Supreme Court New South Wales Medium Neutral Citation: Nirmal Paul & Anor v Apu Saha & Ors [2011] NSWSC 1109 Hearing dates: 22 to 24 August 2011, 29 September 2011 and 14 October 2011 Decision date: 02 December 2011 Before: Ball J Decision: See paragraphs 65 and 66 of this judgment. Catchwords: ASSOCIATIONS AND CLUBS - officers - question as to rightful executive committee of association - whether was a quorum at Special General Meeting - construction of constitution of association - whether executive committee validly removed from office - whether interim committee validly appointed - whether interim committee had power to call an Annual General Meeting - whether Corporations Act 2001 s 1322 can be used to cure irregularities in calling of Annual General Meeting Legislation Cited: Associations Incorporation Act 1984 (NSW) Associations Incorporation Act 2009 (NSW) Associations Incorporation Regulation 2010 (NSW) Corporations Act 2001 (Cth) Cases Cited: Ball v Pearsall (1987) 10 NSWLR 700 Luen Fook Tong Inc v Lowe [2011] NSWSC 1004 Category: Principal judgment Parties: Nirmal Paul (First Plaintiff) Bangladesh Society for Puja and Culture Inc (ABN 45 046 931 929) (Second Plaintiff) Apu Saha (First Defendant) Sanjib Mohanjan (Second Defendant) Rani BS Chowdhury (Third Defendant) Samir Sarkar (Fourth Defendant) Ranjit Kumar Das (Fifth Defendant) Representation: Mr C R de Robillard (Plaintiffs) Mr M Vassili (Defendants) Kent Attorneys (Plaintiffs) Vassili Fozzard Lawyers & Consultants Pty Ltd (Defendants) File Number(s): 2010/417798 Judgment Introduction 1The second plaintiff, Bangladesh Society for Puja and Culture Inc ( BSPC ), was incorporated in about 1996 under the Associations Incorporation Act 1984. It is now taken to be incorporated under the Associations Incorporation Act 2009 (the AI Act 2009 ): see AI Act 2009 sch 4 cl 3. The principal object of BSPC is to organise religious and cultural activities for people of Bangla origin. The word "Puja" means "prayer or devotion". 2For reasons which are unclear from the evidence, the members of BSPC have divided into two principal factions: those who are represented by the first plaintiff, Mr Nirmal Paul, and those who support Mr Apu Saha, the first defendant. This case concerns a dispute between the two factions about the composition of BSPC's executive committee and who is entitled to represent BSPC. The resolution of that dispute turns on what happened at a meeting requisitioned by members of BSPC by notice dated 19 August 2008 to be held on 20 September 2008 and, in particular, whether a new interim executive committee was validly elected at that time. If the interim executive committee was not validly elected at that time, there is a question of what follows from that fact. The defendants in a cross-summons seek declarations that all resolutions of successive executive committees since then are invalid and are not binding on BSPC. Implicit in that claim is a claim that the annual general meeting of BSPC held on 6 February 2011 was not validly called. The defendants also seek an order the effect of which is that control of BSPC would be vested in them. Originally, as an alternative, they also sought an order that BSPC be wound up. However, that order was not pressed in final submissions. Instead, the defendants submitted that, if the court was not prepared to vest control of BSPC in them, then it should give directions for the holding of fresh elections for a new executive committee. On the other hand, in their summons the plaintiffs seek injunctions restraining the defendants from holding themselves out as representing BSPC and, in a reply to the cross-summons, they also seek a declaration that the members of the executive committee for the year 2010-11 and the positions they hold are as follows: President Mr Nirmal Chowdhury Vice President Mr Utpal Shaha General Secretary Mr Nirmalya Talukder Assistant General Secretary Mr Surajit Roy Cultural Secretary Miss Tulip Das Public Relations Secretary Mr Nirmal Chakraborty Treasurer Mr Nikhil Paul Executive Members Miss Smita Dey Dr Santosh Roy Dr Swapan Paul Mr Sandip Guha Those persons (apart from Miss Dey, who was appointed to the committee subsequently) were elected at a meeting held on 6 February 2011. No relief is sought in the reply to the cross-summons in the event that the court concluded that those persons were not validly elected at that time. However, the question whether the court should grant relief in that circumstance under s 1322 of the Corporations Act 2001 (Cth) was raised during the course of the hearing, and in final written submissions the plaintiffs indicated that they sought relief under that section in that event. BSPC's Constitution 3Before dealing with the circumstances giving rise to the current dispute, it is helpful to set out the relevant provisions of BSPC's constitution. That constitution binds BSPC's members as if there were a contract between them under which they each agreed to observe its terms: AI Act 2009, s 26(1); see also Luen Fook Tong Incorporated v Lowe [2011] NSWSC 1004 at [32] per Slattery J, and the cases cited there. Consequently, it is primarily by reference to the terms of the constitution that the current dispute is to be resolved. 4In order to become a member of BSPC, a person must be nominated by a member in writing in the form set out in Appendix 1 to the constitution, which must be lodged with the secretary: rule 6(1). The nomination must be approved by the executive committee: r 5(b). If approved, a nominee must pay an entrance fee and annual membership fee within 28 days of being notified that the applicant has been approved for membership. The amount of the fees is fixed by the executive committee: r 6(3). At the relevant time, the entrance fee was $5 and the annual membership fee was $25. The secretary must, on payment of the fees within the specified time, enter the nominee's name in the register of members and, on the name being entered, the nominee becomes a member of BSPC: r 6(4). A member who fails to pay the annual fee becomes non-financial. A non-financial member may revive his or her financial membership by paying an amount equivalent to the sum of the entrance and membership fees: r 11(4). 5The constitution provides for an executive committee consisting of 11 members, including 7 office bearers and 4 executive members: r 17(1), (2). The various office bearers are described above. Members of the executive committee are elected at the annual general meeting of BSPC and hold office until the conclusion of the annual general meeting next following the date on which they are appointed: r 17(3), (4). Any casual vacancy may be filled by the executive committee: r 17(4). However, r 17(5) provides: The Committee shall at no time consists [sic] of less than six members as a result of occurrences of casual vacancies. 6The election of the executive committee is to be conducted by an election commissioner who is appointed by the executive committee, but who is not eligible for nomination for any position on the executive committee: r 18(2). Any financial member with at least 3 months' membership of BSPC on the election date is an eligible voter: r 18(1). Only eligible voters are entitled to be nominated to any position on the executive committee: r 18(1). Rule 18 of the constitution goes on to describe the nomination process. Nominations must be made in writing and signed by two eligible voters: r 6(a). Rule 18(8) provides that, if insufficient nominations are received as a result of that process, "any vacant positions remaining on the Committee are taken to be casual vacancies". Rule 18(12) provides that: The President of the previous Committee, if not nominated and elected to any position as office-bearer on the current Committee, he/she shall fill one of the four positions of Executive Member of the Committee. Rule 18(13) provides that: The Committee shall be elected for one financial year, but will continue functioning until a new Committee is elected by the Society. 7Rule 23 deals with resignation. It provides: (1) The President may resign office by notice in writing given to the Executive Committee. The Committee may accept the resignation only if the reason of resignation is on personal grounds. In all other cases, the Committee shall refer the resignation to the next general meeting for consideration. (2) Any other officer-bearers and members may resign office by giving written notice to the President. The President after due consultation with the Executive Committee may accept the resignation or may refer the matter to the next general meeting for consideration. 8Rule 24 deals with removal of a committee member. It provides: (1) The Society in general meeting may by resolution remove any member of the Committee or confirm that a casual vacancy exists in respect of that member's office before the expiration of the member's term of office and may, by resolution appoint another person to hold office until the expiration of the term of office of the member so removed. (2) If it is proposed that a member of the Committee be removed from the Committee by resolution referred to in clause (1), the member may makes [sic] prior representations in writing to the President and may request that the representations be notified to the members of the Society, [sic] The President may send a copy of the representations to each member of the Society or, if the representations are not so sent, the member is entitled to require that the representations be read out at the meeting at which the resolution is considered. 9Any 5 members of the committee constitute a quorum: r 25(5). 10Meetings of the committee are to be convened by the secretary with the concurrence of the president. However, any 3 members of the committee can requisition a meeting: r 25(2). Oral or written notice of a meeting must be given to each member of the committee at least 48 hours before the time appointed for the meeting (or such other time as the committee unanimously agrees): r 25(3). 11The executive committee may, whenever it thinks fit, convene a special general meeting: r 30(1). A special general meeting may also be requisitioned by 15 members or 5 percent of the total number of members, whichever is higher: r 30(2). At least 14 days' notice of a general meeting must be given by prepaid post to each member at the member's address appearing in the register of members. The notice must specify the place, date and time of the meeting and the nature of the business proposed to be transacted at the meeting: r 31(1). Rule 31(3) provides: No business other than that specified in the notice convening a general meeting is to be transacted at the meeting except, in the case of an annual general meeting, business which may be transacted under Rule 29(2). Rule 29(2) states that the business that may be transacted at an annual general meeting includes confirmation of the minutes, receiving reports from committees and the election of office bearers and executive members of the committee. 12Rule 29(1) provides: The annual general meeting of the Society is, subject to the Act and the Rule 28, to be convened on such date and at such place and time as the Committee thinks fit. Rule 28(1) relevantly provides: With the exception of the first annual general meeting of the Society, the Society must, at least once in each calendar year and within the period of 6 months after the expiration of each financial year of the Society, convene an annual general meeting of its members. 13Rule 1(1) defines "the Act" to mean "the Association Incorporation Act 1984". However, r 1(3) provides: The provisions of the Interpretation Act 1987 apply to and in respect of these rules in the same manner as those provisions would so apply if these rules were an instrument made under the Act. Sections 68(3)(a) of the Interpretation Act provides that a reference in any Act or instrument to an Act that has been repealed and re-enacted extends to the re-enacted Act. Consequently, the reference in r 29(1) to the Association Incorporation Act 1984 includes a reference to the AI Act 2009. 14Rule 32 deals with the procedure to be followed at a general meeting. Relevantly, it provides: (1) No item of business is to be transacted at a general meeting unless a quorum of members entitled under these rules to vote is present during the time the meeting is considering that item. (2) One-third of all financial members must be present in person (being members entitled under these rules to vote at a general meeting) to constitute a quorum for the transaction of the business of a general meeting. (3) If within half an hour after the appointed time for the commencement of a general meeting a quorum is not present, the meeting: (a) if convened on the requisition of members, is to be dissolved; and (b) ... 15Rule 33(1) provides that the president or, in his absence, the vice-president is to preside as chairperson at each general meeting of the Society. 16Rule 40(2) provides: All money received by the Society must be deposited as soon as practicable and without deduction, to the credit of the Society's bank account. Rule 40(4) requires the Society as soon as practicable after receiving money to issue an appropriate receipt. Factual Background 17The current dispute has its genesis in an annual general meeting of BSPC held on 22 June 2008. At that meeting, a number of previous members of the executive committee were not re-elected, including Mr Surajit Roy (the previous vice president), Mr Danip Guha (the previous treasurer) and Dr Swapan Paul (the previous president), although Dr Paul continued as a member of the committee pursuant to r 18(12). Only 7 committee members were elected at the annual general meeting. They were: President Dr Sudhir Lodh Treasurer Mr Sanjib Mohajan (the second defendant) General Secretary Mr Apu Saha (the first defendant) Executive members Mr Prabir Maitra Mr Samir Sarkar (the fourth defendant) Dr Swapan Paul Mr Nirmalya Talukder 18Following the annual general meeting, the executive committee met on 29 June 2008. A dispute broke out between its members concerning who should be appointed to fill the four casual vacancies on the committee. Originally, Mr Saha proposed 4 names and Dr Lodh proposed 4 others. The matter was discussed at a second executive committee meeting on 10 August 2008, which was not attended by Mr Talukder. Mr Saha says that, at that meeting, after Dr Paul had left, it was agreed that two names would be chosen from the names put forward by him and two from those put forward by Dr Lodh, with the result that Mr Laxmi Gupta, Mr Swapan Roy, Mr Ranjit Das (the fifth defendant) and Dr Santosh Roy filled the casual vacancies. Mr Saha circulated minutes recording that fact. The minutes simply say: The following names were proposed and agreed to fill the unfilled posts: Vice President Mr Laxmi Kanta Gupta Astt. General Secretary: Mr Swapan Saha Roy Cultural Secretary Mr Ranjit Das Public Relation Secretary: Dr Santosh Roy Dr Sudhir Lodh will inform two EC members, who were not present during this discussion, about this decision. In response, Dr Lodh said that the minutes were not accurate. According to him, there was no discussion of who should fill the casual vacancies at the committee meeting on 10 August 2008, since the committee was preoccupied with organising the forthcoming Durga Puja , a major cultural and religious festival. The dispute led Mr Talukder to tender his resignation on 13 August 2008 and Dr Paul to tender his resignation on 17 August 2008. On receipt of those letters of resignation, Dr Lodh sent an email to all members of BSPC in which he said that the executive committee was "non functional". He invited the general members to make suggestions on a way forward. 19Mr Saha replied to Dr Lodh's email on 19 August 2008 disputing the assertions made in it. Following that correspondence, members of BSPC requisitioned a special general meeting. 20There was a third meeting of the executive committee on 30 August 2008, which was attended by Dr Lodh, Mr Saha, Mr Sarkar, Mr Maitra and Mr Mohajan. At that meeting it was agreed to convene the special general meeting for 11.00 am on 20 September 2008 at the Polish Club, Ashfield. In relation to the dispute concerning who was to fill the casual vacancies, the minutes record: Minutes of the previous meeting were approved. Regarding coopting the vacant positions, President gave a note of dissent. Considering the current situation EC agreed to defer the implementation of the decision until suitable time in the near future. 21Although, as I have said, there was a dispute about it, I think that the 4 additional members must have been appointed at the executive committee meeting on 10 August 2008. Mr Saha's faction on the committee (consisting of himself, Mr Sarkar, Mr Maitra and Mr Mohajan) clearly formed a majority on the committee and was in a position to insist on its wishes. Dr Lodh says that the issue was not discussed at that meeting. However, I think that is unlikely. It was a critical issue that had been the subject of debate at the previous meeting. It would be surprising in those circumstances if the issue had not been raised at all at the subsequent meeting and it seems unlikely that Mr Saha would have included a reference to the issue in the minutes if it had not been discussed. In addition, the minutes of the meeting on 30 August 2008 record that the 4 casual vacancies were filled, although they also record Dr Lodh's dissent at that time. It seems clear, then, that the faction led by Mr Saha believed that the 4 additional members had been appointed. It was in a position to bring that about. That is what is likely to have happened. 22Mr Talukder and Dr Paul did not attend the meeting on 30 August 2008. There is, however, no evidence to suggest that Dr Lodh discussed their resignations with other members of the committee or that he accepted their resignations, as the constitution required. Mr Saha's handwritten notes of that meeting simply note both of them as apologies. In my opinion, their resignations did not take effect before the special general meeting on 20 September 2008, and only took effect at that time if the resolutions passed at that meeting were valid. 23The notice calling the special general meeting, which was signed by Dr Lodh and Mr Saha, stated that the agenda of the meeting was to: Discuss the letter from the President Dr Sudhir Lodh and to resolve issues mentioned in the letter and matters arising from the issues; Resolve the matter regarding the resignations of two Executive Members and the formation of the Executive Committee, as per Clause 18(8) and Clause 21(C). Discuss the issues mentioned in the resignation letters of two Executive Members and resolving the issues and matters arising from the issues; Restore Constitutional rules of running the business of the EC. 24There is no dispute that the meeting was validly called to consider those matters. However, there is almost no agreement on what happened at the meeting. The position of Mr Saha and Mr Mohajan is that they arrived at the Polish Club before 11.00 am. They set up a table on the first floor immediately outside the room in which the meeting was to take place at which members could sign their name on a list of members indicating their attendance at the meeting. Mr Saha says that it was apparent that not all members had signed by 11.30 am. Consequently, after speaking to Dr Lodh, it was agreed to postpone the commencement of the meeting until 11.45 am. By that time, 36 members had signed the attendance sheet. The defendants contend that that did not amount to a quorum. Mr Saha announced that fact to those who were in attendance and he and Mr Mohajan left the meeting, with the attendance sheet. 25There are some variations in the account of the meeting given by witnesses called by the plaintiffs. However, all of them differed substantially from the accounts given by Mr Saha and Mr Mohajan. According to the accounts given by witnesses called by the plaintiffs, the table with the attendance sheet (which was set up immediately inside the meeting room) was not set up until about 11.15 am. Indeed, according to Dr Paul it was not possible to obtain access to the building until about that time (although this evidence is contradicted by others). On the plaintiffs' account, there was a large group of people who were lined up waiting to sign the attendance sheet at that time, as many as 40 according to Mr Nirmal Paul, the first plaintiff. The plaintiffs also allege that there were errors in the list, which slowed down the collection of signatures. Dr Lodh denies that Mr Saha spoke to him about postponing the commencement of the meeting. Instead, the plaintiffs' case is that, at about 11.30 am, Mr Saha and Mr Mohajan, who had control of the attendance sheet, refused to permit those who were still waiting to sign it to do so. Arguments broke out concerning that conduct and, a short time later, Mr Saha, amidst something approaching uproar, announced to the meeting that a quorum was not present, following which it is agreed that he and Mr Mohajan left. 26It was also suggested by witnesses for the plaintiffs that Mr Saha did not sign the attendance sheet himself and that other members remained on the ground floor so as to avoid being included in the quorum. In any event, those who remained agreed to proceed with the meeting. A second attendance sheet was produced and signed by the members present. In all, 43 members signed that sheet. The meeting continued for several hours. During the course of it, a resolution was passed (unanimously, according to a record of the meeting) dissolving the then current executive committee. Following that, it appears that Mr Nirmal Paul acted as chairman of the meeting. It was also resolved (again unanimously) to form an interim committee consisting of 9 members, who were to hold office for three months. The 9 members who were elected were: Acting President Mr Nirmal Paul Acting Vice President Mr Nirmal Chowdhury Acting General Secretary Mr Paramesh Bhattacharya Acting Asstt. General Secretary Mr Nirmalya Talukder Acting Treasurer Dr Ashutosh Barai Acting Cultural Secretary Mr Dhruba Bhowmik Acting Public Relation Secretary Mr Ashoke Roy Members Mrs Ratna Hort Mr Sudhir Lodh 27For reasons which will become apparent shortly, many of the issues concerning what happened at the meeting on 20 September 2008 are irrelevant to the resolution of the current dispute. However, I should say something about the differing accounts. Emotions were clearly high at the time and the dispute has continued to fester since then, with the result that the recollection of all those involved is likely to have become clouded by what they see as the justice of their particular position. Both sides sought to obtain support for their version of events from a video of the meeting that was taken by Mr Nirmal Chowdhury and evidence given by him. Mr Chowdhury gave his evidence through an interpreter, although his affidavit evidence is in English and was not translated for him. There is, however, nothing surprising in that. BSPC conducts its meetings in Bangla, although all of its written communications occur in English. It was Mr Chowdhury's practice to video each general meeting of BSPC, and he followed that practice in this case. The video recording was admitted into evidence. The plaintiffs also sought to tender a transcript of the recording together with a translation of that transcript. However, I rejected that evidence on the basis that much of it was irrelevant and it was produced very late with the result that the defendants had not had adequate time to consider it. Nonetheless, the video was of some assistance in understanding what happened at the meeting. 28According to Mr Chowdhury, he arrived at the Polish Club shortly before 11.00 am and entered the meeting room shortly after 11.00 am. The table with the attendance sheet was not set up until about 11.15 am. He said that he had no difficulty in gaining access to the meeting room and no difficulty in signing the attendance sheet when it was made available. Mr Chowdhury gave evidence that he started recording the meeting at about 11.45 am, when he noticed a number of people arguing about the attendance sheet. Several minutes later, Mr Chowdhury recorded Mr Saha announcing that there was no quorum. With one qualification, I accept this evidence. Although Mr Chowdhury was called by the plaintiffs and was elected acting vice president of BSPC at the meeting on 20 September 2008, he willingly made concessions that were contrary to the plaintiffs' case, and he struck me as someone who was doing his best to recall what happened at the meeting. 29The qualification is that I think that Mr Chowdhury must be mistaken about the time when he started to record the meeting. In my opinion, it is more likely to have been about 11.30 am and that was the time that the argument started concerning the attendance sheet. I say that because it is clear from the evidence that Mr Saha did not want the meeting to go ahead. It is also clear from Mr Saha's email dated 19 August 2008 that he was very familiar with BSPC's constitution. It would have been natural in those circumstances for him to insist on strict compliance with the constitution, and I do not think that he can be criticised for doing so. Rule 32(3)(a) required the meeting to be dissolved if no quorum was present within half an hour - that is, by 11.30 am. Mr Saha was undoubtedly aware of that rule. In my opinion, the argument concerning the attendance sheet broke out because Mr Saha was insisting on what he regarded as compliance with r 32(3)(a) in circumstances where members had been given a limited amount of time to sign the attendance sheet and some had not done so. It is hard in those circumstances to understand why Mr Saha would agree to an extension, but then not permit some members to sign the attendance sheet on the basis that the time had expired and no quorum existed at that time. Of course, Mr Saha's evidence is that all those present who wanted to sign did. However, I do not accept that evidence. It is contradicted by the evidence of others, including Mr Chowdhury, whose evidence I do generally accept. It appears from the video that tempers were raised by the time Mr Saha announced that the meeting was dissolved, and it is not easy to understand what brought that about if Mr Saha had agreed to postpone the commencement of the meeting and if everyone who had wanted to sign the attendance sheet had done so and Mr Saha was simply announcing that, despite those facts, there was no quorum. 30Following the meeting, there were attempts to resolve the dispute through mediation, which failed. In the meantime, the defendants continued to meet as the legitimate executive committee of BSPC and to organise events in BSPC's name. Both factions sought unsuccessfully to have the Office of Fair Trading ( OFT ) intervene. The OFT rightly pointed out that it was a matter for the parties to resolve their dispute. Until that happened, the OFT continued for a time to list Mr Saha as the public officer of BSPC, but recorded that that position was disputed. Ultimately, the OFT threatened on several occasions to deregister BSPC if the dispute was not resolved. 31The interim executive committee called a further meeting of members on 20 December 2008 and what purported to be an annual general meeting on 22 February 2009, at which time a new executive committee was elected. The defendants also held what purported to be an annual general meeting on 13 September 2009. The impasse continued throughout 2010. Again, the group aligned with Mr Paul purported to hold an annual general meeting on 27 March 2010 at which another new executive committee was elected. The defendants gave notice on 30 November 2010 of an annual general meeting to be held on 19 December 2010. It was that notice, together with a letter from the OFT dated October 2010 threatening to deregister BSPC if an annual general meeting was not held by 30 December 2010, that prompted the plaintiffs to commence these proceedings seeking interlocutory injunctions restraining the defendants from representing themselves as officers or executive committee members of BSPC and from representing any meeting in which they participate as being an annual or special general meeting of BSPC. Those interlocutory injunctions were granted by McDougall J on 17 December 2010. 32On 20 January 2011, the group represented by Mr Paul gave notice of a further annual general meeting to be held on 6 February 2011 to all members of BSPC. Notice of that meeting was given to the defendants, although by that time they were no longer regarded as members since they had not paid their membership fees. At the same time, a notice was sent inviting nominations for the executive committee together with a nomination form. Notice of the meeting was also given in the Sydney Morning Herald and The Bangla Barta, a community newspaper. Of the 85 financial members, 52 attended the meeting and another 12 attended by proxy. Mr Mrinalendu Dey acted as the election commissioner for that meeting. He subsequently prepared a report confirming that 10 positions on the executive committee were filled, leaving one casual vacancy. That casual vacancy was subsequently filled by Miss Smita Dey. 33It appears that BSPC held a further annual general meeting on 17 July 2011. However, no evidence was led concerning that meeting. Was there a quorum at the meeting on 20 September 2008? 34The answer to this question turns on two issues. The first is how many financial members did BSPC have on 20 September 2008. The second is how many of those attended the meeting on that date. 35The parties agree that as at the time of the annual general meeting held on 22 June 2008 there were 105 financial members. There is no evidence to suggest that those persons did not remain financial members as at 20 September 2008. However, the defendants maintain that a further 20 members were financial as at the later date. The names of those additional persons were included on the attendance sheet used by Mr Saha and Mr Mohajan to record attendances at that meeting. However, none of those 20 members attended the meeting. Nineteen of those persons had been members of BPSC in the past. One was a new member. Mr Saha says that the new member was approved at the meeting of the executive committee on 29 June 2008. However, there is no mention of that matter in the minutes of that meeting. The defendants rely on copies of receipts issued to those persons as evidence that they became financial members before the meeting on 20 September 2008, although Mr Saha accepted in cross-examination that the fees paid by those members were not paid into BSPC's bank account. 36The plaintiffs submit that the court should infer that the receipts were not issued on the dates that they bear because the receipt numbers are out of sequence from other receipts issued by BSPC. The evidence is that, at the time Mr Saha became general secretary, he was given 6 receipt books each containing 50 receipts. Notwithstanding that, Mr Saha ordered additional receipt books and the receipts issued to the new members came from one of those books. The only invoice that relates to the printing of new receipt books that has been produced in the proceedings is one from Austic Printing dated 12 January 2009. The plaintiffs submit that I should infer from this evidence that receipts issued from the new books were backdated. The circumstances in which the new receipts were issued are suspicious. But it is possible that new receipt books were obtained and the invoice for them has been lost. I do not think that the evidence is sufficiently clear to justify a finding that the receipts were backdated. However, the only evidence that the additional 20 persons were members are the receipt books. Those receipt books suggest that the relevant persons paid $25 but did not pay the $5 that was required by the constitution. Mr Saha gave evidence that it was the practice of BSPC not to require non-financial members to pay an amount equal to the joining fee to become financial. But there was no evidence that that practice had been applied uniformly by BSPC over a lengthy period of time apart from Mr Saha's assertion that that was the position. In addition, it is doubtful that any practice that did exist can alter the requirements of the constitution, at least where one or more members takes issue with the membership of another. There is no evidence that any of the amounts said to have been paid by the additional 20 members was received by BSPC and paid into its bank account. None of the persons were called to give evidence and, as I have said, none of them attended the meeting. In those circumstances, I am not satisfied that those persons were members at the time of the special general meeting. It follows that there were 105 financial members at the time of the meeting on 20 September 2008. 37As to the second issue (how many financial members attended the meeting), the question is how many financial members were present in person or by proxy at 11.30 am on the day of the meeting. Contrary to what the parties appear to have believed at the time, the question is not how many of them signed the attendance record by that time. That record provides evidence of who was at the meeting, but it is not determinative. Nor it seems to me does it matter whether Mr Saha and Dr Lodh agreed to extend the commencement time of the meeting or the time at which Mr Saha refused to take further signatures. The constitution did not give Mr Saha and Dr Lodh power to extend the commencement time. Nor, as I have said, did it require signatures to be obtained. It required the meeting to be dissolved if a quorum was not present within half an hour after the time appointed for its commencement. Since the meeting was called for 11.00 am, that time was 11.30 am. The constitution does not specify by whom the meeting is to be dissolved if no quorum existed at that time. In those circumstances, in my opinion, any member was entitled to dissolve the meeting. That conclusion is consistent with the fact that the constitution operates as if it were a contract between all members, giving each a right to insist on and enforce compliance with it. 38There is no real dispute that the 36 members who signed the attendance sheet were present at the meeting at 11.30 am. In any event, the conclusion that they were follows from the conclusion that I have reached that Mr Saha prevented other members from signing the attendance sheet after that time. Were other members present at 11.30 am? Mr Nikhil Paul gave evidence that he and his wife were waiting to sign the attendance sheet prior to 11.30 am but were not able to do so because it was removed. They did sign the second attendance sheet. Mr Paul's evidence was not challenged and I accept it. Mr Utpal Shaha also gave evidence that he was standing in the queue to sign the attendance sheet with two or three other people at around 11.30 am but that the sheet was removed before he could sign. He did sign the second attendance sheet. I accept Mr Shaha's evidence. It is consistent with the conclusion that I have reached that the sheet was removed at about 11.30 am, and there is no reason to believe that he was not present at that time. Dr Santosh Roy gave evidence that he arrived at the meeting as Mr Saha was leaving and that he followed Mr Saha and Mr Mohajan down the stairs seeking to persuade them to return to the meeting. Again, Dr Roy signed the second attendance sheet. If Dr Roy arrived as Mr Saha was leaving, he must have arrived after 11.30 am. Mr Sushovan Das signed the second attendance sheet. However, he gave evidence that he did not arrive at the meeting until 12 noon. 39Four other financial members who did not sign the first attendance sheet signed the second one (Dr Bikash Ghosh, Mr Haran Sarker, Mr Rajit Pandit and Mrs Tapati Sarkar). However, none of those persons gave evidence and there is no evidence that they arrived at the meeting before 11.30 am. I am not prepared to infer that they did in circumstances where a number of people arrived late. 40Mr Paul gave evidence that he saw three other members who were present at the meeting at 11.30 am but who did not sign either attendance sheet. Those persons are Dr Samir Sarkar, Mrs Ganga Sarkar and Mr Prabir Maitra. According to Mr Paul, he saw Dr Samir Sarkar supervising the signing of the attendance sheet with Mr Mohajan and he also saw Mrs Sarkar (Dr Sarkar's wife) and Mr Maitra in the room at the time the attendance sheet was being signed. Mr Paul was not cross-examined on this evidence and I accept it. 41Finally, the plaintiffs say that three members - Mr Sujit Dey, Mr Laxmi Gupta and Mr Bikash Dhar - attended the venue but remained downstairs and did not go into the meeting room. It appears that they were supporters of Mr Saha and I think it can be inferred that they remained downstairs so as not to make up a quorum. In Ball v Pearsall (1987) 10 NSWLR 700, Young J (as he then was) held that, although a member was not obliged to attend a meeting, and although it may be necessary for a quorum to be present at all times, in certain circumstances a member may not be able to bring the meeting to a premature end by withdrawing from the meeting. As his Honour said (at 704): [I]f circumstances exist where the court can see that for an improper reason a plaintiff has brought the meeting to a premature end it may not give him relief because of, for instance, lack of clean hands or not doing equity or alternatively may estop him from saying that there has not been a quorum. ... In this case, however, the relevant members did not attend the meeting at all. Moreover, although it can be inferred that they remained downstairs so as not to make up a quorum, there is no evidence that they did so at the request of any of the cross-claimants. In those circumstances, I do not think that the cross-claimants can be prevented from saying that there was no quorum for that reason. 42Mr de Robillard, who appeared on behalf of the plaintiffs, also submitted that it was an implied term of the contract constituted by the constitution that each party owed the other an obligation to do all things necessary to enable the others to have the benefit of the constitution and that each owed the other a duty of good faith. It is not necessary to consider this submission in any detail. Whatever implied obligations the members owed one another, they did not owe an obligation to other members to attend a meeting they did not wish to attend. The provisions of the constitution relating to quorums operate on the assumption that members are free to attend meetings as they choose. I do not think that that right can be qualified by an implied term. 43It follows from what I have said that there were 42 financial members present at the meeting at 11.30 am. Those members constituted a quorum. Were the resolutions passed at the meeting on 20 September 2008 valid? 44There is no question that there was a quorum present at the time the resolutions were passed. The question is whether the resolutions permitted by the constitution. In my opinion, they were not. 45The resolutions that were passed did three things. They removed all existing executive committee members, they created an interim executive committee of 9 members and they elected 9 members to fill those positions. Rule 24 of the constitution permits BSPC in general meeting to remove one or more executive committee members. However, r 24(2) states that, in the event that that is proposed, "the member may [make] prior representations in writing to the President and may request that the representations be notified to the members of the Society". To say that the relevant member may do something means, in this context, that BSPC must give that member an opportunity to do the thing in question. Moreover, if a member makes the request of the president referred to, then r 24(2) requires the president to comply with that request at least by reading out the member's representations at the relevant meeting. In addition, r 31(1) requires that a notice of a special general meeting specify the nature of the business proposed to be transacted at the meeting. Read together, in my opinion rr 24(2) and 31(1) require advance notice to be given of a proposal to remove an executive committee member and require BSPC to give that member an opportunity to make representations to members of BSPC before they vote on the issue. None of that happened in this case. The notice of meeting said nothing about the removal of executive committee members. It did state that one of the issues to be discussed was "Restore Constitutional rules of running the business of the EC". Whatever that means, it cannot be interpreted as notice of removal of one let alone all of the executive committee members. The same is equally true of the other agenda items. In addition, there is no power conferred on a general meeting to alter the structure of the executive committee or to create an interim executive committee. If the resolutions were not valid, what consequences follow? 46Following the special general meeting, it would have been open to the defendants to insist on compliance with the constitution and, if necessary, to seek appropriate relief from the court. However, they chose not to follow that course. Instead, they sought to operate as if the meeting on 20 September 2008 had not occurred. As I have said, they continued to hold what purported to be executive committee meetings. The first of those meetings was held on or about 18 October 2008. It appears that all members of the executive committee as it existed immediately before the meeting on 20 September 2008, other than Mr Talukder and Mr Paul, were invited to attend that meeting, including the 4 who filled the 4 casual vacancies in August 2008. However, Dr Lodh, Mr Swapan Roy and Dr Santosh Roy refused to attend. They were not invited to do so subsequently. Presumably Mr Talukder and Mr Paul were not invited because they had resigned, although, again as I have said, there is no evidence that Dr Lodh had discussed those resignations with the executive committee or had accepted them, as was required by the constitution. From the point of view of the faction represented by Mr Paul, the question whether Dr Lodh should accept those resignations was overtaken by events. However, from the point of view of the faction aligned to Mr Saha, it was an outstanding issue. 47There are, in my opinion, difficulties in treating this and subsequent meetings as a continuation of the properly appointed executive committee. The meetings were not called in accordance with the constitution. The question of Mr Talukder's and Mr Paul's resignations had not yet been resolved. Consequently, they were entitled to notice of the first meeting, at least, but did not receive it. More significantly, notices of the meeting were not given with Dr Lodh's concurrence and there is no evidence that any of the meetings were requisitioned by 3 members of the committee. After Dr Lodh and Mr Swapan Roy and Dr Santosh Roy refused to attend the first meeting, they were not given notice of subsequent ones, despite the fact that r 25(3) required at least 48 hours' notice to be given to all members of the committee. On 13 September 2009, the group aligned to Mr Saha purported to elect a new executive committee. However, there are difficulties in treating the group aligned to Mr Saha as constituting the true BSPC, which was capable of electing the executive committee. 48First, under the constitution, BSPC is required to hold annual general meetings at which a new committee is to be elected. BSPC is required to give 14 days' notice of the meeting by prepaid post to each member at the member's address as shown in the register of members. Since Mr Saha did not have access to the register of members at the time that the meeting on 13 September 2009 was called, he could not give notice to members by pre-paid post. Mr Saha did attempt to give notice by email, but even then he could not send emails to all members because he did not have access to the password for the Yahoo! email group consisting of all members. It is difficult in those circumstances to say that any general meeting called by Mr Saha was validly called. 49Secondly, the group aligned to Mr Saha never obtained control of BSPC's bank account and never opened a bank account of its own. That is something which is required by the constitution and is a matter of some significance. Prior to the special general meeting, BSPC held approximately $91,000 in its bank account. That amount has now increased to approximately $104,000. One of the principal aims of BSPC is to raise sufficient funds to build a temple for use by its members and, for that purpose, BSPC has conducted various fund-raising activities. Up until the time that McDougall J granted an interlocutory injunction in favour of the plaintiffs, the faction aligned to Mr Saha carried on similar fund-raising activities also under the name of BSPC. However, whatever funds it raised have not been paid into the BSPC's bank account or any bank account that could be described as belonging to BSPC. 50Thirdly, Mr Saha kept a list of members and the membership of the organisation of which he purported to be general secretary changed over time. However, it is very unclear whether those persons paid any membership fees and, if they did, what became of them. In 2011, Mr Saha's faction had 23 members. Mr Saha said that the reduced membership was one of the effects of the injunction granted by McDougall J. Whether that is correct or not, it is very difficult to regard those 23 members as constituting the true members of BSPC, when there is no evidence of what fees they have paid and what has become of those fees and when there remains a functioning organisation which had 85 financial members on 6 February 2011 (and apparently more since then) and which, apart from the meeting on 20 September 2008, operates in accordance with BSPC's constitution, and has control of its bank account. 51That leaves the question whether the interim committee led by Mr Paul could call an annual general meeting or whether subsequent committees were entitled to do so. The answer to those questions depends on two issues. The first is whether the annual general meetings at which new committees were elected were called in accordance with the constitution. The second is whether, if they were not, the court should grant relief under s 1322 of the Corporations Act 2001. Relevantly s 1322 provides: (1) In this section, unless the contrary intention appears: (a) a reference to a proceeding under this Act is a reference to any proceeding whether a legal proceeding or not; and; (b) a reference to a procedural irregularity includes a reference to: (i) the absence of a quorum at a meeting of a corporation, at a meeting of directors or creditors of a corporation, at a joint meeting of creditors and members of a corporation or at a meeting of members of a registered scheme; and (ii) a defect, irregularity or deficiency of notice or time. ... (4) Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the C o urt may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes: (a) an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation; (b) an order directing the rectification of any register kept by ASIC under this Act; (c) an order relieving a person in whole or in part from any civil liability in respect of a contravention or failure of a kind referred to in paragraph (a); (d) an ord e r extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding; and may make such consequential or ancillary orders as the Court thinks fit. ... (6) The Court must not make an order under this section unless it is satisfied: (a) in the case of an order referred to in paragraph (4)(a): (i) that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature; (ii) that the person or persons concerned in or party to the contravention or failure acted honestly; or (iii) that it is just and equitable that the order be made; and (b) in the case of an order referred to in paragraph (4)(c)-- that the person subject to the civil liability concerned acted honestly; and (c) in every case--that no substantial injustice has been or is likely to be caused to any person. The relevant provisions of s 1322 apply to BSPC by virtue of the AI Act 2009, s 96 and the Associations Incorporation Regulation 2010 , reg 16. 52In my opinion, the answer to the first question is that the interim executive committee did not have power to call an annual general meeting. Rule 29(1) of the constitution provides that the meeting is to be convened "on such date and at such place and time as the committee thinks fit". The rule is expressed to be "subject to" the AI Act 2009 and r 28. However, that qualification must be interpreted as a qualification on the committee's power. It is not a qualification on the requirement that the meeting be called by the committee. The rules contain provisions concerning how special general meetings are to be called. Those provisions would have no purpose if anyone was free to fix the time and place of the annual general meeting. 53The question, then, is whether an order should be made under s 1322. The defendants resist an order under s 1322. They submitted that, if control of BSPC is not to be vested in them, the court should give directions for the holding of fresh elections for an executive committee. In support of that submission they relied on the decision in Luen Fook Tong Inc v Lowe [2011] NSWSC 1004. However, the facts of that case were quite different from those of the present one. In that case, members of the relevant association purported to call a meeting of the association at which the members attending the meeting purported to elect a new executive committee. Slattery J held that the meeting was not valid and that the previous executive committee continued in office. That committee was in a position to call a general meeting to elect a new committee in accordance with the relevant constitution. Consequently, it was not necessary for the court to give directions for the calling of a general meeting. Although Slattery J suggested (at [88]) that the court could give directions for the calling of a meeting under s 1322, it is not clear that it can do so except to the extent that such an order is ancillary to or consequential on an order under s 1322(5). The Director-General has power to appoint an administrator under s 55 of the AI Act 2009 if an association persistently fails to comply with its obligations under the Act. On the revocation of the appointment of the administrator, the Director-General must ensure that a committee is elected in accordance with the constitution of the relevant association or may appoint a committee under s 57 of that Act. But there is no suggestion that those provisions have any application in this case. Consequently, the only alternative to relief under s 1322 is an order that BSPC be wound up. 54As I have also said, the summons and reply to cross-summons in this case do not seek relief under s 1322. However, the question whether relief should be granted under s 1322 was raised during the course of the hearing and in the plaintiffs' final written submissions. The defendants did not object to the issue being raised and, indeed, as I have said submitted that, as an alternative to the relief they sought in their cross-summons, the court should grant them relief under s 1322, albeit in a different form from the relief sought by the plaintiffs. Consequently, I think that it is appropriate to consider whether relief should be granted to the plaintiffs under s 1322. 55A preliminary question is the conduct in respect of which relief should be granted. In the normal course of events, it may have been appropriate to consider whether relief should be granted in respect of the first general meeting held after the special general meeting on 20 September 2008. However, the only evidence concerning that meeting was that it was convened by the interim executive committee. There is no evidence concerning how it was convened or to whom notice of it was given. Consequently, I do not think that there is sufficient evidence concerning that meeting to justify granting relief in respect of that meeting. The only other general meeting about which evidence was given was the general meeting held on 6 February 2011. There are two issues in relation to that meeting. First, it was called by an executive committee which was not validly appointed. Second, there is a question of who was entitled to vote at that meeting and whether all persons who were entitled to vote were given notice of the meeting. 56In addressing those two issues, it is necessary to bear in mind the requirements of s 1322. Under s 1322(6), the court cannot grant relief unless it is satisfied of at least one of the three matters set out in para (a) and is satisfied of the matter set out in para (c). That is, the court must be satisfied that the defect is procedural or that the relevant persons acted honestly or that it is just and equitable to grant relief. In addition, the court must be satisfied that no substantial injustice has been or is likely to be caused to any person. 57As to the means by which the meeting was called, I think that the fact that the meeting was not called by a validly elected executive committee was something that satisfied each of the requirements set out in para (a) of s 1322(6). The meeting that was called was an annual general meeting. Both r 28 of BSPC's constitution and s 37 of the AI Act 2009 required the meeting to be held. Indeed, BSPC came under considerable pressure from OFT to call the meeting. Rule 17 of the constitution provided that one of the items of business at an annual general meeting was the election of a new committee, and that is the only item of business about which complaint is made. In circumstances where BSPC was required to hold the meeting and required to elect a new committee at it, the fact that that meeting was not convened by a validly constituted executive committee should be regarded as something essentially of a procedural character. In addition, there is no reason to think that those calling the meeting did not honestly believe that they were entitled to do so. Finally, in my opinion, it is just and equitable to make an order declaring that the meeting was validly called notwithstanding that it was not called by a validly elected committee. BSPC was required to hold the meeting. There is no suggestion that the way in which the meeting was called or conducted was affected by the fact that it was called by an invalidly constituted committee. The absence of an order will have serious consequences for the continuing existence and operation of BSPC. 58Nor do I think that the fact that the meeting was called by an invalidly constituted executive committee caused or was likely to cause substantial injustice to anyone. As I have said, BSPC was required to hold the meeting, and there is no suggestion that the fact that it was called by an invalidly elected committee in some way or another affected the way the meeting was called or conducted. 59There are two issues relating to the membership of BSPC at the time of the meeting held on 6 February 2011. One is whether all those who voted were entitled to do so. The other is whether all those who were entitled to notice of the meeting received notice. 60As to the first issue, the evidence is that, at the time of the meeting on 6 February 2011, BSPC had 85 financial members. There is a question whether each of those members was truly a member of BSPC. To the extent that those persons were members at 20 September 2008 and continued to pay membership fees which were paid into BSPC's bank account, there can be no question that those persons were members and entitled to vote. However, to the extent that those persons sought to become members after 20 September 2008, there is a question whether their membership was valid, since they could not have been approved by a duly elected executive committee under r 5(b) of the constitution. No evidence was led on who precisely were members as at 6 February 2011. However, there was some evidence led of who were members as at 17 July 2011. That evidence indicated that 63 of the then current members were also members as at 20 September 2008. I think that it is reasonable to infer that those persons had remained members throughout the period and that consequently 63 out of the 85 members who received a notice of the 6 February 2011 meeting were clearly members of BSPC at that time. Although it is to be inferred in relation to the balance that their membership had not been approved by a valid executive committee, there is no suggestion that they did not pay the relevant membership fees. Nor is there any reason to suppose that their membership would have been rejected by a validly elected committee. 61As to the second issue (whether everyone who was entitled to receive a notice of the meeting on 6 February 2011 did), it is difficult to see how anyone who had not paid a membership fee was entitled to vote. Nonetheless, Mr Nirmal Paul gave evidence that was not disputed that the defendants received notice of the 6 February 2011 meeting as if they were members of BSPC. It also appears to be undisputed that a number of other persons who were said to be members of the faction aligned with Mr Saha received notice of the 6 February 2011 meeting, with the result that only approximately 10 of the persons aligned with that faction did not receive notice of the meeting. The likelihood, however, is that they were aware of the meeting either as a consequence of discussions they had with one or more of the defendants or by reading about it in The Bangla Barta. There is no evidence to suggest that any of the persons aligned with Mr Saha attended the 6 February 2011 meeting. 62It follows from what I have said that a number of persons who participated in the meeting held on 6 February 2011 could not be regarded as members of BSPC because their membership had not been approved by a valid executive committee. I do not think that that can be regarded as merely a procedural defect. However, again I do not think that there is any basis for saying that those involved did not act honestly. In addition, I think that it is just and equitable to treat the meeting on 6 February 2011 as a valid meeting notwithstanding what had happened. Approximately 75 percent of the people who participated in the meeting were clearly members of BSPC. The balance had paid their membership fees to BSPC. They were treated as members and there is no reason to suppose that their membership would not have been accepted by a validly appointed executive committee. In addition, for the reasons I have given, everyone else who might reasonably be thought to have an entitlement to participate in the affairs of BSPC was given notice of the meeting, and there is no suggestion that they would not have been permitted to participate if they had wanted to. 63For similar reasons, I do not think that what happened caused or was likely to cause substantial injustice to anyone and to the defendants in particular. As I have said, each of the defendants was given notice of the meeting. The obvious reason for doing so was to give them an opportunity to participate in the meeting and to nominate for the new executive committee if they wanted to. There is no reason to suppose that they would have been prevented from exercising that opportunity if they had chosen to do so. It was not put to any of the plaintiffs' witnesses that that is what would have happened. 64Section 1322 of the Corporations Act confers a discretion on the court if the court is satisfied of the requirements set out in subs (6). In my opinion, this is an appropriate case in which to exercise that discretion. BSPC obviously performs an important function in the community which it was established to serve. It has raised significant sums of money which it continues to hold and which are intended to be used for the benefit of the Bangla community in Sydney. The current organisation appears to be stable and to be operating in accordance with BSPC's constitution. The only real alternative to an order under s 1322 is an order that BSPC be wound up. Even if the court had power to order that BSPC call a further general meeting, there seems limited utility in doing so. It is very difficult to see how a court supervised meeting would operate differently from the meeting that was held on 6 February 2011. A further meeting would involve additional costs and is likely to be the source of further disputes. It is unfortunate that the defendants who were members of the 2008 committee were removed in the way that they were. However, they must bear substantial responsibility themselves for what has happened. They chose to leave the meeting on 20 September 2008, and they chose to operate an alternative association rather than requiring compliance with BSPC's constitution. Having regard to those matters, the court should grant relief under s 1322. Orders 65In my opinion, the appropriate form of relief is an order declaring that the meeting of BSPC held on 6 February 2011 was a validly convened meeting of BSPC and that the following persons were validly elected to the executive committee of BSPC in the following positions at that time: President Mr Nirmal Chowdhury Vice President Mr Utpal Shaha General Secretary Mr Nirmalya Talukder Assistant General Secretary Mr Surajit Roy Cultural Secretary Miss Tulip Das Public Relations Secretary Mr Nirmal Chakraborty Treasurer Mr Nikhil Paul Executive Members Dr Santosh Roy Dr Swapan Paul Mr Sandip Guha However, I will hear the parties on the precise form of orders that should be made and whether any other ancillary should be made. I will also hear the parties on whether it is necessary to continue the injunctions granted by McDougall J on 17 December 2010, in the light of those orders. 66Finally, I will hear the parties in relation to costs. ********** 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: 05 December 2011