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Horner v Trustees and Executives of The Sigatoka Club [2011] FJHC 311; HBC241.2010L (1 June 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 241 of 2010L

BETWEEN:

GRAEME ROBERT HORNER
Plaintiff

AND:

TRUSTEES AND EXECUTIVES OF THE SIGATOKA CLUB
Defendants

INTERLOCUTORY JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Ms T Draunidalo for the Plaintiff.

Mr H Ram for the Defendants.

Solicitors: Tupou Draunidalo for the Plaintiff.

Rams Law for the Defendants.

Date of Hearing: 7, 14 March 2011, 13 May 2011
Date of Judgment: 1 June 2011

INTRODUCTION

[1] On 17 December 2010 the Plaintiff, together with other members of the Sigatoka Club, filed an Originating Motion and an Ex-parte Motion seeking orders to restrain the Trustees and Executive members of the Club from going ahead with the planned annual general meeting planned for 19 December 2010. I heard Ms Draunidalo, counsel for the Plaintiff, and granted the orders sought. My reasons were published in a judgment dated 31 December 2010 and reported in Horner v Trustees and Executives of the Sigatoka Club [2010] FJHC 564; HBC241.2010L (31 December 2010).

[2] I then gave directions for hearing inter-partes. That hearing took place on 7 March 2011. At the end of the hearing and at the parties request I adjourned that hearing to 14 March for the parties to explore settlement. On 11 March 2011, the Defendants changed solicitors to their current solicitors. When the matter was called on 14 March 2011, Ms Draunidalo informed me that her client was agreeable to Ms Vasantika Patel, barrister and solicitor, acting as a mediator to conduct fresh elections. Mr Ram, new counsel for the Defendants, had not been sufficiently briefed so I adjourned the matter further. He indicated however, that his clients were not agreeable to Ms Patel and were to suggest three other names. However, several attempts at settlement failed. The Defendants instead filed a Motion on 28 March 2011 for certain declarations. On 13 May 2011, counsel for the Plaintiff informed me that there were no prospects of settlement and I was to deliver judgment on notice.

BACKGROUND

[3] The background from my earlier judgement is that the Sigatoka Club is a private members club. It has a Constitution which was adopted on 15 August 1958. On 20 November 2002, certain amendments were made to the Constitution and registered. A further amended Constitution was registered with the Commissioner Western on 14 December 2008. That Constitution is under dispute. Mr Horner and his supporters say that the second and final draft of that Constitution was only given to them and other members an hour before the meeting adopting it and on a show of hands no more than seven members supported the adoption of that Constitution. Members were assured by the current Trustees and Executives that the amendments had not been adopted as many of them disputed the adoption of the Constitution. However, the Plaintiff and his supports found out recently that this was not correct.

[4] They claim that the Defendants are proposing to hold the 2010 annual general meeting on 19 December 2010 pursuant to this disputed Constitution. They want it stopped because they say it will entrench the Constitution’s confusing and unfair provisions. They also believe that any members who voiced any opposition to the Constitution would face suspension. Previous office bearers have been suspended under the disputed Constitution and can no longer enjoy Club privileges.

[5] The Defendants dispute what the Plaintiff and his supporters say and maintain that the new Constitution was validly passed.

THE MOTION

[6] The Ex-parte Motion sought the following orders:

1. Until further orders, the Defendants are restrained forthwith from proceeding in any manner whatsoever with the annual general meeting of the private members club known as the Sigatoka Club at Sigatoka, Nadroga/Navosa, scheduled for 19th December 2010.
   
2. Until further orders, the Defendants are restrained forthwith from proceeding in any manner whatsoever with the annual general meeting of the Sigatoka Club, Nadroga/Navosa which the Defendants have given Notice for, scheduled for the 19th day of December 2010.
   

100. Until further orders, the Defendants are to manage the day to day affairs of the Sigatoka Club pursuant to the Constitution of the Club as up to the 13th day of December 2008.
     

[7] Only orders in terms of paragraphs (a) and (b) were granted ex-parte and I do not think anything further needs to be done about them. The order in paragraph (c) was to be considered when the application was heard inter-partes.

[8] The Originating Motion seeks the following orders:

1. THAT there be a declaration that the purported amendments to the Constitution of the Sigatoka Club dated 14 December 2010 is null and void;
   
2. THAT there be an order that the Defendants give Notice forthwith for an annual general meeting of the Sigatoka Club pursuant to the Constitution of the Sigatoka Club (duly amended and last registered on 20 November 2002);
   
3. THAT there be an order that the Defendants conduct the next annual general meeting of the Sigatoka Club in accordance with the Constitution of the Sigatoka Club (duly amended and last registered on 20 November 2002);
   
4. THAT there be an order that the Defendants manage the day to day affairs of the Sigatoka Club up to the next annual general meeting in accordance with the Constitution of the Sigatoka Club (duly amended and last registered on 20 November 2002);
   

CONSIDERATION OF THE MOTIONS

[9] In my earlier judgment I said: normally, the Court does not interfere with the affairs of private clubs. However, where persons entrusted with the management of such clubs take a heavy handed approach and act to protect their personal interests rather than the interests of the members as a whole leading to disunity, which seems to be the case here, the Court will interfere to put a check on the dispute escalating.

[10] In Mistry v Chandar [2009] FJHC 236; HBC149.2009L (23 October 2009), I said the following of such disputes:

[16] I think the more helpful authority is the decision of Phillips J cited by Mr Sharma in Kalou & Others as the FPGA v Raikuna & Others [2005] FJHC; HBC 55 of 2005L (6 November 2006) and the later decision of Singh J in the sequel to that case, Rokotavaga & Others as the FPGA v Singh & Others [2007] FJHC; HBC 170 of 2007S (3 June 2008). The underlying principle in those decisions is that the remedy to disputes over election of office bearers is to be found in the association’s constitution and not in the Courts. ...

[17] Further, this is a matter of private law and not public law. The Articles clearly, in my view, give absolute authority to the Council and the Board. They have the power to change the Articles and hence the power to validate any election procedure or result. The Plaintiffs as members of DIAS are bound by the Articles. This Court should be loath to rewrite those Articles which have been adopted by consensus of the members. This Court should also be loath to interfere with the use of any such powers, unless there is a clear case of fraud or abuse and the majority of the members want the Court to interfere.

[11] I also refer to the judgment of Campbell J in McClelland v Burning Palms Surf Life Saving Club [2002] NSWSC 470 submitted by counsel for the Plaintiff to similar effect:

90 A basis additional to the protection of property rights, upon which a court could grant a declaration of the invalidity of an expulsion, and an injunction against giving effect to the invalid expulsion, was recognised in Edgar v Meade [1916] HCA 70; (1916) 23 CLR 29. One plaintiff had been wrongly expelled from an organisation registered under the Commonwealth Conciliation and Arbitration Act 1904. Another plaintiff, representative of a branch concerning which a resolution had been passed to close the branch, challenged the validity of that decision. Isaacs J said, at 43-44:

“In the case of a purely voluntary association, a Court of equity bases its jurisdiction on property, there being nothing else for it to act on. A Court of common law before the Judicature Act regarded the invalid expulsion as void, and gave no damages. So between the two jurisdictions the plaintiff could rely only on property as the basis for jurisdiction.

...

91 In relation to some voluntary unincorporated associations, the rules are not intended to be contractual, and the members have no interest in the property of the association. Concerning such organisations, courts have declined to intervene by way of declaration and injunction when it is alleged an expulsion has occurred contrary to the rules. Thus in Cameron v Hogan [1934] HCA 24; (1934) 51 CLR 358, at 376 which Dixon, Evatt and McTiernan JJ said:

“Hitherto rules made by a political or like organisation for the regulation of its affairs and the conduct of its activities have never been understood as imposing contractual duties upon its officers or member. Such matters are naturally regarded as of domestic concern. The rules are intended to be enforced by the authorities appointed under them. In adopting them, the members ought not to be presumed to contemplate the creation of enforceable legal rights and duties so that every departure exposes the officer or member concerned to a civil sanction.”

cf Balfour v Balfour [1919] 2 KB 571.

92 It is always a matter of construction of the rules of the individual organisation whether they are intended to create contractual relations, whether they confer on members a sufficient right of property to give the member standing to seek a declaration and injunction, or whether there is some other circumstance (such as occurred in Edgar v Meade) which gives the member standing to seek those remedies.

[12] The facts in McClelland (supra) were that Mr McClelland was a longstanding member of the defendant surf club. He was expelled for using club funds without authority and sued the club contending that his expulsion was invalid. The Court held that he was not denied natural justice and the club rules had been followed and dismissed the suit.

[13] I think this is a different case. I am satisfied that there is a serious dispute that the Constitution allegedly adopted in the special general meeting of 14 December 2008 did not meet the two thirds voting and other requirements of the old Constitution of 15 August 1958. I am also satisfied that the Plaintiff and his supporters have been denied natural justice and procedural fairness in that meeting.

[14] I propose to take the course taken by Phillips J in Kalou & Others as the FPGA v Raikuna & Others [2005] FJHC; HBC 55 of 2005L (6 November 2006) and appoint a mediator/facilitator to organise a special general meeting of the Sigatoka Club for the purposes of voting on a new Constitution and a new executive. The Defendants have not submitted any preferred persons so I appoint Ms Vasantika Patel (whom I am informed has given her approval) to act as such. I leave it entirely up to her what details and arrangements she sees fit to make and give her absolute authority, power and discretion to act as she sees fit. Her reasonable fees and expenses are to be paid by the Club.

[15] The Club is to be managed as currently done until the election of the new executive.

THE DEFENDANTS' APPLICATION OF 28 MARCH 2011

[16] Having come to the above conclusions and taken the above course of action, I therefore dismiss the Defendants' Motion filed on 28 March 2011.

COSTS

[17] This matter should not have come to court, and in saying that I think both parties are equally to blame, so in the circumstances I think each party is to pay his own costs, and to avoid any doubt, no costs should not be taken from the funds of the Club and the Defendants' costs are to be paid by the named Defendants personally.

ORDERS

[18] I therefore make the following orders:

• [1] I hereby appoint Ms Vasantika Patel, barrister and solicitor, to be the mediator and facilitator for the purposes of holding a special general meeting of the members of the Sigatoka Club or such meetings as she sees fit: (1) to adopt a new Constitution for the Club; and, (2) for the election of new members of the executive, trustees and such other persons responsible for the management of the Club under the new Constitution.
  
• [2] Such meetings are to be conducted and completed within 3 months from 1 June 2011.
  
• [3] Ms Patel is to be guided by the Club Constitution of 15 August 1958, but subject to that and this order, she has absolute authority, power and discretion as to the conduct of the special general meeting or meetings and for the qualification or eligibility of the members who are entitled to vote.
  
• [4] The Club shall pay for the reasonable costs and expenses of Ms Patel charged or incurred by her as a result of her appointment under this order.
  
• [5] The Club is to be managed as presently done until the new executive and other members responsible for the management of the Club are appointed.
  
• [6] The Defendants' Motion filed on 28 March 2011 is dismissed.
  
• [7] Each party is to pay his own costs but no funds of the Club shall be used for the payment of such costs or expenses in whatever form and the Defendants shall pay their own costs and expenses personally.
  

............................................................
Sosefo Inoke
Judge