Supreme Court New South Wales Medium Neutral Citation: Raue v Morris and ors [2014] NSWSC 215 Hearing dates: 15 November 2013; 6 December 2013; 20 December 2013. Decision date: 17 March 2014 Before: Bellew J Decision: 1.The order restraining the defendants from proceeding, in their capacity as members of the Board of the University of Sydney Union, to entertain or determine the motion prepared by the first, second and third defendants that the plaintiff be found guilty of serious misconduct and that he cease to hold office immediately, is vacated. 2.The summons is dismissed. 3.The plaintiff is to pay the costs of the first to eighth defendants, and the tenth to thirteenth defendants, as agreed or assessed. Catchwords: ADMINISTRATIVE LAW - where plaintiff a member of the Board of unincorporated association - where motion before the Board for expulsion of the plaintiff from his position as a Director - whether power vested in the Board to expel the plaintiff ADMINISTRATIVE LAW - where interim injunction granted preventing the Board from considering the motion for expulsion - where no decision yet made - whether appropriate for the court to intervene in such circumstances and grant declaratory relief - where intervention of the court would amount to a determination of the merits - intervention not appropriate in the absence of a decision having been made by the primary decision maker Cases Cited: Australian Football League v Carlton Football Club Limited [1988] 2 VR 546 Carbines v Powell (1925) 36 CLR 88 at 92; Coco v AN Clark (Engineers) Limited [No2] [1969] RPC 41 at 47 Corrs Pavey Whiting and Byrne v Collector of Customs (Vic) and anor (1987) 14 FCR 434 Dickeson v Edwards (1910) 10 CLR 243 Islamic Council of South Australia Inc v Australian Federation of Islamic Councils Inc (2009) NSWSC 211 Lee v Showmen's Guild of Great Britain [1952] QB 329 Mitchell v Royal New South Wales Canine Council (2001) 52 NSWLR 242 Morton v Union Steamship Company of New Zealand Limited (1951) 83 CLR 402 Raue v Morris [2013] NSWSC 1498 Category: Principal judgment Parties: Thomas Raue - Plaintiff Hannah Morris - First defendant Sophie Stanton - Second defendant John Harding-Easson - Third defendant Karen Chau - Fourth defendant Kade Denton - Fifth defendant Evelyn Radunz - Sixth defendant Robert Magyar - Seventh defendant Rotara Waniganayaka - Eighth defendant Bebe Arhna D'Souza - Ninth defendant Timothy Matthews - Tenth defendant Astha Rajvanshi - Eleventh defendant Emma McDonald - Twelfth defendant Simon Whetton - Thirteenth defendant Representation: Counsel: Ms L Doust - Plaintiff Mr G Sirtes SC and Mr D Robertson - First to eighth defendants and tenth to thirteenth defendants Solicitors: Kemp Strang - First to eighth defendants; tenth to thirteenth defendants File Number(s): 2013 / 303821 Publication restriction: Nil Judgment 1By summons filed on 9 October 2013 the plaintiff seeks the following orders: (1)a declaration that regulation 3.1.4 of the University of Sydney Union Regulations ("the Regulations") is invalid and of no effect; (2)a declaration that he has not, by disclosing to Honi Soit a statement alleged to have been made by a member of the New South Wales Police Force in the course of his duties, engaged in "misconduct" within the meaning of the Regulations; (3)an injunction restraining the defendants from proceeding in their capacity as members of the Board of the University of Sydney Union to entertain the Motion dated 4 October 2013 prepared by Hannah Morris, John Harding-Easson and Sophie Stanton, that the plaintiff be found guilty of serious misconduct and cease to hold office immediately; (4)such further or other orders as the court thinks fit. 2The summons originally came before Button J on 10 October 2013 (see Raue v Morris [2013] NSWSC 1498) at which time his Honour ordered that the defendants be restrained from entertaining or determining the motion referred to in the third prayer for relief in the summons. I have since continued that order, pending the delivery of my judgment. 3The matter originally came before me for hearing on 15 November 2013, at which time the evidence was completed. At that time it was adjourned until 6 December 2013 for submissions, but due to the fact that I was also Duty Judge on that day, it was not able to proceed. Each party then provided me with further written submissions and I heard final oral submissions on 20 December 2013. 4The first to eighth defendants, and the tenth to thirteenth defendants (to whom I shall refer, for convenience, as "the defendants") were represented in the proceedings. The ninth defendant was not represented, and did not file a notice of appearance. On the first day of the hearing, counsel for the plaintiff informed me that she had been approached by the ninth defendant, who was present in court and who had indicated that she may wish to participate in the hearing. As the evidence was still proceeding at that time, the matter was left on the basis that counsel for the plaintiff would inform me in the event that the ninth defendant indicated that she wished to be heard. The matter was not further pursued. THE EVIDENCE 5The affidavits of the plaintiff affirmed on 9 October 2013, 22 October 2013 and 5 November 2013 were read in his case. 6The following affidavits were read in the defendant's case: (i)Alexandra Hardy sworn on 30 October 2013; (ii)Andrew John Woodward sworn 30 October 2013; (iii)Lee Devereux sworn on 30 October 2013; (iv)Sophie Stanton sworn on 13 October 2013; and (v)Hannah Morris sworn on 30 October 2013. THE FACTS 7To a large extent, there is no dispute about the relevant events. However, those events extended over a number of days and were the subject of lengthy affidavit and oral evidence. The facts arising from those events are set out below. The University of Sydney Union 8The plaintiff is a member of the Board of Directors ("the Board") of the University of Sydney Union ("the Union") and currently holds the position of Vice-President. His period of tenure ceases on 30 June 2014. 9Of the thirteen defendants (who are the remaining Directors): (i)the first defendant, Hannah Morris, is the President of the Union; (ii)the second defendant, Sophie Stanton, is the Honorary Treasurer of the Union; (iii)the third defendant, John Harding-Easson, is the Honorary Secretary of the Union; and (iv)the first, second and third defendants, together with the plaintiff, constitute the Executive Directors of the Union. 10The Union is an unincorporated association which provides services and amenities for students at the University of Sydney ("the University"). It is governed by a Constitution dated November 2007 ("the Constitution") and Regulations dated April 2013 ("the Regulations"). 11Any student who is enrolled at the University is eligible for membership of the Union, as are members of the University staff. Membership is voluntary, but a fee is charged to those wishing to become a member. There are currently approximately 13,000 members of the Union. 12The Board has fourteen Directors, eleven of whom are elected. In addition to the eleven elected positions, the Immediate Past President continues to hold office as a non-voting Director for a period of one year following the conclusion of his or her term as President. The Union holds annual elections for the positions of Director. In even years, the election is held for five positions, and in odd years the election is held for six positions. Once elected, a Director serves a term of office for two years. 13The plaintiff is currently paid an honorarium of $4,416.00. The Open Day of 31 August 2013 14On 31 August 2013 the University held an open day for the purpose of providing information to prospective students. As part of that open day, the Union set up information stalls, as well as a stage to provide entertainment to the attendees. Another organisation represented at the open day was the National Tertiary Education Union ("NTEU"), representatives of which were distributing information concerning an enterprise bargaining campaign which was being conducted with the University. 15At some point, a group of protesters apparently linked to the NTEU made their way onto the stage which had been set up by the Union. In the process of doing so, some of those involved pushed and jostled staff members of the Union. The plaintiff was present when the protesters took to the stage. He admits (in paragraph 13 of his affidavit of 9 October 2013) that he was "involved in some of that protest activity". The grievance policy 16On 8 April 2013 Ms Hardy formulated a policy, applicable to all staff, Directors and volunteers of the Union, concerning the method of handling grievances ("the policy"). The policy was set out in a document headed "USU Policies and Procedures" (Annexure TR 10 to the affidavit of the plaintiff of 9 October 2013). Section 2 of that policy makes provision for various procedural steps to be taken when handling a grievance. They include a requirement to provide the respondent to a complaint with an opportunity to be heard. The complaints arising from the Open Day 17In her affidavit of 30 October 2013, Ms Hardy said (at para 14(a)) that as a result of the conduct of protesters at the open day she received two separate complaints from persons who had been working at the Union stall, namely Zachary Ruokari and the second from Lee Devereux. 18It appear that the catalyst for Mr Ruokari's complaint was, at least in part, an email sent by Ms Hardy to Mr Alastair Cowie, the Sales and Marketing Director of the Union, at 12:11pm on 5 September 2013. That email read in part: "Was there any sort of incident report from Zach? It would add some real evidence if one of the staff was placed in a difficult, unsafe situation by a Board Director." 19Ms Hardy's email to Mr Cowie apparently prompted Mr Cowie to send an email to Mr Ruokari at 2:06pm on the same day : "Hi Zach, We are trying to trace the stage storming incident on Saturday and would like you to write a brief account of what happened from your point of view. We're particularly interested if any staff were threatened, felt threatened, or were touched, pushed or otherwise interfered with / unable to do their assigned work. Thanks a lot, Al." 20No affidavit from Mr Ruokari was read by either party but according to Ms Hardy he raised a complaint through the policy. Exhibit 1 is a document headed "USU Incident /Injury Report Form" dated 6 September 2013. It nominates Mr Ruokari as the "affected/injured/ill person" and makes reference to an incident at 12 noon on 31 August 2013 at the "USU Tent - Eastern Avenue" but contains no reference to the plaintiff. The document states that Mr Ruokari suffered shock caused by being grabbed by a person on the arms and a hand written attachment records (inter alia) the following: "What they were doing was wrong. ... 10 - 20 people involved. ... Tried to damage equipment. They intimidated me - it was scary" 21Mr Ruokari also sent two emails to Ms Hardy on 6 September 2013 concerning the incident. Although in those emails he made reference to people (inter alia) "storming the stage" he did not attribute such behaviour to the plaintiff. In these circumstances Ms Hardy agreed (at T38 L19 to 21) that she was not in a position to suggest that Mr Ruokari had made any complaint against the plaintiff. 22The second person who raised an issue regarding the events of Open Day was Ms Lee Devereux, the Union Events Manager. At 8:47pm on 1 September 2013 Ms Devereux sent an email to Mr Cowie headed "Open Day Protests". There was apparently some issue as to whether or not Mr Cowie received the email after it had been originally sent and accordingly Ms Devereux sent it to him again on the morning of 3 September 2013 at 9:01am. Having set out the circumstances in which protestors had taken to the stage, Ms Devereux made reference to the fact that the plaintiff was present with the protestors, although not on stage. Her email then stated: "Sophie and I told Tom they couldn't be on stage and they had to get off. I asked the police how to move them on, they said they aren't in a position to do anything except follow them around, unless instructed otherwise by the University. The police said it's best to let them say there piece and wait for them to move on." 23When asked to give her best recollection of the conversation she had with the police officer Ms Devereux said (at T85 L14 to 18): "The police officer said that they were unable or are unable to move protesters, and that it is best if we just let them do what they were doing and they would eventually go away, and that the university they can't actually do anything without being told to do so by the university." 24Ms Devereux gave evidence (at T86 L40) that when she returned home that evening she told her husband what the police officer had said. She was unable to recall whether she spoke about the matter in detail with any of her colleagues. She agreed (commencing at T90 L34) that in sending her email to Mr Cowie she was not making a complaint about the plaintiff, but rather setting out her summary of what had happened on the day. Ms Hardy agreed (at T45 L25) that the reference to the plaintiff in the email from Ms Devereux did not amount to a complaint about him. Ms Hardy's investigation 25Ms Hardy then commenced what she described (at para 14(e) of her affidavit) as a confidential investigation under the policy. She explained (at para 14(g)) that she had decided to do so because the plaintiff was identified as one of the protestors. Ms Hardy's report 26Ms Hardy prepared a report dated 16 September 2013 in which she made reference to what she described as "two major incidents that affected the operation of the USU stage" on Open Day. Having set out those incidents, her report included the following: "For these staff (and all the USU staff) the devastating thing is that the Vice President, Tom Raue was heavily involved in this protest which affected USU and our Members who performing on the stage. That he felt unable to do anything to protect the staff from this horrendous experience - yet his position as Vice President and the responsibilities of this position, would suggest otherwise. However, I am convinced that Tom did not physically assault or verbally abuse staff during this protest. I am of the opinion that USU must do more to protect our staff from such serious incidents. We have a duty of care. I question the lack of University Security and or Police action at this event." 27Ms Hardy agreed when cross-examined (commencing at T50 L31) that she had reached a number of conclusions about what the plaintiff had done at Open Day from the information which had been provided to her. She also agreed (at T50 L39) that she reached those conclusions without having put the allegations to the plaintiff, and without having heard his account of the matter. The distribution of Ms Hardy's report 28At 9.40 am on 16 September 2013 Ms Hardy sent an email to Ms Morris attaching a copy of her report. She agreed (commencing at T51 L11) that at the time of sending her report to Ms Morris, she had not raised any complaint with the plaintiff, and had therefore not given him any opportunity to provide his account of the relevant events. 29At 10:14am on the same day, Ms Morris sent an email to Ms Stanton and Mr Harding-Easson, attaching Ms Hardy's report. Ms Morris explained (commencing at para 12(c) of her affidavit) that in her assessment, the report was confidential because (inter alia) it involved a response to staff alleging physical assault, verbal abuse, harassment and intimidation. 30A meeting was then held at about 12.30 pm that day at which Ms Hardy, Ms Morris, Ms Stanton and Mr Harding-Easson were all in attendance. Ms Hardy made no notes of that meeting but said (at T54 L6) that its purpose was to "go over the report". 31According to the plaintiff (at para 16 of his affidavit of 9 October 2013) Ms Morris approached him "about a week or two" after the Open Day and said to him: "Sandra wants to meet with Executive on Wednesday". 32The plaintiff said that he assumed the reference to "Sandra" to be a reference to Ms Hardy and said (at paragraph 17 of the same affidavit) that in his conversation with Ms Morris she had not mentioned the purpose for which the meeting was to be held. The plaintiff also said (at para 18) that the day before the meeting was scheduled to take place, he saw Mr Harding-Easson when a conversation took place in the following terms: Plaintiff: Do you know what this meeting's about tomorrow? Harding-Easson: Oh, you didn't get the email? Plaintiff: What's going on? I don't want to get blind-sided. Harding-Easson: Yeah, I'll talk to Hannah about it. That's not fair. 33On the following day, 17 September 2013, Ms Morris forwarded an email to the plaintiff attaching a copy of Ms Hardy's report. In that email Ms Morris said: "Here is the report Sandra compiled concerning the Open Day incident. I am emailing you personally away from the other Exec members because it does mention you in some capacity, and I didn't want to send it to you just in a bulk email. The discussion Sandra will have will be with all of the Executive about what to do moving forward, not just you, but she may ask you for your perspective on the day's events as well." 34A meeting was then held on 18 September 2013 at which the four Executive Directions (including the plaintiff) were present, along with Ms Hardy. The plaintiff said (at para 23 of his affidavit of 9 October 2013) that he formed the impression that the report was a complaint about his conduct. This, he said, was denied by Ms Hardy. The plaintiff also said (at para 26) that he was not informed at any stage that the report was confidential. The plaintiff's disclosure of part of Ms Hardy's report 35The plaintiff explained (at para 28 of his affidavit of 9 October 2013) that the account of Ms Devereux about her conversation with the police officer which was contained in the report "concerned" him because it was contrary to statements previously made on behalf of the University. He said that he took the view that staff and students at the University should be made aware of the statement and concluded that this could be done through the University Newspaper, Honi Soit. With this in mind, the plaintiff engaged in a series of text messages with Ms Morris on 18 September 2013 (which are set out in paras (32) and following of his affidavit of 9 October 2013) in which he informed Ms Morris of his intentions. In the course of that exchange of messages, Ms Morris asked the plaintiff to speak with Ms Hardy before disclosing any material, so as to ascertain whether the information in question had been provided by Ms Devereux under an assurance of confidentiality. 36Having replied that he would do so, the plaintiff said (at paragraph (37) of his affidavit) that he spoke with Ms Hardy. Ms Hardy informed him that she was provided the information in confidence. When the plaintiff told her that he was proposing to release a small part of it, Ms Hardy asked him to speak to Ms Devereux before doing so. 37A meeting took place later on 18 September 2013 between the plaintiff, Ms Hardy, Ms Morris and Ms Devereux. At that time, the plaintiff confirmed with Ms Devereux the accuracy of her account of her conversation with the police officer. Ms Devereux told the plaintiff on that occasion that she would prefer it if the information was not released. She asked the plaintiff to say "as little as possible" so that she could not be identified as the source of the information. 38Ultimately, the plaintiff concluded that the information could be disclosed in a way which would not identify Ms Devereux. He sent an email to her on the following day, 19 September, setting out the detail of an email he was proposing to send to Honi Soit, following which he attended a meeting of the Executive Committee of the Union. At that time Mr Woodward, the Chief Executive Officer of the Union, told the plaintiff that he regarded his proposed disclosure to Honi Soit as completely inappropriate, and a breach of the plaintiff's duties as a director. A debate ensued in which the plaintiff took issue with Mr Woodward's concerns. 39On 19 September 2013 at 2:21pm, the plaintiff forwarded an email to the editor of Honi Soit entitled "USYD Collaboration with Police at Open Day". The email read as follows: "Hi Honi Editors, As you know the university has repeatedly downplayed its relationship with the police and has denied inviting them onto campus. However, a USU staff member was told by police at Open Day that they would not intervene with protesters unless instructed by the University. A confidential USU report states: '... they (police) advised that they were not in a position to do anything but follow them (protesters), unless instructed otherwise by the university.' This is in stark contrast to the image the university has tried to convey about their relationship with the police force, and I am revealing the information to you as I believe it is in the public interest. I cannot reveal any other details of the report or the identity of anyone involved. Although I am not seeking copy approval, I am revealing this information to highlight the relationship of the police and the university, not to create a news story about the USU and would appreciate you use the information in this way. Regards, Tom Raue Vice President" The publication of the plaintiff's disclosure 40On 24 September 2013 an article containing (inter alia) the following appeared on the front page of Honi Soit: "New evidence indicates university collaborated with police at strikes Xiaoran Shi and SRC candidate investigate the continued controversy over police on campus." "Honi Soit has acquired information confirming the University's collaboration with police in relation to police presence and conduct on at least one occasion of protest action undertaken by students and staff on campus. This new information directly contradicts previous statements rejecting any coordination between police and University management. A confidential report prepared by the University of Sydney Union (USU) contains information stating that, during protest action taken at Open Day on August 31, a police officer advised a USU staff member that police were not in a position to do anything but follow them (protesters), unless instructed otherwise by the University. USU Vice-President, Tom Raue, disclosed information to Honi Soit against the wishes of the other executive members of the USU Board citing its importance to "the public interest". Throughout the series of on campus strikes and rallies this year Honi Soit has previously reported on evidence that allegedly points to the University's collusion with police, including the NSW Public Order and Riot Squad, in breaking up picket lines". Action taken by the Board against the plaintiff 41At 11:27am on 30 September 2013, an email was sent to each Director of the Union headed "Notice: Special meeting of the Board of Directors - 1pm Friday 4 October." 42The email read as follows: "Dear all, There will be a SPECIAL MEETING OF THE BOARD OF DIRECTORS HELD AT 1PM ON FRIDAY 4TH OCTOBER 2013 IN THE MACCALLEN CULLEN ROOM, HOME BUILDING. The Motions on Notice and documents are attached. I will also send everyone a calendar appointment. Kind regards Tina Moors, Board Secretary 43A separate document contained a recommendation in the following terms: "That by special resolution, Vice President Tom Raue is found guilty of serious misconduct and shall cease to hold office, effective immediately." 44A further document set out aspects of the background of the matter before stating the following: "5. Tom Raue deliberately disclosed certain information contained in this Report to the University of Sydney SRC Newspaper Honi Soit, in full knowledge of the confidential nature of this report, and against the expressly stated wishes of the rest of the Executive, the CEO, the Human Resources Director and the staff member quoted in the report. 6. Notwithstanding the confidential nature of this information and the fact that Tom Raue only received it in his capacity at Vice President of the USU, he contends the disclosure of this information was justified as it was in the public interest. ... "It is the view of the remainder of the Executive that Vice President Tom Raue's deliberate disclosure of confidential information to the Honi Soit has found him in breach of the University of Sydney Union Regulations, Duty Statements and handling of grievances policy. The President sought legal advice that confirmed our position. In particular we find Tom Raue to have breached - Regulations: 3.1.1 All board Directors shall act in accordance with the Duty Statements for Board of Directors. Duty Statement: 1.a Directors shall comply with their roles and responsibilities as prescribed by the law and as outlined in the institute of company directors publications "Duties and responsibilities of company directors" viz: (a) fiduciary duty to the USU and its members (d) A duty not to make improper use of information." 45The document went on to state: "Tom Raue was previously censured by the Board on 31 August 2012 (B227/12) which enables the Board to determine under clause 3.1.4(a): By Special Resolution only, that the Director in question is guilty of serious misconduct and shall cease to hold office. This shall apply in the case of a serious breach to the Constitution, Regulations and/or Duty Statements, such as a breach of fiduciary duty, abuse of corporate opportunity, disclosure of in camera proceedings, or systemic failure to attend meetings. It is the opinion of the remainder of the Executive that in this instance, Tom Raue's breaches of USU Regulations, Duty Statements and Handling of Grievances policy are significant enough to warrant serious misconduct. As this is an incidence of serious misconduct by a Director who has previously been censured by the Board, the remainder of the Executive considers a motion for removal from the Board the only appropriate course of disciplinary action for the Board to take. This motion for Special Resolution has been put forward to the Board after informing the Board of the matters that are raised against the Director in question, Tom Raue with due notice". 46On 2 October 2013, the plaintiff wrote to the secretary of the Board pointing out that the notice which had been given of the proposed meeting was less than the four clear days which was required pursuant to the Constitution. He then spoke with Ms Morris who effectively conceded that insufficient notice had been given. This prompted the plaintiff to send a further email to the Board secretary at 11:57pm on 2 October 2013, which was copied to Ms Morris, stating: "Hi Tina, Hannah called me earlier today to discuss moving to (sic) meeting to next Friday, with fresh notice. Whilst this would satisfy the requirement for four days notice for a meeting, I want to clarify that it is still beyond the power of the Board to remove me under Regulation 3.14 (sic) as it is inconsistent with the constitution. Can you please confirm for me that this motion will be withdrawn from the agenda of any meeting. As stated in my previous letter, if I do not receive this information I will approach the Supreme Court. Regards, Tom Raue." 47On 3 October 2013 a further notice of special meeting was forwarded to each Director of the Union. That notice was in the following terms: "Dear Directors, In accordance with clause 10.3(e) of the Constitution, and 3.1.4(a) of the Regulations, due notice is hereby given of a SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE UNIVERSITY OF SYDNEY UNION TO BE HELD AT 1PM ON FRIDAY 11 OCTOBER 2013 IN THE WITHDRAWING ROOM, GROUND FLOOR, HOLME BUILDING, SCIENCE ROAD, THE UNIVERSITY OF SYDNEY NSW 2006 Yours faithfully, Andrew Woodward CEO" 48The notice was accompanied by a recommendation in the following terms: "That by special resolution, Vice President, Tom Raue is found guilty of serious misconduct and shall cease to hold office." 49Background information in terms consistent with that set out in [48] above was also provided. The matter then came before Button J who made the order to which I referred in [2] above. THE CONSTITUTION 50There are a number of provisions of the Constitution which are relevant to the issues I am required to determine. 51Clause 7.3 deals with the Board's composition: "7.3 Composition (a) The Board shall comprise: (i) 11 Directors, elected by and from those Members eligible to vote at Union elections; (ii) two Directors appointed by the Senate; and (iii) the Immediate Past President of the Union. (b) If the Immediate Past President is unable or unwilling to become a Director, they may appoint another member of the Immediate Past Executive who is not currently a Director as an alternative Director. The Alternative Director shall then serve; (i) For the balance of the Immediate Past President's term or (ii) Until such time the Immediate Past President Notifies the Union that they are unable to resume their responsibilities. (c) Subject to this Constitution and any Standing Orders, all Members shall have the power to attend and speak at any meeting of the Union, except "in camera" sessions which shall be confined to the relevant Union Committee Members and Members of the Board." 52Clause 7.5 deals with the circumstances in which a director shall cease to hold office: "7.5 Ceasing to hold office (a) A Director shall cease to hold that office if: (i) that Director ceases to be a member of the Union; (ii) the CEO receives a notice of resignation signed by that resigning Director; (iii) that Director is absent from two consecutive meetings of the Board (including special meetings of the Board) without leave of absence being granted by the Board provided that leave shall not be withheld without good reason (iv) that Director is absent from six (6) ordinary meetings of the Board in any Board Year, provided that any Director who ceases to hold office under the terms of clauses 7.5(a)(ii), (iii) or (iv) may continue to act as a Director until the Board appoints a successor. (b) The CEO shall notify the Registrar in writing should a Director appointed by the Senate: (i) resign from the Board; or (ii) be absent from two consecutive meetings of the Board without leave of absence being granted by the Board provided that leave shall not be withheld without good reason, provided that any Director appointed by the Senate so affected may continue to act as a Board member until the appointment of a successor." 53Clause 9.2 deals with the powers of the Board: 9 POWERS OF BOARD AND OFFICE BEARERS ... 9.2 Board (a) The Board shall have the power to do all such things as are necessary for and incidental to the purpose of carrying into effect or furthering the objects of the Union subject to those powers reserved in this Constitution to the University. (b) The Board may enter into Industrial Agreements with organisations which also have Members employed by the University subject to University approval only. (c) The Board may grant a licence for the use of any Union premises by Special Resolution only, subject to University approval. (d) Union premises shall be made available to any club or society recognised by the University where such provision is reasonable and practicable. (e) The Board may enact Regulations by Special Resolution to give effect to the provisions of this Constitution and for the proper conduct of the Union's business provided only that: (i) the mover of any amendment to the Regulations shall set out the Regulation in full and present it to the President who shall include it in the next Notice calling a meeting of the Board; (ii) minor changes to such an amendment may be made by the Board at the discretion of the Chairperson; and (iii) each Regulation passed by the Board shall forthwith be left with the Registrar for the information of the Senate. (f) Should any Member neglect to pay any sum to the Union or in the opinion of the Board be guilty of misconduct, the Board may: (i) take legal action; (ii) expel such member from Membership of the Union; (iii) debar such member from exercising the rights of Membership for such time as it thinks fit provided that: A. such member or Members shall have the right to an appeal to the University; B. the Board may not delegate its authority in such a matter; C. such member shall be informed of the matters to be raised against that member; D. such member shall be given a reasonable opportunity to be heard but shall not be represented before a decision is made; E. if a matter is raised against any member of the Board, such member shall be suspended from the Board for the duration of the Board's deliberations on that matter. 54Clause 10 deals with the issue of elections. Clause 10.3(e) is in the following terms: "10.3 Executive and Union Committees (a)..... (b) There shall be a Special Meeting of the incoming Board on a working day in the last week in June at which the Executive Officers of President, Vice President, Honorary Treasurer and Honorary Secretary shall be elected from amongst its Directors; provided that the office of President is not held by the same person for more than three years. ... (e) A member of the Executive elected under 10.3(b) may be removed from office by Special Resolution of which Notice has been given. 55 Clause 10.4 deals with a Director's term of office: "10.4 Terms of Office (a) Subject to clause 7.5, Directors shall hold office from 1 July to the 30 June for two years following election, provided that any candidate whose election is the subject of protest shall hold office provisionally until declared elected or replaced by the next highest poling validly elected candidate. (b) the Board shall be elected by a quota-preferential method of representation according to the rules published by the Proportional Representation Society of Australia, subject to the provisions of clause 10.2(c)." THE REGULATIONS 56As set out at [53] above, clause 9.2(e) of the Constitution confers on the Board a power to enact Regulations by Special Resolution, to give effect to the provisions of the Constitution and for the proper conduct of the Union's business. 57In the present case, the further notice of the special meeting of the Board dated 3 October 2013 (set out at [47] above) was said to have been issued in accordance with clause 10.3(3) of the Constitution and Regulation 3.1.4(a). Regulation 3 is in the following terms: DIRECTORS AND OFFICE BEARERS 3.1 Board Directors 3.1.1 All Board Directors shall act in accordance with the Duty Statements for Board Directors, which forms Appendix 1 to this document. 3.1.2 The Duty Statements for Board Directors shall not be modified or rescinded except by Special Resolution of the Board. 3.1.3 Failure to adhere to the Constitution, Regulations and/or Duty Statements may be acknowledged by a motion, carried, censuring the Director in question. Further failure by a Board Director to adhere to the Duty Statements may be brought before the Board provided the breach contemplated is clearly ascertainable and evidence thereto is supplied before the Board. 3.1.4 Upon satisfaction of clause 3.1.3, the Board may then decide: (a) by Special Resolution only, that the Director in question is guilty of misconduct and shall cease to hold office. This shall apply in the case of a serious breach to the Constitution, Regulations and/or Duty Statements, such as a breach of fiduciary duty, abuse of corporate opportunity, disclosure of in camera proceedings, or systemic failure to attend meetings. (b) where a Director is being reimbursed for expenses, by simple majority, that the Director in question shall not be reimbursed for expenses for the period in question for which he or she was in breach of his or her duties. Alternatively, future reimbursement of expenses may be suspended to reflect only the period for which the breach was sustained. The period referred to in this Clause shall be calculated in increments of one month. A maximum of nine month's expenses calculated pro-rata may be withdrawn or suspended for the tenure of a Board Director. 3.1.5 In case of 3.1.4 (a), the Director in question shall: (a) be informed of the matters to be raised against that Director with due notice due notice (sic); (b) be afforded a right of reply at the Board meeting at which the Special Resolution is to be put, or at the next ordinary Board meeting; (c) be given a reasonable opportunity to appeal to the University Senate. The Director in question shall be suspended from the Board for the duration of the Board's deliberations if the Special Resolution in 3.1.4 (a) is passed. In respect of Clause 3.1.5 (c), the Board shall be bound by the University Senate's decision. THE SUBMISSIONS OF THE PARTIES Submissions of the plaintiff 58Counsel for the plaintiff submitted that: (i)there was no specific power in the Constitution which enabled the Board to expel an elected officer from office; (ii)Regulation 3.1.4 did not confer such power because it went beyond what was permitted and amounted to the Board conferring a power upon itself to expel an elected officer from office; (iii)there was a justiciable issue for the court to determine; and (iv)the substantive basis for the plaintiff's proposed expulsion, namely the alleged disclosure of confidential information, was misconceived because the information in question was not of a confidential nature and/or was not imparted in circumstances which attracted an obligation of confidence. The power of the Board and the validity of Regulation 3.1.4 59Counsel for the plaintiff argued that the Constitution did not confer a power on the Board to dismiss a Director, and that on a proper construction of the Constitution the members determined, by election, the composition of the Board, and the Board, in turn, was responsible for the day to day conduct of the Union's business. In support of those propositions counsel advanced a number of submissions. 60Firstly, counsel submitted that clause 9.2(a) of the Constitution could not be construed as conferring a power upon the Board to expel a Director. She submitted that to give the Clause that meaning would be tantamount to allowing a simple majority of the Board to eliminate another Director at will, thus defeating the intentions of those members who had elected that particular Director to office. Counsel also submitted that an interpretation of clause 9.2(a) which permitted the Board to expel a Director would render nugatory the provisions of clause 10.4 as to a Director's term of office. 61Secondly, counsel submitted that it was significant that in circumstances where the Board's powers were delineated in some detail by clause 9.2, that clause did not incorporate a power to determine that a Director would cease to hold office. 62Thirdly, counsel submitted that the narrow construction of clause of 9.2(a) which she advanced was supported by the terms of clause 7.5 which sets out the circumstances in which a Director shall cease to hold office. In this regard, she pointed out that those circumstances did not include expulsion. 63Fourthly, and in terms of the validity of Regulation 3.1.4, counsel for the plaintiff submitted that the power to make regulations conferred by clause 9.2(e) could not be permitted to operate in a way which extended the scope or general operation of the Constitution. She submitted that a power to make regulations could only authorise the provision of a subsidiary means of carrying into effect what was in the Constitution, or what was incidental to the execution of its specific provisions. It was submitted that Regulation 3.1.4 offended that principle because it purported to confer, upon the Board, a power to determine that a Director, duly elected by the members, could cease to hold office upon the Board forming a conclusion that he or she had engaged in misconduct. 64Finally, counsel submitted that it was not open to conclude that the regulation making power could be used in a way to confer, upon the Board, a power to expel a Director. This, it was submitted, was because it would be tantamount to conferring a power on the Board to effectively determine its own composition (see Morton v Union Steamship Company of New Zealand Limited (1951) 83 CLR 402). The issue of justiciability 65Counsel for the plaintiff submitted that it was sufficient, in order for there to be a justiciable issue, for there to be a threat to the plaintiff's livelihood or reputation. It was submitted that because the plaintiff was engaged in his duties as a Director on a daily basis, and where he was in receipt of an honorarium (having deferred his studies in order to perform his duties) the Board's proposed consideration of the motion gave rise to the necessary threat. 66Counsel further submitted that the matter before the court was properly justiciable having regard to the decision in Mitchell v Royal New South Wales Canine Council (2001) 52 NSWLR 242. In particular, it was submitted that such decision was authority for the proposition that a court will interfere to restrain decisions which are (inter alia) absurd or unreasonable, or are unsupported by the evidence. It was submitted that on the basis of the court's reasoning in Mitchell the matter before the court was properly justiciable. The substantive basis for the plaintiff's expulsion 67On the assumption that I concluded that there was a justiciable issue, counsel for the plaintiff further submitted that the substantive basis for the plaintiff's proposed expulsion proceeded on the misconception that the information disclosed by the plaintiff was confidential when this was in fact not the case. 68Counsel submitted that the conduct of the plaintiff involved nothing more than the disclosure of part of one sentence contained in Ms Hardy's report and that in these circumstances, even though the information appeared in a report which was shown to the plaintiff in the course of his duties as a Director, it was not information which gave rise to an obligation of confidence. Counsel submitted that information which is publicly known will not attract any obligation of confidence (see Coco v AN Clark (Engineers) Limited [No2] [1969] RPC 41 at 47; Saltman Engineering Company Limited and anor v Campbell Engineering Company Limited (1948) 65 RPC 203 at 215). 69Counsel further submitted that by extension of that principle, information which may properly become publicly known could not attract any obligation of confidence. She submitted that in the present case, information had been freely given by a police officer to Ms Devereux and therefore could not be regarded as having a character which would be capable of attracting any obligation of confidentiality. 70Finally, counsel submitted that the character of the information tended to expose a likelihood of a serious misdeed of public significance having occurred, namely the likelihood of misleading statements having been made by officers of the University. Counsel submitted that in such circumstances, the information lacked confidentiality (Corrs Pavey Whiting and Byrne v Collector of Customs (Vic) and anor (1987) 14 FCR 434 at 456). Submissions of the defendants 71Senior counsel for the defendants submitted that: (i)the Constitution conferred a power on the Board to remove a Director, independently of that contained in Regulation 3.1.4; (ii)Regulation 3.1.4 was valid in any event because it was within the power of the Board to make regulations to give effect to the Constitution for the proper conduct of the Union's business; (iii)in circumstances where no decision had actually been made by the Board, the issue of whether the plaintiff had engaged in the alleged misconduct was a matter to be considered and determined by the Board and not the court, and was therefore not justiciable; and (iv)in the event that I were to find that there was a justiciable issue, the evidence supported a conclusion that the plaintiff had engaged in misconduct warranting his removal as a Director. The powers of the Board 72Senior counsel for the defendants submitted that the Board's reliance upon Regulation 3.1.4 was strictly not necessary because the Constitution gave the Board power to remove a Director by expelling him as a member of the Union. He submitted that the effect of clauses 7.3 and 7.5 of the Constitution was to require that an elected Director be a member of the Union and that such membership was able to be terminated by the Board, in accordance with clause 9.2(f), on the grounds of misconduct. Senior counsel submitted that in these circumstances, the Constitution expressly contemplated the possibility that the Board may decide to expel, from membership of the Union, a person who was a member of the Board at the time, and that the effect of expulsion would be that the person would then cease to hold office as a Director. He submitted that in these circumstances, on a proper construction of the provisions of the Constitution, the power to expel a member (including a Director) was expressly conferred on the Board and that clause 9.2(f)(iii)(E) specifically recognised that a member who was potentially liable to be expelled may be a Director. 73Senior counsel further submitted that that the Board was entitled to exercise the power conferred upon it by Regulation 3.1.4. He submitted that the power to make regulations which was conferred on the Board pursuant to clause 9.2(e) of the Constitution was informed by clause 9.2(a), which empowered the Board to do "all such things as are necessary for and incidental to" carrying into effect the Union's purposes. He submitted that in these circumstances, to interpret clauses 9.2(a) and 9.2(e) in a way which did not empower the Board to enact regulations for the removal of a Director for misconduct, in circumstances where the Constitution expressly conferred the power to remove a Director (albeit by expelling him as a member of the Union rather than merely removing him from his position as a Director) would be perverse. 74It was further submitted that the Constitution primarily entrusted the conduct of the Union's business to the Board, whilst reserving certain powers to the members in general meeting. Senior counsel submitted that a Regulation such as 3.1.4, which provided for the removal from office of a Director for misconduct, was consistent with achieving the objective of facilitating the proper conduct of the Union's business. Senior counsel submitted that in order to properly conduct and manage the affairs and the business of the Union, it was necessary for the Board to be able to ensure discipline amongst its own Directors and that the purpose of Regulation 3.1.4 was to maintain that discipline (see South Australia v Tanner (1989) 166 CLR 161 at 164-165; 174-175). The issue of justiciability 75Senior counsel for the defendants submitted that as matters presently stood, the Board had done nothing more than place a motion on the agenda of a special meeting. He pointed out that no decision had yet been made because the motion had not been (and may never be) passed. He submitted that these matters highlighted the absence of any justiciable issue. He further submitted that the power of a Court to intervene in the decision making of voluntary associations is concerned with impeaching decisions of such associations, not making decisions which amount to determining the merits of a dispute, or second guessing what may or may not be decided. 76Senior counsel further submitted that the absence of any justiciable issue was also highlighted by the fact that in the event of a decision being made by the Board which was adverse to him, the plaintiff could appeal to the Senate of the University. The plaintiff's conduct 77Senior counsel for the defendants submitted that in the event that I concluded that there was a justiciable issue, the question was not whether, on the balance of probabilities, the plaintiff had engaged in misconduct. He submitted that the decision making power of the Board (be it under clause 9.2(f) or Regulation 3.1.4(a)) required that a majority of Directors be of the opinion that the plaintiff had engaged in misconduct. It was submitted that in these circumstances, the Board was entitled to remove the plaintiff on the basis of an opinion it formed to that effect, and that the plaintiff was required to establish that no basis existed by which a Board, acting in good faith and for a proper purpose, could reasonably form that opinion. It was submitted that in order for the court to intervene, it was necessary for the plaintiff to establish that the forming of such opinion on the part of the Board was, on the evidence before the court, one which: (i)was absurd or unreasonable (Dickeson v Edwards (1910) 10 CLR 243 at 254); (ii)no reasonable person could come to (Dickeson (supra) at 254; (iii)was unsupported by the evidence (Lee v Showmen's Guild of Great Britain [1952] QB 329 at 340); or (iv)was affected by unreasonableness (Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223). 78Against this background, and bearing in mind the matters alleged in the motion, senior counsel submitted that on the plaintiff's own evidence: (i)he was aware that a report had been prepared by Ms Hardy into the incident on Open Day; (ii)he was provided with a copy of the report for discussion; (iii)he was informed by Ms Hardy that material contained in her report had been provided to her by staff members in confidence; and (iv)he had then sent an email to Honi Soit which referred to a confidential report and which set out part of the contents of that report. 79It was submitted that in these circumstances there was sufficient evidence to support an opinion on the part of the Board that the plaintiff had engaged in misconduct. Senior counsel also relied upon the fact that the Constitution imposed a duty upon a Director to (inter alia) promote the interests of the Union. He submitted that deliberately breaching confidence was contrary to that duty. CONSIDERATION OF THE ISSUES The power of the Board to dismiss a Director 80Pursuant to the provisions of the Constitution: (i)membership of the Union is a pre-requisite to holding office as a Director [clause 7.5(a)(i)]; (ii)the Constitution confers, upon the Board, the power to expel a member from membership of the Union if that member is, in the opinion of the Board, guilty of misconduct [clause 9.2(f)(ii)]. 81Importantly, clause 9.2(f)(E), by its terms, expressly contemplates that the power in clause 9.2(f)(ii) may be exercised in respect of a Director. 82In my view, in light of these provisions, the Board has an express power to expel a person from membership of the Union on the grounds of misconduct. The effect of such a decision is that a person so expelled cannot, by virtue of clause 7.5(a)(i), hold office as a Director. In these circumstances I do not accept the submission that the Constitution does not contemplate the expulsion of a Director, or that the Board has no power under the Constitution to pass a motion for such expulsion. 83The absence, in clause 7.5 of the Constitution, of any reference to a Director ceasing to hold office as a result of expulsion does not, in my view, assist the plaintiff's position. Clause 7.5 makes express reference to a Director ceasing to hold office upon ceasing membership of the Union. As I have pointed out, clause 9.2(f)(ii) confers an express power on the Board to expel a member from such membership on the grounds of misconduct. 84To accept the submissions advanced on behalf of the plaintiff would be to accept the proposition that the Board has no power whatsoever to expel a Director irrespective of the circumstances, and that primacy should be afforded to factors such as the wishes and intentions of the members who had elected a person to office, and the provisions of the Constitution which set the period of a Director's tenure. The consequence of acceptance of such submissions would be to conclude that once elected, a Director, irrespective of his or her conduct, enjoys complete and unimpeachable security of tenure for the period for which the Constitution provides. That would mean, for example, that even where a Director engaged in a form of misconduct in which he or she had exhibited gross dishonesty, the Board was powerless to proceed to expulsion. In my view, construing the Constitution in that way would lead to an obviously absurd result. Moreover, and as senior counsel for the defendants pointed out, it would also be a construction which was at odds with principles of proper corporate governance. 85On theses bases I am satisfied that the Board has the power to expel a Director. The validity of Regulation 3.1.4 86Regulation 3.1.4 was enacted in exercise of the power conferred upon the Board by clause 9.2(e) of the Constitution. Pursuant to that clause, the Board is given the power to enact regulations by special resolution "to give effect to the provisions of (the) Constitution" ... "for the proper conduct of the Union's business". 87The principal submission made on behalf of the plaintiff in relation to Regulation 3.1.4 was that it was at odds with the principle that a power to make regulations could only authorise the provision of a subsidiary means of carrying into effect what was in the Constitution, or what was incidental to the execution of its specific provisions. 88The principle relied upon by counsel for the plaintiff was stated by Isaacs J in Carbines v Powell (1925) 36 CLR 88 at 92: "It is not open to the grantee of the power actually bestowed to add to its efficacy, as it is called, by some further means outside the limits of the power conferred, for the purpose of more effectively coping with the evils intended to be met ... the authority must be taken as it is created, taken to the full, but not exceeded. In other words, in the absence of express statement to the contrary, you may complement, but you may not supplement, a granted power". 89The decision in Carbines was cited by the majority of the High Court (Dixon CJ, Williams, Webb and Fullaghar JJ) in Shanahan v Scott (1956) 96 CLR 245 at 250: "The result is to show that such a power does not enable the authority by regulations to extend the scope or general operation of the enactment, but is strictly ancillary. It will authorise the provision of subsidiary means of carrying into effect what is enacted in the statute itself and will cover what is incidental to the execution of its specific provisions. But such a power will not support attempt to widen the purposes of the Act, to add new and different means of carrying them out or to depart from or vary the plan which the legislature has adopted to attain its ends". 90There is obviously no doubt about the correctness of the principle upon which counsel for the plaintiff relied. However, I am not satisfied that such a principle is infringed by Regulation 3.1.4. 91In my view, regulation 3.1.4 authorises a subsidiary means of carrying into effect the power to expel a Director. It addresses a specific situation where a censure motion has previously been passed in respect of the Director in question. In my view, the regulation does not add to the power conferred by clause 9.2(f)(ii). Rather, it gives effect to that power by providing a particular means by which it can be exercised in a specific set of circumstances. 92For all of these reasons I am satisfied that the Board has the necessary power to expel a Director. The issue of justiciability 93It has been observed that the policy of the law tends against interference in the affairs of voluntary associations (see generally Cameron v Hogan (1934) 51 CLR 358 at 378). In Islamic Council of South Australia Inc v Australian Federation of Islamic Councils Inc [2009] NSWSC 211 Brereton J, having cited the decision in Cameron (supra), said (at [31]): "In order that a court be persuaded to intervene, a plaintiff must establish some interference with its property rights or interests, or some breach of contract, or some threat to its livelihood or reputation: Field v NSW Greyhound, Breeders, Owners and Trainers Association [1972] 2 NSWLR 948; Carter v NSW Netball Association [2004] NSWSC 737; Rose v Boxing NSW Inc. [2007] NSWSC 20; Kovacic v Australian Carting Association Qld Inc. [2008] QSC 344". 94In the present case it was submitted on behalf of the plaintiff that his livelihood was threatened by virtue of the fact that he was effectively engaged in performing his duties as a Director on a full time basis, for which he was paid an honorarium. 95Some of the authorities cited by Brereton J involved instances of the courts intervening in circumstances where livelihood was threatened (see for example Field) whilst others involved more of a threat to reputation (see for example Carter). Although the plaintiff's position is somewhat tenuous in this respect, I am prepared to conclude that the motion sought to be put before the Board gives rise to some threat to his livelihood or reputation. However, that does not of itself lead to the conclusion that the Court should intervene. 96In each of the cases to which Brereton J referred a decision, the effect of which was to ban the involvement of the respective plaintiffs in the affairs of the relevant association, had been made. In the present case, no decision has been made by the Board of the Union at all. As senior counsel for the defendant submitted, all that has occurred in the present case is that notice has been given of a meeting at which it is proposed to put a motion which will be the subject of debate, and in respect of which the respective Board members will subsequently vote. No actual decision has been made, much less one which adversely affects the plaintiff's position. It is possible that no decision adversely affecting the plaintiff will ever be made. 97To grant relief in the terms sought in paragraph (2) of the summons would involve me in making a determination of the merits of the dispute. Moreover, it would involve me doing so in advance of any determination of that dispute being made by the Board, in circumstances where the Board is entrusted with that responsibility by the Constitution. In my view, following that course would be contrary to a long line of authority, to which Tadgell JA made reference in Australian Football League v Carlton Football Club Limited [1988] 2 VR 546 when he said (at 549-550): "A necessary question underlying the appeal concerns the extent to which the civil courts can and should interfere with the decision of the AFL Tribunal, a domestic tribunal whose decision the parties have agreed to abide. Counsel for the respondents sought to distinguish this case from a long line of decisions in which the courts have declined to interfere, save on a strictly limited basis, at the insistence of the parties affected by the decisions of domestic tribunals to which there has been consensual submission. Examples are legion in which the courts have consistently refused to review on the merits decisions made by private or domestic tribunals that had been established to deal with disputes within organisations to which people had become voluntarily affiliated, by contract or otherwise... The reason for the court's declining to interfere in cases such as these have been various. For one thing, whoever parties have agreed to have their disputes decided by domestic tribunals designated for the purpose, the courts have been in the habit of respecting the agreement or, one might say, not countenancing a breach of it by one party wishing to desert it and to resort to civil courts for resolution of a dispute that the tribunal was designed to decide." 98His Honour proceeded to cite various examples of the limited instances in which a court might be prepared to intervene in a decision made concerning the affairs of a voluntary association. However, I am not being asked by the plaintiff in the present case to interfere with a decision of the Board, because no decision has actually been made. Rather, I am being asked to make the decision, and to determine the merits of the dispute by doing so. For the reasons I have already outlined, the Constitution confers that decision making power on the Board. In those circumstances it is inappropriate for this Court to intervene, particularly in circumstances where no decision adverse to the plaintiff may ever be reached by a majority of the Board. 99Finally, in my view the decision in Mitchell (supra) does not assist the plaintiff. In that case, as with all of the other authorities to which I have referred, the relevant decision had been made. The decision says nothing about the Court's intervention before any decision is made. 100Having reached this conclusion it is not necessary for me to consider the plaintiff's conduct in disclosing part of Ms Hardy's report. That consideration remains a matter for the Board. ORDERS 101I make the following orders: (1)The order restraining the defendants from proceeding, in their capacity as members of the Board of the University of Sydney Union, to entertain or determine the motion prepared by the first, second and third defendants that the plaintiff be found guilty of serious misconduct and that he cease to hold office immediately, is vacated. (2)The summons is dismissed. (3)The plaintiff is to pay the costs of the first to eighth defendants, and the tenth to thirteenth defendants, as agreed or assessed. ********** 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: 17 March 2014