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Singh v Brisbane Sikh Temple (Gurdwara) Inc[2021] QSC 290

Singh v Brisbane Sikh Temple (Gurdwara) Inc[2021] QSC 290

SUPREME COURT OF QUEENSLAND

CITATION:

Singh & Ors v Brisbane Sikh Temple (Gurdwara) Inc [2021] QSC 290

PARTIES:

GURMEET SINGH

(first applicant)

AND

SATINDER PAL SINGH

(second applicant)

AND

HARMINDER SINGH

(third applicant)

v

BRISBANE SIKH TEMPLE (GURDWARA) INC

(respondent)

FILE NO/S:

BS 10910 of 2021

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

Orders made and reasons delivered on 24 September 2021

DELIVERED AT:

Brisbane

HEARING DATE:

23 September 2021

JUDGE:

Jackson J

ORDER:

Upon the applicants offering the usual undertaking as to damages the Court orders that:

  1. Until further order, the respondent is restrained from putting to the members at the annual general meeting scheduled for 12 noon on 25 September 2021, or any other meeting of members of the respondent, resolution 7 as set out in the agenda to the notice of the annual general meeting.
  2. The respondents provide the applicants with a copy of the current register of members by no later than 30 September 2021.
  3. The applicants must file and serve any supplementary affidavit material they wish to rely on by no later than 7 October 2021.
  4. The respondent must file and serve any supplementary material it wishes to rely on by no later than 28 October 2021.
  5. The matter be listed for hearing for four days from 8 November 2021.
  6. Costs reserved.

CATCHWORDS:

EQUITY – EQUITABLE REMEDIES – INJUNCTIONS – INTERLOCUTORY INJUNCTIONS – SERIOUS QUESTION TO BE TRIED – GENERALLY – where the respondent conducted a membership drive in March 2021 – where by 28 March 2021, 3156 individuals had applied for membership of the respondent for the 2021 year – where the respondent’s management committee decided on 30 August 2021 to reject 2151 membership applications – where the originating application applies for orders requiring the respondent to reconsider the rejected membership applications in accordance with the constitution of the respondent – where the election of the management committee for the next two years will take place at the annual general meeting on 25 September 2021 – where the financial ordinary members of the respondent are entitled to vote on the election of the management committee – whether the lawful consideration of the rejected membership applications should precede the election of the management committee – whether an interlocutory injunction should be granted to preserve the status quo of the membership of the management committee until the final hearing of the originating application – whether the applicant has established a prima facie case or serious question to be tried – whether the balance of convenience favours the grant of an interlocutory injunction

ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – PROCEDURAL FAIRNESS – GENERALLY – where there is evidence that there are two factions within the Sikh community and the respondent, being an older members’ faction and a newer members’ faction – where the applicants submit that the management committee preferred the applications from the older members’ faction when deciding which applications for 2021 membership to approve – whether the management committee exercised its powers to accept or reject membership applications by preferring those from the older members’ faction so as to create a majority of voting power at the annual general meeting – whether the management committee exercised its powers for an impermissible purpose

ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – RELEVANT CONSIDERATIONS – FAILURE TO CONSIDER – where one of the respondent’s reasons for not admitting more than 1005 applications for 2021 membership was that its facilities are not capable of attendance by more than 893 individuals and that this number reduces to 394 individuals under COVID-19 restrictions – where the respondent admitted that it compared the applications for 2021 membership with the lists of members for the past five years – where rules 4(2) and 5(6) of the constitution of the respondent expressly provide that the number of members is to be unlimited – whether the respondent failed to observe the rules of the association – whether the respondent failed to take into account a relevant consideration

Associations Incorporation Act 1981 (Qld), s 22, s 23, s 60(1), s 62, s 71, s 72, s 73

Civil Proceedings Act 2011 (Qld), s 9

Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57, applied

Gould v Isis Club Inc [2016] 1 Qd R 363, cited

Millar v Houghton Table Tennis & Sports Club Inc [2003] SASC 1, cited

Mills v Mills (1938) 60 CLR 150, cited

Moromilov v Dragicevic [2013] ACTSC 91, cited

Pettit v South Australian Harness Racing Club Inc [2006] SASC 306, cited

Whitehouse v Carlton Hotel Pty Ltd [1987] 162 CLR 285, cited

COUNSEL:

L Copley for the applicants

P Hastie QC for the respondent

SOLICITORS:

Agnew Litigation & HR Pty Ltd for the applicants

HopgoodGanim Lawyers for the respondent

  1. [1]
    This is an urgent application for an interlocutory injunction to restrain the respondent from considering or resolving upon the election of the management committee at the annual general meeting to be held on 25 September 2021.  An interlocutory injunction will preserve the status quo of the membership of the management committee until the final hearing of the application for declaratory and injunctive relief in relation to the management committee’s decision on 30 August 2021 to reject 2021 applications for membership of the respondent for the 2021 year.
  2. [2]
    The originating application applies for declarations that the management committee’s decisions to reject approximately 600 applications for identified applicants for membership was void.  I will call those applications for membership the “identified applications”.  The applicants apply for orders requiring the management committee to reconsider those applications and other similar applications in accordance with the constitution of the respondent.
  3. [3]
    Because the persons entitled to vote on the election and appointment of members of the management committee include the financial ordinary members, the applicants contend that the lawful consideration of the identified applications and other similar applications should precede the election of the management committee for the next two years.
  4. [4]
    For the reasons that follow, in my view, an interlocutory injunction should be granted to restrain the respondent from considering or resolving upon the election of the management committee until the final hearing of the originating application or further order.
  5. [5]
    The respondent is an incorporated association under the Associations Incorporation Act 1981 (Qld) (“the Act”).  Its objects include promoting an understanding of religious and philosophical traditions of Sikhism, providing means of communication with other Sikh communities nationally and internationally, promoting and conducting regular meetings of religious and cultural activities, including the holding of prayer meetings, religious lectures and Shabad Kirtan and inviting scholars, priests and gyanis to lecture and preach on Sikh’s religious and cultural activities.
  6. [6]
    The relevant constitutional provisions concerning membership of the respondent and the register of members are contained in rules 4, 5, 6, 7, 8, 10 and 11 and I will set them out in full in the published reasons that will be written published reasons.

4. CLASSES OF MEMBERS

  1. The membership of the association shall consist of ordinary members, and any of the following classes of members:-

a) Associate Members

b) Life Members

c) Honorary Members

  1. The number of ordinary members shall be unlimited.
  1. A person may become an ordinary member only if that person qualifies for ordinary membership.

5. QUALIFICATIONS FOR MEMBERSHIPS

  1. Ordinary Member

a) Any Sikh who is a resident of Brisbane or in the vicinity of Brisbane as determined by the management committee and is 18 years of age or older, who does not owe allegiance to any other religion and who faithfully believes in One Immortal God being Ek-Ongkaar, the Ten Sri Guru Sahib Ji, the Sri Guru Granth Sahib Ji, the utterances and teachings of the Ten Sri Guru Sahib Ji and the initiation ceremony of Amrit bequeathed by the Tenth Guru, Sri Guru Gobind Singh Ji may become an ordinary member.

b) Applicants for ordinary membership must pay membership fees and sign a Statutory Declaration stating SIKHISM to be their only religion.

c) Ordinary members who satisfy Rule 5(7) shall have the right to vote in any proceedings of the Association.

  1. Life Member

a) Any Ordinary member who:-

  • is a well regarded senior member of the Sikh community; and
  • has made outstanding contributions to the Association; and
  • is considered by the management committee as worthy of recognition shall be eligible for Life membership.

b) An ordinary Member may only be admitted as a life member of the association after a resolution of the members of the management committee is passed with a two thirds majority.

c) Subject to the rules of the Association, Life members shall enjoy the same privileges as an ordinary member including the right to vote, and the right to be elected to the management committee.

d) A Life member shall be admitted as a Life member for the remainder of their life unless that person resigns or is expelled from the Association.

e) The provisions of these rules relating to payment of a membership fee or any other subscription do not apply to Life members.

  1. Associate Membership

Any person who subscribes to the objects of the association but who does not qualify for ordinary membership may be considered for admission to the association as an associate member. An associate member shall not be eligible for election as an office bearer and shall not have the right to vote in any proceedings or meetings of the association. The management committee may from time to time make rules relating to the admission as an associate member to the association.

  1. Honorary Member

a) Any person who does not qualify for ordinary membership but who over a period of time has made an outstanding contribution to the promotion of Sikhism and/or the welfare of the association may be considered for honorary membership. The management committee shall make any such nomination by notice of motion before a meeting of the management committee. An honorary member shall not be eligible for election as an office bearer and shall not have the right to vote in any proceedings or meetings of the association.

b) The provisions of these rules relating to payment of annual subscriptions do not apply to honorary

  1. Spouses and Children

Subject to the rules of the Association, the spouse and any children of any ordinary member under the age of eighteen (18) shall be entitled to use and enjoy the facilities of the association without the payment of an annual subscription fee or a requirement for membership.

  1. The number of members shall be unlimited.
  1. Residential and financial requirements for ordinary/life members who can vote at any general or other meeting of the association are:-

a) The person must be a financial ordinary or life member; and

a) The person must be a resident of Brisbane or within the vicinity of Brisbane as determined by the management committee.

6. MEMBERSHIP

  1. A person who qualifies under rule 5 for membership, may apply to the Association for such class of membership as may be applicable to that person. Any such application shall be in writing and signed by the applicant and be in a form and contain such information as prescribed by the management committee.
  1. The decision of the management committee shall be final in any mater relating to membership.

8. ADMISSION AND REJECTION OF MEMBERS

  1. At the next meeting of the Management Committee and after the receipt of any application and the fee applicable for any class of membership, such application shall be considered by the Management Committee, who shall thereupon determine the admission or rejection of the applicant.
  1. Any applicant who receives a majority of the affirmative votes of the Management Committee present at the meeting at which such application is being considered shall be accepted as a member to the class of membership applied for.
  1. Upon the acceptance or rejection of an application for any class of membership the secretary shall forwith give the applicant notice in writing of such acceptance or rejection and shall upon acceptance enter that person’s name on the register of members.

10. APPEAL AGAINST REJECTION OR TERMINATION OF MEMBERSHIP

  1. A person whose application for membership has been rejected or whose membership has been terminated may within two months of receiving written notification thereof, lodge with the secretary written notice of that person’s intention to appeal against the decision of the Management Committee.
  1. Upon receipt of a notification of intention to appeal against rejection or termination of membership the secretary shall convene, within three months of the date of receipt by the Secretary of such notice, a general meeting to determine the appeal. At any such meeting the applicant shall be given the opportunity to fully present his or her case and the Management Committee or those members thereof who rejected the application for membership or terminated the membership subsequently shall likewise have the opportunity of presenting its or their case. The appeal shall be determined by the two thirds majority of vote of the members present at such meeting.
  1. Where a person whose application is rejected, does not appeal against the decision of the Management Committee within the time prescribed by these Rules or so appeals but the appeal is unsuccessful. The secretary shall forthwith refund the amount of any fee paid.

11. REGISTER OF MEMBERS

  1. The Management Committee shall cause a Register to be kept in which shall be entered the names and residential addresses of all persons admitted to membership of the Association and the dates of their admission.
  1. Particulars shall also be entered into the Register of deaths, resignations, terminations and reinstatements of membership and any further particulars as the Management Committee or the members at any general meeting may require from time to time.
  1. The Register shall be open for inspection at all reasonable times by any member who previously applies to the secretary for such inspection.”
  1. [7]
    The relevant constitutional provisions as to election and appointment of the management committee of the respondent are rules 12 and 14 and I will set them out in full in the final published reasons.

12. MEMBERSHIP OF THE MANAGEMENT COMMITTEE

  1.  

a) The management committee of the Association shall consist of a minimum of nine (9) members or any other odd number as the ordinary and life members entitled to vote may by special resolution decide.

b) The elected members of the management committee shall appoint from amongst themselves a President, a Vice President, a Secretary and a Treasurer.

c) All of the members of the management committee shall be financial ordinary or life members of the Association.

  1.  

a) The members of the management committee shall hold office for a period of two (2) years from the date of their election at an annual general meeting.

b) All members of the management committee shall retire from office at the second annual general meeting after they were elected and shall be eligible for nomination and re-election.

  1. The election of the members of the management committee shall take place every two (2) years in the following manner:-

a) Any two (2) ordinary / life members of the association shall be at liberty to nominate any other ordinary / life member to serve as a member of the management committee.

b) The nomination, which shall be in writing and signed by the nominator member, his proposer and seconder and accepted by the nominee, shall be lodged with the secretary at least fourteen (14) days before the annual general meeting at which the election is to take place.

c)  A list of candidates’ names in alphabetical order with the proposers’ and seconders’ names, shall be posted in a conspicuous place in the office or usual place from meeting of the Association for at least seven (7) days immediately preceding the annual general meeting.

d) Balloting lists shall be prepared (if necessary) containing the names of the candidates in alphabetical order and each member present at the annual general meeting shall be entitled to vote for any number of such candidates not exceeding the number of vacancies.

e) Should there be an insufficient number of candidates nominated by the commencement of the meeting, nominations may be taken from the floor of the meeting.

f) The meeting may grant an exemption from the strict observance of these rules.

  1. Qualification for election as a member of the management committee

A person shall only be eligible for nomination and subsequent election as a member of the management committee if that person satisfies all of the following requirements:-

a) A financial and ordinary or life member who is a permanent resident of Brisbane or in its vicinity and is a Permanent Resident or Citizen of Australia as determined by the management committee.

b) A member of the Association continuously for at least five (5) years.

c) Had not previously been employed by the Association in any capacity for a period of five (5) years prior to nomination.

d) Has for a period of five (5) years prior to nomination paid building fund contributions to the Association.

14. VACANCIES ON THE MANAGEMENT COMMITTEE

  1. Subject to the provisions of sub-rule 3 of this rule the management committee shall have power at any time to appoint any ordinary member of the association who qualifies as a member of the management committee to fill any casual vacancy on the management committee until the next annual general meeting when elections of management committee members would be conducted.
  1. The continuing members of the management committee may act notwithstanding any casual vacancy in the management committee.

If the number of members of the committee is reduced below the number fixed by or pursuant to these rules as the necessary quorum of the management committee the continuing members may only act for the purpose of increasing their numbers to that required number for summoning a general meeting of the association, but for no other purpose.”

  1. [8]
    The relevant constitutional provision as to the annual general meeting of the respondent is rule 20, which I will also set out in full in the published reasons.

20. ANNUAL GENERAL OR GENERAL MEETING

The first general meeting shall be held at such time, not being less than one month nor more than three months after the incorporation of the Association and at such place as the Management Committee may determine.”

  1. [9]
    In March 2021, the respondent conducted a membership drive.  As a result of the drive and possibly because the 2021 annual general meeting would elect a new management committee, the result was that on or by 28 March 2021, 3156 individuals had applied to become members for the 2021 year.
  2. [10]
    Membership of the respondent is renewed annually.  There were 235 financial members in 2020.  Of the 3156 applications for 2021 membership, about 671 were paid for by 32 individuals.  This was described in some of the respondent’s documents as “stacking”.
  3. [11]
    Because of delay in dealing with the 2021 applications for membership, the management committee delayed holding the annual general meeting.  By linking the annual membership and the annual general meeting in that way, the management committee clearly intended that the 2021 financial memberships should be resolved before the election of the 2021 management committee took place.
  4. [12]
    There are 23 candidates for election for the 2021 management committee competing for nine places.  Obviously, the constitution of the body of electors is likely to have an effect on who may be elected.
  5. [13]
    On 17 May 2021, 48 members of the respondent, including some of the applicants, requested that a special general meeting, as provided for by rule 22(b) of the constitution, be called within 14 days to consider the election of the management committee for 2021.  The request was not responded to by the respondent’s management committee.
  6. [14]
    On 8 July 2021, some of the applicants who are members sought to inspect the register of members of the respondent but were only shown the 2020 register and not permitted to take notes or copies.  No justification was suggested by the respondent for that conduct.  It provides some support for the applicants’ case of bad faith discussed below.  The applicants apply for an order for inspection of the register.  That order is not opposed by the respondent.
  7. [15]
    On 30 August 2021, the management committee decided to admit 1005 of the 3156 applications for membership and to reject the remainder.  The reasoning of the management committee is set out in full in a minute of the meeting of that day.  I will set out the minute in full from pages 57 to 58 of the exhibits to Surinder Singh’s affidavit in the final published reasons.

Membership Applications:

BST Committee provided details of the Membership Drive that was conducted in March 2021. All members present agreed that a particular group was heavily involved in stacking of membership applications that resulted in lapse of time that was set aside for the membership drive resulting in denying receiving applications from many genuine applicants.

By the close of the day 28th March 2021, it was negotiated that applications from all applicants present that day to be collected and processed later dates, however, the group mobilised by Gurlal Singh, Gurmeet Singh, Mandeep Singh and Satinderpal Singh strongly opposed to it and forced the committee not to accept the applications after the closing time. As a result, many genuine applicants were unable to lodge their applications and were left stranded in the queue. QPS had to come in and remove large crowd in registration office.

The BST committee witnessed following practices by the Gurlal Singh/Gurmeet Singh groups during each day of the membership drive:

  • Threats and intimidation towards committee members
  • Stacking applications – individuals involved in lodging large number of applications thereby consuming un-necessary long time
  • One person paying for more than 50 applications by credit/bank card at one time

As a result, a total of 3156 applications are received which was an extremely high from last year’s (2020) total membership applications of 235.

Resolution passed by all present committee has an important task of managing risk of our members and congregation in a safe environment. We acknowledge the number of people they can gather in our prayer hall, dining hall and amenities area. This was verified by registered building certifier and Queensland health for covid safe environment. According to BST Building certifier report, the gathering at the BST is limited to 893 maximum and according to COVID Safe plan the gathering is reduced to 394.

In addition, unethical behaviour by certain individuals by stacking of application forms and deliberately denying regular members access to registration office.

Management Committee followed the Fairness Principle and compared the applications received in 2021 with the applications from last five (5) years. As a result, the committee found many discrepancies in 2021 applications namely

  • variations in names
  • Phone numbers not matching up
  • Email addresses not matching up
  • Addresses of listed persons not matching up
  • One credit/debit card used to make payments of $100 each for more than 50 applications at once

Following the fairness principle and by comparing the current application details with previous years membership details, it is with regret that 2151 membership

 

applications are unsuccessful. All forms that are unsuccessful are inspected and reviewed by all committee members present. All unsuccessful applications are attached safely in a box.

The three applicants Jasjot Savroop Singh, Baljit Singh Mann and Sukhrajwinder Singh their membership was terminated are part of the unsuccessful 2151 applicants. Also, part of that unsuccessful list are Gurlal Singh, Daljinder Singh and Maan Singh due to their aggressive nature and their values not in the interest of the association.

A refund cheque will be posted to all the unsuccessful applicants. Membership notices and other information to be delivered by email, Facebook, website and social media.

A total of 1005 membership applications are approved. Membership applications are onsite for committee inspection and review. All present reviewed the applications forms.

All members present agreed with the adopted Procedural Fairness and verification process of membership application forms.

Resolution put forward and approved by the BST Management Committee that 1005 membership applications are to be approved for the BST membership for 2021-2022 financial year and the Membership Register to be finalised for the financial year 2021-2022. Tejpal Singh contacted by phone to get approval and he agreed.”

  1. [16]
    The respondent has not identified who comprised the members whose applications were admitted or who comprises the applicants for membership whose applications were rejected.  Only the respondent’s management committee knows those facts.  Even now, the management committee has not informed 750 of those whose applications for membership were rejected by its decisions on 30 August 2021.
  2. [17]
    The numerical outcome of the management committee’s decisions on the applications for membership is that 2151 out of 3156 applications were rejected.  It is not suggested that any similar large-scale rejection of applications for membership has occurred previously.
  3. [18]
    In 2017, by way of contrast, about 2600 people applied for membership and there is no suggestion in the evidence of a large-scale rejection of applications.  One of the applicants’ witnesses who has been a member since 2006 says that there has never previously been a large-scale volume of rejection of applications for membership.
  4. [19]
    The record of the meeting of 30 August 2021 contained in the minutes of the management committee is clearly structured to suggest an inference that the number of applications was so extraordinary that it justified the concern expressed by some that there were many applications that were not genuine.  No reference is made in that reasoning to any prior years, such as 2017, when a large number of applications was received.
  5. [20]
    One of the reasons stated for not admitting more than 1005 applications as set out in the minutes was that the facilities of the respondent are not capable of attendance by more than 893 individuals and, under COVID-19 social distancing restrictions, that number reduces to 394 individuals.  The minute refers to an expert report on the capacity of the facilities that supports those conclusions.  However, the report seems unusual in some respects.  First, it is undated.  Second, the circumstances under which it was sought and obtained are not in evidence.  There was also uncontradicted evidence that on occasions in the past comprising festivals or meetings that had been organised by the respondent there have been attendances by up to 10,000 individuals.
  6. [21]
    Perhaps three other factors are more telling.  One is that the management committee does not appear to have taken into consideration that rule 4(2) and rule 5(6) expressly provide that the number of members is to be unlimited.  A second factor is that the management committee does not appear to have taken into account that the respondent’s facilities have been made available to worshippers and others who are not members, so that restricting membership per se will not affect the number of people who might attend.  The third factor is that if rules or bylaws are to be adopted to restrict those who can attend to a particular number, that does not require necessarily that the number of members be restricted in number.
  7. [22]
    A notable feature of the management committee’s approach in deciding the applications for membership that it would admit is that it compared the applications for membership with the lists of members for the past five years, with the inference that some priority was given to the past years’ members.
  8. [23]
    Two observations follow.  One is that such an approach may have favoured the suggested old members’ faction of the respondent’s members.  The other is that such an approach would necessarily exclude or disadvantage genuine applicants for membership who had not previously applied including those who were too young to have applied before 2021.
  9. [24]
    Another possibly concerning aspect of the record in the minutes is the statement that the management committee applied what it called the fairness principle.  What that connotes is not explained, but contextually it appears after the reference to the approach suggesting preference for members of the last five years. More broadly, it appears after the minutes record the management committee’s dissatisfaction with some applications for membership being objected to as being received too late on or about 28 March 2021.
  10. [25]
    The applicants’ case is that the decisions of the management committee to reject the applications that I have called the identified applications are invalid and void.  A number of bases were advanced to support that submission.
  11. [26]
    The vice-president of the respondent says that there are two factions within the Sikh community and the respondent.  One faction is associated with the current members of the management committee, excluding him and one other, and tends to be the older families that have been involved with the respondent for a lengthy period of time and were involved in the original fundraising for the temple.  I will call that the “older members’ faction”.  The other faction consists of newer members and their families who have joined the respondent over the last decade or so.  I will call that the “newer members’ faction”. A number of other deponents also refer to these factions.  I note some of the applicants’ witnesses recognise the factions but are in a camp of neutrals as between the factions.
  12. [27]
    The primary case raised by the applicants’ material is that the management committee has selected applications for membership for admittance so as to prefer those from the older members’ faction.  I will call that the “bad-faith ground”.
  13. [28]
    The applicants submit that the respondent has breached the rules of natural justice in deciding to reject the identified applications for membership and possibly other applications for membership.  Section 71(3) of the Act expressly provides that an incorporated association shall be bound by the rules of natural justice in adjudicating on the rights of its members conferred by the rules of the association on its members.  Gould v Isis Club Inc[1] was a case where a management committee purported to terminate the membership of a member for allegedly unsatisfactory conduct in breach of the right to natural justice by affording a proper hearing.
  14. [29]
    It is unnecessary to decide the point to resolve this application, but at least in the case of applications for 2021 membership by non-members for 2020, it seems to me that the better construction of the Act is that s 71(3) does not apply to an application for membership.  Nothing particularly suggests that a non-member who applies for membership is a member within the meaning of s 71(3).
  15. [30]
    However, that is not fatal to the application.  The rights, assets and liabilities of an unincorporated association become those of the incorporated association on incorporation.[2].  The management committee has the power to control the business and operations of the incorporated association.[3]  The management committee’s members are elected by the members of the incorporated association at a general meeting, unless appointed to fill a casual vacancy.[4].  The rules of the association constitute terms of a contract between the members from time to time and the incorporated association.[5]
  16. [31]
    Although there are differences that must be kept in mind, there is an analogy between the functions of a management committee elected or appointed under Pt 7 of the Act and a board of directors of a company and between the powers of a board of directors of a company and those of a management committee.  In the context of the powers of a board of directors, it is axiomatic that the directors of a company are fiduciary agents and a power conferred on them cannot be exercised in order to obtain some private advantage or for any purpose foreign to the power.[6]
  17. [32]
    That includes a power to issue shares that makes someone a member, so as to destroy or create a majority of voting power at a general meeting, which, as a general rule, is impermissible.[7]
  18. [33]
    In my view, the powers of a management committee to admit annual membership applications under the rules of the respondent as an incorporated association are subject to the same legal principles, or at least that is strongly arguable.  This conclusion is supported by the principle of company law that has also been applied under comparative incorporated legislation for associations that the powers of the management committee must be exercised bona fide and for the benefit of the incorporated association as a whole and having regard to the rules.[8]
  19. [34]
    It follows that if the applicants can establish that the management committee exercised its powers to admit or reject the identified applications for 2021 membership of the respondent by preferring the applications of and of those associated with the older members’ faction, so as to create a majority of voting power at the general meeting to elect the next management committee, that would be for an impermissible purpose and invalidate the rejection of the applications that were rejected for that purpose.
  20. [35]
    The applicants alternatively submit that the management committee exercised the power to reject applications for membership by applying an informal cap or reduction in the number of applications to be admitted, contrary to the express provisions of the rules of the respondent contained in its constitution in rules 4(2) and 5(6) that the number of members shall be unlimited.  The applicants submit that to do so was a failure to take into account a relevant consideration and to apply an informal cap or restriction on the number of applications to be admitted was a failure to observe the rules of the association.
  21. [36]
    I note that section 72(1) of the Act empowers the Court on the application of a member to make an order including an interim order giving directions for the observance of the rules of the incorporated association by any person under an obligation to perform the rules.  In my view, the management committee as the body given the function under rule 8 of the constitution of the respondent of admitting or rejecting applications for membership is bound to comply with rules 4(2) and 5(6) and a failure or refusal to do so may invalidate its decision to reject an application for membership.
  22. [37]
    The applicants submit in the further alternative that, even if no informal cap was applied, to take into account in rejecting applications for membership those who had not been members for or over the past five years discriminated against or excluded those who had not applied to be members in that period, including those who, because of age, were not qualified to be members then, but were 18 years of age in 2021, in a way that failed to observe the definition of the qualification to be an ordinary member in rule 5(1)(a) and the express provisions that the number of members is to be unlimited under rules 4(2) and 5(6).
  23. [38]
    I will call these arguments the unlimited number of members grounds.
  24. [39]
    I note that it will not be necessary to consider further that the applicants submit that the management committee’s decisions to reject the identified applications for membership and other rejected applications were also invalidated because the so-called fairness principle was an irrelevant factor to take into account.
  25. [40]
    The respondent submits that the management committee was concerned to ensure that only those genuinely interested in the respondent would become its members and considered each membership application, whether the applicants were past members and how long the applicants were members, if their applications were to renew their membership and that the committee was conscious that the temple did not have the capacity for more than 893 people and of the effects of the ongoing COVID-19 pandemic.  The respondent submits that accordingly the respondent had a proper basis to carefully consider the voluminous number of applications for membership and properly considered each of the applications.
  26. [41]
    An interlocutory injunction will be granted to preserve the status quo pending the final hearing of the application for final relief if the applicant shows a prima facie case or serious question to be tried, as those concepts were considered in Australian Broadcasting Corporation v O'Neill[9] and having regard to the powers to grant interim orders and other relief under ss 72 and 73 of the Act and s 9 of the Civil Proceedings Act 2011 (Qld).  As well, the balance of convenience must favour the grant of an interlocutory injunction.
  27. [42]
    The respondent submits that the applicant has not shown a prima facie case on a bad-faith ground.  Having regard to the evidence overall at this stage, I do not agree.  It will be a matter of inference, as well as direct evidence, at the final hearing, whether the applicants will be able to prove that the management committee or a majority of those who participated in the challenged decisions acted in bad faith as alleged.  At this stage, it is not even possible to say with particularity who are the admitted members and who are not, but if, as the applicants allege, it is those associated with the older members’ faction who are preferred and admitted, that will raise a possible inference that the management committee acted with that purpose in making its decisions.
  28. [43]
    There are other aspects of the evidence that raise the relevant concern.  I have mentioned the members’ request for a special general meeting to consider the election of the management committee that was ignored and the apparent obstruction of the members who requested to inspect the register of members.  Another example is that one of the applicants’ witnesses, who is a member of the management committee, who was given only a few days’ notice of the meeting on 30 August 2021, that he was unable to attend, says that before that meeting the management committee had not considered the applications for 2021 membership.
  29. [44]
    In my view, however, a powerful fact in support of the alleged bad-faith case is that the management committee without any apparent prior indication or reason or occasion to do so appeared to obtain or decided to utilise an opinion as to the maximum numbers of people who can use the facilities of the respondent as a factor in how many applications for membership should be admitted and how many should be rejected, directly contrary to rules 4(2) and 5(6).
  30. [45]
    It is important to keep in mind that it is not the function of the Court at this stage to decide whether or not the management committee acted in bad faith, nor would it be appropriate to do so.  The question is simply whether a prima facie case or serious question to be tried of that case sufficient to warrant a final hearing is established by the applicant.  That is the only finding I make.
  31. [46]
    Alternatively, in my view, the applicant has established a prima facie or serious question to be tried that the management committee improperly and invalidly exercised the power to reject the identified applications for membership on the unlimited number of members grounds because it failed to have regard to or take into account and failed to observe rules 4(2) and 5(6) in rejecting those applications.
  32. [47]
    As to the balance of convenience, the respondent submits that an interlocutory injunction should not be granted because there will be delay in completing the business of the annual general meeting so far as the election of the management committee is concerned,  that there will be additional costs of reconvening the meeting in the vicinity of $9000,  that the rules of the respondent provide for an appeal process for a rejection of membership that has not yet been availed of and that the Courts are reluctant to become involved in deciding who should be a member.
  33. [48]
    As to delay, the annual general meeting scheduled for tomorrow is already delayed beyond two months from the end of its financial year at the end of March 2021 provided for in the respondent’s rules and is almost at the six month limit for the meeting provided in the Act.  However, there is no significant disadvantage, beyond the desirability of having the 2021 management committee resolved as soon as possible, in delaying consideration of the election of that committee until after the very real question as to who should be a member entitled to vote on that election is resolved.
  34. [49]
    As to the costs that will be incurred, the applicants have offered the usual undertaking as to damages, which will or should cover them.
  35. [50]
    As to the rules providing for appeal, there is no prospect of the appeal procedure resolving the outstanding membership questions in time for the election of the management committee.  Further, at least 750 possible appellants have not yet been notified that their applications for membership have been rejected.  As well, the appeal process is not an exclusive or preferred process that undermines the Court’s powers under ss 72 and 73 of the Act in a case where the appeal process will not adequately deal with the issues as to observance of the rules that are raised.
  36. [51]
    As to the Court’s reluctance to involve itself in membership decisions, the applicants do not seek to place the Court in the place of the management committee in making the decision whether to admit or reject a particular member.  The application is confined to relief that would set aside the decisions to reject the applications for membership by the management committee as invalidly made and requiring a reconsideration of the relevant applications by the management committee according to law.  There is no reason why the Court ought to be reluctant to decide upon those questions or to grant an interlocutory injunction to preserve the status quo, so that they can be decided.

Footnotes

[1] [2016] 1 Qd R 363.

[2] Associations Incorporation Act 1981 (Qld), ss 22 and 23.

[3] Associations Incorporation Act 1981 (Qld), s 60(1)

[4] Associations Incorporation Act 1981 (Qld), s 62.

[5] Associations Incorporation Act 1981 (Qld), s 71(1).

[6] Mills v Mills (1938) 60 CLR 150, 185.

[7] Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285, 289-290.

[8] Millar v Houghton Table Tennis & Sports Club Inc [2003] SASC 1; Pettit v South Australian Harness Racing Club Inc [2006] SASC 306; Moromilov v Dragicevic [2013] ACTSC 91.

[9] (2006) 227 CLR 57, 81 – 84.

Close

Editorial Notes

  • Published Case Name:

    Singh & Ors v Brisbane Sikh Temple (Gurdwara) Inc

  • Shortened Case Name:

    Singh v Brisbane Sikh Temple (Gurdwara) Inc

  • MNC:

    [2021] QSC 290

  • Court:

    QSC

  • Judge(s):

    Jackson J

  • Date:

    24 Sep 2021

  • White Star Case:

    Yes

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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