Randazzo v New South Wales Sport Aircraft Club

Supreme Court of NSW|2009-12-24|Before: Slattery J, Gzell J

CITATION : Randazzo v New South Wales Sport Aircraft Club [2009] NSWSC 1473 This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 21 & 23-24 December 2009 JURISDICTION : Equity

DECISION : See paragraph [56] of the judgment.

LEGISLATION CITED : Associations Incorporation Act 1984 (NSW)

Attorney General v Wentworth (1988) 14 NSWLR 481 Attorney General for the State of South Australia v Diepkorn [2005] SASC 425 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 Broad v Broad (1898) LT 687 CASES CITED : Dale v Smith (1967) 1 WLR 700 Goodwin v VVMC Club Australia (NSW Chapter) [2008] NSWSC 154 McClelland v Burning Palms Surf Life Saving Club [2002] NSWSC 470; (2002) 191 ALR 759 Rose v Boxing NSW Inc [2007] NSWSC 20 Stollery v Greyhound Racing Control Board (1972) 128 CLR 509

PARTIES : Plaintiff: Sam Randazzo Defendant: New South Wales Sport Aircraft Club Inc

COUNSEL : Plaintiff: Mr A A R Vincent Defendant: Mr D Smallbone

SOLICITORS : Plaintiff: Church & Grace Solicitors Defendant: Marsdens Law Group

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY LIST

323562/09 SAM RANDAZZO v NEW SOUTH WALES SPORT AIRCRAFT CLUB INC JUDGMENT 1 HIS HONOUR: The plaintiff, Mr Sam Randazzo sought leave for short service of this matter before me on Monday, 21 December 2009. The proceedings were made returnable before Gzell J on 23 December 2009. His Honour referred the matter into my equity vacation list for hearing and it was heard yesterday. Mr Vincent of counsel appears for the plaintiff. Mr Smallbone of counsel appears for the defendant. As I indicated at the end of yesterday's hearing, I have been greatly assisted by the quality of the submissions in this case, which were crafted and argued at very short notice.

2 The defendant, the NSW Sport Aircraft Inc, is a recreational flying club. The plaintiff is a member of the defendant. The defendant is a non-profit organisation incorporated under the Associations Incorporation Act 1984 (NSW), which leases an airfield at Wedderburn, New South Wales. 3 The defendant's treasurer, Mr John Duncan JP initiated a complaint against the plaintiff on 11 November 2009, some six weeks ago. The complaint was addressed to the secretary of the defendant. This hearing does not require me to enter upon the merits of the complaint. The complaint was in the following terms: Dear Margaret,

I wish to lodge a formal complaint against the recent actions of Sam Randazzo as per Rule 11(a)(ii).

This rule allows for a complaint against a member who "has persistently and wilfully acted in a manner prejudicial to the interests of the association."

The member's actions prejudicial to the interests of the association are as follows:

On or about the 16 th of October Sam directed the clearing of approximately 1000 square meters of mature trees in the north east corner of the club grounds, against the advice of the President that he was only to clear small shrubs and saplings. This has resulted in an investigation and action by Wollondilly Council, at a time when new lease negotiations are underway.

At about 1212 hrs on Sunday 8 th of November during the Club's Open Day Sam made a dangerous high speed low pass on runway 17 in VH-XCG despite being instructed by the ground radio operator not to descend below 500 feet. He had a young child as passenger during this pass. This has resulted in reports being lodged with CASA, with investigation expected shortly.

Sam's conduct has prejudiced the Club's reputation with our local Council, our Landlord and CASA.

I would request that the Committee give serious consideration to this complaint.

4 The letter of complaint formulating the averments or charges was referred to the defendant's committee of management and considered by that committee on 2 December this year. The plaintiff complains that he did not receive the requisite notice of this committee meeting. The committee resolved at this meeting to suspend the plaintiff from membership of the club for a period of three months. On 6 December 2009 the defendant's honorary secretary notified the plaintiff of the committee's decision. On 8 December 2009 the plaintiff's solicitors Messrs Church & Grace notified the defendant of the plaintiff's appeal under rule 12 of the defendant's rules against the committee's 2 December resolution. The plaintiff's solicitors also called on the defendant to withdraw the committee's decision. 5 The plaintiff's suspension under the committee's resolution does not actually come into operation until the exhaustion of the appeal procedure provided under Rules 11 and 12 of the defendant's Rules. The defendant did not withdraw the committee's decision. On 16 December 2009 the defendant gave notice to the defendant of the convening of a general meeting of the defendant on 6 January 2010 to hear his appeal. 6 The plaintiff now seeks interlocutory relief in vacation restraining the defendant, by its servants and agents from:

(a) acting upon or enforcing the committee's resolution of 2 December 2009, that the plaintiff be suspended from membership of the defendant for a period of three months;

(b) proceeding with any appeal from the committee's resolution of 2 December 2009; and

(c) proceeding with any other disciplinary proceedings against the plaintiff arising from John Duncan's complaint of 11 November 2009 about the plaintiff. 7 The defendant has adopted without relevant amendment the model rules for incorporated associations provided for in section 73 of the Associations Incorporation Act 1984 and the regulations. Several of those rules are relevant to consideration of the issues in this case, especially Rules 7, 10, 11, 12, and 41, which are set out below: 7 Register of members (a) The public officer of the association must establish and maintain a register of members of the association specifying the name and address of each person who is a member of the association together with the date on which the person became a member. (b) The register of members must be kept at the principal place of administration of the association and must be open for inspection, free of charge, by any member of the association at any reasonable hour.

10 Resolution of internal disputes (a) Disputes between members (in their capacity as members) of the association, and disputes between members and the association, are to be referred to a community justice centre for mediation in accordance with the Community Justice Centres Act 1983 (b) At least 7 days before a mediation session is to commence, the parties are to exchange statement of the issues that are in dispute between them and supply copies to the mediator.

11 Disciplining of members (a) A complaint may be made to the committee by any person that a member of the association: (i) has persistently refused or neglected to comply with a provision or provisions of these rules, or (ii) has persistently and wilfully acted in a manner prejudicial to the interests of the association. (b) On receiving such a complaint, the committee: (i) must cause notice of the complaint to be served on the member concerned, and (ii) must give the member at least 14 days from the time the notice is served within which to make submissions to the committee in connection with the complaint, and (iii) must take into consideration any submissions made my the member in connection with the complaint. (c) The committee may, by resolution, censure, fine, suspend or expel the member form the association if, after considering the complaint and any submissions made in connection with the complaint, it is satisfied that the facts alleged in the complaint have been proved, provided that no member shall be fined an amount exceeding the annual subscription of a full member of the association. (d) If the committee expels or suspends a member, the secretary must, within 7 days after the action is taken, cause written notice to be given to the member of the action taken, of the reason as given by the committee for having taken that action and of the member's right of appeal under rule 12. (e) The expulsion or suspension does not take effect: (i) until the expiration of the period within which the member is entitled to appeal against the resolution concerned or (ii) if within that period the member exercises the right of appeal unless and until the association confirms the resolution under 12 (e), whichever is the later.

12 Right of appeal of disciplined member (a) A member may appeal to the association in general meeting against a resolution of the committee under rule 11, within 7 days after notice of the resolution is served on the member, by lodging with the secretary a notice to that effect (b) The notice may, but need not, be accompanied by a statement of the grounds on which the member intends to rely for the purposes of the appeal. (c) On receipt of a notice from a member under clause (a), the secretary must notify the committee, which is to convene a general meeting of the association to be held within 28 days after the date on which the secretary received the notice. (d) At a general meeting of the association convened under clause (c): (i) no business other than the question of the appeal is to be transacted; and (ii) the committee and the member must be given the opportunity to state their respective cases orally or in writing, or both; and (iii) the members present are to vote by secret ballot on the question of whether the resolution should be confirmed or revoked; and (e) If at the general meeting the association passes a special resolution in favour of the confirmation of the resolution, the resolution is confirmed.

41 Service of notices (a) For the purpose of these rules, a notice may be served on or given to a person: (i) by delivering it to the person personally, or (ii) by sending it by pre-paid post to the address of the person, or (iii) by sending it by facsimile transmission or some other form of electronic transmission to an address specified by the person for giving or serving the notice. (b) For the purpose of these rules, a notice is taken, unless the contrary is proved, to have been given or served: (i) in the case of a notice given or served personally, on the date on which it is received by the addressee, and (ii) in the case of a notice sent by pre-paid post, on the date when it would have been delivered in the ordinary course of post, and (iii) in the case of a notice sent by facsimile transmission or some other form of electronic transmission, on the date it was sent or, if the machine from which the transmission was sent produces a report indicating that the notice was sent on a later date, on that date. Six Issues 8 The debate between the parties about the case the plaintiff presents reduces to six issues. 9 The first issue is that the plaintiff contends the charges in the letter of complaint are insufficient to found any resolution against the plaintiff under Rule 11 (b) of the defendant's Rules. The plaintiff says that the facts alleged in the charges cannot qualify as a complaint within Rule 11 (b) that the plaintiff has "persistently and wilfully acted in a manner prejudicial to the interests of the association".

10 The second issue is a bundle of related allegations of denial of procedural fairness that are said to have occurred at the committee's hearing on 2 December 2009. These allegations of denial procedural fairness are, firstly (sub-issue 2.1) that the defendant breached the contract constituted by the Rules of the defendant, because it failed to serve notice of the complaint upon the plaintiff in conformity with Rule 11(b). The second matter (sub-issue 2.2) is that the defendant did not give the plaintiff the fourteen days notice prior to the committee's hearing provided by Rule 11(b)(ii) to allow the plaintiff sufficient time to make submissions to the committee.

11 The third issue is whether it is essential to the validity of the committee's decision for the defendant to comply strictly with Rule 11(d) and to provide the plaintiff with reasons for the committee's decision at the same time as giving notice of the decision.

12 The fourth issue is a different kind of procedural fairness issue. It is whether or not the participation of a number of persons in the decision of the committee on 2 December 2009 renders that decision liable to be avoided for disqualifying bias.

13 The plaintiff does not raise the fifth issue. It is the first of two issues raised by the defendant that relate mainly to the balance of convenience. The defendant's counsel, Mr Smallbone, argues that the plaintiff having invoked his right of appeal under Rule 12 now seeks in substance to restrain by injunction the pursuit of his own appeal. The defendant says that the plaintiff cannot both enjoy his appeal rights and seek to restrain the holding of the general meeting of the defendant, to be convened under rule 12, at which those rights are to be exercised.

14 The defendant further says that an injunction restraining the meeting would have two prejudicial consequences. The defendant submits that if an injunction is granted it would not be possible to hold the appeal general meeting within the mandatory 28 day period required under Rule 12 (c). The defendant argues that to grant the injunctions sought would leave the plaintiff's suspension subject to an independent automatic stay and would introduce confusion into the conduct of the disciplinary process.

15 The sixth issue is another matter raised by the defendant in relation to the balance of convenience. The defendant here argues that the plaintiff's alleged actions the subject of complaint involve serious flight safety breaches, serious interference with property rights and may prejudice the relationship between the defendant club and its landlord. The defendant submits that the inevitable delay resulting from the grant of an injunction and of having as a result to restart the Rule 11 and Rule 12 disciplinary process at some indefinite time in the future risks immediate prejudice to the defendant's operating licences.

16 I will now deal with each of those issues. I reserved this matter overnight, because of the state of yesterday's lists, and to give consideration to the legal issues that were raised in the submissions on both sides, some of which only emerged in the course of discussion between the bench and counsel.

17 To obtain an interlocutory injunction the plaintiff must show that there is a serious question to be tried in relation to the final relief that he claims, that damages is not an adequate remedy and that the balance of convenience favours the granting of an injunction: Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63, per Gleeson CJ at [13]; (2001) 208 CLR 199. This first involves analysis of issues 1 to 4 which the plaintiff presents. It is then necessary to consider the balance of convenience issues 5 and 6. 18 I gave early consideration to issue number 1. Were it determined in Mr Vincent's favour, it would completely answer a case based on these complaints and therefore the short way through the present application. Issues two, three and four and their various sub-issues are all, to some extent, open to be answered by aspects of the defendant's issues five and six. 19 It is convenient to start with issues one and three.

Issue One - Content of the Complaint 20 Partly as a result of matters raised by Mr Vincent and Mr Smallbone in argument the issue emerged whether or not the form of Mr Duncan's letter of 11 November 2009 was even capable of constituting a "complaint" within Rule 11(a)(ii) of the Rules. The question is whether or not the letter could be described as a "complaint' that a member of the association "has persistently and wilfully acted in a manner prejudicial to the association." The plaintiff argues that, even without considering any evidence, the factual allegations in the complaint could never amount to persistent or wilful conduct.

21 I was initially attracted to the idea that the plaintiff may be able to argue at final hearing that the letter of 11 November 2009 did not qualify as a "complaint" within Rule 11(a). If the letter is not a "complaint" within Rule 11, the defendant would be undertaking a fall of disciplinary action against the plaintiff which lay outside its rules. 22 If made out against the plaintiff, the content of the complaint could certainly be said to allege conduct that could be described as acting "in a manner prejudicial to the interests of the [defendant]". As Mr Smallbone has submitted, the matters the subject of complaint 1, are matters liable to bring the defendant club under adverse notice by the local council. In relation to complaint 2, the matters alleged are also of a serious kind, involving low-flying at high-speed with children on board. Such conduct if established could well attract the interest of the Civil Aviation Safety Authority ("CASA") in relation to the defendant's operating licence. So the defendant would probably have little difficulty in establishing the element of "manner prejudicial".

23 The other element of Rule 11(a)(ii) is whether the letter charges the plaintiff with conduct that is capable of being described as acting "persistently" or "wilfully". I am persuaded by Mr Smallbone's submissions that the charges in the 11 November 2009 letter could not be dismissed on their face. Any argument propounded by the plaintiff that the conduct charged against him in the complaint could never amount to acting persistently and wilfully, is unlikely to succeed. Mr Smallbone referred me to authorities in relation to the meaning of "persistent". Depending on the quality of the nature of the conduct it may be described as "persistent" even though it has only occurred on very few occasions: Attorney General for the State of South Australia v Diepkorn [2005] SASC 425 and Attorney General v Wentworth (1988) 14 NSWLR 481 at 492, Dale v Smith (1967) 1 WLR 700 and Broad v Broad (1898) LT 687. As a result of these authorities I am of the view that even two occasions, such as the two that are identified here (on 16 October and 8 November 2009), are probably sufficient to qualify the plaintiff's alleged conduct as acting "persistently". 24 Without analysing whether or not there is evidence to support these charges, there is a common element in them, which helps qualify the conduct alleged as "acting persistently". Charge 1 alleges conduct "against the advice of the president" on 16 October 2009. Charge 2 alleges conduct on 8 November 2009 "despite being advised by the ground operator not to descend". The common element in these allegations, about events some three weeks apart, is the repetition of conduct contrary to existing instructions. On the authorities this common element of repetition comes within the concept of "persistent" conduct. 25 I do not think there is a serious question to be tried upon the plaintiff's threshold contention that these charges could never qualify as "complaints" under Rule 11(a)(ii). Whilst of course I am not now finally deciding the matter, the plaintiff's contention on this issue appears to have little substance.

26 Issue three relates to the giving of reasons with the notice of the committee's decision. To attempt to make this out Mr Vincent draws upon a combination of Rule 11(d) and the content of the notice served upon the plaintiff after the committee's decision of 2 December 2009. The Rule 11(d) notice dated 6 December 2009 and served upon the plaintiff provides: Sam Randazzo PO Box 529 Rockdale NSW 2216

In accordance with Rule 11, which appears in full below, the following resolution was passed at the committee meeting on 2 nd December, 2009 in response to the written complaint against you received on 11 November, 2009- MOTION "That the facts of the complaint against Sam Randazzo are proved and that his membership from the NSW Sport Aircraft Club be suspended for a period of three calendar months for persistently and wilfully acting in a manner prejudicial to the interests of the association." Moved by Don Harvie and seconded by Bret Cavanagh. There were 6 votes for the motion and 1 abstention. The motion was carried unanimously.

Please be advised that resulting from this decision you will be required (sic) surrender your gate and clubhouse key for the duration of the suspension period. If during this period you require emergency access to your hangar you will need to contact the committee and arrange to be escorted onto and off the airfield. It is suggested that you remove your aircraft to an alternate location for the duration of the suspension.

Any breach of the above conditions of the suspension will result in an extension of the suspension period.

Please refer to Rule 12, which appears in full below, regarding your right to appeal to the general membership.

Margaret Nightingale Honorary Secretary

27 I initially found Mr Vincent's point attractive. The 6 December 2009 notice of the committee's decision to the plaintiff is spare in the supply of reasons, to say the least.

28 On the other hand, Mr Smallbone points out that an economical statement of reasons is appropriate when conduct of the simple kind alleged here is in question. The complaint itself was precisely drawn and full enough to give a clear understanding of the exact conduct alleged. Rule 11 was set out in the notice. The reference to Rule 11 and the letter of complaint of 11 November in the notice shows that the complaint is one about the plaintiff acting "persistently and wilfully". By 6 December the plaintiff had the letter of 11 November. It is necessary to look at the operation of these rules in relation to clubs of this kind in a commonsense way. The reasons conveyed to the plaintiff for the committee's decision are clear enough. The facts alleged in the complaint were found to have been made out. The committee's view was that those facts amounted to the plaintiff "persistently and wilfully acting in a manner prejudicial to the interests of "the defendant". I do not accept that this issue raises a serious question to be tried.

29 Another necessary ingredient for the plaintiff's success on issue 3 is that the plaintiff must show not only that there were insufficient reasons but secondly that the lack of reasons was such, given the language of Rule 12, to vitiate the committee's decision. But this ingredient need not be put to the test now because I do not think the reasons are arguably inadequate. Where a process is set up, as it is in Rule 12, for an appeal to a general meeting, the provision of reasons serves an important function to equip the subsequent general meeting to decide the question of the complaint at that next level with the exposed reasons of the committee rather than just the committee's own say so that, "The committee knows best. We've made the decision. You should confirm it." Also the imperative language of Rule 11 (d) "the secretary must, within 7 days after the action is taken, cause written notice to be given to the member of the action taken, of the reasons given by the committee for having taken that action…" gives the plaintiff grounds to argue that a decision to suspend or expel will not conform with Rule (d) and will not be effective unless accompanied by reasons.

30 Despite these observations, I determine issue three as stated. This is not a case where the reasons are inadequate such as to raise a serious question to be tried. I then move to issues two and four. It is convenient to deal with issue four first. Issue Four - The Bias Rule 31 The matter raised by issue four is the objectivity of several persons who participated in the committee's decision. The complainant on both charges, Mr Duncan, who was the club treasurer, participated in the committee meeting of 2 December 2007. Mr Rittie, who is the president of the club, presided over the meeting and voted on the resolution. He was also a key witness to the issue of the plaintiff's tree felling alleged in the first charge and the person who authorised the clearance of some of the vegetation the subject of that charge. Another member of the committee, Mr Vic Layder, was involved in the very events, which are alleged against the plaintiff. Further detail is not required about Mr Layder's involvement in those events for present purposes.

32 In relation to issue four, in my view the plaintiff does have an arguable case. Mr Vincent submits the primary problem about the participation of these individuals in the deliberations of this domestic tribunal is that given their personal involvement in the matter in hand, their presence in the committee room does not give the appearance of justice: Stollery v Greyhound Racing Control Board (1972) 128 CLR 509. The defendant's answer to this is to say that the appeal process cures any defect in the constitution of the decision-making committee. In relation to this argument Mr Smallbone has referred me to a decision of Campbell J in McClelland v Burning Palms Surf Life Saving Club [2002] NSWSC 470; (2002) 191 ALR 759, a case to which I will return shortly.

33 The evidence of their involvement is a sufficient basis for the plaintiff to argue that the committee's decision should be set aside, on the basis at least that Mr Duncan was both the plaintiff's accuser and judge: Stollery v Greyhound Racing Control Board (1972) 128 CLR 509. The question then becomes whether or not that is fully answered by Mr Smallbone's argument under issue five.

Issue Two - Addresses and the Notice of the Complaint

34 Issue two is the question of the address of the plaintiff to which notice of the complaint was sent. I have struggled somewhat in dealing with this issue. Mr Vincent argues that strict compliance with the defendant's Rules and especially the notice provisions in Rule 11 is essential in any non-compliance rendering the committee's resolution invalid: Goodwin v VVMC Club Australia (NSW Chapter) [2008] NSWSC 154 per White J at [43]. Mr Vincent says that on the evidence the plaintiff only first became aware of the committee's proposed hearing on 1 December 2009 but even then he was unaware that the meeting was to take place the following day. He says that it was due to the lack of notice to him that did not make submissions defending himself before the committee. 35 Mr Smallbone has put a persuasive argument in reply to this. He says that if one looks at the email address in the register of members kept under Rule 7 and one also looks at the place that the notice was apparently served by email, it is open to infer that the plaintiff was undoubtedly served within proper time at the address required by the Rules and must have received notice of the meeting. Mr Smallbone says that that should be the end of the matter and that if the plaintiff changed his email address but did not notify the defendant of the new email address that the defendant has still complied strictly with the Rules by serving the notice at the address recorded in the Rule 7 register.

36 There are though at least two interesting arguments available to Mr Vincent at a final hearing allowing him to put in issue the contention that he was given notice of the committee's meeting. One argument is factual and the other is legal. 37 The legal argument is that Rule 11(b) requires "on receiving such a complaint the committee must serve notice 'on the member concerned.'" It is arguable at final hearing that when one construes that rule together with rule 41 that, particularly in view of the consequences of the disciplinary process for club members, that the Court must have good quality proof that service actually occurred.

38 The court currently has before it conflicting affidavit evidence on the issue of service and the address for service. One affidavit deposes to the notice of meeting being sent to an email address, which appears to be the correct address. On the other hand the plaintiff deposes that the notice was not received at this email address within time. Even though the same email address was later adopted, for the purposes of some email correspondence between the parties in relation to questions of appeal, the fundamental question under rules 11 and 41 is whether the notice was actually sent or not and whether or not it was received. Given the array of contested affidavit evidence now in play, findings on this issue will depend upon assessment of the credibility of these deponents and is an issue for trial.

39 There will be a factual question about whether there is any doubt that the notice was delivered personally, because the plaintiff was in New Zealand. A legal question will be whether or not, if the notice was sent by prepaid post to the address in the club's register that is sufficient. The notice does seem to have been received there because it was forwarded on late to the defendant from that address. But the arguable question for trial will be whether if the address of the member to be notified has changed, even though it has not been notified to the club, that when all the facts come out about the operation of the address notification system, there may not have been a service of notices in conformity with Rules 11(b) and 41.

40 There was another sub-issue raised by Mr Vincent within this issue. He says that the notice of the complaint to the plaintiff was not adequate because it did not point out the consequences of the plaintiff's non-appearance or his failure to make submissions: Rose v Boxing NSW Inc [2007] NSWSC 20, at [70]. In my opinion, for the reasons put by Mr Smallbone, this argument does not raise a serious question to be tried. The combination of serving a copy of Rule 11, which in Rule 11(c) refers to the consequences of finding the complaint proven, together with the letter, which shows what is enclosed, is sufficient, in my view, to point out to the plaintiff the consequences of a failure to make submissions. One only has to read clause 11(c) to see that the practical consequences of proof of a complaint are suspension or expulsion. They do not have to be highlighted in red.

41 So it seems to me that questions about 14 days' notice in issue 2.2 and lack of notice of the hearing all fall to be decided according to the same considerations. Mr Smallbone's point is now forced to base his answer that there is not a serious question to be tried on his argument about the appeal process. Issue 5 - An Appeal Cures Procedural Defects 42 On issue five, Mr Smallbone now takes the significant burden of saying that even though, as I have found, issue two raises a serious question to be tried, this question is fully answered because of the existence of the appeal process provided for under Rule 12. He says the authorities suggest that the appeal process would cure whatever defects occurred in the committee's decision, as Campbell J says in McClelland v Burning Palms Surf Life Saving Club [2002] NSWSC 470, (2002) 191 ALR 759, the Court may therefore exercise a discretion not to intervene to cure problems in the earlier decision. His other argument is about approbating and reprobating within the appeal process. He says the plaintiff must withdraw his appeal as the price of gaining injunctive relief. 43 Mr Smallbone took me to Campbell J's decision in McClelland v Burning Palms Surf Life Saving Club (2002) 191 ALR 759; [2002] NSWSC 470; Campbell J's decision was given on a considered basis after a three-day hearing and after a committee decision and appeal decision had taken place. His Honour's decision construes the same rules under the Associations Incorporation Act 1984 that apply to the defendant. The essence of his reasoning in relation to the effect of the appeal to a general meeting is set out in [156] and [157], as follows: "[156] However, the decision about whether the appeal to the meeting on 15 July cures any earlier defect in the proceedings does not depend on the direct application of the decisions in earlier cases. Whether the full opportunity which Mr McClelland was given to address the meeting on both guilt and penalty on 15 July cures any earlier defect, depends in part on his election to treat the earlier decision as a decision within the scope of the rules, by appealing against it, and in part upon the construction of the rules themselves. As well, s18(3) of the Associations Incorporation Act (see para 105 above) has the effect, it seems to me, that even if an association passes a resolution for expulsion in a way which is prohibited by its rules, that is not a sufficient reason for the expulsion to be invalid.

[157] Cl15.6 of the Rules makes clear that, if an appeal against a decision of the Committee under cl15.4 is lodged, the decision of the Committee is to be of no effect unless and until a general meeting confirms the resolution. This shows, in my view, that the general meeting has full power to decide matters of both guilt and penalty. If an appeal is lodged, the rules themselves provide that there is no effective resolution of expulsion or suspension until that appeal is dealt with. As a matter of construction, and bearing in mind s18(3) of the Act, it seems to me that the right of appeal to the general meeting is conferred in relation to not only valid decisions of the Committee under cl15.4, but also in relation to purported decisions of the Committee under cl15.4. If there had been a breach of natural justice in the decisions of the Committee, concerning some matter which the rules, properly construed, required to happen, those decisions would be, for that reason, defective decisions, but not (because of s18(3)) invalid. Even though they were defective, they would be purported decisions of the Committee. When there is an appeal instituted, within the confines of the rules, against such a purported decision, and the General Meeting acting in accordance with the rules decides to confirm the expulsion, that expulsion is effective."

44 This decision appears to me to have direct application in relation to procedural defects relating to inadequate notice of meeting under the same Rules as those of the defendant. I am troubled, nevertheless, about the application of McClelland to a bias case. The law draws a distinction between the bias rule and the audi alterem partem rule. The Courts apply especially close vigilance to the scrutiny of decisions involving the former.

45 McClelland's case was a notice case, not a bias case. Mr Vincent can still argue at trial that, despite McClelland's case, so far as the bias argument is concerned, that it may not be answerable through the existence of the Rule 12 appeal process. McClelland's case does not itself decide that question against Mr Vincent. 46 I also have a residual concern about an argument which does not appear to have been advanced to Campbell J in McClelland v Burning Palms Surf Life Saving Club [2002] NSWSC 470; (2002) 191 ALR 759. One of the vices of treating the appeal as a complete answer in a case such as this one is that where there is a bias related procedural fairness issue that the whole appeal process may be distorted by the committee being able to present to the later general meeting under Rule 12 that the decision is valid, when in fact it has been vitiated because of the bias rule. I refer of course not to actual bias but the way that rule is applied technically in relation to reasonable apprehension of bias in administrative law. So in those two respects, despite the apparently complete answer to the plaintiff's case that Mr Smallbone has pressed upon me by issue number five, both issue number four and issue number two survive the attack. The plaintiff has demonstrated a serious question to be tried on these two issues.

47 As to the approbate and reprobate issue in relation to the appeal, it seems to me that Mr Smallbone raises some valid arguments about what may have to happen with the Rule 12 appeal process if final injunctive relief is granted. If final relief is granted it could be expected that the plaintiff will be required to withdraw his appeal as the condition of the grant of such relief. These are matters that can be dealt with by consequential orders at a final hearing.

48 The last question of the balance of convenience. Mr Smallbone's point in relation to balance of convenience relies on an important element of the public interest. His submission that any unnecessary delay in a matter involving the serious charges against a member that this one does, is contrary to the interest of the club, all its members and those who fly with the club. He submits that an important primary question is whether or not any delay should be permitted at all. 49 The defendant club has acted with commendable expedition in dealing with the matters of complaint raised about the plaintiff's conduct and is therefore able to put this argument about the balance of convenience with considerable credibility.

50 The events the subject of this complaint are alleged to have occurred in October and November. The complaint was dealt with expeditiously in less than a calendar month (2 December) from the date of complaint (11 November). Thus, sitting here as I am on Christmas Eve, the question is whether finalisation of this complaint should be deferred any longer and specifically deferred past 6 January 2010, the date for which the general meeting is scheduled. 51 This is a discretionary issue. In the short term the club has done all that it reasonably can under the law through its rules to ensure compliance with external regulatory obligations such as those imposed by CASA. It would be a sound answer to CASA or any other regulatory critic of the defendant for the club to point out that it has done all it can to deal quickly with the matters that have been brought to its attention.

52 The defendant's expeditious conduct has been recognised by the speedy course of these proceedings. That should, in the short term, be some answer to intervention by regulatory authorities. One can also expect that the club's directors themselves would be vigilant in the short term about its management of the club's affairs in relation to external authorities. Possible Expedition 53 Given this public interest element in speedy resolution of these proceedings it seems to me that this is a very appropriate case for me to refer directly to the expedition list on the Friday of the first week of term. That is what I will do.

54 It is not for a judge such as myself on this kind of application to express a final view or any opinion about any aspect of the law that I have covered but merely to deal with what appears to be arguable and whether or not the plaintiff's case raises a serious question to be tried. Conclusion and Orders

55 Accordingly, I will grant the interlocutory injunctions requested and make the following orders: 56 ORDERS: 1. Until further order and upon the Plaintiff by his Counsel giving the usual undertaking as to damages, the defendant be restrained from

a. acting upon or enforcing the resolution of the committee of the Defendant made on 2 December 2009 that the plaintiff be suspended from membership of the defendant for the period of 3 months; and b. proceeding with any appeal in respect of the resolution of the committee of the Defendant made on 2 December 2009 that the plaintiff be suspended from membership of the defendant for the period of 3 months. 2. Costs reserved. 3. Adjourn the proceedings into the Expedition list on Friday 5 February 2009. 4. These orders may be entered forthwith. **********

04/02/2010 - Decision not restricted - Paragraph(s) 1-56

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Associations Incorporation Act 1984(NSW)

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Judgment (69 paragraphs)

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Cases Cited (9)

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