Perren v Nambour Bowls Club Inc [2018] QSC 148

[1] The applicant, Mrs Perren, was a member of the respondent, the Nambour Bowls Club (the Club), since August 2013. Her husband is and has been a member of the club for 20 years. Mrs Perren held various positions with the Club including on its governing body, the Management Committee, up until December 2016. On 23 February 2017, she was advised by the Club that the Board did not recognise either Mrs Perren or her husband as members as they had not paid annual fees said to be due on 31 December 2016 (sic) (the first decision). Mrs Perren and her husband then re-applied for membership of the Club. Mrs Perren was refused membership on 2 March 2017 (the second decision). An appeal against that decision made to the general meeting of the Club failed on 7 April 2017 (the third decision). Mrs Perren and her husband subsequently became members of the Maroochy Bowls Club, which shares reciprocal rights with the Club. On 12 January 2018, the Club made a decision to prohibit Mrs Perren having access to the premises of the Club (the fourth decision).

[2] The question for this Court is whether any or all of the decisions are void on the basis that they were either made in breach of the Club's Constitution or that there was a denial of natural justice.

[3] Both Mrs Perren and the Club agree that if the Court determines that the first decision of the Club, made on 23 February 2017, was in breach of the Constitution of the Club or the rules of natural justice and void, it would follow that the second to fourth decisions should be set aside on the same basis. That does not apply to the other decisions which are the subject of challenge, in the event that the Court does not determine that the first decision was void.

Constitution is a contract with members

[4] Section 71 of the Associations Incorporation Act 1981 (Qld) ("the Act") provides that:

• (1) Upon incorporation the rules of the association shall constitute the terms of a contract between the members from time to time and the incorporated association.
• (2) Where a member of an incorporated association is deprived by a decision of that association of a right conferred on the member by the rules of that association as a member thereof, the Supreme Court shall have jurisdiction to adjudicate upon the validity of that decision under the rules.
• (3) An incorporated association shall be bound by the rules of natural justice in adjudicating upon the rights of its members conferred by the rules of such association on its members.

[5] The Supreme Court, upon application of an incorporated association or of a member thereof, may make orders including, inter alia, declaring and enforcing the rights and obligations of members of such incorporated associations between themselves and the rights and obligations between such incorporated associations and any member or members thereof.[1] Section 72(2) of the Act provides that an order may be made under this section notwithstanding that no right of a proprietary nature is involved, or that the applicant has no interest in the property of the incorporated association.

[6] The powers of the Supreme Court upon hearing such an application to grant relief as appropriate in circumstances are outlined in s 73 of the Act.

[7] Relevantly, on 23 December 2016, Mrs Perren received an email from the Club with the subject "Membership Payments for 2017". No invoice was attached. What was described as membership payment advice for 2017 was in the following terms:

Please note that payment for all dues can be made by Direct Credit to our bank account at Heritage using the following information: ...

You may also pay by Cheque, cash or use Eftpos at the Club. ...

If you have already paid, please disregard this message.

As the earlier message stated, we must know your intentions before the end of the year, so this can be sent to Bowls Queensland for their records. ..."

[8] The notice was attributed to Ray Capper, Secretary, Nambour Bowls Club. There is no evidence of any earlier email or message having been sent to Mrs Perren and she denies having received an earlier email. I accept that to be the case.

[9] On 8 February 2017, Mrs Perren sent an email to the Club which was addressed to the Board stating, inter alia, that after having made contact with a number of the men from the Club when her husband was playing bowls at Coolum:

"...It made us both think that we need renew (sic) those friendships and get back into playing bowls in the open pairs on Wednesday afternoon.

It will be necessary to pay our memberships fees for 2017 - $170 for both of us. I have done a direct deposit into the club's bank account for the following:

• Refer to my email that I sent into the Club on 10 November (see below) where I advised that the Club owed us $74 for green fees that we had paid for bowls on Scorpio Day ($50) and then on Wednesday 9 November 2 bowl triples ($24). On both of these days we had arrived at the Club not registered to play but due to numbers being down and players not turning up we played in both these events. You will see in my previous email (10 November) I raised this with the then Chairman - Brian Flux that as the precedent had previously been set by the Club, members had been exempt from paying green fees when they filled in at short notice. Therefore I can see no reason why we cannot be afforded the same and requested that we be reimbursed our $74. I did point out that both Wayne Doran and Robert Combes should also be reimbursed $25 each as they also filled in at short notice on Scorpio Day.

Extract from my email 10 November - After receiving such criticism today, my understanding is that it appears to be Club policy that when you fill in at short notice to make up teams there is no necessity to pay green fees. Therefore I would like to receive money from the Club $50 for Scorpio Day and $24 for yesterday Wed Triples. Also Robert Combes and Wayne Doran will also need to receive $25 each. As this precedent was set on one of the Mixed Pairs days when Ralph, Marty and Ron Abraham filled in and paid no green fees, I see no reason why we cannot be afforded the same.

To this date I have received no response or reimbursement for these green fees. Therefore you will see that the membership fees that I am paying is $170 less $74, that is $96 is being paid as a direct deposit into the Club's bank account.

I should also point out that after we played on Scorpio Day, Macca (Peter McNaughton) had commented that we weren't required to pay our green fees for the event. However at the time no one refunded us any money.

Written confirmation to this email would be appreciated."

[10] The email was said to be on behalf of "Nev & Robyn Perren". No payment had in fact been directly deposited into the Club's account.

[11] On 9 February 2017, an email was sent by Ray of the Nambour Bowls Club, stating:

[12] On 15 February 2017, a further email, said to be on behalf of "Nev & Robyn Perren", was sent in the following terms:

I refer to my email of 8 February where I stated that our membership fees for this year would be $170 less overcharge of green fees to an amount of $74, leaving a payment of $96 to be made to the Club. In my email I did ask for written confirmation to my email. Ray did reply with a confirmation which was very nice. However I was asking for a written confirmation of agreement to my calculations. Therefore before I transfer $96 into the Club's bank account I would like confirmation that the Board agrees with this figure. I do not want to find that after I have paid $96 we are told that we are not financial members."(emphasis added)

[13] There was no response to Mrs Perren's request. On 23 February 2017, a letter was sent by the Club to Mrs Perren and her husband, stating:

The closing date for payment of Nambour Bowls Club 2017 membership fees was 31 December 2016.

As no annual fees have been received the Board does not recognize you as members.

Attachment - Nambour Bowls Club Inc Membership Application forms"

[14] In response to that letter, Mrs Perren sent an email on 23 February 2017 to the Club, in the terms:

"Thanks for your letter Ray. Obviously this is the easy way out for the Club to address my question regarding our membership fees. I have to wonder how long it took for Ralph and Brian to come up with this response. As I said in my recent email, when I raised this issue back in November with the then Chairman he opted to ignore me then. So I guess I should be thankful that after two more emails I have now received a response.

Nev and I plan to have a meeting with Ralph to discuss our issues and continued membership with the Club."

[15] Mrs Perren deposes to a meeting subsequently occurring, which is outlined in Mrs Perren's affidavit. Her evidence as to what occurred is not challenged in the affidavit of Mr Wells, who was one of the persons with whom she met. Mr Green, who was also said to have attended the meeting did not give evidence. Mrs Perren and her husband were told that they had to re-nominate for membership. At the meeting Mrs Perren informed Mr Wells and Mr Green, the Chair and Vice Chair of the Club, that she had not received an invoice from the Club. Subsequently, Mrs Perren and her husband submitted the application for membership.

[16] It was accepted by counsel for the Club, correctly in my view, that given the evidence presented, particularly by Mr Corps, that the Management Committee did vote to terminate Mrs Perren's membership pursuant to clause 10(d) of the Constitution. That is so, notwithstanding that the letter of the Committee of 23 February 2017 was not expressed in those terms. While committee members cannot be expected to act and write as lawyers do, as was observed by McMeekin J in Gould v Isis Club Incorporated,[2] the reference to termination of membership is of some importance given that it enlivens appeal rights.

[17] Mrs Perren contends that the Club failed to accord her natural justice in the processes that were followed leading to the termination of her and her husband's membership on 23 February 2017, and further that the Club failed to follow its rules for the termination of her membership.

Could the Management Committee terminate Mrs Perren's membership?

[18] According to the Constitution of the Club, which is Exhibit 1, after an amendment in 2004:

"The financial year of the Club will end on the 31st October each year. The Annual Subscription shall be payable in advance."

[19] It appears, however, that the Club may not have been operating on that basis. The Club contend the fees were due on 31 December 2016.

[20] Paragraph 8(b) of the Constitution states:

"The membership fees for each class of membership shall be payable at such time and in such manner as the Management Committee shall from time to time determine."(emphasis added)

[21] Mrs Perren contends that neither the email of 23 December 2016 nor the attachment "Subscription Notice to All Members" is a tax invoice, nor does it state when the subscription fee is due or the consequences of non-payment. Mrs Perren submits, therefore, that the email and notice did not comply with the Club's Constitution and that there was no date upon which the fees were stated to be due.

[22] By comparison, Exhibit 2, which is an invoice issued by the Club for the period from 1 January 2018 to 31 December 2018, stated:

"Subscriptions are due and payable in advance by 31/12/2017

If you do not intend being a Member for the 2018 year, please notify the Secretary before that date for ease of transition."

[23] It was contended by the Club that the notice to members that the Club "must know your intentions by the end of the year" was sufficient to establish that the due date for the fees was 31 December 2016. It further relied on the fact that Mrs Perren had paid her fees before 31 December in previous years, and that there was some course of conduct by which members knew that the date the fees were due was the end of December.

[24] Evidence was presented on behalf of the Club to support the fact that the fees were due on 31 December 2016 and that Mrs Perren would have known of that fact. That evidence was objected to on behalf of Mrs Perren. Mr Corps, who is the current assistant treasurer of the Club and has been on the Management Committee for the Club for the past two years, sought to depose in paragraph 4 of his affidavit:

"I can say that all membership fees fall due on 31 December of each year and the Club notified members of this each year in around December via email or post."

"Robyn, in her capacity as Assistant Secretary, was aware that her fees were due on 31 December 2016."

[26] No basis for the belief is identified and Mr Corps seeks to swear the knowledge of Mrs Perren without stating the basis upon which that knowledge exists or the basis upon which it is said that the fees fall due. Both paragraphs are inadmissible.

[27] Similarly Mr Wells, who had been the Chairman of the Club, sought to swear that "All members are aware their fees are due by the end of the year, being 31 December. All members are sent either an email or a letter via post advising them that their membership fees are due before 31 December each year".[3] There is no doubt that Mr Wells would be in a position as Chairman to have knowledge of such matters, however, his evidence in that regard relies on the fact that an email or letter advises members that their membership is due on 31 December each year. No evidence of such an email or letter was before the Court in relation to 31 December 2016. It is therefore inadmissible.

[28] Mrs Perren also objected to paragraph 13 of the affidavit of Mr Flux, who is a former Chairman of the Club. His evidence is similarly a conclusion or assertion and he does not set out the facts upon which his knowledge of the date that the membership fees were due is based, nor the basis upon which it is said that each member would receive an email enclosing an invoice from the Club Secretary each year. It is inadmissible. Paragraph 10 of Mr Robson's affidavit is inadmissible on the same basis.

[29] Even if the evidence referred to above was admissible, it is insufficient to establish that the Club had complied with clause 8(b) of its Constitution in determining the time when fees were payable.

[30] There is no evidence of any determination or resolution of the Management Committee having been made within the terms of paragraph 8(b) of the Constitution. In effect, the evidence that has been sought to be presented to suggest that there was such a determination is by reference to a course of conduct. However, other than the assertions which are inadmissible, the evidence that Mrs Perren and other members had paid fees by 31 December in previous years or in 2016 is insufficient to establish a course of conduct which supports the fact that the due date for the fees was 31 December at the end of each year or in 2016. Nor was the evidence sufficient to establish any course of conduct by which the requirements of clause 8(b) of the were varied. The sets out the mechanism by which the Annual Subscriptions will be determined to be payable. The clauses in the are the terms of the contract between the Club and its members.

"If a member has membership fees or other moneys in arrears for a period of twenty-eight days, the Management Committee shall consider whether the membership shall be terminated."

[34] Counsel for Mrs Perren pointed out that 10(d) is inconsistent with 10(e)(iii), which provides for the Management Committee to consider whether to terminate membership where a member "has membership fees in arrears for a period of two months or more" however, nothing turns on that discrepancy in this application which requires me to reconcile the two provisions.

[35] Under clause 10(d) the Management Committee can only consider whether to terminate a membership when a member's membership fees are in arrears for at least 28 days. For the memberships fees to be in arrears, they must have been due and payable by a certain date.

[36] It is submitted by the Club that:

"...the relevant circumstances were that the applicant well knew of the due date for payment of Membership Fees, and apparently made a purposeful decision not to pay them and then sought to conflate two unrelated issues making it clear that she was not going to pay the full Membership Fees. Those facts alone enlivened the power to terminate the Membership Fees. ... The Management Committee was not considering a disciplinary complaint. The rules of natural justice required nothing more of the respondent."

[37] In particular, the Club also contends that the Court could infer from the terms of Mrs Perren's email of 8 February that she had made a positive decision not to pay membership fees. In this regard, it also relies on Mrs Perren's evidence that she did not attend the Club after 8 December 2016, nor did she attend the annual general meeting, as supporting its contention. Those matters however, do not give rise to an inference that she had made the positive decision not to pay her membership fees. The conduct of non-attendance is readily explicable by the fact that there had been some unpleasant incidents in November 2016 involving Mrs Perren and other members of the Club and she was not nominating for a position on the Management Committee. The terms of the email of 8 February 2017 do not establish that Mrs Perren well knew the date the fees were due.

[38] The Club also contends that the email of 15 February 2017 made it clear that Mrs Perren did not intend to pay the full membership fee. The email however, goes on to explain that Mrs Perren did not want to find that "after I have paid $96 we are told that we are not financial members". While Mrs Perren contended she considered that she was entitled to a set off against the membership fees, she clearly is looking for the Club's agreement with that position and she did not indicate that she would not pay the full fees if the Club did not agree. I do not consider that the inference for which the Club contends is a proper inference to be drawn from the email.

[39] Mrs Perren was not cross-examined and none of these matters were put to her. I do not find that the evidence supports that she deliberately did not pay her membership fees by the due date or that she was not willing to pay the full membership fee.

[40] I find that in the circumstances, the Management Committee did not have power to terminate Mrs Perren's membership, as it had not determined that the due date for the membership fees was 31 December 2016 nor informed her that that was the due date. She was therefore not in arrears for a least a period of 28 days so as to enliven the Management Committee's power to consider whether the membership should be terminated.

[41] Mrs Perren also contends that she was denied natural justice insofar as the first decision to terminate was made without the Management Committee putting her on notice that they were going to consider whether to terminate her membership for non-payment of fees. Mrs Perren also contends that the decision was made mala fides, as there was no rational basis for making the decision in question. The Management Committee did not give reasons for terminating Mrs Perren's membership.

[42] An incorporated association is, under the Act, bound by the rules of natural justice in adjudicating upon the rights of its members conferred by the rules of such an association on its members. What is required by natural justice varies depending on the circumstances of the case.[4]

[43] In the present case, the Constitution of the Club did not provide that termination was automatic upon non-payment of fees. It was a basis upon which the Management Committee could consider terminating membership.

[44] I consider that in the particular circumstances of this case, natural justice did require the Management Committee to give Mrs Perren notice of their intention to consider whether her membership should be terminated due to the fees being in arrears, given that:

• (a) she had been an active member of the Club for over two years including holding a position on the Executive;
• (b) she had indicated that she wished to continue with her membership; and
• (c) she had provided a calculation of the fees which she considered were payable taking into account a set off of "green fees" that she considered should be refunded, prior to the decision to terminate her membership.

[45] It was Mr Corps' evidence that members who filled in for a team and subsequently had to pay green fees did not receive a reimbursement from the Club for those green fees, contrary to the view expressed by Mrs Perren. That supports the fact that in the present case, there was a denial of natural justice in not informing Mrs Perren of the view of the Club that the green fees were not properly the subject of reimbursement and that the membership fees had to be paid in full, in response to her emails, prior to terminating her membership.

[51] The Club contends that, pursuant to section 73(2) of the Act, the Court may refuse to entertain the application or to make an order on the application where, inter alia, having regard to the importance of the issue, the lapse of time, acquiescence or other circumstances, it was unreasonable for Mrs Perren to bring the application. Declaratory relief also enlivens the Court's discretion as to whether to grant relief.

[52] While considerable time has passed between when Mrs Perren's membership was terminated and the present, and she has had her membership re-application subsequently refused and an appeal to the general meeting was unsuccessful, that does not in my view overcome the fact that, pursuant to the terms of the Constitution, the Management Committee lacked the power to terminate her membership in the first place. I do not consider the making of the application by her was unreasonable or trivial.

[53] The Club particularly relies on the rejection of Mrs Perren's application at a general meeting. While the general meeting did affirm the decision of the Management Committee to reject the application for membership by Mrs Perren, that meeting was informed at least in part that "Robyn was not prepared to pay the full membership fees and under the Constitution, members have to pay the full fee and Robyn was not prepared to do that".[7] That evidence was not disputed in the affidavit evidence provided on behalf of the Club. The meeting was also informed that the Management Committee had been entitled to terminate her membership in the first place on the basis of the non-payment of fees. Mrs Perren's membership would not have been the subject of a general meeting in relation to that issue or have had to re-apply for membership if the Committee had not terminated her membership in the first place when it had no power to do so. There matters do not persuade me that the Court should not make orders as a result of the decision by the Management Committee to terminate her membership when it had no power to do so in the circumstances discussed.

[60] I make a declaration that the decision made by the respondent on 23 February 2017 to terminate the applicant's membership of the respondent was unauthorised by the Constitution of the respondent and was void.

[61] I further declare that the respondent denied the applicant natural justice in determining that it should terminate the applicant's membership on 23 February 2017.

[62] I order that the first to fourth decisions be set aside.

[1] Section 72(1) of the Act.

[2] [2016] 1 Qd R 363 at [64].

[3] Affidavit of D Robson sworn 13 April 2018 at [7].

[5] See Mason J in Twist v Randwick Municipal Council [1976] HCA 58; (1976) 136 CLR 106 at 116 referred to by McMeekin J in Gould v Isis Club Incorporated [2016] 1 Qd R 363 at [72] to [74].

[6] Petersen v Proserpine Golf Club Inc [2018] QSC 71 at [64].

[8] Which was expressed by the parties' counsel at the hearing.