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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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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