For thousands of years wars have been fought over religious beliefs, so it should be of little surprise that in two local incorporated associations in Western Australia differences of belief between members have recently found their way into the Supreme Court. These matters have highlighted issues about whether the Constitution is a contractually enforceable document and the lengths members of non-profit voluntary associations will go to in what they consider to be the interests of the associations and their members.
In the case of Raja v Darul-Iman (WA) Incorporated [No 2] WASCA 251, delivered 14 June 2012, proceedings originally commenced in 2005 with 2 groups of members of a Muslim association purporting to control the association by virtue of different meetings allegedly appointing them. Each attempted to instruct solicitors to commence action for specific performance of a contract for sale of land. On one hand an appeal was commenced against the Master's finding that despite a want of authority of some members, there were no grounds for staying the action.
The Court of Appeal allowed the appeal and noted that an action, though brought without authority, was not a nullity in the sense that it was void ab initio without the possibility of subsequent ratification, which could be obtained relating back to the institution of the action. The Court of Appeal stayed the action pending determination of the substantive matter of membership and current office bearers. Mr Bin Omar then commenced a fresh action, in an alleged representative capacity, seeking declarations as to membership and the office bearers. In the meantime, the costs of the original proceedings and the appeal were reserved pending determination of those declarations despite it being submitted that the solicitors for the party commencing without authority should personally bear the costs.
In the case of Bagga v The Sikh Association of Western Australia [2012] WASC 193, delivered 12 June 2012, 8 members of the Association sought to overturn the effect of certain decisions of the Executive Committee. Justice Le Miere was required to consider whether the Association's constitution was a legally enforceable contract between members capable of enforcement through the Court, and if so, whether the requisition initiated by the plaintiffs calling upon the Committee to call a Special General Meeting of members was valid. The Association itself was incorporated under the Associations Incorporation Act (WA), which differs from equivalent statutes in other states in that the Act itself does not specify that the Constitution constitutes a binding contract between members.
Justice Le Miere instead had to consider various cases and the circumstances of the Association, finding that there was an intention for the constitution to be contractually binding and enforceable through the Court. However, His Honour then considered the requisition in the context of the constitution, finding that the members in general meeting lacked authority to pass the 4 special resolutions proposed, including for the removal of the Committee and a resolution which attempted to overturn the Committee's decision to appoint a new priest upon the expiration of the current priest's contract of employment.
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