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Applications for Memberships in Sikh Temple Rejected by Respondent
Singh & Ors v Brisbane Sikh Temple (Gurdwara) Inc [2022] QSC 17 (25 February 2022)
The respondent operates a Sikh temple and conducts an annual membership drive. Any application from an applicant who was not a member in the previous five years was rejected by the respondent. The Court, in determining whether the respondent exercised the power to reject applications for an improper purpose, relied upon the Associations Incorporation Act 1981.
Facts:
The respondent (“the Temple”) is an incorporated association under the Associations Incorporation Act 1981 (Qld) (“the Act”). The applicants are ordinary members of the Temple. The constitution of the Temple was registered on 19 March 2013 (“the Constitution”). In March 2021, the Temple undertook a membership drive and invited applications for ordinary membership for the period 1 April 2021 to 31 March 2022.
The number of applications received totalled 3156. On 30 August 2021, the Temple (acting through its management committee) accepted 1005 of the applications and rejected the remaining 2151 applications. The applicants commenced this proceeding seeking declaratory relief to the effect that the Temple contravened the Constitution when deciding to reject the applications. At the time the proceedings were commenced, an annual general meeting of the Temple was scheduled for 12 noon on 25 September 2021 concerning the election of the management committee for the next two years.
Pursuant to the Constitution, a financial ordinary member is entitled to vote in the election of the management committee. On 23 September 2021, Jackson J heard an urgent application for interlocutory orders restraining the Temple from considering or resolving upon the election of the management committee at the annual general meeting. On 24 September 2021, His Honour granted an interlocutory injunction which preserved the status quo. At the time of the interlocutory application, the primary case raised by the applicants’ material involved the contention that the management committee had considered the applications for membership in bad faith by giving preference to one of two factions said to exist within the Sikh community.
The number of registered applications, 3156, was regarded by the management committee as being a very large number. Mr Hardev Singh, a member of the management committee, became concerned about the safe capacity of the Temple premises from a fire and COVID-19 perspective. The respondent applied a “fairness principle” criteria to assess the applications, whereby any application from an applicant who was not a member in the previous five years was rejected.
Issue:
Whether or not the respondent exercised the power to reject applications for an improper purpose.
Applicable law:
Associations Incorporation Act 1981 (Qld) - requires an incorporated association to have a management committee and the business and operations of the incorporated association are to be controlled by the management committee.
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; [1973] HCA 36 - provided that the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another.
Allen v Townsend [1977] FCA 10; (1977) 16 ALR 301 - Evatt and Northrop JJ referred to the similarities between industrial organisations of employees and companies in terms which might equally be applied in relation to associations incorporated under the Act.
Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53 - provided that it is trite law that an instrument must be construed as a whole. Indeed it is the only method by which inconsistencies of expression may be reconciled and it is in this natural and common sense approach to problems of construction that justification is to be found for the rejection of repugnant words, the transposition of words and the supplying of omitted words.
Harlowe’s Nominees Pty Ltd v Woodside (Lake’s Entrance) Oil Co NL (1968) 121 CLR 483; [1968] HCA 37 - provided that an exercise of the power cannot be maintained as having been bona fide in the interests of the company unless the company had at the time of the exercise an immediate need of the capital to be paid up on the new shares.
HNA Irish Nominee Ltd v Kinghorn (2010) 78 ACSR 553; [2010] FCAFC 57 - provided that in giving a commercial contract a business like interpretation, it is necessary to consider the language used by the parties, the circumstances addressed by the contract and the objects that it is intended to secure.
Howard Smith Ltd v Ampol Petroleum Ltd [1974] UKPC 3; [1974] AC 821 - provided that the shares shall be under the control of the directors, who may allot or otherwise dispose of the same to such persons on such terms and conditions and either at a premium or otherwise and at such time as the directors may think fit.
Millar v Houghton Table Tennis & Sports Club Inc (2003) LSJS 241; 2003 SASC 1 - where the first question is whether the applicants are, in fact, members by virtue of the lodging of the application forms.
Mills v Mills (1938) 60 CLR 150; [1938] HCA 4 - provides that the application of the general equitable principle as to the acts of directors managing the affairs of a company cannot be as nice as it is in the case of a trustee exercising a special power of appointment.
Pettit v South Australian Harness Racing Club Inc [2006] SASC 306 - provides that the constitution of an association binds the association and all of its members.
Pine Rivers, Caboolture & Redcliffe Group Training Scheme Inc v Group Training Association Queensland & Northern Territory Inc [2015] 1 Qd R 542; [2013] QCA 358 - Fraser JA (with whom McMurdo P and Atkinson J agreed) noted that pursuant to the Act a management committee is charged with the control of an incorporated association’s business and operations and is deemed to be the agent of the incorporated association for all purposes within its objects.
Stratford Racing Club Inc v Adlam [2008] NZCA 92; [2008] NZAR 329 - where the committee of the Stratford Racing Club Inc relevantly contended that it had a complete discretion as to whom to accept as members.
Analysis:
The decision to apply the criteria to limit membership appears to have been motivated by safety concerns connected with the number of “occupants” that could be safely allowed at the Temple’s premises at any given time. There can be no doubt that the management committee needs to give careful consideration to regulating the number of people it can safely allow, at any given time, to visit or occupy the Temple’s premises. That is all part and parcel of the management committee’s power to generally control and manage the administration of the property of the Temple. However, the management of visitation and occupancy is separate and distinct from any consideration as to whether a person should be rejected from membership of the Temple in accordance with the Constitution.
In terms of express, substantive rights, membership of this incorporated association essentially conferred voting and nomination rights. Visitation and occupancy rights were not expressly attached to or an indicia of membership. The Constitution did not countenance the physical size and safe occupancy limits of the Temple building or buildings as they exist from time to time, operating as a constraint or limitation upon the number of persons who should be admitted to ordinary membership of the Temple.
Conclusion:
Pursuant to s 72 of the Associations Incorporation Act 1981 (Qld), it is declared that the management committee’s decision as contained in the minutes of the management committee dated 30 August 2021 to reject 2151 applications for membership is void and of no effect. Pursuant to s 73 of the Associations Incorporation Act 1981 (Qld), the management committee is directed to consider the rejected applications in accordance with the Constitution and according to law.
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