Kabbara & Ors v Australian National Sports Club Incorporated [2020] NSWSC 497

Supreme Court New South Wales

Medium Neutral Citation: Kabbara & Ors v Australian National Sports Club Incorporated [2020] NSWSC 497 Hearing dates: 2 April 2020 Date of orders: 01 May 2020 Decision date: 01 May 2020 Jurisdiction: Equity Before: Rein J Decision: See [44]-[47]. Catchwords: CONTRACTS – Implied terms – Terms implied in law – Where 18 (originally 19) plaintiffs sued a sporting club from which they had been purportedly expelled, alleging that the expulsions lacked a proper basis and were not in accordance with the club's constitution (which operates as a contract between the members) – Separate determination of two questions, namely whether the constitution contained two implied terms, the first being the "expulsion term" (which states that members can only be expelled for the reasons identified in cl 22 of the constitution, which are the grounds for making a complaint about a member) and the "fairness term" (which states that members will not be expelled without first being afforded procedural fairness) – The plaintiffs advanced three alternative bases for implying the terms: from the express words of the contract, from the nature of the contract, and because the terms are necessary to give business efficacy to the contract – The club contended that neither term was implied in the constitution, that the club was free to expel members for any reason and that the club was not required to afford members procedural fairness in expelling them – Held: both the expulsion term and the fairness term are implied in the constitution. The first is implied on the basis of the combined effect of the express words of the contract (namely cl 11(c), which specifies the consequences of expulsion, and cl 22, which specifies the grounds for making a complaint about a member). The second is implied based on the "nature" of the contract, because the authorities on clubs indicate that, where an expulsion power exists, procedural fairness (or natural justice) will be implied unless it is excluded expressly or by necessary implication.