Plaintiff Challenges Termination of his Membership

Morris v Victorian Farmers Federation [2022] VSC 407 (19 July 2022)

The plaintiff challenged the decision of the defendant to terminate his membership. The plaintiff asserts that there was inadequate particularisation of impugned conduct. The Court, in resolving this dispute, relied upon Corporations Act 2001 (Cth).

Facts:

The plaintiff, Ian Morris, challenged the decision of the defendant, the Victorian Farmers Federation (‘VFF’), to terminate his membership. The VFF is an Australian public company, incorporated under the Corporations Act 2001 (Cth), and limited by guarantee. Various commodity groups operate under its auspices that are dedicated to issues affecting the interests of a particular form of primary production or products. This includes United Dairyfarmers Victoria (‘UDV’), of which Mr. Morris is a member.

At the heart of the plaintiff’s case was the complaint that the VFF’s decision, taken by a domestic tribunal in the form of the board, was invalidated by procedural unfairness. Since July 2015, Mr. Morris has been a member of the VFF, and the UDV within the VFF.  He was the Secretary of the Corangamite Branch of the UDV and a recent member of the Colac Branch. Ms. Germano encountered Mr. Morris at a VFF AGM and VFF Grains Conference on 24 February 2020 when she attended a meeting at which he was present. 

She described his conduct as unnecessarily disparaging of individuals on the policy council and aggressive and critical of the governance of the UDV policy council. Board meeting minutes dated 30 June 2020 record a verbal update from a grievance panel constituted to investigate allegations against Mr. Morris, among others. Mr. Morris claimed that the minutes of the grievance panel meeting was inaccurate. He said that he did not appreciate at the time that it was a grievance panel meeting and that the meeting of 25 June 2020 did not involve members being reprimanded for any behaviour.  

However, on 8 July 2020, the VFF wrote to Mr. Morris notifying him of the outcome of the grievance panel.  The letter said: "The VFF Board met Monday 29 June 2020 and after due consideration, the VFF Board resolved to issue you with a formal warning, and in so doing, advise you that any further breaches of the VFF Member Code of Conduct may result in the termination of your membership with the Victorian Farmers Federation." The board resolved that it was satisfied the allegations against Mr. Morris were accurate and that his conduct was sufficient to warrant the board terminating his membership.  

Issue:

Whether or not the VFF validly exercised its power to terminate Mr. Morris’s membership under cl 4.8 of the VFF Constitution (‘Constitution’).

Applicable law:

Constitution cl 4.8 - provides that the membership of a Member will be terminated and the Member’s name removed from the register of Members at the sole discretion of the Board if the Member.

Constitution cl 10.3.4 - provides that a notice of a meeting of directors must be given in accordance with the Corporations Act.

Corporations Act 2001 (Cth) s 1322(3) - provides that ‘a meeting notice of which is required to be given in accordance with the provisions of this Act, or any proceeding at such meeting, is not invalidated only because of the accidental omission to give notice of the meeting or the non-receipt by any person of notice of the meeting, unless the Court, on the application of the person concerned, a person entitled to attend the meeting or ASIC, declares proceedings at the meeting to be void.’ 

Commonwealth v Verwayen (1990) 170 CLR 394 - election, estoppel and waiver are cognate concepts: each relates to the sterilisation of a legal right otherwise than by contract. 

Wiseman v Borneman [1971] AC 297, 309 - where the question is whether in the particular circumstances of the case, the tribunal acted unfairly so that it could be said that their procedure did not match with what justice demanded. 

Analysis:

In the 16 February 2022 letter, the VFF said, ‘at VFF/UDV meetings, including on or around 13 December 2021, 16 December 2021 and 17 December 2021, acting in an aggressive manner towards other VFF members, failed to allow other people to be heard in such meetings, pursued an individual agenda at meetings and verbally attacked other VFF members and their views at such meetings.’  The board did not dispute Mr. Morris’s response that he did not attend any meetings on 16 and 17 December 2021.  What Mr. Morris did at the 13 December meeting remained unparticularised, stated only at that time in broad terms.

Because the prior warning, as an allegation, was limited in this way, and only the 13 December 2021 meeting was referred to, these incidents could not have comprised the ‘pattern’ of conduct supporting the board’s termination decision. On multiple occasions, Mr. Morris in correspondence invited the board to particularise the ongoing and repeated occasions of breach of the Code to properly understand the allegations against him.

It continued to make generalised references in its 16 February 2022 letter, to ‘VFF/UDV meetings’, indicating the scope of the relevant impugned conduct was broader. Mr. Morris, in the particular circumstances of this case, was not in a position to properly defend himself against the accusations that led to the termination of his membership because he did not have proper details of them. 

Conclusion:

The defendant’s decision and resolution of 1 April 2022 terminating the plaintiff’s membership is invalid and of no force and effect.