Dunlevy v The Law Society of New South Wales [2006] NSWSC 1408

Reported Decision : 61 ACSR 36

New South Wales Supreme Court

CITATION : Dunlevy v The Law Society of New South Wales [2006] NSWSC 1408

HEARING DATE(S) : 13/12/06 JURISDICTION : Equity Division

JUDGMENT OF : Young CJ in Eq

EX TEMPORE JUDGMENT DATE : 12/13/2006

DECISION : A person who has been appointed to fill a casual vacancy in the office of Senior Vice-President of the Law Society, and who holds that office at the end of that calendar year shall become President of the Law Society at the commencement of the next following calendar year.

CATCHWORDS : CORPORATIONS [10]- Articles of Association- Construction- Succession of Senior Vice-President to President- Whether succession applicable to person filling casual vacancy- Held "Yes".

PARTIES : Geoffrey James Dunlevy (P) The Law Society of New South Wales (D)

FILE NUMBER(S) : SC 6212/06

COUNSEL : B Walker SC and S E J Prince (P) T F Bathurst QC and E A Collins (D)

SOLICITORS : Gilbert+Tobin (P) Corrs Chambers Westgarth (D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

YOUNG CJ in EQ

Wednesday 13 December 2006

6212/06 – DUNLEVY v THE LAW SOCIETY NEW SOUTH WALES JUDGMENT 1 HIS HONOUR: The defendant company was incorporated under the Companies Act 1874 in the year 1884 as a company limited by guarantee and it retains that status under the Corporations Act 2001 (Cth). 2 It has adopted a set of Articles of Association and, needless to say, the control of its day-to-day business must take place subject to those Articles of Association. 3 The Articles of Association provide that the governing body of the defendant is a Council which, under article 8 is to consist of 21 councillors, and that within that governing body there are some senior office bearers, namely (a) the President, (b) a Senior Vice-President (c) a Junior Vice-President, (d) a Treasurer and (e) an Immediate Past President. 4 The present problem involves the proper construction of the Articles of Association in the context of the events that happened earlier this year when the then Senior Vice-President was appointed a judge of the District Court, and ceased to be a member of the Council and the plaintiff was appointed by the Council pursuant to Article 9.6 to the casual vacancy in the position of Senior Vice-President. Doubts have arisen as to whether that appointment entitles the plaintiff after 31 December this year, if he still at that time is Senior Vice-President, to succeed to the Presidency. 5 The dispute has to be dealt with quickly because the defendant company has a significant role to play in the regulation of the legal profession, and under the Articles its President is the person who supervises the affairs of the defendant and is himself or herself a prominent player in the regulation of the profession in New South Wales. Thus these proceedings, which were commenced by summons filed last Friday, 8 December 2006, have proceeded to a final hearing today and it is necessary to give an ex tempore judgment, even though some of the issues that have been raised might well have justified more mature consideration. 6 The parties have agreed that the following question be decided first in priority to all other issues that might arise in the proceedings: "On the true interpretation of the Articles of Association of the Law Society of New South Wales (" the Law Society "), that the person who has been appointed to fill a casual vacancy in the office of Senior Vice-President of the Law Society and in a particular calendar year and who holds that office at the end of that calendar year shall become President of the Law Society at the commencement of the following calendar year." 7 I have been greatly assisted in coming to grips with this question by the learned submissions of Mr B Walker SC and Mr SEJ Prince, on behalf of the plaintiff, and Mr TF Bathurst QC and Ms EA Collins, on the part of the defendant. 8 There is no dispute as to the basal facts. At the election held in accordance with the Articles of Association in 2005 the plaintiff was elected to the position of Junior Vice-President and his Honour Judge Peter Johnstone of the District Court, as his Honour now is, was elected Senior Vice-President. 9 On 20 April 2006 Judge Johnstone resigned his office as Senior Vice-President to take up his appointment, and at a meeting of the Law Society Council that day it was resolved that the plaintiff be appointed to fill the casual vacancy in the position of Senior Vice-President. Thereafter, the plaintiff has continued to be the Senior Vice-President and still continues to be the Senior Vice-President as at today. 10 In November 2006 there was a further meeting of the defendant's Council and a resolution was passed that no councillor shall in accordance with Article 9.4.2 move to become the President as of 1 January 2007, noting that a casual vacancy shall occur in the office of President commencing 1 January 2007 and resolved that that casual vacancy be filled by Ms June McPhie, who is the person who is President for the calendar year 2006. 11 The plaintiff considers that that resolution was ineffective because it was contrary to the Articles of Association, and commenced these proceedings for a declaration to that effect. 12 The Articles of Association, like any other document that a person may prepare, may not completely deal with every eventuality that fate may throw up. However, it fairly comprehensively deals with the way in which the governing body of the defendant is to be chosen. 13 I have already mentioned the constitution of the Council and the fact that there are senior office bearers. The Articles use the words "appoint" or "elect", and whilst at first blush it might appear that there is some semantic difference between the terms, it has been conceded that the terms are used interchangeably, and I will use the word Mr Walker used in his closing address, "chosen", to cover both terms. 14 The scheme of the election of senior office bearer is set out in Article 9. 15 9.2 mandates the Council to fix a date in the year for the election of office bearers for the next ensuing year. 16 9.4.1 provides that a Senior Vice-President, the Junior Vice-President and the Treasurer will each hold office for the calendar year following their election. 17 9.4.2 then reads as follows: "At the end of the calendar year following the election of the Senior Vice-President the Senior Vice-President shall become the President and shall hold office as President for 1 calendar year. The President shall be paid such annual allowance as the Society in General Meeting shall from time to time determine." 18 9.4.3 reads: "At the end of the term of office of the President the President shall become the Immediate Past President and shall hold office as Immediate Past President for 1 calendar year." 19 Article 9.5 says when the term of office of an office bearer shall end. It includes among other stipulations the end of the next calendar year after the appointment. 20 9.6 empowers the Council to fill casual vacancies in the senior office bearer positions, other than that of Immediate Past President, and provides: "A person filling a casual vacancy holds office for the remainder of the term of the office bearer who last held the position." 21 Although I was taken through various other provisions of the Articles, in light of the concession that was made, it does not seem to me that there is much purpose in reiterating them in these reasons. 22 Mr Bathurst QC pointed out a possible problem with the way in which the scheme operates, and that is that a person who might be chosen at a Council meeting to fill a casual vacancy might be a member of the Council who himself or herself had only recently been chosen to be a member of the Council by filling a casual vacancy under Article 8.7.1. Under Article 8.7 such a person should only hold office until the next ordinary election of members of the Council, which seems to take place in October or November, so that in that sort of situation it would be very odd if Article 9.6 operated for all purposes to put the person who had been chosen, as a result of filling a casual vacancy, to be Senior Vice-President in exactly the same position as a person who had been duly elected to that position at the November election in the preceding year. Such a person would have to face an election in October/November and it may be that the membership would not continue that person's membership of the Council. 23 However, Mr Walker in his address in reply pointed to Article 8.4.2, that if the elected term of a councillor would expire during his or her term of a senior office bearer, the senior office bearer shall remain a member of the Council ex officio until his or her term as senior office bearer has expired. That, to my mind, would seem to cover the objection made, and so it is unnecessary to consider whether, as the plaintiff was never in the situation of filling a casual vacancy on the council, the argument is relevant to him in any event. 24 Construction of documents such as Articles of Association is a matter of how the words impress themselves on the mind of the decision maker. However, in my view, looking at the Articles as a whole, there is a clear scheme that in order to get a person the appropriate experience for the very onerous position of its President the defendant has made it clear that only an experienced person is to take up the role of President. It thus instituted a scheme where there is an apprenticeship-type scheme whereby Senior and Junior Vice Presidents are to "learn the trade" of being a leader of the Law Society and then step into the shoes of the President. 25 There is no semantic difference between a person who is elected at the Council elections of office bearers to be a President or to be a Senior Vice-President, and a person who becomes Senior Vice-President at the instance of the Council to fill a casual vacancy. In my view, the natural reading of the Articles is that so long as that person is duly in the office of Senior Vice-President as at midnight on 31 December that person becomes the President on the first moment of 1 January in the next succeeding year and for the whole of 2007 unless, of course, he or she dies, resigns or otherwise lawfully ceases to be the President. 26 Mr Walker puts the submission too that the words "Senior Vice-President" are used in two different senses in Article 9.4.2. The first part of 9.4.2 deals with the time at which a person is elected as Senior Vice-President and the second part of the clause deals with the person who is the Senior Vice-President as at midnight on 31 December and that it is erroneous to equate the two. I think there is merit in that, but I am just a little disattracted, if I can coin that word, with such an artificial submission, when it seems to me on the whole of the Articles of Association the position for which the plaintiff contends is correct. 27 Accordingly, I answer the question posed "yes". The defendant is to pay the plaintiff's costs of the proceedings to date. The balance of the proceedings are adjourned to my list on Wednesday 7 February 2007 at 9.50 am for mention.