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[2000] SASC 87
Supreme Court of SA
2000-03-31
Olsson J
Original judgment source is linked above.
Whether there was ever any eligible association capable of registration pursuant to the Associations Incorporation Act - whether relevant association duly registered and incorporated - whether the presumption of regularity applicable to the proceedings of corporate bodies. GENERALLY Internal administrative irregularity and mismanagement of the affairs of an incorporated association - alleged lack of experience and knowledge of the formal requirements as to the proper conduct of the undertaking of a corporate entity by the defendants - consideration of Constitution and Rules of the incorporated association at relevant times and the legal validity of certain events to determine lawful membership and lawful composition of committees of management. Whether relevant meetings were lawfully convened in order that purported amendments of the original provisions of the Constitution and Rules of the association could lawfully be effected - determination of whether registration of purported new amended Constitution and Rules of association was lawful. POWERS AND FUNCTIONS OF COURTS Consideration of locus standi of the plaintiffs - whether plaintiffs' claim for declaratory relief denied by the operation of the principle discussed by the High Court in Cameron & Ors v Hogan ; - whether discretion vested in the court pursuant to s 31 of the Supreme Court Act 1935 to make declarations on claims advanced by certain of the plaintiffs as to their asserted status as members of the relevant entity and its committee of management - discussion of whether any of the plaintiffs could demonstrate a special interest entitling them to declaratory relief, inter alia, on the basis discussed in Bateman's Bay Local Aboriginal Land Council & Anor v Aboriginal Community Benefit Fund Pty Ltd & Anor ; Whether a remedy in rectification is available in relation to the and Rules of an incorporated association - whether, on the facts, any circumstance has been proved which could possibly found an entitlement to rectification. Consideration of circumstances entitling persons to make an application under s 61 of the Act - whether, on the evidence, the two personal plaintiffs entitled to relief pursuant to s 61(1) of the Associations Incorporation Act and/or declaratory relief pursuant to s 31 of the Supreme Court Act - consideration of remedies available pursuant to s 61 of the Associations Incorporation Act. REMEDIES WHERE OPPRESSION -- WHAT CONSTITUTES OPPRESSIVE CONDUCT Whether the affairs of the relevant association have been conducted in manner contrary to the interests of its members as a whole and in a manner oppressive both to its members generally - consideration of meaning of the word "oppression". Whether, having regard to various financial transactions as between the defendant Tanasijevic and the relevant association, there is a balance owing by it to him - whether declaratory relief should be granted in respect of such transactions.
Plaintiffs TOMA POPOVIC, RADE JOVICEVIC AND SERBIAN AUSTRALIAN SENIOR CITIZENS CLUB INCORPORATED:
Judgment No. [2000] SASC 87
7.0 Purported alterations to the Constitution and Rules of the SCWA 35
10.0 The SCWA Annual General Meeting held on 14 August 1994 50
11.0 The SCWA Annual General Meeting of 14 November 1994 52
12.0 The "Special General Meeting" of the SCSA held on 15 October 1995 55
13.0 The meeting of the SCSA held on 10 December 1995 55
17.1 The membership provisions in the Constitution and
17.2 Who comprised the Committee of the SCSA as at
30 October 1993 and 14 November 1994 respectively? 75
17.3 The convening of the meetings of 30 October 1993
17.4 The membership of the SCSA and the SCWA 82
18.0 Conclusions as to the claim pursuant to s 61 of the Act 90
"The delegates who will negotiate with the Federal Government department and the Hungarians include: Vlado Tanasijevic, Milinko Rakich, Rade Jovicevic."
"Furthermore it was decided to use copies of rules of other organisations so it could be possible to register as soon as possible. Mrs Helena Jasinski explained everything that was needed for such an organisation. It was decided for Mrs Rada Turner, Mr Ljubo Bukva and Rade Jovicevic to carry out all this and the meeting was closed at 8.30."
(1) whilst Ms Jasinski has a positive recollection of the involvement of Bukva, Tanasijevic and Rada Turner in the overall Norwood Nursing Home project, she could say little more than that Bukva, Tanasijevic and Turner were at conferences where the Rules were "probably" discussed. However, she simply could not recall the precise part played by each, whether those persons specifically provided instructions as to the content of the Rules, or whether she was merely instructed to produce an appropriate set of rules (T1841). Furthermore, it is her memory that, at least on some occasions, other persons were also present. She cannot now recollect who they were. Jovicevic could have been one, but she cannot specifically remember that he was (T1842);
(2) she attended to the drafting of the Constitution and Rules of the SCWA and also the tendering of advice concerning the then proposed joint venture with Caritas;
(3) she certainly had an involvement with at least the solicitor for Caritas, officers of the relevant Federal Department and Mr Walsh of the office of the Australian Government Solicitor; however, she cannot presently remember whether she lodged the documents to effect incorporation, or whether this was left to those instructing her. Jovicevic proffered evidence that he lodged the necessary documentation (T217), while Bukva's evidence is to the effect that it was left to Ms Jasinski (T387). On balance I consider that lodgment was effected by Jovicevic. The relevant documentation to lead to incorporation (reproduced in exhibit P2) was signed by him and appears to be in his handwriting;
(4) she was not certain whether more than one draft of the Constitution and Rules was prepared. She recalls having been given a copy of the SCSA Constitution and Rules, but was aware that they were not considered, by the Federal departmental officers, appropriate for funding purposes (T1844-5). That is confirmed by the witness Dana Vuckovic. The objects specified in them were not limited, exclusively, to aged care related activities. The SCWA therefore had to be brought into existence to provide a vehicle for federal funding. Ms Jasinski procured a copy of the Caritas Constitution and Rules from its solicitor, as these were known to be acceptable to the Federal Department. She cannot now recall whether this was used as a model and, if so, to what extent;
(5) there were some discussions with her instructors concerning the content of one or more drafts. (Bukva's memory was that at least one draft was discussed (T385).) Her usual practice was to read proposed rules to the clients in detail, although she has no present memory as to precisely what she did on the occasions when she discussed any draft or drafts;
(6) Ms Jasinski said, in examination in chief, that she had no independent memory of the instructions which she received, nor of the capacity in which the various instructors came to her (T1835). She obviously had no present memory of attending the SCSA committee meeting on 5 October 1986. She spoke in English with those who instructed her and it was not unknown for them to talk amongst themselves in Serbian (T1854). They seemed more comfortable amongst themselves in doing this, although Rada Turner had a good grasp of English; and
(7) this witness cannot now recollect whether she sent any drafts out to the instructors, or whether they merely came to her office and she then went through the substance of them, sight unseen. Her practice was, normally, to send out a draft in advance of any discussion of it.
(a) The interlocking provisions of Rules 4, 8(c) and 9(c), as they appear in the originally registered version of the Constitution and Rules of the SCWA, would have represented the final instructions which she received from those who instructed her. She would not have released the document for registration until she had been satisfied that this was so;
(b) Her original instructions had been that the SASC and SCWA were to have identical membership and identical committees of management. However, a problem arose in relation to the proposed membership structure, during the course of funding negotiations with the Commonwealth;
(c) For this reason a change was made, so that the final format was as appears in section 2.2 of exhibit P2;
(d) Although Ms Jasinski has no present specific memory on that score, it is likely that she would have sent out a final draft of the proposed Constitution and Rules to those instructing her for consideration, before discussing it with them;
(e) Despite the fact that Ms Jasinski cannot now be absolutely certain, she thinks that the change made was insisted upon by the officers of the Federal Department and accepted by her instructors. It was definitely not due to any error or misunderstanding on her part. The final version was, in fact, acceptable to the Commonwealth; and
(f) In cross examination, Ms Jasinski purported to express a firm, returning memory that her final instructions were as actually set out in the Constitution and Rules, as registered. There was, she said, a change in her original instructions concerning the composition of the membership of the SCWA.
"... I do remember there was discussion about the membership of one being the same as the membership for the other and there was some difficulty with it which I cannot recall. Whether it was a difficulty that one of them was there of however many there were didn't like it and wanted it different, whether the Commonwealth had some input in relation to there might have been something wrong with it, I have no idea, but what they came to me with initially was not what they agreed to at the end and the document that was produced. So that their instructions from what they came to me with and what they left there with was not the same and I didn't go off on a frolic of my own and alter what their instructions were nor did I misunderstand or make a mistake. There was a reason for it and I can't remember what the reason was but there was a reason for it and it was with negotiation, long discussions that what's in that document now was agreed upon by those that were instructing me and that was what was in the document and that's what they agreed to, what they accepted."
(1) Neither party sought, deliberately, to explore that issue in the course of the evidence. It was not in contention on the pleadings;
(2) In their defence the defendants specifically admitted the due incorporation of the SCWA;
(3) The unchallenged evidence is that the Commissioner for Corporate Affairs duly registered the SCWA as an incorporated association under the Act on 3 November 1986. No steps have ever been taken to set aside or annul that registration. A copy of the Constitution and Rules so registered and bearing the registration certificate of the Commissioner is to be found in exhibit P2.
"I do not think that a name or title, or the existence of a written constitution or rules governing the combination, or the existence of some form of contract between the members, is an essential characteristic, but clearly the existence of one or more of these would go a long way towards satisfying the need for some degree of organisation and continuity and for the satisfactory identification of members. Likewise, the existence of office-bearers, a committee and a bank account are relevant to a degree of organisation. The absence of all of these features makes it unlikely, but not impossible, that an association has been formed or is being carried on."
[There is no evidence as to whether there were any other members of the committee asserted to be in office at that time, save that I understood the witness Jovanovic to say that he remained a member of that committee until about 30 November 1993, when he resigned due to ill health.]
"1. President - Vlado Tanasijevic 2. Vice President - Aleksander Ivkovic 3. Secretary - Nenad Pusonjic 4. Deputy Secretary - Ratka Rakich 5. Treasurer - Vlasta Mladenovic 6. Deputy Treasurer - Milinko Rakich 7. Members of the Management Committee - N. Draskovic 8. " - T. Popovic 9. " - M. Reljic 10. P/Control Committee - Ratko Mandic 11. Member - Sveto Stojanovic 12. Member - Racan Vukovic"
"ADDITION AND SUBSTITUTION OF MEMBERS OF THE COMMITTEE: A. President Vladan Tanasijevic B. First Vice-President Andrija Mladenovic C. Second Vice-President Branislav Jankovic (resigned due to personal reasons) D. Administrative Secretary Ratka Rakic E. General secretary (Public Officer) Nenad Pusonjic F. Treasurer Vlasto Mladenovic TEN MEMBERS OF THE COMMITTEE: 1. Milinko Rakic 6. Nikola Jovanovic 2. Nedeljlo Draskovic 7. Mile Gostich 3. Toma Popovic 8. Sveta Stojanovic 4. Milan Reljic 9. Racan Vukovic 5. Ratko Mandic 10. Jova Dragicevic Rada Turner 11. Bata Panic 12. Gorica Panic - Cica 13. Wendy Pusonjic"
"... it was agreed that so reorganised Welfare Association will automatically become a part of the Umbrella Serbian Community and therefore would facilitate the future work of the Community because the Welfare Association would operate as a separate section."
"President: V. Tanasijevic First Vice-President: A. Mladenovic Second Vice-President: B. Panic General Secretary: N. Pusonjic Administrative Secretary: R. Rakic Treasurer: Cica Panic Auditor's Committee: Ratko Mandic, Racan Vukovic, M. Stepanovic Ten members of the Committee: 1. N. Draskovic 6. T. Panic 2. T. Popovic 7. R. Turner 3. M. Reljic 8. B. Jovanovic 4. R. Vukovic 9. L. Arezina 5. J. Dragicevic 10. B. Reljic"
"Termination of Offices of old and election of new Board Old Board terminated to exist and members of new Board were elected. Mr Steva Nikolic suggested that the old Board remains with only few changes. The new Board consists of the following members: President - Mr Vladan Tanasijevic Vice President - Mr Andrija Mladenovic Vice President (ii) - Mr Milinko Rakic Gen. Secretary - Mr Nenad Pusonjic Assistant Secretary - Mrs Andja Ristivojevic Treasurer - Mr Rajko Lalic Deputy Treasurer - Mr Tomo Popovic Public Officer - Mr Nedeljko Draskovic Control Committee - Mr Ratko Mandic, Mr Racan Vukovic, Mr Aca Ivkovic 10 members of the Board - Management Committee 1. Jovo Jocic 6. Steva Nikolic 2. Jovo Dragicevic 7. Ljubo Alimpic 3. Tika Stamenkovic 8. Radmila Turner 4. Milan Reljic 9. Ratka Rakic" 5. Miodrag Mijatovic
The significance of the foregoing events within the SCSA will become apparent in due course. I now return to the developing scenario within the SCWA.
Once detailed planning for the Pennington project got under way, the so-called "Board of Directors for the Pennington Village" took over the management of the detailed, day to day development and eventual conduct of the facility. I pause to comment that the body known as the Board of Directors for the Pennington Village was re-titled to the Management Committee shortly prior to the opening of the facility, at a meeting held on 23 January 1993, although the expression "Board of Directors" seems, nevertheless, to have persisted, in some documents, for a long time thereafter. For the sake of clarity I will now refer to this body as the Management Committee.
This de facto group, which included the "office holders" referred to in the document of 24 October 1991, together with three others, (Toma Popovic, Nikola Jovanovic and Rada Turner) seems, thereafter, to have operated as a somewhat autonomous entity within the SCWA - given that some changes of membership occurred over time.
The minutes of the Management Committee of the Pennington Village reveal that Mladenovic became chairman of it as at 23 January 1993. He was then, still, acting as Vice-President of the SCSA and the SCWA.
In late 1993 or early 1994, Rada Turner was told by Tanasijevic that she was no longer required.
Popovic testified that Tanasijevic also invited him to join the Management Committee of the Pennington Village. He gave evidence that he was never a member of the committee of the SCWA. He further said that, in about late 1994, he was also told by Tanasijevic that his participation was no longer required. Thereafter, he was not informed when meetings were to be held and thus did not attend them (T997).
The foregoing events speak eloquently of the manner in which Tanasijevic simply assumed control of the situation and acted as if the SCWA was akin to his own, personal fiefdom.
So far as I can determine, the general committee of management of the SCWA, as at March 1993, was said, in the documentation before me, to have included:-
It is not easy to discern whether others were also involved, or how the composition was said to have come about.
The material in exhibit P5 suggests that, once the Management Committee of the Pennington Village was formed, meetings of the general committee of management of the SCWA became somewhat infrequent. Indeed, the minutes of the former and the evidence of witnesses, such as Nenad and Wendy Pusonjic suggest that, at least certain matters related to the SCWA at large and the operations of the Pennington Village in particular, tended to be somewhat intermingled. The Management Committee for the Pennington Village met quite frequently, particularly in the early stages when the facility was being constructed and commissioned.
As at 9 June 1994, the material before me indicates that the Management Committee for the Pennington Village was said to be comprised of Toma Popovic, Ratka Rakic, Radmila Turner, Nenad Pusonjic, Vladan Tanasijevic, Nikola Jovanovic, Wendy Pusonjic and Andrija Mladenovic.
By 20 November 1994, the name Mile Gostich appeared in purported minutes as a member of the committee of management of the SCWA. It is not clear how that came about.
The composition of the purported membership of the SCWA over time is shrouded in considerable mystery.
The evidence indicates that, prior to 1991, there were simply no adequate administrative records maintained in relation to the SCWA. Indeed, it was not until 1993/4 that the administration of the SCWA had been brought under some reasonable degree of administrative control, at least so far as the Pennington Village operation was concerned. I conclude that that scenario was little less applicable to the SCSA. A perusal of the relevant documentation related to both organisations is strongly suggestive of an attempt at a degree of ex post facto reconstruction of them in relatively recent times.
Exhibit P35 purports to be a photocopy of a Members Register Book for the SCWA from 1987 to 1994. Andja Ristivojevic testified that, at some time in 1994, an inspector from the Corporate Affairs Commission (the witness Boys), returned various books to her office, which had been produced by Gostich to Boys for inspection. She observed that these included a red covered book which appeared to be the original of P35. She noted that this seemed to be brand new in appearance, although it purported to contain records extending back to the inception of the SCWA. Moreover, all entries had been made in the same ink and were in the same handwriting. It appeared to her to have, then, recently been written up.
She says that she returned this book and the other material to Nenad Pusonjic at his request - a proposition which he rejects. She testified that she has not seen the original of P35 since. Pusonjic claims that he is unaware of the whereabouts of the original of P35. I take his evidence to be that he, along with Tanasijevic and Jovanovic, handed the original to Boys with the rest of the documentation of the SCWA. Exhibit P98 provides a list detailing the documentation which was given to the Corporate Affairs Commission with the third item being the Members Register. Moreover, he says that once Boys had finished with them they then passed the documentation, including the original of P35, to Ristivojevic. P98 appears to evidence the receipt by Ristivojevic of everything, save the minutes of the meeting on 11 July 1994. From there on, the whereabouts of the original of P35 is a complete mystery. It has not been discovered or produced at trial.
However, its provenance eventually emerged in the course of the cross examination of Nenad Pusonjic (commencing at T2137). He accepted that, sometime in 1994, he wrote up the whole of the book in one day, in preparation for the SCWA Annual General Meeting in that year, as "a suggestion as to who might be treated as members at a given point in time, because of the contributions they had made" (T2141). This is to be contrasted with the evidence of Tanasijevic, who asserted that he gave the names to Pusonjic as being the entities and persons who were, in his view, the actual members of the SCWA at the time (T2912).
It is instructive to contrast the lists of organisations and persons said, in exhibit P35, to be members of the SCWA for the years 1993 and 1994, with the entities and persons listed in Appendix "A" to exhibit P15. The latter exhibit consists of the minutes of the Annual General Meeting of the SCWA held on 14 August 1994. Obvious inconsistencies appear.
The members' register for 1993 and 1994 lists 10 organisations. This falls to be compared with Appendix "A", to exhibit P15 which refers to a total of 15 organisations, listed as members for those years.
Moreover, there is simply no explanation as to how it is that organisations, as such, were shown to be members of, and permitted through delegates, to participate in and vote at the meetings of the SCWA. Such bodies were not within the membership rule of the Constitution, as originally drafted. Even under the purported amendments said to have been made on 30 October 1993, membership was restricted to "all members of the Serbian community and their spouses". Corporate or organisational membership was never provided for.
Further, the effect of the evidence of Nenad Pusonjic is that those permitted to attend and vote at the 1994 Annual General Meeting were not identified by reference to any properly maintained records of membership. Indeed, I took him to say that, at the time, there was considerable doubt as to who were the members of the SCWA. (See T2136, T2141, T2144.)
In cross examination, apropos exhibit P15, he said (T2144 - 2145):-
"Q. At the front - and keep it at that page - but at the front of the meeting it says as 'present' '40 financial members and delegates of member organisations (Appendix A).' If you turn to appendix A, you will see that there be a number of organisations listed and a number of individuals listed. Where did you obtain the list of those organisations and the list of those individuals as members of the Welfare Association as at 14 August 1994. A. I mean, the minutes taker was Michael, so he put all of those in that order as minute taker and the only one - as I see in Exhibit P35, when I put those individual then, I can give you an explanation for that and the organisations. When I make those lists, there was, those individuals and organisations, I put in those lists and P35 was people or organisations who would give a donation or support to the projects. So that was my understanding, and then I believe that the minute-taker who did this minute (INDICATES) on the particular meeting, looks like he put them all who was present there, more likely than - because, really, it wasn't really clear clarification who was a member. Q. Looking at the front page of the minutes, it reads, the date, the venue and then present. The words after 'present' are, '40 financial members and delegates of member organisations (Appendix A).' It is as clear as crystal that those 40 people and organisations - I haven't counted them, but it says it's 40 - listed in appendix A were, according to these minutes, were financial members and delegates of member organisations of the Welfare Association. My question to you is this. Where did this list of financial members and delegates of member organisations come from. A. I did explain that, didn't it? I said my understanding was that - that is why I made this list - that people, individuals and organisations who give a donation or support to the projects have been put on the list as the members. Q. If you look at Exhibit P35 and you look at the member register for 1994, underneath that, organisations, there are ten listed by you. When you look at appendix A of Exhibit P15, there are more than ten organisations listed, so the lists are not the same. A. It's not the same because, when I prepared this, there was some documentation - from documentation I have, each of those organisations who did give a donation or support to the projects, so that's where the list comes from; from that understanding and then, when I look at this list (INDICATES), it looks to me that they're more like, those on there, who are present there. HIS HONOUR Q. It talks about them, in the minutes, as being 40 financial members. That presupposes that somebody had checked their financial status within the organisation, does it not. A. Personally, I might not be - I might be disagreeing with the wording of that, how it was put in that - in the explanation for that."
This to be contrasted with his earlier cross examination concerning exhibit P35, where he said (T2141):-
"A. I would say I prepared this before - I am sure - the AGM in August 1994. Really, the members, people who were involved with the project, it wasn't really clear, because the suggestion did come to allowing the individuals to be members of the association. Wally did say it is fair that we prepare the list of people who did all those contributions, so we can present them at the AGMs. That's why we did call not just individuals, we called the organisations, and individuals, who contribute to the project on those particular AGMs, to express their view. Really, this document is based on those facts. I would say there wasn't really a member, as like people will come forward and pay membership and put in. This was more like a suggestion for the members. We didn't have anything - the whole process was more like organising rather than - Q. That applies to the whole of the book, including 1994. You just wrote it up for presentation at the annual general meetings. A. That's right, all this book, I done in one day, from the papers. Q. You don't suggest that this was other than a suggestion as to who might be treated as members at a given point in time, because of the contributions they had made. A. Exactly. Q. That's the sole basis of it. A. Correct."
The reference to "Wally" is, of course, a reference to the defendant Tanasijevic.
The evidence of Nenad Pusonjic on this score was most unconvincing. Indeed, it verged on the ludicrous and bore no regard at all for any technical requirements for admission to membership under the SCWA Constitution and Rules in any form propounded by the various parties.
I do not believe his explanation as referred to above. Given his evidence, a more likely inference is that the membership register was hurriedly prepared by Pusonjic, at the instance of Tanasijevic, as a response to the letter received from Boys (the investigator for the State Business and Corporate Affairs Office) in June 1994 (exhibit P34), in order to present Boys with a picture of apparent statutory compliance by the SCWA.
Whatever may be the true situation, it is clear that exhibit P35 is completely useless as any reliable or authentic basis for determining membership of the SCWA at any relevant time.
It does, of course, serve to show that one or more of the defendants did not hesitate to fabricate records to achieve their ends.
In my earlier reasons, I drew attention to the fact that Exhibit P33 purports to be a register of financial members of the SCWA from 28 November 1986 to 13 January 1996. It is a file of what are said to be original applications for membership. It discloses that, in the year 1995-6, there were said to be 28 financial members and two honorary members. No less than 17 of the forms bear dates prior to or about the time of the commissioning of the Pennington Village. One of them is made out with the name of Popovic and is dated "15-5-1991". However, it contains no other details and is unsigned.
Prima facie, these documents raise obvious questions as to their validity or accuracy. Some allegedly date back to 1986 and 1987, according to the dates written in on them. However, a significant number of those dates cannot be genuine. This is because they are set out on letterhead which bears an address and telephone numbers which did not exist until long after the dates which they bear. Moreover, it is patent, even on a cursory glance at the applications, that most of them exhibit the writing of more than one person. It also seems that the dates on many applications have been written by the same person, in the same pen. The dates on a number of the applications have been altered by use of correcting fluid. Their authenticity as documents created on the dates which they bear is, to say the least, very much in question.
Rada Turner testified that, in early 1995, Tanasijevic presented her with one of these forms in blank (save for her name, which he had written in) and asked her to fill it in. She did so, signed it and then gave it back to him. She thought that she had dated it. She pointed out that white correcting fluid has been put on the original date entry, which has been altered to 4/3/1987. She did not write in that date. The date, as it now appears, is similar to the handwriting of Tanasijevic. Late in 1995, Tanasijevic asked her to pay him a $10 membership fee. She did so.
During the trial, a receipt dated "17-12-95" signed by Tanasijevic and purporting to evidence payment of a $10 membership fee by Popovic to the SCWA, was put to the latter. He disclaimed all knowledge of it and unequivocally said that he did not, at any time, make such a payment.
What obviously occurred is best illustrated in relation to the membership applications of the witness Vuckovic and her husband. When she initially gave evidence, she thought that they had become members in June 1994. However, when she consulted her file she produced a copy receipt dated 1 June 1992 for a $500 donation to the SCWA and two copy applications for membership written out in the respective hands of herself and her husband. These both bear the date "1-6-1992", but, again, are on the letterhead which could not possibly have come into existence until early 1993, by reason of the address and telephone numbers on it.
A perusal of the original membership application forms of both Dana Vukovich and Zika Vukovich (forming part of exhibit P33) reveals instantly that the name and date on each of the forms is in identical hardwriting and in different ink colour from that elsewhere on the forms.
Further, this same handwriting and ink colour is identical to that appearing in the dates on the other original membership application forms contained in exhibit P33.
It is apparent to me that Mrs Vuckovic's first memory was correct. I infer that she did not sign the form until 1994 and did so leaving the date blank. A date, consistent with that of the above donation made was obviously inserted by someone else at a later date.
The witness Nenad Pusonjic was cross examined concerning exhibit P33. He said that all of the application forms were brought into existence by Tanasijevic some time after 30 October 1993 (T2161 - 2162). He asserted that they were backdated to dates when the relevant persons had either first made a financial donation or done voluntary work for the SCWA (T2162). Tanasijevic gave evidence to much the same effect, although he thought that this was done at about the time of the first Annual General Meeting on 14 August 1994, to attempt to regularise membership records (T2911 - 2912). Having regard to the evidence of Mrs Vuckovic, that could have been the situation, although I consider it more probable that the documentation was produced and dated for the benefit of Boys.
Pusonjic claimed that these actions were sanctioned by resolutions of the committee of management (T2164). He claims that relevant minutes were raised but those have disappeared (T2168 et seq). Certainly none were produced. His evidence as to the existence of such minutes was most unconvincing and I reject it.
The cross examination of Tanasijevic as to the membership of the SCWA was lengthy and extremely frustrating. He ducked and weaved incessantly. In the end I took him to say these things:-
(1) At the time when the SCWA was bought into existence he had no clear understanding of the membership provisions in its Constitution and Rules (T2760-2761);
(2) he did read those provisions some time in 1987 and then realised that they stipulated that the persons comprising the committee of management of the SCSA were to be both the committee of management of the SCWA and also the members of the latter (T2765, T2773 (incorrectly paginated as T2273));
(3) he had no concept of the key differences in role between the members of the committee of management of the SCWA and the general membership of that association;
(4) the committee of management of the SCSA had been content to leave it to a steering committee comprising Ljubo Bukva, Rada Turner and Rade Jovicevic to formulate the detailed provisions of the Constitution and Rules in concert with Ms Helena Jasinski (T2803, T2804).
Notwithstanding the above, Tanasijevic nevertheless seemed to consider that the membership of the SCWA could be accorded to any natural persons who were prepared to make cash donations, or otherwise assist in promoting its initiatives (T2272). I was totally unable to understand on what basis he arrived at such a conclusion. Somehow, it seemed to be founded on the premise that, in the opinion of Tanasijevic, the scheme in (2) above did not work satisfactorily in practice. There was a clear internal inconsistency in his evidence (cf T2272 and T2275).
At first I thought it possible that this witness did not, indeed, conceptually appreciate either the provisions of the Constitution and Rules of the SCWA, or the differences between general membership of the association and membership of its committee of management. However, as his cross examination proceeded, even after making due allowance for difficulties of language and cultural difference, I firmly came to the view that Tanasijevic fully understood all of those things.
The real truth of the matter was revealed by his statements that the structure postulated by the Constitution and Rules simply did not suit his purposes. In relation to Article 4(a), that the membership of the SCWA was to be made up of the committee of the SCSA, he was constrained to comment "It's a nice setup idea but in practice it doesn't work" (T2758). He repeated those sentiments (T2759). The plain fact of the matter was that he perceived the need to involve a lot more people at both levels to achieve his goals. Accordingly, he deliberately ignored the provisions of the Constitution and Rules on an "end justifies the means" basis.
Wendy Pusonjic said that, as Treasurer, she did not ever have, or maintain, any list of members of the SCWA or their membership fee payment status. She merely receipted and banked such fees as were either paid direct to her or were received by persons such as Tanasijevic or Nenad Pusonjic and passed on to her. She did not take steps to follow up non payment of membership fees (T2315-2316), or to maintain any record of current financial membership status.
Given the foregoing background, exhibit P33 purports to record that persons who were said to be members of the SCWA prior to early 1993 included:-
It is immediately obvious that, insofar as many of these persons were not members of the committee of the SCSA at the relevant times, they could not, lawfully, have been admitted to membership of the SCWA, absent some proper amendment of its initial Constitution and Rules to permit such admission.
Moreover, none of the defence witnesses ever volunteered any satisfactory explanation as to how, it was said, no less than 9 Serbian organisations were shown in exhibit P35 as members of the SCWA by 1992. Nor was any satisfactory explanation available to demonstrate how or why that asserted membership had swelled to 15 by 14 August 1994, as listed in Appendix A to exhibit P15.
It is beyond doubt that none of the organisations in question could ever, validly, have been accorded membership status pursuant to any propounded version of the SCWA Constitution and Rules. Despite this, they were treated as members and their delegates were permitted to participate in and vote at general meetings in substantial numbers.
Tanasijevic contended that, when Rade Jovicevic resigned as General Secretary of the SCSA in 1987, he also ceased to be a member of the SCWA, because he implicitly resigned that membership as well. There is no evidence that he did purport to resign any such membership, although it remains a question of law as to whether resignation of his office within the SCSA automatically brought about such a result.
On the other hand, a number of new organisations affiliated with the SCSA, came into existence in addition to the original eight founding members. For example, these included a second Orthodox Church, a Sisters group associated with it, the Beograd Soccer Club, another Ravna Gora Group, two Senior Citizens Clubs and several other bodies. A question arises as to how and when they became members of the SCSA. The records are by no means clear, although, as has already emerged, membership was plainly acknowledged over time.
7.0 Purported alterations to the Constitution and Rules of the SCWA
I have already dealt with some aspects of the evidence bearing on this topic in Popovic No 4. What I now say should be read together with, and in extension of, those reasons.
The defendants' claim that important amendments were lawfully made to the Constitution and Rules of the SCWA on 30 October 1993 and 14 November 1994 respectively. On 28 November 1994, the defendant Nikola Jovanovic applied to the Corporate Affairs Commission for registration of a complete new set of Rules, which were said, cumulatively, to incorporate amendments adopted by the members on the above two dates.
The circumstances giving rise to that application were asserted by one Tellis, as solicitor for the SCWA, in a letter dated 29 November 1994, written by him to the State Business and Corporate Affairs Office. The text of this read as follows:-
"RE: SERBIAN COMMUNITY WELFARE ASSOCIATION OF SOUTH AUSTRALIA INCORPORATED I refer to your letter to my client dated the 31_st_ May, 1994 in relation to Amendments to the Serbian Community Welfare Association of South Australia Incorporated Constitution. I note that there was a discrepancy in relation to the Form 7 dated 21_st_ January, 1994 on which form it was shown that Mr. N. Jovanovic was the Public Officer. In fact, Mr. N. Jovanovic was acting in the capacity but had not been confirmed as Public Officer of the Association and, accordingly, Mr. R. Jovicevic was still on your records as the Public Officer of the Association. At the Annual General Meeting of the Serbian Community Welfare Association of South Australia Incorporated Mr Nikola (Nick) Jovanovic was formally elected to the office of Public Officer of the Association. He has now signed the appropriate documentation in order for the Amended Rules to be lodged. At a Special Meeting held on the 30_th_ October, 1993 at the Pennington Aged Care Village, 19 Windsor Avenue, Pennington the Serbian Community Welfare Association of South Australia proposed certain amendments to their Constitution and the amendments to the Constitution of the Association was wholly accepted by all members present. The Association's Constitution was duly amended and, unfortunately, the Amended Constitution was not lodged with the State Business and Corporate Affairs Office until the 30th May, 1994 at which time the filing fee plus penalty was paid in the sum of $101.00. As Mr. Nikola (Nick) Jovanovic was not able to sign the appropriate documentation registering the Amended Constitution the documents were then returned by your office to the Serbian Community Welfare Association of South Australia Incorporated. At the Annual General Meeting of the Association on the 14_th_ November, 1994 some further amendments were proposed and these have now been incorporated as amendments into the Constitution. Also, the appropriate forms have been signed by Mr. Nikola (Nick) Jovanovic who has now formally been elected as Public Officer of the Association and who can now sign the appropriate forms which are required to be completed when lodging the amended Constitution. Mr. Vladan Tanasijevic, President, of the Serbian Community Welfare Association of South Australia Incorporated will attend to the lodging of the Amended Constitution. Enclosed are copies of the Minutes of Meeting of the Serbian Community Welfare Association of South Australia Incorporated held on the 30_th_ October, 1993 and the 14th November, 1994. The originals will be annexed to the Form 6, Application for Registration of Alteration to Rules."
The new, revised Constitution and Rules ultimately lodged with the Corporate Affairs Commission purported to bring about quite profound changes to the pre-existing situation.
Article 4 had been replaced with a new provision which stipulated that membership should be open to all members of the Serbian Community and their spouses, such membership being divided into ordinary members and life members. Provision was also made for conferral of honorary membership. As I read the relevant documents, the effect of the asserted amendment was that the various organisations affiliated with the SCSA were not eligible to be members, as such.
The content of Article 8 was said to have been replaced by a new Article 5, which provided that there should be a Management Committee comprising a President, Vice-President, Secretary, Treasurer (ie the four Office Bearers) and three other members, all of whom were to be elected at an Annual General Meeting and hold office for a term of three years. The Office Bearers were required to be financial members of the SCWA for at least six months.
The foregoing amendments were asserted to have been made against the background of the content of the original Constitution and Rules, relevant provisions of which stipulated, in Article 13, as follows:-
"13. RULES (a) Subject to approval by a resolution of the members of the Association, these rules may be altered (including an alteration to name) or be rescinded and replaced by substituted rules. Such an alteration shall be registered with the Commission as required by the Associations Incorporation Act 1985 as amended from time to time. (b) ...."
The requirements and procedures for convening meetings of members of the SCWA, as prescribed in its original Constitution and Rules were set out in Article 15. This was expressed as follows:-
"15. MEETINGS (a) The Committee may call a special general meeting of the Association at any time, and shall call an annual general meeting on the same date and at the same place, at a time immediately following the annual general meeting of the "Serbian Community of South Australia Incorporated." (b) The first annual general meeting shall be held within eighteen months after the incorporation of the Association, and thereafter within five months after the end of its financial year. (c) At least fourteen days notice of any general meeting shall be given to members. The notice shall set out where and when the meeting will be held, and particulars of the nature and order of the business to be transacted at the meeting. In the case of an annual general meeting, the order of the business at the meeting shall be the consideration of the accounts and reports of the Committee and the auditors, the appointment of auditors and Committee members (if required), and any other business requiring consideration by the Association in general meeting. (d) Notice of a meeting at which a special resolution is to be proposed shall be given at least twenty one days prior to the date of the meeting. (e) A notice may be given by the Association to any member by serving the member with the notice personally, or by sending it by post to the address appearing in the register of members. (f) Where a notice is sent by post, service of the notice shall be deemed to be effected if it is properly addressed and posted to the member by ordinary prepaid mail."
A proposal to amend the Constitution and Rules could be placed before either an annual or special general meeting of members. Such meetings had to be convened by a resolution of the Committee (see Article 15(a)). The Rules did not define what constituted "a special resolution" falling within Article 15(d). This phrase was plainly intended to have the meaning attributed to it by the Associations Incorporations Act 1985 ("the Act"). As provided by s24 of that statute, a proposal to effect amendments to the Constitution and Rules would clearly be of that type. The section required 21 days' written notice of any proposed amendment and agreement to it by not less than three quarters of the members attending and voting (see s3 of the Act).
The defendants plead that the original Constitution and Rules of the SCWA were amended, in the respects which I have already identified, at a general meeting of its members held on 30 October 1993, although the precise detail of that amendment is not asserted. A revised set of rules bearing the date 30 October 1993 is contained in exhibit P50.
The evidence as to what occurred at that time is difficult to reconcile.
There is no contemporaneous record of any notice convening either a general meeting of the SCWA or of its committee of management. The precise amendments said to have been agreed to at the meeting in question were not recorded in the purported minutes of the meeting. All that is recorded was that a resolution was passed that the amendments could be made, so long as any changes were presented to and passed by the members. After that, the record asserts that the amendments were passed paragraph by paragraph.
Certain witness evidence is, positively, to the effect that no convening notices of any type of meeting were ever issued, there was no meeting of members (as such) and that no final resolutions were passed. Although I took Nenad Pusonjic to assert that notices were sent out, his evidence on that score was most unconvincing. It is at odds with that given by Jovanovic. I find that no notices were sent. The persons who were at the meeting were simply orally requested to attend.
It is said by the witnesses Jovicevic, Turner and Popovic that, although a meeting was held on 30 October 1993, it was no more than an informal committee meeting of some type. They are (and were) uncertain as to its precise status. Furthermore, as earlier recited, Popovic says that he was only a member of the Management Committee for the Pennington Village. He was asked by Tanasijevic to attend. The defendants now say, inter alia, that it was a meeting of the committee of the SCWA.
A difficult feature of this case is that no continuous (or what I would regard as adequate) permanent record as to all of the business of the SCWA or its committee of management since 1986 has been produced by anyone. However, the defendants did discover, inter alia, loose page documents which purport to be minutes of what transpired on 30 October 1993.
The content of such documents is contained in Exhibits P11 and P12 respectively.
Prima facie, those documents purport to evidence the conduct of simultaneous meetings of both the committee and members of the SCWA. They are expressed in virtually identical terms, save for their respective headings and a minor variation in the verbiage of one paragraph. They suggest that each of the two meetings was held at the Pennington Village at 3.00 pm and concluded at 4.30 pm on 30 October 1993. They record that the persons present at both meetings were Vladan Tanasijevic, Nikola Jovanovic, Toma Popovic, Wendy Pusonjic, Nenad Pusonjic, Andrija Mladenovic and Rada Turner. Mrs Ratka Rakic was recorded as absent at "both" meetings.
The defendants asserted that all these persons, other than Popovic, were the then current members of the committee of the SCWA. Rada Turner is adamant that Wendy Pusonjic was not present at the October meeting. Toma Popovic also does not recall her presence. Pusonjic agrees that his then wife Wendy was not present at the commencement of the meeting. However, he contends that she arrived late. She gave evidence to the same effect. I accept that evidence.
I pause to point out that the minutes of the 1993 Annual General Meeting of the SCWA, held on 14 August 1994, record that Vladan Tanasijevic (who occupied the chair) was recorded as saying "The previous amendment to the SCWA Constitution has been authorised at the AGM at Kilkenny in 1992. The present Committee amended the Constitution thereafter". (Emphasis added) The lastmentioned reference to amendment is clearly a reference to the events of 30 October 1993. The alleged "authorisation" is, seemingly based on the content of the minutes of a general meeting of the SCSA held on 22 November 1992. I will return to this topic in greater detail later.
Apart from the document dated 30 October 1993 and Jovanovic's purported recognition of it, there is no evidence as to the precise form of the proposed new Constitution which was discussed on that date. Exhibit P10 indicates that there had clearly been an attempt by Jovanovic, on 30 May 1994, to file a new Constitution and Rules, said to have been adopted on 30 October 1993, with the State Business and Corporate Affairs Office. As already emerges, this failed because the official record still showed Rade Jovicevic as Public Officer.
Both sets of minutes related to the events of 30 October 1993 contain this sentence:-
"At the end of the reading of the Constitution, Mr Tanasijevic asked if there were any further questions, and when there were none, voting took place, where the new Constitution was wholely accepted by all present."
Of course, it was not the prerogative of the committee to pass any such amendments. They could do no more, under the Constitution and Rules of the SCWA, than refer and recommend them to a general meeting for consideration. Moreover, not all members of either the committee of management, nor the SCWA itself, were present. There is, accordingly, no evidence of unanimous waiver of formal notice. Nor is there any evidence of later formal adoption of what is recorded in the minutes.
The witness Rada Turner testified that the proposed Constitution had not been distributed prior to the meeting and no formal notice of the meeting had been given. Her evidence was that, not only was the proposed revised Constitution tabled for the first time at the meeting of 30 October 1993, but, also, the above extract from the "minutes" does not reflect what actually occurred. She is adamant that the outcome of the meeting was that the revised draft Constitution and Rules was merely approved by the committee to be placed before an Annual General Meeting of the SCWA. Her recollection of such an outcome is consistent with what was recorded in the second paragraph of the minutes. Her testimony in that regard essentially accords with the evidence given by Popovic. On the evidence, I entertain little doubt that what was said by Rada Turner and confirmed by Popovic is substantially accurate.
To some extent their evidence was verified by that of the defence witness Wendy Pusonjic. She understood that the meeting was no more than a committee meeting and agreed that no written notice of it was given. Jovanovic also testified to a similar effect. Wendy Pusonjic saw the proposed new Constitution and Rules at the meeting for the first time. However, she asserted that exhibit P11 accurately recorded what occurred. At the time, she thought that the committee had power to effect the relevant amendment.
Rada Turner made the point that Tanasijevic was a person who did not allow legal technicalities or formalities to stand in his way in achieving that which he desired (T451). Furthermore, Popovic testified that, on one occasion, Tanasijevic said to him "Don't worry about the people. If Hitler, Stalin and Tito listened to the people, they would have achieved nothing". The witness Ristivojevic also spoke of him making such a statement on a number of occasions (T1158).
Tanasijevic passionately denied making any such statements, but the preponderance of evidence suggests that he probably did so. It is clear that he brought to his task the attitude that it was his prerogative to decide what was to be done and it was for the "crew" to carry out orders. I do not make that remark with any derogatory intent. He made the point that he had great difficulty in motivating the Serbian community towards attainment of his vision. His motives may well have been of the best intent, but his approach to implementation was clearly autocratic.
On the evidence, this fairly represented the attitudinal approach of Tanasijevic to the conduct of the affairs of both Associations. His conduct at a Pennington Village Management Committee Meeting held on 9 June 1994, provides a graphic illustration of the manner in which he was prepared to brook no resistance to his wishes. Further, it demonstrates that he sought to establish personal domination of the decision making processes. This was adverted to by various witnesses and recorded in the minutes. It was, to say the least, unfortunate and most undesirable behaviour.
As Mrs Ristivojevic put it, he tried to disregard everybody who did not comply with his requests or decisions; and he tried to offend anybody who was there to have something to say which was contrary to his opinion (T1158).
I accept the evidence of Andja Ristivojevic, to which I will shortly refer in more detail, as to the manner and circumstances in which the gathering on 30 October 1993 came about.
It is significant that the only persons said to have been present at the asserted "meetings" of 30 October 1993 were those who constituted the Management Committee of the Pennington Village.
Indeed, there is much to be said for the proposition that, if there was any properly convened meeting at all, it was, in fact, that Management Committee of the Pennington Village, rather than that of the committee of management of the SCWA itself. That conclusion is strongly reinforced by a perusal of the Committee structure annexed to exhibit D20.
In this regard, it is to be reiterated that, as at 30 October 1993, Popovic was not a member of the committee of the SCWA. He was merely an invited member of the Management Committee of the Pennington Village. At the time the witnesses Jovanovic and Rada Turner were also members of that committee, but not members of the Committee of Management of the SCWA. The presence of those three persons at the meeting said to have been evidenced by exhibit P11 is only explicable on the basis that the minutes dated 30 October 1993 (which were raised as single agenda item minutes) related to something which was no more than either a meeting of the Management Committee of the Pennington Village or some form of informal committee meeting of interested persons.
The foregoing conclusions are lent strong support by the evidence of Andja Ristivojevic. She was a generally impressive witness. I unhesitatingly accept the substance of her testimony, despite some minor inconsistencies revealed in her cross examination. I have no reason to suspect her veracity.
Ms Ristivojevic was appointed Administrator of the Pennington Village as from about 14 October 1992 and thereafter attended all committee meetings held at the Pennington Village, save for that said to have been held on 30 October 1993. She also prepared minutes for all meetings until that function was taken over by Michael Gostich at about the time of the Annual General Meeting held on 14 November 1994. She had declined to continue in the role of Minute Secretary, because of what she considered to be the constant pressure brought to bear on her and criticisms and threats made to her by persons such as Tanasijevic, Pusonjic and Jovanovic. (See T1329-1334 and exhibit P92.)
In her capacity as Administrator she was responsible for the co-ordination of bookings for the use of rooms for any meetings proposed to be held at the Pennington Village.
This witness made the point that the initial administration of the affairs of that body left a great deal to be desired, as was identified by the auditor in the course of preparation of the financial statements for the first Annual General Meeting of the SCWA held on 14 August 1994.
Ms Ristivojevic said that, in practice, little distinction was made between meetings of the committee of the SCWA and those of the Management Committee of the Pennington Village (T1139). However, whilst she maintained the financial records pertaining to the Pennington Village operations, those related to the wider areas of interest of the association were kept by the Treasurer, Wendy Pusonjic (T1139).
Moreover, although Andrija Mladenovic was appointed chair of the Management Committee shortly after she took up her appointment, Tanasijevic continued giving her instructions concerning many matters of detail.
Her evidence as to the convening of the meeting of 30 October 1993 is, to say the least, illuminating.
It was to the effect that, a couple of days prior to that date, Tanasijevic and Nikola Jovanovic came to see her at her office and booked a room for the meeting. They told her that she would not be required to attend and take minutes, because what was proposed was merely an informal meeting to discuss possible amendments to the Constitution of the SCWA. Tanasijevic said that no minutes would be taken at all. She did not see either of the purported minutes comprising exhibits P11 and P12 until shortly prior to the trial of this action (T1144), nor did she see the document purporting to constitute the amended Constitution (exhibit P50) until about the same time.
The compelling inference which arises as to the events of 30 October 1993 is that Tanasijevic caused separate minutes of a purported members' meeting of the SCWA to be raised in relation to what was (and had been convened as) no more than an informal meeting of what was probably the Management Committee of the Pennington Village. That meeting had been called for the purpose of attempting to gain support for a desired revision of the Constitution and Rules, to be put forward for adoption at a duly convened meeting of members.
I entertain no doubt that the existence of two apparently parallel minutes, virtually identically expressed - one being said to be related to a committee meeting and the other to a simultaneous members meeting - was no more than an ex post facto attempt by Tanasijevic to give legal credence to something that did not in fact occur.
I conclude, unhesitatingly, that no separately identifiable and properly convened meeting of members of the SCWA was ever held on 30 October 1993. This appears to have been the view of the witness Kolarovich when he looked into the situation in May/June 1994 - one which was well founded.
I am strengthened in this view by the fact that, when pressed in cross examination, Nenad Pusonjic said that the meeting was, indeed, convened as no more than a special meeting of the committee of the SCWA and that only committee members were invited to attend (T2085). He says that he raised both minutes, the first being exhibit P11, which refers to the conduct of a committee meeting. When asked to explain the raising of the minute P12, he was totally unable to give any coherent account of when this occurred, or why it was separately raised. His evidence that the original minute may have been lost and a fresh minute raised to replace it (albeit in a differing form) does not explain how xerox copies of two signed minutes, in the respective forms of exhibit P11 and P12 are in existence. His testimony as to this (T2149-2152) was simply not credible.
The evidence of Wendy Pusonjic as to the minutes reinforces my conclusion and affords a clue as to how the second version of the minutes may well have come into existence.
She said that she typed up the minutes on her word processor shortly after 30 October 1993, from notes made by Nenad Pusonjic at the meeting. I infer that these were, in fact, the minutes comprising exhibit P11. They were then signed by both Tanasijevic and Nenad Pusonjic.
Wendy Pusonjic testified that she has no present memory as to how, when, or why the second version of the minutes were brought into existence. She accepts that these appear to have been a version of the first minutes simply edited on her word processor (T2297-2298). She further accepted that it was more likely than not that she would have produced the edited version, because her then husband did not have the necessary skills to operate the computer (T2299, T2301).
In the course of her evidence she did volunteer, as a possible explanation, that the second version may have been produced "when we had to supply everything to the Corporate Affairs to audit everything". True it is that she also said that it may have been that, at that time, the original minutes could not be located. However, she was constrained to concede that this did not explain the current presence of two different, signed versions, or the obvious editing which took place. If it were a matter of simply printing out another copy to be signed, there would have been no need for any editing. It would simply have been a matter of calling up the file on the computer and re-printing it.
On balance, I conclude that, at the time of the investigation by Boys in June/July 1994, both the members' register (exhibit P35) and the minutes comprising P12 were deliberately fabricated to give the appearance that the administration of the SCWA was in order; and to justify the then asserted composition of both the membership and committee of management of that entity. I infer that it was a minute in the form of exhibit P12 which was then forwarded by Tellis to the State Business and Corporate Affairs Office with his letter of 29 November 1994. An alternative thesis as to the production of that exhibit is that it was expressly produced to accompany such letter.
In the course of his cross examination, Tanasijevic sought to promote the concept that, what occurred on 30 October 1993 was valid because resolutions passed at SCSA general meetings held on 24 October 1991 and 22 November 1992 respectively somehow operated to confer power on the eight persons who in fact comprised the Management Committee of the Pennington Village to effect such amendments to the Constitution and Rules of the SCWA as they deemed appropriate (T2823, T2826).
I have earlier referred to the relevant minute of the meeting of the SCSA held on 24 October 1991. Its full form was expressed as follows:-
"Regarding Item 6 on the Agenda, which is the Serbian Welfare Association, the President had already stated his proposals in his report, and as there were no objections, it is left to the Committee of the Serbian Community to reorganise and nominate the Committee and individual membership at the next meeting. In conclusion it was agreed that so reorganised Welfare Association will automatically become a part of the Umbrella Serbian Community and therefore would facilitate the future work of the Community because the Welfare Association would operate as a separate section."
That of the meeting held on 22 November 1992 recorded:-
"The president Vladan Tanasijevic further stated that the Serbian Community Welfare Association of SA Inc has its own separate Constitution and submitted his proposal that those people who donate $1000 or $500 should remain life members; he further proposed that some minor Amendments to the Constitution should be made as it is quite common among any Government bodies or other Institutions to introduce changes from time to time. The Committee will make sure that these changes are implemented. This proposal was accepted."
[Tanasijevic stated that this minute was incomplete because it omitted reference to an agreement that any persons who had made donations or provided support to the work of the SCWA could be accepted as ordinary members.]
But a moment's consideration is sufficient to indicate that Tanasijevic had no real grasp of the concepts of separate corporate identity, or the process by which rule changes had to be effected to achieve validity.
Further, he seemed totally unable to proffer any coherent, comprehensible or credible explanation as to how or why P11 and P12 were produced.
Finally, I record that I expressly reject the evidence of Jovanovic to the effect that the eight persons referred to in exhibits P11 and P12 had been duly elected to the SCWA Committee prior to 30 October 1993. Not only is there no evidence to that effect, but also his inference that minutes of relevant general meetings had been purloined by or on behalf of the plaintiffs was non-credible. It came late in the trial and reeked of recent invention to extricate him from a situation which had become otherwise inexplicable during cross examination. It is also inconsistent with the content of the various minutes put to him by Mr Sallis.
I find that no amendments of the Constitution and Rules of the SCWA were validly made on 30 October 1993.
The next relevant event seems to have been a somewhat stormy committee meeting held on 9 June 1994.
Once again, it is by no means clear whether this was a meeting of the Management Committee of the Pennington Village, or the committee of the SCWA. Bearing in mind the persons in attendance and the evidence of Popovic and Kolarovich, the former possibility is the more probable.
As the witness Kovaleff, the auditor, pointed out, one of the essential problems which existed at the time was that no clear distinction was made between either the meetings or the minutes of the two entities. The result was a very poor recipe for proper administrative activity and decision making.
At one stage, Ratka Rakich protested at the conduct of Tanasijevic in making decisions on his own. Popovic is also recorded as saying that Tanasijevic did not have the right to be the sole decision maker. The minutes record that the former said that she was sick and tired of coming to Management Committee meetings and having decisions made for her. She resigned on the spot and walked out of the meeting.
After a rather heated debate, an invited solicitor, Kolarovich, explained the need for proper decision making processes. It was resolved that Mr Kolarovich consider and update the Constitution. A draft of the update was to be presented at the following Committee meeting. That did not, in fact, transpire because, due to the atmosphere of conflict which generated, Kolarovich later declined to act further in the matter.
One topic discussed at the meeting was a proposal by Tanasijevic to sell some vacant land adjacent to the Pennington Village development, for debt reduction purposes. The minutes indicate that he was quite abusive when opposition was expressed. He said that he had, in any event, already put the land on the market. This was what prompted the walk out by Ratka Rakic. Advice was given by Kolarovich that approval for the sale could only be given by a general meeting of members of the SCWA.
The flavour of the meeting and the inappropriate behaviour of Tanasijevic at it readily emerges from the following extracts from the relevant minutes:-
"7 The Chairman passed the motion to vote for or against selling the land. The other members of the Management Committee wanted to discuss whether we are allowed or not to sell that land. Discussion Mr Nenad Pusonjic explained that he had understood from his and Vince Dimasi's meetings while the Hostel was being built that we were allowed to sell the extra land. Mr Pavle Kolarovich pointed out that we had to have that permission in writing. Mr Vladan Tanasijevic and Mr Nenad Pusonjic tried to explain that the land was already purchased by the SCWA and therefore we do not need to contact DHHS. Mrs Radmila Turner pointed out that is worth checking with DHHS. The Management Committee decided Mr Nenad Pusonjic should go to the DHHS to talk to Mr Vince Dimasi. Later we will write them a letter regarding selling the land. 7.1 Mr Vladan Tanasijevic said that he wanted to sell the land no matter what DHHS or anybody thought. He said that he already put the land on the market for sale. Mrs Ratka Rakich was angry and asked how he can make a decision on his own? Do the other people on the Management Committee have any input in decision making? Mr Toma Popovich said that the Hostel doesn't belong to Mr Vladan Tanasijevic and that all members of the Management Committee should be included and consulted when decisions were made, whatever Mr Vladan Tanasijevic has donated or loaned, he had done it voluntarily and it didn't give him a right to be the only decision maker. Mr Vladan Tanasijevic replied that he couldn't work and sit with the people who hadn't donated anything, not even a pot plant to the Hostel. "Everything in the Meeting room belongs to me even the chairs people are sitting on." Mrs Ratka Rakich stood up and packed her things. She said that she is sick and tired of coming to Management Committee meetings and have decisions made for her. In answer to the Chairman's question: "Are you resigning?", she replied: "Yes", and walked out. 7.2 Mr Pavle Kolarovich tried to explain that there was a proper procedure for all decisions to be made as it was specified in the Constitution. Decision about selling the property of SCWA has to be made on the AGM or on special GM with a certain number of the organisation - members. We should abide by the Constitution which has been registered with the Office of Corporate Affairs. Mr Vladan Tanasijevic replied that we don't need a solicitor and accountant and he will engage another solicitor to protect him from Mr Pavle Kolarovich. Mr Pavle Kolarovich said that it appeared to him that Mr Vladan Tanasijevic had something personal against him. He understood that he had been invited by Mr Andrija Mladenovic - He didn't turn up uninvited. He also understood that the Management Committee wanted to follow the correct procedure from now on, and he was there only to help us. He thought that we needed legal help to update our Constitution. The Chairman explained that Mr Vladan Tanasijevic probably wanted to engage a solicitor for his own business. He also suggested that we should not dismiss Mr Pavle Kolarovich. The Management Committee decided that Mr Pavle Kolarovich should look through our registered Constitution and update it. He will present a draft at our next meeting."
Exhibit D8 comprises minutes of what is alleged to have been an extraordinary meeting of the members of the SCWA held at the Pennington Village on 19 June 1994. Only seven persons (including Popovic) plus an officer of the relevant Federal Department, were said to have been in attendance. All of the seven persons were members of the Management Committee of the Pennington Village. Six were said to be members of the Committee of the SCWA.
The minutes assert that the meeting approved the sale of the land, Popovic dissenting.
Popovic agrees that a meeting of the persons attending was held and that exhibit D8 accurately reflects what transpired. He says that there was no formal notice convening the meeting. He was simply invited by Tanasijevic to attend. This situation classically illustrates the cavalier fashion in which Tanasijevic sought to convene meetings, characterise them to suit his ends and generally orchestrate the affairs of the SCWA. There is no suasive evidence that any formal notice of meeting or agenda were ever sent to the members of the SCWA. I find on the balance of probabilities, that none were in fact sent and that the meeting was, at best, a meeting of the committee and not the members of the SCWA.
The evidence of Tanasijevic bearing on this meeting and also on the Annual General Meeting of the SCWA, held only two months later, was quite impossible to understand or follow, despite the best efforts of both Mr Sallis and myself. Tanasijevic constantly kept changing direction (T2846-2851).
As I understood his fundamental assertion, it was to the effect that the eight persons who were said to have constituted the committee of management of the Pennington Village, following the SCSA meeting of 24 October 1991, constituted the full membership of the SCWA. As such, they were entitled to attend and vote at general meetings, both as at 19 June 1994 and 14 August 1994. This situation was said to have arisen by virtue of the combined effect of resolutions of members of the SCSA passed at separate meetings held on 24 October 1991 and 22 November 1992.
Tanasijevic was unable to explain satisfactorily how, if that was so, the minutes of the meeting on 14 August 1994 unequivocally record that it was attended by "40 financial members and delegates of member organisations" and 4 observers, who, according to the evidence and on the face of the minutes, freely participated in and voted at the meeting. At one stage, he suggested that the true members of the SCWA were those persons and entities listed as donors in appendix "a" to the minutes of the Annual General Meeting. However, when he saw the difficulty into which that contention was leading him, he changed direction once again. He then asserted that the eight persons were the only real members; and that, in effect, the other persons present had simply been encouraged to attend and show interest as "supporters". (T2869)
Later again, this witness seemed to shift back to the proposition that, somehow, certain organisations were financial members of the SCWA as at 14 August 1994. (See T2870 et seq). Of course, such a situation is consistent with the content of the purported register of members (exhibit P35). Eventually Tanasijevic was at least constrained to concede that the delegates of all organisations represented at the meeting were permitted to participate in it and vote. (T2877) On a perusal of exhibit P15 there is no doubt that they did.
This was yet another example of the inherent unreliability of this witness. It also served to illustrate the manner in which he sought to orchestrate situations as it pleased him, to meet his own desired ends.
10.0 The SCWA Annual General Meeting held on 14 August 1994
The question of a possible revision of the Constitution and Rules was discussed at the First Annual General Meeting of the SCWA (in respect of the year 1993), which was, in fact, held on 14 August 1994. At that point, no Annual General Meeting at all had ever been convened since the initial incorporation of that body (T2071-2072). Tanasijevic said that he simply reported on the activities of the SCWA at Annual General Meetings of the SCSA (T2778).
Nenad Pusonjic contended that written notices of both this and the second Annual General Meeting were prepared and handed to certain members of the Serbian community (T2190). However, no such notices were ever produced in evidence. This is also not consistent with the evidence of other witnesses. For example, Rade Jovicevic testified that he attended the first AGM after he had been advised by Tanasijevic that it was to be held. He said that he received no formal written notification.
According to the English version of the minutes, the meeting was attended by delegates of 15 organisations and 24 individual persons, said to be members, and two "observers". Rada Turner said that she attended on the invitation of Tanasijevic. How both the organisations and individual persons could then properly have been members, on any view of the possible provisions of the Constitution and Rules, is impossible to envisage. Wendy Pusonjic testified that certain of the persons listed had never been recognised as members of the SCWA (T2316-2319). Jovanovic asserted that, in about 1994, soon after the Pennington Village became operational, the 15 organisations listed in Appendix A of exhibit P15 applied for membership and were admitted. Their delegates thereafter participated in the SCWA meetings. Quite apart from a total lack of any minutes referring to admission to membership, the situation was, as I have elsewhere demonstrated, that organisations have never been eligible for membership under any propounded version of the Constitution of the SCWA.
During the evidence of the witness Gostich, detailed minutes of this meeting made by him in the Serbian language were produced and then translated by the assigned court interpreters. These were more extensive than the English version. Gostich said, in effect, that the English version was an abbreviated, "sanitised" version of what took place, because a copy of it had to be supplied to the relevant Federal Department. He thought it unwise to include any discordant, contentious material in it!
Of particular interest, for present purposes, is a reply by Tanasijevic, recorded in the Serbian version of the minutes, to a query as to why the Hindmarsh Senior Citizens Club had not received formal notification of the meeting.
Tanasijevic responded to the effect that the Club had not been notified because the meeting was that of the SCWA and not the SCSA. He then continued by stating "Only the individual members and organisations who financially assisted in this project [i.e. the creation of the Pennington Village] have been invited".
Herein lies the clue to the manner in which Tanasijevic orchestrated "membership" of the SCWA. It is quite apparent, in relation to this and other meetings of that body, that no proper formal membership application and acceptance processes were ever implemented, regardless of the state of its Constitution and Rules at any given point in time. I say this notwithstanding some of the content of exhibit P33 to which I have separately referred. One searches in vain to locate any reference in minutes of committee meetings to applications for, or formal admission to, membership.
On the whole of the evidence, I unhesitatingly infer that Tanasijevic simply made arbitrary decisions as to who would, from time to time, be recognised as a member, based on monetary or other perceived forms of support given to the Pennington Village project.
As I will later record, other evidence given by Gostich strongly underpins that thesis.
Andja Ristivojevic also attended the meeting of 14 August 1994. Tanasijevic told her it was being held and that she was to attend. At the meeting the chairman, Mladenovic, said that she could become a life member of the SCWA on payment of $100. This was towards the end of the agenda. She paid such a sum to Wendy Pusonjic at the meeting and was given an immediate receipt. It is to be noted that there is no record in any minutes of the SCWA of the taking of a prior decision concerning membership fees for persons aspiring to become life members. It is inconsistent with the content of the minutes of the Annual General Meeting of the SCSA held on 22 November 1992 (exhibit D39), which speak of quite different amounts.
Andja Ristivojevic did not see any members at the meeting with copies of either the Constitution or of the amendments discussed, as recorded in the minutes.
The minutes of that meeting refer to the conduct of "a lively debate" on the subject.
In the course of the debate, reference was made to what was said to have been an amendment of the SCSA Constitution, although it is not clear as to what was in contemplation. There is no evidence that any such amendment had ever occurred. Some oblique reference was also made to the fact that the SCWA Constitution and Rules had already been amended by the committee, as authorised at the [SCSA] AGM in 1992. (See exhibit P15, para 10.)
The minutes reveal that, after a detailed discussion of some internal administrative problems, which were said to have arisen concerning the signing of cheques, the committee was asked to prepare all suggested amendments to the Constitution of the SCWA. It was then resolved that a copy of the amended constitution be forwarded to all members and member organisations for perusal before the next Annual General Meeting. It is difficult to reconcile this with any proposition that a new Constitution embodying extensive amendments had, already, lawfully been made.
So far as I can determine that resolution was never carried into effect.
In the course of his evidence, Rade Jovicevic testified that he spoke concerning the method of altering the Constitution and the need for adequate notice to, and consideration by, the constituent organisations of the SCSA. He raised issues concerning the participation in the meeting (both as to discussion and voting) by persons who he did not consider to be members. He said that Mr Tanasijevic thereupon became aggressive towards him and told him to leave the meeting. Mr Jovicevic was upset at the atmosphere which had been generated. He did in fact leave the meeting, as directed.
11.0 The SCWA Annual General Meeting of 14 November 1994
The material before me indicates that a Second Annual General Meeting of the SCWA (in respect of the year ended 30 June 1994) was held on 14 November 1994. Although a purported notice of meeting (exhibit P16) has been produced by the defendants in the course of discovery, none of the witnesses called by Mr Sallis, who attended the meeting, ever received it. Mrs Ristivojevic testified that Tanasijevic merely told her that the meeting was being held. She attended both as a paid up member and as Administrator. The defence witness Jovanovic does not recall receiving any formal notice of the meeting.
It was said, in the minutes, that the meeting was attended by 8 delegates of organisations, 20 individual financial members and 6 proxies. It was noted in those minutes (exhibit P17) that the membership was then 10 organisations and 28 individuals. Once again this appears to be in discord with any propounded version of the Constitution and Rules of the SCWA.
Jovicevic says that his organisation (the Serbian Folklorik Group Oplenac) did not receive exhibit P16 (T186-7) and Popovic has never seen it.
Exhibit P16 does not appear to contemplate any further revision of the Constitution and Rules beyond the discrete amendments referred to in it, although it certainly does pre-suppose that the amendments discussed on 30 October 1993 had already, lawfully, been made. Indeed, the evidence of Wendy Pusonjic was to the effect that the proposed amendments set out in that exhibit were the only amendments considered and discussed at the meeting (T2332-2333).
The minutes of the meeting (which were in fact prepared by Dr Grubor, following his election as minute secretary at the meeting) record the moving of a motion for adoption of specific, discrete amendments to certain clauses, along the lines of the annexure to exhibit P16. They do not indicate that a complete new revised version of the Constitution and Rules was tabled and adopted - quite the contrary.
Mrs Ristivojevic did not see any document of the nature of either exhibit P50 (the document purporting to constitute the amended Constitition) or MFI P51 (the document titled "AMENDED RULES OF THE SERBIAN COMMUNITY WELFARE ASSOCIATION OF SOUTH AUSTRALIA INCORPORATED") at the meeting.
Exhibit P3, which purports to be a collection of documents relevant to the Constitution and Rules of the SCWA, contains several versions of the Rules said to have been discovered by the defendants. There is one version dated 30 October 1993, which appears to have been drafted by Tellis. This is followed by a further document, also apparently prepared by Tellis, which bears the date 14 November 1994. The latter seems to be a new, consolidated version of the whole Constitution and Rules, said to incorporate both the specific amendments attached to the notice of the Annual General Meeting and also the earlier revision said to have been accepted by the meetings on 30 October 1993.
The version of the Constitution and Rules which was ultimately lodged with the Corporate Affairs Commission, as having been adopted by what was claimed to have been a special resolution passed by members at the Annual General Meeting held on 14 November 1994, appears to be that which is set out in Exhibit P3 and dated 14 November 1994 (see also MFI P51).
I record that, in the course of his evidence, the witness Gostich, who chaired the meeting of 14 November 1994, asserted that the revised Constitution and Rules said to have been adopted at the meeting of 30 October 1993 was distributed to the members; and that he read them in detail in Serbian. He unequivocally asserted that, not only did the meeting adopt the specific amendments set out in the purported notice of meeting exhibit P16, but it also adopted the whole of the revised rules, including those amendments. (See T2438-2440)
Several points must be made concerning this evidence.
First, what is now asserted was never put to any of the plaintiffs or their witnesses. It is, once again, classically, a situation attracting the rule in Browne v Dunn (1893) 6 R 67.
Second, the evidence of Gostich in this regard is in clear conflict with the minutes of the meeting which he, himself, signed. Those minutes render it clear that all that were put to the meeting were the proposed discrete amendments adverted to in exhibit P16 and the rationale for them. It is clearly recorded that only those particular amendments were passed on this occasion Furthermore, the purported notice convening the meeting, was quite specific in its terms. It adverted merely to the actual amendments discussed at the meeting.
Third, there is no suggestion whatsoever, in the minutes, that any wider motion was either put or adopted. Moreover, bearing in mind that it has always been asserted by the defendants that the revised rules were adopted on 30 October 1993, it is impossible to perceive why the issue of adoption of them would have been put to the meeting of 14 November 1994, in any event.
Finally, the suggestion runs counter to the evidence of the other witnesses to whom I have referred.
I unhesitatingly reject the evidence of Gostich on this topic, which, in my view, tells very strongly against the general credibility of the witness. At the kindest, his evidence was an ex post facto rationalisation, on his part, of what he would have wished to have occurred and did not. Unfortunately this witness had clearly lost his sense of objectivity. It seemed to me that, wittingly or unwittingly, he placed a partisan gloss on various aspects of his evidence.
The evidence given by the defendant Jovanovic is contrary to the defence case. Whereas that case is that the Constitution and Rules were lawfully amended by a general meeting of SCWA held on 30 October 1993 and then further amended on 14 November 1994, Jovanovic readily concedes that the only meeting held on the former date was some type of committee meeting. He initially asserted that, notwithstanding that the relevant minutes do not support such a contention, the meeting of 14 November 1994 passed and confirmed the amendments agreed to on 30 October 1993, as well as the additional amendments to Rule 7. However, he did not, ultimately, persist in that stance when pressed.
His original contention runs counter to the strong flow of evidence to the contrary. It is also inconsistent with his response in re-examination as recorded at page 3243 of the transcript. I summarily reject it.
I find that no due notice was given of any proposed amendments of the nature of those adverted to in exhibit P16 and that no resolution to give effect to them was passed by the requisite majority of members of the SCWA entitled to attend and vote. Those amendments were, accordingly, not validly affected.
12.0 The "Special General Meeting" of the SCSA held on 15 October 1995
On 15 October 1995, an informal meeting of a so-called "Initiative Committee", consisting of representatives of many of the organisations affiliated with the SCSA, resolved to call upon Tanasijevic, as President, to convene an Annual General Meeting of that body within four weeks. A letter of requisition, signed by Jovicevic on behalf of the meeting, was written to Tanasijevic accordingly. This was occasioned by the fact that no Annual General Meeting had been convened for about two years. I take the letter to be adverting to the Annual General Meeting which ought to have been held in January 1995, in respect of the 1994 year.
This demand was not complied with. On 17 November 1995, Jovicevic, on behalf of the requisitioning group, purported, by letter in writing to all affiliated organisations, to convene an "Irregular" Annual General Meeting of the SCSA. This was to be held at the St Sava, Kilkenny Church premises on 3 December 1995 at 2.00 pm.
Such a meeting was held and attended by representatives of 14 organisations (see exhibit P41). It was not attended by anyone said to have been a then member of the committee of the SCSA. Inter alia, the meeting purported to remove the existing committee of that body and replace it with a differently constituted group. It is common ground that this meeting was not validly convened. I need say no more about it.
13.0 The meeting of the SCSA held on 10 December 1995
However, by letter dated 20 November 1995, presumably addressed to what were said to be all members of the SCSA, Tanasijevic, as its President, convened a Meeting of the members of that body for 2.00 pm on 10 December 1995 at the premises of the "Beograd" Sports Club. In that letter (exhibit P43) he claimed that there were only 15 paid up members.
Some dispute arose, during the course of the defendants' case, as to whether this was convened as an Annual General Meeting, or a Special General Meeting. As I have recorded, no Annual General Meeting had been held for about two years. It was the fundamental complaint of the "Initiative Committee" that Tanasijevic was in default in not calling such meetings as and when they were due.
I observe that the two official interpreters assisting the parties were not in agreement as to the Serbian language used by Tanasijevic in the convening letter written by him. I note the vehement assertion of the interpreter who made the translation of the relevant documents that the language employed did, in its context and idiomatic use, signify an Annual General Meeting (T1998).
This was disputed by the interpreter assisting the defendants and Gostich. The contention of the latter two persons was that the meeting of 10 December 1995 was convened as a special general meeting and not an annual general meeting, because the word "skupstina" used in exhibit P43 only means "annual general meeting" when coupled with the word "godisnja". The latter is said to be missing in the Serbian versions of both exhibits P43 and P44. Mr Ross-Smith contends that this assertion is reinforced by the fact that what is recorded in the minutes of the meeting expressly contemplates the holding of an Annual General Meeting a few weeks later, in January 1995.
In my view the lastmentioned point is not significant in the resolution of the dispute. Such a meeting was due to be held at that time, in the normal course, in respect of the 1995 year. What was being complained of was the lack of an Annual General Meeting in respect of the 1994 year.
The English version of the minutes was, significantly, not produced and signed until 18 January 1996. Although the meeting went forward in the format of an Annual General Meting and referred to misplaced or stolen minutes from "the previous AGM", the minutes were titled "MINUTES OF A SPECIAL GENERAL MEETING ... ". There were reports from the President and Secretary, and references to the inability to present either a Treasurer's or Auditor's report.
Exhibit P44 purports to be the original, English version minutes of the meeting held on 10 December 1995. However much he now seeks to distance himself from the accuracy of them, it is clear that Gostich plainly settled and signed those minutes as an accurate record of what occurred. According to such minutes "the Committee was dissolved by those present and stood down".
It is to be borne in mind that Article 8 of the Constitution and Rules of the SCSA, inter alia, provided that an Annual General Meeting shall be "composed of two members from each member organisation and other persons as members" and "be conducted by election [sic] chairman". It also stipulates that "The Annual General Meeting dissolves ald [sic] and elects the new Committee".
I construe this as meaning that, on the holding of an Annual General Meeting, there is, in fact, an automatic dissolution of the old committee; and that no formal resolution to that effect is actually required. That is what the relevant Article says in quite clear terms.
There is no doubt in my mind that, despite some attempt on the part of Nenad Pusonjic to suggest that the relevant motion was not properly moved, some specific resolution related to dissolution of the old committee was clearly moved and passed. He, himself, added the attendance of Jovicevic to the list of organisational members (exhibit P45) who were represented by delegates. Jovicevic moved the relevant motion. (See T2034-2036) It was the unequivocal evidence of Jovicevic that the "old" committee actually resigned at the meeting (T197). I accept that evidence, which is consistent with the reference in the minutes to it having "stood down". I think that it is probable that, when the minutes spoke of the dissolution of the old committee, they were referring to a resolution that it should in fact "stand down". There is no doubt in my mind that it did so. It should be noted that the evidence of Jovicevic, as recorded at T197 was never challenged in cross examination. It is also clear from Jovicevic's re-examination that he took the meeting of 10 December 1995 to be a belated Annual General meeting called by Tanasijevic in response to the letter of requisition sent to him, as earlier recited.
Gostich testified that the intention of those at the meeting was that the new committee proposed to be elected on that occasion was only to be a caretaker committee until the AGM to be held a few weeks later. Although the minutes do not say this, the fact is that, under the Constitution and Rules of the SCSA, a new committee would, necessarily, fall to be elected at the following AGM.
A motion was passed at the meeting, purporting to elect a new committee. The minutes appear, possibly, to be incomplete as to who constituted the committee at that stage. The minutes of the 10 December 1995 meeting (exhibit P44) state that a new committee was elected on 3 December 1995 at an "extra-ordinary" meeting of the SCSA. They also record that the new committee consisted of Popovic (President), Jovicevic and Miso Tepavcevic (two Vice-Presidents), Rakich (Secretary), Milorad Mijatovic (Treasurer), and Vasko Vukoje (Public Officer). These minutes were prepared by Jovicevic and verified by Gostich.
By reference to exhibit P41 (minutes of meeting held on 3 December 1995), Popovic says that the committee then comprised:-
Vice Presidents Rade Jovicevic and Misa Tepavcevic
Certainly he purported to hold office a s President thereafter.
In addressing the contentions of the parties as to the nature of the meeting of 10 December 1995 it must be noted that, in his letter of 20 November 1995 convening it, Tanasijevic does not set out any specific agenda or reason for convening it, as would be expected in the case of a special general meeting. He simply refers to the invalid attempt of the Initiative Committee to hold a meeting on 3 December 1995. It is difficult to perceive why the meeting was called at all, if it was not intended to constitute that Annual General Meeting which ought to have been held in the preceding January and was not.
On balance I conclude that the meeting of 10 December 1995 was intended to be and held as a belated Annual General Meeting in respect of the 1994 year. Accordingly, the resolution to elect a new committee was valid.
Even if I am incorrect as to the proper characterisation of the meeting I remain of the opinion that it was valid in any event.
The Minutes indicate that the old committee "stood down" as a response to the resolution passed and there was no dissent at the election of a new committee. This is consistent with Jovicevic's evidence. The defendant members of the old committee present plainly accepted the situation and remained at and participated in the election and completion of the meeting. They cannot now be heard to approbate and reprobate.
Moreover, their term of office under Article 8 had well and truly expired. They were due to cease to hold office in the preceding January and it was not their prerogative to remain in office by the simple expedient of declining to convene an Annual General Meeting.
Mr Ross-Smith contended that, if the meeting was, in fact, an Extraordinary meeting, there was no evidence that it was properly called, because it was not established that it had been requisitioned by "not less than 2/3 of members under Article 8b." The short answer to that argument is that it was not requisitioned under that Article at all, and did not have to be so requisitioned. Article 8b contemplates the convening of an Extraordinary meeting either on receipt of a requisition or "if any special event occur".
There can be no question that, if the meeting was not a validly convened, belated Annual General meeting, it was convened by Tanasijevic (impliedly with the concurrence of the "old" committee) by virtue of the occurrence of a special event. That event was the then impossibility of convening the Annual General Meeting for 1994 in accordance with the Constitution and Rules (January having long passed) and the demand of members that something be done to regularise the situation.
It is difficult to see how, in such a scenario, the situation could have been regularised other than by calling an Extraordinary meeting in the manner actually adopted. A situation had arisen for which the constitution and Rules did not provide and a very real issue had arisen, inter alia, as to the status of the members of the "old" committee.
On this alternative view, I see no basis for impugning the resolutions related to the committee - the more so as the meeting process was initiated and carried into operation by the defendants themselves, or one or some of them.
14.0 Membership of SCSA as at 15 October 1995
At this point, it is pertinent to reflect on the evidence bearing on the membership of the SCSA immediately prior to the meeting held on 10 December 1995.
I have already made some reference to this earlier in these reasons, in relation to lists of member organisations attached to the minutes of the General Meetings held on 24 October 1991 and 22 November 1992 respectively.
There is no formal membership register of the SCSA which extends back to its inception. At best, assistance is gleaned from a consideration of certain of the documentary exhibits, read in light of the oral evidence of particular witnesses (e.g. Popovic). These include the letterhead of the SCSA itself. (See, for example, exhibits P109 and D22.)
It appears to me that the financial records of the SCSA are far from complete in historical detail. In reading them, it is important to note the distinction between recognised membership, on the one hand, and actual collection and/or payment of fees, on the other. It does not follow that membership automatically lapsed, or was cancelled, simply by virtue of non payment or collection of fees at given points in time. Certainly, none of the rules in its Constitution so provide. Jovanovic testified that, during his time on the committee of the SCSA, no steps were ever taken to expel or cancel the membership of any non financial organisation (T3040). He reiterated evidence to a like effect in cross examination.
Exhibits P75 and P76 purport to disclose the following picture:-
Said to have been a member, but no details as to dates. Membership cancelled.
Said to have been a member, but no details as to dates. Membership cancelled.
Membership date not indicated. Fees paid for 1998.
8. Association of Ex Servicemen, Draza Mihailovic
Membership since 1991, now cancelled. Last fees paid for 1997 year.
Membership since 1991, now cancelled. Last recorded fees paid for year 1993.
Membership since 1991, now cancelled. Last recorded fees paid 1993.
Membership since 1991, now cancelled. Last recorded fees paid for 1992.
Membership since 1991. Last fees paid for 1997 year.
Membership since 1996, now terminated. No record of fees paid.
Membership since 1996, now terminated. No record of fees paid.
20. Serbian St Sava Association, Woodville Park
Membership since 1996. Fees paid for 1996. Unclear whether membership terminated.
Membership since 1996. Fees paid up to and including 1997.
Membership since 1996. Fees paid up to and including 1998.
Membership since 1990. Fees paid up to and including 1994.
Membership since 1992. Only fees paid for that year.
I am not satisfied that the relevant records bearing on membership are necessarily fully accurate or complete, although they do at least positively confirm certain payments of fees and some original membership dates. Moreover, I am by no means certain as to what is meant by the expression that membership has been "cancelled", or how any cancellation is said to have been achieved.
It will be remembered that the organisations numbered 8, 9, 10, 11, 12, 18, 24 and 25 in exhibit P75 were the founding members of the SCSA, yet the membership records now extant, in the main, do not extend back beyond about 1991. Moreover, the records do not, generally speaking, disclose exact dates of commencement of membership or, where relevant, alleged termination of it.
All that can be said with confidence is that at least the 18 organisations referred to in lists of attendees at the various Annual General Meetings of the SCSA were consistently recognised as its members (see exhibits D39 and D42 cf exhibit D62); and that recent acceptance of membership fees of the several bodies who have paid them also evidence a similar, ongoing acceptance.
15.0 The AGMs of SCWA held on 21 December 1995, 16 January 1997, 24 January 1996
As appears from exhibit P31, a large group of persons attended the AGM of the SCWA held on 21 December 1995. The status of some of them was a matter of contention.
Almost immediately, a lengthy debate occurred at that meeting as to this and related issues. According to the minutes, the contention ranged over issues such as:-
(1) what took place at the AGM of the SCWA held on 14/11/94;
(2) whether the changes of the Rules of the SCWA asserted to have been effected on 14/11/94 were validly made;
(3) who was entitled to vote at the AGMs of 14/11/94 and 21/12/95;
(4) whether all the affiliated Serbian clubs were notified of the AGM in 1994;
(5) whether non members of the SCWA voted at the AGM of 14/11/94; and
(6) whether "invalidly appointed" [sic] members of the SCWA in 1994 could vote at the then present AGM.
Furthermore, "nothing was resolved about the verification of members". I infer that all persons present freely participated in the discussion and voted at the conclusion of it, regardless of whether they were members, or delegates of members, or not.
A committee of two persons was appointed to enquire into the convening of the meeting of 14 November 1994 and report back as to its validity. According to the witness Kuzenko-Taskovic, no such report was ever made.
Nenad Pusonjic sought to deny the accuracy of the signed minutes of what transpired on 21 December 1995. Suffice it to say that I did not find his testimony on this topic at all convincing. On the whole of the evidence, I consider that the minutes were substantially accurate. Certainly the evidence of the witness Kuzenko-Taskovic, a solicitor, was to that effect. I record that, on 19 January 1996 (viz almost a month later), she made notes of her impressions of what had occurred at the meeting (exhibit D70). Putting to one side a series of notes which are no more than comments or value judgments on her part, I do not perceive these to be at serious odds with the factual matters set out in the formal minutes. Indeed, they verify that Tanasijevic "decided to step down as Chairman and invited nominations".
It is recorded in the minutes that Tanasijevic declined to act as the Chair and, as a consequence, Popovic was elected as the chairman. I reject Pusonjic's suggestion that Popovic simply took over the chair and would not allow Tanasijevic to preside. If this had been so it is strange that Tanasijevic passively accepted such a situation and continued to participate in the meeting in manner recorded in the minutes. That is utterly inconsistent with his personality and character. It is also inconsistent with what is said in exhibit D70.
After an extremely frustrating afternoon of cross examination, during which he seemed incapable of giving a direct answer to a direct question, Gostich also, eventually, accepted that, in narrative terms, the signed minutes of the meeting held on 21 December 1995 (exhibit P31) accurately portrayed what transpired at that meeting - at least as to the key events.
At first, I took Gostich to cavil at the description that Tanasijevic declined to preside and that he (Gostich) declined to act as minute secretary. There was a suggestion that Tanasijevic wanted his nominee to preside and that was not accepted by the meeting. There is some support for that lastmentioned proposition in exhibit D70.
In the main, the meeting was inconclusive as to its outcome. Ultimately, it was adjourned over to 16 January 1996.
More than 40 persons attended at that adjourned meeting. On any view, it seems obvious that some of those persons were not recognised members of the SCWA. This included a solicitor Andrew Clare who, Tanasijevic said, he had retained on behalf of the SCWA.
The adjourned meeting got off to an unhappy start when Tanasijevic announced that, as President, he intended to occupy the chair - notwithstanding that, on 21 December 1995, he had declined to do so. A dispute then arose as to whether Povovic was entitled to continue as chairman at what was an adjourned, and not a fresh, meeting. By vote, the meeting confirmed Popovic as continuing occupant of the chair.
Upon that resolution being passed Tanasijevic and nine other persons left the meeting. Those persons were said to have included the members of the then existing committee of management. The minute secretary, Andja Ristivojevic, remained and recorded what transpired throughout the meeting. Tanasijevic subsequently wrote to her, as an employee of the Pennington Village, accused her of misconduct in so doing, and threatened her with dismissal from her employment if she misbehaved in the future. (See exhibits P94 and P95.)
Following the departure of Tanasijevic and those who left with him, the persons remaining at the meeting purported to pass a series of resolutions:-
(1) dissolving the existing committee and electing a new committee;
(2) rescinding amendments to the rules made on 14 November 1994; and
(3) making new amendments to the Rules relating to membership of the Association and the Constitution of its committee. (In essence this restricted membership of the body to five delegates from each of the two churches. The President was to be elected at the AGM for the forthcoming year, together with five members nominated by each church.) As appears from exhibit D21, the meeting purported to elect 11 persons, who were not the same persons as comprised the committee of management of the SCSA.
These resolutions were all plainly invalid, both because they ran counter to the express provisions of the Constitution and Rules of the SCWA and also for want of proper notice.
It was the lastmentioned train of events which seems to have precipitated the present litigation.
In this regard Popovic said that the purported election of the replacement committee was intended to be a short term, stop-gap measure. However, its composition appears to bear no real relationship to the then composition of the committee of the SCSA.
It is asserted by the defendants that, at the time of leaving the meeting, Tanasijevic announced that, as President, he was adjourning it and that all financial members of the SCWA would "very soon be advised of a date, place and time of the adjourned" meeting.
I do not accept that assertion. The evidence satisfies me that, even if Tanasijevic did purport to adjourn the meeting, it is more probable than not that he was not generally heard to do so. As Wendy Pusonjic said, the meeting was sheer mayhem by that stage (T2354-2356). Gostich agreed with her assertion. The plaintiffs and their witnesses deny hearing any such statement by Tanasijevic and I accept their evidence in that regard. The minutes contain no reference to such an occurrence.
Interestingly, Tanasijevic did not ever depose, in the course of his evidence, that he did purport to adjourn the meeting. Moreover, I took him not to challenge the description of what occurred as recorded on page 1 of the relevant minutes, despite the manner in which the transcript reads at p2956.
It is important to note that the solicitor Andrew Clare attended at the meeting with Tanasijevic and also left it with him (exhibit P4 8/104). Although it was originally announced that Clare was to give evidence, it was later simply stated that he would not be called. No explanation was given for this change in approach. I, unhesitatingly, conclude that, had he been called, he would not have assisted the defendants. If Tanasijevic had purported to adjourn the meeting then, undoubtedly, Clare would have been in a position to verify that situation. He was advising him.
I, therefore, conclude that no such statement was made by Tanasijevic; and that he and his adherents simply took umbrage and left the meeting.
It was asserted by the witness Gostich that, on both 21 December 1995 and 16 January 1996, the meetings were attended by a substantial number of persons who were not members of the SCWA and who, particularly on the latter occasion, actually dominated the meeting - to the virtual exclusion of those who were members.
When requested by me to identify any clear record of the actual membership of the SCWA at these times, Gostich was quite unable to do so. He merely made vague references to the existence of some membership records, the contents of which it ultimately appeared, were unknown to him. Moreover, he kept shifting ground. At one stage he sought to suggest that membership was restricted to those who paid $100 fee (T2446). When it was pointed out that this only related to life membership, he then said that payment of $10 per annum effected membership (T2447). Later again he said that membership was also accorded to those who had made donations (T2450), but, when pressed, sought refuge in making the statement that this had occurred before his time.
It is typical of the recklessness of some portions of his evidence that he was more than content to make dogmatic statements that a meeting was or was not attended by members or non members, when he patently had no knowledge of the extent of membership or any detailed records pertaining to it. He was totally unable to explain, in relation to what was asserted to be the third session of the 1995 Annual General Meeting of the SCWA, how, or by whom, the list was compiled of those persons or entities specifically entitled and expressly invited to attend it. Ultimately, he retreated to the bald assertion that, in the relatively short period of his tenure as Secretary, he had come to know who the members were.
It must be said that, in general, Gostich ultimately left the witness box as a substantially discredited witness. I found his evidence in chief patently unconvincing on the face of it. In important respects, it was impossible to reconcile it with documentary and other suasive oral evidence. Moreover, it rapidly emerged in cross examination that, for reasons enshrined in the transcript at pages 2452-2497, he had a lengthy history of bad relations with the plaintiffs and those on the committee of the Hindmarsh Church. He bore them great resentment.
There is no point in traversing the relevant content of the cross examination in detail. It speaks for itself. His conviction for assaulting Milan Ardalich, his expulsion from the Hindmarsh Church for what was, seemingly, highly improper conduct, his dismissal by the committee of the SCSA (chaired by Popovic) from his employment as a so-called "grant in aid" worker, and his obvious jealousy of Ratka Rakic and perception that she and the plaintiffs had plotted to discredit and get rid of him, readily explain his obvious feelings of bitterness towards the plaintiffs.
He was patently a very partisan witness in favour of Tanasijevic. His demeanour in the witness box left much to be desired, as he sought to justify himself and his conduct. It was readily apparent that important segments of his evidence were coloured by his antipathy towards the plaintiffs. His cross examination concerning allegedly missing minutes and the minutes of the AGM of the SCWA held on 21 December 1995 (commencing from T2617) was frustrating in the extreme. It merely served to illustrate the reluctance of this witness to give direct, accurate answers to questions, rather than either seek to justify himself or make attacks on the plaintiffs or their witnesses.
I am not prepared to accept his evidence, in preference to that of the plaintiffs and their witnesses, where there is a divergence and no suasive corroboration of what he said. In a number of respects, Mr Sallis quite properly invoked the principle of Browne v Dunn. His submissions in that regard were soundly based.
Nenad Pusonjic described how the members of the committee of the SCWA, who had held office prior to 16 January 1996, met and purported to appoint a date, time and venue for what they contended was the adjourned Annual General Meeting.
He said that a list of twenty eight persons, who were alleged to be the then only current financial members of the SCWA, was prepared (as appears in the annexures to Exhibit P23). These persons were then advised that the "resumed" Annual General Meeting would be held at 7.00pm on 24 January 1996 at the offices of solicitors retained by Tanasijevic. They were the only recipients of such advice. (T2959-2960)
According to exhibit P23, which are said to be minutes of the so called Third Session of the adjourned Annual General Meeting, it was attended by 17 financial members and four proxies. Tanasijevic then presided over the meeting which proceeded, inter alia, in effect, to deny the validity of what had transpired at the meeting on 16 January 1996. The minutes ultimately record as follows:-
"The vote of confidence took place by which Association's members expressed their full confidence in the Committee. The Committee has the mandate to lead the Serbian Community Welfare Association of SA Inc. until the next Annual General Meeting. CARRIED_."_
Once again, the evidence does not reveal how the list of 28 members was compiled, or what criteria were applied to determine "membership", bearing in mind that no proper, formal membership record had been maintained. (See the evidence of Wendy Rusonjic T2356-2357). It is by no means clear to me whether any written notice of the adjourned meeting was given, although Tanasijevic inferred that this was done (T2959-2960). None has been produced in evidence.
A fundamental issue to be addressed in relation to the so-called "Third Session" meeting is as to whether, in the relevant circumstances, it was ever lawfully convened. If Tanasijevic and his associates were no longer lawfully members of the Committee of the SCWA, following the meeting of 16 January 1996, then, manifestly, they had no authority to call the meeting for 24 January 1996. I conclude that that was, indeed, the actual situation. Furthermore, the convening of the meeting and its conduct ignored the express provisions of the Constitution and Rules of the SCWA as to its membership and the members of its committee of management.
During the course of the trial, substantial time and evidence was devoted to an examination of certain specific financial transactions involving the funds of the SCWA. The aim was not to attempt to establish dishonesty on the part of Tanasijevic, or anyone else. Rather, it was to demonstrate that he flagrantly disregarded proper processes of administration and simply arrogated to himself virtual sole authority as to what was to be done. It was also designed to establish that, on a proper accounting as between himself and the SCWA, he was indebted to it.
I do not see any point in plumbing all of the various transactions to the depths. Those primarily in issue are evidenced or referred to in the documentation to be found within exhibits P20 and P97. They include the drawing of cheques for large sums of money, the advancing of moneys for the purposes of the Serbian Chamber of Commerce, the funding of the attendance of various persons at what seems to have been a politically based dinner and the like. The precise detail of a number of the transactions is not really important for present purposes. What is important is the fact that there seems to be a complete dearth of recorded resolutions of the committee of management of the SCWA giving either general or specific authority to make the relevant payments, or enter into the relevant transactions. The obvious inference is that Tanasijevic, not infrequently, simply gave instructions for cheques to be drawn and this was done without any prior consideration or discussion at committee level.
It is, of course, true that, on various occasions, well nigh desperate financial situations arose when the SCWA did not have funds available to it to meet substantial, urgent liabilities or obligations which arose. Undoubtedly Tanasijevic and his wife acted with great generosity and the best of motives by making donations, advancing their personal moneys or moneys through a company controlled by them, or raising loans (for which they were personally responsible) to assist the SCWA. Without them doing so, neither the Norwood Nursing Home nor the Pennington Village projects could have been carried through to a successful completion.
However, the gravamen of the situation was that Tanasijevic plainly stood in a fiduciary relationship with the SCWA. It was imperative that, if there were to be substantial financial transactions as between himself or his company and the SCWA then these should have been carefully documented and the subject of definitive committee resolutions. This did not happen. The manner in which Tanasijevic personally orchestrated what was to be done was simply inappropriate and improper. This is particularly so, as was conceded by Ellery, the expert accountant called by the defendants, where there was no contemporaneous primary agreement, or even committee minutes, evidencing the various transactions and the terms of them.
To the extent that he also personally sanctioned other financial transactions, including the reimbursement to himself of a repayment by him to Bukva of what was originally asserted to be a donation of $15000 by the latter to the SCWA, the payment of a telephone account for Nenad Pusonjic and so on, without express, minuted authority of the Committee of Management, then his conduct as chairman of the committee was also quite inappropriate, in terms of proper administration.
What occurred was, of course, entirely consistent with his whole approach to the administrative affairs of the SCWA, which he sought to control, albeit with the best of motives, as if the decision making processes were his own personal prerogative.
So far I have merely spoken, in general terms, about the deficiencies in the financial management of the SCWA.
However, the plaintiffs sought, in their statement of claim, to take the situation somewhat further. They set out to aver and demonstrate that, on a proper accounting as between Tanasijevic and the SCWA, a balance was due by him to it. They claimed declarations to that effect and orders that he pay the balance to the SCWA. An issue also arose between the parties as to whether any (and, if so, what) interest was payable by the SCWA to Tanasijevic in respect of moneys advanced by him to it and in respect of overdraft advances procured by him for the purposes of the SCWA.
It is convenient to deal with this lastmentioned point first.
The witness Ellery said, in the course of his cross examination, that the material examined by him revealed that, at the time when the moneys were lent to or raised on behalf of the SCWA, the precise arrangements were never spelt out. Not only was there no agreement on the part of the SCWA to pay interest, but, in fact, as to certain transactions, it was expressly said that the loans were interest free loans, for specific terms. Even in the lastmentioned cases there was no agreement to pay interest if the advances were not repaid at the conclusion of the stipulated periods. Moreover, in the case of one sum of $28000, Tanasijevic testified that he had never sought interest on the advance and still does not do so.
It appears that, in formulating financial statements, Ellery computed interest in favour of Tanasijevic on the basis that this had, in effect been sanctioned by minutes of a meeting of the committee of the SCWA held on 10 January 1996 (exhibit D7) - which came to light for the first time during Ellery's evidence and had never been discovered - and paragraph 6.4 of the minutes of the purported 3rd Session of the Annual General Meeting of the SCWA held on 24 January 1996.
Two points must be made as to this basis for Ellery's conclusion.
First, the reference in exhibit D71 appears to be no more than the expression of some person's opinion that interest ought to be paid, voiced when a chairman's report presented by Tanasijevic was being discussed. No motion was moved to that effect. The meeting merely resolved to accept the chairman's report, as presented.
Second, whilst the 3rd Session minutes do purport to record a minute resolving that the relevant interest paid by Tanasijevic on his overdraft be reimbursed to him by SCWA on an ex gratia basis, the validity of that resolution is dependent on the validity of the very meeting itself. I have elsewhere referred to that issue.
As I understand the evidence of the expert accountants, the issues in contention, apart from the question of interest, really come down to a quite narrow compass.
It was originally Lilley's conclusion that, on a proper accounting, Tanasijevic was indebted to SCWA in the sum of $22174.
In light of additional information which he obtained, Lilley later reduced that debit to $7363, subject to the fact that he considered that another $13000 referred to in the copy cheque stubs appearing at the foot of exhibit P20 had not been adequately vouched, as items paid by Tanasijevic for the benefit of the SCWA. Ellery says that Lilley now concedes a further $3021 in favour of Tanasijevic.
For his part, Mr Ellery argued that, on the whole of the material available, it appeared that the SCWA in fact still owed Tanasijevic a sum of $20775.92, in addition to any interest which might properly be payable.
As I understand the situation, the difference between the two conclusions largely rests upon a resolution of three issues:-
(1) whether credit should be given to Tanasijevic for the total of $13000 recorded in the cheque stubs reproduced at the foot of exhibit P20;
(2) whether, on the evidence, it is proper to conclude that the $15000 repaid by Tanasijevic to Bukva (and then reimbursed by SCWA to the former) was properly categorised as a repayment of a loan - or was an unauthorised refund to Bukva of what had originally been paid to the SCWA as an unqualified donation; and
(3) whether certain unvouched payments said to have been made by Tanasijevic for the SCWA should be allowed (T3343).
There can be no doubt that the state of the evidence as to all of the transactions in question leaves a great deal to be desired.
Ellery was unable to identify any SCWA record of the three payments totalling $13000. Of that sum two amounts (of $10000 and $2000 respectively) were said to have been loaned to the SCWA by Tanasijevic on 28 November 1986 and 31 December 1986 respectively. The balance of $1000 was said to have been paid by him to Jasinski & Co and reimbursed by SCWA on 14 May 1987. The lastmentioned sum has never been vouched.
In his report Lilley commented that he had no evidence that the details on the three cheque butts were valid, as there were no available SCWA records as at the relevant dates and the returned cheques were not available. He said that "It does, however, appear possible that an amount of $1000 (included in the $13000) was repaid by the Norwood Nursing Home in July 1988". He could not see any basis for allowing the amounts in favour of Tanasijevic.
As I understood Mr Ellery's attitude it was that, whilst he accepted that there was a paucity of verification of the transactions, he saw no reason not to take the Tanasijevic cheque butts at face value. He agreed that, at the end of the day, it was an issue that a court would need to decide on the balance of probabilities.
As to the Bukva transaction, there is no doubt that Bukva originally paid $15000 to SCWA, for which he was given a receipt on 28 November 1986 (exhibit P46). That receipt is merely endorsed "Serbian Welfare asociati on [sic] Nursing Home Trust A/C". It is not clear how the $15000 was processed or used by SCWA.
There is equally no doubt that Tanasijevic personally repaid that sum to Bukva on 18 February 1987; and was, himself, subsequently reimbursed by SCWA.
It is clear that Tanasijevic made the repayment to Bukva without any specific authority of the Committee to do so; and that no authority for his reimbursement was either given or minuted.
Such books and records of SCWA as exist do not record the basis of the original receipt by it of the $15000.
However, as Ellery pointed out in his report, in a letter written on 7 April 1996 by Tanasijevic to the witness Laczina, the former said "... Ljubo [ie Bukva] asked for his $15000 to be reimbursed. Let me remind you that he had given this amount as his contribution. At that point in time he made huge pressure against me to reimburse him so I was compelled to give him my personal cheque for $15000."
In the course of his evidence in this case, I took Tanasijevic to assert that Bukva originally made a donation of $15000, but later demanded his money back (T2790-2793) when it appeared to him that very few other donations were then being made to fund the purchase of the Norwood Nursing Home.
Bukva gave evidence early in the trial. It was his assertion that Tanasijevic gave him to understand that the $15000 was to be an "investment" in the Norwood Nursing Home. He testified (T361) that "My understanding was that we would be enjoying the reward, you know, benefits of that investment [ie in the Norwood Nursing Home]."
He went on to say that, when the documentation to consummate the purchase of the Norwood Nursing Home was being prepared, he was told that "individuals cannot get any benefit from it by putting the money in, so that is not actually as a shareholder, that only community can have part of it".
He said that he became very unhappy at hearing that for the first time and demanded a return of his money. He confirmed that Tanasijevic did pay him the $15000 on 18 February 1987.
It is no simple task to determine where the truth lies on this topic. Bukva was more than vague in his description of what was said when the money was originally paid over. I am left with the distinct impression that the money was initially paid over as a donation rather than a loan, or an "investment" (whatever that expression connotes!) and that Bukva became disenchanted when other members of the community did not also support the project. This caused him to recant and put pressure on Tanasijevic.
It is significant that there was never any suggestion that the money was to be a loan for any specified term, or to bear interest. It must have been apparent that this was not a payment for something of the nature of a shareholding. Bukva made no explanation of what he understood to have constituted an "investment" or what "benefits" he expected to enjoy.
On the balance of probabilities I am driven to the conclusion that, at time of payment, the $15000 was an unqualified donation and that Tanasijevic bowed to pressure to allow Bukva to recant. He did so and made the repayment without any authority of the committee of management of the SCWA and purely by his own decision.
The question of the $13000 presents little less difficulty.
The irresistible inference arising from the evidence is that the "DECLARATION ON NON-INTEREST LOAN", a copy of which is reproduced in exhibit P20, was a self serving document prepared by Tanasijevic and never signed by anyone. It was not sanctioned by any contemporaneous committee minute.
The cheque butts copied onto exhibit P20 certainly appear to be genuine cheque butts in cheque book stubs related to the personal account of Tanasijevic. It has been verified that amounts corresponding to those set out in the butts in question were, in fact, subsequently debited to his account.
Whilst I appreciate Lilley's concern about the lack of supporting evidence, I nevertheless consider that Ellery's approach is not unreasonable. There is no reason to believe that the endorsements on the cheque butts were not genuine, contemporaneous notes of the transactions to which they purport to relate. They are certainly consistent with the steps which were being taken by Tanasijevic, at the time, to keep the project alive. The purported payment to Jasinski & Co is consistent with payment for the work done in relation to the incorporation of the SCWA and the completion of the Norwood Nursing Home project.
By a somewhat fine balance, I see no reason to disallow the items, despite the lack of specific minutes bearing on them.
Much the same must be said of the other miscellaneous items under debate between Lilley and Ellery. True it is that they were not adequately vouched. However, on balance, it is likely that they were paid by Tanasijevic and were debits met on behalf of the SCWA. I would allow them.
In the net result, it is appropriate to accept, as correct, the figure of $20775.92 calculated by Ellery in favour of Tanasijevic.
On the other hand, it seems to me that this must be reduced by the $15000 related to the Bukva reimbursement. Tanasijevic had no personal authority, unilaterally, to refund what had been donated by Bukva. His action was never authorised by the committee of management and was not to the benefit of the SCWA.
It now becomes necessary, in light of the evidence as above discussed, to review certain specific issues arising in these proceedings.
17.1 The membership provisions in the Constitution and Rules of the SCWA
I have earlier referred to the fact that the original Constitution and Rules of the SCWA stipulated that:-
(1) Its membership was "to be made up of the Committee of the "Serbian Community of South Australia Incorporated" (Rule 4(a)) and (2) Its Committee was to be comprised of a President, Vice President, Administrative Secretary, Secretary General (who shall be the Public Officer of the Association) and Treasurer and four Committee members who hold the same office in the Committee of the "Serbian Community of South Australia Incorporated" and all of whom shall be members of the Association (Rule 8).
It will at once be seen that there a degree of tautology between the two rules.
Moreover, as I have pointed out, there is one point of inconsistency between Rule 8 of the Constitution and Rules of the SCWA and Article 5 of the Constitution and Rules of the SCSA. The latter is expressed in these terms:-
"Article 5 - The Committee: The Committee of the Community shall consist of: a - President, b - Vice-President, c - Administrative Secretary, d - Secretary General (Public Liason [sic] Officer) e - Treasurer and f - 3 Members."
It follows that Rule 8 must be read down to accord with Article 5. If the Committee of the SCWA was to consist of the persons who hold the same office as the members of the Committee of the SCSA, then there could only be three members, other than those who occupied the specific nominated positions identified in Rule 8.
In section 8.0 of these reasons I have dealt at length with the purported general meeting of the SCWA on 30 October 1993 and, in section 11.0, the Annual General Meeting held on 14 November 1994.
In summary, I have concluded that no separately identifiable and properly convened meeting of members of the SCWA was held on 30 October 1993 and that no motion was passed at the Annual General Meeting of 14 November 1994 to attempt to effect any amendments of Rules 4 or 8 of the Constitution and Rules of the SCWA. Any relevant amendments of other Rules said to have been passed at the latter meeting seem to have assumed that the Constitution and Rules had, validly, been amended on the earlier occasion. In fact Rules 4 and 8 remained unchanged from their original form.
But to make those points is to beg even more fundamental questions.
In section 7.0 of these reasons I demonstrated that the power to enact amendments of the Constitution and Rules of the SCWA was vested in the members of the SCWA, by special resolution passed at a duly convened general meeting (r 13(a) and r 15). It follows that, even if, contrary to my findings, some resolution for amendment of Rules was moved at a purported meeting on either 30 October 1993 or 14 November 1994, it could only have been validly passed if:-
(a) a special general meeting of members had been convened by the lawful committee of the SCWA; and
(b) the requisite motion was duly moved, seconded and voted upon (by the necessary majority) by those persons who were the lawful members of the SCWA at the time of the meeting.
It is therefore necessary to determine what persons properly constituted both the committee of management of the SCWA and also its membership as at the above two dates. That, in turn, necessitates a review of the implications of the evidence touching on the membership of the Committee of Management of the SCSA.
17.2 Who comprised the Committee of the SCSA as at 30 October 1993 and 14 November 1994 respectively?
As emerges in s 5.0 of these reasons, there were originally 8 affiliated organisations comprising the membership of the SCSA (Article 2). There were also eight members comprising its Committee (Article 5). Having listed the formal composition of the Committee, Article 5 contains a footnote which states:-
"(One member of each affiliated organizasion [sic] shall be on the Committee.)."
The Constitution and Rules are silent as to how the initial committee of the SCSA was to be selected.
Article 7 is somewhat curiously worded. However, it clearly envisages the admission of additional Serbian organisations as members. Indeed, on one construction of Article 7a, which refers to "other Serbians", it may well be that individual persons are also eligible for membership, on compliance with the procedures set out in that Article. Be that as it may, the unequivocal evidence in this case is that no individual persons have ever been admitted to membership, although various Serbian organisations, apart from the original members, have been accepted.
"Article 8 - Annual meeting: a - An annual meeting of the Community is to be known as Annual General Meeting and shall be held in January each year. b - Extraordinary meeting shall be called if any special event occur or at the request of not less than 2/3 of the members. c - The Annual General Meeting disolves [sic] ald [sic] and elects the new Committee. d - The Annual General Meeting shall be conducted by elected chairman. e - The Annual General Meeting is composed of two members from each member organisation and other persons as members. f - The Committee shal [sic] inform all members by letter 14 days before the annual meeting is to be held. g - The amendments to the Constitution can be made only at the annual meeting. h - The minutes from the annual meeting as well as from the monthly meetings shell [sic] be submitted to each member organization."
There is some evidence that Jovanovic was probably also a member of each committee, but it is impossible to say, with confidence, whether there were also other members.
"1. President ... Vlado Tanasijevic 2. Vice President ... Aleksandar Ivkovic 3. Secretary ... Nenad Pusonjic 4. Deputy Secretary ... Ratka Rakich 5. Treasurer ... Vlasta Mladenovic 6. Deputy Treasurer ... Milinko Rakich 7. Members of the Management Committee ... N. Draskovic 8. T. Popovic 9. M. Reljic 10. P/Control Committee Ratko Mandic 11. Member " Sveto Stojanovic 12. Member " Racan Vukovic"
17.3 The convening of the meetings of 30 October 1993 and 14 November 1994
. proper notice of any resolution to effect the amendment was given; and
. if so, whether any relevant resolutions were duly passed by persons entitled to attend and vote.
"SERBIAN COMMUNITY WELFARE ASSOCIATION INC.
NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the Annual General Meeting of the Serbian Community Welfare Association Inc. will be held at S.S. Club, BEOGRAD on 14_th_ October, 1994. at 7.00 am/pm NOVEMBER BUSINESS OF THE MEETING: 1. To receive a report from the management committee. 2. To receive the financial statements for the Association for the year ended 30_th_ June, 1994. (these will be available at the meeting.) 3. To appoint an Auditor. Mr Anatoly Kovaleff of Merchant Accountants has advised his willingness to continue in that position. 4. To fix membership fees for the 94/95 year and due date for payments. 5. To elect members of management committee consisting of: (1) The President (2) Vice President (3) Secretary (4) Treasurer (5) Three Committee Members. 6. To elect a public officer. 7. To consider and pass amendments to the constitution as per attached schedule. 8. To transact any other business which can be conducted at an Annual General Meeting. FOR AND ON BEHALF OF THE BOARD (signed) N. PUSONJIC SECRETARY"
17.4 The membership of the SCSA and the SCWA
"One reason which must contribute in a great degree to produce the result is the general character of the voluntary associations which are likely to be formed without property and without giving to their members any civil right of a proprietary nature. They are for the most part bodies of persons who have combined to further some common end or interest, which is social, sporting, political, scientific, religious, artistic or humanitarian in character, or otherwise stands apart from private gain and material advantage. Such associations are established upon a consensual basis, but, unless there were some clear positive indication that the members contemplated the creation of legal relations inter se, the rules adopted for their governance would not be treated as amounting to an enforceable contract."
"If a member of a voluntary association complains, not of an invalid expulsion, but of some failure to observe the rules on the part of the committee or other officers, it would be necessary for the member complaining to show that the rules were intended to confer upon him a contractual right to the performance of the particular duty upon which he insists. It can seldom be the true meaning of the rules of any large association of such a kind that those undertaking office thereby enter into a contract with each and every member that they will execute the office in strict conformity with the rules. If, however, it were determined that the committee or the officers of a voluntary association in attempting to exclude the member complaining, or in some other respect, had committed a breach of contract, the remaining members of the association would not be responsible. The committee or officers may be agents for the members fo the association. But if so, they are agents for all the members. If in the case of a member complaining they have violated the rules, they have exceeded their authority. Upon no doctrine of agency can one of the joint principals hold the others responsible."
"The organization is a political machine designed to secure social and political changes. It furnishes its members with no civil right or proprietary interest suitable for protection by injunction. Further, such a case is not one for a declaration of right. The basis of ascertainable and enforceable legal right is lacking. The policy of the law is against interference in the affairs of voluntary associations which do not confer upon members civil rights susceptible of private enjoyment. See Watt v MacLaughlin. For these reasons the respondent is not entitled to invoke the jurisdiction of the Courts of law in reference either to his complaint that his nomination for selection was improperly withheld from ballot, or that a resolution for his expulsion was adopted without authority or justification under the rules. In these circumstances the question, whether, upon the true meaning of the rules, the central committee acted in accordance with or contrary to them is not one of which the Court takes cognizance."
"(b) The registered rules shall bind the Association and every member to the same extent as if they had respectively signed and sealed them, and agreed to be bound by all of the provisions thereof."
This, coupled with the express provisions of s 23(1) of the Act, does have the specific effect of creating, between those parties, a relationship akin to one arising in contract.
. the passage of a special resolution of members to effect amendment;
. the making of some order pursuant to s 61 of that statute.
18.0 Conclusions as to the claim pursuant to s 61 of the Act
"61. (1) An application to the Supreme Court for an order under this section may be made by a member of an incorporated association or by a former member expelled from the association (provided that the application is made within six months of the expulsion), who believes - (a) that the affairs of the association are being conducted in a manner that is oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members, or in a manner that is contrary to the interests of the members as a whole; or (b) that an act or omission, or a proposed act or omission, by or on behalf of the association was or would be oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members or was or would be contrary to the interests of the members as a whole; or (c) that the rules of the association contain provisions that are oppressive or unreasonable; or (d) that the expulsion of the member was unreasonable or oppressive."
"(7) For the purposes of an application under this section, a breach of the rules of an incorporated association by the committee of the association may be regarded as constituting action that is oppressive to members of the association."
. regulating the conduct of the association's affairs in the future;
. directing the association to institute, prosecute, defend or discontinue specified proceedings, or authorising a member or members of the association to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the association;
. appointing a receiver or a receiver and manager of the property of the association;
. restraining a person from engaging in specified conduct or from doing a specified act or thing;
. requiring a person to do a specified act or thing;
. for the alteration of the rules of the association;
. that the member expelled be reinstated as a member of the association.
"(5) Where an order under this section makes any alteration to the rules of an association, then, notwithstanding anything in any other provision of this Act but subject to the provisions of the order, the association does not have power, without the leave of the Court, to make any further alteration to the rules inconsistent with the provisions of the order but, subject to this section, the alteration has effect as if it had been duly made by resolution of the association."
(1) The committee of management of the SCWA had, in effect, abdicated its responsibilities and permitted Tanasijevic to enter into the various financial transactions adverted to earlier in these reasons and to direct the making of payments not for the direct purposes or in the interests of the SCWA without the authority of either a general or specific resolution of the committee;
(2) Meetings of the SCWA had not been lawfully convened or purported meetings had not been convened at all, nor resolutions lawfully passed, as earlier recited;
(3) Amendments to the Constitution and Rules of the SCWA had been registered when it was patent that they had not lawfully been passed;
(4) Purported committees had been "elected" in contravention of the Constitution and Rules of the SCWA and had assumed control of its affairs;
(5) Ineligible parties had unlawfully been admitted to "membership" of the SCWA and permitted to participate in and vote at general meetings in substantial numbers;
(6) Tanasijevic had unlawfully assumed the prerogative of inviting persons to become members of committees of the SCWA and also of removing them at will;
(7) He had conducted meetings in an arrogant, autocratic and undemocratic fashion;
(8) Membership records of the SCWA had been falsified to mislead the witness Boys.
(9) Whilst the SCWA was under the de facto domination of Tanasijevic, proper books, records and accounts had not been maintained either in a timely manner or, in part, at all; and
(10) In general, the SCWA had not discharged its obligations pursuant to the Act either in a timely manner, or, in certain respects, at all.
POPOVIC & ORS
TANASIJEVIC & ORS
(1934) 51 CLR 358
(1998) 155 ALR 684
(1906) 4 CLR 835
(1987) 11 NSWLR 715
(1974) 2 NSWLR 559
(1974) 1 NSWLR 295