Wolfe v Sydney Bush Walkers Inc

1. [1]

   This case is an unhappy example of a falling out between members of a recreational club that has led, quite unnecessarily, to legal processes out of all proportion to the issues at hand.

2. [2]

   The Sydney Bush Walking Club was established in 1927 for the purpose of promoting bush walking, social activity amongst its members and a regard for the preservation of wildlife and “the great outdoors” in Australia.

3. [3]

   The defendant, Sydney Bush Walkers Inc, is the successor to the Sydney Bush Walking Club. It is an association incorporated pursuant to the Associations Incorporation Act 2009 (NSW). I shall refer to it at as “the Club”.

4. [4]

   The plaintiff, Mr Ian Wolfe, became a member of the Club in 1978. In 2011 and 2012 he was the president of the Club.

5. [5]

   On 10 January 2018 a meeting of the Club’s members purported to expel Mr Wolfe from the Club. There is a dispute as to whether that purported expulsion had legal effect.

6. [6]

   Mr Wolfe seeks an order pursuant to s 11(3)(b) of the Commercial Arbitration Act 2010 (NSW) that a different dispute be referred to arbitration.

7. [7]

   That dispute does not relate to any act or omission affecting his rights as a member of the Club. Rather it relates to whether Mr Wolfe’s successor as president, Mr Leigh McClintock, was afforded the time specified in the Club’s constitution to make submissions in reply to a complaint made by Mr Wolfe. That complaint related to the manner in which Mr McClintock dealt with a complaint made by yet another member of the Club, Mr Kenn Clacher, that his work had been plagiarised by a further member of the Club (not Mr Wolfe) in a book recording the Club’s history. As best as I can understand the terms of Mr Wolfe’s complaint, it relates to the terms of an apology (“the Apology”) that Mr McClintock recommended the Club make to Mr Clacher. The Club made the Apology in its February 2014 newsletter. I set it out below (at [40]).

8. [8]

   In that regard, Mr Wolfe relies upon cl 10 of the Club’s constitution, which provides:

9. [9]

   In his List Statement, Mr Wolfe alleges:

Decision

1. [10]

   The dispute agitated by Mr Wolfe on 14 February 2014 is not “the Dispute” now sought to be referred to arbitration.

2. [11]

   The dispute sought to be referred to arbitration concerns procedural rights that have been waived by the party to whose benefit they accrued.

3. [12]

   In any event, the Dispute is not a “dispute” within the meaning of cl 10(1) of the Club’s constitution. It is not capable of reference to arbitration.

4. [13]

   The proceedings should be dismissed with costs.

Circumstances leading to the Dispute

1. [14]

   Whilst Mr Wolfe was president in 2011, the Club’s committee commissioned a Club history to be written by a number of members, including Mr Clacher. The book was to be entitled “The Intervening Years”. It was a successor to an earlier book published in 1987 entitled “The First Sixty Years”.

2. [15]

   Mr Wolfe deposes:

3. [16]

   The nature of Mr Clacher’s complaint is revealed by the following statement of Mr McClintock at a meeting of the Club’s committee on 15 January 2014:

4. [17]

   In his affidavit, Mr McClintock said:

5. [18]

   Later in 2013 Mr McClintock negotiated the terms of the Apology with Mr Clacher. Mr Clacher was prepared to accept the Apology to resolve the issue of the alleged plagiarism of his work.

6. [19]

   Mr McClintock said that:

7. [20]

   On 15 January 2014, the Club’s committee resolved to approve the Apology wording and to publish the Apology in the Club’s February 2014 newsletter.

8. [21]

   On 30 January 2014 Mr Wolfe sent an email to the secretary of the Club entitled:

9. [22]

   This is “the Complaint” referred to in Mr Wolfe’s List Statement. It is hard to follow but is expressed in these terms:

10. [23]

    According to the List Statement, the complaint was made pursuant to s 11(1)(b) of the Club’s constitution.

11. [24]

    Clause 11 of the constitution provides:

12. [25]

    The Club’s committee dealt with Mr Wolfe’s 30 January 2014 complaint at a meeting on 5 February 2014.

13. [26]

    The committee did not formally serve notice of Mr Wolfe’s complaint on Mr McClintock, nor give him 14 days to make submissions in response, as required by cl 11(3) of the constitution.

14. [27]

    However, this was of no concern to Mr McClintock. He knew of the complaint. He was present at the 5 February 2014 meeting.

15. [28]

    According to Mr John Flint, a committee member, Mr McClintock said:

16. [29]

    In his affidavit Mr McClintock said:

17. [30]

    By reason of s 26 of the Associations Incorporation Act, the Club’s constitution binds its members “to the same extent as if it were a contract between them under which they agree to observe its provisions”.

18. [31]

    Accordingly, the constitution must be construed “as if it were a contract”. If a provision in the constitution is for the benefit of a particular member, compliance with it can be waived by that member (for example in N C Seddon, R Bigwood and M P Ellinghaus, Cheshire & Fifoot: Law of Contract (10th ed, 2012) at 20.13).

19. [32]

    The requirements of cl 11(3) of the constitution are for the benefit of the member who is the subject of a complaint. It provides that the committee must give that member notice of the complaint and 14 days in which to make submissions to the committee. The clause does not provide the person making the complaint with any benefit.

20. [33]

    In the circumstances, the clause provides benefits to Mr McClintock which he could waive it he wanted to.

21. [34]

    It is clear that Mr McClintock had notice of the complaint.

22. [35]

    The evidence of Mr Flint and Mr McClintock makes clear that Mr McClintock did waive compliance by the committee of its obligation under cl 10(3)(b) to give him formal notice of Mr Wolfe’s complaint and 14 days to make submissions in respect of it.

23. [36]

    The committee considered Mr Wolfe’s complaint. Mr McClintock left the meeting for this part of the committee’s deliberations.

24. [37]

    The committee considered whether Mr Wolfe’s complaint established that “the President’s actions had been ‘prejudicial’ to the interests to the association [for the purposes of cl 11(1)(b) of the constitution] in negotiating a public apology to Ken Clacher and others”.

25. [38]

    The committee concluded there were no grounds for Mr Wolfe’s complaint.

26. [39]

    The minutes record:

27. [40]

    The Club published the Apology in its 2014 February newsletter. It read:

28. [41]

    That led Mr Wolfe to lodge the “formal Dispute with the 2013 committee in relation to the Contravention” referred to in his List Statement.

29. [42]

    Again, Mr Wolfe’s email is hard to follow but was in the following terms:

30. [43]

    The first part of the complaint (pars (a) a to e) comprised allegations against Mr McClintock that he defamed Mr Wolfe, provided misleading information to the committee and abused his position as president.

31. [44]

    The second part of the complaint (pars (b) a and b) was directed against the Committee. It alleged that the Committee had not, or perhaps would not, hear Mr Wolfe’s 30 January 2014 complaint. It also alleged the “text of the statement” (presumably the Apology) was misleading.

32. [45]

    However Mr Wolfe did not agitate what he now contends to be the failure of the Club’s committee to “conduct the mandatory constitutional step” of giving Mr McClintock notice of Mr Wolfe’s complaint of 30 January 2014 and 14 days to make submissions about it.

33. [46]

    On 5 September 2017 Mr Wolfe’s solicitors wrote to the Club:

34. [47]

    That letter misapprehends the dispute Mr Wolfe agitated in his 14 February 2014 email. It may be what Mr Wolfe had in mind. But what is now sought is reference to arbitration of the dispute Mr Wolfe in fact made on 14 February 2014; not a dispute he then meant to raise; and not one his lawyers later understood to have arisen from his 14 February 2014 email.

35. [48]

    For those reasons alone, the proceedings should be dismissed.

The proper construction of cl 10

1. [49]

   The matter can also be resolved by reference to the proper construction of cl 10 of the Club’s constitution.

2. [50]

   Clause 10 refers to “a dispute” between a member of the Club with another member or between a member (or members) and the Club itself.

3. [51]

   The constitution does not define what “a dispute” is.

4. [52]

   But a reasonable person in the position of the Club or its members would not think that any dispute, no matter how trivial or how remote from the complainant’s interests, could be dealt with under cl 10.

5. [53]

   As Mr Carolan, who appeared for the Club, pointed out, cl 13 of the constitution entrusts the control and management of the affairs of the Club to its committee.

6. [54]

   If any decision or act of the committee could be referred to mediation, and arbitration if necessary, the capacity of the committee to “control and manage the affairs of the” Club would be hamstrung.

7. [55]

   To take an extreme example, could it be supposed that if the committee proposed there be a Club picnic on a particular day, that a member who disagreed with the allocated day could “dispute” the committee’s decision and invoke the mechanism of cl 10 to have the matter referred to mediation and then, if the matter could not be resolved at mediation, to arbitration? Surely not.

8. [56]

   In my opinion, Mr Carolan was correct to submit that, in its context, the word “dispute” in cl 10 should be read as meaning a dispute which impinges, in a real and practical way, on the interests of the disputant, as a member of the Club.

9. [57]

   Any failure by the committee to give Mr McClintock notice and adequate time to respond did not impinge on Mr Wolfe’s interests as a Club member. The only rights impinged on would have been those of Mr McClintock. And he waived them.

10. [58]

    The fact that the committee dismissed Mr Wolfe’s complaint takes the matter no further.

Did the Club admit there is a “dispute”?

1. [59]

   For some time, the Club acted as if it understood that the dispute raised in Mr Wolfe’s 14 February 2014 email should be dealt with under cl 10 of the constitution.

2. [60]

   Thus on 1 July 2016 Mr Wolfe and representatives of the Club attended a mediation at a Community Justice Centre, as contemplated by cl 10(1) of the constitution. The matter did not settle at the mediation.

3. [61]

   Later on 9 November 2016 Mr Flint who was then the president of the Club, wrote to Mr Wolfe saying that the Club’s committee had resolved “to finalise this matter through arbitration” and accepted Mr Wolfe’s earlier suggestion that Mr Steve Lancken be appointed as the arbitrator.

4. [62]

   The following year on 12 July 2017 the solicitor for the Club wrote to Mr Wolfe’s solicitors saying that:

5. [63]

   On 21 September 2017 Mr Robert Carter, then the vice president of the Club, responded:

6. [64]

   On 8 October 2017 Mr Lancken, the proposed arbitrator, wrote to Mr Wolfe and Mr Carter seeking to appoint a time for preliminary hearing. Mr Lancken said:

7. [65]

   That the meeting did not take place. A short time later, on 28 November 2017, Mr Wolfe commenced these proceedings.

8. [66]

   Mr Byrne, who appeared for Mr Wolfe, submits that the Club’s agreement to “proceed to Arbitration” amounted to an admission by the Club that there was a “dispute” between Mr Wolfe and the Club for the purposes of cl 10 of the Club’s constitution.

9. [67]

   I do not accept that submission. The question of whether what Mr Wolfe agitated in his 14 February 2014 email is a “dispute” for the purposes of cl 10 of the constitution is a question of law involving the construction both of his email and of the constitution. I do not consider that the Club’s conduct amounts to an admission in relation to those matters.

10. [68]

    Mr Byrne did not submit that any question of waiver arose by reason of the Club’s conduct.

The significance of the purported expulsion of Mr Wolfe

1. [69]

   In view of these conclusions, it is not necessary for me to consider whether, as the Club contends, a separate reason for dismissing Mr Wolfe’s claim is that he no longer has standing to raise a dispute under cl 10 of the constitution by reason of the fact that he is no longer a member of the Club.

2. [70]

   That question would require consideration of, first, the proper construction of cl 5 of the constitution. That clause provides that, relevantly, a right that a person has by reason of being a member of the Club “terminates on cessation of the person’s membership”. The issue is whether the effect of that clause is to deprive a Club member of a right that has accrued prior to cessation of that person’s membership: see McDonald v Dennys Lascelles Ltd [1933] HCA 25; (1933) 48 CLR 457 at 477.

3. [71]

   The question would also require consideration of the doctrine of “separability” or “severability” whereby arbitration clauses are considered to be agreements independent from the main contract (for example, Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192; (2006) 157 FCR 45 at 219(ff) (Allsop J) and s 16(2) of the Commercial Arbitration Act 2010).

4. [72]

   The question would also invite consideration of the question of whether or not Mr Wolfe has been validly expelled from the Club. Mr Wolfe contends that the resolution of the general meeting of members of Club to expel him was not valid because the notice sent to members of the general meeting did not comply with the requirements of the constitution.

5. [73]

   The fact that argument ranged so widely reflects the extent to which perspective has been lost in these proceedings.

Conclusion

1. [74]

   For those reasons my conclusions are as I have set out at [10] to [12] above.

2. [75]

   The proceedings should be dismissed with costs.