to the contention that the Executive Council rather than the general meeting had power to appoint new members of the Executive Council by referring to cl 19(1) of the Model Constitution in Schedule 1 of the Associations Incorporation Regulation 2010 ("Model Constitution") which provides for the filling of vacancies in the positions of the Executive Council by members nominated and appointed by simple majority vote. Mr Smallbone also submits that the proposition that the general meeting did not have the power to appoint further members of the Executive Council is contrary to authority, and refers to Grant v John Grant & Sons Pty Ltd (1950) 82 CLR 1 at 22; Link Agricultural Pty Ltd v Shanahan [1998] VSCA 3; 1 VR 466 at [54]-[55]; Integrated Medical Technologies Ltd v Macel Nominees Pty Ltd (1988) 13 ACLR 110. It seems to me that, consistent with the approach adopted in Link Agricultural Pty Ltd v Shanahan above, to which Mr Smallbone refers, the provisions in the Association's constitution for the appointment of members of the Executive Council to fill casual vacancies in the Association's Constitution should be read as concurrent with, and alternative to, the provisions for the appointment of such members by the general meeting under the Model Constitution. However, it is not necessary to reach a final determination as to that matter, since I have held that the Requisition and the 2 March meeting were not valid, and should not be validated, for the reasons noted above.
The Defendants also contend, in respect of any requirement to give remaining members of the Executive Council the opportunity to fill casual vacancies occurring by removal of members of that Committee at the meeting on 2 March 2014, that also was a procedural irregularity (Amended Defence [30]). It seems to me that the validation of that matter would cause substantial injustice, and the Court should not exercise any discretion to validate it, for the reasons noted above in respect of the other claims for validation made by the Defendants.
[14]
Defendants' Cross-claim for relief under s 1322(4) of the Corporations Act
The Defendants in turn bring a Cross-Claim for relief under s 1322(4) of the Corporations Act seeking orders declaring that the 2 March meeting was not rendered invalid by reason of the several matters by which the Requisition and meeting are attacked by the Plaintiffs. Validation is sought for any invalidity of the Requisition or the 2 March meeting by reason of the lack of a valid requisition under cl 26 of the Association's constitution; the want of one month elapsing between the date of lodgement of the Requisition and the First Notice; by reason of any insufficient notice; any failure or defect in the notice convening the meeting to state the "purpose or removing" [sic] of each of the Plaintiffs from office or otherwise state the business of the meeting; any failure to give remaining members of the Executive Council the opportunity to appoint officers to fill the vacancies created by the removal of the Plaintiffs; or any other defect or deficiency of power in the general meeting to appoint members to the Executive Council; or any other defect or deficiency alleged in the Statement of Claim. The order sought extends, in short, to a deficiency or deficiencies of several kinds in respect of the Requisition and the 2 March meeting.
The Court can only make an order under s 1322(4) if it is satisfied that the act, matter or thing or the proceeding is essentially of a procedural nature; or the person or persons concerned in or party to the contravention or failure acted honestly; or that it is just and equitable that the order be made (s 1322(6)(a)(i)-(iii)). The conditions specified in s 1322(6)(a)(i)-(iii) are not cumulative, and only one of those conditions needs to be satisfied in order to allow an order to be made under s 1322(4): Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd above; Gosford Christian School Ltd v Totonjian [2006] NSWSC 725; (2006) 201 FLR 424 at [80]. I proceed on the basis that s 1322 of the Corporations Act should be given the wide application recognised by the High Court in Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396. French CJ there observed that that section should be construed widely to give effect to its policy, and did not consider the section was limited to where there was disobedience of a prohibition or non-compliance with an obligation. Hayne, Crennan and Kiefel JJ similarly rejected the view that s 1322(4) was limited to validating actions that were able to be achieved under the Corporations Act or a company's constitution or was not available for actions that could not otherwise be achieved. Gageler J observed that a contravention of the company's constitution may occur if something happened differently to what the constitution required. I also accept that the view may be reinforced by the possibility that greater informality may affect the administration of associations registered under the Associations Incorporation Act 2009: Ahmed v Chowdhury above at [233]. However, the potential width of the application of the section does not exclude the relevance of injustice arising from the relevant event, to which I will refer below, in determining whether it should be applied in a particular case.
[15]
The Plaintiffs' proposal in opening
In opening, the Plaintiffs submitted that the Court should make an order confirming their position at least on an interim basis, and also make an order for an election of members of the Executive Council. I do not propose to make such an order. First, Mr Smallbone made clear that the Defendants do not have confidence in either the process which would be adopted for an election or its fairness. So far as the process proposed by the Plaintiffs contemplates a committee involving representatives of each of the Plaintiffs and the Defendants, it seems to me that there is substantial force in Mr Smallbone's submission that such a committee may well be deadlocked. Second, it seems to me that the offer made by the Plaintiffs, if it were to have any real weight, would have needed to have been made shortly after orders were made by Darke J, when it might have had real benefit in narrowing the differences between the parties, and the fact that it is made over a year later means that it now has much less advantage, particularly where the Plaintiffs' term of office will in any event expire later this year.
[16]
Conclusion and orders
The outcome of these proceedings is in many respects unfortunate, and may provide little benefit to either of the parties, and the circumstances in which that has occurred is also regrettable. On the one hand, the Plaintiffs took several points as to the form of the Requisition and the Petition, at least some of which were of a somewhat technical character. On the other hand, the requisitionists were squarely placed on notice as to the issues as to the form of the Requisition and the Petition, at least by late January 2014, and could have withdrawn the Requisition and Petition at that point and requisitioned a new meeting in a manner that complied with the Association's constitution. Had that course been taken, the costs involved in the interlocutory application before Darke J and in several days of hearing before me would have been avoided. The Plaintiffs' offer to call a new election, made on the first day of this hearing, more than a year after the relevant events, could also have been made long before, and might then have had some utility in avoiding the continued disputes within the Association and the substantial costs which will have been incurred in these proceedings.
The result of these proceedings, and the history of disagreement and litigation surrounding the Association, leaves open the risk that ultimately a member or members may bring an application for the Association to be wound up, notwithstanding the benefits it could, absent dissention among its members, or does deliver to its members and the community. None of the underlying difficulties within the Association would have been avoided had the Court reached the opposite result in these proceedings, and simply substituted the Defendants, who do not have the confidence of the Plaintiffs and those who support them, for the Plaintiffs, who do not have the confidence of the Defendants and those who support them, as members of the Executive Council.
As I noted above, the Plaintiffs sought a declaration that the meeting of 2 March 2014, by which the First-Seventh Defendants were purportedly appointed or elected as office bearers of the Association was not a meeting held in accordance with the Association's constitution and a declaration that the Executive Council remains as it was prior to 2 March 2014. I consider that a declaration should be made as to the invalidity of the 2 March meeting, for the reasons set out above. The current membership of the Executive Council follows from that declaration, at least so far as the matters raised in these proceedings are concerned, but I do not consider I should make a wider declaration in that respect. The Plaintiffs also seek an order that the Defendants be restrained from acting or purporting to act for or on behalf of the Association, or representing to any person or organisation that they are officers or authorised representatives of the Association. It seems to me that an order should not be granted in that form, so far as it is indeterminate in time and does not address the possibility that the First-Seventh Defendants might at some point be lawfully appointed as officers or representatives of the Association, although that did not occur on 2 March 2014. The Defendants' Cross-Claim should be dismissed. The Defendants must pay the Plaintiffs' costs of the proceedings, as agreed or as assessed.
[17]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 01 June 2015
Parties
Applicant/Plaintiff:
Khan
Respondent/Defendant:
Khan; Re Islamic Association Western Suburbs Sydney Inc
Declaration: the 2 March 2014 meeting was not held in accordance with the Association's constitution and is invalid; Defendants' cross-claim for validation under s 1322 dismissed; Defendants to pay Plaintiffs' costs as agreed or assessed; parties to lodge agreed short minutes of order within 14 days.
Clause 12 provides for the powers of a committee described as the Executive Council of the Association which, inter alia, has the power to control and manage the Association's affairs, to exercise such functions as may be exercised by the Association, other than those that are required by the constitution to be exercised in general meeting, and to perform such things as appear to it to be necessary or desirable for the proper management of the Association's affairs (Ex D7, 1/146). Clause 17(1) of the Association's constitution in turn provides that the office of a member of the Executive Council shall become vacant in specified circumstances including, in cl 17(1)(g):
"Upon a resolution being passed by a two-thirds majority of members present at a properly constituted General Meeting specially called for the purpose, to remove him/her from office." (Ex D7, 1/147).
Clause 26 of the Association's constitution in turn permits the calling of special general meetings, which are general meetings of the Association other than annual general meetings. By cl 26(1), the Executive Council may, whenever it thinks fit, convene a special general meeting of the Association. Clause 26(2) provides that the Executive Council shall, on the requisition in writing of not less than 5% of the total number of members convene a special general meeting of the Association. Clause 26(3) provides that a requisition of members for a special general meeting:
(a) shall state the purpose or purposes of the meeting,
(b) be signed by the members making the requisition,
(c) shall be lodged with [the] secretary of the executive council and,
(d) may consist of several documents in a similar form, each signed by one or more of the members making the requisition.
Clause 26(4) provides that, if the Executive Council fails to convene a special general meeting to be held within one month after the date on which a requisition of members is lodged with the secretary, any one or more of the members who made the requisition may convene a special general meeting to be held not later than three months after that date. Clause 26(5) provides that a special general meeting convened as referred to in cl 26(4) shall be convened as nearly as is practicable in the same manner as general meetings are convened by the Executive Council and any member who thereby incurs expense is entitled to be reimbursed by the Association for any expense so incurred.
Clause 27 of the Association's constitution provides that, except where the nature of the business proposed to be dealt with at a general meeting requires a special resolution, the secretary must give notice of the meeting, sent by pre-paid post at least 14 days fixed before the holding of the meeting. Where the nature of the business proposed to be dealt with at a general meeting requires a special resolution, the secretary must give 21 days' notice before the date fixed for the holding of the general meeting. No business other than that specified in the notice convening a general meeting may be transacted at the meeting.
I now turn to the facts that gave rise to this application. An election of the Executive Council of the Association took place on 10 November 2013 and the Plaintiffs were elected as the Executive Council at that time. Persons associated with the Defendants did not stand at that election, although contradictory evidence was led in this application as to whether that reflected their belief that they would not be elected or a wish (that has plainly not come to pass) to restore harmony to the Association. It is not necessary to determine that dispute for the purposes of this judgment.
The Plaintiffs initially contended that, on or about 16 November 2013, and immediately after they were elected as Executive Council, 77 persons were admitted as members of the Association at a meeting of the Executive Council. The Plaintiffs ultimately did not seek to rely on the admission of those persons in these proceedings.
Issues arose in respect of the affairs of the Association in late 2013, including the resignation of the Imam who had long been associated with the mosque operated by the Association, which appears to have reflected differences with the Executive Council. It appears that the dispute that arose in late 2013, and culminated in the calling of the 2 March meeting, was at least associated with the resignation of the Imam who had previously undertaken responsibilities in respect of the Mosque operated by the Association. It appears that at least some members of the Association and of the local community were distressed by the circumstances in which the Imam had ceased his involvement with the mosque and I accept that was at least an immediate contributor to the steps which followed, albeit that it may have combined with other concerns that had previously existed (Bajwa T157-159, 161). I accept that matter may also have prompted interests associated with the Defendants to seek, in the Requisition and the Petition, to dissolve the Executive Council, and in the final outcome of the meeting held on 2 March to remove several of its members. It does not seem to me that that can be fairly characterised, as Mr Cheshire seeks to characterise it, as being no more than a faction out of power taking an opportunity to seek to replace the Executive Council that had been elected in November 2013 and was then in power. That characterisation seems to me to give too little weight to the fact that there is no reason to think that the concerns held by the Defendants, and members of the community associated with them, were not genuinely held.
A meeting took place in late December 2013, involving both members and non-members of the Association, to consider calling a special general meeting of the Association. Mr Cheshire, who appeared for the Plaintiffs, put substantial weight on the involvement of persons who were not members of the Association in that meeting and later events. I do not consider that matter has any significance, because a proper requisition, made by a sufficient number of members of the Association, would not be invalidated merely because non-members of the Association held the same view as those members who had requisitioned the meeting, or had provided support or practical assistance to the requisitionists in calling the meeting. It also seems to me that any reference to whether persons were members of the Association needs to have regard to the fact that the Executive Council had control over the admission of members to the Association, and there is at least some evidence that suggests that the Plaintiffs were not inclined to admit persons to membership of the Association if they considered that those persons were not supportive of their management of the Association.
The Plaintiffs point out that Mr Haji Ibrahim was significantly involved in preparation of the relevant documents to requisition a special meeting of the Association following the meeting in late December 2013. Mr Cheshire emphasises the fact that Mr Haji Ibrahim was not called by the Plaintiffs to give evidence, although he was available (Mahmood Zahid T202). (Although Mr Zahid's name was stated in his affidavit as Zahid Mahmood, he confirmed in cross-examination that his first name was Mahmood and his surname was Zahid. I will refer to him by his correct name in this judgment.) However, it does not seem to me that any particular issue in respect of the validity of the Requisition or Petition depended upon any matter to which Mr Ibrahim's evidence was likely to be of particular relevance, so that any inference that his evidence would not have assisted the Defendants is of little significance.
Drafts of the Requisition were prepared in early January 2014 (Ex D1 and D2) and Counsel accepted that the documents shown to the signatories to the Petition were substantially in accordance with the contents of Ex D2. The persons who signed the Petition generally gave evidence in cross-examination that they were shown the Requisition (implicitly, in the draft form that it then existed) at the time they signed the Petition. Evidence of Mr Bajwa, who was an (or the) ultimate signatory to the Requisition, in cross-examination that the Requisition was not typed until 6 January 2014 (T165) seems to have been mistaken to that extent. It appears that Mr Haji Ibrahim prepared the Requisition and Petition in hand and gave them to Mr Zahid, who was not a member of the Association, who arranged for them initially to be typed by his son, although he was later involved in finalising the Requisition (Zahid T193-197). Mr Zahid then gave the Requisition and the Petition to Mr Bajwa (T163). Other persons, including non-members of the Association, were involved in obtaining signatures to the Petition. Mr Mahmood determined which names were to be entered on the last page of the Requisition, by identifying persons who had signed the Petition who he believed were foundation members of the Association and inserting their names into the Requisition before it was given to Mr Bajwa to be signed (Zahid T195). Mr Bajwa then sent the Requisition and the Petition to the Secretary of the Association. I will set out the terms of the Requisition and the Petition below, in dealing with the Plaintiffs' attack on their validity.
The Executive Council of the Association discussed the Requisition at a meeting on 21 January 2014 (Ex D7, 1/276) as follows:
"Discussion: Requisition from Afzal Bajwa was received to call a S[pecial] G[eneral] M[eeting]. This was discussed in the meeting and the members found several flaws the requisition [sic]. Firstly, the Petition was signed by non-members and non-financial members. Secondly some of the points raised in the letter were not according to the [Association] constitution. According to the [Association] constitution it has empowered the E[xecutive] C[ouncil] members to make decision regarding employment of all staff for [Association].
Conclusion: All the E[xecutive] C[ouncil] members agreed that [Association] members have the right to call SGM to decide if the E[xecutive] C[ouncil] decision was constitutionally valid or invalid. The secretary of the Association to declare the quorum, and the President to chair the SGM meeting, not otherwise as stated in the requisition. The Secretary to write to Afzal Bajwa and advise him to correct the Requisition and re-submit. If Afzal Bajwa fails to do this, then [Association] will call for a SGM. This was unanimously approved by all E[xecutive] C[ouncil] members."
I note, for completeness, that the Executive Council also discussed requests from Mr Bajwa and others for an up to date membership list of the Association and agreed that that list was "very confidential" and that "no one has the constitutional right to have this confidential information" and only members have the right to make arrangements with the secretary and view the list in person. That approach points to the difficulty, also addressed in the Defendants' evidence, which the Defendants experienced in obtaining meaningful access to the Association's member register, if it maintains one in proper form, to which I will refer further below.
By letter dated 21 January 2014, which it appears was not posted until late January, the Association's secretary advised Mr Bajwa of matters that "need to be clarified" in respect of the Requisition. The Secretary pointed out that the first purpose identified for the special general meeting, to decide the Imam's employment, was addressed to a matter which the Executive Council had power to decide under the Association's constitution. He referred to the third and fourth stated purposes, relating to the dissolution of the Executive Council and updating of the Association's constitution, and noted that there was a procedure in the Association's constitution for the suggested changes to the constitution. He also took issue with the approach in the Requisition to the quorum and chairperson of the meeting, and expressed the view that some of the persons who signed the Requisition were not members, and identified several persons named in the Requisition and the Petition who were said to be not members or not financial members of the Association.
It appears a further meeting of interests associated with the Defendants took place on 24 January 2014 and was attended by both members and non-members (Shahzad Khan T142). I have indicated above why it seems to me that the fact of non-members' involvement in that meeting is of limited significance.
On 29 January 2014, the Defendants gave notice ("First Notice") (Ex D7, 1/280) for a special general members' meeting which was to take place on 16 February 2014 at a specified location, the agenda items for which included:
"3. Discuss and resolve the employment matter of Imam Dr Shabbir Ahmed.
4. Review of the recent action of the Executive Council that resulted in unrest and disharmony among the members and the community. And to dissolve the Executive Council.
5. Appointment of the Interim Committee to run the affairs of the [A]ssociation till election to be held within three months from the date of this S[pecial] G[eneral] M[eeting]."
The third and fourth items referred to broadly corresponded to the first and second items noted in the Requisition, as set out below.
By letter dated 2 February 2014, the secretary of the Association referred to a conversation between him and Mr Bajwa on 26 January 2014, in which the secretary says he advised Mr Bajwa of errors in the Requisition. That letter stated that:
"I spoke to you on Sunday 26th January 2014 and advised you verbally on these flaws and errors and you asked me to send this via post, which I did.
Despite of [sic] the advice and discussion you have called a SGM of the [Association] for 16 February 2014 which is unconstitutional. [The Association] will challenge any decision taken by the members on 16 February 2014, since the SGM DOES NOT FULFIL REQUIREMENTS OF [ASSOCIATION] CONSTITUTION [sic]. You and the members who called for the SGM will be liable for all costs incurred.
We will call a SGM as soon as you re-submit the amended requisition. Can you respond to my letter of 21 January within 72 hours of receiving this letter: Failure to your response with correct requisition according to [Association] constitution, the E[xecutive] C[ouncil] will have no choice but to call a SGM ourselves."
On 4 February 2014, the Defendants issued a further notice dated 4 February 2014 ("Second Notice") (Ex D7, 1/281) which stated that the special general meeting to be held on 16 February 2014 had been "postponed" to 2 March 2014 "due to revised agenda and additional notice required for the meeting." The revised agenda now contained the following items:
"2 To remove the following persons from the office of the Executive Council as per clause 17[(1)]g of the constitution of the [Association] [A list of the names of the Plaintiffs, who then constituted some but not all of the members of the Executive Council, followed].
3 To appoint replacements of the removed members of the Executive Council."
At that point, what was sought at the 2 March meeting departed from what was sought by the Requisition, the Petition and the First Notice (as the reference to a "revised agenda" acknowledged) so that the employment status of the Imam was no longer to be considered, the Executive Council was no longer to be "dissolved" or all of its members removed, an interim committee was no longer to be appointed, and now only some of the members of the then Executive Council were to be removed and replaced. I will return to the significance of those matters below.
By his response dated 6 February 2014 (Ex D7, 2/620), Mr Bajwa responded that the Secretary's objections were "not valid and acceptable" for several reasons, including the Association's failure to provide access to membership records and lists, the existence of protests against the Executive Council's actions, a complaint that the letter dated 21 January 2014 had not been posted until 29 January 2014 and that the Executive Council had not held the special general meeting within one month of the Requisition and concluded:
"Members have already called the meeting in exercise of their right per the constitution clause 26(4), you are therefore, urged to be at the meeting on 2 March 2014, as per amended notice already posted to you and members."
On 14 February 2014, the Plaintiffs, as the then Executive Council of the Association, determined to hold a special general meeting to take place on a later date than that convened by the Defendants, 23 March 2014. They sent notices of that meeting on about 24 February 2014. The agenda for that meeting included, for each member of the Executive Council:
"Whether pursuant to clause 17(1) of the constitution [the Executive Council member] be removed from office."
Further correspondence as to the validity of the 2 March meeting followed between the secretary of the Association and the Association's solicitors on the one hand and Mr Bajwa on the other. By letter dated 24 February 2014, the solicitors acting for the Association, presumably on the instructions of the Plaintiffs or the Executive Council, identified several matters alleged to have the result that the Requisition and Petition were invalid, including that various persons were not members of the Association due to non-payment of membership fees; that the proposed dissolution of the Executive Council was not in accordance with cl 17(1)(g) of the Constitution; that the Requisition failed to identify a purpose of removing each of the members of the Executive Council from office, for the purposes of cl 17(1)(g) of the Constitution; and that the Petition did not make explicit reference to a resolution for removal from office of each member of the Executive Council (Ex D7, 2/638). The Association's solicitors also expressed the view that:
"In the absence of a valid "requisition", any notice, issued pursuant to cl 26(4) of the Constitution (calling of a special general meeting) would be invalid."
That letter also identified suggested defects in the First Notice and indicated that:
"We are instructed that the Executive Council will not recognise the meeting of 2 March 2014 as a "special general members meeting" of the [Association] as it is contrary to the constitution of the [Association] and is accordingly unlawful."
The Plaintiffs, being some but not all of the members of the Association's Executive Council were purportedly removed from the Executive Council and replaced by the First to Seventh Defendants at the 2 March meeting, which was attended by 111 persons (Ex D7, 1/288). Separate resolutions for removal of each of the Plaintiffs from the Executive Council of the Association were passed at that meeting, purportedly pursuant to cl 17(1)(g) of the Association's constitution, in each case specifying the reasons for removal. I set out, by way of example, the reasons given for Mr Aijaz Khan's removal from the Executive Council (Ex D7, 1/297), namely that he was alleged to have:
"(1) Caused unrest and anxiety amongst the members of [the Association] and community by various actions, some of which are appended below.
(2) Disregarded and refused to address the serious concerns of the members and community, which lead to a very serious and major conflict between the community and the Executive Council resulting in demonstrations, confrontations and some incidents of violence between the E[xecutive] C[ouncil] members and community for many weeks.
(3) Attempted to exclude members from the membership register without any procedure and valid reasons.
(4) Failed to responds [sic] to many requests and reminders from members to provide access to membership and [A]ssociation's financial record [sic].
(5) Delayed beyond the time allowed by the [Association] constitution, the response to the requisition dated 06 Jan 14 for SGM including verbal requests by many members to call SGM, since 5 Dec 2013.
(6) Being member of previous E[xecutive] C[ouncil]s caused actions to remove members from the membership register and misused and misrepresented the office of treasurer.
(7) Being member of Australian Islamic College of Sydney Board caused [Association] lose control of the College which was created by [Association] and was real asset and main source of earning for the [Association] and Rooty Hill Mosque.
(8) Being disrespectful to the IMAM, (Dr Shabir Ahmed), creating hostile atmosphere against him, reprimanding in a derogatory manner ignoring the dedicated 23 years services of IMAM to the community which consequently resulted in the resignation under duress by the IMAM (Dr Shabir Ahmed).
(9) Rushing into accepting the resignation with immediate effect, disregarding Imam's request to carry on his employment till March 2014.
(10) Did not provide membership and financial records to the members for the purpose of conducting SGM on 2 March 2014."
Many of those matters were also recorded in the reasons for the removal of other Plaintiffs from the Executive Council, in various combinations. It is not appropriate, given the nature of this application, to seek to determine the factual accuracy of the allegations put against the Plaintiffs and relied upon as supporting their removal from the Executive Council. It is important to note, however, that these allegations were of a serious character. As I will note below, it seems to me that the character of the allegations, by which the resolutions for the Plaintiffs' removal were supported, potentially gives rise to significant injustice to them if the meetings were not properly convened or the resolutions not properly passed, but are nonetheless allowed to stand.
After that meeting, the Defendants approached the Court and sought and obtained, at a contested interlocutory hearing before Darke J on 14 March 2014 (Khan v Khan [2014] NSWSC 342), interlocutory orders that, until specified dates, the Executive Council of the Association, as it was prior to 2 March 2014, continue to act in that capacity pending final determination of these proceedings. Those orders were subsequently continued by consent until further order. The Plaintiffs have, since 14 March 2014, remained in office pursuant to those orders.
At the further meeting convened by the Plaintiffs and held on 23 March 2014, attended by 187 persons, the resolutions for removal of the Plaintiffs that had had purportedly been passed at the 2 March meeting were again put and defeated. That would, of course, be of little relevance if they had effectively been passed at the 2 March meeting.
The Plaintiffs submit that the Association is split between two factions and has been in that position for many years. I am satisfied that at least the present position is that a significant number of members support the Plaintiffs and a significant number of other members, and other persons who would be members but for the Executive Council's refusal of their applications for membership, do not. That appears to have been the position at least since the election immediately after the judgment of Pembroke J (Bajwa T157-159, 162, Abdul Khan T277-278; Mohammad Sami T332-335]. That matter seems to me to undermine the reliance by Mr Smallbone, who appears for the Defendants, on community opinion to emphasise the merit of the Defendants' position. I accept that the Defendants are genuinely dissatisfied with the Plaintiffs' stewardship of the Association and may well have good reason for that dissatisfaction. The evidence led in these proceedings as to the manner in which the Association's records are held and the evidence that decisions as to who is admitted to membership of the Association are made in a manner that seems to promote the position of those presently in control of the Association are matters that might well support such dissatisfaction. Beyond that, it should be emphasised that the Court's role is to determine the validity of the Requisition and the Petition (so far as it is relied on to support the Requisition) and the 2 March meeting and whether they should be validated, and not any question of who would be "better" to run the Association, which is a matter to be decided by its members in accordance with its constitution and not by the Court. Any concern as to the Defendants' conduct in managing the Association cannot be addressed by treating an otherwise invalid requisition or meeting as though it were valid, unless the conditions for validation under s 1322 of the Corporations Act are satisfied. The matters to which Mr Smallbone refers would be of greater relevance if an application were made by one or more members of the Association for its winding up on just and equitable grounds.
Mr Smallbone submits that the removal of the Plaintiffs and the appointment of the Defendants at the meeting of 2 March 2014 "was the expression of democratic governance, through the appropriate organ of the Association" and that any attempt to "frustrate or defeat" the rights and powers of members would tend to pervert the Association and that "[n]o narrow or technical approach should be taken to the validity or validation on attempts to invoke constitutional mechanisms for the exercise of democratic decision-making" and
"the Court should be astute to defeat attempts to frustrate such rights and powers and put down attempts to defeat democratic governance of incorporated associations".
It seems to me that there are several difficulties with approaching the matter on so broad a basis. The first is that, as Mr Cheshire pointed out and as I will note below, the two meetings of the Association organised by the Plaintiffs and the Defendants respectively reached opposite results. The second is that the manner in which the will of members of the Association is to be expressed is confined by its constitution and the Associations Incorporation Act 2009. Third, Mr Smallbone's submission tends to assume that the meeting on 2 March in fact expressed the will of the Association, which is a question to be determined, in part, by the regularity of the means invoked for that meeting.
I accept that, as Mr Cheshire points out, there is no reason to treat the 2 March meeting as any more or less expressive of the will of the Association's members than the meeting of 23 March 2014. I accept that, as Mr Cheshire also points out, that meeting expressed the will of the persons associated with the Defendants since the persons associated with the Plaintiffs largely did not attend it. The meeting of 23 March 2014 similarly expressed the will of the persons associated with the Plaintiffs, so far as persons associated with the Defendants withdrew from it before the vote was taken. That proposition is relevant, however, only so far as it reinforces the fact that the Court should simply seek to determine the validity of the Requisition, the Petition (so far as it is relied on to support the Requisition), the 2 March meeting and the application for validation of them, in accordance with legal principle, rather than making any assumption that any potential outcome is more conducive to reflecting the views of the Association's members or the local community, which views are plainly deeply divided.
The Plaintiffs rely on an affidavit of Mr Mohammed Arif dated 6 March 2014 to establish that he had not received the First Notice or the Second Notice for the special general members meetings of the Association. As I will note below, it seems to me that Mr Arif's evidence reflected the particular circumstance that his address was not correctly recorded in the records of the Association that were made available to the Defendants. The Plaintiffs also rely on the affidavit of the Fifth Plaintiff, Mr Mohammed Malak, dated 6 March 2014 to establish that several notices of the relevant meetings were sent to him, in the same envelope, addressed to members of his family and, implicitly, that separate notices were not sent to those family members. Those family members were not, however, called to give evidence to that effect. Several other affidavits were read by the Plaintiffs on voir dire, but not, in the event, in the substantive proceedings.
The Defendants in turn relied on in the order of 40 affidavits from a large number of witnesses, many of whom were cross-examined. The Defendants relied on the affidavit of the First Defendant, Mr Shahzad Khan dated 13 March 2014, parts of which were not pressed, and other parts of which related to the calling and conduct of the 2 March meeting. Mr Khan also gave evidence of his background and the contribution which he sought to make to the Association, having been elected, or purportedly elected, as its new president at the 2 March meeting, after the purported removal of Mr Aijaz Khan as its former president. Mr Shahzad Khan's further affidavit dated 21 August 2014 referred to the difficulties experienced by the Defendants in obtaining access to minutes and other documents of the Association and to the Association's purchase of properties using interest bearing loans in 2013, which is plainly a matter with which he and other persons associated with the Defendants disagree. However, I should again record that the role of the Court in this application is not to determine the prudence or otherwise of the manner in which the Association is presently being managed, but to determine the validity of the Requisition, the Petition and the 2 March meeting and whether any deficiency in that regard should be validated.
The Defendants relied on an affidavit of the Second Defendant, Mr Sohail Shamim, dated 20 August 2014 which referred to his having read an earlier version of the Requisition and agreed with the Petition, and having been involved in visiting others and asking them to sign the Petition, and also himself signing the Petition. Mr Shamim's second affidavit dated 28 November 2014 referred to his having paid membership fees for the Association, by giving the amount to Mr Chaudhry, to have it deposited in the bank account of the Association on his behalf; to his having been permitted to attend the annual general meeting on 2 November 2014, after he was initially told that he could not because his membership fees were in arrears; and to his observation that at least one other person was not permitted to enter the annual general meeting on the basis of arrears in membership fees. He also refers to various invoices and other documents relating to membership of the Association. Mr Shamim's further affidavit dated 3 February 2015 deals with the circumstances in which he asked others to sign the Petition and refers to his and Mr Siddique's signature of the Second Notice. By his affidavit dated 15 April 2015, Mr Shamim also referred to dealings with the records of the Association which are primarily relevant to the issue of the 77 members, which, as I noted above, is no longer relied upon by the Plaintiffs.
The Defendants read an affidavit of the Third Defendant, Mr Mohammad Siddique, dated 13 March 2014 relating to his willingness to perform the duties of secretary of the Association, the position to which he was elected, or purportedly elected, at the 2 March meeting. By his further affidavit dated 15 April 2015, Mr Siddique led evidence relating to the Association's records which was primarily relevant to the issue of the admission of the 77 members in November 2013, which is now not relied on by the Plaintiffs. Mr Siddique also gives evidence of his payment of four years of membership fees at the special general meeting on 2 March 2014, the deposit of the relevant funds to the Association's bank account, and the subsequent refusal to renew his membership by the Executive Council under the Plaintiffs' control.
The affidavit of the Sixth Defendant, Mr Mahmood Khan, dated 3 February 2015 deals with his attendance at the meeting in December 2013 to which I referred above, and a conversation with Mr Aijaz Khan concerning the position of the Imam, and to a discussion concerning the requisition with Mr Zahid and Mr Bajwa in January 2014, and to his signature of the "requisition" for the meeting, although Mr Zahid had signed, by hand, the Petition rather than the Requisition. The Defendants also read an affidavit of the Seventh Defendant, Mr Nizam Ali dated 13 March 2014. Mr Ali was elected, or purportedly elected, as treasurer of the Association at the 2 March meeting and referred, in evidence admitted as to his state of mind, to concerns which he holds in respect of the conduct of the Plaintiffs in the affairs of the Association.
The Defendants read affidavits of Mr Bajwa dated 3 February 2015 and 9 April 2015. Mr Bajwa's first affidavit related to the circumstances in which the Requisition was made and the First Notice and Second Notice were signed and issued. Mr Bajwa's further affidavit dated 9 April 2015 provided further detail as to his receipt of a draft of the Requisition and the Petition from Mr Zahid, discussions about the draft Requisition and Petition with several persons who signed the Petition, and his attempts to access the Association's membership register. Mr Bajwa's evidence in cross-examination was that, notwithstanding the reference to dissolution of the Executive Council in the Requisition, it was not the requisitionists' intention to remove all members of the Executive Council, but only those who were "making the problem" (T179). Mr Bajwa did not accept that that approach was directed only to the removal of those persons who were not in the Defendants' camp, but characterised the removal as directed to those who are "not doing the good job" (T180). Where, as I have noted, the Association was divided between persons who took different views, an evaluation of that matter was, of course, likely to reflect those differing views. I will refer below to the evidence of others who signed the Petition who did not share Mr Bajwa's understanding of its intent.
By his affidavits dated 3 February 2015 and 2 April 2015, Mr Mahmood Zahid gave evidence as to his concern as to the Imam's resignation, the meeting in late December 2013 to which I referred above and his efforts in arranging for several persons to sign the Petition (to which he referred in his affidavit as "the requisition"), and for several persons to sign the Second Notice, and of his dealings with Mr Bajwa and others, in relation to the Requisition, the Petition and the First Notice and Second Notice. By his affidavit dated 13 March 2014, Mr Shakir Chaudhry also gave evidence of steps which had been taken to give notice, initially for the first proposed special general meeting on 16 February 2014 and subsequently for the special general meeting on 2 March 2014. By his affidavit dated 14 March 2014, Mr Mohammad Abdul Sami referred to earlier disputes in respect of the Association and to the expulsion of members of the Association. I again note that the role of the Court, in this application, is not to determine wider issues as to whether the Association is managed in a proper manner, although those issues would very likely arise if an application for the winding up of the Association were brought.
Other evidence led by the Defendants related to the issue as to the purported admission of 77 members to the Association in November 2013, on which the Plaintiffs no longer rely, and difficulties in obtaining access to membership lists and records of the Association. The Defendants read the affidavit of Mr Saeed Chaudhry dated 8 April 2015. Mr Chaudhry was elected, or purportedly elected, as a member of the Executive Council on 10 November 2013 and addressed the circumstances of the suggested admission of 77 members of the Association at a meeting of the Executive Council on 15 November 2013. By his affidavit dated 13 March 2014, Mr Mazhar Idris also gave evidence as to the meeting of the Executive Council on 15 November 2013, dealing with the issue of the admission of the 77 members, and of unsuccessful attempts to obtain minutes of Executive Council meetings and other records of the Association from its secretary. By her affidavit dated 13 March 2014, Mrs Sumrah Shahbaz also referred to unsuccessful attempts to obtain access to the membership lists and financial records of the Association and to her husband's unsuccessful attempt to be reinstated as a member of the Association. By her further affidavits dated 3 February 2015 and 2 April 2015, Mrs Shahbaz expanded on that evidence and also referred to her signature of the Petition on 5 January 2014 and of the notice of general meeting on 4 February 2014.
Other affidavits relied on by the Defendants related to the circumstances in which the Petition was signed by a number of signatories. By his affidavit dated 31 January 2015, Mr Mohammad Ur Haq gave evidence of having been provided with the Requisition (which would then have been in draft form) by Mrs Tahseen Chaudhry and that he, his wife and his children signed the Petition. By his affidavit dated 31 January 2015, Mr Ehsan Ul Haq similarly gave evidence of being shown the Requisition (which would then have been in draft form) and the Petition and signing the Petition because he "wanted the Association to be run correctly in accordance with its constitution and the needs of the community". By his affidavit dated 2 February 2015, Mr Abdul Rehman Khan gave evidence of his signature of the Petition, and of having been shown the first part of the Requisition, the letter to the Association's secretary, in early January 2014. By his affidavit dated 31 January 2015, Professor Mahmood Nagrial also refers to having been shown the Requisition (as noted above, then in draft form) and Petition in early January 2014 and having signed the Petition as he wanted a special general meeting to be called. Mr Mohammad Ayub Khan, by his affidavit dated 31 January 2015, refers to having been given the Requisition (again, then in an earlier draft form) and the Petition on 4 January 2015 and to he and his wife having signed the Petition. Mr Namul Wakil, by his affidavit dated 31 January 2015, also refers to having been shown the Requisition (again, then in draft form) and the Petition on 4 January 2014 and to having signed the Petition and to his understanding that, by signing his name on the Petition, his approval of the letter and his support for calling a special general meeting would be confirmed. By his affidavit dated 31 January 2015, Mr Mohammad Akram refers to a conversation with Mr Zahid concerning problems in the Association, to having been shown the Requisition and the Petition and to having signed the Petition on about 4 January 2014. The letter referred to would again have been a draft of the Requisition.
The Defendants also relied on several other affidavits of witnesses who were not required for cross-examination. I have also had regard to those affidavits but no useful purpose would be served by summarising them.
The last page of the body of the Requisition was signed in handwriting by Mr Bajwa and stated that Mr Bajwa had signed the Requisition "for and on behalf of" 20 named persons who were identified as members of the Association. The Plaintiffs contend that four of those persons were not members of the Association and another six of them were not "financial", in the sense that their annual subscriptions to the Association were not current. That list is said to be continued in an "attached list Annexure A", which is not attached, and the last page of the body of the requisition refers to Annexure B which is the Petition, to which I will refer further below.
The Plaintiffs plead that there was no valid requisition requiring the convening of the 2 March meeting under clause 26 of the Association's constitution (Statement of Claim [14]). That contention is particularised by reference to numerous overlapping matters. In dealing with this and other allegations of invalidity in this application, I proceed on the basis, recognised at least since Isle of Wight Railway Co v Tahourdin (1884) LR 25 Ch D 320 and Fruit & Vegetable Growers Association Ltd v Kekewich [1912] 2 Ch 52 at 57 that the Court "ought not to be astute to discover and give effect to objections raised against efforts made by shareholders to call a meeting of the company to consider its own affairs". In NRMA Ltd v Snodgrass [2001] NSWCA 312; (2001) 52 NSWLR 383 at [22], the Court of Appeal referred to Isle of Wight Railway Co v Tahourdin above and also emphasised the need for "curial restraint in construing notices of meeting and in precluding members from exercising such limited powers as they possess as regards company governance", and referred to the possibility that ambiguities in a requisitionist's notice of meeting can be debated and modified. It seems to me that the same or greater restraint should be exercised in dealing with objections to a meeting called by members of an incorporated association.
However, it seems to me that a requisition of a meeting, which must be signed by 5% of the members of a company or association, raises very different issues to that arising under s 54A of the Conveyancing Act or under the Limitation Act. It can scarcely be contemplated that, if a requisition contained the printed names of 50, 100 or 500 members of a company or association, and required the calling of a meeting within a relatively short time period, a company or association should have to make individual inquiries to determine whether each of those persons had authorised the application of his or her name to the document, in printed form, by an agent. The application of the "authenticated signature fiction", as formulated in Leeman v Stocks above, may also contemplate that extrinsic evidence would be admissible to determine the authority of the agent who signed the document, although White J reserved the position in that regard in Kation Pty Ltd v Lamru Pty Ltd above at [37]. By contrast, the Court will ordinarily not have regard to extrinsic evidence to determine the validity of a requisition: Re Carlton Football Club Ltd; Gratton v Carlton Football Club Ltd [2004] VSC 379; (2004) 51 ACSR 29 at [10].
I do not consider that the "authenticated signature fiction" should be extended beyond the kind of documents which were in issue in the cases to which I have referred above, generally contractual documents, to apply to a requisition to convene a general meeting of a company or an incorporated association. In the latter context, the existence of a handwritten signature will be important in allowing a company or incorporated association to verify that the requisitionist in fact supports the convening of the meeting, which would otherwise not be apparent from a printed list of names, where the company or incorporated association would ordinarily not have ready access to any authority given by the persons identified by printed names for the application of their names. The approach for which Mr Smallbone contends, in respect of printed signatures on a requisition, has the difficulty that it would require the Association in the first instance, and ultimately the Court, to determine the validity of the entity that received a requisition, if the relevant authorities were not provided to that entity at the same time as the requisition, by reference to extrinsic evidence or assertions as to the circumstances in which those authorities were given. The use of extrinsic evidence for that purpose would be contrary to the approach of determining that matter on the face of the relevant requisition that was preferred in Re Carlton Football Club Ltd; Gratton v Carlton Football Club Ltd above. This finding has the consequences that the Requisition was signed only by Mr Bajwa, unless it can be read together with the Petition, and that the Requisition was not valid unless it can be either read together with the Petition or validated under s 1322 of the Corporations Act.
The next issue is whether the Requisition, read without the Petition, was signed by less than 5 per cent of members. On the finding that I have reached above, the Requisition was plainly signed by less than 5 per cent of members, since it was signed only by Mr Bajwa. I should nonetheless address the position if the other names printed in the Requisition were treated as signatures, both because the parties devoted substantial attention to it and in case an appellate court takes a different view as to the effect of the printed names on the Requisition.
Whether the requisite number of signatures is established, if the printed names are treated as signatures, depends on whether two or four of the persons named on the Requisition are treated as not eligible to requisition a meeting because they were not members of the Association at the time of the Requisition. The Plaintiffs' initial claim that other persons were not "financial members" of the Association at the time, in the sense that their membership fees had not been paid, need not be determined since, as Mr Smallbone points out, a member's ability to requisition a meeting, under the terms of the Association's constitution, was conditioned on his or her status as a member, not on whether he or she was "financial" at that time, at least unless he or she had been excluded from membership by reason of non-payment of membership fees in accordance with the Association's constitution.
The Plaintiffs submit that four of the persons whose names were printed on the Requisition, Mr and Mrs Ghaznavl, Mrs Naeema Ahmad and Mrs Hussina Wakeel were no longer members of the Association, because Mr and Mrs Ghaznavl had not paid membership fees for 5 years and Mrs Ahmad and Mrs Wakeel had not paid membership fees for 3 years, so that less than 5% of members had requisitioned the meeting even on the basis of the 347 members identified in the judgment of Pembroke J, requiring at least 18 members. I should first note that the Plaintiff's calculation of the number of members required for a valid Requisition may well be incorrect, although the evidence does not allow me to determine what would be the correct calculation. Mr Smallbone points out that the threshold number of members required to call a meeting would be less than 5 per cent of the 347 members identified in the judgment of Pembroke J, where there is a suggestion that some of those members had died and, at least on the Plaintiffs' case, other memberships had lapsed (Nasib Mohammed 6.3.2014 [9] admitted as submission subject to a limiting order under s 136 of the Evidence Act). The Defendants submit that, on that basis, only 15 signatories to the Requisition would be required. That number would be satisfied even if Mr and Mrs Ghaznavl, Mrs Ahmad and Mrs Wakeel are not counted, if the persons whose names are printed in the Requisition can, contrary to my view, be treated as having signed it.
It appears that Mrs Wakeel, Mrs Ahmad and Mr and Mrs Ghaznavl were in arrears in respect of their membership fees at the date they signed the Petition and the later date their printed names were applied to the Requisition. That much emerges from the fact that they deposited membership fees into the Association's account on 12 February 2014, after the date of the Requisition, but the Executive Council declined to accept that payment on the basis that they had not paid their membership fees for 3 or more consecutive years, or within 28 days of a reminder letter to pay those fees that had previously been sent on 22 November 2013 (Ex D7, 1/283).
The position in respect of Mrs Ahmad and Mrs Wakeel raises an initial question as to the proper construction of cl 6(1)(d) of the Association's constitution, as to which the parties advanced detailed submissions. That clause (which I set out in paragraph [6] above) provides that full members of the Association lose their membership upon default in the payment of membership fees for, inconsistently, five or three consecutive years. There is a dispute between the parties as to which figure is correct on the proper construction of that clause. The terms of that clause particularly impact on the position of Mrs Ahmad and Mrs Wakeel because they are alleged not to have paid membership fees for 3 but not 5 years, so that they would be excluded from membership if that clause should be construed as referring to 3 years but not if it should be construed as referring to 5 years.
Before turning to the matters which give rise to the contradiction in that clause, I should note that the Courts will generally exercise caution in relying on evidence of surrounding circumstances in questions of construction of a corporate constitution and, by analogy, that of an incorporated association. That issue has been considered in earlier case law to which the parties did not draw my attention. In Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd [2006] FCAFC 144; (2006) 59 ACSR 444, the Full Court of the Federal Court observed that, although evidence of surrounding circumstances could be admitted in construing a company's constitution, different considerations applied than in respect of an ordinary contract. Weinberg J (at [66]) noted that third parties could rely on such a constitution and that it was proper to consider surrounding circumstances likely to be well-known to or readily ascertainable by third parties. Kenny J (at [123]) also observed that a constitution served a public purpose and that third parties might rely on it from time to time, and that the Court may place greater weight on the text in construing a company's constitution and that the range of applicable surrounding circumstances may be narrower. In Ananda Marga Pracaraka Samgha Ltd v Tomar (No 6) [2013] FCA 284; (2013) 94 ACSR 199 at [153]ff, Dodds-Streeton J similarly noted that the Courts were traditionally reluctant to imply terms or rely on extrinsic evidence in construing a company's constitution which, unlike ordinary contracts, were public documents in which third parties could rely.
I turn now to the circumstances in which the contradiction in cl 6(1)(d) of the Association's constitution arose. Proposed amendments to the Association's constitution, apparently prepared in 2009, initially provided for an amendment with effect that:
"Full members of [the Association] shall lose their membership upon defaulting membership fees for three (3) consecutive years."
Those amendments were considered at a meeting of the Association's Executive Council held on 7 May 2009 (Ex D7, 1/180). A notice of a meeting of foundation members of the Association, to be held on 7 June 2009, also provided for loss of membership by full members of the Association on defaulting in payment of membership fees for 3 consecutive years (Ex D7, 1/194). However, a notice of special general meeting dated 22 June 2009 provided, differently, for loss of membership by full members on defaulting in payment of such fees for 5 consecutive years (Ex D7, 1/205). There is no explanation in the documents in evidence for that different approach. The form of amendments provided to a special general meeting on 9 August 2009 in turn provided for full members of the Association to lose their membership upon defaulting membership fees for 3 consecutive years (Ex D7, 1/214). The Plaintiffs also seek to support the contention that the amendments made in 2009 referred to a 3 year period by tender of a minute book of the Association in 2009, although the Defendants in turn take issue with the authenticity of the minutes of the meeting on 9 August 2009. There is considerable support in these documents for the proposition that the intent of the amendments were that loss of membership would occur after 3 years of arrears of membership fees, although one document refers to the 5 year period. Mr Aijaz Khan was in turn cross-examined by Mr Smallbone to seek to establish that he understood that a member would only be excluded for membership after 5 years, and not 3 years, but did not accept that proposition (T48ff).
However, cl 6(1)(d) of the Constitution, in the form lodged with the Office of Fair Trading following the amendment of the constitution in 2009, provided for membership to lapse on 5 years' arrears of membership, rather than 3 years' arrears of membership, the latter being the position contemplated by the majority of the documents noted above (Ex D7 1/134). The notification of the terms of the amendments to the Office of Fair Trading at the time they were made in 2009 ought to have been a reliable record of the form of the resolution that was passed. A consolidated constitution subsequently lodged with a notice of further amendments in 2010, which did not amend cl 6(1)(d), nonetheless altered that clause to refer to "five (3) years", compounding the uncertainty as to which figure was correct (Ex D7, 1/144).
The Plaintiffs also rely on the minutes of a meeting of 15 November 2013 (Ex D7, 1/263) as being consistent with membership of the Association ceasing after non-payment for 3 years, although those minutes contemplated that members then in arrears would be given an opportunity to pay those arrears. Those minutes are well after the date of the amendments to the constitution and it seems to me that they should be given little weight. It is also apparent that any rule providing for loss of membership after three years, if it took the form for which the Plaintiffs contend, was applied somewhat selectively by them, so far as, at least on one occasion, the Plaintiffs have permitted a member to pay membership fees for four or five years in arrears, for the period 2009 - 2013 (Ex D7 2/554; Sohail Shamim 28.11.2014 [27]; Aijaz Khan XX T48), while not permitting other members to do so.
No application for rectification was brought in respect of cl 6.1(d) of the Association's constitution. It seems to me that the balance of the evidence supports the view that that clause was directed to exclusion of members who had not paid membership fees for three rather than five years. However, there seems to me at least a possibility that the clause cannot be corrected, as a matter of construction, and given the contradictory indications of its intended application, and may be void for uncertainty on that basis. It is not necessary to express a final view as to that matter. I do not consider that I should grant discretionary relief (as is sought in this application) to the Plaintiffs which depends only on treating members of the Association as excluded from membership after three years in arrears of membership fees, where the Association has held out an inconsistent position by its lodgement of its constitution with the Office of Fair Trading, and where exclusion from membership is a significant matter.
The position of Mr and Mrs Ghaznavl and Mrs Ahmad and Mrs Wakeel also raises a wider issue. In his written closing submissions, Mr Smallbone emphasises that the Plaintiffs have the onus of proof in persuading the Court of the factual basis for the claim that particular persons were not financial members of the Association at particular times, and points out that the elements of such a claim involve, first, that a particular person was in arrears at a particular time; second, the position as to the payment of membership fees by that person; and, third, the question of how long that person had not paid membership fees, so far as reliance was placed on cl 6(1)(d) of the Association's constitution. The evidence as to these matters led by the Plaintiffs was at best incomplete and inconclusive, both as to members as a whole and as to the particular members who are alleged to have been in arrears at the time of the Requisition. Mr Smallbone also points to the significance of evidence of record-keeping and the accuracy of records for proof of that matter, and submits that proof of those matters may not be established if one is left with uncertainty as to the provenance, status or reliability of documents relied upon to support a claim that a member had not paid membership fees.
The evidence is that there are differing membership lists, maintained by members of the Executive Council, and haphazard procedures for the payment and receipt of membership fees and identification of who those fees relate to, as well as inconsistent practice as to when payment of such fees in arrears is accepted and when it is not. I am not satisfied that the processes adopted by the Association for the receipt of membership fees, or the records kept by the Association in relation to membership, are sufficiently reliable to place weight on them, in determining when persons who had previously been in arrears of membership had paid those fees, or for what period those persons had been in arrears of membership. So far as a proposition as to whether members were "financial", or in arrears, depends on Mr Aijaz Khan's evidence as to the origin of annotations as to the financial status of members in documents to which he had referred in his affidavit evidence, I am also not persuaded by that evidence, which was undermined by difficulties including Mr Khan's initial inability to recognise his own handwriting, albeit in copy documents, and the extent of alterations on the originals of documents that were subsequently produced on notice to produce. Indeed, Mr Khan's evidence in cross-examination, in respect of handwritten notations on a membership register, was initially that he had not seen the membership register before and the handwriting on the document was definitely not his handwriting (Aijaz Khan T54), before he reversed that position, when leave was granted for further oral examination by Mr Cheshire, and he was shown an original of the document (Aijaz Khan T62ff; Ex P2).
I am not satisfied that, where these deficiencies in the Association's record keeping and practice for the receipt of fees exist, the Plaintiffs have established that any of the persons who they claim were not members of the Association, by reason of arrears of membership fees, should not be treated as valid signatories to the Requisition. It seems to me that, so far as the Plaintiffs bear the onus of establishing that those persons' membership of the Association should be treated as having lapsed, by reason of arrears of membership fees, they have not discharged that onus.
The Plaintiffs initially also contended that the Requisition was defective by reason that, after 347 members were identified by the orders of Pembroke J made in September 2012, 77 new members were admitted on 15 November 2013, so that more than 20 signatories to the Requisition were required. That contention is no longer open, since the Plaintiffs no longer seek to support the admission of the 77 new members in November 2013.
It follows that, if (contrary to my view) the Requisition could be treated as signed by the persons whose names were printed on it, the Plaintiffs would not have established that less than 5% of members of the Association had signed the Requisition.
Mr Cheshire submits that the Petition was not a valid requisition for the calling of a special general meeting under cl 26 since it was, rather, a petition noting concerns as to the management of the Association and calling for a special general meeting or resignation of the Executive Council and did not state the purpose of purposes of the special general meeting. Mr Cheshire also submits that the Petition could not be considered together as part of the Requisition since, although a requisition under cl 26 could consist of several documents, they were required to be "in a similar form" and, although this could be said in respect of each of the pages of the Petition, it could not be said in respect of the Petition and the Requisition.
The Defendants respond that the Petition was also a requisition under cl 26 of the Constitution for the calling of special general meeting, the Petition was attached to the Requisition and together the documents identified the purpose of calling the special general meeting, and that the Requisition and the Petition need not be identical since they together comprised the Requisition. Mr Smallbone in turn submits that the Requisition and the Petition can together be treated as a single document, points out that the Requisition and Petition refer to each other and submits that they are, upon their proper construction, intended to constitute one requisition, seeking a special general meeting of members, and that the ordinary reader "would understand that the requisition calls for a general meeting to consider the dissolution and reconstitution of" the Executive Council. (The words "and reconstitution of" the Executive Council in this submission mischaracterise the substance of the Requisition, which sought to replace the Executive Council with an interim committee, not reconstitute it or change its membership in its existing form. I will return to that issue below.)
It is convenient to deal first with the Plaintiffs' claims that the Petition was not a requisition but a petition (Statement of Claim [14], particular (c)) and that the Petition did not requisition the convening of a special general meeting by the Executive Council (Statement of Claim [14], particular (d)). I do not accept those submissions. It seems to me that the first proposition is not correct because a document can be both a petition and a requisition, and the Petition (even if read as a separate document) was a requisition for the purposes of cl 26 of the Constitution so far as it made clear that its signatories sought to requisition a meeting under that clause, although they also identified other concerns and also sought other matters such as the resignation of the Executive Council. The second proposition is also not correct for the same reason.
I now turn to the Plaintiffs' claim that the Petition did not state the purpose of the special general meeting to be called (Statement of Claim particular (e)). I accept that submission, if the Petition is read as a separate document to the Requisition. The generality of the concerns identified in the Petition, the absence of identification of particular resolutions to be put to the meeting and the reference to alternative possibilities including the resignation of the Executive Council, were such that the Petition did not identify the purpose of the special general meeting, so far as it left open a broad range of possibilities that would be consistent with the concerns identified in it. That proposition may be illustrated by the fact that it would have been consistent with the Petition (albeit not necessarily within a general meeting's powers) to pass a precatory resolution calling for more consultation with members or for greater financial transparency and accountability, since concerns as to the absence of those matters were identified in the Petition, or requesting the resignation of the Executive Council or, possibly, for unidentified amendments to the Association's constitution, where a need for reform was identified. The possibility of dissolution of the Executive Council and formation of an Interim Committee, identified in the Requisition, were not expressly raised by the Petition but might also fall within a wider reform purpose, and there was no suggestion in the Petition of removal of particular members of the Executive Council while leaving its structure intact. Where several different approaches would have been consistent with the Petition, because of its generality, it seems to me that, read separately from the requisition, it does not identify a particular purpose or purposes of the meeting.
The Plaintiffs also particularise their attack on the Requisition on the basis that the Petition did not form part of the Requisition, since it was not in a similar form to the Requisition (Statement of Claim [14] (particular (g)). On balance, it seems to me that the Requisition and the Petition were objectively intended to be read together, but were not a single document, and were also not similar documents, for reasons noted below.
I accept that, as Mr Smallbone points out, there is a significant degree of cross-referencing in the Petition to the Requisition, and I have referred above to the evidence that a draft of the requisition (Ex D2) was shown to those who signed the Petition. However, the Requisition and the Petition were drafted as separate documents, as I noted above, and the Requisition was not finalised by adding the names of the requisitionists until several days after the Petition was signed. The process by which Mr Zahid determined the names to be applied to the requisition also seems to me to emphasise the separateness of the Petition and the Requisition, so far as the Petition existed at an earlier point in time, at which only drafts of the Requisition existed, and the final form of the Requisition did not exist until Mr Zahid added the relevant names to it, which he could not have done unless the Petitions had already been signed at the point the Requisition was finalised.
The language of the documents also recognises their separate character, in describing the Petition in terms which distinguish its character from that of the Requisition, as:
"The Petition singed [sic] by the local community demanding re-instatement of [the Imam] as the Pish Imam of the Rooty Hill [mosque]".
The Petition also states that "the undersigned have signed both This Petition and The Requisition", and that statement also recognises the separate identity of those documents. I should add that that statement was not strictly correct, if the reference to "signed" is to signature in hand, and was also not strictly correct even if it was not, so far as the names of signatories to the Petition were not included in the draft Requisition when the Petition was signed and only some of the names of those who signed the Petition were subsequently included in the Requisition. That statement does seem to me to indicate that the signatories to the Petition were also confirming their support for the Requisition, and that supports a view that the Requisition and the Petition should be read together, but not the treatment of them as a single document.
In support of the proposition that the Requisition and Petition are the same document, Mr Smallbone also submitted that, if one person put in a requisition and 40 others wrote separate letters expressing their adoption of the requisition and adding further comments, the sentences adopting the requisition would constitute a requisition in the same terms as the requisition. I do not accept that submission, since a letter would not be in the same or similar form as such a requisition, for the purposes of cl 26 of the Association's constitution, even if a sentence in it was in the same or a similar form to a sentence in the requisition or indicated support for the requisition. Mr Smallbone also responds to the submission that the Requisition and the Petition cannot be considered together, because they are not in similar form as required by cl 26 of the Association's constitution, by submitting that the statement in the Petition that its signatories assent to the Requisition means they have subscribed to a Requisition which is identical in form and the addition of further material in the Petition does not detract from their assent to the Requisition. In Fruit & Vegetable Growers Association Ltd v Kekewich above, Warrington J held that two documents which had requisitioned a meeting were in "like form" for the purposes of s 66(2) of the Companies (Consolidation) Act 1908 (UK) where they were in identical terms, except that the words "in addition to the affairs of the company in general" were added at the end of one of them. His Honour's reasoning was that the additional words "made no difference to the general purport of the requisition". It seems to me that that is not the case here, where the additional matters identified in the Petition substantially expand the nature of the matters that might be considered at the relevant meeting. The question of similarity of documents is also, of course, a question of degree and the differences between the Requisition and the Petition in this case are substantially greater than the additional phrase added in Fruit & Vegetable Growers Association Ltd v Kekewich above.
For these reasons, it does not seem to me that the Petition and the Requisition can be treated as the same document or as in a similar form, for the purposes of cl 26 of the Association's constitution. The signatories to the Petition therefore cannot be treated as having signed the Requisition, and the Petition's failure to state the purpose of the special general meeting also cannot be remedied by reference to the purposes stated in the Requisition.
The Plaintiffs also particularise their attack on the Requisition on the basis that the Petition and Requisition together were not a requisition of not less than 5% of the total number of members of the Association and the Petition and Requisition together were not signed by not less than 5% of the total number of members of the Association (Statement of Claim [14] particulars (h)-(i)). I accept that submission to the extent that I have held above that the Requisition was signed only by Mr Bajwa and the Requisition and the Petition cannot be treated as a single or similar documents and the signatories to the Petition cannot be treated as signatories to the Requisition.
Mr Cheshire also submitted that some of the signatories to the Resolution were members of the same family and others were less interested in the affairs of the Association than they had been in previous years. It does not seem to me that those matters are of significance, so far as the validity of the Requisition and the Petition is concerned or in assessing whether they should be validated under s 1322 of the Corporations Act. The test for a valid requisition is whether a sufficient number of members wish to have the relevant meeting called, and that will not be less the case by reference to their family relationships or any assessment of the extent of their previous commitment to the Association. It also does not seem to me that that fact that some members had paid arrears of membership fees in order to be eligible to call the relevant meeting in any way disentitles them from taking that course, if the Requisition and the Petition were otherwise valid.
I first refer to the applicable legal principles, before addressing the claims to validation of the particular deficiencies. Section 1322 of the Corporations Act applies in respect of the Association's affairs, by reason of ss 96 and 97 of the Associations Incorporation Act 2009 and reg 16 of the Associations Incorporation Regulation 2010 (NSW). It is not necessary to address the operation of those sections at length; the parties did not address submissions to them and their application has been well summarised by Lindsay J in Ahmed v Chowdhury above at [87]ff. Section 1322(2) of the Corporations Act provides that a procedural irregularity does not invalidate a proceeding, unless the court forms the opinion that that irregularity has caused or may cause substantial injustice that cannot be remedied by an order of the court, and declares that proceeding to be invalid. In Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd [2005] NSWSC 1005, Palmer J summarised matters relevant to determining whether an irregularity was procedural rather than substantive, and observed (at [103]) that an irregularity would be substantive if it changed the substance of the "thing to be done", but procedural where it departed from the prescribed manner in which the thing was to be done, without changing the substance of the thing. In this case, it seems to me that the irregularities on which the Plaintiffs rely are generally procedural in character, and I will proceed on that basis. It is unlikely that that characterisation could make any ultimate difference to the outcome of the proceedings, where the Defendants also rely on s 1322(4) of the Corporations Act and the existence of substantial injustice is relevant to both provisions.
A procedural irregularity cannot be validated under s 1322(2) if a remedial order would cause substantial injustice, in the sense of a prejudice arising from the particular irregularity rather than from the act generally, and that prejudice would be "unfair or inequitable, taking into account the interests of all of those who would have been directly affected by such a dispensation", including by depriving a person of his or her legal rights: Super John Pty Ltd v Futuris Rural Pty Ltd [1999] NSWSC 627; (1999) 32 ACSR 398 at [14]; National Australia Bank v Market Holdings Pty Ltd (in liq) [2001] NSWSC 253; (2001) 37 ACSR 629 at [185]. Substantial injustice will be established, for the purposes of s 1322(2), at least if a different result may have been produced in a meeting had a procedural irregularity not occurred: Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd above at [111]. A meeting is also not invalidated by an accidental omission to give notice, unless the court declares proceedings at the meeting to be void on application by specified persons: s 1322(3); Australian Hydrocarbons NL v Green (1985) 10 ACLR 72 at 80; 3 ACLC 779.
Mr Smallbone submits that the matters relevant to whether substantial injustice is established for the purposes of s 1322(2) of the Corporations Act are, relevantly, the Association, its nature, its constitutional objects, its interests (consistent with its legal character as a not for profit incorporated association and its constitutional objects) and its members' interests (consistent with the Association's nature and constitutional objects). Mr Smallbone also points to the relevance, in that regard, of the fact that the Association is not a purely private body but is a registered charity, which has religious and educational objects, and operates a mosque and leases land to a related school. Mr Smallbone points out, and I accept, that the private interests of individuals in remaining in office are not a relevant (or, I interpolate, at least a lesser) consideration in that regard, although I should recognise that there is a proper interest of the Association and its members in having proper processes followed for the removal of members of its Executive Council. Mr Smallbone also points out, and I accept, that any relevant injustice must have an appropriate connection with the relevant defect in the sense that it arises from the defect: Australian Hydrocarbons NL v Green above at 82.
I will deal with several of the matters as to which the Defendants rely on s 1322(2) together, given the overlap between them, although I recognise they must be considered individually and also cumulatively and I have approached them on that basis. As I noted above, by paragraph 18 of their Amended Defence, the Defendants contend that, if the Petition did not itself take effect as a requisition or as requisitions in similar form, that defect was a procedural irregularity in respect of the convening of the meeting held on 2 March 2014 and was a defect of notice in respect of that meeting, and they rely on s 1322(2) of the Corporations Act in that regard. The Plaintiffs also contend that it would be a procedural irregularity, validated under s 1322(2) of the Corporations Act, if the Requisition and Petition are separate instruments and do not take effect together as a requisition or requisitions (Amended Defence [19]) or if the signatures to the Petition did not take effect as signatures of the Requisition (Amended Defence [20]). It seems to me that, in the particular circumstances, these matters would not, individually or collectively, cause substantial injustice and would be validated by s 1322(2) of the Corporations Act, where a draft of the Resolution (Ex D2) was shown to persons signing the Petition, there are cross-references between the documents and there is clear evidence that the signatories to the Petition also supported the Requisition and the calling of a special general meeting. It was plain enough that the persons who had signed the Petition intended to indicate their assent to the Requisition, from its terms, and the Plaintiffs had the ability to confirm that matter by reviewing the terms of and the handwritten signatures to the Petition. (I will note below that what was done at the 2 March meeting ultimately departed from the purpose of that meeting, as provided by the Requisition or explained to the signatories to the Petition in soliciting that support.)
The Plaintiffs also had the ability to make inquiries, as they did, to determine whether the persons named on the Requisition and the signatories to the Petition were members of the Association. I recognise that Mr Zahid determined which names were to be entered on the last page of the Requisition, by identifying persons who had signed the Petition whom he believed were foundation members of the Association and inserting their names into the Requisition before it was given to Mr Bajwa to be signed (Mahmood Zahid T195). It does not seem to me that this matter would prevent validation of the Requisition, where the Petition indicated that those persons were prepared to have their names applied to the Requisition, and the Petition had been provided to the Association, and notwithstanding that other persons had also signed the Petition.
The Defendants contend that it would be a procedural irregularity, validated under s 1322(2) of the Corporations Act, if the Requisition and Petition, taken together or separately, were not signed by at least 5% of the total number of members of the Association (Amended Defence [21]). This issue does not arise on my findings above. Once the procedural irregularity of the separation of the Requisition and Petition is validated, the two should be read together, and I have held above that the Plaintiffs have not established they were signed by less than 5% of members of the Association on that basis. Had that issue arisen, it seems to me that substantial injustice might well have been established to prevent validation, where the effect of validation would be to require the Association to call a special general meeting, and the Plaintiffs to face the threat of removal from office, although only a lesser number than contemplated by the Constitution had indicated their wish that such a meeting occur. The result in that regard would also likely depend on the extent of the shortfall in the number of requisitionists from that contemplated by the constitution. Again, that issue does not arise if the Requisition and Petition are read together so that the 5% threshold for calling the meeting is satisfied.
The Defendants also contend that it would be a procedural irregularity, validated under s 1322(2) of the Corporations Act, if the Requisition and the Petition did not comprise documents in a similar form, so that their lack of similarity deprived them of a sufficient number of signatures (Amended Defence [22]). It also seems to me that, in the particular circumstances, the fact that those documents were separate would not cause substantial injustice and would be validated under s 1322(2) of the Corporations Act, given the cross-references between those documents and the evidence that the signatories to the Petition supported the Requisition and the calling of the meeting.
The Defendants also contend that it would be a procedural irregularity, validated under s 1322 of the Corporations Act, if the Petition did not state, or did not sufficiently state, the purpose of the special general meeting (Amended Defence [23]). It seems to me that this matter would and did cause substantial injustice and could not be validated under s 1322(2) of the Corporations Act, particularly so far as it extends to the lack of a clear specification of the purpose of the meeting in the Petition and the failure to identify a purpose in the Requisition and the Petition consistent with what occurred at the 2 March meeting. Neither the Requisition nor the Petition identified, either plainly or at all, a purpose of the meeting as removing some but not all of the members of the Executive Council, although that step was permitted under the Association's constitution, and was purportedly effected at the 2 March meeting.
In oral submissions, Mr Cheshire submitted (T369) that the Requisition and Petition had been directed to the dissolution of the Executive Council and the creation of an Interim Committee and, by the time of the Second Notice, what was to be done had changed to the removal of 7 out of the 11 members of the Executive Council. He pointed out (T370) that a significant number of members who signed the Petition were told that it was to bring about the dissolution of the Executive Council and the creation of the interim council and the move away from that would not have been in accordance with those members' expectation and, conversely, no issue of removal of individual members of the Executive Council was raised with most of those who signed the Petition and, to the extent that some of those persons understood that the Council was to be removed, they understood that it was to be a removal of all members of the Council and not some of them.
I have referred above to the process by which drafts of the Requisition were prepared and shown to those who signed the Petition. Many of those who signed the Petition were told that it was to call a meeting to discuss various matters and that is consistent with the terms of the Petition (Bajwa 9.4.2015; Mahmood Zahid 2.4.2015; Tahseen Chaudhry 31.3.2015). The evidence of several signatories to the Petition in cross-examination was that they understood that an Interim Committee was to be appointed at the meeting, and some understood that as a step toward reconciliation or a new election (Tahseen Chaudhry T240, Mahmood Khan T275, Rehan Ahmad T296, Mohammad Khan T299). Evidence given by other signatories to the Petition in cross-examination was consistent with, in some cases, the calling of a special general meeting to discuss their concerns and remove the entire Executive Counsel rather than part of it as ultimately occurred (Bajwa T161-162, 172, Tahseen Chaudhry T240). While Mr Bajwa gave evidence that he sought a special general meeting to remove only the members of the Executive Council who the Defendants considered were not performing adequately, and that was what ultimately occurred at the 2 March meeting, that emphasises the difficulty that neither the Requisition nor the Petition identified that as the purpose of the meeting (Bajwa T179-T182). The process adopted had the result that members of the Association who signed the Petition, or supported the Requisition, had their attention directed to matters other than whether they sought to remove some, but not all, of the members of the Executive Council, which was the ultimate resolution put to the 2 March meeting.
There seems to me to be a substantive difference between a purpose of the meeting, as identified in the Requisition, of dissolving the Executive Council and appointing a new body, the Interim Committee, in substitution for it, or a wider purpose of reform identified in the Petition, and the substitution of several new members of the Executive Council for previous members of the Executive Council, within the same organisational structure, as was done at the 2 March meeting. That difference is emphasised by the fact that a meeting called to achieve the purposes stated in the Requisition or the Petition would have been called for business other than the removal of individual members of the Executive Council, and the proposal for dissolution of that Council would not have constituted a removal of each of its members as permitted by cl 17(1)(g) of the Association's constitution. That difficulty was avoided at the 2 March meeting, but only by departing from the purposes stated in the Requisition and the Petition.
I recognise that the Defendants submit that none of the persons who signed the Petition have come forward, since that date, to suggest that the Requisition or the Petition misrepresented their position and the evidence of those persons in cross-examination supports that submission. However, that does not seem to me to be an answer to the injustice, particularly to the Plaintiffs, which would arise from validating an otherwise invalid requisition to call a meeting for one purpose, namely the dissolution of the Executive Council and the appointment of an Interim Committee, which is relied on to support the holding of a meeting that effected something else, namely the retention of that Council and the change of some but not all of its membership. It seems to me that substantial injustice would result for the purposes of s 1322(2) of the Corporations Act where, as the cross-examination demonstrated and as Mr Cheshire emphasised in submissions, what was done at the 2 March meeting did not conform to what was set out in either the Requisition or the Petition or discussed with the majority of the persons who signed the Petition, when their signatures were sought.
Mr Cheshire also put, in oral closing submissions, that it would be unfair for the deficiencies in the Requisition and Petition to be validated, where those deficiencies were likely to lead to doubt as to the validity of the meeting and the different positions taken by the two groups of members of the Association, which in fact occurred (T372). I understand that submission to raise unfairness to the Plaintiffs, so far as they were required to assess the validity of the Requisition and the Petition and reached an assessment which, on the findings I have reached was well-founded, that the Requisition and Petition were not valid and proceeded accordingly. The unfairness in validating the Petition or Requisition in respect of this deficiency seems to me to be exacerbated by the serious allegations made against the Plaintiffs in the resolutions which were passed at the 2 March meetings, which had not been specifically identified in either the Requisition or the Petition.
In oral submissions, Mr Smallbone responded to the difficulty arising from the change in approach between the purposes stated in the Requisition and the Petition and what was done at the 2 March meeting by submitting that:
"The Requisition enlivens the right to convene a meeting for any purpose stated in it if less than the whole number of purposes is the subject of notice the notice will be valid. There is no requirement that the requisitionists persist with everything they originally requested." (T385)
That submission may well be correct. However, it does not seem to me to assist, whether as to the constitutional validity of the Requisition or the Petition, or as to validation under s 1322(2) of the Corporations Act, where what is done at a meeting departs substantively from what was identified as its purposes in the Requisition and the Petition. As I have noted above, that occurred here where the removal and replacement of some but not all members of the Executive Council was substantively different from the dissolution of the Executive Council and its replacement by an Interim Committee.
It seems to me that the injustice resulting from the change of approach is emphasised because, as Mr Cheshire points out in closing submissions, the Executive Council would have been bound, had it called a meeting the subject of the Requisition and the Petition, to do so in accordance with the Requisition and the Petition, in a manner that would have been invalid because it would have included matters other than the removal of individual members of the Executive Council, for the purposes of clause 17(1)(g) of the Association's constitution. It would not have affected the requisitionists' purpose for the Executive Council to call a meeting for only one of the purposes specified in the Requisition and the Petition. When the requisitionists, by the time of the Second Notice, altered their approach so as to seek to remove some of the members of the Executive Council, and no more than that, they moved away from the meeting which they had previously required the Association to call. The injustice involved in that course is further emphasised by the fact that the correspondence from the Association's secretary and the Association's solicitors, to which I have referred above, had squarely raised the difficulties with the form of the Requisition and the proposed meeting. The requisitionists did not address those difficulties, when invited to do so by the Association by that correspondence, by making a further, valid, requisition and only did so, in part, by changing the matter which was to be considered at the 2 March meeting from that which was the subject of the Requisition and the Petition.
In dealing with the interlocutory application in these proceedings ([2014] NSWSC 342), Darke J expressed the view (at [33]) that:
"… in my opinion, the better construction of r 26(4) is that the Executive Council has one month from the date of requisition in order to convene a Special General Meeting. That is to say, there is one month before the right of a requisitioning party to itself convene a meeting arises. There is no doubt that the language of r 26(4) has its difficulties, and the construction advanced by the defendants is clearly available. Nevertheless, given the notice requirements of r 27, which in the case of general meetings requiring special resolutions, provides for at least 21 days' notice before the date fixed for the holding of the general meeting, it would provide only a very short time for the Executive Council to act in order to not give rise to the rights of requisitioning members to themselves convene a Special General Meeting. Viewed in the context of r 26 as a whole, which provides essentially for the Executive Council to be the body which controls the convening of Special General Meetings, I think that the construction which gives them one month in which to act is the better one."
His Honour also noted, properly, that it was not necessary for him to reach a definitive conclusion as to the proper construction of the provision in an interlocutory application and it was sufficient that he find, as he did, that there was at least a serious question to be tried in this case as to whether the purported calling of a meeting prior to the expiration of one month from the date of the Requisition gives rise to the conclusion that the calling of that meeting was invalid.
Mr Cheshire submits that cl 26 of the constitution requires the Executive Council to call a special general meeting within 1 month of receiving a requisition but does not require that the special general meeting take place within 1 month of that requisition and contends that, in any event, the entitlement of a requisitioning member to call a special general meeting does not arise until a month has elapsed from the requisition. Mr Cheshire also submits that the only resolution contemplated by the Association's constitution that required other than a simple majority was a resolution for the removal of a member of the Executive Council under cl 17(1)(g) and that cl 32, dealing with the notice required for a special resolution, should be treated as applying to that resolution, to give it some work to do. I do not accept the submission that cl 32 would have no work to do, unless cl 17(1)(g) of the Constitution is treated as requiring a special resolution. Mr Smallbone points out that the provision for a special resolution in fact has application in respect of cl 44 of the Association's constitution, which provides for a three-quarters majority for a winding up, and that is sufficient to give the clause work to do.
Mr Cheshire also submits that the construction of cl 26 for which the Plaintiffs contend allows a short period for the secretary to receive a requisition; call a meeting of the Executive Council; decide upon a date for a special general meeting; decide upon an appropriate form of notice; and address an envelope for each of the several hundred members, place a copy of the notice in each envelope and send that envelope by pre-paid post. Mr Cheshire also submits that the secretary may wish to consider the contents of the requisition and whether it complies with cl 26; to seek legal advice in relation to the requisition and to raise issues with, or seek clarification from, the persons who requisitioned the meeting. As I noted above, Darke J gave weight to these matters in preferring the view, at an interlocutory stage, that cl 26 required only the convening but not the holding of a general meeting within one month of the receipt of the Requisition.
Mr Smallbone responds that, when the Defendants issued the First Notice on 29 January 2014, the Plaintiffs had already failed to convene a special general meeting for the purpose of cl 26(4) since, under the notice requirements under cl 27, a special general meeting could not then be held within one month of 6 January 2014, being the date of the requisition. Mr Smallbone also contends, with some force, that the reading of cl 26(4) of the Constitution for which the Defendants contend has support, both in the text of the clause, and in the case law, which had not been drawn to the attention of Darke J when he was granting interlocutory relief.
As a matter of construction, it is plainly open to read the one month time limit in cl 26(4) of the Association's constitution as referring to the words "to be held" which it immediately follows. The reading which the Defendants give to cl 26(4) is supported by the fact that the time limit applicable to members convening a special general meeting in that clause is applied to when the meeting is held, and it would be surprising if a consistent approach was not taken to the convening of such a meeting by the Executive Council. Mr Smallbone also points out, and I accept, that the construction for which the Plaintiffs contend would place no time limit on the holding of the relevant meeting, other than any implication at general law that the meeting would have to be held within a reasonable time after it was convened. The reading of cl 26(4) of the Association's constitution for which the Defendants contend is also supported by the construction given to a similar clause in Adams v Adhesives Pty Ltd (1932) 32 SR (NSW) 398 at 401, which had not been drawn to the attention of Darke J at the interlocutory application. In that case, in considering an article which required the directors to "convene" a meeting within a specified time of a requisition by shareholders, Harvey CJ in Eq expressed the view that the article contemplated that the meeting would be held within that period. In Guss v Veenhuizen (1976) 136 CLR 34 at 39, in the context of dealing with s 136 of the Companies Act 1961 (Vic) which required a general meeting to be "held" at least once in each year, Barwick CJ also observed that the word "held" meant "called and concluded" within the relevant period. Steven J and Mason J observed (at 43) that:
"The protection of shareholders which is the evident object of s 136 is more effectively served if "held" is given a broad rather than a narrow meaning. … It gives added protection to the shareholders if it is read as requiring that the company in general meeting should proceed to the consideration within the time prescribed of so much of its business as is required by law to be transacted at such a meeting. The narrower construction would allow an indefinite adjournment of the meeting, without the transaction of any business at the initial meeting."
The same consideration supports a reading of cl 26 of the Association's constitution as requiring that the meeting not only be called but held within the time period, where the contrary view would allow the course to which their Honours refer to be taken, or a meeting to be called but held at a significantly later date.
It seems to me that the fact that the secretary is allowed a relatively short time to take these steps is not sufficient to support the reading of cl 26 for which the Plaintiffs contend. Plainly, the persons who drafted the constitution may have considered the calling of a special general meeting to be a matter of significance for the Association, which would require the secretary and the Executive Council to act promptly. Mr Cheshire points to the fact that the Association is a voluntary association and points to the possibility of other commitments of members of the Executive Council. While that might well have supported the drafting of the constitution to allow additional time for the convening of such a meeting, it does not seem to me sufficiently persuasive to support a reading of the existing terms of the constitution in the manner for which Mr Cheshire contends. The proposition that a group of members should be entitled to call a special general meeting, if the Executive Council did not do so within 17 days of the receipt of a requisition, in the case of an ordinary resolution, is not so unreasonable as to warrant a construction of the clause which would not place any clear time limit on when the meeting was held. The only consequence of a failure to call the special general meeting within the period provided is, of course, that the persons requisitioning the meeting then have the opportunity to do so. The number of members involved in the Association is, while large in numerical terms, significantly less than might be involved in a corporate setting, and it is by no means unreasonable to expect that a meeting could be called within 17 days, and held within a month, of a requisition.
However, the Plaintiffs also rely on the fact that the requisitionists called the meeting, by both the First Notice and the Second Notice, before the one month period for the Association to hold the meeting had expired. It seems to me that the requisitionists' right to call such a meeting under cl 26(4) of the Association's constitution arises only where there is an existing, and not an anticipated, failure to hold a special general meeting within the one month period. In the present case, that failure had not arisen at the time the First Notice or the Second Notice was issued, albeit that it would likely (although not inevitably) arise at the end of that period. The failure was not inevitable because, inter alia, it may have been possible to the Executive Council to convene a meeting at short notice and for members unanimously to consent to that short notice of that meeting. As Mr Cheshire points out, the Plaintiffs could also have proceeded to hold the meeting, with shorter notice than was specified in the constitution, and sought to have that meeting validated under s 1322 of the Corporations Act. For these reasons, it does not seem to me to be open to the requisitionists to call the relevant meetings, before the one month specified for the holding of that meeting has expired.
By paragraph 24 of their Amended Defence, the Defendants contend that, if one month was required to expire before the First Notice was issued, the failure to give that notice was a procedural irregularity in respect of the convening of the 2 March meeting and was a defect of notice in respect of that meeting. It is not necessary to determine that question, where the invalidity of the Requisition for the reasons noted above invalidates the 2 March meeting. It seems to me preferable not to do so, since this issue could only arise if an appellate Court took a different view from that which I have taken in respect of the applicable facts and legal principles, and the relevant discretion would then have to be exercised on that different basis.
The Defendants alternatively contend that the Second Notice dated 4 February, when posted on 6 February, was deemed to have been served on 13 February, and was therefore served more than one month after the Requisition was lodged on 6 January, and also more than 1 month after 10 January, when the Plaintiffs contend the Requisition was received. It is also not necessary to determine that question, since I have held that the Second Notice was not supported by the Requisition, read on its own or with the Petition, since it provided for a meeting to take different steps from those which the Requisition and the Petition contemplated.
The Plaintiffs initially also contended that notice of 14 or alternatively 21 days was not given of the 2 March meeting under cll 26(5) and 27(1) or 27(2) of the Association's constitution. The allegation that 14 days' notice was not given of the 2 March meeting does not now seem to be pressed by the Plaintiffs, since their further particulars (Ex D2) given on 2 December 2014, item 21, acknowledge that, so far as the Second Notice was sent by pre-paid properly addressed post on 4 February 2014, then it would be deemed to have been received more than 14 days prior to 2 March 2014, unless the contrary is shown. There is unchallenged evidence of posting of the Second Notice on 6 February 2014 (Mahmood Zahid 2.4.2015; Shakir Chaudhry 13.3.2014). Rule 41 of the Association's constitution provides for service by post on a member at the address shown in the Association's register of members and that, unless the contrary is proved, the document is deemed to have been served at the time at which it would have been delivered in the ordinary course of post. The Plaintiffs did not seek to establish the contrary in these proceedings. The contention that 14 days' notice of that meeting was not given is therefore not established, if it is pressed.
The Plaintiffs alternatively contend that a resolution referred to in cl 17(1)(g) of the Association's constitution required a special resolution, such that 21 days' notice would need to be given of that meeting (Statement of Claim [5])]. The Defendants respond that the resolution was not a special resolution, because cl 17(1)(g) of the constitution provided that a resolution for removal could be passed by a two-thirds majority, and clause 32 provided that, except in a case to which clause 32(1)(b) applied, a special resolution of the Association was a resolution passed by a majority comprising not less than three-quarters of the members of the Association. Clause 32(1)(b) was not applicable in the present case. I do not accept the Plaintiffs' submission that a resolution for removal of a member of the Executive Council requires a special resolution and 21 days' notice, where cl 17(1)(g) of the Constitution requires a two-thirds majority for the resolution and cl 32 provides that a resolution is a special resolution where passed by a three-quarters majority upon 21 days' notice.
By paragraphs 25 and 26 of their Defence, the Plaintiffs contend that, if 21 days' notice of the special general meeting was required and was not given or if 14 days' notice of the meeting was not given, the failure to give that notice was a procedural irregularity in respect of the convening of the meeting held on 2 March 2014 and was a defect of notice in respect of that meeting. These issues do not arise and need not be determined given the findings that I have reached above. I note, however, that it seems to me that, as Mr Smallbone submits, any deficiency in the time for giving notice would here be a procedural irregularity, and any shortness of notice would, in the relevant circumstances, not have caused any substantial injustice, so as to be validated under s 1322(2) of the Corporations Act. The Plaintiffs were plainly aware, for a considerable time, of the Defendants' attempt to convene the 2 March meeting and made an apparently considered decision not to attend it. There is no evidence, and no suggestion, that any other persons who wished to attend that meeting were deprived of an opportunity to do so by reason of any shortness of notice, particularly given the time that had elapsed since the Requisition.
Mr Cheshire also refers to discussions among the Plaintiffs immediately prior to the meeting on 2 March 2014, at which it was decided which persons would take up new positions on the Executive Council once the Plaintiffs were removed (Mohammed Siddique T322-325). It seems to me that there would have been nothing improper with those discussions, had the original requisition been directed to the removal of some but not all of the members of the Executive Council. I have addressed above the difficulty that arises, not because of those discussions, but because what was contemplated to occur at that meeting, the removal of several members of the Executive Council, was not what the Requisition or the Petition had sought.
In any event, as Mr Smallbone submits, it seems to me there was compliance with cl 26(5) with the Association's constitution, which required those who requisitioned the meeting to act "as nearly as practicable in the same manner as General Meetings are convened by the Executive Council", when they gave notice to members using the list of members that was available to them, and notice was given to Mr Arif at the address recorded in that list. Conversely, there seems to me little attraction in a proposition that, if the requisitionists were entitled to call the relevant general meeting, and gave notice of it to members using the information which the Association provided to them, the meeting should miscarry because that information was incorrect in respect of Mr Arif.
The Defendants plead that any failure to give notice of the special general meeting to members of the Association was a procedural irregularity, or otherwise was a defect of notice in respect of the convening of the meeting which was inadvertent or accidental and that the persons who requisitioned the meeting had made reasonable efforts to obtain records of the names and addresses of the members of the Association (Amended Defence [27]). It seems to me that any failure to give notice to Mr Mohammed Arif, in circumstances that his address was wrongly recorded in the register of members that was available to the Defendants, and that Mr Arif does not say that he was not aware of the relevant meeting, is a procedural irregularity which did not give rise to injustice to any relevant person and is validated under s 1322(2) of the Corporations Act as applied by the Associations Incorporations Act 2009. If I were not correct in my view that any omission to give notice to Mr Arif is a procedural irregularity, then I would have made an order under s 1322(4) of the Corporations Act in that regard, had that been the only difficulty in respect of the 2 March meeting.
The findings that I have reached above indicated that several of the relevant matters could properly be characterised as of a procedural nature for the purposes of s 1322(6)(a)(i) of the Corporations Act. I am also satisfied that members of the Association, including the Plaintiffs, acted honestly within the meaning of s 1322(6)(a)(ii) of the Corporations Act, and that permits the potential application of s 1322(4). I note, for completeness, that I am not satisfied that it would be just and equitable, for the purposes of s 1322(6)(a)(iii), for an order to be made under s 1322(4), for the same reasons that I am not satisfied that validation of the Requisition and the meeting can occur without substantial injustice, for the purposes of s 1322(2) of the Corporations Act.
A matter may only be validated under s 1322(4) of the Corporations Act if no substantial injustice has been or is likely to be caused to any person: s 1322(6)(c); Holmes v Life Funds of Australia Ltd [1971] 1 NSWLR 860. Whether there is "substantial injustice" for the purposes of s 1322(6)(c) involves a weighing of the prejudice if the order is made against the prejudice suffered by, relevantly, other members of the Association if it is not made: Re Compaction Systems Pty Ltd & the Companies Act [1976] 2 NSWLR 477 at 493; Gangemi v Osborne [2009] VSCA 297. A meeting may be validated under this section, although notice of that meeting was not properly given, if that failure does not cause substantial injustice to any person: Holmes v Life Funds of Australia Ltd above. In an application under s 1322(4), the onus is on the Defendants, who seek to invoke the operation of the section, positively to establish that no substantial injustice has been or is likely to be caused to any person: Australian Hydrocarbons NL v Green above; Elderslie Finance Corporation Ltd v Australian Securities Commission (1993) 11 ACSR 157 at 160. I do not consider it necessary to deal with each of the deficiencies for which the Defendants seek validation seriatim. I am not satisfied, for the purpose of s 1322(6)(c) that no substantial injustice has been caused, or is likely to be caused, to any person, for the reasons noted above, in respect of the divergence between the purpose for which the relevant meeting was convened and what was done at the 2 March meeting. I am therefore not able to make an order under s 1322(4) of the Corporations Act.
I should add that, in some circumstances, a challenge to the validity of an election of office bearers of an incorporated entity may be able to be dismissed on discretionary grounds, despite a finding that the relevant election was effected by non-compliance with procedural requirements: Rivers v Bondi Junction-Waverley RSL Sub-Branch Ltd (1986) 5 NSWLR 362 at 373 - 374; Ahmed v Chowdhury above at [13]. I do not understand the Defendants to have submitted, in terms, that I should take that course, although many of the matters that would have been relevant to such a discretion have been canvassed in dealing with the applications under s 1322 of the Corporations Act. The matters which indicate that relief should not be granted under s 1322 of the Corporations Act also indicate that such relief should not be granted on a discretionary basis.
The parties should bring in agreed short minutes of order to give effect to this judgment within 14 days.