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[2008] NSWSC 1320
Supreme Court of NSW
2008-12-08
Barrett J, Centres Act J
Original judgment source is linked above.
CITATION : Leyonhjelm v Mateer [2008] NSWSC 1320
JURISDICTION : Equity Division Corporations List
DECISION : Proceedings stayed pending mediation.
CATCHWORDS : ASSOCIATIONS AND CLUBS - incorporated association - disputes about internal affairs - applicability of model rule requiring internal disputes to be referred to mediation - whether proceedings should be stayed pending mediation
Associations Incorporation Act 1984, ss 11(2), 19(2)(a), 19(3) LEGISLATION CITED : Associations Incorporation Regulation 1999, Schedule 1, rules 7(2), 7(3), 10 Community Justice Centres Act 1983, s 3
CASES CITED : Badgin Nominees Pty Ltd v Oneida [1998] VSC 188 Huddart Parker Ltd v The Ship "Mill Hill" [1950] HCA 43; (1950) 81 CLR 502
David Leyonhjelm - Plaintiff PARTIES : Chris Mateer - First Defendant David Sanders - Second Defendant Paul Guigovaz - Third Defendant
COUNSEL : Mr S J Burchett - Plaintiff Mr B J Murphy, Solicitor - Defendants
SOLICITORS : Whitfields - Plaintiff B J Murphy & Company - Defendants
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST
1 The plaintiff claims to be a member of the Inner West Hunters Club Inc which I shall call "the Club". The Club is an association incorporated as such under the Associations Incorporation Act 1984. 2 The plaintiff filed a summons on 12 August 2008 in which he seeks various relief based on the general proposition that certain decisions of 7 November 2007 were valid decisions having effect as resolutions of the Club in general meeting and that certain decisions of 28 November 2007 were not valid decisions having effect as resolutions of the Club in general meeting; also, that certain subsequent proceedings were not valid. 3 The dispute centres on questions about who are and are not office-bearers of the Club and who does or does not have authority within the Club. 4 The defendants are individuals whose status in or relation to the Club is questioned by the plaintiff. I have heard today a notice of motion by which they seek an order that the summons be struck out. In support of that application, the defendants rely on rule 10 of the model rules contained in Schedule 1 to the Associations Incorporation Regulation 1999: "(1) Disputes between members (in their capacity as members) of the association, and disputes between members and the association, are to be referred to a community justice centre for mediation in accordance with the Community Justice Centres Act 1983 .
(2) At least 7 days before a mediation session is to commence, the parties are to exchange statements of the issues that are in dispute between them and supply copies to the mediator." 5 It is common ground that the application for incorporation of the Club was accompanied by a copy of rules so that, by force of s 19(2)(a) of the Associations Incorporation Act, those rules, as duly amended subsequently, are the rules of the Club - together, however, with such, if any, additional provisions as are deemed by s 19(3) to be included in the rules of the Club. Section 19(3) is as follows: "Where in relation to any matter the model rules make provision but the rules of an incorporated association do not make provision, the provision of the model rules shall, in relation to that matter, be deemed to be included in the rules of the incorporated association."
6 The adopted rules do not make any provision concerning resolution of disputes between members or between members and the Club. The provision about that matter made by rule 10 of the model rules is therefore deemed to be included in the club's rules. 7 By s 11(2) of the Act, the rules of an incorporated association bind the association and the members of it to the same extent as if the rules had been signed and sealed by each member and contained covenants on the part of each member to observe all the provisions of the rules. Provisions deemed by s 19(3) to be included in the rules thus have contractual force. 8 The position is therefore one in which the members of this incorporated association are bound together contractually in terms of the rules. With respect to the matter in model rule 10, therefore, the parties should be regarded as in the same position as if they had entered into a agreement to submit any dispute of the kind referred to in model rule 10 to the form of dispute resolution with which that rule is concerned. The general position with respect to such parties is that stated by Dixon J in Huddart Parker Ltd v The Ship "Mill Hill" [1950] HCA 43; (1950) 81 CLR 502 at 508-509: "But the Courts begin with the fact that there is a special contract between the parties to refer, and therefore in the language of Lord Moultonin Bristol Corporation v. John Aird & Co. at p. 259, consider the circumstances of a case with a strong bias in favour of maintaining the special bargain or as ScruttonL.J. said in Metropolitan Tunnel and Public Works Ltd. v. London Electric Railway Co. , at p. 389, 'A guiding principle on one side and a very natural and proper one, is that parties who have made a contract should keep it'." 9 In other words, once it is seen that parties have made a contract for the submission of disputes to some form of alternative dispute resolution, the general approach of the court will be that they should be kept to their contract. 10 In Badgin Nominees Pty Ltd v Oneida [1998] VSC 188 Gillard J said at [36]: "The court clearly has jurisdiction to stay a court proceeding on the simple basis that 'a contract is a contract' and the parties should abide by it." 11 The particular form of dispute resolution to which the parties are committed through the rules in this case is one created by Parliament, by way of the form of mediation for which provision is made by the Community Justice Centres Act 1983. 12 The objects of that Act as set out in its s 3 are to provide for the establishment and operation of community justice centres for the purpose of, amongst other things, providing dispute resolution and conflict management services, including the mediation of disputes. 13 The fact that the model rules under the Associations Incorporation Act expressly adopt the system of mediation for which provision is made by the Community Justice Centres Act emphasises that Parliament has seen fit to provide that, as a general principle, persons involved in incorporated associations who fall into dispute should take advantage of the system of mediation for which specific provision has been made by legislation directed towards resolution of community disputes. 14 As in any mediation, there is a need for parties to approach the matter constructively. Parties sometimes think that they are being sent to mediation. That is the wrong attitude. It is better to think of being given an opportunity to obtain the assistance of a skilled mediator in an attempt to find a mutually agreeable resolution of differences. Courts can impose solutions. Parties can find their own solutions. And this is particularly so when they have the assistance of mediators to do so. It is far preferable, in most cases, that parties should take that opportunity and work constructively together to resolve their differences with assistance, rather than that they should litigate their disputes. 15 One particular concern of the plaintiff is an apparent inability to obtain copies of the register of members of the Club. I have been taken to correspondences about the various records being kept on computer, requests for access to computerised material and so forth. Again, the model rules are relevant. 16 The rules of the Club, as adopted, provide in rule 4 for the keeping of a register of members containing the full names and addresses of members. No further specification on this subject is made in the Club's own rules, with the result that again there is scope for the operation of the model rules with respect to matters not covered by the Association's own Rule. 17 In this case, the model rule provisions that are relevant are rules 7(2) and 7(3). The clear requirement under those provisions is that there should be a hard copy paper register (whether or not records are also kept on computer) that is kept at the principal place of administration of the association and that it be open for inspection free of charge by any member of the association at any reasonable hour; also, that any member may obtain a copy on payment as specified in rule 7(3). 18 All parties will be well advised to recognise and give full effect to the clear provisions of the model rules in this respect. 19 It is not appropriate that the proceedings be struck out. They should, however, not proceed unless and until mediation has occurred. 20 I order that the proceedings be stayed pending referring of the dispute, the subject of the proceedings, to mediation in accordance with model Rule 10. 21 I make directions as follows: 1. The plaintiff and the defendants within seven days serve upon each other a statement of the issues of dispute between them for referral to mediation and the terms of the persons proposed to attend the mediation. 2. Within fourteen days the plaintiff and the defendants confer and agree on a Community Justice Centre to conduct a mediation. 22 Costs of today are reserved. **********
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Leyonhjelm
Mateer