Cox v Caloundra Golf Club Inc & Ors [1995] QSC 246

IN THE SUPREME COURT OF QUEENSLAND Brisbane No. 1407 of 1995 BETWEEN: DENISE COX Plaintiff AND: CALOUNDRA GOLF CLUB INC First Defendant AND: ELROY MILES JANZ PAUL SARQUIS GEOFFREY HOLD GEOFFREY BEASLEY KENNETH COULTON DONALD COWIE Second Defendants JUDGMENT - THOMAS J. Delivered: 27 September 1995 CATCHWORDS: Associations and Clubs - disciplinary proceedings - rules - breach of procedural requirement - whether breach technical only - whether "proceedings under Act" (i.e. Associations Incorporation Act 1981) - acquiescence - availability of appeal to general meeting - whether Court should intervene- whether Court should validate irregularity. Associations Incorporation Act Ss. 43(1), 43(2), 70. Counsel: A. Morris QC for the Plaintiff G. Griffin QC for all Defendants Solicitors: Dobbyn Musgrave for the Plaintiff Gadens Ridgeway for all Defendants -- 1 of 12 -- Hearing Date: 21 September 1995 -- 2 of 12 -- IN THE SUPREME COURT OF QUEENSLAND Brisbane No. 1407 of 1995 BETWEEN: DENISE COX Plaintiff AND: CALOUNDRA GOLF CLUB INC First Defendant AND: ELROY MILES JANZ PAUL SARQUIS GEOFFREY HOLD GEOFFREY BEASLEY KENNETH COULTON DONALD COWIE Second Defendants JUDGMENT - THOMAS J. Delivered 27 September 1995 This is a motion for final judgment under O.57 r.2 and alternatively for an interlocutory injunction. On 20 July 1995 the management committee of the club suspended the plaintiff's membership for a period of six months and removed her from the office of Ladies' Captain. The main point at issue is whether such actions were valid. -- 3 of 12 -- 2 The problems from the point of view of the club and its management committee arose from the fact that in the early part of July 1995 the plaintiff made various statements to various members of the press which led to the publication of articles critical of the club and its management, including allegations that the club was "run by archaic male chauvinists", that women were too afraid to play and that the club was "embroiled in a sex discrimination row". On 10 July the Club President sent her a "notice under rule 10 and rule 15(e)(iii)" of a meeting to be held on 19 July commencing at 6.30 p.m. at which an enquiry would be conducted under those rules concerning charges against her that were then listed and particularised. The charges were "1. That you have conducted yourself in a manner such as renders you unfit for membership of the Caloundra Club; and 2. That, as an officer of the Club, you have done acts prejudicial to the character and interests of the said Club." She was invited to attend and promised the opportunity to defend herself. Before describing the subsequent events and proceedings it is desirable to set out the relevant rules of the club. Rule 10 relevantly provides: "EXPULSION The Management Committee shall have power to .. suspend .. from the Association any person .. whose conduct whether within or without the club premises in the opinion of the Management Committee renders .. her unsuitable for membership. Before a person is .. suspended .. her alleged .. conduct shall be inquired into by the Management Committee, and such person shall be given full opportunity to defend himself and justify or explain his .. conduct. Seven (7) days notice by letter .. of the date, place and time of the Management Committee Meeting at which such matter will be inquired into shall be sufficient notice to such person. If a two-thirds majority of the Management Committee present when the matter is inquired into are of the opinion that the person . . has been guilty of such conduct as aforesaid, and that the person has failed to afford proper justification or explanation, the Management Committee may . . suspend for such period as the Management Committee in its sole discretion decides . . If such person so . . suspended . . be dissatisfied or aggrieved by the decision of the Management Committee, he or she may appeal against such decision to the next General Meeting of the Association, or to a Special Meeting which shall be called at the earliest possible date in accordance with Rule 15(c). . The decision of the Management Committee may be set aside or varied by such meeting by the majority vote of those present." -- 4 of 12 -- 3 Rule 15(e)(iii) relevantly includes the following: "The Management Committee shall have power to remove from office any officer of the Association who shall, by a resolution passed by not less than two-third (2/3) of the members of the Management Committee present at a meeting of the Management Committee, be declared to have . . done any act prejudicial to the character or interests of the Association. Before any charge against any officer is considered, the Management Committee shall cause a notice in writing to be sent to such officer . . specifying the charge brought against such officer and the date, place and time (not less than seven (7) clear days after the date of giving such notice) of the Management Committee Meeting at which such charge will be inquired into and at such meeting such officer shall be given full opportunity to defend himself . ." The rule goes on to give the same right of appeal as "under rule 11", but I interpret this as providing the officer with the same right of appeal as that mentioned in r.10. It is to be noted that r.10 deals with discipline of members whilst r.15 deals with discipline of officers. Under other parts of r.15, it is provided that the management committee is to consist of ten persons who are designated by particular offices. The management of the association and the carrying out of its objects are vested in the management committee. Six members of the committee are necessary in order to form a quorum (r.16(a)). It is immediately apparent from a perusal of r.10 that the alleged offending conduct "shall be enquired into by the management committee". The committee of course has a general power to appoint delegates or sub-committees to act for it or to undertake tasks on its behalf. For example, under r.16(f)(i) the management committee is required to appoint each financial year "finance sub- committees and such other sub-committees from time to time as they may think necessary and may delegate to such sub-committees such powers as they may think fit". There is evidence that early in 1995 a sub-committee known as the "special purposes committee" was established by the management committee, and that its members were Mr Sarquis, Mr Hold and Ms Hancock. The actual powers that were delegated to it are not stated. However, at a special management committee meeting of 8 July 1995 a motion was duly carried "that the enquiry into the actions of -- 5 of 12 -- 4 Mrs Cox be held by the special purposes committee and that the committee's recommendation be passed on to a full management committee for ratification". It seems to have been intended from that point on that the special purposes committee should act on behalf of the management committee for the purposes of conducting at least the initial part of the inquiry that was necessary into the actions of the plaintiff. Unfortunately r.10, in my view, contemplates that the management committee, when it exercises disciplinary powers of this kind, must itself perform the necessary enquiry and be present when the matter is enquired into. This is the inescapable result of the requirement that "if a two-thirds majority of the management committee present when the matter is enquired into" are of the necessary opinion, "the management committee may suspend etc". This goes against the reading of r.10 contended for by Mr Griffin QC to the effect that "management committee" should be read as "management committee or its duly appointed sub-committee". Similarly, r.15(e)(iii) contemplates the necessity of a decision by two-thirds of the members of the committee, and that a notice of the charge be given to the relevant officer specifying the place and time of "the management committee meeting at which such charge will be enquired into". It is also provided that at such meeting the officer shall be given full opportunity to defend himself. These requirements plainly contemplate that the meeting is to be both conducted and decided by the same persons, and plainly the decision has to be made by two-thirds of those constituting a full quorum of the management committee. It may be inconvenient that a full quorum of the management committee needs to be present throughout such enquiries, but that seems to be the plain effect of the rules. It is contemplated that the persons who conduct the enquiry would be the ones who make a decision, and that a two-thirds majority of those persons will be necessary. The quorum requirement means that six persons at least must be present for such proceedings. Accordingly, as it seems to me, this particular disciplinary exercise was doomed from the -- 6 of 12 -- 5 outset. The notice of the necessary enquiry was duly and properly given by the letter of 10 July 1995, but when Mrs Cox and her solicitor attended for the purposes of the enquiry, the special purposes committee was present instead of the management committee. The special purposes committee received representations from the plaintiff and her solicitor and endeavoured to obtain further information. A ten-page statutory declaration was presented on her behalf the effect of which was to claim that she had been seriously misquoted by the press in the major items particularised in the notice to which she was responding. At the end of that meeting she was given notice that the management committee would consider the matter at a stated time on the following night. On the following night a duly constituted meeting of the management committee was held. It was stated that the management committee was convened "to continue to conduct an enquiry which commenced last night with the special purpose committee arising out of a notice which was sent to Mrs Cox on 10 July". The committee was informed that the plaintiff would not be attending this meeting. The committee was obviously informed of proceedings by the members who had attended the previous night, and the plaintiff's statutory declaration was received and perused along with various newspaper articles. Eventually a secret ballot was conducted resulting in a vote of 6-0 that the plaintiff was "guilty" under both rules. The plaintiff was then informed in writing of the decisions. Numerous submissions were made by Mr Morris QC on behalf of the plaintiff including that the management committee meeting was not held at the time and place specified in the notice. I would not deny potential validity to the decision on the following night on this particular basis, as the plaintiff was sufficiently advised when she attended on 19 July that the committee would be considering the matter on 20 July. Nor would I uphold the submission that on any objective view it could not be held that the plaintiff had been guilty of conduct which could render her unsuitable for -- 7 of 12 -- 6 membership of the club. I would also reject the submission that the decision is invalid on the ground that the committee failed to make an express finding that the plaintiff failed to afford proper justification or explanation. Her explanation was apparently considered by the committee and not regarded as adequate. I do not think that the decision would be rendered void by the failure to record an expression of opinion by the committee that the plaintiff failed to afford proper justification or explanation. The point upon which I think the decisions fail is the failure of the management committee to conduct its own enquiry as required by the rule. The general power to delegate functions to a subcommittee is in my view excluded by the more specific requirements of rr.10 and 15(e)(iii). Mr Griffin submitted on behalf of the club that even if the procedure were invalidly taken there was power to relieve against the irregularity, and further that the plaintiff ought to be denied a remedy in this Court because she failed to pursue further remedies available to her under the rules. Those submissions raise the possible application of ss.43 and 70(1) of the Associations Incorporation Act 1981. These sections include: "43 (1) The Court may, on an application brought pursuant to section 42, grant such relief as is appropriate in the circumstances. (2) The Court may refuse to entertain such an application, or to make an order on such application, or may refuse an order for costs, or may make an order for costs against a party, whether successful or not, if it is of the opinion that - (a) the issue raised in the application is trivial; (b) having regard to the importance of the issue, the nature of the incorporated association, any other available method of resolving the issue, the costs involved, lapse of time, acquiescence or any other relevant circumstance, it was unreasonable to make the application; (c) the unreasonable or improper conduct of a party has been responsible for the making of an application, or has added to the cost of the proceedings." "70 (1) No proceeding under this Act shall be invalidated by any defect, irregularity or deficiency of notice or time unless the Court is of opinion that -- 8 of 12 -- 7 substantial injustice has been or may be caused thereby which cannot be remedied by an order of the Court. (2) The Court may if it thinks fit make an order declaring that such proceeding is valid notwithstanding any such defect, irregularity or deficiency." (3) Without affecting the generality of subsections (1) and (2) .. where any omission, defect, error or irregularity (including the absence of a quorum at any meeting of the incorporated association or of the management committee) has occurred . . whereby there has been default in the observance of the rules . . of the incorporated association or whereby any proceedings at . . any meeting . . of the management committee . . have been rendered ineffective, the Court - (a) may . . make such order as it thinks fit to rectify . . the consequences in law of any such omission, defect, error or irregularity, or to validate any act, matter or thing rendered or alleged to have been rendered invalid by or as a result of any such omission, defect, error or irregularity; and (b) shall before making any such order satisfy itself that such an order would not do injustice to the incorporated association or to any member or creditor thereof . ." The preliminary question arises, for the purpose of applying s.43, whether the present proceeding should be regarded as "an application brought pursuant to s.42". Similarly, under s.70, the question arises whether the present proceeding is a "proceeding under this Act". I would resolve both these questions in the affirmative. Whilst it is true that the plaintiff could obtain somewhat similar relief at common law, there is no doubt that her claim is one which seeks to enforce rights and obligations between a member and an incorporated association. Section 42(1)(b) expressly gives the Court power to make such an order. It is not necessary that a writ or notice of motion expressly label the relief as being sought under the section. Even if the relief is sought under both sources of jurisdiction, it may still be regarded as an application brought pursuant to s.42. If it may be regarded as brought pursuant to s.42, it follows that the present application is a "proceeding under this Act" for the purposes of s.70. It is unnecessary to consider whether proceedings may be regarded as being under the Act in a wider sense, such as the fact that the -- 9 of 12 -- 8 association sues or is sued by virtue of its incorporation under the Act. It was submitted for the defendants that the failure of the committee to comply with the requirements of rr.10 and 15 was "highly technical" and that I ought to exercise the power of declaring it valid notwithstanding any defect, irregularity or deficiency. Notwithstanding the breadth of the powers of rectification of defects entrusted to the Courts, in the context of disciplinary proceedings involving expulsion or suspension, especially where the determination may be thought to involve some degree of personal disgrace, a Court must be very careful before it disregards a breach of the rules, especially a breach of the rules where the correct procedure could have produced a different result. The conduct of a disciplinary proceeding by three people on the first night and six on the second when the rules contemplate that the whole proceedings shall be conducted by at least six persons is not necessarily a minor matter and I reject the submission that it was "highly technical". I do not think that the regularisation by the Court of the present omissions and defects would be consistent with the doing of justice to the plaintiff. I therefore reject the submission for Court intervention in favour of the defendant under s. 70. The submission under s.43 is more persuasive. It was submitted that I should refuse to entertain the application on a number of grounds. Firstly it was submitted that the plaintiff has been guilty of unreasonable delay in that the decision was made on 20 July, the writ was issued on 8 August and the notice of motion was filed on 14 September. In short, there was nearly three weeks before the issue of the writ and then a further five weeks before the motion was filed. That is not very long under normal circumstances, but when it is realised that the plaintiff's office as Ladies Captain was due to expire in November it means that almost half of the remaining period of the office was allowed to expire before a motion for the present relief was brought. So far as the six months' suspension of membership is concerned, almost one-third expired before the present motion was filed. That however must be -- 10 of 12 -- 9 tempered by the fact that the last entry of appearance was filed on 23 August, and under O.57 r.2 the motion is to be made after appearance or after the period for default of appearance. It was also urged that the plaintiff acquiesced in the decision in that she obeyed it by returning club property, did not seek to continue to carry out the duties of Ladies Captain, and did not seek to exercise rights of membership. I do not think that her failure to conduct a campaign of disobedience should count against her in these proceedings. It is not suggested that she waived her rights or that her conduct caused any prejudice or disadvantage to the defendants. The combination of these factors does not come close to persuading me that it was unreasonable for the plaintiff to make the present application. However there is a further factor, of greater persuasion, that has to be added before this particular discretion can be exercised. It is the circumstance that under r.10 (and also as I read it, under r.15(e)(iii)) the plaintiff had a right to appeal against the decision to a special meeting which the committee would have been obliged to call at the earliest possible date. Such a meeting would have had the power to set aside or vary the committee's decision by a majority vote. It is my view that in general Courts should be a last resort for the determination of club and association disputes. A democratic decision of the members will be the preferred course in most instances. In the present case however the plaintiff was faced with a difficult situation in having her complaint determined in that way. Her primary grievance was the committee had not acted in accordance with the rules. She would also wish to contend that the committee made the wrong decision and that she should not have been suspended anyway. Whilst it would be possible to bring both matters for decision by a special meeting under r.14(c) without waiving her rights to object to the committee's lack of jurisdiction for its decision, this would be a difficult path to tread. It is also open to think that the decision of a Court on the proper interpretation of the rules would be preferable in some ways to a decision by a fairly large meeting of members. On the other hand -- 11 of 12 -- 10 substantial costs (in my opinion considerably more than the cost of calling a special meeting) are involved in the bringing of court proceedings such as these. Also, Courts have no wish to intrude into the general conduct and resolution of club disputes (Re Mogaccis [1994] 1 Qd.R. 59, 67-68). In the present matter I do not think that the combined circumstances relied upon are sufficient to require the door of the Court to be shut against the plaintiff. I do not say that points of construction of rules will always be more desirably determined by a court rather than a general meeting, but against the somewhat emotive background of this matter such an issue would be more likely to have created tensions and divided the club than to have solved the issue in a satisfactory way. The objectivity and authority of a Court determination is a factor in the present matter. I decline to exercise the discretion referred to under s.43(2). No good reason was shown why I should not proceed to give judgment under O.57, r.2. It was not submitted that pleadings were necessary or that any additional facts should be canvassed. It would seem to be in the interest of all parties in any event that there be an early determination of the validity of the proceedings that have taken place and avoid a protracted state of suspended rights. It seems to me that mediation from a qualified person would be a preferable course to the institution of further proceedings, whether of a disciplinary kind or in a court. It will be declared that the purported suspension of the plaintiff from membership and the purported removal of the plaintiff from the office of Ladies Captain of the first defendant on 20 July 1995 by the second defendants on behalf of the first defendant was void. I shall hear submissions on the need for any further orders, and on costs. -- 12 of 12 --