Thompson v Cavalier King Charles Spaniel Rescue (Qld) Inc

The plaintiff’s membership of the respondent had been terminated. Not content with the appeal process under the rules of the Association, he instead brought this proceeding seeking damages for a breach of an alleged Member/Member contract he argued was necessarily implied by operation of s 71 Associations Incorporation Act 1981. Justice Jackson found that there was no basis at law for the plaintiff’s claim and gave summary judgment for a defendant on that claim. Further, his Honour permanently stayed the proceeding against the association pursuant to s 73 Associations Incorporation Act 1981, because of the plaintiff’s unreasonable conduct.

Jackson J

9 May 2022

Background

The plaintiff is a self-represented former member of Cavalier King Charles Spaniel Rescue (Qld) Inc – a charity primarily concerned with the rescue and rehoming of dogs of the Cavalier King Charles Spaniel breed (“the Association”). [8]–[12]. The Association is a small not-for-profit incorporated association under the Associations Incorporation Act 1981 (“the Act”). [10].

In 2011 the Committee of the Association resolved to terminate the plaintiff’s membership. [12]. Subsequently, the plaintiff commenced this proceeding, in which he sought the ‘continuance’ of his membership (on the basis that the resolution terminating his membership was “invalid on a myriad of grounds”) and monetary compensation for a loss of income he previously derived from boarding dogs for the Association. [17]–[20]. The proceeding was brought pursuant to s 72 of the Act, which enables the Supreme Court to make various orders on the application of a member of an incorporated association. [60].

This judgment concerned applications for summary judgment, or orders stopping the proceeding under s 73 of the Act, brought by the third defendant (a member of the Committee that terminated the plaintiff’s membership) and by the Association itself. [1]. Those applications were successful. The claim against the third defendant was summarily dismissed, and the claim against the Association was permanently stayed. [3]. They were the only remaining defendants to the proceeding.

Why there was summary judgment on the contractual damages claim

The plaintiff’s claim against the third defendant was for damages for breach of contract, which he alleged were recoverable as a result of a statutory contract created between members by the Association’s Rules. [34]. In particular, the plaintiff relied on s 71 of the Act, which provides that “[u]pon incorporation the rules of the association shall constitute the terms of a contract between the members from time to time and the incorporated association”. [25]. As summarised by Jackson J, the issue was:

“whether a management committee member purporting to exercise a power of the management committee (in this case the rule empowering the Committee to terminate a member’s membership) along with the other members of that committee is acting in discharge of a contractual obligation as an individual member to each other member of the incorporated association”. [39].

His Honour said he could find no support for such a conclusion. [40]. His Honour also considered the analogous statutory deemed contract under s 140 Corporations Act 2001 (Cth) but found that in that context there was no support for a claim of the kind advanced by the plaintiff. [49].

It followed that the plaintiff did not have a real prospect of success in his claim against the third defendant. [51]. Accordingly, summary judgment for the third defendant was granted under r 293 UCPR. [57].

Why the claim against the Association was permanently stayed

Section 73 of the Act provides that, on an application made under s 72 (which this proceeding was, although started by claim), the Supreme Court may “refuse to entertain such an application” if it is of the opinion that: “the issue raised in the application is trivial”, or “the costs involved, lapse of time, … or any other relevant circumstance” mean “it was unreasonable to make the application”, or “the unreasonable or improper conduct of a party has been responsible for the making of the application or has added to the costs of the proceeding”. [59].

Justice Jackson considered that the power provided by this section should be exercised for a number of reasons. This included because the plaintiff had declined to pursue an internal appeal within the Association, which rendered the making of this application to the court “unreasonable”. [69]. Further, substantial costs had been incurred by the parties, and a significant proportion of those costs had been due to the plaintiff’s unreasonable conduct. [70]. Also, there was some evidence that the plaintiff had a collateral purpose for the proceeding (of vexing the Association). [72]. Lastly, the plaintiff’s claim for damages was relatively trivial (of about $1,300 per annum). [76].

All of these circumstances combined to make it appropriate to use the discretionary power under s 73 of the Act to “make an order … permanently staying the proceeding against the Association”. [80].

W Isdale