New South Wales Supreme Court CITATION : Sri Guru Singh Saba Sydney (Sikh Assoc of Sydney Inc) & 1 or v Balbir Singh & 2 ors [2005] NSWSC 996 HEARING DATE(S) : 6 September 2005 JUDGMENT DATE : 6 September 2005 JUDGMENT OF : Brereton J CATCHWORDS : COSTS - where proceedings compromised - whether grounds to depart from general rule that each party bear its own costs - no question of principle. Sri Guru Singh Saba Sydney (The Sikh Association of Sydney Inc) & 1 or PARTIES : Balbir Singh & 2 ors FILE NUMBER(S) : SC 4091/05 R Newton (plaintiffs) COUNSEL : T Orlizki (solicitor) (defendants) SP Nasti & Co (plaintiffs) SOLICITORS : Norman Waterhouse (defendants) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BRERETON J Tuesday 6 September 2005 4091/05 Sri Guru Singh Saba Sydney (The Sikh Association of Sydney Inc) & 1 or v Balbir Singh & 2 ors JUDGMENT (ex tempore – revised 12 October 2005) 1 HIS HONOUR: On 16 May 2005, the defendants requisitioned a general meeting of the plaintiff Association, as they were entitled to do under clause 25 of the Association's Constitution. That requisition proposed two resolutions: the first was to elect a Committee to manage the affairs of the Association, presumably in substitution for the then Committee; and the second was to limit the authority of the Committee to expend funds in legal actions without the approval of a properly convened special general meeting. 2 The Association does not appear to have responded to that requisition. As a result, the defendants, as they were entitled to do in the absence of the Association having convened a special general meeting within one month of the requisition of 16 May, on 6 July 2005, themselves gave notice convening a special general meeting to be held on 30 July 2005, again proposing, as the business of the meeting, the election of office bearers and the resolution restricting use of funds. 3 On or about 9 July 2005, the Association's Management Committee met and discussed the requisition, and determined to request the defendants not to proceed with the proposed special general meeting but to deal with the question of election of office bearers at an annual general meeting. On 17 July 2005, the Association circulated a notice to members, convening what was called "an Annual/Special General Meeting" to be held on 18 September 2005. 4 On 18 July 2005, the Association sent a letter to the First Defendant, advising of the decision to call an "AGM/SGM" to be held on 18 September 2005, and that the Committee was writing to all members to provide "an equal opportunity to send any special resolutions they want discussed or voted on at that meeting". The letter asked that the First Defendant give consideration to creating an atmosphere of goodwill by keeping the interests of the Association in the forefront, and offered to discuss matters. 5 On 22 July, the Association approached the duty judge and obtained leave to file in court a summons claiming orders restraining the defendants from proceeding with the proposed special general meeting and compelling them to circulate notification that it was not regularly convened and would not proceed. Time for service was abridged, and the matter came before the Court on 25 July, when proceedings were ordered to be heard on a final basis at 2pm on 26 July. 6 On 26 July, the proceedings were compromised and orders were made by consent that an annual general meeting take place on 27 August, and that the special general meeting due to take place on 30 July be adjourned until the date of that annual general meeting, with the Association making no admission as to the validity of the special general meeting. Costs were reserved. 7 The proceedings were stood over to 30 August, and on 30 August, the proceedings were further adjourned to today. 8 Given that the matter was set down for hearing on a final basis on 26 July, the orders made by consent on that day should be regarded as a final settlement of the matter, leaving only the question of costs outstanding. 9 Although Mr Newton, for the plaintiff, seeks leave to discontinue the proceedings, that is not an appropriate course after final relief has been granted, even by consent. Orders were made on a final basis on 26 July, and nothing is served by granting leave to discontinue the proceedings in circumstances where final relief has been granted. The orders made on 26 July exhausted the proceedings, save as to the question of costs. 10 In those circumstances, the reference to the prima facie position as to costs on discontinuance which largely informed the defendants' argument, is not relevant. However, the general proposition that where proceedings are compromised, it may often be inappropriate for the Court to investigate the matter in detail to ascertain what the outcome would have been, is pertinent. It is well established that where the substance of proceedings is resolved by negotiated settlement and the parties are unable to agree on costs, it will be rarely appropriate to determine outstanding costs issues by close investigation of the merits of the respective claims and defences. In such circumstances, it will often be appropriate to make no order as to the costs of the proceedings, although, in particular cases, either the clarity with which it can be seen that a particular outcome was inevitable and that one party has simply bowed to that inevitability, or the circumstance that one party has acted unreasonably, may warrant a departure from that course. 11 So far as the Association's original application is concerned, it seems to me that there was a reasonable argument, without passing final judgment on it, that a resolution which proposed the election of a totally new Committee might not be available at a special general meeting. On the other hand, it seems to me that the argument that the second proposed resolution limiting expenditure could not be passed by a general meeting, was doomed to fail. In those circumstances, the Association was not entitled to refuse to convene a special general meeting, at least for the purposes of the second resolution referred to in the requisition. It may well be that an association is not bound to convene a special general meeting where all the proposed business would be ultra vires the proposed meeting. But if some of the proposed business is within power, an association is not excused from complying with its obligation to convene a meeting by the circumstance that part (but not all) of the business is beyond power. 12 It is next relevant that there does not appear, on the evidence before me, to have been any response whatsoever by the Association to the requisition, until the defendants gave notice convening the special general meeting, the Association having failed to do so. Had the Association responded earlier and raised the issues about its concerns as to the validity of at least some of the business earlier, it may well be that these proceedings could have been avoided. 13 On the other hand, it has to be acknowledged that by the consent orders of 26 July, the Association did succeed to the extent that the special general meeting convened for 30 July did not take place on that date, its business being adjourned, without admission as to validity, to the annual general meeting. Thus it gained a measure of success. But so did the defendants, who had the AGM brought forward by three weeks from the date proposed by the Association. (Although various assertions have been made about what happened at the annual general meeting, there is no evidence about it save for the notice of meeting before me and I do not see those events as relevant in any event to the decision I now have to make). 14 Each party has had a measure of success. I am not prepared to find that either acted so much more unreasonably than the other to justify a costs order. Without a far more exhaustive investigation of the issues and the merits of the positions of either party than is possible in a duty judge's list, which consideration would itself involve visiting further costs on both parties, there is insufficient ground to depart from the starting position that, in these circumstances, it is appropriate to make no order as to the costs of the proceedings. 15 I make no order as to costs, to the intent that each party bear its and his own costs. The minute book of the Association is returned. ********** 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. 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