Brisbane Sikh Temple (Gurdwara) Inc & Ors, Re [1998] QSC 39

IN THE SUPREME COURT OF QUEENSLAND Brisbane OS No.5835 of 1997 Before the Hon. Mr Justice Mackenzie [re: Brisbane Sikh Temple (Gurdwara) Inc. & Ors.] IN THE MATTER of the Rules of the Supreme Court of Queensland - and - IN THE MATTER of the Associations Incorporations Act 1981 - and - IN THE MATTER of the Brisbane Sikh Temple (Gurdwara) Inc., Raghbir Singh, Nirmal Singh Sandhu and Murkhtiar Singh JUDGMENT - MACKENZIE J. Judgment delivered: 27 March 1998 CATCHWORDS:ASSOCIATIONS - Jurisdiction to appoint administrator to Incorporated Association - consent orders - removal of administrator - apprehension of bias. ss 73, 91, 133 Associations Incorporations Act 1981 O.58 rr 1 and 7 Rules of the Supreme Court s.246 Supreme Court Act 1995 Counsel: A.N. Skoien for applicants T. Somers for respondent P.J. Starkey D. Murphy for respondents Tarsem Singh Sohota and Soham Singh Saranah Solicitors: Paul Carter & Associates for applicants Sciacca’s for respondent P.J. Starkey Mott & Associates for respondents Tarsem Singh Sahota and Soham Singh Saranah Hearing date: 11 February, 1998 -- 1 of 6 -- IN THE SUPREME COURT OF QUEENSLAND Brisbane OS No.5835 of 1997 Before the Hon. Mr Justice Mackenzie [re: Brisbane Sikh Temple (Gurdwara) Inc. & Ors.] IN THE MATTER of the Rules of the Supreme Court of Queensland - and - IN THE MATTER of the Associations Incorporations Act 1981 - and - IN THE MATTER of the Brisbane Sikh Temple (Gurdwara) Inc., Raghbir Singh, Nirmal Singh Sandhu and Murkhtiar Singh JUDGMENT - MACKENZIE J. Judgment delivered 27 March 1998 The background to the matter is that on 8 August 1997 Williams J, by consent appointed Mr Starkey as administrator of the Temple because a dispute had arisen between members. The appointment was intended to be of limited duration since the order also provided for mediation, which failed. Mr Starkey’s appointment was to be until resolution of the matters in issue or determination thereof or until further earlier order. The power given to him by the order was also limited in that his only obligatory function was to “administer the financial affairs of the association”. He was also empowered to convene a general meeting of the association but only if the parties to the summons consented for him to do so. That has not happened, because consent was not forthcoming. -- 2 of 6 -- -- 3 of 6 -- 2 Notwithstanding that the order appointing Mr Starkey as administrator was made by consent, it is now deposed that neither Mr Mukhtiar Singh nor Mr Raghbir Singh knew that Mr Starkey had been for several years the personal accountant of Tarsem Singh Sahota and Sohan Singh Saranah, the respondents to the summons. Mr Starkey was also auditor of the association for some years but that was known to the deponents of the affidavits. Mr Mott’s affidavit establishes that all of these facts were known to the applicants’ solicitor and were discussed prior to the consent order being made. There is no evidence that anything specific that has happened since that date that may be relied on as a basis for suggesting that Mr Starkey has acted improperly in any way in carrying out his duties. The only facts relied on as tending to establish a reasonable apprehension of bias are the professional relationship with the two persons mentioned above in respect of their personal accounting affairs and the fact that he was the auditor of the association. Because the order before Williams J was made by consent there is nothing to suggest that the basis upon which it was being made was explored in detail, as one would expect on a busy chamber day. Both the limited nature of the powers given to the administrator, and the fact that s.91 of the Associations Incorporation Act does not purport to apply the provisions of the Corporations Law relating to administrators to the case of incorporated associations show that any basis of the appointment comes from other sources. None of the parties say there is no power to appoint someone to perform the functions prescribed by Williams J. In my opinion there is ample power under 0.58 rr 1 and 7 of the Rules of the Supreme Court to make such an order. Other suggested sources were the inherent power of the court and either s.73 or s.133 of the Associations Incorporation Act, and s.246 of the Supreme Court Act 1995 (formerly s.5(8) of the Judicature Act 1876). It is unnecessary to analyse the applicability of all of those provisions since I am satisfied the necessary power exists. It is also unnecessary and misleading to place too much regard upon the authorities relating to removal of administrators, liquidators and the like under the Corporations Law or on guidelines of -- 4 of 6 -- 3 the accountancy profession relating to the circumstances in which a person should not accept appointment as a liquidator or an administrator. The very limited nature of the powers of the present administrator has been previously adverted to. The only function conferred on him without qualification is the power to administer the finances of the association. That is essentially an accounting function. The notion of reasonable apprehension of bias has little room to operate in regard to this. There is no evidence of actual bias, let alone impropriety. The other power given to him is contingent upon consent of the parties. I consider that no case has been made out for removing the administrator. However there is one practical consequence of Mr Starkey’s occupancy of the office if the association is to function under its own duly appointed office bearers. That is that there is no reason to suppose the parties will consent to the meeting referred to above being called while Mr Starkey is the administrator. Some mechanism, having regard to the state of the evidence about who is entitled to vote at a meeting for the election of office bearers, has to be put in place. In the absence of substantial consensus as to who is entitled to vote the risk that a party who feels disadvantaged by the election of office bearers will challenge its validity is real. Whoever institutes the procedure to determine who are qualified to vote and chairs the meeting will of necessity have to be someone who does not suffer from the suspicion of any of the parties. For that reason it may be necessary to have someone else carry out that role either by a change in the identity of the administrator or by appointing someone specifically to convene and conduct the necessary meeting. It would be preferable if that decision was made by the parties. There are no doubt many ways in which the affairs of the association could be regularised. One possible blueprint would be to require the secretary to deliver to the person who was to convene the meeting a list of persons who in the secretary’s opinion are members of the association entitled to vote at elections for the office bearers of the association at the time of compilation of the list. Within a certain time after receipt of that list the person appointed to convene the meeting might -- 5 of 6 -- 4 deliver that list to interested members of the association for the purpose of allowing them to make representations as to the correctness or otherwise of the list. It would be necessary for an interested person to advise the administrator in writing of the names of any persons whom the interested person alleged not to be a member entitled to vote as at the date of the list and the grounds for holding that opinion and of the name of any person whose name was not included in the list but whom the interested person says is a member entitled to vote, together with the grounds for holding that opinion. The person appointed to convene the meeting should be empowered to determine, as soon as possible after that is done, the names of members of the association who are entitled to vote at elections and deliver a copy of that list to each of the interested persons. The final list would also contain the names of any persons who had become members of the association entitled to vote at elections subsequent to the date of the first list, according to the records kept by the administrator. The procedures suggested above are not part of the order. It is merely a suggestion as to how the matter may be progressed if the parties wish. However it is obvious that if the association is to function again under its own office bearers some means has to be devised as a matter of urgency to ensure that elections are held and a committee which has been elected by means which will minimise the scope for further legal disputation has been elected. In the meantime it is only necessary to say that grounds have not been established for removal of the administrator having regard to the extremely limited functions he is to perform under the order of Williams J. The application is dismissed with costs to be taxed. -- 6 of 6 --