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Board of Trustee of South Seas Club v Chung Lee [2021] FJHC 397; HBC101.2021 (21 December 2021)

IN THE HIGH COURT OF FIJI

AT LAUTOKA

CIVIL JURISDICTION

HBC 101 of 2021

BETWEEN:

BOARD OF TRUSTEE OF SOUTH SEAS CLUB a duly registered club under the Registration

of Clubs Act with their office situated at Nede Street, Lautoka City.

PLAINTIFF

A N D:

CHUNG LEE of Simla, Lautoka.
1^ST DEFENDANT

A N D:

MANSUR KHAN of Waiyavi Stage II, Lautoka.

2^ND DEFENDANT

A N D:

RAJENDRA SWAMI of Naviyago, Lautoka.

3^rd DEFENDANT

A N D:

JOHN MAHENDRA of Malamala Street, Simla, Lautoka.

4^th DEFENDANT

A N D:

SANJAY PRASAD of Simla, Lautoka.

5^th DEFENDANT

A N D:

HAROON MOHAMMED of Vomo Street, Lautoka.

6^th DEFENDANT

A N D:

BEN SINGH of Kuata Street, Simla, Lautoka.

7^th DEFENDANT

A N D:

CECIL JAMES of Malamala Street, Simla, Lautoka.

8^th DEFENDANT

A N D:

KANDA SAMI MUDALIAR of Lautoka.

9^th DEFENDANT

A N D:

BRIJESH CHAND of Banaras, Lautoka.

10^th DEFENDANT

A N D:

ANIL KUMAR of Lautoka.

11^th DEFENDANT

A N D:

RAYMOND SINGH of Drasa Vitogo, Lautoka.

12^th DEFENDANT

A N D:

RAMESH CHAND of Simla, Lautoka.

13^th DEFENDANT

A N D:

NARENDRA SAMI of Rifle Range, Lautoka.

14^th DEFENDANT

Appearances: Mr. A. Ravindra Singh for the Plaintiff (In Person)
Mr. W. Pillay for the Defendants

Date of Hearing : 26 November 2021
Date of Ruling : 21 December 2021

R U L I N G

INTRODUCTION

1. South Seas Club (“SSC”) is a club registered under the Registration of Clubs Act. Because registration under the said Act does not, per se, confer a juridical personality on a Club, I assume that SSC is an unincorporated association, in the absence of any evidence or suggestion to the contrary.
   
2. At present, the SSC is fraught with issues caused by a division between its Board of Trustees on the one hand and its (former) Management Committee on the other.
   
3. There are allegations and cross-allegations of corruption and improprieties between the parties.
   
4. Their troubles appear to have started exactly a year ago when, on 23 December 2020, the Board of Trustees made the decision to dismiss the entire Management Committee. The Board took this action based on certain allegations of misappropriation of funds, financial mismanagement, fraud and infighting within the said Committee.
   
5. Upon dismissing the Management Committee, the Board immediately took over management of the Club. It did so under clause 114 of SSC’s constitution.
   
6. It appears to be common ground between the parties that the constitution only allows a maximum of three months to the Board to take over management of the Club. This is provided for under the constitution.
   
7. It would appear that the Board was ever mindful of the three-month requirement above. It would appear also that the Board was ever mindful of the fact that under the constitution, the foundation members, most of whom are represented in the Management Committee, have powers to remove any Board member without cause.
   
8. It would appear that, mindful of the above, and the fact that the relationship between the Board and the Management Committee seemed to be at the worst, the Board would call an AGM on 21 March 2021. According to Singh, at this meeting, the Board presented the Trustees Internal Audit Report to the Foundation Members.
   
9. According to the Board, the AGM unanimously voted that the Trustees’ time to manage the affairs of the SSC be extended for further two years. This is to allow time for a thorough investigation into the allegations against the Management Committee.
   
10. One of the issues raised by Mr. Pillay is whether or not the AGM can validly agree as such to extend the term of the Board to two years when the constitution only allows a maximum time of three months. Mr. Pillay also questions whether the Board is entitled under the constitution to call an AGM. According to Mr. Pillay, whenever the Board exercises its powers under the constitution,
    
11. Some seventeen days after the AGM, on 07 April 2021, the Foundation Members held a special meeting pursuant to clause 103 of the constitution.
    
12. Clearly, the above meeting did rattle the Board because, on the very next day, on 08 April 2021, the Board filed an ex-parte Notice of Motion pursuant to Order 29 rules 1,2 and 3 of the High Court Rules 1988 seeking the following Orders:
    
    • (1) That the purported removal of the Board of Trustees of the South Seas Club by the Defendant’s by the meeting held on 7^th April 2021 at 6pm was unconstitutional and therefore null and void.
    • (2) That the purported removal of the Board of Trustees of the South Seas Club by the Defendant’s letter dated 7^th April 2021 was unconstitutional and therefore null and void.
    • (3) That an interim injunction restraining all the Defendant’s whether by themselves or through their servants and/or agents or otherwise howsoever from hindering or interfering in any way with the management, running, control and operations of the South Seas Club until determination of the within action or until further orders or determination by this Honorable Court.
    • (4) Than an interim injunction restraining all the Defendant’s whether by themselves or through their servants and/or agents or otherwise howsoever from the use of physical or oral threats, intimidation, abusive and malicious behavior towards the Board of Trustees, staff and members of the South Seas Club until determination of the within action or until further orders or determination by this Honorable Court.
    • (5) That an interim injunction removing all the Defendant’s from the premises of South Seas Club until determination of the within action or until further Orders or determination by this Honorable Court.
    • (6) That the Defendant’s return all keys and all properties belonging to the South Seas Club House to the Plaintiff.
    • (7) That Lautoka Police Officers do act and render all assistance required by the Plaintiff in the service of Orders and render assistance necessary in the enforcement of the Orders.
    • (8) That costs of this application be paid by all Defendants on a full indemnity basis and;
    • (9) Such further and/or other reliefs or Orders as this Honorable Court may deem just and expedient.
      
13. The Motion is supported by an affidavit of Aman Ravindra-Singh sworn on 08 April 2021. Singh is a trustee of the South Seas Club. He says that he appears in this case not as counsel for the Board, but in person in his capacity as one of the trustees of the Club.
    
14. Notably, no Originating Process was filed with the Motion as required under Order 29 Rule 1(3) of the High Court Rules 1988. It appears that Singh did not alert the Court of this oversight at the ex-parte hearing before Mr. Justice Stuart on 08 April 2021. This led to the result of Stuart J not giving any direction as to the filing of an Originating Process, and neither did Singh give any undertaking to file one.
    
15. Notably also, Stuart J did grant the following Orders on 08 April 2021 but did not give a returnable date.
    
    1. That an interim injunction restraining all the Defendants whether by themselves or through their servants and/or agents or otherwise howsoever from hindering or interfering in anyway with the management, running, control and operations of the South Seas Club until determination of the within action or until further Orders or determination by this Honorable Court.
    2. That an interim injunction restraining all the Defendants whether by themselves or through their servants and/or agents or otherwise howsoever from the use of physical or oral threats, intimidation, abusive and malicious behavior towards the Board of Trustees, staff and members of the South Seas Club until determination of the within action or until further orders or determination by this Honorable Court.
    3. That the Defendant’s return all keys and all properties belonging to the South Seas Club House to the Plaintiff.
    4. That Lautoka Police Officers do act and render all assistance required by the Plaintiff in the service of Orders and render assistance necessary in the enforcement of the Orders.
    5. That Order to continue in effect until further order of the Court.
    6. That Defendants are entitled to apply to set aside the Order.
    7. Any other Orders sought by the Plaintiffs are to be applied for on Notice.
       
16. Meanwhile, as it happened, on 09 April 2021, the very next day after Stuart J made the above Orders, the Board decided to suspend the 14 members who are the defendants herein.
    
17. Because Stuart J had not given a returnable date on 08 April 2021, the defendants, after being served all the Court documents, would instruct Gordon & Company to file a Summons To Set Aside the Orders of Stuart J. The said Summons was filed on 14 April 2021 seeking the following specific Orders:
    
    • (1) That the Orders granted to the Plaintiff Ex-Parte by the Honorable Mr. Justice Stuart in Court on Thursday the 8^th of April 2021 be dissolved and/or set aside unconditionally.
    • (2) That the action and/or proceedings and/or matter be set aside and/or struck out with costs to the Defendants since no originating process was invoked by the Plaintiff under Order 5 of the High Court Rules and/or that the Plaintiff has no locus standi to commence this action.
    • (3) That time for the service of this application be abridged to one (1) day.
    • (4) That the Court Sheriff and/or the Fiji Police Force do render any and all assistance in the enforcement of the Orders herein which may include but is not limited to, explaining these orders to security officers, office holders and/or patrons of South Seas Club.
    • (5) That Costs of this action be costs in the cause.
    • (6) Such further or other order(s) that the Honorable court may deem fit, just, expedient and necessary in the circumstances.

That the Plaintiff intends to read and rely upon the affidavit of Cecil James in support filed herein:

(1) Leave granted to the Defendants by the High Court at Lautoka in order dated 8 April 2021 being paragraph 6 which reads, “That Defendants are entitled to apply to set aside the order” and
(2) Order 36 Rule 6 of the High Court Rules and;
(3) Order 2 Rule 2 of the High Court Rules and;
(4) Under the Inherent Jurisdiction of this Honorable Court.

18. At some point around that time, the Covid-19 lockdown intervened which resulted in a period of inactivity in this matter.
    
19. On 01 November 2021, Gordon & Company also filed a Summons to allow the 14 members into the Club. The application is supported by an affidavit of Cecil James.
    
20. Meanwhile, the Board’s 08 April 2021 Motion was called before the Master inter-partes on 05 November 2021 wherein the Master granted 28 days to the Respondents to file and serve an affidavit in opposition and 14 days thereafter to the Board to file and serve a reply. The Master then adjourned the matted to 11 January 2021 for hearing on the Motion.
    
21. What I am dealing with now are the respondent’s two applications, the first is the application to set aside Stuart J’s Orders and the second is their application to allow them (defendants) entry into the Club.
    
22. I will postpone the hearing of the application to set aside Stuart J’s Orders to 11 January 2022.
    
23. As for the application to allow the defendants into the Club, I note that at some point between 17 November 2021 to 26 November 2021, the Board would uplift the suspension of 14 of the 19 members in question.
    
24. It would appear that the Board wishes to have the five other members to remain suspended. I gather from a brief hearing on this matter before me on 26 November 2021 that the reason why the Board wishes to have these five to remain suspended is because of a perceived risk that they may stir things up.
    
25. Members of an unincorporated association are bound together by contract. The terms of their contract are in the rules of the organization. In the SSC’s case, these rules are set out in the organization’s constitution (see Conservative and Unionist Central Office v Burrell [1980] 3 All ER 42, LaLton LJ). As the Court said in Dawkins v Antrobus [1881] UKLawRpCh 28; [1879] 17 Ch D 615, the Court steps in to determine disputes within such associations in order to keep the parties to their contract or bargain.
    
Having ving said that, the five members in question can only be suspended and remain suspended in terms of the provision of the Constitution. There is nothing before me yet to convince me that their suspension should continue.

27. If they are a security risk, which there is no clear evidence before me that they are, then the ideal way to address that is to strengthen security at the Club at the Club’s own expense.
    
28. Accordingly, I order that the suspension of the membership of the five members in question be uplifted. The Board is to continue in its interim management position until further Orders. Parties to bear their own costs. Matter adjourned to 11 January 2022 for hearing at 10.30 a.m. on the Board’s Motion dated 08 April 2021 and also on the defendant’s application to set aside Stuart J’s Orders of 08 April 2021. Parties to bear their own costs.
    

...............................

Anare Tuilevuka

JUDGE

Lautoka

21 December 2021