REDHEAD GRANGE INCORPORATED v BRETT DAVIDSON & 1 OR [2002] NSWSC 90

Reported Decision : (2002) 55 NSWLR 14

New South Wales Supreme Court

CITATION : REDHEAD GRANGE INCORPORATED v BRETT DAVIDSON & 1 OR [2002] NSWSC 90 FILE NUMBER(S) : SC 5133/01 HEARING DATE(S) : 7 February 2002 Written submissions JUDGMENT DATE : 28 February 2002

PARTIES : Plaintiff: Redhead Grange Incorporated Defendant: Brett Davidson & Karen Davidson JUDGMENT OF : Brownie AJ at 1

COUNSEL : Plaintiff: JR Connors Defendant: GJ Graham SOLICITORS : Plaintiff: Harris Wheeler Defendant: Colin A Hogan & Co CATCHWORDS : Associations and clubs - rights, duties and liabilities of members - rights of members to resign. Associations and clubs - jurisdiction of courts - property rights and obligations DECISION : I make declarations in terms of paragraphs 1 and 2 of the Summons, and order the Defendants to pay the Plaintiff's costs.

- 14 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BROWNIE AJ Thursday, 28 February 2002 5133/01 redhead grange incorPorated v BRETT DAVIDSON & KAREN DAVIDSON JUDGMENT 1 HIS HONOUR: The Defendants became members of the Plaintiff association, and purported to resign. The question to be decided is whether that resignation was effective. 2 The Plaintiff was incorporated in 1997 pursuant to terms of the Associations Incorporation Act 1984. It seems to have been called into existence in connection with the proposed subdivision of some land at Redhead, near Newcastle. That land was owned by FAI General Insurance Limited, and ultimately it was subdivided. Lot 68 in the subdivision became known as the "Leisure Club Lot". 3 The Defendants entered into a contract with FAI General Insurance Limited, whereby the latter sold to the Defendants Lot 56 in the subdivision. Special Condition 46 of the Contract was in the following terms:- "46 Membership of Redhead Grange Incorporated (a) The Purchaser acknowledges that upon registration of the transfer to it of the property, it will (by that fact) become a member of Redhead Grange Incorporated (the "Association") and be entitled to access to the Leisure Club Lot being Lot 68 in the Plan and the facilities including:- (i) tennis court; (ii) gymnasium; (iii) children's play area; (iv) The Winderhouse Hall; (v) gardens; and (vi) shaft enclosure (viewing only – no access is allowed). (b) The parties will adjust contributions payable in respect of the Leisure Club Lot in accordance with the Constitution of the Association on the basis of $213 per lot for the year current as at the date of completion. The amount of contributions shall be adjusted from the date of registration of the plan of subdivision up until June 30, of the following year, on a daily basis. The purchaser shall not be entitled to make any objection, requisition or claim for compensation or delay completion in relation to the payment or adjustment of the contributions referred to in this clause. (c) The Vendor discloses to the Purchaser the terms of the Constitution of Redhead Grange Incorporated ("the Constitution") which is annexed hereto and marked with the letter "R". The Purchaser shall not make any objection, requisition or claim in respect of the Constitution, or anything referred to in or arising out of the Constitution nor any changes to the Constitution which the Vendor, or any relevant authority shall deem necessary or desirable, (including incorporation of the Association under the Corporations Law) PROVIDED THAT the terms of any such alterations do not adversely affect the purchaser's interest in the lost to an extent which is not minor. ( d) If there is a dispute between the parties… [of a certain kind, it was to be resolved in a certain way]." 4 In due course the Defendants became the registered proprietors of Lot 56. Annexure "R" to the Contract was a copy of the Plaintiff's Constitution, which contained the following clauses or rules:- 1. Membership Qualifications (a) the members of the Association shall comprise two classes, namely:- (i) founding members; (ii) proprietors. (b) founding members shall be natural persons who authorise the incorporation of the Association on behalf of FAI General Insurance Company Limited. FAI General Insurance Company Limited may appoint other persons to act as founding members in place of any such person or persons.