Australian Federation of Islamic Councils Inc v United Muslims of New South Wales Inc

1. [1]

   BATHURST CJ: These proceedings arise out of disputes between the first appellant, Australian Federation of Islamic Councils Inc (AFIC), and the first respondent, United Muslims of New South Wales Inc (UMNSW), in relation to, broadly speaking, the question of whether UMNSW remains the New South Wales State Council within the meaning of the expression “State Council” in the Constitution of AFIC (the AFIC Constitution) with the consequential rights granted to it in that capacity.

2. [2]

   The questions raised by the proceedings can be summarised as follows.

   1. (1)

      Does UMNSW remain the State Council of New South Wales for the purpose of the AFIC Constitution?

   2. (2)

      Did the resolutions passed at a meeting on 16 January 2021 of what were described as “AFIC NSW member societies” have the effect of removing UMNSW as the State Council and replacing it with a committee, described as the “New Council”, chaired by the second appellant, Abraham Zoabi (Mr Zoabi), the convenor of the meeting?

   3. (3)

      Following the election of Hossam Elrayes (Mr Elrayes) as its president at its Annual General Meeting on 17 January 2021, was UMNSW entitled to nominate Mr Elrayes as the delegate for the State Council of New South Wales on the Federal Council of AFIC?

3. [3]

   The primary judge answered questions (1) and (3) in the affirmative, declaring that UMNSW is the State Council for New South Wales, as defined in cl 3 of the AFIC Constitution, and that Mr Elrayes is the duly appointed delegate for the State Council of New South Wales, as defined in cl 12(1) of the AFIC Constitution.

4. [4]

   AFIC and Mr Zoabi have sought to appeal against these declarations, contending that questions (1) and (3) should be answered in the negative and question (2) answered in the affirmative.

5. [5]

   Three matters can be noted at the outset. First, the second respondent, The Council of Islamic Societies in New South Wales (CIS), was registered as an incorporated association by the committee chaired by Mr Zoabi. However, it was not contended that it replaced UMNSW as the State Council. CIS played no part in the proceedings.

6. [6]

   Second, underlying the issues in the litigation are a number of disputes concerning the corporate governance of each of AFIC and UMNSW. These proceedings, which relate to the construction of the respective constitutions and the validity of resolutions passed at the two meetings to which I have referred above, do not consider, much less resolve, any of these disputes. They are in turn irrelevant to the issues in the appeal.

7. [7]

   Third, UMNSW contends that AFIC requires leave to appeal. Both parties filed detailed written submissions on this issue. It is unnecessary to deal with these submissions. Resolution of the issues the subject of these proceedings is self-evidently of importance to a significant section of the Muslim community in this state. In these circumstances, to the extent that it is necessary, leave should be granted.

The constitutions

1. [8]

   Because resolution of the proceedings turns in large measure on the construction and interaction of AFIC and UMNSW’s respective constitutions, it is convenient to set out the relevant portions of each prior to setting out the factual background relevant to the determination of these proceedings.

2. [9]

   AFIC was incorporated in Tasmania on 14 October 1999 under the Associations Incorporation Act 1964 (Tas) (the Tasmanian Act). Its present constitution was adopted in May 2018.

3. [10]

   The Preamble to the AFIC Constitution summarised the objectives of AFIC. So far as it is relevant, the Preamble is in the following terms:

4. [11]

   There was some debate as to whether State Councils existed before the incorporation of AFIC. It was said to be relevant to the question of whether State Councils could be replaced. It appears from the Preamble that there were State Councils in existence prior to the incorporation of AFIC and indeed, there was a predecessor umbrella federal body. It should be noted, however, that UMNSW was not incorporated until 13 July 2016.

5. [12]

   Clause 3 of the AFIC Constitution contains the following definitions of relevance:

6. [13]

   Clause 5 is of importance and is in the following terms:

7. [14]

   AFIC contended that under the AFIC Constitution UMNSW as a relevant State Council was not required to be a member of AFIC, notwithstanding its description in the AFIC Constitution as a “constituent body”. If this submission was correct, there may be a difficulty in the contention that UMNSW was contractually bound by the AFIC Constitution: see Islamic Council of NSW v The Australian Federation of Islamic Councils [2000] NSWSC 115 at [101]. However, in my opinion, under the AFIC Constitution UMNSW was required to be a member of AFIC as well as being a constituent body in its capacity as a State Council. This is made clear by cl 12(3)(b) of the AFIC Constitution, which provides that where a society is acting as the State Council, it is entitled to be represented by two delegates at any meeting of Federal Congress, one delegate in its capacity as the State Council and one delegate as a member society (this matter is dealt with at [67]ff below).

8. [15]

   The AFIC Constitution makes provision for three tiers of administration and governance. Clause 8 provides that the Federal Congress is the highest policy-making organ, with ultimate responsibility to achieve the objects and purposes of the Federation. Clause 9 vests the general governance and control of the affairs of the Federation in the Federal Council, subject to the AFIC Constitution and resolutions of the Federal Congress, whilst cl 10 provides that the business and affairs of AFIC shall be manned and administered by the Executive Committee in accordance with the Constitution and resolutions of the Federal Congress and the Federal Council.

9. [16]

   Clauses 11 to 13 deal with the Federal Congress. So far as is relevant, they provide as follows:

10. [17]

    Clauses 14 to 16 deal with the Federal Council. Clause 14 provides for its composition while cl 15 sets out its powers and functions. The clauses are in the following terms:

11. [18]

    Clause 17 deals with the composition of the Executive Committee, whilst cl 18 deals with its powers and functions. Of relevance are the following:

12. [19]

    Clause 31 provides that State Councils have the right to nominate candidates for the positions of president, vice-president, secretary and treasurer. Clause 32 deals with election to those positions. It provides that the persons entitled to vote in such elections are the delegates of each State Council and the representative of the Executive Committee as determined pursuant to cl 12(4).

13. [20]

    Clauses 34 to 37 deal with meetings of the Federal Congress. Clause 35 provides that the “annual/Biannual” Congress meeting is to be held not more than four months after the close of the financial year. Clauses 36 and 37 are in the following terms:

14. [21]

    Clause 46 is in the following terms:

15. [22]

    Clause 50(1) deals with membership subscriptions. It provides:

16. [23]

    Clause 57 concerns amendments to the AFIC Constitution. It provides as follows:

17. [24]

    Annexure A to the AFIC Constitution contains what are described as Rules for the Conduct of Islamic Arbitration. Neither party has sought to invoke those provisions.

18. [25]

    It should be noted that the Model Rules for associations incorporated under the Tasmanian Act (the Model Rules) apply to AFIC to the extent they are not inconsistent with the AFIC Constitution (the Tasmanian Act s 16). I will refer to the Model Rules to the extent necessary later in this judgment.

19. [26]

    UMNSW is registered under the Associations Incorporation Act 2009 (NSW) (the NSW Act). Clause 1 of UMNSW’s Constitution (the UMNSW Constitution) states that UMNSW is referred to in that document as the “Muslim Council or UMNSW or the Council or the State Council”.

20. [27]

    Clause 4 describes the objectives of UMNSW. Of relevance are the following:

21. [28]

    Clause 5 deals with membership. It contains the following provisions (there being two paragraphs (v) in the original document, the first appearing after paragraph (iii)):

22. [29]

    Clause 6 deals with management. Relevantly, it provides:

23. [30]

    Clause 7 says that the office bearers shall consist of the chairman, vice chairman, secretary, assistant secretary, treasurer, assistant treasurer and at least five Executive Committee members. It provides for their election every two years at the Annual General Meeting.

24. [31]

    Clauses 12 and 13 deal with special meetings and Annual General Meetings. These meetings are in addition to the meetings of all of the member societies of UMNSW required to be held every two months pursuant to cl 6(i)(c) of the UMNSW Constitution.

25. [32]

    Clause 16 deals with expulsion of members. It is in the following terms:

26. [33]

    Clause 21 concerns amendments to the UMNSW Constitution. It provides that the constitution may be amended by a resolution of AFIC at a general or special meeting and with the approval of the Minister administering the Charitable Collections Act 1934 (NSW).

27. [34]

    Clause 23 deals with dissolution. It provides:

28. [35]

    There are a number of matters which can be noted at this stage. First, it seems clear that UMNSW was incorporated to act as the umbrella society for Islamic societies in this state. Second, there was at least an anticipation that UMNSW would continue in that role until its dissolution. Third, its constitution was evidently drafted to operate coherently with the AFIC Constitution. Notably, it envisages that Islamic societies in New South Wales would be members of each of UMNSW and AFIC.

29. [36]

    To some extent the difficulties in the present case arise from assertions by the parties that there are New South Wales Islamic societies that are members of AFIC but not members of UMNSW, as well as other such societies which are members of UMNSW but not of AFIC.

The background to the current dispute

1. [37]

   As I indicated at the outset, significant disagreements had arisen between the representatives of AFIC and UMNSW concerning the corporate governance and administration of each entity. Abraham Hammoud (Mr Hammoud) and Hicham Zraika (Mr Zraika) had been making enquiries concerning certain financial dealings carried out by the then president of AFIC, Dr Rateb Jneid (Dr Jneid). Mr Hammoud was a member of North Shore Crescent Society Inc which was a New South Wales member society of UMNSW and AFIC. Between 5 May 2018 and 18 May 2020, he was also a member of the Executive Committee of AFIC. Mr Zraika at the time was the chief executive officer of AFIC.

2. [38]

   On 18 May 2020, Mr Hammoud was removed from the Executive Committee of AFIC by Dr Jneid in purported exercise of his power under cl 20(1)(f) of the AFIC Constitution. That provision entitled the president to remove any Executive Committee member with the concurrence of five members of the Executive Committee. There was no issue raised as to the validity of his removal.

3. [39]

   In June 2020, Mr Zraika was removed from his role as chief executive officer of AFIC.

4. [40]

   On 9 November 2020, AFIC wrote to UMNSW asserting that “[a]s a result of AFIC’s member society review,” four officers of UMNSW “may no longer participate in UMNSW affairs”. The reason given was that in the case of three of those officers, their societies’ memberships of AFIC had lapsed whilst in the case of the fourth, his society had never been a member of AFIC. The letter referred to the UMNSW Executive as a “caretaker committee”.

5. [41]

   On 10 November 2020, AFIC informed Talal Elcheikh (Mr Elcheikh) that he may be placed on AFIC’s “register of proscribed individuals”. On 17 December 2020, AFIC purported to add Mr Elcheikh’s name onto “the Register of Proscribed Persons”, stating that the effect was that Mr Elcheikh was barred for five years from holding office in the AFIC structure and attending any AFIC State Council meetings. It was conceded in the Court below that that action was invalid.

6. [42]

   On 15 November 2020, the AFIC Executive Committee held what was described as an emergency meeting. In the course of the meeting, its new chief executive officer, Keysar Trad (Mr Trad), made the following proposal which was recorded in the minutes of that meeting in the following terms:

7. [43]

   On 17 November 2020, the secretary of AFIC, Arun Abdullah (Mr Abdullah), wrote to AFIC and UMNSW member societies in New South Wales. That letter headed “Re Changes at the UMNSW” included the following comments:

8. [44]

   The “member societies” who made the demand under the clauses of the AFIC Constitution are not identified.

9. [45]

   On 4 December 2020, Mr Zoabi sent an email to various Islamic societies in New South Wales in his capacity as “Interim Committee Coordinator” of the “Muslim Council of NSW and AFIC”. It contained the following comments:

10. [46]

    On 10 December 2020, UMNSW gave notice of its Annual General Meeting to be held on 17 January 2021. The “Agenda” stated that the business of the meeting included the “election of office-bearers”. It reminded members of the need to pay their subscriptions as determined by UMNSW and AFIC and to have completed the attached UMNSW membership form. It was not contended that the notice of meeting had not been given to all of the societies on UMNSW’s register of members. Rather, it was said by AFIC that non-AFIC member societies voted at the meeting and that five AFIC member societies (who were not members of UMNSW) had not been given notice of the meeting.

11. [47]

    On 28 December 2020, Mr Zoabi sent the following notice to New South Wales AFIC member societies:

12. [48]

    On the same day, Mr Zoabi wrote separately to Mr Mohamed Charchou (a representative of the Western Sydney Islamic Society) and Mr Hammoud, stating that they were not permitted to participate in AFIC’s affairs and requested details of their respective societies’ committee members so that he could extend them an invitation to the AFIC proposed meeting on 16 January 2021.

13. [49]

    On 4 January 2021, Mr Zoabi wrote to AFIC’s member societies in New South Wales advising:

14. [50]

    On 6 January 2021, the president of AFIC wrote to “delegate[s] of NSW member societ[ies]” as follows:

15. [51]

    On 15 January 2021, UMNSW wrote to the UMNSW member societies reminding them of its Annual General Meeting, criticising AFIC and disputing the validity of the interim committee.

16. [52]

    On 16 January 2021, the meeting convened by Mr Zoabi was held. It appears that 19 societies attended. Of those attending, 10 were not members of UMNSW and of the other nine, only one, the Canterbury Islamic Society, attended the subsequent UMNSW meeting of 17 January 2021.

17. [53]

    The meeting of 16 January 2021 was opened by AFIC’s chief executive officer, Mr Trad, who is recorded as having made the following remarks:

18. [54]

    The minutes of the meeting record that thereafter, the delegates agreed to select a committee to represent them as “the Muslims of NSW”. Mr Zoabi was ultimately the sole nominee for president and was elected. Other office bearers were also elected.

19. [55]

    After that vote took place, the following was recorded in the minutes under the heading “General Business”:

20. [56]

    On 1 February 2021, CIS was registered as an incorporated association under the NSW Act with the name “The Council of Islamic Societies in NSW Incorporated”.

21. [57]

    On 17 January 2021, UMNSW’s Annual General Meeting was held. Seventeen Islamic societies which were member societies of UMNSW attended. Mr Elrayes was unanimously elected as president. The other office bearers were also unanimously elected. It was common ground that nine of the societies which voted were not members of AFIC. It was also accepted that at the time of this meeting there were 25 societies listed on the UMNSW register of member societies.

22. [58]

    On 22 January 2021, UMNSW informed AFIC that Mr Elrayes would be the delegate for the State Council of New South Wales on the Federal Council of AFIC.

23. [59]

    On 11 February 2021, AFIC wrote to the chairs of each of its State Councils stating that it had accepted the appointment of CIS as a State Council and that it had been advised Mr Zoabi was the representative of the State Council for New South Wales, pursuant to cl 12(1) of the AFIC Constitution. As has already been noted, it was not contended in the underlying proceedings, or in this Court, that CIS had in fact been appointed the State Council for New South Wales.

24. [60]

    The underlying proceedings were commenced on 26 February 2021.

The issues in the appeal

1. [61]

   AFIC’s notice of appeal and UMNSW’s notice of contention raise the following issues:

   1. (1)

      Whether the primary judge erred in holding that the AFIC Constitution does not permit the removal or displacement of an existing State Council by AFIC’s member societies for that state electing a new State Council (appeal ground 1).

   2. (2)

      Whether the group of individuals constituting the New Council, purportedly appointed on 16 January 2021, was capable as an unincorporated association of being a State Council under the AFIC Constitution (notice of contention ground 1).

   3. (3)

      Whether the primary judge erred in not finding that at the meeting on 16 January 2021, the AFIC member societies in New South Wales who were present decided that UMNSW should be removed as State Council and replaced by the elected committee of individuals constituting the New Council (appeal ground 2).

   4. (4)

      If UMNSW remained the AFIC State Council for New South Wales, whether Mr Elrayes was duly appointed as its delegate under cl 12(1) of the AFIC Constitution (appeal grounds 3 and 4).

Consideration

1. [62]

   As the answers to the questions raised depend in large measure on the construction of the AFIC Constitution and of the UMNSW Constitution, it is convenient at the outset to say something about the correct approach to that exercise.

2. [63]

   With respect to this subject several matters may be noted.

3. [64]

   First, it does not seem to be disputed that the principles involving the interpretation of commercial contracts apply to the interpretation of the constitutions, although having regard to their public dimension, caution is required in the use of extrinsic material: Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1; [2006] FCAFC 144 at [55]-[56], [124], [239]-[242]; see also National Roads and Motorists’ Association Ltd v Parkin (2004) 60 NSWLR 224; [2004] NSWCA 153 at [81]-[84] and Glencore Coal Assets Australia Pty Ltd v Australian Competition Tribunal (2020) 280 FCR 194; [2020] FCAFC 145 at [90].

4. [65]

   Thus, in considering the UMNSW Constitution it is appropriate to take into account, as part of the context, the provisions of the AFIC Constitution. Although the present AFIC Constitution only came into force in May 2018, subsequent to the incorporation of UMNSW, the AFIC Constitution in force previously was in similar terms.

5. [66]

   Second, it was common ground that the respective constitutions operated as a contract between the associations and their members. In relation to UMNSW, that is given statutory force by s 26(1) of the NSW Act. Although there is no equivalent provision in the Tasmanian Act, it was accepted that the AFIC Constitution was equally binding on AFIC and its members.

6. [67]

   Furthermore, the AFIC Constitution contemplates that UMNSW and each State Council will be a member of AFIC. This is apparent from two matters. First, as I mentioned earlier, cl 12(3)(b) of the AFIC Constitution provides that a State Council can have two representatives at Federal Congress meetings, one by virtue of it being the State Council and the other by virtue of it being a member society of AFIC. Consistently with cl 12(3)(b), cl 46 provides that at meetings of Federal Congress, each of the two delegates has a vote, one as the State Council delegate and the other as the delegate of the society which is the State Council. By contrast, only the State Council delegate can vote at Federal Council meetings (pursuant to cl 12(3)(a) of the AFIC Constitution).

7. [68]

   The use of the expression “constituent body” when referring to the State Council in cl 5(2) of the AFIC Constitution does not alter that being the position. A similar expression, “constituent part”, is used in relation to each local Islamic society in cl 5(2) of the AFIC Constitution. It can be contrasted with the expression “Member of Federation”, which is defined in cl 3 of the AFIC Constitution as individual persons who are members of a society. It does not mean that the societies themselves, including the society which is the State Council, are not members of AFIC.

8. [69]

   The significance of UMNSW being a member of AFIC is twofold. First and uncontroversially, UMNSW is a party to the contract constituted by the AFIC Constitution between AFIC on the one hand and its member societies on the other, as well as between those member societies themselves. Second, as a member society, UMNSW will be subject to the expulsion provisions contained in the Model Rules. Section 16 of the Tasmanian Act states that the Model Rules apply to the extent they are not inconsistent with or excluded by the AFIC Constitution.

9. [70]

   Rules 33 and 34 of the Model Rules deal with expulsion. They are in the following terms:

10. [71]

    The third matter to be noted is that each of the constitutions also needs to be considered in its statutory context. In relation to the Tasmanian Act it should be noted that although s 3 declared an incorporated association as an excluded matter for the purposes of s 5F of the Corporations Act 2001 (Cth), that exclusion did not apply to the winding-up provisions. By s 32 of the Tasmanian Act, the winding-up of an incorporated association is deemed to be an “applied Corporations legislation matter” for the purposes of Pt 3 of the Corporations (Ancillary Provisions) Act 2001 (Cth) in relation to Pts 5.5, 5.6 and 5.7 of the Corporations Act. Those provisions include the power to wind-up a corporation on the just and equitable ground.

11. [72]

    The winding-up provisions in the Corporations Act were not incorporated into the NSW Act in a similar fashion. However, s 63 of the NSW Act empowers a court to wind-up an incorporated association. That section is in the following terms:

12. [73]

    Further, it should be noted that whilst s 95(1) of the NSW Act declares an association to be an excluded matter for the purposes of s 5F of the Corporations Act, s 95(3) relevantly provides that the subsection does not apply to exclude the operation of Ch 2F of the Corporations Act, which deals with members’ rights and remedies. Section 231 of the Corporations Act, which appears in Ch 2F, provides that a person is a member of a company if they are a member of the company on its registration or agree to become a member after its registration and their name is entered onto the register of members. Part 2F.1 deals with members’ remedies, including oppression and derivative actions.

13. [74]

    Fourth, looking at both constitutions overall it was plainly intended that each should operate harmoniously with the other and that member societies in New South Wales were to be members of each of AFIC and UMNSW. In the case of the AFIC Constitution, this is clear from cll 5(2), 5(7) and 5(8). In addition, cl 50(1) provides for State Councils to collect and pay AFIC members’ annual subscriptions to AFIC.

14. [75]

    Similarly, cl 5(iv) of the UMNSW Constitution provides that applications for membership shall be considered by UMNSW and AFIC. It provides in cl 5(v) that the membership fee payable to UMNSW should include a membership fee for AFIC. Clause 16 provides that a ground for expulsion of a member society is that it has failed to pay an annual subscription to UMNSW and to AFIC for two consecutive years.

15. [76]

    Finally, as I mentioned earlier, it was common ground between the parties that nine of the societies which voted at the 17 January meeting of UMNSW were not members of AFIC. It was also common ground between the parties that there were other New South Wales member societies of AFIC who did not appear on the UMNSW register. There was no evidence as to how this had occurred and in particular, it was not contended that any of the AFIC members not on the register of UMNSW were wrongly excluded from membership of that body or indeed, had made any attempt to join it. Further, notwithstanding the requirements in the AFIC Constitution that member societies be members of their local State Council and that UMNSW collect the AFIC subscription fee, no complaint was made that any non-AFIC members had been admitted to membership of UMNSW. In light of this and the absence of any argument that the meeting of 17 January was not validly called and conducted in accordance with the UMNSW Constitution, it is necessary to consider the issues raised in the appeal in circumstances not envisaged by either constitution, and with no explanation as to how those circumstances occurred.

Whether the AFIC Constitution permits a State Council to be removed by AFIC’s member societies in that state (appeal ground 1)

1. [77]

   There is no express provision in the AFIC Constitution governing the removal of State Councils. The primary judge concluded that cl 5(2), which made it “incumbent” on a State Council to remain a member of AFIC, was inconsistent with an implied term permitting their removal (United Muslims New South Wales Inc v Australian Federation of Islamic Councils [2021] NSWSC 382 (the primary judgment) at [66]-[67]).

2. [78]

   AFIC submits that this construction would mean that a State Council, once appointed, would remain in that position “for perpetuity”. That conclusion was said to be inconsistent with cl 5(1), which required a State Council to be replaced by a member society if it became the sole society in New South Wales. If a State Council does not necessarily hold that position indefinitely, it is said to follow that there is a mechanism for its removal and replacement. It further submits that cl 5(2) is not an impediment to that conclusion because on its proper construction it only requires that a State Council perform the acts required of it by the AFIC Constitution.

3. [79]

   In response, UMNSW submits that the AFIC Constitution permits the State Council to be replaced, but only in limited circumstances. In addition to cl 5(1), those circumstances include where AFIC’s Executive Committee is justified in exercising its emergency powers to intervene in the affairs of a State Council (cl 18(e) of the AFIC Constitution). However, the exceptional nature of those circumstances suggests that there is no general power to remove a State Council.

4. [80]

   Focusing on AFIC’s position, there is nothing in the AFIC Constitution which permits member societies of AFIC in a particular state to remove and replace its State Council. If there was such a power, it would be expected to be provided for expressly in the AFIC Constitution. However, there is nothing in the AFIC Constitution to empower such member societies of AFIC to exercise those powers. Nor do the powers conferred by the AFIC Constitution on the Executive Committee, the Federal Council and the Federal Congress include an express power to remove a State Council.

5. [81]

   So far as the Executive Committee is concerned, whilst it may intervene in the affairs of a State Council under cl 18(e) of the AFIC Constitution, its powers do not extend to the removal of a State Council, and in any event are subject to ratification by the Federal Council acting on behalf of the Federal Congress.

6. [82]

   The powers and functions of the Federal Council are set out at [17] above. The Federal Council is empowered to exercise the powers and functions of the Federal Congress in between Federal Congress meetings. Its decisions, however, have to be ratified and can be reversed.

7. [83]

   The powers and functions of the Federal Congress are also set out at [16] above. The only power to constitute a society is contained in cl 13(h) of the AFIC Constitution, which does not include forming or appointing a State Council.

8. [84]

   However, cl 13(e) of the AFIC Constitution gives power to adjudicate disputes between State Councils and AFIC member societies and to give directions in respect of such disputes. Whilst the contrary is arguable, I do not think that decision-making power goes so far as to enable the removal of the State Council. That is because of the existence of the expulsion provisions set out at [70] above. If AFIC wished to remove a State Council (which as I have indicated, is a member) it would need to resort to the procedures in those provisions. This has not occurred.

9. [85]

   The current dispute might have been addressed by the New South Wales member societies in other ways. First, the difficulty which arises is at least partly due to the fact that some societies in New South Wales are members of AFIC and not of UMNSW, whilst others are members of UMNSW and not of AFIC. As I have pointed out, that is an outcome not intended by the respective constitutions. If, as was intended, societies were members of both bodies, decisions concerning the fate of UMNSW would be made by a majority of the AFIC/UMNSW societies in the state.

10. [86]

    Second, the Court has power to wind-up a state association under s 63 of the NSW Act, including on the grounds that the committee has acted in a manner that is unfair and unjust to association members, and on the just and equitable ground. Further, disgruntled members would be able to access the oppression provisions in Ch 2F of the Corporations Act.

11. [87]

    It follows that under the AFIC Constitution, a State Council can be removed by AFIC by the invocation of the expulsion provisions in the Model Rules, or as a result of it being wound up, or by orders made in proceedings under Ch 2F of the Corporations Act. However, absent the use of the expulsion provisions, AFIC does not have the power to remove a State Council. The removal of UMNSW in this case did not occur by invocation of either of those provisions.

Whether an unincorporated group of individuals was capable of being a State Council under the AFIC Constitution (notice of contention ground 1)

1. [88]

   This issue logically precedes consideration of the issue of whether the meeting of 16 January 2021 purported to elect a new State Council because, irrespective of the intention of the parties at that meeting, it would not be effective if an unregistered and unincorporated group of individuals could not be a State Council.

2. [89]

   The primary judge answered this question in the affirmative. His Honour observed that nothing in cl 5 specified the legal structure of a State Council and concluded that as a matter of construction, an unincorporated group of individuals, such as the New Council, could constitute a State Council (primary judgment at [64]).

3. [90]

   In this Court, UMNSW submits that cl 5(2) contemplated that each State Council would have a constitution, because that clause required that constitution be “in conformity” with the AFIC Constitution. It submitted that the New Council did not satisfy that requirement because the evidence did not suggest that it had a constitution. UMNSW also relied on the reference in cl 5(6) of the AFIC Constitution to each State Council having full control over “its” property. That pronoun was said to be inconsistent with property being held jointly by the individuals constituting the new State Council. Although the primary judge acknowledged that a group of individuals could hold property jointly or through a trust structure (primary judgment at [62]), UMNSW submitted that such a structure would be “inconvenient” and was not intended by the framers of the AFIC Constitution.

4. [91]

   AFIC submits that neither of those provisions precluded the New Council from comprising the State Council. It noted that nothing in cl 5(2) of the AFIC Constitution required the State Council to adopt a constitution before or at the time of its formation. Accordingly, AFIC relied on the fact that it was open to the group of individuals comprising the new State Council to agree to a constitution at some later point in time. With respect to cl 5(6) of the AFIC Constitution, AFIC relied on the primary judge’s observations that an unincorporated association could hold property, including as joint owners or on trust.

5. [92]

   It is correct that a group of individuals can join together to form an association and can hold property, whether jointly or by means of a trust structure. It is also possible for such associations to have rules whose efficacy will depend on the consensus reached by the parties who join together in forming the association. Thus, in Cameron v Hogan (1934) 51 CLR 358; [1934] HCA 24, in rejecting Mr Hogan’s claim for an injunction restraining his expulsion from the Australian Labor Party of the state of Victoria, the plurality made the following remarks at 370-371:

6. [93]

   In Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1980] 3 All ER 42, Vinelott J held that the plaintiff, which could accurately be described as the Conservative Party, was not an unincorporated association for the purpose of the Income and Corporation Taxes Act 1970 (UK). In reaching that conclusion, Vinelott J made the following comments (at 58):

7. [94]

   In Kibby v Registrar of Titles (1999) 1 VR 861; [1998] VSC 148, Mandie J set out what he regarded as the essential characteristics of an association:

8. [95]

   In the present case the association said to have been formed by the appointment of the committee at the meeting of 16 January 2021 had no rules or any other form of agreement binding the original members (presumably, the original committee members), no mechanism for holding property and no procedure for the admission of members. All these seem to be essential requirements for a State Council under the AFIC Constitution (see cll 5(2), 5(6), 12(4)). Further, it had no procedures for the election of a chairman and other delegates to attend and participate in the Federal Council and Federal Congress, or procedures to levy subscriptions. In these circumstances, the committee formed was incapable of operating as a State Council.

9. [96]

   However, the primary judge dealt with the matter at a higher level of abstraction, namely, that it was possible for the State Council to be an unincorporated association.

10. [97]

    Accepting the possibility that such an association could have rules, provide for the admission of membership and take such other steps such that it could be described as an unincorporated association within the meaning of the authorities, and at least in theory could operate as a State Council, in my opinion the State Council is required by the AFIC Constitution to be an incorporated association, as is AFIC. Clause 5.2 of the AFIC Constitution requires State Councils to be registered with the relevant state or territory government authorities. The only way registration can occur, at least in New South Wales, is by an application under s 6 of the NSW Act. It is unnecessary to set out that section in detail but it includes particular requirements including, for example, a statement of the association’s objects, a copy of the proposed constitution and the identification of the person who is to be the association’s first public officer (see the NSW Act s 6(3)). It was not suggested that there was any other method by which an association could be registered with the relevant state authority.

11. [98]

    This conclusion is supported by the context. The State Council is an umbrella organisation for other societies in the relevant state, most having in excess of 100 members. It is difficult to see how as a matter of practice it could operate other than as an incorporated association.

12. [99]

    For these reasons, the primary judge erred in concluding that for the purposes of the AFIC Constitution, a State Council could be an unincorporated association.

Did the meeting on 16 January 2021 resolve that the committee which was elected be constituted as a new State Council for New South Wales (appeal ground 2)

1. [100]

   The primary judge concluded that he was not able to find that the meeting resolved that the group of individuals comprising the New Council were to form the State Council, rather than CIS or some other body with a legal structure to be determined at a later date (primary judgment at [57]). It followed that his Honour could not make the declaration sought by AFIC’s originating process, which was that those individuals constituted the State Council. That conclusion was supported by the lack of clarity at the meeting as to the role of the new body, what rules it would have, and what consequence this had for UMNSW.

2. [101]

   In its challenge to that conclusion, AFIC refers to the correspondence of late 2020 which recorded that member societies had expressed “profound concern” about UMNSW’s conduct and “demanded” that a caretaker interim committee be appointed “to manage the NSW affairs of member societies”; the nomination form for “AFIC NSW Islamic Council Committee 2021” attached to the notice of the meeting; and the minutes of the meeting itself. It submits that material supports the finding that a reasonable person attending the meeting would have understood that as member societies of AFIC, they were voting for UMNSW to be removed as State Council and replaced by a committee comprising the elected individuals.

3. [102]

   AFIC also placed reliance on what was said by this Court in North Sydney Brick & Tile Co Ltd v Darvall (1989) 17 NSWLR 327. In that case, a resolution to make an in specie distribution of shares in a company was held to be a declaration of a dividend notwithstanding that that was not stated in the resolution. Clarke JA (Samuels JA agreeing) considered that it was necessary to look at the substance of the matter and concluded, having regard to the surrounding circumstances, that although the form of the resolution was deficient, the shareholders in substance agreed to make the distribution in the permitted way, namely by way of dividend (North Sydney Brick & Tile Co Ltd v Darvall at 338-341).

4. [103]

   UMNSW submits that the primary judge’s conclusion on this issue was correct. It submits that neither the pre-meeting correspondence nor the minutes suggested that a specific issue voted on at the meeting was the removal and replacement of UMNSW as a State Council of AFIC. Although the minutes referred to the election of a committee “to represent them as the Muslims of NSW”, the nature of that representation and whether it was as the State Council to AFIC was not discussed or resolved.

5. [104]

   I accept that a resolution of which there is more than one possible meaning is not void for uncertainty and will ultimately bear the meaning that the court decides upon its proper construction: The Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429; [1968] HCA 8. I also agree that the approach of the court in construing the resolution would be to seek to ascertain the objective intention of those who resolved upon it, consistently with the principles in the cases referred to at [64] above. However, the primary judge was correct in concluding that the resolution did not have the effect of removing UMNSW as State Council and appointing the committee in its place, quite apart from the question of whether it had power to do so.

6. [105]

   Apart from the election of office bearers at the New Council, the only matter which could be said to constitute a resolution at the meeting was that recorded in the minutes under the heading “General Business”, which I have set out at [55] above. Importantly, there was no resolution appointing the elected committee members as a State Council. The only reference to the forming of an association was under the heading “General Business” where it was stated that no disagreement was recorded to the intention to register an association. However, it is not suggested that that association, CIS, which was registered on 1 February 2021, thereby became the State Council.

7. [106]

   Further, the agenda attached to Mr Zoabi’s letter of 28 December 2020 convening the meeting (see at [47] above) made no reference to a proposal that the committee appointed would be the new State Council. Nor did it suggest that it was proposed to resolve that UMNSW be removed as State Council. The agenda item, “[w]here we stand in relation to UMNSW”, does not amount to or include such a suggestion.

8. [107]

   In considering this issue it is relevant to take into account the various letters leading up to the meeting which assert dissatisfaction with UMNSW by AFIC member societies in New South Wales, AFIC’s support for the interim committee and the assertions made by Mr Trad at the meeting. All of this would indicate that some participants may have been dissatisfied with UMNSW and indeed, had a desire to see it replaced. However, this material does not warrant the conclusion that the effect of the resolution was to remove UMNSW as the State Council and replace it with the New Council.

9. [108]

   This conclusion is supported by the fact that the committee had no constitution, no proposal regarding the payment of subscriptions and no structure by which it would hold property, matters which were essential attributes of a State Council.

10. [109]

    In these circumstances, what occurred at the 16 January 2021 meeting fell well short of the meeting resolving that the committee be appointed as the new State Council and that UMNSW be removed. At most it could be regarded as being resolved to take steps towards that objective, but not as having achieved it.

11. [110]

    In the circumstances, it follows that the primary judge was correct in declaring that UMNSW is the State Council for New South Wales, as defined in cl 3 of the AFIC Constitution.

Was Mr Elrayes validly nominated by UMNSW as delegate for the New South Wales State Council to the Federal Council of AFIC (appeal grounds 3 and 4)

1. [111]

   The primary judge held that if Mr Elrayes was appointed as president of UMNSW, then its status as State Council meant that he would become its delegate to AFIC under cl 12(1)(a) of the AFIC Constitution. There was no challenge to the validity of the meeting of UMNSW at which that position was filled. Accordingly, his Honour made the declaration sought by UMNSW that Mr Elrayes was the delegate for the New South Wales State Council (primary judgment at [82]-[83]).

2. [112]

   The primary judge reached that conclusion even though some of the members of UMNSW which participated at that meeting were not AFIC members. Clause 5(7) of the AFIC Constitution does not specify consequences for non-compliance with it. His Honour concluded that as a matter of construction it did not mean that the participation of non-AFIC members in a State Council’s affairs made those steps invalid for AFIC’s purposes. Otherwise the position would be unworkable, because the affairs of a State Council could be invalidated by the participation of a non-AFIC member even where the relevant State Council was not aware of their membership status. Nor did it matter that some AFIC members, who had not themselves applied to become members of UMNSW, were for that reason not given notice of that meeting. The primary judge accepted that cl 5(8) did not mean that AFIC members were automatically members of the State Council (primary judgment at [74]-[75]).

3. [113]

   In this Court AFIC maintained that the appointment of Mr Elrayes as president of UMNSW did not need to be recognised by AFIC because it involved the participation of non-AFIC members. It contends that the primary judge’s contrary conclusion made the last sentence of cl 5(7) otiose. It repeated its submission made before the primary judge that cl 5(8) means that AFIC members automatically became members of the State Council who were entitled to be notified of its meeting. It also relies on provisions in the AFIC Constitution which contemplate that the State Council will be controlled by AFIC members. They include cl 38(1) which permits a State Council to propose motions to Federal Congress meetings, and cl 57(2) which permits it to propose alterations to the AFIC Constitution.

4. [114]

   UMNSW submits that the AFIC Constitution cannot override the membership provisions of its own constitution. Accordingly, cl 5(8) cannot have the legal consequence of admitting AFIC’s members to membership of UMNSW. It also supports the primary judge’s reasoning as to the inconvenience that would arise if cl 5(7) is given the effect of invalidating the acts of a State Council where non-AFIC members participate.

5. [115]

   AFIC’s argument depends in large measure on the construction and effect of cl 5 of the AFIC Constitution. It contends that voting on the election of the chairman of the State Council, who is entitled to represent the State Council at Federal Council and Federal Congress meetings, involved participation in the affairs of AFIC. By virtue of cl 5(7), AFIC says that only AFIC member societies resident in the relevant state could vote on that issue. So far as AFIC member societies which were not members of UMNSW were concerned, it was contended that cl 5(8) of the AFIC Constitution deemed them to be members of the New South Wales society.

6. [116]

   This was contended to be the case notwithstanding that the validity of the UMNSW meeting was not challenged. Thus, as I have pointed out, it was contended that UMNSW could still elect a chairman or president but that the person elected would not be considered the chairman of the State Council for the purpose of cl 12(1) of the AFIC Constitution because that person was voted in by societies which were not members of AFIC.

7. [117]

   Clause 12(1) of the AFIC Constitution does not contain any limitation of the nature suggested. It provides for particular persons to be the State Council representatives but says nothing about their method of election. If there is any limitation, it must be found in cl 5.

8. [118]

   The first matter to note is self-evident. Clause 5 does not form part of the UMNSW Constitution. Thus, cl 5(8) of the AFIC Constitution cannot operate to constitute AFIC members as members of UMNSW irrespective of the latter’s constitutional and statutory requirements. In particular, it cannot override the statutory requirement in s 231 of the Corporations Act by deeming societies which have not agreed to become members in accordance with s 231(b) of the Corporations Act to be members. The principle that a person is not a member of a company until its name is entered on the register of members is well established: Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 409-411, 419. In Maddocks v DJE Constructions Pty Ltd (1982) 148 CLR 104; [1982] HCA 17, the Court noted (at 117) that the authorities and statutory provisions made it clear that a person is not and cannot become a member unless and until he or she agrees to become a member and his or her name is entered in the register of members.

9. [119]

   Similarly, the provisions in cl 5(7) of the AFIC Constitution cannot of themselves override the entitlement of UMNSW members to exercise the rights conferred on them under the UMNSW Constitution by effectively prohibiting them from voting on a resolution at a general meeting of that association.

10. [120]

    That is not to say that the provisions have no effect. Clause 5 of the AFIC Constitution is directed to ensuring that each of AFIC and the umbrella state organisations have common membership by imposing contractual obligations on the State Councils and the societies which have become members of AFIC. Clause 5(3)(c) obliges AFIC to admit a society to membership if it complies with the requirements of that provision. The relevant rules are made by Federal Congress in accordance with cl 13(c) and cl 13(l) of the AFIC Constitution (see [16] above).

11. [121]

    Clause 5(2) of the AFIC Constitution obliges each local Islamic society to be a “constituent part” of the State Council. The first step in doing so is to apply for membership of that Council. The procedure requires consideration of that application for membership by UMNSW and AFIC (cl 5(iv) of the UMNSW Constitution). Clause 5(v) of the UMNSW Constitution provides that application for membership shall be accompanied by an application fee as determined from time to time by UMNSW and AFIC, whilst cl 5(x) provides that the annual membership fee of UMNSW shall include a membership fee for AFIC. Clause 50 of the AFIC Constitution provides for UMNSW as the State Council to collect that fee and account for it to AFIC.

12. [122]

    It is in that context that cl 5(7) of the AFIC Constitution operates. The last sentence of that clause assumes that local societies are members of each State Council and have paid their subscription fees through that State Council. Assuming UMNSW is complying with its obligation under cl 50 of the AFIC Constitution, a non-financial member of AFIC would also be a non-financial member of UMNSW and liable to be expelled on a failure to pay the annual subscription for two consecutive financial years.

13. [123]

    In those circumstances, cl 5(8) of the AFIC Constitution does not operate as a deeming provision. Rather, it makes it clear that an AFIC member society in New South Wales is entitled to membership of the State Council and imposes an obligation on UMNSW to admit them, subject to its constitution, which is required in principle to be in conformity with the AFIC Constitution.

14. [124]

    In these circumstances, if UMNSW wrongfully refused to admit an AFIC member society to its membership, AFIC would be entitled to bring proceedings to enforce the obligation contained in cl 5(8) of the AFIC Constitution. Similarly, UMNSW could bring proceedings against AFIC if it refused to admit a member society of UMNSW which was entitled to admission under the AFIC rules.

15. [125]

    Further, it may be possible for UMNSW member societies or AFIC to challenge the validity of a meeting of UMNSW on the basis that societies entitled to vote have been wrongly excluded, or because societies not entitled to vote have been wrongly included.

16. [126]

    This is consistent with the view taken by Hodgson CJ in Eq (as his Honour then was) in Islamic Council of New South Wales v Australian Federation of Islamic Councils [2000] NSWSC 115 (ICNSW v AFIC). In that case AFIC had purported to appoint a caretaker committee to intervene in the affairs of the plaintiff (a predecessor to UMNSW) to run its affairs until new office bearers were elected. AFIC convened a meeting of the plaintiff to elect new office bearers and amend the plaintiff’s constitution. It should be noted that the relevant provisions of the AFIC Constitution at that time were in similar form to its present constitution.

17. [127]

    Hodgson CJ in Eq stated that where intervention was authorised by AFIC’s rules, it did “not necessarily mean that the intervention which took place was valid and effectual” (ICNSW v AFIC at [93]). That depended on the NSW Act and the plaintiff’s constitution. His Honour reached the following conclusions (ICNSW v AFIC at [101]-[102]:

18. [128]

    In the present case AFIC did not seek to intervene in the affairs of UMNSW. Had it done so, as Hodgson CJ in Eq correctly emphasised, the relationship between the two societies was based in contract.

19. [129]

    A further issue that arose in that case was the failure to give notice of the meeting to various societies which were members of the plaintiff but had not paid their subscriptions to AFIC. It was submitted by AFIC that because of cl 5(7) (identical to cl 5(7) in its present constitution), those societies were not entitled to participate in the affairs of the plaintiff. Hodgson CJ in Eq in rejecting the submission, observed (ICNSW v AFIC at [107]):

20. [130]

    I respectfully agree.

21. [131]

    In the present case AFIC, in conceding the validity of the UMNSW meeting, has accepted that members of UMNSW were entitled to attend and vote. It follows that any resolution passed at the meeting was effective to appoint Mr Elrayes as president. Once it is accepted that cl 5(7) of the AFIC Constitution is not incorporated into the UMNSW Constitution, it does not seem to me that this result can be circumvented by the submission that whilst the resolution may be valid for UMNSW’s purposes, it was not sufficient to confer on Mr Elrayes the right to attend the Federal Council and Federal Congress meetings as a delegate of UMNSW.

22. [132]

    It again must be emphasised that there is no suggestion that UMNSW acted improperly in admitting non-AFIC members to its society. Had such allegations been made, the validity of the meeting may have been open to challenge either by a UMNSW member or possibly by AFIC under the arrangements contained in the AFIC Constitution. However, absent any such allegation, participation of those members at the meeting did not invalidate the resolution or limit its effect.

23. [133]

    So far as the AFIC members who were not UMNSW members were concerned, they had no entitlement to attend and vote as they were not members. I have pointed out that cl 5(8) of the AFIC Constitution did not deem AFIC members to be UMNSW members, as distinct from imposing a contractual obligation on UMNSW to admit them if they applied for membership. There is no suggestion that they applied and that UMNSW wrongfully refused to admit them. In those circumstances, their non-attendance did not affect the validity of the resolution.

24. [134]

    The primary judge was thus correct in declaring that Mr Elrayes was the duly appointed delegate for the State Council of New South Wales as defined in cl 12(1) of the AFIC Constitution.

Conclusion

1. [135]

   In the result none of grounds of appeal 1 to 4 is made out. At the same time notice of contention ground 1 should be upheld.

2. [136]

   It follows that AFIC’s appeal from the declarations made by the primary judge on 26 April 2021 should be dismissed with costs.

3. [137]

   BELL P: I agree with the reasons of the Chief Justice and the orders he proposes.

4. [138]

   MEAGHER JA: For the reasons given by the Chief Justice, I agree that AFIC’s appeal should be dismissed with costs.