Supreme Court New South Wales Medium Neutral Citation: Knox v Nile & Ors [2022] NSWSC 195 Hearing dates: 22 and 23 February 2022 Decision date: 01 March 2022 Jurisdiction: Equity - Corporations List Before: Black J Decision: Winding up order made and stayed for specified period, with Court-appointed receiver to be appointed as liquidator; scope of receiver's powers varied pending winding up; and all remaining issues in proceedings set down for hearing Catchwords: INCORPORATED ASSOCIATION — Members' rights and remedies — Whether winding up on just and equitable grounds should be ordered — Whether winding up order should be stayed for period. Legislation Cited: - Associations Incorporation Act 2009 (NSW), s 10, s 25, s 39, s 63, s 64, s 65, s 66, s 95 - Civil Procedure Act 2005 (NSW), s 90 - Corporations Act 2001 (Cth), s 95A, s 232, s 233, s 461, s 532, s 1322 - Electoral Funding Act 2018 (NSW), s 76 - Evidence Act 1995 (NSW), s 136 Cases Cited: - Alstom Ltd v Sirakas [2012] NSWSC 1064 - Australian Securities and Investments Commission v ActiveSuper Pty Ltd (No 2) (2013) 93 ACSR 189; [2013] FCA 234 - Bandiara v Bilabil Community Preschool & Oosh Inc [2018] NSWSC 1903 - Chen v Shaanxi Chamber of Commerce [2021] NSWSC 337 - Gerard Cassegrain & Co Pty Ltd (in liq) v Cassegrain (2013) 305 ALR 687; (2013) 97 ACSR 283; [2013] NSWCA 455 - Hodgson v Amcor Ltd [2012] VSC 162 - Luen Fook Tong Inc v Lowe [2011] NSWSC 1004 - Massey v Wales (2003) 57 NSWLR 718 - Re Application of Volleyball Conference of New South Wales (Young J, 10 April 1995) - Re CNPR Limited [2018] NSWSC 989 - Re DJG Securities Pty Ltd [2013] NSWSC 588 - Re FGM Print Pty Ltd [2018] NSWSC 1478 - Re Kwang Huauyu-Soon Inc [2009] NSWSC 658 - Re OGL Resources Ltd [2015] NSWSC 58 - Re Spitfire Q Pty Ltd [2021] NSWSC 866 - Re Catombal Investments Pty Ltd [2012] NSWSC 775 - Sengthong v Lao Buddhist Society Inc [2016] NSWSC 1408 - Singh v Singh; Flora Trading as Flora Constructions v Budget Demolition and Excavation Pty Ltd [2008] NSWSC 386 - Treadtel International Pty Ltd v Cocco (2016) 117 ACSR 176; [2016] NSWCA 360 Category: Procedural rulings Parties: Charles Robert Bray Knox (Plaintiff) Fred Nile (First Defendant) Silvana Nile (Second Defendant) Annie Wright (Third Defendant) Christian Democratic Party (Fred Nile Group) Incorporated (Fifth Defendant) Representation: Counsel: T Hall (Solicitor – Plaintiff) P King/J Loxton (First – Third Defendants) M Heath (Receivers) J Ferguson (Solicitor – Interested Party) Solicitors: Hall Partners (Plaintiff) Robert Balzola & Associates (First – Third Defendants) Matthews Folbigg (Receiver) Gibson Howlin Lawyers (Interested Party) File Number(s): 2020/270818 Judgment Background and history of the proceedings 1. The Plaintiff, Mr Knox, sought relief in respect of the affairs of the Fifth Defendant ("Association") which is a political organisation incorporated under the Associations Incorporation Act 2009 (NSW) and associated with the First-Third Defendants, Reverend Nile, Mrs Nile and Ms Wright ("Nile parties") and other persons. That application was followed by other interlocutory applications brought by the Nile parties, Mr Knox and an intervening party, Mr Collins, and the ongoing disputes relating to the Association have continued despite an agreement formed at an earlier mediation, a subsequent meeting of the Association, consent orders made by Henry J on 12 May 2021 ("May Consent Orders") and the appointment of a receiver to conduct an election of office bearers in the Association. The existing disputes were not resolved by a hearing over several days before Rein J in November and December 2021, and new disputes as to the conduct of the election have emerged in the course of a further two day hearing before me. 2. The hearing before me was directed to the question whether the Association should be wound up in insolvency or on the just and equitable ground, inter alia, by reason of the ongoing disputes and the costs incurred in the proceedings. Mr Knox sought such an order and the Nile parties resisted that order and, at times, contended that the proceedings should be dismissed without a determination on the merits of the remaining issues in dispute. Mr Condon, the receiver appointed to the Association by the May Consent Orders, was represented at the hearing and Mr Collins was also heard at this hearing. 3. I now turn to the history of the proceedings and the receivership resulting from the May Consent Orders. By Summons filed on 17 September 2020, the Plaintiff, Mr Knox sought interlocutory and other relief, including declarations that the Nile parties do not hold offices within the Association. The relief then sought, over 17 months ago, was directed to the outcome of an annual general meeting of the Association held in December 2019, over two years ago. By a Statement of Claim subsequently filed on 25 February 2021, Mr Knox also sought orders restraining certain conduct on the part of specified Defendants, a declaration that Reverend Nile did not hold the office of State President of the Association and was not a member of the board of the Association, declarations as to the position of Mrs Nile and Ms Wright and such other order as the Court thinks fit. 4. By a First Cross-Claim Cross-Summons filed on 22 October 2020, the First and Second Defendants, Reverend Nile and Mrs Nile sought orders under s 1322 of the Corporations Act 2001 (Cth) in respect of the conduct of the annual general meeting of the Association held on 7 December 2019 and the purported appointment of several Defendants as officers of the Association, and such other orders as the Court deems fit. 5. A mediation was then held in November 2020, where it is alleged an agreement was reached providing for the appointment of a caretaker board of the Association and the calling of an annual general meeting on 28 November 2020, at which a new management committee or board of the Association would be elected. There is a dispute as to the validity of the conduct of the annual general meeting in November 2020 and the validity of the election of the Association's board at that time. 6. As I noted above, multiple interlocutory applications were then brought in the proceedings. By a Notice of Motion filed on 24 November 2020, Mr Knox sought orders that certain nominations were ineligible to be considered for election at an annual general meeting of the Association; appointing a receiver/manager over the Association to convene that meeting, take charge of the Association's assets and finances and administer them until further order of the Court; and restraining Reverend Nile and Mrs Nile from approving payments by the Association or from its bank account and suspending Ms Wright's authority and power to undertake any duties or role as the state manager of the Association. By a further Notice of Motion filed on 9 February 2021, Mr Knox sought orders restraining the Nile parties from acting as if they are members of the Association's State Board and causing any transfer or withdrawal from accounts held by the Association, and such other orders as the Court thinks fit. 7. While Mr Knox's applications and the proceedings were on foot, on 9 April 2021, the board of the Association appointed Mr Condon as voluntary administrator on the basis that the Association was insolvent or likely to become insolvent. By a Notice of Motion dated 21 April 2021, Mr Condon then sought an order validating his appointment as administrator of the Association or alternatively an order appointing him as receiver and manager of the Association for limited purposes, namely to conduct an election of a new management committee and provide a report to the Court as to affairs and governance of the Association. That Notice of Motion also sought "consequential and further orders". By an Amended Notice of Motion filed on 6 May 2021, Mr Knox in turn sought an order appointing an independent solicitor for the purpose of conducting an election in accordance with short minutes of order previously signed by Mr Knox and several Defendants and an order appointing a different person as receiver over the Association. 8. Mr Condon's and Mr Knox's motions were heard before Henry J on 12 May 2021. A report to creditors tendered at that hearing recorded advice received by the Association's board that the costs associated with these proceedings would be significant and would have the effect of placing the Association into insolvency and advised that a voluntary administrator should be appointed under s 54 of the Associations Incorporation Act. Mr Knox contended at that hearing that the appointment of Mr Condon as administrator had been improper, where there were existing disputes as to the validity of the then Board's appointment, the Association was not insolvent and Mr Knox had then been seeking the appointment of a receiver to the Association. Henry J recorded what she was told as to the purpose of the voluntary administration at paragraph 10 of her judgment, and I will return to that purpose below. It appears that Mr Knox then withdrew his opposition to the validation of Mr Condon's appointment as voluntary administrator of the Association and Henry J validated that appointment under s 1322 of the Corporations Act. It appears that the Nile parties also supported the appointment of a receiver and manager to the Association at that hearing. 9. In her judgment delivered on 12 May 2021 (Knox v Nile [2021] NSWSC 538), Henry J identified some of the issues as to the governance of the Association which then existed, observing (at [19]) that: "Based on the evidence on this application, in my view, there is a question as to whether the new Board had the power to appoint Mr Condon as administrator of the [Association] on 9 April 2021. This issue arises because it is not clear that the parties to the mediation agreement were authorised to appoint the caretaker Board, who then convened the Annual General Meeting in November last year. There is also the question raised by these proceedings, which is not necessary for me to determine on this application, as to whether the elections undertaken at that meeting were conducted according to the [Association's] constitution which requires all office bearers to be endorsed by at least 75% of the members of the Annual State Council, rather than a simple majority." 1. Her Honour also observed (at [22]) that: "It is apparent from the evidence and, indeed, accepted by the parties to these proceedings that there was an intractable impasse between the various party factions and there was a need for an independent third party to step in and take control of the [Association]. There is no evidence on this application, or any basis for considering, that there will be any prejudice to members or creditors of the [Association] as a result of Mr Condon's appointment, particularly in circumstances where the question of his costs, fees and disbursements are reserved and will be determined on another day." 1. Her Honour also noted (at [26]) the purpose of the appointment of a receiver and manager (which, I interpolate, has not since been achieved in the nine months in which the receiver and manager has been in office, during which very substantial costs have been incurred) as follows: "The appointment of a receiver and manager in this case is for the primary purpose of resolving a dispute about the continuing governance of the [Association], an association governed by the Associations Incorporation Act, whilst, at the same time, preserving the [Association's]'s property. Specifically, the appointment seeks to empower the receiver to administer and supervise an election process which, as is evident from the history of these proceedings, is expected to be contentious. Courts have recognised the jurisdiction to appoint a receiver for these purposes: Sengthong v Lao Buddhist Society of NSW Incorporated [2016] NSWSC 1408 at [170] ff; Chen v Shaanxi Chamber of Commerce [2021] NSWSC 337 at [11] –[12] . Given the history of disputes and current impasse, I am satisfied that the circumstances warrant the appointment of a receiver and manager to the [Association] in this case." 1. Her Honour then made the May Consent Orders, which appointed Mr Condon as receiver and manager of the Association for specified purposes ("Receiver") and provided, inter alia, that: "1 Pursuant to s 1322(4) of the Corporations Act 2001, the appointment of the Applicant, Schon Gregory Condon, as administrator of the Fifth Defendant (the Association) be validated nunc pro tunc. 2 Pursuant to s 435C and/or s 447A of the Corporations Act 2001 ending the administration of the Association. 3 Reserve the question of the Administrator's costs, fees and disbursements. 4 Schon Gregory Condon be appointed as receiver and manager (Receiver), without security, of the assets and undertaking of the Association commencing on the date of this order and continuing until further order of the Court. 5 The Receiver has power to: (a) convene an extraordinary general meeting (the Meeting) of the Association, to be held as soon as may be practicable, for the purpose of: (i) electing persons to the positions of the management committee of the Association, identified in subclauses 4.1, 4.2, 4.3, 4,4, 4.5, 4.7 of the Association's [c]onstitution and any other consequential or necessary appointments; (ii) obtaining and collating feedback from the Association's membership as to any governance issues concerning the Association (for the purposes of order 9(d)); (b) issue a notice (the Notice) of the Meeting to all members of the Association at least 14 days before the date fixed for the holding of the Meeting, which specifies [certain matters]; (c) approve or reject any nomination for membership of the Association received at any time by the Receiver in accordance with clause 11 of the Association's [c]onstitution; (d) preside as chairperson at the Meeting, or nominate a person to chair the Meeting at the Receiver's discretion; (e) permit members to attend the Meeting remotely via proxy or audio/visual link, in accordance with the usual course as permitted by the Association's [c]onstitution; (f) exercise all the rights of the chairperson at the Meeting, as provided for under the Association's [c]onstitution; and (g) without limiting the terms of the immediately preceding sub-paragraph of these orders, determine who is eligible to vote as a member of the Association at the Meeting. 6. The Notice be issued to [specified persons] … 7. For the purposes of the Meeting, motions arising at the meeting, including the election of Committee members, are to be determined by a majority of the votes of members present at the meeting and entitled to vote. 8. For the purpose of orders 4, 5, 6 and 7 of these orders, the Receiver has all of the rights and powers: (a) of the Association; (b) of a member of the Association; (c) of any and all members of the management committee of the Association; (d) the 'State Office', 'the Electorate Branch' and the 'Branch Membership'; (e) necessary to manage any and all of the assets and undertaking of the Association in such manner as the Receiver considers appropriate, consistent with the objectives of the Association; and (f) as may be reasonably incidental to the pursuit of any of the matters identified in order 5 or the exercise of any the powers otherwise conferred by these orders … 9. Within 14 days of the convening of the Meeting, the Receiver provide to the Court and the legal representatives of the Plaintiff and the First to Third Defendants, a written report which [addressed specified matters]; 10. The reasonable costs and expenses properly incurred by the Receiver in the performance of his duties and the exercise of his powers and any matters arising from, relating to, incidental to and in connection with the performance of his duties and the exercise of his powers under these orders be paid from the assets of the Association. 11. All questions concerning the quantification of the Receiver's reasonable costs and expenses be reserved. 12. Liberty be reserved to all parties and the Receiver's to apply to the Court to vary or discharge these orders or for directions generally. 13. The Plaintiff's Notice of Motion filed on 9 February 2021, Amended Notice of Motion filed in Court on 12 May 2021 and the Administrator's Notice of Motion filed on 21 April 2021 be dismissed. …" 1. By an email dated 7 June 2021, a member of the Receiver's staff then referred to a list of the Association's electorate branches and their delegates which had been provided to the Receiver and sought confirmation of the date that each of the branches had been approved by the State Council under cl 6.2 of the Association's constitution. As will emerge below, that matter was important to the Receiver's ability to conduct the meeting contemplated by the May Consent Orders in accordance with the Association's constitution, with delegates of the electorate branches voting to elect new officers at that meeting. A response dated 7 June 2021 from Ms Wright, who described herself as State Director of the Association, did not provide that confirmation and instead provided an explanation of sorts of the status of the Association's branches, as follows: "All [Association] branches currently in operation are 'reformed branches' in that they are branches that once were in operation but for one reason or another ceased being so active. It is extremely normal for political parties of all persuasions to have branches spark to life during election campaigns and then 'go to sleep' once the election period is over. … I will further note that many (if not all) of our branches are decades old, at one point we had a branch in each of the 93 State electorates. However, poor housekeeping by branches and multiple moves of Head Office have made historical recordkeeping nigh impossible." That explanation does not assist in identifying the current electorate branches of the Association. 1. By a notice issued on 21 September 2021 to members of the Association, the Receiver referred to the May Consent Orders and to the officers who would be elected and referred to a delay resulting from concerns raised by members with the operation of the May Consent Orders and the Association's constitution. That notice proceeded on the basis that cl 4(b) of the Association's constitution required the approval of 75% of branch delegates for the election of officers at an Annual State Council, and also noted that concerns had been raised as to the validity of existing branch delegate appointments and that the Receiver did not consider that adjudicating on the validity of delegate appointments was his role; I refer below to the Receiver's evidence of the difficulties which would be involved in determining that matter. That notice also recorded the Receiver's then view that a validly elected board would be in a position to resolve the validity of the register of delegates, but that proposition ignored the difficulty that a valid register of delegates was necessary to identify the delegates who could vote on an election of the board. That notice indicated that the Receiver also then understood the May Consent Orders to provide for an election by all members of the Association, rather than by delegates of the Association's electorate branches. That position was incorrect, where those orders provided for the election to be determined by "a majority of the votes of members present at the meeting and entitled to vote" but did not define who was entitled to vote at that meeting, and the Association's constitution provided for the election of office holders by voting by delegates of the Association's electorate branches at an Annual State Council. The Receiver retreated from that position in this hearing. The notice indicated the then difficulty of conducting a physical meeting by reason of COVID-19 stay at home orders which were then in force and called for nominations to fill the relevant board positions. A voting protocol prepared by the Receiver contemplated that all members would be entitled to vote at the proposed meeting and a memorandum to members concerning the meeting proceeded on the same basis. 2. By a further Notice of Motion filed on 30 September 2021, the Receiver sought orders amending the May Consent Orders to allow the election of office holders to take place by postal ballot, and also sought such further or other order as the Court deems fit. By a further Notice of Motion dated 13 October 2021, Mr Knox sought further orders directed to steps taken by the Receiver. By a Further Amended Notice of Motion dated 30 November 2021, an intervening party, Mr Collins, sought orders vacating the May Consent Orders, orders under s 233 of the Corporations Act modifying the Association's constitution and directing the Receiver to convene a meeting to elect specified office bearers of the Association; declarations as to the electorate branches of the Association; and other relief, including such other or further orders as the Court deems fit. 3. The proceedings were then listed to deal with the several further notices of motion before Rein J on 10 and 11 November 2021 and again on 30 November 2021. By his judgment delivered on 7 December 2021, Rein J noted that all parties there accepted that the May Consent Orders were inconsistent with the Association's constitution; that the parties had attempted to agree new orders but that there was no agreement relating to the identification of the branches of the Association; and it was the branch system which would, by the terms of the Association's constitution, produce the delegates who would vote to elect its office holders. His Honour noted that an order was sought under the oppression provisions of the Corporations Act (as possibly incorporated by s 95(3)(a) of the Associations Incorporation Act) amending the Association's constitution to provide for a simple majority, rather than a 75% majority under cl 4(b) of the Association's constitution (which I address below), to determine the outcome of elections. His Honour noted that that issue would need to be litigated and that the Receiver "has previously indicated that the Association does not have the financial capacity to meet future costs in the event of further litigation." His Honour went on to observe that: "It seems from the evidence filed to date in respect of the issue of the Association's solvency that critical to that matter is the question of whether donations to the party and payments made by the Electoral Commission are or are not available to be used in payment of legal costs of the Association connected with this litigation and the costs of Mr Condon and his staff and any legal costs claimed by the other parties from the Association. The internal stalemate is also a concern in relation to the continued viability of the Association and I do not think one could be entirely confident that even if the elections go ahead that there would not be further disputes between the parties. Some have been raised on previous occasions but not formalised into any motions and the original proceedings commenced by Mr Knox have not, as yet been determined. Given the issues in respect of solvency (and also the internal conflict potentially undermining the viability of the Association) I think these proceedings should be transferred to the Corporations List and it will be listed on Monday, 13 December 2021 ... None of the legal representatives appearing in the matter contested the appropriateness of that course." 1. The matter was then listed in the Corporations List on 13 December 2021 and I directed the Receiver to serve updating evidence and submissions as to the Association's solvency and as to the scope of the Court's jurisdiction to wind up the Association, whether under the Associations Incorporation Act or otherwise, by reason of any question as to the Association's continuing solvency. I also directed any other party which wished to serve evidence or submissions in response, limited to that issue, to do so by 28 January 2022 and listed the matter for hearing before another Judge in the Corporations List on 10-11 February 2022. The Receiver substantially complied with that direction and I will refer to his affidavit evidence below. The Nile parties then sought to adjourn the hearing that was listed for 10-11 February to allow them more time to file evidence. I acceded to that application, where it seemed to me that the Receiver's evidence had raised issues as to then proper use of the Association's remaining funds, which would also need to be addressed in dealing with the question whether the Association should be wound up. 2. I summarised the position as it then stood in my ex tempore judgment delivered on 9 February 2022 as follows: "It seems therefore, and at least the [Nile parties] and [Mr Collins] accept, that matters have developed to expose a difficulty that, if the Association is financially solvent, it may only achieve that result by expending funds in a manner that would be inconsistent with its objectives. That plainly raises a possibility that, rather than continuing a receivership in a manner that will involve those costs increasing over the short to middle term, or achieving solvency at the cost of meeting costs in a manner that are inconsistent with the Association's objectives, an order should be made that the Association be wound up on the just and equitable ground. The receiver properly recognises that that order may be available, although expressing the view that it should not be made in his submissions, apparently on the basis that the Association can achieve solvency by applying its funds to meeting continuing costs as noted above, rather than for electoral purposes. It seems to me that, in these circumstances, if the matter proceeded, a two stage process would develop, where the trial judge might well find that the Association is solvent, but its solvency is achieved at the cost of departing from its objectives, raising the question whether it should then be wound up on the just and equitable ground, which would then need to be determined. All parties have ultimately accepted that, in those circumstances, it is preferable that both issues be addressed together, which will require an extension of the scope of evidence and submissions so far as the receivers are concerned, and an extension of the time and scope of evidence and submissions so far as other parties are concerned. While I am conscious of the Court's reluctance to vacate a hearing date, particularly if the only reason to do so is delay in compliance with the Court's directions, it does not seem to me that this is a case of that character. While there has been delay in compliance with the Court's direction, the real reason to vacate the hearing date is to ensure that all relevant matters can be addressed at once, and that course is appropriate in the circumstances." 1. The parties have now had, and taken advantage of, the opportunity to lead further evidence and make further submissions as to the question of the Association's solvency, the disputes between its members and whether it should be wound up in insolvency or on the just and equitable ground. Affidavit and other evidence 1. I now turn to the affidavit and other evidence led at this hearing, before addressing the Association's constitution and the parties' submissions. The Nile parties' evidence indicates the continuance of the disputes within the organisation and their lack of confidence in the Receiver's activities. By an affidavit dated 18 February 2022, Reverend Nile addresses the history of the Association and identifies its aims and objectives, which appear to have both a religious and a political character. He records (in evidence admitted with a limiting order under s 136 of the Evidence Act 1995 (NSW) as submission only) his disappointment that the Receiver has not called and conducted an extraordinary general meeting and asserts that it was promised that would be conducted within six weeks for $35,000, and he criticises the fees charged by the Receiver and foreshadows a challenge to those fees. Reverend Nile then annexes five letters which he says are from "longstanding [Association] Branches that represent multiple members", and which he says indicate that members are "dissatisfied and very unhappy with the Receiver's conduct and abuse of his position and power". Reverend Nile also contends (in evidence also admitted with a limiting order under s 136 of the Evidence Act as submission only) that the Receiver has "abused his position and power", not conducted his "Court-ordered mandate" and should be dismissed. 2. The letters annexed to Reverend Nile's affidavit make very similar points, suggesting a degree of coordination in their preparation. The first, dated 20 December 2021, from a person (whose identity is masked) who is described as the secretary of the Ballina branch of the Association commences with an extended attack upon a person connected with the Association who is not party to the proceedings; identifies the fact that the Association is "struggling to remain solvent" and complains as to a salary paid to that person; and then identifies the purpose of the appointment of Mr Condon as voluntary administrator to the Association in April 2021 as follows: "The Condon Group was engaged in April 2021 to put a stop to the Knox litigation which began in September 2020. At this time, the Party was in good shape financially." That suggestion, repeated in several of the letters annexed to Reverend Nile's affidavit, raises a question whether the appointment of Mr Condon as voluntary administer was made for an improper purpose, if it was directed to terminating the proceedings brought by Mr Knox in this Court, and where a voluntary administrator could only be appointed if the Association was insolvent or likely to become insolvent and not when it was "in good shape financially". It is not necessary to determine that question in order to determine this application. The secretary of the Ballina branch also complains about the delay in the extraordinary general meeting and the failure to conduct a postal vote and refers to advice from the head office of the Association to the Receiver that "a postal vote would suffice". He or she also expresses his or her shock that the Receiver invited all members of the Association to vote at an extraordinary general meeting, and complains that would have been a breach of the Association's constitution because "only [two] Delegates and Coordinators from each Branch are eligible to vote", and records his or her belief that the Receiver's failings have forced the Association "into the very area of possible insolvency". As I will note below, the Nile parties now support (in submissions in reply) the form of election by all members which that email rightly recognised was inconsistent with the Association's constitution. 1. By another email dated 2 January 2022, Mr Tom Harris, who says he is the treasurer and secretary of the Penrith branch of the Association and that his wife is the current president of that branch, also criticises the Association's continued employment of a person connected with the Association and repeats the proposition, apparently commonly understood among Association members, that the Association was "completely solvent" at the beginning of the voluntary administration, although I noted above that a voluntary administrator could only properly have been appointed if it were insolvent or likely to become insolvent, and the administration costs now threaten its solvency. Mr Harris also suggests that the voluntary administrator had a "clear mandate" to conduct an extraordinary general meeting for the election of a new Association board. 2. By an email dated 22 December 2021, a person (whose identity has been masked) who says that he or she writes on behalf of the combined Central Coast branches of the Association, and that he or she is the president of the Association's Gosford branch, launches a similar attack upon a person connected with the Association, again complains as to the Receiver's fees, and also advises that: "At the time of your appointment our Party was in a very comfortable financial position, there are now serious concerns or our solvency due to your failures and ongoing costs." That member also refers to the failure to conduct an extraordinary general meeting and contends that the Receiver "disrespected our members by sneakily attempting to push a plebiscite vote (a breach of our [c]onstitution) instead of a delegate vote for the Board" and recognises that the Association is now "struggling to remain solvent". I pause to note that, the Nile parties now support (in submissions in reply) the form of election which that member there challenged. 1. By email dated 22 December 2021, a fourth person whose identity is also masked describes himself or herself as a long-serving veteran of the Association since 2006 and says he or she is writing on behalf of the Shoalhaven branch, of which he or she was president. He or she also complains as to the continued payment of a salary by the Association to a third party and then observes that: "I was on the Board when we voted you in as Administrator in April. This was voluntary administration NOT INVOLUNTARY, as our Party was not in financial straits to be wound up. You were engaged to protect us from any future litigation from the hostile Charles Knox Group of dissidents." [emphasis in original] This observation, apparently made by a member of the board which appointed the voluntary administrator, again raises a question whether that appointment was made for an improper purpose. As I noted above, it is not necessary to determine that question. 1. By her affidavit dated 17 February 2022, Mrs Nile, who describes herself as the Senior State Deputy President of the Association, refers to voting undertaken at an annual general meeting of the Association on 28 November 2020 and observes that no candidate achieved 75% of the votes (as required by cl 4(b) of the Association's constitution, which I address below) and states that previous party administrators have not required a 75% majority of delegate and coordinator votes and that percentage has not been achieved in her nine years with the Association. Mrs Nile in turn identifies the votes that took place at that meeting, falling short of that requirement. 2. By her affidavit dated 17 February 2022, Ms Wright, who describes herself as the State Director of the Association, refers to the agreement reached following a mediation on 6 November 2020, and contends that the reference in that document to the "Annual State Convention" is incorrect and should refer to the "Annual State Council". Ms Wright asserts that the procedures set out in the terms of agreement were complied with at the annual general meeting and contends that a new board was elected at the annual general meeting, apparently disregarding the non-compliance with the 75% vote requirement in cl 4(b) of the Association's constitution. Ms Wright then refers to subsequent events and to her suggestion that the Receiver convene an extraordinary general meeting of the Association by a postal vote and she objects to the Receiver's invitation to all members of the Association to vote at that meeting. Ms Wright identifies her concern that this involved a breach of the Association's constitution and that only two delegates and one coordinator (implicitly, from each electorate branch) were entitled to vote rather than all members of the Association being entitled to vote under that constitution. I will note below that the Nile parties now advance the contrary position in submissions in reply, if the Court does not accept the contention that the proceedings should be dismissed without determining them. 3. Ms Wright then contends (in evidence admitted with a limiting order under s 136 of the Evidence Act as submission only) that the appointment of the Receiver should be terminated for several reasons, and also refers to a dispute as to payment made to a former employee of the Association, contends the Receiver's fees are exorbitant, and complains that the Receiver has not communicated with her or Reverend Nile and that there is no reason why the affairs of the Association should not be resumed and conducted by the "presently elected board". She also addresses the Association's funds (in evidence also admitted with a limiting order under s 136 of the Evidence Act as submission only) and its objectives. 4. By his affidavit dated 18 February 2022, Mr Voyias, who describes himself as the finance manager for the Association, refers to the receipt of funds by the Association from the Electoral Commission in respect of the 2019 state general election and identifies the Association's practice of collecting donations from members that are earmarked for state elections, spending those funds on state elections and then seeking reimbursement from the Electoral Commission. Mr Voyias' evidence is that the Electoral Commission has placed no conditions on the use of those funds, and he annexes a letter dated 15 February 2022 from the Electoral Commission. That letter sensibly declined to advise the Nile parties' solicitors as to questions of statutory interpretation but confirmed the Electoral Commission did not determine conditions under s 76 of the Electoral Funding Act 2018 (NSW) with respect to the disbursement of the amount paid to the Association. It does not follow, of course, that the Association was free to apply its funds for any purpose, including funding the continued infighting between the several parties to these proceedings. Mr Voyias also asserts, without further evidence, his belief that the Association is solvent and identifies the purpose of appointing a voluntary administrator to the Association in April 2021 as follows: "We agreed in April 2021 to enter into a voluntary administration with Condon Group, which then morphed into a Receivership. This was to conduct an AGM and elect a new board and get on with getting ready to contest the upcoming elections. Condon Group was to conduct an AGM before EOFY for approximately $35,000 " 1. As I have noted above, the voluntary administration regime is directed to the position of an association that is insolvent or likely to become insolvent, and does not provide a means for controllers of an association to conduct annual general meetings or elect new boards or prepare for the contest of parliamentary elections. Mr Voyias also complains as to the conduct of the Receiver, and records advice given by the Association's "head office" to the Receiver that a postal vote would suffice. He objects to the Receiver's proposal that all members of the Association should be able to vote, although, as I noted above, the Nile parties now support that approach in submissions in reply, if the proceedings are not dismissed. 2. The Nile parties also tendered the Receiver's affidavit dated 23 February 2022 which referred to his identification of the number of the Association's members as at 22 February 2022, although whether that is the relevant date to identify members entitled to vote at a meeting, if voting is not restricted to delegates of electorate branches, is also in dispute. It appears that a number of those memberships have lapsed, and it is not clear how the Receiver's calculation of the number of financial members of the Association reconciles to these figures. The Receiver there estimates that it would take 45 days to convene a mixed physical and virtual member meeting, although the Nile parties contend for a postal vote, possibly in addition to other mechanisms of voting. There is a degree of uncertainty as to the Nile parties' position as to this affidavit, since Mr King (who appeared for them on the second day of hearing) initially contended that affidavit was "misleading" before later tendering it and relying on it. 3. Turning now to the Receiver's evidence, by his affidavit dated 15 October 2021, Mr Condon set out the steps which he had undertaken since his appointment which included maintaining the "operational trading status" of the Association with control over its ongoing income and expenditure, considering the alternatives of an election by voting delegates nominated by each valid branch of the Association and allowing all members to vote individually, investigating the future viability of the Association and undertaking other steps. He indicates that he has begun the preparation of a report containing the results of his investigation, which he foreshadows will ultimately be provided to the Court and a newly elected board of the Association. 4. Mr Condon indicates that he is satisfied, from his review of membership lists, that there are 1120 eligible members of the Association as at 8 October 2021 eligible and entitled to vote at the extraordinary meeting proposed by the orders, who are financial members of the Association. That approach is inconsistent with the Association's constitution, which does not contemplate an extraordinary general meeting at which financial members of the Association would be entitled to vote. Mr Condon also notes that, if voting was to be undertaken on the basis of branch delegates (as, I interpolate, the Association's constitution contemplates), then it would be necessary for him to convene branch meetings to confirm those delegates. I should add that it would also be necessary to identify the branches of the Association which were entitled to appoint delegates, which is a matter in dispute in the proceedings. Mr Condon also refers to difficulties which arose in respect of the conduct of the earlier meeting contemplated by the May Consent Orders as a result of the lockdown arising from COVID-19. In any event, that proposed meeting of all financial members would not have brought about a valid appointment of officers of the Association in accordance with its constitution. Mr Condon also gave evidence of the reasons he considered that voting should take place by way of postal ballot, but that suggestion depended upon the premise that officers of the Association could be appointed by a vote of all financial members, which is not consistent with the Association's constitution. 5. By a second affidavit dated 29 November 2021, Mr Condon addressed funds held by the Association in various accounts as at 26 November 2021, including $323,011 held in operational accounts and $599,414 held in election campaign fund raising accounts that may have restrictions under the Electoral Funding Act, of which an amount of $544,572 was held in a State Election Account. He also referred to monthly expenditure of the Association in the amount of $39,327 and monthly income of $60,332 derived from Electoral Commission funding, donations and membership dues, and recognised that that income would likely be significantly impacted if there was no timely resolution to these proceedings. Mr Condon also identifies unpaid claims of creditors of the Association totalling $96,852 and indicates that his firm's costs to 12 May 2021 are $40,401 exclusive of GST, his solicitors' fees are $23,833.50 inclusive of GST to that date and he was yet to receive Counsel's fees for that period; he claims further remuneration totalling $104,426 exclusive of GST in respect of his appointment as receiver of the Association, presumably in the period to late November 2021, his solicitors' costs in respect of the receivership are $54,825.10 and Counsel's fees up to and including the hearing on 30 November 2021 are $33,850 including GST. He also estimates future costs for the receivership to the end of January 2022 as $35,000, excluding GST; future solicitors' fees of $22,000 inclusive of GST and Counsel's fees of $11,000 inclusive of GST on the basis that certain matters would be resolved on 30 November 2022, which did not occur. The total remuneration and disbursements claimed by Mr Condon is in excess of $325,000, partly exclusive of GST, comprising a substantial proportion of its remaining assets. Mr Condon there expressed the view that the Association was solvent because there was sufficient funds to pay the costs of the administration and the costs of the receivership as and when they fall due, although that conclusion did not address the propriety of paying those costs from the election accounts. 6. By a third affidavit also dated 29 November 2021, Mr Condon refers to representations that he has received from members of the Association concerning the matters relating to running the Association, the election process for the Annual State Council, the validity of different branches of the Association and the Association's employment of particular individuals. He annexes a list of members of the Association to that affidavit, including persons who are "current members" although not currently financial. He observes that the Association does not have an ability reliably to confirm which members of the Association belong to a particular branch, and that there is no prohibition on members joining multiple branches or holding executive positions within multiple branches. He observes that: "I am concerned that in any election for the State Council, based on the inadequacy of records for each Branch and the processes of the Association, there is no way of determining whether a Member of the Association may vote or would vote at multiple branches. The present system of the Association would appear not to prevent this circumstance. The [c]onstitution appears to be silent on the topic." 1. This is plainly a legitimate concern, but it does not address the difficulty that the Association's constitution contemplates an election for the State Council in that manner. Mr Condon also refers to deficiencies in the Association's records regarding branches and their respective members, both prior to the November 2020 annual general meeting and in previous years. Mr Condon's affidavit also noted difficulties with the appointment of members to electorate branch executives, the conduct of branch meetings and determining whether branches are active. That affidavit also annexed a membership list which divided Association members into the categories of "single" or "couple", rather than into the membership categories provided by the Association's constitution. Mr King, without reference to any supporting evidence, advanced submissions in reply that there was no difference between those categories. 2. By an affidavit dated 6 December 2021, Mr Gavin King, who is an employee of Mr Condon's firm, referred to the means by which donors made donations to the Association and to the transfer of funds by the Electoral Commission into the State Election Account with a balance of $486,307 on 20 August 2019. 3. By his further affidavit dated 18 January 2022, Mr Condon expressed the view that the Association is solvent if, and only if, it applies moneys received from the Electoral Commission and held in the State Election Account to expenses including the costs of the receivership and the costs of legal representatives which likely includes the costs of the proceedings. He reserved the position as to any orders for costs which may be made in favour of other parties in the proceedings. Mr Condon also fairly recognised that it appears that the Association is not solvent if it is not permitted to apply those funds in that manner. As I noted above, a further difficulty arises, even if the Electoral Funding Act does not prohibit that use of the funds, if that use would be inconsistent with the Association's purposes. 4. By his further affidavit dated 17 February 2022, Mr Condon annexes correspondence from persons he describes as members of or donors to the Association, although their identities are masked. That correspondence highlights members' perception of the continuing governance failures within the Association. For example, an email dated 22 November 2021 records that: "I have been concerned about how the present members of the Board have been causing factional in-fighting that has blighted the [Association] for years with expensive Court cases. I understand the Supreme Court of New South Wales recently has appointed you, Mr Condon, as an independent Receiver to conduct an election. I understand that all members of the [Association] would be able to vote and have a say in who would be elected to the new board. I was extremely happy and satisfied that this could proceed." That member or donor then records his or her dissatisfaction that members of the board, including Ms Wright, objected to non-board members voting at the proposed election. While that person's views are understandable, Ms Wright's position took advantage of the fact that the Association's constitution is structured, rightly or wrongly, so that members do not have a direct vote as to its board and to provide for the election of office holders to be conducted through branches (I interpolate, if that could occur where the identity of those branches was also in dispute). That member or donor also records other dissatisfaction with the conduct of the Association's board. 1. Another member indicates his or her view that justice will not be served unless all of the financial members of the Association are given the opportunity for a vote in a special ballot. That member invites the Court to allow parties 48 hours to reach an agreement, or to remove all persons from their present positions and conduct a postal vote of all financial members. There seems little point in a vote in the manner proposed by that member which would not comply with the Association's constitution. Another member records his or her belief that the affairs of the Association "now appears to be in disarray" and records his or her concern as to the magnitude of the Association's debts. He or she also seeks to have members of the Association empowered to vote on the appointment of a new president and board, but that approach again would not comply with the Association's constitution. Another member expresses his or her view that: "To date the parties' two warring factions, by their sheer stubborn intransigence, it would seem, continue to 'war', with unfortunately, no end in sight." That member also, understandably, wishes financial members of the Association to be permitted to vote directly for a new board. 1. By an affidavit dated 16 February 2022, Mr Gavin King, who is an employee of Mr Condon's firm, gave evidence of expenditures made from the State Elections Account since the payment made on 20 August 2019 by the New South Wales Electoral Commission into that account. It is not necessary to address that evidence further for the purposes of this application. 2. Mr Collins, who is a current financial member of the Association, and the secretary and a branch delegate for the Miranda electorate branch of the Association, was also heard in the application. By his affidavit dated 1 November 2021, Mr Collins indicates that he has been a member of the Association for approximately 20 years. He refers to the appointment of Mr Condon as Receiver and to Mr Collins' nomination for the positions of deputy president, state secretary and board member in the election which has not yet been conducted. Mr Collins intervened in the proceedings after the Receiver filed a motion to vary the May Consent Orders to permit a postal vote, at a time that the conduct of a physical meeting would have been constrained by COVID-19 restrictions. Mr Collins there refers to the manner in which electorate branches of the Association can be created and exhibited a list of electorate branches dated 6 April 2020, to which he had access as secretary of the Miranda Electorate Branch. He notes that delegates of branches were given a voting card at the 2019 Annual State Council meeting but those cards were not issued at the 2020 Annual State Council meeting or since that date. His evidence is that, with one exception, the branches listed in that branch list were certified and accepted by the State Manager as entitled to provide delegates to vote at that meeting. His evidence is that certain other branches have been closed by branch members and are inactive and another was suspended in March 2020. His evidence is that there has not been a meeting of the State Council since February 2020 and no electorate branches have been approved since that date, and he contends that only 14 electorate branches are entitled to provide delegates and State electoral coordinators to an Annual State Council meeting. 3. Mr Collins' evidence is also that no Annual State Council meeting took place in the 2020 calendar year, placing the Association in contravention of the requirement under the Associations Incorporation Act for an annual general meeting to be held within six months after the end of its financial year. He there sought a variation of the May Consent Orders to avoid the need for the proposed extraordinary general meeting to be followed by an Annual State Council meeting or annual general meeting, although that proposal now has no utility given the lapse of time. He there submitted that any meeting should be conducted by voting of electorate branch delegates as contemplated by the Association's constitution rather than by members generally and opposed the conduct of a postal ballot. He also contested Mr Condon's view that there some 1120 current financial members of the Association. By a second affidavit dated 29 November 2021, Mr Collins corrected his earlier evidence to indicate that the last State Council meeting of the Association took place in March 2020 rather than February 2020. 4. Mr Collins also relied on the affidavit dated 7 December 2021 of Mr Ferguson, his solicitor, which referred to unsuccessful attempts to achieve a resolution of matters in dispute during the hearing before Rein J in November and December 2021. Mr Collins also tendered an affidavit dated 6 December 2021 of Ms Wright which contended that the Association had 44 branches in 2016 and 71 branches in 2017 and that all of the branches existing in those years remain valid, and contended that there are currently 93 valid branches of the Association. Ms Wright there accepted that a branch may become inactive, but contended there was no provision in the Association's constitution for it to be lapsed or terminated, and observed that she has contact details for 40 branches of the Association. Ms Wright's evidence emphasises the range of alternatives put by the parties as to the number of valid branches of the Association, and I have referred above to the Receiver's evidence as to the lack of documentation that would allow that dispute to be resolved. 5. By a further affidavit dated 21 February 2022, Mr Collins responds to Mr Condon's affidavits dated 18 January 2022 and 17 February 2022. Mr Collins responds to Mr Condon's evidence (which was not pressed) that the views of the parties to the proceedings do not necessarily represent the broader views of the membership, and he observes that Mr Condon has not sought to contact the electorate branch of which Mr Collins is an officer to seek its views, canvassed the views of members of the Association generally or conducted any meeting of party members during the time he has been the voluntary administrator or receiver of the Association. Mr Collins also refers to his participation in regular meetings of party members to discuss the litigation and the issues affecting the Association, and his attendance at branch meetings of his electorate branch and another branch by invitation and at a monthly "joint branches meeting", attended by about 40-50 members of the Association from about fifteen branches. He also refers to three ad hoc meetings of members of the Association, and attended by approximately 70 members in total, and to resolutions passed at the meeting on 19 February 2022 that Mr Collins be encouraged to develop a plan to keep the Association solvent by cost cutting rather than the use of election refunds and that: "[i]f the party is only solvent because it can spend monies from the Election Fund on non-election expenditures, that is inconsistent with the objectives of the party and its members, and that it is acknowledged that it may be because of this be [sic] wound up on a just and fair basis." The Association's constitution 1. I now turn to the Association's constitution. Clause 3 of that constitution sets out the Association's aims and objectives which include: "(e) To endorse, nominate and support the election of Christian candidates into Local, State, and Federal Government, in both the Upper and Lower Houses of Parliament, and Legislative Assemblies in all States and Territories of Australia, as applicable. (f) To uphold our Christian Constitutional Monarchy and Christian Westminster System of Government through the policies of [the Association] as a Christian Democratic Political Movement, respecting the sovereignty of Australia." 1. Clause 4 of the Association's constitution provides for the Annual State Council annually to elect the office bearers or management committee of the Association. Clause 4(b) of the constitution provides that each person nominated to be one of the Office Bearers must be elected (or "endorsed") by a vote of 75% of the "members at the Annual State Council". The term "Annual State Council" is defined in cl 9.4 of the Association's constitution and comprises two delegates from each electorate branch and all state electorate co-ordinators and that body endorses candidates for positions on the State Board. It is convenient to deal here with a preliminary issue as to the construction of that clause. Mr Knox and Mr Collins contend that clause requires a vote of 75% of members for the election of office bearers and I have addressed the evidence that that requirement has not been met above. Mr King, who appears with Mr Loxton for the Nile parties, contested that reading of the clause in oral reply submissions (T100). That clause requires that all office bearer positions "must be endorsed" by at least 75% of the members at the Annual State Council and it does not seem to me that that clause could be given any effective operation if it contemplated that an office bearer could be elected notwithstanding that requirement was not satisfied. Mr King also points to cl 4.7.1 of the Association's constitution, although it seems to me that the better reading of that clause is that it is directed to the endorsement of the particular persons who are nominated by the State Board for specific skill sets and who may then be endorsed by the Annual State Council "or, when necessary, by the next State Council meeting". In any event, that clause does not assist the Nile parties in demonstrating that officers have been validly appointed to the Association, where there is no suggestion that the 75% requirement which was not satisfied at Annual State Council meetings was later satisfied at any State Council meeting. I will return below to a further submission made by the Nile parties that the Court should make an order amending that clause under the oppression provisions of the Corporations Act. 2. Electorate branches are in turn established under cl 6 of the constitution. Clause 6.1 records that the Association operates "Member Branches in accordance with a Membership Focus and Democratic structure of the [Association]". Clause 6.1(a) distinguishes between accredited branches, which must have at least 10 financially current members, sub-branches with 5 – 9 members and provisional branches with less than 5 members. Clause 6.1(b) provides that all three branch levels must have a president, secretary and treasurer. Clauses 6.2 – 6.3 provide that: "6.2 All Electorate Branches and Sub-Branches must be officially recognised and credentialled by the State Board and finally approved by the State Council. Branches are established and facilitated under the direction of the State Manager, and delegated authority of the Electorate Manager reporting directly to the State Manager, all such Branches being recommended by the State Manager to the State Board. … 6.3 All Electorate Branches operate under and via the [Association] Branch Policies and Guidelines Manual as supplied and updated from time to time." It seems to me that cl 6.2 contemplates that the relevant Electorate Branch must be officially recognised and credentialled by the State Board and approved by the State Council, before it obtains that status. 1. Clause 15 of the constitution in turn provides that: "As a non-profit Organisation, the income and property of the [Association] whensoever derived shall be applied solely towards the promotion of its objectives as set forth in the [c]onstitution and no portion thereof shall be paid or transferred directly or indirectly by way of dividend bonus or otherwise howsoever to its Members, provided that nothing herein shall prevent the payment in good faith of remuneration to any Officer or servant of the Organisation for services actively rendered to the Organisation." 1. Clause 21 of the constitution provides several mechanisms for amendment of the Association's constitution. The first is a constitutional convention, which may be convened by the NSW State Board by special resolution, or within a year after receiving a requisition from 20% of registered delegates at a NSW State Council meeting, but that mechanism requires either a validly constituted State Board or a validly constituted State Council whose delegates may make such a requisition. Clause 21.2 permits an amendment by 75% of delegates at the Annual State Council meeting, but provides that the procedure for the election of delegates in respect of a constitutional convention shall be the same as for the Annual State Council meeting. That mechanism requires the appointment of delegates from electorate branches which, as I will note below, are in dispute. Clause 21.5 provides that the proposed amendments must be passed by at least a 75% majority at a Constitutional Convention, but that assumes that either such a convention can be called in accordance with the Association's constitution or, possibly, that the Court could convene such a convention if the Association is unable to do so, in the exercise of an inherent jurisdiction. The parties' submissions and determination Whether the Court has power to make a winding up order 1. By an email dated 17 February 2022 to the Nile parties' solicitor, copied to other parties and my Associate, Mr Hall, who appears for Mr Knox, attached submissions in which Mr Knox "contends that the Association ought to be wound up on the just and equitable ground". By those submissions, Mr Hall also submits that, under r 36.1 of the Uniform Civil Procedure Rules 2003 (NSW) ("UCPR"), the Court may make such order as the nature of the case requires, whether or not a claim for relief extending to that order is included in any Originating Process or Notice of Motion. Mr Hall submits, on Mr Knox's behalf that: "In all the circumstances, the Association ought to be wound up and Mr Trent McMillen ought to be appointed as its liquidator." 1. In oral opening submissions, Mr Hall confirmed that Mr Knox had formed the view, following the hearing over four days before Rein J in November and December 2021, that the Association's affairs had become ungovernable and that a just and equitable winding up was the proper course in those circumstances (T3). 2. The Nile parties respond that that the Court has no such jurisdiction. This response seems to turn on two matters, the first directed to whether that relief was originally sought in the proceedings, and the second being a "query" as to Mr Knox's standing which was raised by Mr King in oral submissions in reply. As to the first of those points, in opening submissions, the Nile parties contend that Mr Knox's Summons and the Cross-Summons did not seek the winding up of the Association. Mr Ferguson, who appears for Mr Collins, also initially submitted that Mr Knox did not seek an order winding up the Association in insolvency or otherwise. By submissions in reply served on 22 February 2022, Mr Heath, who appears for the Receiver, contested the Nile parties' submission that the Court did not have jurisdiction to wind up the Association. 3. As I noted above, the relief that Mr Knox originally sought in his Statement of Claim included such other order as to the Court seemed fit and other parties sought similar relief. Other parties, including the Nile parties also sought such other orders as the Court deems fit in their several applications. Mr Knox now seeks a winding up order and other parties have had procedural fairness in that regard. The Court is authorised by both s 90(1) of the Civil Procedure Act 2005 (NSW) and UCPR r 36.1 (to which Mr Hall referred) to give such judgment, or make such orders, as the nature of the case may require and the operation of these provisions is not dependent upon any reliance upon them being foreshadowed in a motion, although they can be invoked by inclusion of a claim for "any other order(s) the Court deems appropriate": Alstom Ltd v Sirakas [2012] NSWSC 1064; see also Hodgson v Amcor Ltd [2012] VSC 162 at [55]. In Gerard Cassegrain & Co Pty Ltd (in liq) v Cassegrain (2013) 305 ALR 687; (2013) 97 ACSR 283; [2013] NSWCA 455 at [95], Emmett JA similarly observed that: "Under [UCPR] r 6.12(1), a statement of claim or summons must specifically state the relief claimed by the plaintiff. However, that requirement is not strictly enforced having regard to the provisions of the Civil Procedure Act 2005. Section 56 requires the just, quick and cheap resolution of the real issues in dispute, and ss 22 and 90 permit the court to give such judgment as the nature of the case requires. More important still is [UCPR] r 36.1, which permits the court at any stage of the proceedings to give such judgment or make such order as the nature of the case requires, whether or not the claim for relief extending to that judgment or order is included in any statement of claim or summons, that is to say, notwithstanding failure to comply with r 6.12(1). Further, s 63 of the Supreme Court Act 1970 requires the court to determine proceedings finally and to grant all the remedies to which the parties are entitled. The effect of these various provisions, as well as the amplitude of the power of amendment in Pt 19 of the Rules, is generally that a party's failure to claim a particular form of relief in an originating process will not necessarily disentitle it from obtaining an appropriate order." 1. In oral submissions in reply, Mr King also relied on the Court of Appeal's decision in Treadtel International Pty Ltd v Cocco (2016) 117 ACSR 176; [2016] NSWCA 360 which he submitted was authority that Mr Knox did not have standing to wind up the Association, although he did not draw attention to any reasoning in that judgment that supported that conclusion. That case dealt with the position where a person who was not then a member of a company, but contended that he should be recorded on the company's share register as a member, sought to wind up the company. The Court reached the unsurprising decision, consistent with earlier authority, that a person who was not then a member of the company did not have standing to wind it up under Part 2F.1 of the Corporations Act. 2. Mr King did not otherwise explain how that decision advanced the Nile parties' position, and it may be intended to do no more than support a contention that, if Mr Knox is not a member of the Association, he would not have standing to wind it up. This depends upon the second matter raised by Mr King in oral reply submissions, where he referred to "a query as to the status of [Mr Knox] as a non-member" (T93). By way of background, Mr Knox had pleaded in paragraph 6 of his Statement of Claim filed on 25 February 2021 that he was a member of the Association, and had been its treasurer for the 2020 calendar year; the Nile parties did not comply with a previous order to file their Defence made by the Registrar and did not deny Mr Knox's claim to be a member of the Association by any pleading; and the Nile parties were not granted leave to reopen their evidence at this hearing to read plainly inadmissible evidence to support a suggestion that Mr Knox was not a member of the Association. I proceed on the basis that there is no genuine dispute as to whether Mr Knox is a member of the Association, where these proceedings have continued for many months on the apparent common ground that he has standing to bring them as a member of the Association; no defence was filed denying that he is a member of the Association; and the raising of a "query" as to that matter by Counsel in reply, when Mr Knox had no to opportunity to lead evidence in response to that "query", does not raise a genuine dispute as to that matter. 3. The Court has power to wind up an incorporated Association, on a member's application, under s 63 of the Associations Incorporation Act, inter alia, where it is insolvent or the Court is of the opinion that it is just and equitable that the Association be wound up. The provisions relating to winding up of an incorporated association were reviewed by Lindsay J in Sengthong v Lao Buddhist Society Inc [2016] NSWSC 1408 ("Sengthong") and his Honour there noted that that the provision for "just and equitable" winding up in s 63(1)(i) of the Associations Incorporation Act corresponded to s 461(1)(k) of the Corporations Act. His Honour there referred (at [151] to Gordon J's observation in Australian Securities and Investments Commission v ActiveSuper Pty Ltd (No 2) (2013) 93 ACSR 189; [2013] FCA 234 at [19] that the classes of conduct which justify a winding up order on the just and equitable ground are not closed and each application depends on the circumstances of the case; see also Re Catombal Investments Pty Ltd [2012] NSWSC 775; Re CNPR Limited [2018] NSWSC 989; Re Spitfire Q Pty Ltd [2021] NSWSC 866. His Honour also noted (at [153]), by reference to authority, that an association could be wound up under that section where "management of an association is deadlocked or paralysed by a loss of mutual trust and confidence between the members of the association" and observed (at [155]) that the determination whether to make a winding up order was fact specific and required consideration of alternative remedies available to address problems identified in management of a particular association. On the facts of that case, his Honour held that a winding up was not just and equitable where the relevant association's problems arose from disputed elections occurring after an extraordinary event, and the Court could provide a mechanism to allow that association's membership an opportunity to have a management committee elected in a Court supervised election "according, so far as may be practicable, to the terms of the [c]onstitution". In Chen v Shaanxi Chamber of Commerce [2021] NSWSC 337 ("Shaanxi"), Sackar J observed that: "[t]he Court's jurisdiction to intervene in the affairs of a registered organisation … where necessary and appropriate is not in doubt so as to ensure proper governance … Equally, the Court has jurisdiction to appoint a receiver to facilitate an election and in other wide ranging circumstances where the interests of justice warrant it." 1. For the reasons noted above, it seems to me that, contrary to the submission made by the Nile parties, the Court has power to make a winding up order in respect of the Association. I am satisfied that, as matters now stand, an order should be made to wind up the Association on Mr Knox's application, although I will stay that order for a period to allow yet another opportunity for the parties to resolve their differences or at least agree the basis on which a meeting of the Association could be held to elect officers and resolve the ongoing dispute as to the identity of the electorate branches whose delegates could vote at an Annual State Council meeting. I first address whether a winding up order should now be made by reference to the matters that were identified in my judgment deferring this hearing at the Nile parties' request, before turning to the wider matters raised in the course of the hearing that support the same result. The Association's solvency and use of electoral funds 1. The first of those matters was the Association's solvency and use of electoral funds. I have referred above to the Receiver's evidence as to his assessment of the Association's solvency, and he has expressed the view that the Association is solvent provided it can have recourse to the funds it has received from the Electoral Commission, being a significant portion of the amount currently held in the Association's State Election Account, for the costs of the receivership and the Receiver's costs of these proceedings and subject to the question of other parties' costs of the proceedings. Mr Heath contends that the Court should find, as a matter of construction of the Electoral Funding Act, that the monies received from the Electoral Commission referred to in the Receiver's evidence is not a "political donation" within the meaning of that Act. He fairly acknowledges that the Receiver's conclusion as to the Association's solvency depended upon the impact of any costs orders in these proceedings, and he notes the Receiver's understanding that the other parties now seek their costs of the proceedings against the Association. 2. In their opening written submissions, the Nile parties adopt the Receiver's view that the Association is not insolvent if it can expend electoral funds on the costs of the receivership and the proceedings, but neglect the contrary view he expresses (as I noted in paragraph 37 above) if the Association is constrained in expending electoral funds, and the reservation to his opinion in respect of the costs of these proceedings. They rely on the fact that the Electoral Commission placed no conditions on the payment made to the Association under s 76 of the Electoral Funding Act, but do not address the extent to which the use of those funds is limited by the Association's purposes. Mr King, in submissions in reply, submitted that there is no or insufficient evidence that the Association is insolvent. 3. Mr Ferguson, for Mr Collins, rightly recognises that the Receiver's view that the Association is solvent on the specified basis, but also fairly recognises that "the longer the Receivership lasts, the more of these funds will be sent on the expenses of the Receiver, including appropriate work in response to litigation, including this proceeding." He recognises that, although the Association may be solvent within the meaning of s 95A of the Corporations Act, there is a question for the Court whether the Association's use of electoral funds towards litigation and other irregular administrative costs, including the Receiver's costs, is consistent with the Association's rules, objects and aims. He raises the question whether: " … an outcome which extends or prolongs the period in which those costs are incurred, or increases the likelihood of those expenses being incurred, [is] fair and just to the member of the association?" That question overlaps with the issues in respect of a winding up on the just and equitable ground which I will address below. 1. I accept that the Association is presently solvent, applying the relatively narrow cashflow test for solvency under s 95A of the Corporations Act, because the substantial financial claims against it that are accruing as a result of the receivership and the proceedings are not yet debts that are due and payable. Although a voluntary administrator and a Court appointed receiver will ordinarily be allowed his or her costs from the assets of the body to which he or she is appointed, the Receiver has not yet sought an order from the Court as to the costs of the receivership. It appears the parties and interested persons may seek their costs of the proceedings, a matter to which I return below, but costs have generally been reserved and there is no agreement or assessment as to their amount. That, of course, provides no comfort as to the Association's financial position once those debts fall due. 2. I did not understand any party ultimately to contend that the Electoral Funding Act or any condition imposed by the Electoral Commission prevented the application of the funds that would otherwise be applied by the Association to participation in elections to the payment of the costs of the receivership or the parties' and interested persons' costs of the proceedings. The Receiver submits that there no legal impediment, so far as electoral legislation is concerned, to the use of the Association's funds for the purpose of the receivership, and Ferguson, for Mr Collins, adopted that submission. I do not reach any finding that such a prohibition exists. However, the Receiver also fairly recognised that that limited conclusion does not indicate that the use of the Association's funds in that manner is a proper use of those funds, particularly as more funds are used for that purpose over time and less for any electoral purposes. This conclusion highlights the significance of whether the basis for a winding up on the just and equitable ground is established. The parties' submissions as to winding up on the just and equitable ground 1. Turning first to Mr Knox's submissions, Mr Hall referred to the agreement reached at the mediation on 6 November 2020 (to which I referred above) and Mr Knox's claim that the election convened on 28 November 2020 was not conducted in accordance with the requirement for a 75% majority under cl 4(b) of the Association's constitution. Mr Hall also referred to a communication from Reverend Nile to members of the Association, apparently made prior to 14 February 2021, which referred to the Association's practice of conducting elections as follows: "It is noted that our standard Party practice over the years has been to gain a majority of delegate [sic] rather than attain unanimous or 75% of delegate votes at our Annual State Council. The proposed constitutional change recognises our standard Party practices so as to eliminate any degree of confusion or dispute over the final results stemming from our Annual State Council." 1. Mr Hall also refers to the appointment of Mr Condon, initially as voluntary administrator of the Association, and then by the Court as Receiver by the May Consent Orders. Mr Hall in turn summarises the circumstances of the Association, namely that it has been involved in these proceedings since September 2020; the Receiver was appointed to convene an election for the Association and has not been able to do so (and, I interpolate, the present proposal for an election is not consistent with the Association's constitution and officers of the Association could not be appointed by delegates of the branches where the identity of the branches is presently unknown); and the parties have been unable to resolve their differences despite encouragement by Rein J for them to do so in the listings on 10–11 and 30 November and 7 December 2021. In submissions in chief, Mr Hall also submits that Mr Condon's conclusion that the Association is solvent depends upon its application of the public monies received by it and placed in a fund for the conduct of elections to the costs of its ongoing internal disputes. In oral opening submissions, Mr Hall acknowledged the "sensible suggestions" made by Mr Collins in submissions, but contended that they were not capable of resolving the disputes in respect of the Association. He submitted that Mr Knox's nominee for appointment as liquidator, Mr McMillen, should be appointed rather than Mr Condon being appointed that role, and that it would be undesirable to delay the appointment of a liquidator and instead appoint a provisional liquidator or narrow the scope of the Receiver's role (T9), two possibilities which I address below. Mr Hall adopted the same position in his oral closing submissions as in his opening submissions. 2. In reply submissions, Mr Hall again submitted that the Association had a failed management structure and was not properly governable. He contended that an agreement was reached under the 2020 Heads of Agreement between the parties that no new branches of the Association would be established and that any election by branches would need to take place having regard to the branches which existed in May 2020. He also refers to a "membership" drive by the current "board" of the Association, although there is no evidence of that matter. Mr Knox also observed that he would support a meeting, if the Court was sufficiently persuaded that would bring an end to the hostilities. As will emerge below, I am not persuaded of that matter, and it seems to me that the unresolved issues as to the conduct of that meeting will simply open another front in the parties' ongoing disputes. 3. By their submissions dated 17 February 2022, the Nile parties submit that Reverend Nile is the current chair of the Association's board and Ms Wright is its current State director appointed by the board, and that Reverend Nile, Mrs Nile and Ms Wright are delegates to a State Council and members of the board. Each of those matters is in dispute and cannot be determined in this application, although it is not apparent how they could validly hold those positions without an election conducted in accordance with the 75% voting requirement in accordance with cl 4(b) of the Association's constitution. The Nile parties submit that a new board was duly elected on 28 November 2020, but that submission again disregards the non-compliance with the 75% voting requirement in cl 4(b) of the Association's constitution which emerges from Ms Wright's evidence. The Nile parties also submit that the appointment of the Receiver under the May Consent Orders should be terminated and the proceedings "otherwise dismissed" without a determination on the merits. The Nile parties submit that the Association's role as a political party remains viable, that there is no deadlock in the affairs of the Association and they identify alternatives including the holding of a State Council meeting and the election of a fresh board and refer to case law including Sengthong and Shaanxi to which I referred above. They do not address the manner in which those alternatives are to be achieved, where there is no consensus between the parties in respect of them; these proceedings have continued for many months; and it is not apparent how the Receiver's remuneration and his and the parties' legal costs in respect of the proceedings, if they seek them, are to be implemented without dissipating the remaining assets of the Association. 4. In oral opening submissions, Mr Loxton retreated from the position taken by the Nile parties in their written submissions and no longer submitted that the Receiver should be removed or the proceedings dismissed, while seeking to reserve the opportunity to do so in the future. Mr Loxton also raised the possibility that an election could be conducted by voting by delegates of electorate branches, although I have pointed above to the evidence as to the extent of dispute as to the identity of the Association's electorate branches and Mr Condon's evidence as to the absence of documentation to resolve it. Mr Loxton fairly acknowledged that the dispute between the parties included the question whether there were, on the one hand, less than 20 valid branches and, on the other hand, up to 35 or 45 valid branches of the Association and also, oddly, contemplated that branches might be invited to vote before it was determined which of them was a valid branch, apparently on the basis that some branches that are not valid would choose not to vote in any case (T12). Mr Loxton, in oral closing submissions, returned to the possibility that the Receiver might determine the identity of electorate branches and submitted that the membership should be given an opportunity to deal with the relevant issues rather than the Court making a winding up order, and addressed the difficulty arising from the 75% requirement in cl 4(b) of the Association's constitution. 5. In oral submissions in reply, Mr King first submitted that the Association's objectives were "lofty, spiritual, but ultimately very temporal objectives of the highest order in the public interest" and addressed the virtues of a "Christian democracy" (T91). It seems to me that the Court must focus on somewhat narrower questions, namely whether the Association is presently able to conduct itself in a manner that will not cause its objects to be frustrated and its assets to be eroded by the continuance of disputes between the parties, or can appoint its officers and conduct its Annual State Councils in the manner required by its constitution. Mr King also pointed to the integrity of those involved in the Association and I recognise that there has been no criticism by any party of the integrity of other parties in the course of this hearing. Reversing the position taken by Mr Loxton in chief, Mr King then submitted that the future of the Association "should be left in the hands of those who have successfully run and manage[d] it for 43 years" and the proceedings should be dismissed or the Receiver should be discharged. Plainly, any assessment of the success of the Association may require qualification for the difficulties addressed in this hearing as to the identity of its electorate branches, compliance with the constitutional requirements for the appointment of officers in Annual State Councils over recent years and the extent of the disputes between its members, and it does not follow from an assertion of the Association's past success that the proceedings could now be dismissed or the Receiver discharged given its present circumstances. 6. Mr King, in oral submission in reply, also referred to the "internal management rule" and a "hands off" approach which he attributed to the Court in respect of voluntary associations or at least political organisations that served the public interest (T95). I recognise that the Association is a voluntary association and a political party which has attracted some voting support. However, it is incorporated under and subject to the Associations Incorporation Act which provides for winding up on the just and equitable ground in an appropriate case. I should not apply any broadly formulated "hands off" rule that is not drawn from the statute and I should not be either more or less ready to wind up a political organisation that is unable to pursue its objectives by reason of internal conflict than to wind up a religious or cultural or other association in the corresponding situation. Mr King also advanced the submission that the Receiver had "created problems because of the inability to identify which branches" ought to be permitted to appoint delegates to vote at a meeting (T97), and he submits that the identification of branches is set out in cl 4.6.1 of the Association's constitution, which provides that the State Council shall comprise nominated and approved representatives, one from each State electorate as appointed by the Electorate Branch. I put aside the difficulties with this submission that the State Council and the Annual State Council appear to perform different roles under the Association's constitution and office bearers are elected at the Annual State Council rather than the State Council. The more fundamental difficulty with this submission is that it appears that the Association does not maintain the documents that are necessary to identify its electorate branches, the members are unable to reach any consensual position as to the radically different numbers of electorate branches for which different members contend, and it is impossible to see how any fault can be attributed to the Court-appointed receiver in respect of that position. 7. Mr King in turn submitted, in reply, that: "A proper exercise of [the Court's] discretion in the current circumstances is either to dismiss the proceedings, which would have the consequence of terminating the receivership which is proved expensive and futile because nothing has been achieved except to create a deadlock instead of solving it and in our respectful submission that's the proper way forward. Alternatively, if your Honour is not disposed to dismiss the proceedings, then your Honour should under the power to which I have referred under the rules discharge the orders made by Henry J, which would have the same result." 1. There is a degree of common ground between this submission and the submissions of Mr Knox and Mr Collins as to the difficulties with the receivership and the deadlock within the Association, although it seems to me that there is no basis to attribute that deadlock to the Receiver rather than to the members of the Association to which he was appointed. I do not accept, however, how that difficulty or deadlock could properly be resolved by simply terminating the receivership where no Annual State Council meeting can be held to appoint officers to the Association. Mr King's submission seems to me to highlight the choice between alternative remedies, whether a general meeting of the Association, a winding up, or a winding up that is stayed for a period to give the members of the Association a further opportunity to achieve consensus. 2. In oral submissions in reply, Mr King also raised the possibility that an election at which all members could vote should be conducted by the Receiver, exercising powers under the Model Rules under the Associations Incorporation Act or the reserve powers to which I refer below, in person or virtually and with a power to receive postal votes, with a specified agenda. That agenda provided for the election of office bearers but not for any amendments to the Association's constitution, and would not have resolved the issues as to the identification of the Association's electorate branches or its inability to conduct Annual State Council meetings without identifying those electorate branches. 3. Mr Heath, for the Receiver accepted that the previous hearing before Rein J had revealed a deadlock between the parties to the proceedings. The Receiver relies on Sengthong for the view that the Court would not order a winding up while the Association had a prospect of continuing. I do not read that decision as indicating that a winding up should be deferred and a receivership left in place, if the meeting to be convened by the receiver has little prospect of resolving the dispute and the continuing conduct of the dispute would likely dissipate an Association's remaining assets in a manner that is inconsistent with its underlying purposes. The Receiver also submits that the Court would be reluctant to order winding up, where it could direct (as Henry J already did) a meeting of the Association. While the Court made such an order in Sengthong, I do not understand that decision to contemplate that such a meeting would be pursued where it is unlikely to resolve the range of issues in dispute. 4. Mr Heath also submits that the Association's funds can properly be used to maintain the Association for the purpose of implementing the May Consent Orders. That seems to me to be a question of degree. It would no doubt be a proper expenditure of the Association's funds to continue a receivership or conduct a meeting that would resolve its governance difficulties; but a different conclusion could follow if those expenditures and litigation costs will substantially exhaust the Association's funds over time and if that meeting will not resolve the Association's difficulties. Here, that the extent of the costs incurred and the extent of the issues which remain to be resolved suggest that the Association's assets will be substantially dissipated, before the May Consent Orders are implemented; and the implementation of the May Consent Orders will not resolve the Association's difficulties, since those orders leave unresolved who is entitled to vote at that meeting and an election of office holders pursuant to those orders will not resolve the dispute as to the identity of its electorate branches or allow future Annual State Councils to be held until that dispute is resolved. The Receiver also submits that the expenditure of such funds would be for the "very purpose of putting the [Association] in a position to achieve its electoral purposes, not inconsistent with them", but that submission is undermined by the inability of the proposed meeting to achieve that objective. 5. In oral opening submissions, Mr Heath noted that the Receiver's conduct since his appointment had been directed to maintaining the Association, dealing with members and the ongoing Court proceedings, and addressed the question whether the conduct of an election in the manner proposed by the Receiver would have been inconsistent with the Association's constitution. He submitted that, as evidence had developed, it appeared that the Association was solvent and would not be prohibited from applying funds for the purposes of the receivership under the Electoral Funding Act, but recognised that an issue remained as to whether that would be consistent with the Association's objectives. Mr Heath also referred to the possibility of a general membership vote to appoint new officers of the Association. I address that possibility further below. 6. By submissions in reply served on 22 February 2022, Mr Heath responded to the Nile parties' submission that there was no deadlock in the Association's affairs by pointing to the parties' inability to agree as to the eligibility of branches to vote or send delegates to a general meeting of the Association when that matter was listed before Rein J. Mr Heath responded to the contention that there had been undue delay in calling the meeting contemplated by the May Consent Orders by pointing to the fact that the several parties had contested the manner in which the Receiver proposed to call that meeting and sought that it be called in a different way, and indicated that the Receiver was willing to make a determination as to the validity of branches, while recognising the likelihood that other parties would challenge that determination. In the event, I am satisfied by the Receiver's evidence that he would not be able to reach a determination as to the validity of the existing branches on the documentation available to him, although he might well be able to determine the different question which branches might have existed, had members chosen to create them and had they then be approved in the manner contemplated by the Association's constitution. 7. Mr Heath acknowledges that Mr Collins' submission as to the risk of dissipation of the Association's funds by litigation is a fair concern, but submits that the Receiver's use of the Association funds to implement the May Consent Orders is consistent with the Association's objectives, although he recognises that position is complicated by the contest as to the identity of electorate branches and the risk of ongoing litigation about that issue. Mr Heath also submitted that a direct membership vote would minimise the risk of further litigation and provide the best chance of the Association continuing. Mr Heath also pointed to the differing views of the parties as to which officer positions should be filled at any general meeting of the Association, and it is not apparent that there is any principled basis on which the Court could determine that question, where members of the Association cannot reach common ground about it. 8. Mr Ferguson made balanced and thoughtful submissions, by which I have been assisted, on Mr Collins' behalf. Mr Ferguson refers to the Association's objectives as set out in its constitution and addresses the conduct of the proceedings over the nearly 18 months on which they have been on foot. He refers to orders made by Lindsay J in October 2020 which required the Nile parties to take steps to end suspensions of multiple members and purported closures or suspensions of some eight branches of the Association, and observes that the number of persons and branches that were suspended "hints at (if not outrightly points to) serious factional splits within the party". Mr Ferguson also refers to the outcome of the mediation undertaken in November 2020, the appointment of a voluntary administrator to the Association in April 2021, the validation of that appointment by Henry J in May 2021 (without, it appears, any potentially improper purpose in that appointment having been disclosed) and the appointment of the Receiver "to administer and supervise an election process" and the grant of the powers necessary to convene an "extraordinary general meeting" to him. Mr Ferguson submits that that extraordinary general meeting should have occurred before November 2021, although that submission neglects the fact that an extraordinary general meeting at which all members of the Association elected office holders would not have complied with the Association's constitution and would arguably not have resulted in an effective election of office holders to the Association. 9. Mr Ferguson fairly recognises that, without confirmation of which electorate branches are entitled to send delegates or a co-ordinator to an Annual State Council meeting, the Annual State Council cannot be convened or elect nominees to the Association's management committee. He also recognises that there is no clause in the Association's constitution dealing with casual vacancies for committee positions and the constitution does not provide any other avenue for appointment or election of committee members. He recognises that the identity of which electorate branches are entitled to send delegates or a co-ordinator to an Annual State Council is uncertain and the parties have variously claimed there are between 13 and 93 valid and existing branches. He submits that no consensus can, or will, be reached between the active parties in these proceedings as to the identity of the Association's electorate branches. He also contends that the Receiver, who would have the responsibility of convening and chairing any meeting of the Annual State Council and would have the responsibility of admitting votes at such a meeting, is either unwilling or unable to determine which of the branches are valid and entitled to send voting delegates. 10. Mr Ferguson also points out that the State Council, which approves electorate branches, cannot itself be convened without first determining which current branches are valid and able to send a delegate to that meeting. He also points out that the State Council has not been convened since March 2020 and there is no prospect of it convening in the near future and that "this problem is intractable, and perhaps impassable." Mr Ferguson also fairly recognises that no Annual State Council meeting for the Association was held in 2021; that meetings of the Annual State Council of the Association held in 2019 and 2020 are the subject of unresolved disputes; and it is at least arguable that the Association has not had a validly elected "State Board" since 2019. Mr Ferguson also refers to Mr Collins' earlier proposal that, as at November 2021, rather than conducting the meeting contemplated by the May Consent Orders and the Association's annual general meeting in succession, it would have been preferable to conduct an Annual State Council meeting to achieve the appointment of a new board and submits that, by December 2021, the parties to the proceeding were in general agreement that that was the appropriate course. If that was the position in December 2021, it is no longer, since the Nile parties now contend (at least in their opening submissions and in reply) that the proceedings should be dismissed and the Association returned to their control without resolving the disputed governance issues in these proceedings, although they also put an alternative submission as to a postal vote of all members. Mr Ferguson also fairly acknowledges, on Mr Collins' behalf, that there is no guarantee that a further election of new office bearers would "solve the principal issue dividing the parties, namely the question of which Electorate Branches are entitled to send delegates to the Annual State Council Meeting". 11. Mr Ferguson in turn submits that: "As appears obvious from these proceedings, there is a state of discord within the [Association]. The Applicant submits that it is very unlikely that any one candidate for election will ever receive support of 75% of the voting delegates at an Annual State Council meeting. It is very likely that a meeting convened and using that threshold will result in many, if not all, Office Bearer positions remaining vacant. This position is not sustainable, and the current [c]onstitution is not fit for purpose. It is, respectfully, patently obvious that the [Association]'s [c]onstitution will need a significant revision if the [Association] continues as an association. However, the principal difficulty is that there remains a significant difference of opinion as to the list of valid Electorate Branches. Certainty as to those basic constituent bodies is crucial to the operation of the [Association]. [Mr Collins] therefore submits that the Court should be reluctant to return the [Association] to normal corporate existence without some confidence that these issues can be resolved. However, this Court has (respectfully, quite rightly) raised a concern that hearing, and resolving, the internecine disputes of the [Association] in this Court is likely to involve the [Association] in protracted litigation. Doing so while, necessarily, maintaining the appointment of the Receiver has the potential to exhaust whatever member funds remain. The Applicant considers that the above issues are relevant to an enquiry by this Court as to whether it is instead appropriate to wind the association up on just and equitable grounds." 1. As Mr Ferguson fairly points out, the Court may make an order winding up an incorporated association where there is a lack of competence in its conduct and management of its affairs or the management of its affairs is deadlocked or paralysed by a loss of mutual trust and confidence between the members of the Association: Sengthong at [152]-[153]. Mr Ferguson fairly recognises that the disputes in this case are more fundamental than those that arose in Sengthong, where they extend to the identity of constituent bodies that can exercise voting rights at the State Council and Annual State Council meetings and that, absent a resolution of that dispute, "it is virtually impossible for the [Association] to conduct business of the Association in the long term". Mr Ferguson also accepts that "there is a deadlock or impasse in the [Association] or its management, and that the members generally lack confidence in the management of the Association". He accepts that there is sufficient material before the Court to justify an inference that the Association has, or is, engaged in activities inconsistent with its objects or that it is just and equitable to wind up the Association. 2. In oral opening submissions, Mr Ferguson provided a helpful review of the Association's constitutional provisions, observed that the question of the identity of delegates from the electorate branches appeared to be at an "impasse" and could only be resolved by extensive litigation and identified Mr Collins' concern as to whether the Association's resources should be spent in that way or, on a winding up, made available to a new Association which had similar objects. He emphasised that Mr Collins was not himself seeking a winding up order but recognising the existence of the issues that might require such an order. He also noted the possibility that a restriction of the Receiver's powers, which limited the extent of the costs incurred, might be an acceptable outcome for the parties, but pointed to the risk that, if matters continued in their present course, then the Association would have few assets remaining even if a new board was appointed (T17). 3. Mr Ferguson, in oral closing submissions, also addressed a question whether officers of the Association had ceased to hold office on the voluntary administrator's appointment. It is not necessary to address that question, where the failure to comply with cl 4(b) of the Association's constitution likely has the consequence that the appointment of officers to the Association has been invalid for several years and there was in any event no relevant meeting to appoint such officers in 2021. Mr Ferguson also developed a subtle construction argument, in respect of the interaction between the Associations Incorporation Act, the Model Rules and the Association's constitution, as to the ability to convene a special general meeting of the Association. Without any disrespect to Mr Ferguson, it is not necessary to determine that argument since, even if a special general meeting could be convened, it would not have the power to appoint officers in accordance with the Association's constitution. I address the question of residual powers of members if the Association's governing body is unable to act below. 4. In oral closing submissions, Mr Ferguson rightly recognised a further difficulty with the Association's present position, namely that any amendment of the Association's constitution to identify the electorate branches would itself require the involvement of delegates to the Annual State Council, which could only be appointed once the identity of those electorate branches had been resolved (T65). Mr Ferguson also raised a question whether the reserve powers recognised in Singh v Singh extended beyond management decisions, to those which were reserved to the Annual State Council under the Association's constitution. I would be inclined to think, although it is not necessary to decide, that they would if, as here, the Annual State Council is presently unable to be constituted or act. Mr Ferguson accepted that, if there was no way of resolving the issue of which are the Association's electorate branches, then there was no alternative other than to wind up the Association (T67). Mr Ferguson also contended, contrary to the position assumed (but not established) by the Nile parties, that there are no officers of the Association presently in place where no Annual State Council meeting has been held (T68). Mr Ferguson also raised the possibility that the identity of the branches could be resolved by the appointment of a chair of any meeting, who would either admit or deny a delegate of that branch the opportunity to vote (T69); however, it seems to me that that proposition could only be accepted if the chair would have a proper basis on which to make that determination. 5. Mr Ferguson also raised a possible application of the plenary jurisdiction of the Court under s 23 of the Supreme Court Act 1970 (NSW) as a source of the Court's jurisdiction to call a meeting. It is not necessary to determine the extent of that jurisdiction, where I am not satisfied that there is utility in that meeting for the reasons noted below. Dissipation of the Association's assets in the receivership and the litigation 1. I now turn to the issue of the dissipation of the Association's assets in the receivership and the litigation, which was also recognised in my judgment deferring this hearing at the Nile parties' request. I sought clarification, after the two day hearing before me, from the parties as to whether they would seek the costs of these proceedings from the Association, and the amount of those costs, in order to assess the significance of that issue to a just and equitable winding up. Mr Knox responded that he sought his costs of the proceedings against the Nile parties, and quantified them in the order of $87,000, but did not indicate whether he would seek those costs against the Association if they were not ordered against the Nile parties or they could not meet that costs order. The Nile parties' response was unclear, indicating that they do not seek costs in "this cause", which appeared to be a reference to the hearing before me rather than the proceedings generally; suggesting a costs order should not be made where it would "put further strain on the [Association's] finances"; then expressly reserving the Nile parties right to "argue" (and presumably claim) costs depending on the Court's orders; and providing no information as to the amount of those costs. I infer that the Nile parties' costs of the proceedings would likely be greater than those incurred by Mr Knox, since they have been represented by Counsel and by two Counsel for part of this hearing. 2. The Receiver fairly confirmed that he sought his costs of the proceedings from the Association's assets, and quantified his legal costs of the voluntary administration as about $23,800, his legal costs of the receivership to 23 February 2022 as over $154,000, and his other costs of the receivership to that date as $171,430 inclusive of GST, updating the information included in his affidavit evidence. Mr Collins indicated that he sought his costs of intervention in this hearing since December 2021 out of the Association's assets, and quantified those costs as in excess of $24,000 inclusive of GST, and identified costs referable to the motion that was not determined by Rein J as about $50,000, while recognising that representations by the parties to Rein J may prevent his seeking those costs from the Association. It will immediately be apparent that the Association now faces substantial claims for costs of the voluntary administration, receivership and the proceedings, of at least $373,000, increased to $510,000 if Mr Knox and Mr Collins seek the other costs they have quantified against it, and likely to a much greater figure if the Nile parties seek the costs which they have not disclosed, which they have reserved their ability to do. While these claims do not establish insolvency, because they are not presently due and payable, they will substantially erode or extinguish the Association's existing assets, if pressed, and they will further increase at the hearing that is necessary to determine the remaining issues in the proceedings. 3. The ongoing hostilities between the parties and persons associated with the Association in various capacities have continued since the Receiver's appointment and it seems to me that the costs which have been incurred and will continue to be incurred in the receivership and the actual and potential claims for costs of these proceedings will likely dissipate the Association's assets, in substantial part, before the proceedings are resolved so that its political purposes could not then be achieved. I am satisfied that these matters, combined with the lack of any apparent hope of resolution of the internal disputes within the Association in the foreseeable future and the inconsistency between the use of the Association's resources for those costs and its specified purposes supports a winding up order. This is, of course, a question of degree and the proceedings are unusual because of the scale of the costs incurred; the fact that several attempts to narrow them (including the mediation and the May Consent Orders) have failed; the multiplication of interlocutory applications, the determination of which will likely not return the Association to functionality; and the fact that, as will emerge below, the differences between the parties and interested parties appear to be widening rather than narrowing. Wider issues raised in the hearing 1. The parties directed their attention at the hearing to a wider range of issues than the matters noted above. It is not strictly necessary to determine those issues to be satisfied that a winding up order should be made, although I will address them briefly in fairness to the parties' submissions about them, and they would largely have provided alternative or additional bases for a winding up order. 2. The evidence, including that of Ms Wright to which I referred above, indicates that the manner of appointment of officers to the Association has not complied with the 75% requirement in cl 4(b) of its constitution for several years. It appears that no Annual State Council meeting was held by the Association in 2021 and no such meeting could be held in future without first resolving the fundamental and ongoing dispute as to the identity of the Association's electorate branches so to appoint delegates of the branches to attend it. An election of office holders cannot presently be conducted in the manner prescribed by the Association's constitution, where the controversy as to the identification of its electorate branches cannot be resolved without continuing litigation which will continue to erode the Association's assets, and may be impossible to resolve in such litigation given the deficiencies in the Association's branch records. 3. It has also emerged, in the course of this hearing, that there is also a lack of utility in a meeting of Association members (either as contemplated by the May Consent Orders or in some other form) as an alternative to a winding up order or as a means to appoint office holders and address the difficulties that no Annual State Council meeting was held in 2021 and that the Association cannot now conduct an Annual State Council, or at least cannot do so without further disputes, because of the ongoing dispute as to which electorate branches would appoint delegates to such a Council. That lack of utility could only be resolved by a fundamental change of position among the parties as to their disputes as to the manner in which such a meeting would be held, including which branches could appoint delegates to it or, if it were conducted as a member meeting, who would vote, how that vote would be conducted and what resolutions, including as to constitutional amendments, would be put before them. The position here is radically worse than the common position where all that is required to resolve a dispute within an association is to elect new office holders. 4. Mr Ferguson, for Mr Collins, gave particular attention to the manner in which an alternative general meeting can be conducted, as an alternative to a winding up of the Association under s 63 of the Associations Incorporation Act, including the conduct of an extraordinary general meeting. He submits that a meeting of members of the Association may be the only remaining feasible way to break the current impasse. Mr Ferguson fairly recognises that the Association's constitution does not provide for general meetings, although cl 4.18 deals with postal ballots and the use of technology, and instead contemplates that the Annual State Council meeting is the general meeting, at which where branch delegates rather than members will elect office bearers. He also fairly recognises the validity of a resolution under s 38 of the Associations Incorporation Act is determined by the members of the Association who are entitled to vote on it, under the Association's constitution, which would not include the Association's members generally. Mr Ferguson also fairly recognises that there is no provision under the Association's constitution to call a special or extraordinary general meeting or for members generally to vote at such a meeting. He refers to s 25 of the Association Incorporation Act, which applies where an Association's constitution fails to address a matter referred to in Schedule 1 of that Act. It is by no means apparent that that assists here, because the Association's constitution does address the manner in which its officers are to be appointed and provides an alternative mechanism to a general meeting or extraordinary meeting at which all members may vote. It is not necessary to address that matter further where, even if s 25 of the Associations Incorporation Act conferred a power to call such a meeting, it could not appoint new office holders other than in accordance with the Association's constitution, requiring the appointment of delegates by the branches that are disputed, or otherwise under a residual or reserve power that I address below. 5. The first difficulty which arises is that the meeting cannot practically take place as contemplated by the Association's constitution, again because of the because of the ongoing dispute as to which electorate branches would appoint delegates to such a Council, and I have referred to the evidence of the difficulties in resolving that dispute above. An alternative would be to rely on a residual or default power of members to address these issues in general meeting in a manner not contemplated by the Association's constitution. I recognise that there is authority that the Associations Incorporation Act does not displace the principle that, once an association's governing body, such as the Annual State Council, does not exist or cannot function, then the members themselves may act in its place, exercising a reserve or default power through a duly convened meeting of members: Massey v Wales (2003) 57 NSWLR 718 at 730ff; Singh v Singh; Flora Trading as Flora Constructions v Budget Demolition and Excavation Pty Ltd [2008] NSWSC 386 at [132]; approved in Luen Fook Tong Inc v Lowe [2011] NSWSC 1004. Mr Heath, in submissions in reply, fairly points to a question as to the scope of Singh v Singh above, noting that members can only act through a duly convened meeting of members or through the concerted action of all of them, although he contends the May Consent Orders currently provide for such a meeting to be convened. He raises the possibility that a meeting would need to comply with procedural requirements for the conduct of a meeting under the Model Rules, to which reference was made in Singh v Singh and also addresses Mr Condon's evidence as to the time that would be required to hold a meeting that took place as a hybrid physical and virtual meeting, which was tendered by the Nile parties as I noted above. It may also be arguable that, where the Association's constitution does not provide for the manner in which members generally would reach a decision in general meeting, as distinct from by delegates at an Annual State Council, then they would do so by majority vote in respect of the appointment of new officers of the Association, or possibly by special resolution in respect of an amendment of the Association's constitution, by reason of ss 10 and 39 of the Associations Incorporation Act. 6. A second difficulty which arises is how that meeting would take place. The May Consent Orders are inadequate to address that difficulty and the disputes in respect of them are multiplying. Those orders provide for voting by those persons "entitled" to vote but the identity of those persons is a key issue in dispute. They cannot presently be implemented by voting by delegates of electorate branches, given the issues as to the identity of the branches noted above. Even if they could be implemented by voting by current members of the Association, in a manner not contemplated by its constitution, there is a dispute as to the number and identity of those members and whether the membership records reflect the categories of members contemplated by the constitution, which would need to be resolved. Those orders also do not provide for how that meeting should be held, and the disputed options include by a physical meeting, or possibly a hybrid meeting involving physical and virtual alternatives, or a postal ballot. There is also a question as to which offices should be the subject of such an election, and the consent position between some parties reflected in the May Consent Orders does not bind members who were not party to the proceedings. 7. A third difficulty is what such a meeting would achieve. By contrast with the position which commonly exists in incorporated associations, the appointment of office holders (which was all that was contemplated by the May Consent Orders) would here achieve little, because they could not conduct the Annual State Council without a resolution of the question which branches that were entitled to appoint delegates to it. The steps necessary to resolve that difficulty would not be straightforward, although they could include constitutional amendments to identify the existing branches or at least a basis on which they could be determined. However, the parties have not formulated any constitutional amendments that would be put to such a meeting, and there is no reason to think that there would be any greater consensus as to any amendments necessary to address that issue as to the identity of branches than as to the substantive question of the identity of those branches. 8. I have ultimately concluded that holding such a meeting does not assist here, unless the parties can resolve their differences as to who can vote and how it is to be held. As matters stand, such a meeting would prolong and expand, rather than resolve, the internal disputes within the Association; those disputes as to the conduct of that meeting are also now so many and so fundamental that the Court could not resolve them before the remaining assets of the Association are dissipated by costs; and these matters support a winding up order on the just and equitable ground. 9. In oral opening and closing submissions, Mr Loxton also addressed the possibility of an order made by the Court under the oppression provisions in ss 232-233 of the Corporations Act amending the Association's constitution to delete the 75% voting requirement in cl 4(b) and Mr King returned to that matter in reply. Mr King there submitted that the 75% requirement should be replaced by 50% by an amendment to the constitution ordered by the Court under s 233 of the Corporations Act. However, Mr King did not identify any evidence that would support a finding of oppression (as distinct from matters that would support a winding up on the just and equitable ground) to provide a proper foundation for the exercise of that power, if it was available in respect of an incorporated association. In reply submissions, Mr Heath drew attention to Bandiara v Bilabil Community Preschool & Oosh Inc [2018] NSWSC 1903, where Robb J briefly considered but did not decide the question whether ss 232-233 of the Corporations Act applied to an incorporated association, by reason of s 95 of the Associations Incorporation Act, where those sections are not "excluded" in respect of associations registered under the Corporations Act. Mr Heath fairly accepted the difficulty that ss 232-233 of the Corporations Act only apply, in their terms, to a "company" as defined in the Corporations Act. 10. It is not necessary to address the question whether ss 232-233 of the Corporations Act are available in respect of an incorporated association in New South Wales, although they are not specifically applied to incorporated associations by the Associations Incorporation Act (NSW), which also does not include the express provisions which address oppression in the corresponding legislation of several other States. The evidence necessary to establish oppression was not led and, if oppression had been established, the appropriate relief may well have been a winding up of the Association rather than a constitutional amendment. Matters which weigh against a winding up order 1. I recognise that a winding up order would also disrupt any continuing political activities of the Association. However, it appears those activities have already been substantially disrupted by the dispute between the Association's leadership, and I have referred above to the fact that the costs incurred in the receivership and the proceedings are likely to dissipate the Association's funds that would be available for political activities in any event. I also recognise that, as Lindsay J pointed out in Sengthong, the effect of a winding up order would not necessarily be, ameliorated by the existence of a process under s 65 of the Associations Incorporation Act to transfer surplus property (if any exists after the conclusion of this dispute). However, by contrast with Sengthong, this is not a case where all parties to the proceeding acknowledge that a receiver and manager could supervise an election for a newly constituted management committee. Who should be appointed as liquidator 1. As I noted above, Mr Knox seeks an order that McMillen be appointed as liquidator of the Association, rather than Mr Condon being appointed to that role, and tendered a consent dated 22 February 2022 of Mr McMillen to appointment as liquidator of the Association (Ex K4). By submissions in reply served on 22 February 2022, Mr Heath, for the Receiver, also addressed the question whether Mr Condon should be appointed as liquidator if the Association was to be wound up, while recognising that that was a matter for the Court. I recognise that, ordinarily, the liquidator proposed by the applicant for a winding up order would be appointed as liquidator. 2. A similar question arose in respect of the potential appointment of Mr McMillen rather than Mr Condon as receiver and manager, when the May Consent Orders were made, and Henry J there observed ([2021] NSWSC 538 at [35]) that "[i]t would be in the Association's best interest to realise the potential time and cost advantages from Mr Condon being appointed to that role". I have concluded, for similar reasons, that Mr Condon should now be appointed as liquidator of the Association. It seems to me that, on balance, there is likely to be an advantage in continuity, and a potential cost saving in appointing Mr Condon as liquidator, although I recognise that saving may be marginal given the extent of the costs that have been accrued in his role as receiver. It does not seem to me that there is any lack of independence affecting his appointment to that role, where his claim to reimbursement of remuneration as a receiver will be determined by the Court, rather than by the liquidator, and other parties will have the opportunity to oppose that claim. I will grant the necessary leave under s 532 of the Corporations Act (which provides that a person must not, except with the Court's leave, seek to be appointed or act as liquidator of a company if that person is, relevantly, a creditor of the company in an amount exceeding $5,000) which appears to apply to an incorporated association by reason of s 64 of the Associations Incorporation Act. The Court regularly grants leave under that section in respect of the appointment of replacement liquidators: see, for example, Re OGL Resources Ltd [2015] NSWSC 58; Re FGM Print Pty Ltd [2018] NSWSC 1478. Stay of the winding up order, narrowing of the Receiver's powers and whether a provisional liquidator should be appointed 1. I will stay the winding up order which I am satisfied should be made for a relatively short period to allow the parties a further opportunity to resolve their differences as to what could be achieved by any meeting of delegates of branches of the Association or members generally and how it could be conducted. The Court can set aside that order before it takes effect if the parties agree the basis for the conduct of meeting that would result in the appointment of officers to the Association and the making of any necessary amendments to the Association's constitution to regularise the branch system and allow future meetings of the Annual State Council to occur. 2. I will also vary the May Consent Orders (which expressly had effect until further order of the Court) to continue the Receiver's appointment only for the narrow purpose of preserving the Association's assets, while that stay is in place. This order should reduce the risk of the continuing dissipation of the Association's assets by the Receiver's remuneration and costs, by reducing the scope of his activities, and ensure that only the individual parties and not the Association are exposed to the continuing costs of this dispute, and will preserve the opportunity for the determination of the remaining issues in the proceedings on their merits. There is no doubt as to the Court's power to continue the Receiver's appointment for this narrow purpose, having regard to the extensive review of the relevant authorities by Lindsay J in Sengthong at [170]ff. I address the manner in which the remaining issues in the proceedings will be determined below. 3. For completeness, I invited submissions about whether there would be any utility in the appointment of a provisional liquidator rather than making a winding up order, at least as an interim position. Where the Court has power to wind up an association, it is at least arguable that it also has power to appoint a provisional liquidator in respect of an association, although the Associations Incorporation Act does not specifically provide for such an appointment. The power to make such an appointment was recognised in respect of the predecessor legislation in Re Application of Volleyball Conference of New South Wales (Young J, 10 April 1995) and by White J in Re Kwang Huauyu-Soon Inc [2009] NSWSC 658, and is implicitly recognised by s 66(1) of the Associations Incorporation Act which provides an appeal to the Court from an act, omission or decision of a provisional liquidator. It seems to me that any benefit from the appointment of a provisional liquidator can be achieved by retaining the Receiver in place and narrowing his powers as noted above. Determination of the balance of the proceedings 1. The remaining issues in the proceedings may have been narrowed by this judgment. At least the Nile parties reversed the position they had previously taken in an interlocutory application as to who was entitled to vote at a meeting in the course of this application, so they will presumably not press that application. I will now make orders for the filing of any further evidence (with qualified guillotine orders) and submissions as to all remaining issues, and allocated a hearing date in late April and early May 2022 to determine those issues. Proposed orders 1. For the reasons set out above, I propose to make the following orders, but will allow the parties until 4pm on 7 March to make submissions not exceeding 5 pages in one and a half spacing as to the form of these orders, as distinct from the substantive question whether they should be made: 1. The Fifth Defendant be wound up and Mr Condon be appointed as its liquidator, with such leave as may be required under s 532 of the Corporations Act 2001 (Cth). 2. Stay order 1 to 4pm on 29 March 2022. 3. Vacate orders 5-9 made by Henry J on 12 May 2021 with effect from 4pm on 8 March 2022 and, from that time, the Receiver have power only to take such further steps as are necessary to preserve the assets of the Association pending the winding up of the Fifth Defendant or further order of the Court. 4. Liberty to the Receiver to apply, on 2 business days' notice to all parties, in respect of any further specific powers that may be necessary to give effect to order 3 and in respect of any issues which arise in giving effect to that order. 5. The parties and interested persons advise all parties and the Associate to Black J which remaining applications are pressed by them and file and serve all further evidence and their submissions in respect of all remaining issues in the proceedings by 4pm on 16 March 2022, no further evidence to be relied on if filed and served after that date without leave. 6. The parties and interested persons file and serve all further evidence and their submissions in reply by 4pm on 6 April 2022, no further evidence in reply to be relied on if filed and served after that date without leave. 7. All remaining issues in the proceedings be listed for hearing before Black J on 13 May 2022. 8. The costs of and incidental to this hearing be reserved for further submissions. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 March 2022