Kumar v Satsang Hindu Maha Sabha of NSW Incorporated

Surrounding circumstances

1. The surrounding circumstances for the determination of these new questions remain the same as those set out in paragraphs [11] to [16] of the First Decision. In addition, the parties agreed that further surrounding circumstances relevant to the question of construction were these facts: 1. each Committee member was a respected member of the Association and regarded as being independent; and 2. two of the members of the Committee were pundits, that is to say Hindu priests.
2. It is convenient at this point to set out the relevant terms of the Settlement Agreement (emphases added): "1. The parties agree to abide by the current Model Constitution under the Association Incorporation Act 2009 until such time as the Committee elected in accordance with the following clauses has called an Annual General Meeting to consider the new Constitution of the Association. 2. The parties agree that all current members including life members of the Association may vote at the meeting referred to in Clause 6 Provided that they have paid their membership fees. 3. The Parties agree that new members may join the Association, but that in order to become a member of the Association, a new member must meet the following requirements: i. A person qualifies to become a member of the Association if he/she: a) Follows or intends to follow and respect the principles of the Sanatan Dharam; b) Is of 18 years of age and over; c) Has been nominated for membership of the Association by a valid member; and d) Has been approved for membership of the Association by the Committee referred to in Clause 4. 4. The parties agree that the following person shall constitute the Committee referred to in Clause 3 (i)(d) above and shall be responsible for vetting new members along the strict guidance of Clause 3(i) above. The members agreed by parties are: a. Mahen Singh; b. Pundit Prakash Maharaj; and c. Pundit Nitya Anand Maharaj 5. The Parties agree that once a member is approved for Membership referred to in Clause 4, the member will be eligible to vote in General Election referred to in Clause 6 provided that: a. They have applied for membership by 28 February 2019; and b. They have paid their membership by no later than 15 March 2019."

Subsequent events not relevant to the construction of the Settlement Agreement

1. On 22 February 2019 a letter of instructions (the "Letter") was sent to the Committee over the signatures of the solicitors for each of the parties. The terms of the Letter had been negotiated between the parties. Those terms included: "4. As part of the settlement, the Parties have jointly agreed that all three of you, who are respected members of our society and are independent, be appointed, to be responsible for vetting new members along the strict guidance as set out in paragraph 5 below. 5 The parties agreed that new members may join the Association, but that in order to become a member of the Association, a new member must meet the following requirements: A person qualifies to become a member of the Association if he/she: • Follows or intends to follow and respect the principles of the Sanatan Dharam; • Is of 18 years of age and over; • Has been nominated for membership of the Association by a valid member. 6. The Parties agree that all new membership applications be sent to all three of you for assessment. All three of you shall be responsible to do your due diligence independently. All three of you must jointly approve or reject applications for membership referred to in paragraph 5 above. 7. All three of you or one of you on behalf of all three of you shall return the approved and rejected applications to the Secretary. 8. The approved member will be eligible to vote in General Election provided that: • They have applied to you for membership by 28 February 2019; and • They have paid their membership by no later than 15 March 2019. 8(Sic) For the above reason, we will appreciate your acknowledgment and agreement to this request and also to make provisions for you all three to meet anytime between 1 March 2019 and 10 March 2019 to review the membership applications and provide a list of members approved by you to ensure that members can pay their membership fee to the Treasurer by no later than 15 March 2019. 9. We will shortly provide a list of current financial members to assist you in ascertaining who is a valid member for the purpose of nominating new applicants."
2. Neither party contended that the Letter was either a variation of the Settlement Agreement or a further agreement between the parties, particularly insofar as it directed the Committee to act unanimously. Nothing turns on this because, in fact, the Committee did act unanimously. The Letter otherwise appeared to be a recitation on behalf of the parties of how they understood the Settlement Agreement was to work. The parties agreed that the Letter could have no effect on the construction of the Settlement Agreement because it was post-contractual conduct.
3. The Committee was given 305 application forms from new members. The form had been prepared by the parties based upon the membership application form attached to the 2009 Constitution. Each membership form contained these statements: "1. I hereby apply to become a member of the above named incorporated association. In the event of my admission as a member, I agree to be bound by the rules of the association for the time being in force. 2. I agree and acknowledge that correspondence pertaining to the affairs of the association may be communicated to me via electronic means as provided. 3. I declare that I am a follower and believer of Sanatan Dharam and its principals (sic). 4. I am over the age of 18 years and join the association of my own free will and shall attempt to attend to all events and functions of the association. 5. I have/have not (please cross out one) been convicted for any criminal matters in the past Five Years (5 yrs) nor have any matter pending in any court of law in any state or territory or any country to my knowledge. (If yes please explain on a separate sheet)."
4. On 10 March 2019 the Committee returned all 305 applications to the Secretary of the Association. The Committee had rejected all of them.
5. On 15 March 2019 the solicitors for the plaintiffs wrote to the Committee asking them "to provide brief reasons" as to why each application had been rejected.
6. Although the Committee had no obligation under the Settlement Agreement to provide reasons for their decision, they did so on 19 March 2019. Their letter (the "Reasons") included: "Subject: Re: Kumar & Prasad v Satsang Hindu Maha Sabha of NSW Inc & Ors Supreme Court Proceedings: 2018/00205485 Request was made by your office for vetting of new membership application for Satsang Hindu Maha Sabha of NSW Inc., by email on 27 February 2017. The joint letter dated 22 February 2019 by the above confirmed that following have been appointed as the Vetting assessors for new membership application in a term of settlement reached by Plaintiffs Mr. Dharam Kumar and Chandrika Prasad and the Defendants Satsang Hindu Maha Sabha of NSW , Mr. lndarjit Rai and Mr. Shalesh Sundar. In the term of settlement following were appointed as vetting [assessors] officers:- 1. Pundit Prakash Maharaj 2. Pundit Nitya Anand Maharaj 3. Mr. Mahen Singh All assessors are independent and are not involve in the current dispute of the association. Around 25th February 2019 one Ravin Lai delivered some 246 new application forms to the residence of Pundit Nitya Anand Maharaj indicating that all forms are to be signed and approved by all three assessors as it shall be used for voting in forthcoming election of office bearers of the association. Meanwhile on the 28th February 2019 further applications were received from Satsang Hindu Maha Sabha of NSW Inc. via electronic mode and later hard copies were delivered at the residence of Pundit Prakash Maharaj. These were 59 new applications thus the total number of application was 305. On Sunday 10th March, 2019 we all three assessors namely Mr. Mahen Singh, Pundit Nitya Anand Maharaj and Pundit Prakash Maharaj set together in the offices of Pundit Prakash Maharaj at Rooty Hill, NSW to perform the task of assessment of all new applications as per the request. In due course of this meeting it was moved by Mr. Mahen Singh that Pundit Prakash Maharaj to lead as chairman, this was seconded by Pundit Nitya Anand Maharaj. Pundit Prakash Maharaj accepted the role. All three assessors were well conversed with the task imposed upon them and proceeded with the assessment of all 305 applications. The document supplied did not ask us to give reasons. Mr Ramrakha's recent letter seeks reason as the Plaintiff have lodged documents in court. We received and read the following documents (a) The terms of settlement dated 10 December 2018, (b) The letter from Kirath Ramrakah and Ajay Singh to the assessors dated 22 February 2019,and (d) The model constitution (e) All the application forms submitted by new members (f) Membership List 1. We noted that under clause 3(a) of the terms of settlement, a person was qualified to become a member of the association if he or she "follows or intends to follow and respect the principles of the Sanatan Dharam." 2. We further noted that the letter from Kirath Ramrakah and Ajay Singh to the assessors dated 22 February 2019 has two paragraphs numbered 8 The first of these paragraphs refers to the new members being eligible to vote at an upcoming general meeting to be held on 31 March 2019 The second of these paragraphs requests that the assessors review the applications before 15 March 2019 so that they can pay their membership fee prior to that date and vote, this appears to be significant as if they have not paid their membership fees by that day they would not be eligible to vote at the meeting on 31 March 2019 The paragraphs numbered 10 to 12 deal with appointment of scrutineers at the meeting to be held on 31 March 2019. 3. From these matters and the timing of the applications to join the association it is clear that the purpose of new members joining the association is so that they can vote in the upcoming election. 4. By being involved in this process the proposed new members are clearly following or intending to follow and respect the principles of the Sanatan Dharam. 5. The intrusion of politics into religion by the means being used in this case shows no respect to the most revered religion of over 1 5 billion followers of Sanatan Dharam. … 8. There are number of religious scriptures in Hinduism or you may say Sanatan Dharam which guides the followers of Sanatan Dharam with philosophies and routines of life. This religious books are known as:-

• Vedas: Rigveda, Yajurveda, Sam Veda and Artharveda
• Upanishad's - Total 108
• Puraans - Total 18
• Shastra's - Total 6
• Ramayana - Total 12
• Gita Total 5 9. These are the common religious scrips that we Hindus or followers of Sanatan Dharam are bounded by. Anyone who breaches the teachings of these above mentioned Holy Scriptures cannot call themselves a staunch Sanatan Dharam follower. 10. There is no space in Sanatan Dharam for any politics. There is no mention of any such thing as election for office bearers in Sanatan Dharam. There are number of associations and groups formed all over the world who practice the teachings of Sanatan Dharam in their congregations. These groups have their leader and associates who look after the management of associations affairs on volunteer basis. … 17. It appears in these applications that the applicants are playing a game to gain control of the Association and the Temple by any means abusing the teachings of the Sanatan Dharam at large. Our teaching says "Satya Ahinsa Parmo Dharam" (truth and peace are the real religion) here it is displayed motive that one has to win one way or the other. A deceiving and cheating motive is clearly present immediately once you see the applications. 18. We received letters from both solicitors with notations that this was urgent for the purpose of forthcoming elections of the association. That is a clear sign that the motive of these applications were not for social or religious congregations it was for one and only one purpose voting in the elections. … Conclusion - The intrusion of politics into religion by means of utilising judicial system will not only destroy the temple or this defendant association but shall show no respect to the most revered religion of over 2 billion followers of Sanatan Dharam. Here the status of Sanatan religion is on the stake and any intervention by judicial system shall be cited as an attack on the religion. Thus we all three assessors after our due diligence on each application and citing the motives are satisfied that all applications are to be declined at this stage. The applicants if they have genuine intentions to join and follow Sanatan philosophy may join after the general elections and follow the directions of new committee of the association. We applied our due diligence and carry out our work properly based on the material provided to us. Accordingly, all 305 applications were marked declined and returned to Secretary Mr. Shalesh Sundar personally by Pundit Prakash Maharaj on Sunday 10th March, 2019."

1. On 18 March 2019 I granted leave to the plaintiffs to file in Court an amended summons which included these prayers for relief: "1. A declaration that there has been a breach of the agreement entered into between the parties on 10 December 2018 (the Agreement). Particulars (a) The Agreement is wholly in writing and entirely comprised in signed terms of settlement and the joint letter of instruction dated 11 February 2019 which appears at Tabs 2 and 5 of Exhibit AS-1. (b) All 305 applications for new membership of the Second Defendant provided were refused. (c) The persons appointed under clause 4 of the terms of settlement failed to carry out the task delegated to them, or alternatively, failed to properly carry out that task. 2. A Declaration that the Agreement between was unjust in the circumstances at the time it was entered into within the meaning of section 9 of the Contracts Review Act 1980 (NSW). Particulars (a) Performance of the Agreement was unjust. (b) The Plaintiffs refer to and repeat paragraphs 1(b) and (c) above. (c) By refusing all 205 applications the purpose and effect of the Agreement entered into by the parties to resolve the dispute have been entirely abrogated. 3. An order under section 7 of the Contracts Review Act 1980 (NSW) that the Agreement is unenforceable until Orders (a) to (b) below have been complied with: (a) That an independent third party determine the 305 new membership applications of new members of the Second Defendant, strictly in accordance with the terms of the documents referred to in Order 1(a) above, within 7 days of these orders being made. (b) The annual general meeting is called and held no later than 28 days after these orders being made. 4. An order under section 7 of the Contracts Review Act 1980 (NSW) that the Agreement is varied so as to accommodate the matters referred to in 3(a) and (b) above."

Two preliminary observations

1. Before turning to the parties' submissions, two preliminary points should be noted.
2. First, the plaintiffs sought to make something of what they described as the "finding" in paragraph 4 of the Reasons that "by being involved in this process the proposed new members are clearly following or intending to follow and respect the principles of the Sanatan Dharam". The defendants submitted that the sentence was clearly in error and should have read (emphasis added) "by being involved in this process the proposed new members are clearly not following or intending to follow and respect the principles of the Sanatan Dharam".
3. Reading the Reasons as a whole, the Court accepts, on the balance of probabilities, that "not" is missing from paragraph 4. However, nothing really turns on this. Even if the starting point of the Committee's Reasons is that the applicants, by submitting their applications, were purporting to follow or intending to follow and respect the principles of the Sanatan Dharam, the conclusion of the Committee was, nevertheless, that the applicants were not doing so because of their involvement in what the Committee perceived to be a political process. The Committee's conclusion is unarguably clear, notwithstanding how paragraph 4 is to be read.
4. Second, the parties accepted that it was no part of the Court's function to review the correctness of the theological opinion expressed by the Committee and they did not seek to tender any expert evidence on the topic. That approach is correct. In the western legal tradition it reflects a position taken by civil courts as early as the first century, when the Book of Acts records that the apostle Paul was brought before the proconsul Gallio. The proconsul declined to entertain the dispute, saying "if it were a matter of crime or serious villainy, I would be justified in accepting the complaint of you Jews; but since it is a matter of questions about words and names and your own law, see to it yourselves; I do not wish to be a judge of these matters." (see Acts 18: 14-15 NRSV). Modern judicial expressions of the same sentiment may be found in Attorney-General (NSW) v Grant (1976) 135 CLR 587 at 612 (per Murphy J); Church of the New Faith v Commissioner of Payroll Tax (Vic) (1983) 154 CLR 120 at 150 (per Murphy J); Uniting Church of Australia Property Trust (NSW) v Vincent (unreported, NSWCA, Kirby P, Clarke and Sheller JJA, 19 August 1994) at 10 per Kirby P and cited in Ulman v Live Group Pty Ltd [2018] NSWCA 338 at [248]; and Catch the Fire Ministries Inc v Islamic Council of Victoria Inc [2006] VSCA 284; (2006) 15 VR 207 at [36] per Nettle JA.

Construction - resolution

1. The Court accepts the defendants' submissions as to the proper construction of clauses 3 and 4 of the Settlement Agreement. Those submissions form the basis of what follows. I will then explain why I have not accepted the plaintiffs' submissions.
2. While not determinative of the meaning of words in the context of a particular agreement, dictionary definitions are "at least a guide to the conventional meaning of words": Lewison and Hughes, "The Interpretation of Contracts in Australia" Law Book Co, 2012 at [5.03]. In this case, clauses 3 and 4 need to be read together, in particular the use of "approved" in clause 3(i)(d) and "vetting" in clause 4. Clause 3(i)(d) requires that the applicant be "approved for membership of the Association". "To approve" is defined in the Shorter Oxford English Dictionary 6th edn as, among other things, "to confirm authoritatively".
3. That definition supports a substantive rather than merely administrative function. However, insofar as it might be thought that there was any ambiguity about whether "approve" involved a substantive rather than merely administrative task, that is resolved by the context of the approval in clause 3(i)(d) having to be by the Committee which, under clause 4, is "responsible for vetting new members along the strict guidance of clause 3(i) above".
4. The Shorter Oxford Dictionary, 6th edn, defines "vet" to mean "examine (work, a scheme, person, etc) carefully and critically for deficiencies or errors; spec. investigate the suitability of (a candidate) for a post requiring particular loyalty and trustworthiness". Similarly, the Macquarie Online Dictionary defines "vet" to include: "3. To check the aptitude, character etc., of (a person): we'll vet the applicants carefully. 4. To examine (a product, proposal or the like) with a view to acceptance, rejection, or correction."
5. A reasonable person apprised of the surrounding circumstances would understand from the combination of "approve" and "vet" that the parties to the Settlement Agreement intended that the role of the Committee pursuant to clauses 3 and 4 of the Settlement Agreement was to be a substantive one. That conclusion is fortified when one of the relevant surrounding circumstances is that two of the three members of the Committee are Hindu priests. Given that the dispute resolved by the Settlement Agreement concerns the affairs of the Association, which conducts a Hindu temple, and that the first qualification for membership of the Association is that the applicant "follows or intends to follow and respect the principles of the Sanatan Dharam", the choice of two pundits as members of the Committee clearly points to an expectation that they would bring their theological expertise to the vetting and approval process.
6. The foregoing conclusions reflect the submissions of the defendants. There are two additional reasons why I have accepted those submissions: 1. The parties could easily have provided that the membership applications were to be taken as conclusive proof of their contents. They did not do so. It would be odd to entrust a mere administrative task to three respected and independent members of the community (including Hindu priests) when an independent solicitor or accountant could easily have performed the clerical task of validating the correct completion of the membership applications. 2. The validity of the construction which I have preferred can be tested against other provisions of clause 3(i). For example, in the absence of clear words, it would be an odd construction to conclude that the Committee could not or should not satisfy itself, if it wished, that someone was over the age of 18. For example, if they in fact suspected someone was under the age of 18 but had said in the membership application that they were over 18, it would be nonsensical to suggest that the Committee was not required to take steps to verify the applicant's age. Similarly, the Committee would have to have recourse to other information to determine whether or not a nominator was a valid member of the Association.
7. Once this construction of clauses 3 and 4 is accepted, then it cannot be said that the Committee has failed to do what it was required to do. It decided that by applying for membership to participate in the electoral process, the applicants were not following or intending to follow and respect the principles of the Sanatam Dharam. Without passing on the correctness of the theological opinion expressed by the Committee and only looking at the Reasons within the four corners of the document, the Reasons are rational and logical. Contrary to the alternative case advanced on behalf of the plaintiffs (which assumed the construction advanced by the defendants), I do not agree that by approaching the matter theologically the Committee has taken into account irrelevant considerations or otherwise failed to fulfil the task committed to it by the Settlement Agreement.
8. In that regard, it is, with respect, not apt for the plaintiffs to refer in the amended summons to the Settlement Agreement having been "breached". The members of the Committee are not parties to the Settlement Agreement. Their role is analogous to the familiar one of an expert required to perform a determination under a contract. The question is whether the expert has performed the task contemplated by the contract (see Legal & General Life Australia v A Hudson (1985) 1 NSWLR 314; G Lubofsky, "Setting Aside Expert Determinations - A Comprehensive Review" (2018) 92 ALJ 529). Failure to do so does not result in a breach of the contract. It is rather that the expert's determination does not meet the contractual description of the determination so that it does not have whatever effect the contract provides it should have on the rights and liabilities of the parties to the contract.
9. The Court will next consider the several arguments on construction advanced by the plaintiffs.
10. First, it was submitted that the evident purpose of the Settlement Agreement was to resolve the issues in dispute between the parties and not to create new disputes. A reasonable observer would resist a construction of the Settlement Agreement that the Committee could engage in any other conduct other than an administrative task, because this would only add to the matters in dispute because the validity of the other steps taken by the Committee would necessarily become an issue between the parties. This argument is rejected precisely because the parties have committed the approval process to the Committee as respected and independent people. The parties to the Settlement Agreement have expressly left the approval for membership of the Association to the Committee without further recourse.
11. Second, it was submitted that because the process of approval of new members was a matter done entirely on the papers, all that was contemplated was an administrative task. This argument is rejected because it assumes what it seeks to prove.
12. Third, it was submitted that if a theological assessment was to be undertaken, a lay person would not have been included on the Committee. I do not agree. First, the pundits are in the majority, if it were the case that the Committee was to function by majority. Insofar as there was a subsequent direction for the Committee to function unanimously, the parties accepted that could not influence the construction of the Settlement Agreement. In any event, it just does not necessarily follow that the inclusion of a lay person excludes the possibility of the Committee undertaking a theological assessment.
13. Fourth, it was submitted that the Committee members were selected on the basis that they were respected, independent Hindus, and not for their theological expertise. This submission ignores that facts that two of the Committee members who were selected are pundits and that the dispute concerns the affairs of a religious organisation.
14. Fifth, it was submitted that no instructions were provided to the Committee to carry out any independent inquiries because the information on the form was to be accepted at face value. This argument, again, assumes what it has to prove. As I have already observed, the parties could have agreed that the membership applications were to be taken as sufficient proof of their contents.
15. Sixth, it was submitted that the nature of the task the Committee was required to carry out did not indicate that there was any need for religious or spiritual expertise. That submission again fails to grapple with the fact that the Settlement Agreement required the Committee to "[vet] new members along strict guidance of clause 3(i) above", which included that a person "follows or intends to follow and respect the principles of the Sanatam Dharam".
16. Insofar as the plaintiffs advanced an alternative argument that there had been a "breach" of the Settlement Agreement on the construction advanced by the defendants, I have already dealt with that argument in paragraph [29] above. The Court does not accept the various criticisms of the Reasons advanced by the plaintiffs. Once the defendants' construction of clauses 3 and 4 of the Settlement Agreement is accepted, it cannot be said that the Committee asked itself the wrong question or misconceived its function under the Settlement Agreement by applying theological considerations.

The CRA - resolution

1. The gravamen of the plaintiffs' complaint relying on the CRA was that the consequences and effect of the Settlement Agreement as performed were unjust in the sense of substantive injustice. No complaint was made with respect to the unfairness of the methods used to make the agreement (procedural injustice): see West v AGC (Advances) Limited (1986) 5 NSWLR 610 at 620E-622B.
2. The plaintiffs relied on two specific matters under s 9(2) of the CRA: "(1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of: (a) compliance with any or all of the provisions of the contract, or (b) non-compliance with, or contravention of, any or all of the provisions of the contract. (2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following: … (d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract, … (l) the commercial or other setting, purpose and effect of the contract."
3. The fundamental difficulty with the plaintiffs' case under the CRA is that they are unable to point to any relevant injustice and by whom it has been suffered. Most importantly, the decision of the Committee does not appear to have worked any injustice on the parties. Nor, as the Reasons make clear, does the decision permanently shut out the new members from later applying for membership. The problem for the plaintiffs is that a surprising outcome is not necessarily an unjust outcome.
4. The defendants based their resistance to the plaintiffs' case under the CRA by reference to this last point. Even if, contrary to the Court's conclusion, there had been some injustice, the defendants drew attention to s 9(4): "In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made."
5. The Court accepts the defendants' submission that s 9(4) is a complete answer to the plaintiffs' reliance on the CRA. I accept that submission because if, for the sake of the argument, the operative injustice was the rejection of all applications on theological grounds, it was not reasonably foreseeable at the time the contract was made.
6. On the other hand, the very process established by clauses 3 and 4 of the Settlement Agreement necessarily includes the possibility that some, many, and perhaps even all, of the applications could be rejected. Looking at the matter from that point of view, then the outcome is in any event not unjust for the purposes of the CRA.
7. The defendants' arguments based upon s 9(2)(d) either assumed the plaintiffs' construction (by asserting that the process was confined to an examination of the papers) or submitted that the "moral virtue" of new members was difficult, if not impossible, to assess. This latter argument cannot succeed because the Committee was not called to sit in judgment on the "moral virtue" of the new applicants for membership.
8. The plaintiffs' reliance on s 9(2)(l) similarly fails. The plaintiffs' complaint is that the Settlement Agreement contemplates what they submitted was an "open and transparent process" which is not what has happened. They submitted that the purpose and effect of the Settlement Agreement have been entirely abrogated and that the Committee considered factors other than those that it was required to consider by the Settlement Agreement.
9. The Court does not agree. Having accepted the defendants' construction of clauses 3 and 4, it follows that the Committee has done what it was required to do under the Settlement Agreement. That conclusion is not impeached by the fact that the mechanism for approving new members under the Settlement Agreement has produced a result that was unexpected by, and is clearly surprising to, the parties to the Settlement Agreement.

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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: 26 March 2019