Plaintiff v Defendant

2 Responsibility for the organisation and governance of the sport has been in the hands of a number of bodies since 1983. In August 1998, the plaintiff was appointed as the SecretaryGeneral of the Federation of Australian Kung Fu & Wu Shu Organisations Ltd, which changed its name in 1999 to Australian Kung Fu (Wu Shu) Federation Ltd. That body was deregistered shortly after the incorporation of the Federation in 2004. The Federation was the governing and representative body of the sport until about June 2012, and was recognised as such by the IWSF and the Australian Sports Commission, the latter being the body responsible for funding and regulation of sport in Australia. Since June 2012, the recognised governing body of the sport has been Kung Fu Wu Shu Australia Ltd.

3 The Federation was incorporated under the New South Wales Associations Incorporations Act 1984 ("Act"), and is governed by the Fair Trading Rules lodged with the relevant authorities ("Rules"). There was some dispute between the parties prior to the issue of the proceeding as to whether the Rules governed the operation and business of the Federation (as opposed to the rules said to have been subsequently adopted by the Federation).

4 The dispute between the plaintiff and the Federation arose in September 2008 when Mr Missingham sent an email to the plaintiff ("29 September email") stating, as follows:

It is with regret that I must inform you that you have been suspended as Secretary General for the [Federation] pending the outcome of an Ethics Committee Hearing that has been convened to examine your activities as Secretary-General. A list of the charges that have been put before the Committee has been attached. The substance of these charges, if proven, mean that you have breached Rules 11(b), 11(c), 11(d), 11(f) of our Association.

Under our Rules you are provided 14 days to respond to these matters. David Crook is the Chairman of the Ethics Committee his email address is copied herein.

Under our Rules you may not contact or seek to influence any Committee member or person you may wish to provide a statement to the Ethics Committee.

5 A table summarising the charges referred to in the annexure to the 29 September email ("Charges") is annexure A to this judgment. Charges 1 to 10 relate to the alleged misuse of and misappropriation of funds deposited into the Federation's bank account.

6 The uncontested evidence of the plaintiff in relation to the Federation's bank account is, in summary, as follows:

(a) in November 2001, following a resolution by the directors of the Federation, the Federation opened a bank account with the Victorian Teachers Credit Union ("account"), with the plaintiff and Mr Domenic Amato, the treasurer of the Federation, as joint signatories;

(b) about a year later, the plaintiff spoke to Mr Amato and told him that the requirement for both signatories to sign on transactions upon the account made it difficult to operate the account on a day to day basis;

(c) following this discussion, both Mr Amato and Mr Missingham agreed that the rules governing the operation of the account should be altered to enable either of the plaintiff or Mr Amato to make decisions with respect to the account, and the credit union was informed accordingly;

(d) between 2001 and September 2008 the plaintiff had the primary role in operating the account;

(e) in February 2008, the plaintiff agreed with Mr Missingham that Mr Charles Tsui-Po should be added as a signatory to the account. In March and April 2008, the plaintiff and his accountant undertook a reconciliation of the account from its commencement until 31 March 2008; and

(f) on or about 9 July 2008, the plaintiff provided a copy of the reconciliation and the source documents to Mr Amato.

7 It appears from the correspondence that Mr Amato's review of the reconciliation and the source documentation provided to him by the plaintiff gave rise to the investigation and laying of the Charges.

8 On 15 October 2008, the plaintiff was notified that an additional (twelfth) charge in respect of his management of the Federation had been brought against him, being that he had breached rule 42(2) of the Rules, which provided that "all cheques, drafts, bills of exchange, promissory notes and other negotiable instruments must be signed by any 2 members of the committee or employees of the association, being members or employees authorised to do so by the committee".

9 On 2 December 2008, the plaintiff was notified that a final charge had been brought against him ("listening device charge") being that he attended the Annual General Meeting of the Federation with a concealed listening device.

10 On 5 December 2008, the Federation purported to remove the plaintiff from his position as Secretary-General.[1]

11 On 24 December 2008, the Federation informed the plaintiff that the Ethics Committee had determined the listening device charge against him. On 22 February 2009, the Federation heard and determined ten of the Charges, and found against him in respect of nine Charges ("Decision"). It decided, as a consequence, to permanently expel him from the Federation. It also determined to caution and reprimand him in respect of the listening devices charge.

12 On 24 March 2009, the plaintiff lodged an appeal against the Decision. At a special general meeting held on 19 April 2009 ("SGM"), that appeal was heard, and the SGM purported to uphold the Decision.

13 In addition to the actual laying and determination of the Charges referred to above, the following relevant events took place after the of 29 September email:

(a) on 30 September 2008 Mr Missingham sent an email to all state chairmen of the Federation informing them that the plaintiff had been suspended from his position as Secretary-General, and that the plaintiff was to be excluded from any email, mail or telephone communications regarding Federation activities until further notice;

(b) on 5 October 2008 Mr Keith, the President of the Oceania Wu Shu Federation, sent an email to the Secretary-General of the IWUF (and others) stating that the Federation had advised him of the plaintiff's suspension from the position of Secretary-General of the Federation as a result of "accusations of serious misconduct", and that as a consequence, the plaintiff was automatically suspended from any position he held in the Oceania Wu Shu Federation. At that time, the plaintiff was the Oceania Wu Shu Federation's Technical representative to the IWUF;

(c) on 5 October 2008 Mr Missingham sent an email to the Secretary-General of the IWUF stating that the plaintiff had been suspended and charged with "a range of charges relating to financial and administrative misconduct";

(d) on 7 October 2008 an email was circulated among the Federation's membership stating that Mr Missingham wished to meet with all possible members of the Federation on 9 October 2008 to discuss, among other things, the plaintiff's suspension (however, the placement of this issue on the meeting agenda was subsequently revoked);

(e) on 8 October 2008 the plaintiff sent an email to Mr Missingham which, among other things:

(i) stated that the charges set out in the attachment to the 29 September email referred to breach of rules 11(b) to (d) and 11(f) of the Rules but no such rules existed;

(ii) requested a copy of any complaint received by the Federation about his conduct;

(iii) asked what power there was to suspend him as Secretary-General; and

(iv) asked to be informed of the basis upon which he was to be prevented from contacting any witness.

(f) on 8 October 2008 Mr Missingham replied to the plaintiff's email suggesting that the plaintiff read the Rules as they answered most of what he had raised;

(g) on 9 October 2008 the plaintiff received an email from Mr David Crook, the Chairman of the Federation's Ethics Committee, which stated that the 14 day period provided by the Rules for the plaintiff to respond to the Charges was "finite";

(h) also on 9 October 2008 the plaintiff was provided with a copy of an email sent by the Chairman of the Federation's Competition and Events Committee to all members of that committee stating that Mr Missingham had directed that no communication be directed to the plaintiff; and

(i) on 14 October 2008, the plaintiff instructed his solicitor, Mr John Price of Garland Hawthorn Brahe ("GHB") to send an email to Messrs Missingham and Crook which:

(i) gave notice that the plaintiff required more than 14 days to prepare his submissions with respect to the Charges;

(ii) sought confirmation that the reference to rules 11(b) to (d) and 11(f) was in fact intended to refer to rules 11(1)(b) to (d) and (f);

(iii) sought an explanation as to the basis upon which the plaintiff was suspended as Secretary-General, given that there was no such power in the Rules, and there was no "rule 10, appendix 5" as referred to by Mr Missingham in correspondence; and

(iv) sought further information in respect of the charges, in particular, copies of Account Operational Requirements, emails and meeting minutes referred to in the Charges, full and precise details of amounts said to have been misappropriated by the plaintiff, and full details of inappropriate conduct said to have been engaged in by the plaintiff.

14 Following GHB's letter to Messrs Missingham and Crook on 14 October, Mr Crook extended the time for the plaintiff to respond to the first ten Charges (said by Mr Crook to have stemmed, "in the main", from documents provided by the plaintiff to Mr Amato) to 19 October 2008, and informed the plaintiff that the eleventh charge (relating to alleged intimidatory and coercive conduct) would be determined on a date to be determined after the plaintiff's return from a pending overseas trip, and that the twelfth charge would also be determined upon his return.

15 While it is not necessary to reproduce all subsequent correspondence between the plaintiff and GHB on the plaintiff's behalf on the one hand, and Mr Missingham and Mr Crook on the other hand, the following matters are evidenced by that correspondence:

(a) no further information was provided by the Federation to the plaintiff with respect to the Charges, notwithstanding the requests and protests of the plaintiff and GHB that the failure to provide such information was adversely affecting the plaintiff's ability to make submissions with respect to the Charges;

(b) the Federation objected to GHB's involvement in the disciplinary process, refusing to accept the written "interim" submissions prepared by GHB on behalf of the plaintiff (following which the plaintiff forwarded a copy to the Ethics Committee); and

(c) the plaintiff required that any consideration of the Charges take place at a hearing, at which all relevant people should be in attendance to give evidence and answer questions.

16 On 30 November 2008, the plaintiff attended the AGM of the Federation. At the AGM Mr Missingham stated that the rules of the Federation had been amended. The question of whether the Federation's Rules had been validly amended is discussed in more detail in paragraphs 34 to 36 of these reasons. Also at the AGM, Mr Crook provided the plaintiff with a letter informing him that the Ethics Committee would provide him until 30 January 2009 to respond to the Charges (it is not clear whether this was in respect of all Charges, or simply the first ten Charges). Finally, an incident at the AGM led to a further charge being laid against the plaintiff: the plaintiff was asked to leave the meeting after those in attendance at the AGM discovered that the plaintiff was in possession of a concealed listening device.

17 The plaintiff was informed of the listening device charge on 2 December 2008 by an email from Mr Crook. The listening device charge was expressed in the following terms:

That [the plaintiff] did on the 30th of November 2008 attend the AGM with a concealed listening and recording device without the consent of the meeting or its individual members. This action is in contravention of the LISTENING DEVICES ACT 1992 SECTION 4(1).

...

This action had the capacity to place the [Federation] into disrepute as it involved the [Federation] AGM in the commission of an illegal act.

That when challenged at the meeting Song did, in the presence of all AGM attendees, admit to this act and by the commission of this act has breached Rule 11-c of the Rules of Association.

You have 14 days from today to respond.

18 Despite repeated demands by the plaintiff and GHB in correspondence, the Federation did not provide the plaintiff with any further information or documents regarding the Charges. However, it informed the plaintiff that a meeting of the Ethics Committee would be convened in Canberra on 22 February 2009, and invited the plaintiff to attend to present his response to the first ten Charges.

19 On 21 February 2009 the plaintiff sent an email to Mr Neal Hardy, the deputy chair of the Ethics Committee, which, among other things:

(a) summarised the history of the disciplinary process to date and the correspondence between the parties;

(b) noted that he had responded to the Charges despite the fact the further information requested by him had not been provided;

(c) confirmed that he had provided Mr Amato with all information that was relevant to his operation of the account;

(d) provided a further explanation in respect of the listening devices charge;

(e) stated that the hearing on 22 February 2009 could not proceed because, among other things, the information he had requested had not been provided; and

(f) stated that he would attend a hearing if he received the outstanding information in sufficient time beforehand.

20 The plaintiff did not attend the meeting of the Ethics Committee on 22 February 2009.

21 On 19 March 2009, the plaintiff received a letter from the Secretary of the Federation dated 12 March 2009 ("expulsion letter"). The expulsion letter:

(a) noted that the plaintiff was a member of the Federation and had on numerous occasions signed agreements where he agreed to abide by the Rules;

(b) commented upon the plaintiff's distribution of the 29 September email to other Federation members and the response of the numerous Federation members to publicity of the Charges;

(c) noted that the plaintiff had made a number of allegations and criticisms of the disciplinary process, which were rejected as being erroneous and confused. However, the Federation had determined to form an Administrative Review Sub Committee to review and report upon these allegations;

(d) despite being given additional time to prepare further submissions to the Ethics Committee and to appear at the hearing, the plaintiff did not take advantage of these opportunities;

(e) the Ethics Committee found that Charge 1 was partly proven, Charges 2 to 9 were proven, and Charge 10 was not proven;

(f) the Ethics Committee considered the penalty for the listening devices charge and determined that the plaintiff:

(i) be officially cautioned regarding his behaviour at the AGM and his subsequent responses to the Ethics Committee;

(ii) be further cautioned regarding his attempts to mislead the Ethics Committee as part of his defence to the listening device charge;

(iii) be instructed that he may not bring a listening/recording device into any further Federation meeting or hearing;

(g) in relation to the penalties for the first ten Charges, the letter stated that the Ethics Committee had determined, and the Committee of the Federation had confirmed, the determination of a penalty of permanent expulsion from the Federation. The letter stated:

The Ethics Committee considers that the proven charges make a pattern of mismanagement and abuse of position that is both convincing and destructive to the [Federation] as a whole; that your administrative conduct has been deliberate, and that further that you sought personal advantage from this misconduct. This has been exacerbated by your attitude to the processes, which appears disdainful.

It was further noted that by your words, deeds, actions and inactions you neither recognise nor wish to comply with the Rules of our Association despite the fact that you have repeatedly provided written agreement to do so. As such you cannot remain as a member because by your own submissions and actions you will not comply with our Rules; and

(h) if the plaintiff wished to appeal the decision, the plaintiff had seven days to provide written notification of his intention to do so, with any appeal to be heard and determined by a Special General Meeting of Members of the Federation.

22 On 24 March 2009, the plaintiff notified the Federation that he wished to appeal against the Decision. The Federation convened the Special General Meeting of Members ("SGM") on 19 April 2009. Eight people attended the SGM, including the plaintiff. The plaintiff gave evidence that at the SGM, he was told that any appeal against the disciplinary process would need to be made to the administrative review committee. The plaintiff commenced reading from a document he had prepared and distributed to those in attendance. Mr Missingham interrupted on several occasions, and while the plaintiff was halfway through, told him "he had had enough". He was prevented from making any further oral submissions to the SGM.

23 The plaintiff's evidence regarding what occurred at the SGM was corroborated by two other attendees, Ms Larissa Koroleva and Mr Charles Psui-Ho, in their affidavits sworn on 13 November 2013.

24 The result of the SGM was that the Ethics Committee's findings and decisions were overwhelmingly upheld, with a number of persons present holding substantial numbers of proxy votes.

25 During the course of the SGM, the plaintiff was provided with a partial copy of a document said to have been signed by him and faxed from his home to the Federation in 2001, which was titled "Wu Shu Development Account Operational Requirements". The plaintiff denied sighting or signing this document, and the provenance of this document, along with GHB's attempts to inspect the original version of this document was the subject of lengthy and repetitive correspondence over the following two or three years. However, ultimately not much turns upon this matter in the current proceeding given the relief sought by the plaintiff, and the charge relating to the plaintiff's alleged breach of the terms of this document was never heard and determined by the Federation.

26 Following voluminous correspondence between the parties and their solicitors, and ultimately unsuccessful attempts to resolve the dispute, the plaintiff issued this proceeding on 30 June 2011 seeking the following relief:

(a) a declaration that his purported expulsion from the Federation is invalid;

(b) an order that the Federation reinstate the plaintiff to the position of Secretary-General of the Federation;

(c) an order that the Federation do all things necessary to have the plaintiff reinstated to the positions he held with regional and international umbrella bodies for the sport;

(d) damages; and

(e) costs.

27 The statement of claim also included claims against Mr Missingham and Mr Glen Keith, the President of the Oceania Wu Shu Federation, for libel and slander in relation to written and oral statements made by them both in relation to the matters which were the subject of the disciplinary action, in addition to other unrelated matters.

28 The plaintiff's claims for damages for defamation were the subject of a summary judgment application by Mr Missingham, relying upon the limitation period in s 5(1AAA) of the Limitation of Actions Act 1958 (Vic). The plaintiff was granted an extension of time to bring his claims in defamation, but in his amended statement of claim dated 28 November 2011 he withdrew all of his claims against Mr Missingham and Mr Keith for defamation.

29 In its defence dated 31 January 2012, the Federation admitted various factual matters, but denied that the plaintiff's suspension from his position as Secretary-General of the Federation was invalid, and denied that the plaintiff had been denied natural justice. In relation to the question of whether the plaintiff had been afforded natural justice, the Federation stated as follows:[2]

(a) prior to any charges being laid, [the plaintiff] was provided an opportunity to explain his actions, and present information and documents to the Treasurer of the [Federation];

(b) upon laying the charges which are the subject of the Amended Statement of Claim, it established an Ethics Committee, provided [the plaintiff] with detailed notice of the charges and the procedures, and invited [the plaintiff] to respond to those charges;

(c) following requests from [the plaintiff], it provided repeated extensions of time (amounting to over 4 months) so that [the plaintiff] could respond to the charges, both in writing and at a hearing before the Ethics Committee;

(d) the Ethics Committee had regard to the written submissions of [the plaintiff];

(e) despite the extensions/adjournments, [the plaintiff] did not attend the hearing of the Ethics Committee;

(f) despite [the plaintiff's] failure to attend the hearing, it provided [the plaintiff] with detailed reasons for its decision and then allowed him to appeal out of time;

(g) the decision of the Ethics Committee was upheld by a special general meeting of its members; and

(h) following his failed appeal, [the plaintiff] was repeatedly notified that he could again appeal the decisions to the Administrative Review Committee (within 90 days) if he felt that any procedures or administrative processes had been in error.

30 The plaintiff discontinued the proceeding against Mr Missingham on 8 May 2012, and against Mr Keith on 20 November 2012. A mediation took place on 13 December 2012. However, by this time, the Federation was no longer the recognised governing body of the sport in Australia, its place having been taken by Kung Fu Wu Shu Australia Ltd (which was incorporated in January 2010) from 7 June 2012. However, it appears that the governing body is now Kung Fu Wu Shu NSW Inc.

31 After the mediation, and prior to the next scheduled directions hearing on 19 February 2013, the solicitors for the Federation informed the Court that they no longer held instructions to act on behalf of the Federation, and filed a Notice of Ceasing to Act. From that time, the Federation has taken no active part in this proceeding, and, prior to the intervention of the solicitors for the plaintiff in early 2013, its registration with the New South Wales Office of Fair Trading ("Registrar") was in the process of being cancelled. The Federation was notified of the hearing date of this proceeding through one of its former office bearers (the former treasurer, Mr Dominic Amato),[3] and I was informed that Mr Amato was present in court during the course of the hearing.

32 The plaintiff's complaints in this proceeding are that:

(a) the Federation's conduct during the disciplinary process, including its suspension and subsequent removal of him as Secretary-General, breached various Rules of the Federation, and thereby the contract between the plaintiff and the Federation; and

(b) the Federation's conduct during the disciplinary process denied the plaintiff natural justice.

33 There appears to have been no dispute at any time that any rules governing the Federation constituted an enforceable agreement between the plaintiff and the Federation.[4] As a consequence, this Court has jurisdiction to hear and determine this proceeding, and can make a finding that the Federation has breached the applicable rules and grant declaratory relief without making a finding that the plaintiff has suffered any diminution of property, income, or reputational interest.

34 During the course of correspondence between the parties, the Federation asserted that Mr Missingham was entitled to suspend and remove the plaintiff from his position as Secretary-General by reason of the provisions of rules said to have been adopted by the Federation in 2008 ("Purported Rules"). In its defence dated 31 December 2012, it denied that the Rules were the applicable rules, but appeared to accept that "Appendix 5, Section 10" of the Purported Rules, which contained the provisions authorising Mr Missingham to suspend or remove a member unilaterally prior to a complaint or charge being determined, did not form part of the rules of the Federation, but in fact were an "operating procedure adopted by the [Federation] under its rules and notified at its AGM in 2008".[5]

35 The evidence before the Court demonstrates as follows:

(a) the Rules were lodged with the Registrar on 15 January 2007, and have not been replaced by the Purported Rules or any other rules;

(b) at the AGM of the Federation on 30 November 2008 the meeting conducted a vote to approve the Purported Rules as the new rules of the Federation;

(c) despite (b) above, the minutes of the AGM record that the motion approving the Purported Rules, while carried by the meeting, still fell short of the number of votes required to effect a change; and

(d) there is no other evidence that the Rules were replaced by the Purported Rules, or any other rules.

36 Accordingly, I accept the submissions of counsel for the plaintiff that the applicable rules governing the disciplinary process were the Rules, and that any reliance upon provisions of rules which were inconsistent with the Rules was of no effect.

37 The authorities relied upon by the plaintiff demonstrate that, when exercising disciplinary powers, a club or association must strictly adhere to the relevant rules. As Ashley J said in Hodginson v Yarra Valley Country Club Inc:[6]

... there is clear authority for the proposition that there must be strict compliance with the rules of a club or similar body which pertain to expulsion of members ... where the rules on a natural reading convey a particular meaning, adoption of a procedure which does not strictly comply with the procedure conveyed by that meaning should be considered impermissible.

38 Similarly, in Andricciola v Italian Community of Keilor Association Incorporated,[7] Batt J said:

... the power of expulsion must be exercised in strict conformity with the rules by which it is given, otherwise the purported expulsion will be inoperative.

39 Taking the suspension of the plaintiff from his position of Secretary-General of the Federation first, the email of Mr Crook to the plaintiff dated 9 October 2008, professed to rely upon 'Appendix 5, Section 10' of the Purported Rules to support the plaintiff's suspension. Subsection (iii) of "Appendix 5, Section 10" provides as follows:

[The President] shall be empowered to suspend or remove any appointed official or elected Committee member (State or National) for actions which are in breach of this charter or the Rules of Association of the AKWF or who acts contrary to a direction/instruction by the President or his/her appointed representative or who the President deems to have a conflict of interest with his/her AKWF position and a position that said official may have with another organisation.

40 This power is significantly different from the disciplinary powers granted by the Rules. Rule 11(3) of the Rules provides as follows:

The committee may, by resolution, expel the member from the membership or suspend the member from membership or apply some other penalty in accordance with Rule 14.1.16 if, after considering the complaint and any submissions made in connection with the complaint, it is satisfied that the facts alleged in the complaint have been proved.

41 Rule 11(3) of the Rules provides that the committee is only empowered to suspend or expel a member after having considered a complaint and any such submissions made in connection with a complaint. The committee does not have such a power before those steps are taken. The Rules do not contain any appendix such as that annexed to the Purported Rules, which grants the power to suspend or remove an office bearer to one individual.

42 Further, the suspension was said to take effect immediately upon notification of Charges. Rules 11(5) of the Rules provides as follows:

The expulsion or suspension or other penalty [rendered by the Ethics Committee after its deliberations] does not take effect:

(a) until the expiration of the period within which the member is entitled to appeal against the resolution concerned; or

(b) if within that period the member exercises the right of appeal, unless and until the association confirms the resolution under 12(5) [right of appeal],

whichever is the later.

(a) the 29 September email said that the plaintiff had been suspended "pending the outcome of an Ethics Committee hearing"; and

(b) the email sent by Mr Missingham to all state Federation chairmen on 30 September 2008 stated that the plaintiff had been suspended as Secretary-General effective that day and he was to be excluded from any "email, mail or phone advices about [Federation] activities until further notice."

44 In addition, no reference is made in the 29 September email to any resolution passed by the committee. Counsel for the plaintiff submitted that a failure to pass such a resolution constitutes a breach of rule 11(3) of the Rules.

45 Alternatively, a resolution may have been passed without the plaintiff's knowledge in compliance with 11(3) of the Rules. Even if that was the case, counsel for the plaintiff submitted that the purported suspension was still impermissible pursuant to the Rules because it was effective immediately, not after the hearing or determination of a complaint, or after any appeal from an adverse determination.

46 Accordingly, the suspension of the plaintiff from his position as Secretary-General was beyond the power of Mr Missingham as President of the Federation, and did not comply with the Rules.

47 Counsel for the plaintiff submitted that, for substantially similar reasons as set out above, the purported removal of the plaintiff from his position as Secretary-General of the Federation on 5 December 2008 was invalid, as it relied upon provisions of the Purported Rules, and no equivalent provisions existed in the Rules.

48 In relation to the disciplinary process, counsel for the plaintiff submitted that the Federation breached rule 14.1.17 of the Rules by determining the issues of both guilt and penalty on the same occasion (that is, during the hearing on 22 February 2009).

Where the [Ethics] Committee determines an offence has been committed, before imposing any penalty the Committee shall:

(a) give the offender an opportunity to make submissions on penalty, including any mitigating circumstances which may bear on the extent of the penalty which may be imposed; and

(b) give any member affected by the offence the opportunity to make representations and submissions on the subject of penalty and said member may request that the [Ethics Committee] apply any of the penalties able to be applied under these Rules.

50 Accordingly, counsel submitted that the plaintiff should have been afforded an opportunity, between the findings of guilt and the imposition of penalty, to make submissions aimed at mitigating any penalty. The Federation's conduct in failing to provide the plaintiff with such an opportunity was a breach of rule 14.1.17.

51 Counsel for the plaintiff submitted that the handling of the appeal process by the Federation was fundamentally flawed, in that the SGM convened for the purpose of hearing the plaintiff's appeal did not comply with the requirements of the Rules and the Act. Pursuant to rule 12(5) of the Rules, upon the hearing of appeal by a member of a disciplinary decision:

If at the general meeting the association passes a special resolution in favour of the confirmation of the resolution, the resolution is confirmed.

For purposes of this Act, a resolution of an association is a special resolution if:

(a) it is passed by a majority which comprises not less than three-quarters of such members of the association as, being entitled under the rules of the association so to do, vote in person or, where proxies are allowed, by proxy at a general meeting of which not less than 21 days' written notice specifying the intention to propose the resolution as a special resolution was given in accordance with those rules ...

If the nature of the business proposed to be dealt with at a general meeting requires a special resolution of the association, the secretary must, at least 21 days before the date fixed for the holding of the general meeting, cause notice to be given to each member specifying, in addition to the matter required under clause (1), the intention to propose the resolution as a special resolution.

54 The evidence of the plaintiff, Ms Koroleva and Mr TsuiPo confirms that no notification was provided to members that a special resolution was to be considered at the SGM, and that no reference was made to a special resolution of the SGM. Accordingly, counsel for the plaintiff submitted that any resolution passed at the SGM did not comply with the requirements of the Act, and contravened the Rules, and was thus of no effect.

55 Further, counsel for the plaintiff submitted that, in addition to contravening the Act and the Rules, the Federation's conduct of the appeal denied the plaintiff the right to be heard in respect of the Charges.

At a general meeting of the association convened under clause (3) [being for the purpose of hearing an appeal against a resolution of the committee]:

(a) no business other than the question of the appeal is to be transacted; and

(b) the committee and the member must be given the opportunity to state their respective cases orally or in writing, or both; and

(c) the members present are to vote by secret ballot on the question of whether the resolution should be confirmed or revoked.

At an Enquiry, the Committee will provide a person, against whom a breach of the Rules is alleged, with an opportunity to be heard and to give evidence, ask questions and make submissions.

58 The evidence before the Court established that the plaintiff wished to make oral submissions at the SGM but was prevented from doing so. Further, the affidavits of Larissa Koroleva and Charles Tsui-Po establish that they were not afforded an opportunity to read in full the written version handed out. The vote was called immediately after the plaintiff was cut off by Mr Missingham, who informed those present that the decision "had already been made".

59 Finally, counsel for the plaintiff submitted that the Federation should not be excused from any breaches by it of the Rules by reason of rule 14.1.5. This rule provides as follows:

Any procedure or requirement regulating an Enquiry will be regarded as a guideline only, and any decision of the Committee is not invalid by reason of a procedure or requirement not being fulfilled.

60 Of course, this rule applies only to any enquiry conducted by the Ethics Committee, not any decisions by Mr Missingham to suspend or remove the plaintiff as an office holder of the Federation, or the conduct of any appeal. Further, having regard to the authorities referred to at paragraphs 37 and 38 above, I agree with the submissions of counsel for the plaintiff that the function of a rule of this nature is to cure minor omissions or deviations from the disciplinary procedure established by the Rules, not to excuse a substantive failure to comply with the Rules.

61 In any event, the rule applies to any decision of the Ethics Committee, not an appeal, and could accordingly not immunise an improperly conducted SGM hearing of an appeal pursuant to rule 12 of the Rules.

62 Counsel on behalf of the plaintiff submitted that, while the Rules do not expressly require that the rules of natural justice apply to the disciplinary procedures conducted by the Federation, the authorities provide that, in the absence of any express agreement or statutory provision to the contrary, the rules of natural justice apply to tribunals, including "domestic" such as the Federation, when exercising disciplinary powers or functions.[8] It is settled law that in order to provide a person whose legal rights might be affected by a decision of a tribunal natural justice, a tribunal must:

(a) afford the person affected a right to be heard; and

(b) be free of bias.

63 Counsel for the plaintiff submitted in the current case, it is not necessary for the plaintiff to establish that the failure to accord natural justice caused detriment to the plaintiff, or that if a fair hearing had been provided, it would have been used effectively. The only matter to be determined is whether the disciplinary process was fair.

64 Counsel for the plaintiff submitted that by reason of the matters below, the plaintiff was denied natural justice both because he was not informed of the true nature of the accusations made against him, and he was not provided with an opportunity to properly put his case to the Ethics Committee. The plaintiff repeatedly sought clarification of the Charges in order that he might properly prepare his response to the Ethics Committee. The Federation failed to provide any particulars requested, or any particulars at all.

65 For example, the email sent to the Federation by GHB on 14 October 2008 sought:

(a) details of the amounts of money the plaintiff was alleged to have transferred inappropriately;

(b) details of the unauthorised loans he was alleged to have made;

(c) copies of the 'Account Operational Requirements' he was alleged to have been provided with and to have breached;

(d) copies of meeting minutes he was alleged to have created; and

(e) details of the most ill-defined of all the allegations: inter alia, that he "presided over a culture of fear", that he was "racially discriminative", and that he "coerced, intimated or threatened" members of the Federation.

66 In Kioa v West,[9] Brennan J cited with approval the following observations of Tucker LJ in Russell v Duke of Norfolk:[10]

The critical question in most cases is not whether the principles of natural justice apply. It is: what does the duty to act fairly require in the circumstances of the particular case?

67 In these circumstances, the subject matter being dealt with (being allegations that might carry the consequence of permanent expulsion and perhaps even criminal charges) was of the utmost gravity. Accordingly, comprehensive and clear details should have been provided. In the absence of any such particulars, the plaintiff was denied the opportunity to say everything that could have been said in his favour, and was prejudiced as a result.

68 Counsel for the plaintiff cited, by way of example, the first charge alleged that the plaintiff misappropriated funds. A vague reference was made to "in excess of $14,000", but no particular transactions were complained of, and the plaintiff was forced to provide a response that was guesswork. He should instead have been provided with sufficient details of the transactions to enable him to explain each one. Further, the meaning of the allegations that he "presided over a culture of fear", or "used his position for personal profit at the expense of Federation members" is not clear from any of the evidence.

69 Further, the evidence demonstrates that the Federation refused to allow the plaintiff to make submissions at the SGM in the course of his appeal against the Decision. In addition to constituting a breach of the Rules, this conduct was a clear denial of natural justice.

70 The case against the plaintiff was put to a vote; the case in support was quite simply not heard. As a result, counsel submitted that the decision purportedly supported by that vote should be declared void by the Court.

71 On 24 December 2009, the Federation notified the plaintiff that it had determined the listening device charge against him. However, the plaintiff had not been notified of, nor was invited to attend, any hearing in respect of that charge.

72 In my view, the plaintiff has established that the Federation, by purporting to suspend and then expel him from his position as Secretary-General of the Federation, did not act in accordance with the Rules, and therefore breached its contractual obligations under the Rules. Further, I agree that in the course of the disciplinary process, the Federation failed to comply with the requirements of natural justice.

73 In my view, the most egregious breach of the rules of natural justice was the failure of the Ethics Committee to provide particulars of the Charges and to identify with some particularity the evidence upon which it intended to rely. While in all disciplinary proceedings it is necessary to provide a reasonable degree of particularity, it should be noted that in the current case the allegations, including the allegations in relation to the eleventh charge, which was never pressed, were allegations of conduct which amounted to dishonesty, fraud, intimidation and corruption of potentially a criminal nature. Indeed, it is noteworthy that in the expulsion letter, reference was made, in the context of applying the penalty of permanent expulsion, to "a pattern of mismanagement and abuse of position." It is not acceptable for the Federation to make a finding of a "pattern" of conduct without ever properly identifying (or at least disclosing to the plaintiff) the constituent elements of that misconduct such that he had a proper opportunity to respond to the Charges.

74 It is not necessary for the plaintiff to establish loss and damage or other detriment in order for the Court to find that the Federation has breached its contractual obligations towards the plaintiff, or that he was entitled to a remedy for the Federation's breach of the requirements of natural justice. However, to the extent that such a loss, damage or detriment is relevant to the Court's discretion to provide declaratory and other relief, on 7 December 2012 the plaintiff filed and served particulars of loss and damage. In his particulars of loss and damage, the plaintiff:

(a) provided an outline of his educational and business experience, including his establishment of the business known as "Tai Chi Australia" ("TCA");

(b) provided an outline of his other activities in the sport, including his media, coaching, and official roles;

(c) stated that as a consequence of the Charges, the adverse determination of the Charges, and the expulsion of the plaintiff by the Federation, the plaintiff's international reputation, standing and business have been adversely affected; and

(d) stated that as a result, he had suffered losses totalling $617,072.90 as a result of:

(i) students withdrawing from TCA;

(ii) potential users of a training program targeted at seniors not being prepared to commit to the program, resulting in loss of potential income from training workshops, licensing fees, DVD sales, and international income; and

(iii) the loss of an opportunity to save rent expenses by the development of a purpose build training hall.

75 The losses alleged to have been suffered by the plaintiff as a result of the plaintiff's conduct have not been the subject of any evidence. However, sufficient particulars have been provided to demonstrate that the plaintiff's losses are not merely illusory, and, in any event, it is not difficult to infer that a person of the plaintiff's experience and standing would suffer reputational damage by reason of his expulsion from the Federation for charges of the nature found proven.

76 While it is apparent from the correspondence between the Federation and the plaintiff, and the Federation and GHB, that the Federation and its office bearers considered that the plaintiff's conduct during the disciplinary process was highhanded and disdainful, there is nothing immediately apparent from the evidence that suggests that the plaintiff should be denied relief by reason of his own conduct. It is correct that the plaintiff adopted an adversarial approach in response to the laying of the Charges and his suspension from an early stage. His conduct, especially his conduct in attending the AGM with a concealed listening device, and his failure to attend the hearing of the Ethics Committee on 22 February 2009 could be considered by a disinterested observer as foolhardy. However, such conduct needs to be viewed in the context of the seriousness of the Charges, the evident blow to his reputation of the laying of the Charges and their publication, and the refusal of the Federation to provide him with particulars of the Charges. Of course, if the allegations which are the basis of the Charges are correct, or even partially correct, this would not reflect well at all on the plaintiff. However, none of the above detracts from the plaintiff's contractual entitlements to be dealt with in accordance with the Rules, and his entitlements at law to basic procedural fairness.

77 One issue remains: whether there is any utility in restoring the plaintiff to his position as a member and office bearer of the Federation given that it is no longer recognised as the governing body for the sport in Australia by either the Australian Sports Commission or the international representative bodies, and appears to be effectively defunct. This may well be a question that can only be determined in hindsight, depending upon what occurs after the plaintiff has been restored to his position as Secretary-General, and whether he is able to resuscitate the Federation as a viable representative body for the sport.

78 Finally, it should be made clear that the findings of the Court regarding the Federation's lack of compliance with the Rules and the requirements of natural justice does not amount to an exoneration of the plaintiff in respect of the allegations referred to in the Charges. Indeed, if the Federation commences to be anything other than a shell, it will need to start the disciplinary process afresh, given that there is no suggestion that the actual laying of the Charges was invalid.

79 Accordingly, it is appropriate to make the declarations sought by the plaintiff. However, given that the Federation is effectively defunct, I did have some concerns about the potential efficacy of the mandatory orders sought by the plaintiff, being:

1. The defendant do all things necessary to reinstate the plaintiff as a member of the defendant.
2. The defendant do all things necessary to inform the International Wu Shu Federation (which is also known as the IWUF) and the Oceania Wu Shu Federation that:

1. the defendant's purported expulsion of the plaintiff from membership of the defendant was invalid and ineffective; 2. the defendant's purported decision to suspend the plaintiff from his position as Secretary-General of the defendant was invalid and ineffective;

1. the defendant's purported decision to remove the plaintiff from his position as Secretary-General of the defendant was invalid and ineffective;

1. the defendant's Purported Determinations were invalid and ineffective; and 2. any other purported determinations of the defendant of the Other Charges were invalid and ineffective.
2. The defendant pay the plaintiff's costs of the proceeding including any reserved costs on a standard basis.

80 In particular, I had some concerns as to whether there is any efficacy in making orders requiring that an organisation which does not meet the minimum requirements regarding membership under the Act make orders of the nature sought. I heard further submissions from counsel in that regard, and was satisfied that it was appropriate to make orders which required the defendant to inform the IWUF and the Oceania Wu Shu Federation of the terms of the orders made in this proceeding.

David Crook (Chairman), Neal Hardy (Deputy Chairman), Dennis Watts, Wilson Lo, Kevin Blundell, Brad Casey, Anthony Shing, Alice Bei Dong

The Committee will commence on the 30 September 2008 and cease on or before the 26 November 2008

The Committee will investigate and take such action as is indicated and possible within the AKWF Rules of Association into the activities of Song Jin Han who did occupy the position of Secretary General of the AKWF.

1. issue penalties on any charge that is considered by the Committee to be proven
2. where and if warranted the Committee will refer specific charges to the appropriate government authorities for further action
3. make such recommendations to the Competitions and Events Committee (CEC) about the continuing role of the Secretary General and how it may change or be replaced

1. That Song Jin Han (SJH) did, in contravention to the two signatory requirement, create an electronic banking facility enabling him to transfer money from the Wu Shu Account without the need for a second signatory and that in excess of $14,000 was removed from the Wu Shu account via this method.
2. That SJH did transfer funds from the Wu Shu account into his private bank account.
3. That SJH did issue unauthorised 'loans' to himself with funds from the Wu Shu development account and that these 'loans' were only repaid when SJH was notified of an examination of the Wu Shu account.
4. That SJH did expend funds, exceeding five hundred dollars, from the Wu Shu development account without authorisation.
5. That SJH did not keep or provide proper invoices/receipts for a number of withdrawals from the Wu Shu account.
6. That SJH did operate the Wu Shu account outside of the Account Operational Requirements provided to him.
7. That SJH did fail to include in his Annual Reports to members cumulative deposits of $57,437 into the Wu Shu Account between 2001 and 2008.
8. That SJH did provide information to AKWF members that there were no monies being allocated for Wu Shu development in spite of the fact that over $57,000 was received and under his control for this purpose.
9. That SJH, in December '07, did request and was provided a laptop computer to assist with his administrative duties stating that he needed this laptop as he did not have one. SJH had purchased, via the Wu Shu account a laptop two months earlier.
10. That SJH did either coerce, influence or collude with others to create minutes authorising expenditure that exceeded the account operational procedures.
11. That the cumulative effect of the actions of SJH have undermined and impacted on the national and international image of the AKWF and OWUF and that SJH's actions have been a deliberate attempt to circumvent the constitutional, operational and administrative functioning of the AKWF and said actions have demonstrably been contrary to the interests of the AKWF and its members and the broader Chinese martial arts community. Said actions may include but may not be limited to the following:
    1. That SJH has presided over a 'culture of fear' within the Chinese Membership of the AKWF and has intimidated AKWF members with methods that include but are not limited to: threats of influencing residency visas, withholding or removing athlete selection to international events.
    2. That SJH, via a series of intermediaries has attempted to undermine the management of the AKWF including but not limited to that SJH, in February 2008, did attempt to seriously undermine the AKWF, at a critical time in its attempts to secure funding and conduct the Australian Championships, via a series of emails that were authored by SJH but sent via another AKWF member who was influenced by SJH for this purpose.
    3. That SJH has coerced, influence or threatened AKWF members to withdraw entries and/or to not lodge entries into State and National AKWF events.
    4. That SJH has coerced, influenced or threatened AKWF members to withdraw and/or not participate as Committee members with the CEC.
    5. That SJH has behaved in a racially intolerant and inciteful manner in that he did denigrate and demean the Caucasian management of the AKWF and did suggest that the AKWF should be governed by only Chinese people.
    6. That SJH did use his position for person profit at the expense of AKWF members.

During the course of the Committee's enquiries and deliberations on the aforementioned matters the Committee should also be aware that we have received verbal complaints regarding the below listed matters. If during the course of this Committee more substantive evidence is forthcoming the Committee may lodge and review additional charges around these below listed matters:

1. That SJH did initiate discussions with others within the AKWF about the creation of an alternative association to the AKWF with the ultimate goal of replacing the AKWF with this association and that he would be President of this new association.
2. That SJH did initiate discussions with members of IWUF about the creation of alternative associations to the WKWF and OWUF with the ultimate goal of replacing the WKWF and OWUF with alternate associations under his control.

1. That SJH did initiate discussions with Kung Fu/Wu Shu organisations in New Zealand about the creation of an alternative association to the Oceania Wu Shu Federation (OWUF) with the ultimate goal of replacing the OWUF with this association and that he would be President of this new association.

1. That SJH did solicit and receive cash payments to influence the selection process of athletes in international events.

1. That SJH did collude with Ramesh Patel to delay the signing of an entry form by Ramesh Patel so as to conceal the fact that Ramesh Patel is a British citizen and so may not have been eligible to compete and/or enter into an Australian representative team.

[1] Curiously, the Rules make no reference to the position "Secretary-General", although rule 16(1)(2)(d) refers to the office bearers of the Federation including the "secretary". There has been no suggestion that the plaintiff was not an office bearer of the association by reason of holding the title "Secretary-General", which may well have been a title granted for historical and/or cultural reasons.

[3] See the affidavit of Mr John Price sworn 13 November 2013.

[4] In any event, see s 11(2) of the Associations Incorporation Act 1984 (NSW), which was in force at all material times.

[5] See paragraph 6 of the Defence to the Amended Statement of Claim.

[6] [1996] VicRp 29; [1996] 1 VR 421, at 429.

[7] [2001] VSC 364, at [54].

[8] Dickason v Edwards [1910] HCA 7; (1910) 10 CLR 243, at 255 (per O'Connor J).

[9] [1985] HCA 81; (1985) 159 CLR 550.