In the matter of Order of AHEPA NSW Inc.

1. [1]

   HER HONOUR: The plaintiffs are three members of the first defendant, Order of AHEPA NSW Incorporated (AHEPA NSW). “AHEPA” stands for Australasian (or, sometimes, Australian) Hellenic Educational Progressive Association. The second defendant is the NSW Commissioner for Fair Trading, who has filed a submitting appearance. This case is about whether the constitution of AHEPA NSW was validly amended at a meeting in November 2018 and whether resolutions passed at subsequent meetings in accordance with the new constitution — concerning AHEPA NSW’s participation in redeveloping Bexley Bowling Club, about which its members are sharply divided — were also valid. In the event that there is a problem with how the constitution was adopted in November 2018 or subsequent resolutions, then AHEPA NSW seeks orders under section 1322(4) of the Corporations Act 2001 (Cth) declaring that the resolutions are valid nonetheless.

2. [2]

   This case turns upon the membership rules of AHEPA NSW and who was entitled to vote at the meeting in November 2018. This is the third proceedings to have considered these rules, although the first and second proceedings were resolved by consent and thus not the subject of argument. Put shortly, the plaintiffs contend that before one is entitled to be a member of AHEPA NSW, one must be a member of a NSW “Chapter” of an unincorporated association, The Order of AHEPA Australasia, itself recently incorporated as AHEPA Australia Limited.

3. [3]

   Three difficulties presented themselves in resolving the issues in this case. First, the foundational documents of AHEPA NSW and The Order of AHEPA Australasia — rules, constitutions, regulations and by-laws — do not align and appear to have been drafted and amended over several decades without the consistent involvement of people qualified to ensure such documents are internally consistent, clear and accurate. The structure of The Order of AHEPA as recorded in these documents was both complex and obscure. The use of defined terms appears to have changed over time, suggesting a loss of corporate memory. Record-keeping has been patchy, with some of the foundational documents going missing for lengthy periods and amendments to foundational documents not being registered with NSW Commissioner for Fair Trading in a timely manner. For about a decade, the members appear to have conducted themselves in a manner not referred to in the documents at all. This has led, over time, to entrenched but not necessarily informed ideas about how things should be done.

4. [4]

   Second, there was a lack of understanding amongst members as to the nature of unincorporated and incorporated associations, differing views as to what “The Order of AHEPA” referred to, and the extent to which “The Order of AHEPA” in its unincorporated form operated alongside the incorporated association, AHEPA NSW. AHEPA NSW described the confusion as arising “in respect of the interaction and co-existence (or non-existence) of one or more incorporated associations, various of which have been referred to as the Order of AHEPA”. The competing submissions had, on occasion, an ethereal rather than legal quality. Third, the acrimony amongst some members of AHEPA NSW and with the national bodies of The Order of AHEPA may have impinged upon people’s ability to think critically about these subtle matters.

5. [5]

   In the result, I have concluded that:

6. [6]

   I hope this judgment clarifies long-standing issues and enables the members of AHEPA NSW to turn their efforts to the admirable objects of the association, including,

Witnesses

1. [7]

   Seven witnesses gave evidence for the plaintiffs: Demetrios (Jim) Antonakos (a director of AHEPA Australia Ltd), Maria Alexandrou (President of Chapter Arete No. 3), Mary Nagle (Secretary of Chapter Heracles No. 12), George Lianos (longstanding member of the committee of management of AHEPA NSW), Michael Londos (a member of Chapter Heracles No.12), Anthony Alexandrou (a member of Chapter Prometheus No. 6) and Stephanie Andrews (solicitor). Some were cross-examined although the credit of the witnesses was not in issue: Mr Antonakos, Mrs Alexandrou and Ms Nagle were long-standing antagonists of AHEPA NSW and this was apparent in the manner in which they gave evidence; Mr Lianos was a nice man.

2. [8]

   Five witnesses gave evidence for AHEPA NSW: John Kallimanis (former President of AHEPA NSW), Dr Panayiotis Diamandis (Secretary of AHEPA NSW), Theophilus Premetis (Treasurer of AHEPA NSW), Harry Fandakis (Chairman of the Buildings Committee of AHEPA NSW) and Nick Kagelaris (Secretariat for AHEPA NSW). Mr Fandakis was a pleasant fellow who seemed exhausted by his efforts to advance the property development in the face of significant obstacles. He did not have a clear appreciation of the precise nature of any particular meeting that was held and was subjected to unnecessarily aggressive cross-examination, as was Dr Diamandis who was suggested from the outset to be lying. The plaintiffs did not, in the result, submit that Dr Diamandis was a liar. Whilst his decisions and approach were not perfect, at the end of the day he was a school teacher serving in a voluntary community organisation guided by legal advice.

3. [9]

   It seemed to me that, on both sides, the witnesses’ interpretations of the membership rules of AHEPA NSW were overly technical when it suited them and otherwise ‘high level’. I was not much assisted by their evidence in the witness box as to what they thought or understood the rules meant.

History of AHEPA

1. [10]

   Although AHEPA NSW was incorporated in January 1993, the genesis of the association was some 60 years earlier. In 1934, some 30 Australians of Greek heritage gathered at Werris Creek in regional New South Wales and decided to set up a fellowship organisation inspired by the American Hellenic Education Progressive Association, founded in the USA in 1922. The By-laws and Ritual of the American association were adopted to form “The Order of AHEPA”, initially in New South Wales but then also in Queensland and Victoria. Members formed a number of “Chapters” in each state. The over-arching organisational body in each state for the Chapters was called a “Grand Lodge”.

2. [11]

   In 1954, New South Wales, Queensland and Victoria formed the “Supreme Lodge of Australia" and held the inaugural national convention. Further “Chapters” were formed for women in the 1950s. The over-arching organisational body in each state for the women’s Chapters was called the “District Lodge”. Further Chapters were formed for younger people in the 1970s. The Order of AHEPA came to be established in Western Australia (1965), South Australia (1977) and the A.C.T. (1987).

3. [12]

   In 1980, Mr Antonakos became a member of The Order of AHEPA and joined Chapter Prometheus No. 6. In 1986, he was elected President of the Chapter and consequently became a member of the Grand Lodge of New South Wales. In 1981, Mrs Alexandrou became a member of The Order of AHEPA and joined Chapter Arete No. 3, a women’s chapter. In 1988, Mr Lianos became a member of The Order of AHEPA and joined Chapter Heracles No. 12. In the late 1980s or early 1990s, Mr Kallimanis joined The Order of AHEPA and Chapter Diogenes No. 8.

4. [13]

   In 2016, AHEPA NSW described Sydney as the centre of AHEPA activities and initiatives in New South Wales and Australia. Of 35 Chapters throughout Australia, AHEPA NSW described itself as having 11 Chapters and also 8 committees dedicated to special interests such as education, culture and archaeology, golf, Hellenic literature and poetry and bowling. AHEPA NSW owns property in Surry Hills and Rockdale, the latter housing its headquarters and meeting hall. AHEPA NSW’s property is worth some $20 million.

5. [14]

   The first contemporaneous document in this case is a trust deed executed in 1981 in connection with the purchase of a property in Chippendale. The deed refers to the property being purchased by the trustees on trust for “the Order of AHEPA in the State of New South Wales”. Whether this was a reference to “The Order of AHEPA” in the form of the “Supreme Lodge of Australia”, the “Grand Lodge” of New South Wales or some other embodiment of the Order is not stated. The fact that the Order was specified with respect of “the State of New South Wales” suggests the land was held on trust for the members of the Order in that state.

Constitution and regulations for The Order of AHEPA Australasia 1990

1. [15]

   In 1990, The Order of AHEPA adopted a Constitution and Regulations for Australia and New Zealand. As these documents have changed little since, it is worth describing the arrangements thereby put in place. Clause 7 of the Constitution provided:

2. [16]

   The National Convention was described as “the highest constituted body of the Order”: clause 8. It was an overarching “legislative” body with general powers to fix fees and distribute them, establish charitable institutions, amend the Constitution and award honorary membership. The National Convention is convened once a year, and is formed primarily of delegates from Grand and District Lodges and Chapters.

3. [17]

   The Supreme Lodge is another national body, having an “executive” character. It has power to contract and employ, to settle disputes between state lodges and chapters, and to “interpret and enforce the Constitution”. It is comprised of former Presidents of the Supreme Lodge and Grand Lodges only. It also appoints a variety of office-holders, including a President, who is then eligible to sit on the body in perpetuity.

4. [18]

   This structure is replicated at the state level. The Grand Lodge is an executive body formed from past and present Presidents of Chapters. A District Lodge holds the same place in the hierarchy, but is constituted by female Chapters known as the “Daughters of Penelope”. The Grand Lodge is to convene a State Convention, made up of all the Grand and District Lodge members, and also delegates from the Chapters in that State, which has a similar deliberative role to the National Convention.

5. [19]

   In respect of “Chapters” at Clause 22(a):

6. [20]

   Importantly, Part XIV of the Constitution was entitled “Order of AHEPA in the State of New South Wales”. Section 64 provided:

7. [21]

   Rules followed in Part XIV in respect of: keeping a register of members; the keeping, audit and presentation of accounts; the annual general meeting (to be held on the same day as the State Convention); the composition of the Management Committee of the Order of AHEPA in the State of New South Wales (being the officers of the Grand Lodge) and, the composition of Management of Committee of New South Wales Chapters (being the officers elected under the regulations of The Order of AHEPA Australasia). Some rules were different from The Order of AHEPA Australasia and some envisaged an overlap between the Orders going forward in respect of the composition of Management Committees of Chapters and The Order of AHEPA in the State of New South Wales. Part XIV envisaged that The Order of AHEPA in the State of New South Wales, whatever that was, would co-exist with the State Convention, Grand Lodge and the New South Wales Chapters.

8. [22]

   Although clause 35 of the Constitution gave each of the units of AHEPA the power to appoint trustees to hold property, Additional Rule 7 provided that, for the Order of AHEPA in New South Wales, three trustees would be elected at a general meeting and, in Additional Rule 7(b):

9. [23]

   Additional, and different, rules were also made in the Constitution for the Order of AHEPA in the State of Victoria, although not for holding property. There would appear to have been no property then owned by the Order of AHEPA in Victoria which warranted particular treatment. This rather suggests that the Order of AHEPA, as it had begun in New South Wales and spread to Victoria, had an independent existence of sufficient longstanding in those states to warrant specific rules to reflect the practices which had been adopted in those states to run their respective associations.

10. [24]

    The Regulations for The Order of AHEPA Australasia included the procedure for applications for membership of a “Chapter”, which envisaged a committee investigating the fitness of the applicant followed by an interview and instruction of the applicant in the ways of the Order. In the event of a favourable report from the interviewing committee, the application was to be submitted to a Chapter at a meeting and determined by secret ballot. A successful candidate was required to present themselves for initiation into the Order.

11. [25]

    As I read these foundational documents, there were in fact a number of unincorporated associations in The Order of AHEPA at the time: there were (at least) Chapters, The Order of AHEPA in New South Wales, The Order of AHEPA Australasia and likely other unincorporated associations in other states and territories. The Constitution and Regulations contained a structure or framework in which these unincorporated associations interacted. Unincorporated associations can “affiliate” or “federate” in a larger unincorporated association. As Professor Dal Pont explained in Law of Associations (LexisNexis Butterworths, 2017) at [10.16]:

12. [26]

    An example is the Conservative Party in the United Kingdom, considered in Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1980] 3 All ER 42. The Conservative Party has a complex structure with three elements: the Parliamentary Party comprising members of both Houses of Parliament; the mass membership represented by the National Union of Conservative and Unionist Associations comprising local constituency associations, and the party headquarters knows as the Central Office. These three elements are repeated at three levels — constituency, area and national. At the head stands the Leader of the Party. The National Union provides a meeting place where members of the party come to debate policy and organises an annual party conference attended by representatives of the local constituency associations and other conservative bodies such as the Young Conservatives. It was argued in that case that the National Union was an unincorporated association with its members being all the members of all the local constituency conservative associations. Vinelott J disagreed, at 55:

13. [27]

    The similar structure of the Australia Labor Party State of Victoria was described Cameron v Hogan (1934) 51 CLR 358 at 373–4. Another example is the International Amateur Athletic Federation, to which was affiliated numerous national bodies: Reel v Holder [1981] 3 All ER 321; [1981] 1 WLR 1226 (Court of Appeal). In contrast, in Hall v Job (1952) 86 CLR 639, the High Court considered the Loyal Orange Institution of New South Wales, established in 1875, and held that a subordinate Lodge established in Parkes in 1902 under the rules and regulations of the Institute did not exist as an exclusive association but was an integral part of the larger organisation. At 650:

14. [28]

    Whilst the plaintiffs submitted that The Order of AHEPA Australasia bore substantial similarities to Hall v Job, I disagree. The Chapters, Grand and District Lodges and State Convention were not subordinate units of a national body, but distinct entities in their own right, not established by the national body but pre-dating it and with an independent existence. Rather, seems to me that the Constitution of The Order of AHEPA Australasia documents an affiliation or federation of unincorporated associations rather than creates one unincorporated association. The fact that some of these unincorporated associations have since incorporated — some Chapters, The Order of AHEPA in New South Wales and The Order of AHEPA Australasia (which the plaintiffs submitted was the incorporation of the National Convention) — rather confirms that each of these unincorporated associations had a sufficient sense of identity, organisation and continuity (Kibby v Registrar of Titles [1999] 1 VR 861; [1998] VSC 148 at [50]) to incorporate without thereby diminishing the existence of any other unincorporated association within the Order.

15. [29]

    In 1991, Dr Diamandis became a member of The Order of AHEPA and was initiated into Chapter Heracles No. 12. Dr Diamandis says he has never been a member of The Order of AHEPA Australasia and referred to Chapters as Chapters of The Order of AHEPA NSW, not Chapters of The Order of AHEPA Australasia. The differences in nomenclature used by the parties were indicative of the nebulous nature of The Order of AHEPA and its manifestations. But in reality I think that the Chapters were neither Chapters of The Order of AHEPA Australasia or The Order of AHEPA in the State of New South Wales but simply Chapters in their own right, that is, unincorporated associations which interacted with each other and the other “units” in the AHEPA hierarchy utilising the framework in the Constitution.

Unincorporated and incorporated associations

1. [30]

   It is timely to say something about the differences between unincorporated and incorporated associations. Unincorporated associations are not recognised by the law as legal entities. As Lord Millett explains in the Foreword to Stewart et al., The Law of Unincorporated Associations (Oxford, 2011), at v:

2. [31]

   To his Lordship’s summary may be added the following: the association’s rules do not necessarily have contractual force even between the members, unless the members intend to create legal relations between themselves. As such, the basic position at common law and in equity is that the Courts will not intervene in the management of unincorporated associations to enforce those rules. The seminal case of Cameron v Hogan (1934) 51 CLR 358 makes this clear. Per Rich, Dixon, Evatt and McTiernan JJ at 370:

3. [32]

   The position cited above holds true today in the United Kingdom, except for limited statutory ameliorations. In this jurisdiction, however, these problems are sought to be remedied by the Associations Incorporation Act 2009 (NSW), the Associations Incorporation Act 1984 (NSW), and its predecessors in other states, and in New Zealand, going back to the middle of the nineteenth century. The Preamble to the Associations Incorporation Act 1858 (SA) conveniently sets out what these Acts seek to do:

4. [33]

   Importantly, Schedule 2 of the 2009 Act, as applied by section 8 (or Schedule 2 of the 1984 Act as applied by section 15), provides that, on registration, the former unincorporated association ceases to exist: the definition of “former body” as including “an unincorporated body that has been incorporated as a consequence of its registration under this Act” makes this plain. The Schedule provides for the transfer of assets, rights and liabilities and any proceedings to the new incorporated association. Likewise, acts and omissions are taken to be done by the new body, and any reference to the former body in any document is taken to be a reference to the new body. So much was confirmed many years ago in the High Court of Australia in Kepert v West Australian Pearlers Association (Inc) (1926) 38 CLR 507 per Knox CJ, Gavan Duffy, Rich and Starke JJ at 514:

5. [34]

   More recently, in Faehrmann v Van Vucht [2018] NSWSC 397, Ward CJ in Eq considered whether it is possible for an unincorporated association to continue to exist notwithstanding incorporation. Amongst the authorities collated and analysed by her Honour at [97] ff is Burston v Oldfield [2003] NSWSC 88, where Hamilton J found that the incorporation of One Nation NSW Political Party Inc was not a case of an unincorporated association incorporating at all, but a new association being formed and incorporated for a separate purpose. His Honour Hamilton J observed at [11]:

6. [35]

   In Mune v Centro Argentino of Victoria Inc [1996] 2 VR 82, the Court of Appeal of the Supreme Court of Victoria held that the majority of the members of an unincorporated association did not agree to incorporate and thus, although the incorporated association had the same name as the unincorporated association, it was not in fact the successor to the unincorporated association but was successor to the ad hoc group that met to approve its incorporation: Ormiston JA (with whom Winneke P agreed) at 94; Hayne JA at 95–6. In Kibby v Registrar of Titles, Mandie J held that there was no unincorporated association in existence at all when land was purchased by people who met regularly at a chapel at Ferny Creek to discuss religion and philosophy, and so the property was not held on trust for such an association but, obiter, if it was an unincorporated association, then the majority of its members approved its incorporation.

7. [36]

   In Ray v Eastern Suburbs Motorcycle Club Incorporated [2012] NSWSC 1151, Ball J found that the unincorporated association ceased to exist when the Club decided to incorporate, but as Ward CJ in Eq noted in Faehrmann at [102]:

8. [37]

   A similar review of contemporaneous evidence — correspondence, minutes, bank accounts and conduct — led Windeyer J to conclude in Jobnet Employment Services Inc v Copeman (1999) 32 ACSR 554; [1999] NSWSC 848 that it was intended that an unincorporated association would become incorporated and continue to carry out the work of the unincorporated association as the incorporated association: at [26]. Likewise in Faehrmann, whilst Ward CJ in Eq accepted that it was theoretically possible for the unincorporated association to continue to exist alongside the incorporated association, it was found not to have been established in that case, at [112]:

Incorporation of AHEPA NSW

1. [38]

   In January 1993, AHEPA NSW was incorporated under the Associations Incorporation Act 1984 (NSW). Mr Antonakos and Dr Diamandis were founding members. AHEPA NSW adopted rules, “Rules of Order of AHEPA NSW Incorporated”. It is these rules I have to interpret — as amended in 2003, 2005, 2007 and 2010. The Rules commenced:

2. [39]

   The objects of the AHEPA NSW were described in rule 2: (emphasis added)

3. [40]

   The plaintiffs submit that the reference to “the unincorporated association” in rule 2 is a reference to The Order of AHEPA Australasia, “there being no other “unincorporated association” in existence”. For the reasons already stated, I do not think it was the only unincorporated association in existence. Further, the plaintiffs’ submission is at odds with the express reference in rule 2(a) to “AHEPA in New South Wales” and “the Order of AHEPA New South Wales”. In addition, the objects which follow rule 2(c) use the phrase “members of the Association” where Association was defined in the Rules as AHEPA NSW.

4. [41]

   AHEPA NSW says the reference to an unincorporated association was plainly a reference to the unincorporated existence of the association prior to its registration. I agree, but the question is what that was. Further, APEPA NSW submits that the Chapters were not incorporated in 1993, although some have since been incorporated, and it was these Chapters that constituted, and now constitute, the “unincorporated association”. I do not think that follows. Rather, I consider the reference to the “unincorporated association” in 1993 was to the entity referred to in the 1981 trust deed and Part XIV of the Constitution of The Order of AHEPA Australasia, that is, The Order of AHEPA in the State of New South Wales.

5. [42]

   This is confirmed by contemporaneous documents. In July 1993, consistently with what was apprehended would occur in rule 2(a) and (b), the solicitor for AHEPA NSW made a statutory declaration in support of an application to change the name of the proprietor of the Chippendale property declaring:

6. [43]

   In August 1993, an Application to Record Change of Name was completed, including a second statutory declaration by George Kyriazakos, company director, to the effect that AHEPA NSW was now an incorporated association and:

7. [44]

   Returning to the Rules, Part II “MEMBERSHIP”, Rule 1 provided: (emphasis added)

8. [45]

   The plaintiffs say that the reference to “the unincorporated association” in rule 1(a) is a reference to The Order of AHEPA Australasia although, consistently with what I have already said, I think it is a reference to The Order of AHEPA in New South Wales. It is implicit in the incorporation of a previously unincorporated association that members of the former unincorporated association are transitioned to the incorporated association, hence reference in rule 1(a) to members of the association “prior to its incorporation”, where “it” was AHEPA NSW.

9. [46]

   As to rule 1(b), the Rules provided:

10. [47]

    As to who was qualified to be a member of AHEPA NSW, rule 2 provided:

11. [48]

    Like rule 1, it seems to me that rule 2 envisaged existing members of the unincorporated association becoming members of AHEPA NSW under sub-rule (a), but also new members joining AHEPA NSW directly under sub-rule (b) through a process of nomination and approval. As to nomination, rule 3 provided:

12. [49]

    In respect of the register of members, rule 7 provided:

13. [50]

    Rule 12 provided for the affairs of AHEPA NSW to be managed by a committee of management comprising the President, Vice-President, Treasurer and Secretary of AHEPA NSW and three ordinary members: rule 13. In respect of the election of office-bearers and ordinary members of the committee of management, rule 14 provided for candidates to be nominated by a member of the Association at the annual general meeting, seconded by another member of the Association and voted for at the meeting. Again, the committee of management was sourced from members of AHEPA NSW, selected by its members with no apparent involvement by The Order of AHEPA Australasia.

14. [51]

    As to witnesses in these proceedings who were on the committee of management from time to time, either as office bearers or ordinary members:

15. [52]

    The committee of management was entitled to delegate to one or more sub-committees, consisting of such members as the committee thought fit: rule 20. AHEPA NSW has a Buildings Committee of which Mr Fandakis is the Chair.

16. [53]

    The committee could not exercise functions that were required by the Rules to be exercised by a general meeting of members of the Association (rule 12(b)). Further, a special resolution at a general meeting was required before the committee of management could “sell, purchase, mortgage, charge, lien, borrow, lend, encumber or create any liabilities”: rule 12(d). A special resolution required 75% of members to vote at a meeting of which 21 days’ notice had been given: rule 30(a).

17. [54]

    The committee of management could call special general meetings whenever it thought fit (rule 24(1)). Where the nature of the business proposed to be dealt with at a general meeting required a special resolution of the Association, 21 days’ notice was required, to be given by the Secretary sending notice by post to the members’ addresses appearing in the Register of Members: rule 25(2). For meetings where the business proposed to be dealt with did not require a special resolution, 14 days’ notice was required: rule 25(1). Questions were to be determined on a show of hands unless a poll was demanded, in which case a poll was to be taken: rule 29. All votes were required to be given personally (rule 31(2)) and a member was not entitled to vote unless all money due and payable by the member to the Association had been paid (rule 31(4)).

18. [55]

    In Part V, “Miscellaneous”, Rule 40 provided:

19. [56]

    Section 19(2) and (3) of the 1984 Act provided:

20. [57]

    AHEPA NSW submitted that, as a consequence of section 19 and confirmed by rule 48, the only rules applicable to AHEPA NSW were those lodged with the Corporate Affairs Commission upon registration. This is correct. Part XIV of the Constitution of The Order of AHEPA Australasia ceased to prescribe the rules for “Order of AHEPA in the State of New South Wales”. However, there was nothing to stop AHEPA NSW incorporating the Constitution by reference if it wished.

21. [58]

    There is no evidence to suggest that the incorporation of AHEPA NSW was not authorised by the members of The Order of AHEPA in the State of New South Wales (Mune v Centro Argentino of Victoria Inc) or that it was not a case of an unincorporated association incorporating but a new association being formed and incorporated for a separate purpose (Burston v Oldfield) or that it was envisaged that The Order of AHEPA in the State of New South Wales would coexist with AHEPA NSW. The plaintiffs place weight on Mr Kallimanis’ understanding, described in his affidavit in the first proceedings, In the matter of Order of AHEPA NSW Incorporated [2018] NSWSC 458 (AHEPA No 1), that AHEPA NSW was formed to look after properties owned by the Grand Lodge of NSW and the members of AHEPA in NSW as somehow confining the nature and role of AHEPA NSW. However, Mr Kallimanis did not become actively involved in AHEPA until 1999 — at Chapter level — and became a member of the Committee of Management in 2000, seven years after AHEPA NSW was incorporated. His understanding is thus of little assistance. Further, the Rules of AHEPA NSW go well beyond holding property and extend to membership, management, meetings, money and, to the extent not covered, adopted the model rules. According, it seems to me that in 1993, The Order of AHEPA in the State of New South Wales ceased to exist apart from AHEPA NSW: Kepert v West Australian Pearlers.

22. [59]

    The Grand Lodge, District Lodge, State Convention and NSW Chapters continued, however, presumably as unincorporated entities within the framework provided by the Constitution of The Order of AHEPA Australasia. In 1995, Mr Antonakos became President of the Grand Lodge of New South Wales and New Zealand. In 1999, Mr Antonakos became Secretary of the Grand Lodge of New South Wales and New Zealand and served in this position until October 2009.

AHEPA NSW 2003 rules

1. [60]

   In 2000, Mr Kallimanis became a member of the Committee of Management of AHEPA NSW. He asked for a copy of the Rules and no one was able to give him a copy, nor could he find one. It was thought that the Rules had never been registered. In fact, the Rules had been registered but a copy was not retrieved until 2016, and then only from the NSW Commissioner of Fair Trading after a physical search of its archive facility.

2. [61]

   In any event, in September 2003, a special general meeting was called to adopt the Rules, which Mr Kallimanis was informed were the same as those adopted in 1993. In fact, the rules were substantially revised. Importantly, “unincorporated association” was now defined in rule 1(2)(f):

3. [62]

   Rules 1 and 2 in respect of membership were combined and re-numbered as rule 3. Rule 3 now provided, with changes from the former rules marked:

4. [63]

   As originally framed, the 1993 Rules brought members of the unincorporated association of The Order of AHEPA in the State of New South Wales into the incorporated entity under rule 1(a) and rule 2(a), and also provided for the admission of new members directly under rule 1(b) and rule 2(b). The two pathways to membership, being for existing and new members, were obvious. The amendments to the Rules in 2003, however, appear to have muddied the waters. In particular, changing “or” to “and” between former rule 1(a) and (b) — now rule 3(1)(a) and (b) — had the result that the rule 3(1) only applied to pre-existing members of the Order of AHEPA NSW “prior to its incorporation” in 1993 and only rule 3(2)(b) provided a pathway for new members.

5. [64]

   The plaintiffs submit that the reference in rule 3(1) to the “unincorporated association” is a reference to the national body and its membership rules as AHEPA NSW was an incorporated association by this time and thus did not meet the description of an unincorporated association. This submission ignores two things. First, the text in rule 3(1) was first enacted in 1993 when The Order of AHEPA NSW was an unincorporated association and seems to me to have been directed towards bringing the members of The Order of AHEPA NSW into the incorporated association, AHEPA NSW. Second, the submission ignores the definition of “unincorporated association” in rule 1(2)(f). In AHEPA No 1, Black J noted at [9]:

6. [65]

   Rule 3 in the 1993 Rules became rule 4, with changes to sub-rules (1) and (2) as marked:

7. [66]

   Mr Kallimanis said that he could not recall the procedure in rule 4 being followed while he was on the committee of management. Rather, a person became a member of a Chapter in New South Wales and, each year before the State Convention, each Chapter submitted a list of its financial members as at 30 June of that year as part of its annual reports, including the names of any new members admitted to the Chapter during the year. The list was tabled at the State Convention and adopted by the delegates. At the convention, or shortly afterwards, the Chapters paid to AHEPA NSW $1 plus GST for every new member admitted to the Chapter during the year. The list as approved at the State Convention was then sent to the secretary of AHEPA NSW and became the list of financial members. Once a member had been a financial member of a Chapter for three years, they were treated as a member of AHEPA NSW entitled to vote at the annual general meeting. Mr Antonakos described a slightly different process. Either way, it was a significant departure from the procedure laid down by the 2003 Rules.

8. [67]

   Rule 5 of the revised 2003 rules provided: (changes marked)

9. [68]

   The 2003 Rules contained equivalent provisions in respect of the Register of Members (now rule 8). The powers of the committee of management remained the same (now rule 13) but the membership of the committee increased to five ordinary members in addition to the office bearers: now rule 14. But an important change was made to the election of office-bearers and ordinary members of the committee of management. Whilst originally each member of the committee of management was nominated by a member of the Association at the annual general meeting, rule 15 now provided:

10. [69]

    “Grand President”, District President” and “chapter” were not defined in the 2003 Rules but were terms which would have had a clear meaning to those involved in the activities of The Order of AHEPA through their local Chapter. It is perhaps in the context of this drafting mess that AHEPA NSW’s senior counsel submitted in AHEPA No 1 in respect of the meaning of “unincorporated association” — in the face of its definition — “we take that to mean the membership of the Order of AHEPA geographically situated in New South Wales, that is, Chapters in New South Wales”. In any event, rule 15 now radically shifted the composition of the committee of membership from members of AHEPA NSW to the officers of the Grand Lodge and District Lodge of New South Wales and nominees of the Chapters in New South Wales. The plaintiffs submit that these amendments increased the importance of the “unincorporated association” to the functioning of AHEPA NSW and further incorporated aspects of the Constitution of The Order of AHEPA Australasia into AHEPA NSW’s Rules. The latter proposition is correct insofar as the Constitution of The Order of AHEPA Australasia described how the Grand President and District President were elected, was a Chapter was and who was a member and Secretary of a Chapter, and thus identified the persons who the 2003 Rules then prescribed would form the committee of management.

11. [70]

    Otherwise, the ability to delegate to sub-committees was now rule 21. The rules in respect of calling meetings remained the same, albeit re-numbered: calling special meetings (rule 24), notice (rule 26), making of decisions (rule 30), special resolutions (rule 31) and voting (rule 32). The right to inspect the books were now in rule 39. Rule 40 in respect of Surplus Property which, it will be recalled, provided that in the event of winding up of AHEPA NSW, surplus property would vest in The Trustees, was removed.

Amendments to the rules of AHEPA NSW: 2005 to 2010

1. [71]

   Recalling the annual method of recording existing and new members of AHEPA NSW set out at [66], Mr Kallimanis said that the list of financial members that each Chapter submitted with its annual report to the State Convention did not record how long the members had been financial members, whether the member had been unfinancial for a period and, if so, for how long. This made it very hard to work out who was a member of AHEPA NSW or a member entitled to vote. From 2003 to 2005, the committee of management regularly discussed and debated rule 3 and that it was not working. Further, the three year waiting period was considered to be too long and leading to the loss of members.

2. [72]

   This debate appears to have been misguided as, not only was rule 3 not being applied in its terms but rather by some informal process which appears to have arisen whilst the rules were mislaid, but rule 3 as amended in 2003 did not apply a three-year waiting period to new members but only those were already members on incorporation of AHEPA NSW in 1993. The ham-fisted nature of the 2003 amendments resulted in theoretical unfairness to existing members — I say theoretical as by 2003 all existing members had more than served their 3 year waiting period — but unfairness undetected by the committee.

3. [73]

   In November 2005, AHEPA NSW’s rules were amended by special resolution. Rule 3 became:

4. [74]

   According to Mr Kallimanis, after this amendment the Chapters continued to submit their annual report to the Grand Lodge before the State Convention including a list of financial members as at the end of 30 June of that financial year: this was then approved as the list of members in New South Wales at the State Convention. The list was sent to AHEPA NSW and became the list of members of AHEPA NSW for the next financial year. Members on this list were entitled to vote at AHEPA NSW’s general meetings. AHEPA NSW did not have a separate Register of Members. Mr Antonakos described a slightly different process.

5. [75]

   On 29 November 2007, rule 14 of the 2003 Rules was amended to expand the number of ordinary members of the committee of management to “such number of ordinary members as corresponds to the number of Active Chapters of the unincorporated Association”. “Active Chapters” was not defined in the AHEPA NSW rules although the 1990 Constitution of The Order of AHEPA Australasia dealt with inactive chapters in clause 102. Again, it seems that the term “unincorporated association” or the amalgam “unincorporated Association” was now being used in a way different to that originally intended in 1993. This resolution was also not registered until 2018. In AHEPA No 1, Black J noted at [14]:

6. [76]

   In 2009, Mr Antonakos was elected as National President of The Order of AHEPA Australasia.

7. [77]

   On 22 January 2010, AHEPA NSW again amended its rules to add back to rule 3(1) “Membership Qualifications”:

Order of AHEPA Australasia constitution and rules 2010

1. [78]

   In 2010, the constitution and regulations of The Order of AHEPA Australasia were amended, the latter now called By-laws. The constitution, again, contained its own provisions for trustees (now Part VII) and, perhaps curiously, additional rules for The Order of AHEPA in the State of New South Wales. The Additional Rules now noted:

2. [79]

   The drafters of the 2010 constitution of The Order of AHEPA Australasia do not appear to have appreciated the implications of the incorporation of AHEPA NSW and simply retained the Additional Rules from the 1990 constitution without amendment, apart from referring to The Order of AHEPA in the State of New South Wales as AHEPA NSW Incorporated. Before passing on from this document, it should be noted that the Additional Rules were not the same as AHEPA NSW’s rules. In respect of the register, funds and authorisation of accounts, AHEPA NSW’s rules were more detailed although not necessarily inconsistent. In respect of the financial year, audits and trustees, the Additional Rules had no comparable in the AHEPA NSW’s rules. In respect of the annual general meeting and distribution of surplus property on dissolution, AHEPA NSW’s rules were inconsistent with the Additional Rules. Overall, the Additional Rules appear to have been written without regard to the rules of AHEPA NSW.

3. [80]

   Like the 1990 Regulations before it, the 2010 By-laws contained Part X in respect of the admission of new members to Chapters. The process of application, investigation and interview was, essentially, unchanged. As before, in the event of a favourable report from the interviewing committee, the application was to be submitted to the Chapter at a meeting for voting. As before, a successful candidate was required to present themselves for initiation into the Order. Dr Diamandis says the interview procedure has not been used for many years, and I am inclined to accept that evidence as inherently likely.

The struggle begins

1. [81]

   In about 2010, the committee of management of AHEPA NSW reviewed its future. The average age of members of AHEPA NSW was then between 65 and 70 years. Less than 10% of members were under 50 years of age. The number of active members was about 300. Mr Fandakis was then a member of the committee of management and expressed a concern that the majority of members chose not to be involved in the activities of AHEPA NSW as they did not find the organisation interesting or engaging. It was thought that one of the main reasons why members did not attend events was because AHEPA NSW’s headquarters on the Princes Highway at Rockdale did not have modern facilities or parking. This was thought to be unacceptable, particularly where AHEPA NSW had assets worth some $20 million. It was thought that, to better secure the future of the organisation, AHEPA NSW should establish new headquarters capable of attracting more new and younger members. From 2011 to 2014, the committee of management explored various options.

2. [82]

   In March 2015, the Grand Lodge of New South Wales was said to have seceded from The Order of AHEPA Australasia and informed the National Lodge of this fact in May 2015. Legal advice was obtained and the National Lodge decided to expel Mr Kallimanis, then President of the Grand Lodge, for breaches of the Constitution. In June 2015, the president of the National Lodge met with the Grand Lodge of New South Wales to try to negotiate their differences.

3. [83]

   In October 2015, at the National Convention of The Order of AHEPA Australasia, the chairman gave an opening address defending the continuing relevance of the ideals of the Order as “NOT antiquated” and noted:

4. [84]

   Further, it was resolved:

5. [85]

   On 18 November 2015, the 2003 Rules of AHEPA NSW were further amended, although the amendment was not registered and, in the first proceedings, AHEPA NSW agreed not to register the amendment as part of a compromise of the proceedings. It is reasonable to think that the amendments were directed towards further separating AHEPA NSW from the hierarchy of The Order of AHEPA Australasia. On 21 November 2015, Elias Doufas, who appears to have a held a senior role within The Order of AHEPA Australasia, emailed Mr Antonakos and other representatives of the New South Wales, Queensland, Victoria, Western Australian and ACT Grand Lodges, formulating a “Plan of Action”. It was then apparently in mind to bring legal action against a member referred to as “JK”, which I take to be a reference to Mr Kallimanis, President of AHEPA NSW. Mr Doufas proposed:

6. [86]

   As best the “Plan of Action” can be understood, it appears that there was something of a power struggle between The Order of AHEPA Australasia and the Grand Lodge of New South Wales such that the national body was giving consideration to incorporating a new AHEPA NSW. The dispute appeared to concern matters of intellectual property of AHEPA and property. In December 2015, the president of the National Lodge again met with the Grand Lodge of New South Wales to attempt to negotiate their differences.

Property development at Bexley

1. [87]

   In February 2016, Rockdale City Council called for tenders to redevelop Bexley Bowling Club and enter into a long-term lease. On 18 March 2016, Mr Kallimanis submitted a tender prepared by the Committee of Management of AHEPA NSW. Mr Fandakis believed that the project should be undertaken to ensure the future survival of AHEPA NSW by upgrading its facilities and attracting new and younger members.

2. [88]

   AHEPA NSW proposed to refurbish and repair the existing buildings to bring them up to current building codes, retain one of the bowling greens and construct car parking on another. AHEPA NSW committed to invest $950,000 in this task, including a new cafe and commercial grade kitchen. On completion of these works, AHEPA NSW proposed to submit a development application to construct a multi-purpose hall called “the North Bexley Community & Recreational Centre” costing between $3 million and $4 million, to include a main hall for sport and social use, a stage, canteen, community rooms, gymnasium and facilities. Preliminary concept plans and perspectives for the multi-purpose hall, surrounding spaces and the existing buildings were submitted. As to its financial capacity to undertake and complete the proposed works, AHEPA NSW stated in its tender:

3. [89]

   In April 2016, the Council accepted the tender for the leasing of the site. In June 2016, a Deed of Agreement was signed by the Council and AHEPA NSW.

4. [90]

   In July 2016, the President of the National Lodge endeavoured to continue negotiations with the Grand Lodge of New South Wales but a motion was unanimously passed by the National Lodge that there should be no further talks with the Grand Lodge of New South Wales.

5. [91]

   In September 2016, AHEPA NSW submitted a revised proposal. An extension was proposed to the first floor of the existing building. A lower ground parking area was also proposed for the new multi-purpose hall. President Kallimanis proposed to do the project in two stages, the first being to refurbish the existing buildings and grounds including an extension to the first floor and the lower ground floor parking area. The new multi-purpose hall would then be completed in Stage 2.

6. [92]

   In October 2016, the National Convention of the Order of AHEPA Australasia took place. The chairman, in his opening address, recorded his disappointment that only 50 AHEPANs were in attendance and the younger people “stayed away”.

7. [93]

   A motion was passed that the National Lodge finalise amendments to its constitution, on the path towards the incorporation of the National Lodge. Mr Doufas pointed out some important matters in respect of the incorporation of the national body, including:

8. [94]

   On 30 October 2016, the State Council of New South Wales was formed by members of Chapters Arete, Antigone and Apollon. Ms Penny Cretan was State President.

9. [95]

   On 14 December 2016, the Council accepted AHEPA NSW’s revised proposal. Mr Fandakis said that, whenever a proposal was made to the Council, some 20 colour copies of the proposal on A3 size paper were printed and placed on the main table at the meeting hall of AHEPA NSW so that whoever wanted a copy could get one.

First proceedings

1. [96]

   On 19 December 2016, AHEPA NSW commenced proceedings in the Corporations List, as it had not registered the resolutions passed in 2005, 2007, 2010 or 2015, amending its rules, in the time required by the 2009 Act and the Associations Incorporation Regulation 2016 (NSW). In April 2017, two members of AHEPA NSW, Mrs Alexandrou and Louisa Melas, were appointed as representatives on behalf of any of the members of AHEPA NSW who wished to contend that any of the resolutions were invalid.

2. [97]

   In January 2017, a newspaper article appeared in a local newspaper, “Big Plans for Bexley Club”, reporting that AHEPA NSW had taken over the lease of the site after its tender had been accepted by Rockdale Council. Photographed in the article is the first plaintiff, Mr Lianos, described as of the representatives of AHEPA NSW. Dr Diamandis described Mr Lianos as an integral part of the project team. Mr Lianos has attended most meetings of the committee of management since 2015 as a delegate of Chapter Anatole and has actively participated in discussion and debate about Bexley Bowling Club. The third plaintiff Luke Kyprios has attended almost every meeting of the committee of management since about 2016 as a delegate of Chapter Prometheus No. 6.

AHEPA Australia Limited

1. [98]

   In July 2017, AHEPA Australia Limited was incorporated. Mr Doufas was appointed as secretary and one of its many directors. Mr Antonakos became a director. The only asset of AHEPA Australia Limited is a trademark and some cash. Mr Fandakis considered that AHEPA NSW does not have any ties with AHEPA Australia Limited. AHEPA NSW says that the decision by persons aligned with the plaintiffs to incorporate AHEPA Australia Limited with a similar name is itself a reflection of the strategic steps taken by factions as part of a “broader dispute” concerning the future direction of various Greek cultural organisations or associations.

2. [99]

   In October 2017, the National Convention of The Order of AHEPA Australasia took place. The State Council of New South Wales attended, represented by Ms Cretan and Mrs Alexandrou. The minutes record that Mrs Alexandrou and Ms Melas “reported passionately” on their situation in New South Wales. It was said that AHEPA NSW had used a security guard to exclude 20 members of Daughters of Penelope Chapters from the annual general meeting, changed the locks of the AHEPA meeting hall, sold the building without going to an annual general meeting and drafted a new constitution which did not include the Daughters of Penelope. The following motion was carried:

3. [100]

   A new constitution was approved at the National Convention of AHEPA Australasia, being “Revision C” of The Order of AHEPA Australasia constitution. Mr Doufas explained to those present:

4. [101]

   On 6 March 2018, the Minister for Local Government approved the issue of a 21-year lease of Bexley Bowling Club to AHEPA NSW. This was an important advance in AHEPA NSW’s efforts to develop the site. The Council contacted AHEPA NSW and arranged a meeting at Council’s chambers on 12 April 2018. Before the meeting, AHEPA NSW inspected the property with a BCA consultant and a structural engineer with a view to preparing building condition reports.

Clarifying the Register of Members

1. [102]

   On 21 March 2018, Black J heard the first proceedings. As senior counsel for AHEPA NSW explained, after a protracted period of negotiation, AHEPA NSW and the representative members had come to an agreed position, abandoning the 2015 resolution but jointly seeking to have the earlier resolutions registered and also to establish a regime to ascertain the membership of AHEPA NSW going forward. After an explanation by AHEPA NSW’s senior counsel, adopted by counsel for the defendants, as to the circumstances in which the constitution had sought to be amended from time to time, his Honour made consent orders to register the 2005, 2007 and 2010 amendments and to call a special general meeting to reconstitute the membership. Further, the Court noted an agreement between AHEPA NSW and the representative defendants:

2. [103]

   On 10 April 2018, AHEPA NSW inspected the Bexley Bowing Club with a structural engineer. The building appeared to have deteriorated and the engineer expressed concern about the structural capability of the building to permit the extension to the first floor. On 12 April 2018, AHEPA NSW met with the Council and conveyed the findings of its engineer, suggesting that their consultants needed to examine the building further to determine the best course of action. Council stressed that this must be done immediately and AHEPA NSW must submit a proposal quickly. Council required AHEPA NSW to compile and submit a schedule of all works and associated specifications for Stage 1 and to advance the proposed works from conceptual to full design, with the design package to form part of a development application. AHEPA NSW retained structural, hydraulic, electrical, mechanical and BCA consultants to report on the existing condition of the building and consider revised proposals.

3. [104]

   On 13 April 2018, Black J gave reasons in respect of the orders already made in AHEPA NSW No 1, noting at [2]: (emphasis added)

4. [105]

   On 27 April 2018, Mr Kagelaris made sure the Register of Members was up to date and sent it to Mrs Alexandrou in preparation for a Special General Meeting to take place on 30 April 2018. A “unique list” was also provided to check members as they entered the room to vote, comprising 302 names. Mr Kagelaris had only been secretariat of AHEPA NSW since November 2017 and so it was, it seems to me, probably the first time he had done this task. In respect of discrepancies or errors in earlier versions of the register of members, President Kallimanis noted in a letter to Mrs Alexandrou attaching the list:

5. [106]

   In May 2018, AHEPA NSW received the reports and findings of its consultants and in June 2018, AHEPA NSW submitted an amended proposal to the Council to demolish the existing buildings on the site. AHEPA NSW submitted to Council that, based on its consultants reports, it was not technically feasible to retain the existing building and extend the first floor as previously envisaged. It was also not economically viable to refurbish and upgrade the existing building. In June 2018, AHEPA NSW submitted an architectural proposal for the proposed new building, to also be completed in Stage 1.

Second proceedings

1. [107]

   It would appear that the judgment of Black J in AHEPA No 1 did not quell the disputes between the members of AHEPA NSW. On 12 June 2018, President Kallimanis invited the members of AHEPA NSW to an open forum on 24 June 2018 to “put an end to the lies and to the personal attacks” and to discuss:

2. [108]

   On 24 June 2018, the Open Forum was held from 3.30 pm to 6.00 pm. Some 65 people attended. Notes of the meeting prepared by Mr Antonakos, who, it will be recalled, swore an affidavit in support of the defendants’ position in the first proceedings, reflect the level of acrimony then present. An explanation appears to have been given of AHEPA No 1 and discussion as to how to move forward, including proposing a new constitution at the next annual general meeting. According to Mr Antonakos’ note, which I am slightly reluctant to rely upon given his apparent antipathy to Mr Kallimanis, Mr Kallimanis expressed concern about the National Lodge’s “Plan of Action”, thought to include taking control of the assets of AHEPA NSW. In respect of the Bexley Bowling Club, the architect explained that it was not viable to refurbish the existing building and that plans to demolish that building were currently with Council for approval. There were questions from the floor as to the cost of the new building, and the architect was unable to commit to a cost at that stage.

3. [109]

   On 23 July 2018, AHEPA NSW wrote to Chapters Arete No. 3, Antigone No. 8 and Apollon No. 16, rejecting cheques for membership fees of AHEPA NSW. The letter stated:

4. [110]

   On 24 August 2018, Mrs Alexandrou and Evangelia Bouris commenced a second set of proceedings against AHEPA NSW in the General List of the Equity division of this Court seeking declarations as to who were members of AHEPA NSW. Mrs Alexandrou and Mrs Bouris sought to be appointed as representatives of all members of Chapters Arete No. 3, Antigone No. 8 and Apollon No. 16.

5. [111]

   On 12 September 2018, the Council endorsed AHEPA NSW’s revised proposal to replace the existing building and resolved that a further report be submitted tabling the proposed lease terms and design documentation including a detailed program and costings, demonstrating AHEPA NSW’s financial capacity to deliver the proposed works. Council also resolved that, three months after Council resolved to progress the lease, AHEPA NSW would be required to lodge a development application for the site. On 13 September 2018, Council asked AHEPA NSW to submit a full scope of works including specifications as required by the Preliminary Deed of Agreement in one month and, further, to advance discussions on the proposed terms for the Deed of Agreement to Lease and the lease.

6. [112]

   In about September 2018, Mr Kagelaris completed the annual task of updating the Register of Members. He used the lists of financial members sent by the Secretary or President of each Chapter after the end of the financial year on 30 June 2018: the lists did not have a standard format and were generally handwritten. The lists arrived in July and August. Mr Kagelaris updated the Register of Members based on this information, adding new members who had joined the Chapters and deleting the members who had neglected to pay their annual membership fees, had resigned or passed away. Mr Kagelaris maintained the register in an excel spreadsheet recording the name, address and contact details for each member and the Chapter to they belonged. On completion of this task, the Register of Members had 368 members. A member of Chapter Arete No. 3, Mary Loizou, was omitted in error.

Membership of AHEPA NSW increased

1. [113]

   On 18 September 2018, AHEPA NSW obtained advice from counsel on rule 3 of AHEPA NSW’s rules. Counsel concluded that rule 3 identified two separate pathways to membership:

2. [114]

   On 25 September 2018, the Council met with AHEPA NSW and outlined its key timeframes established by Councillors with a view to a further report being submitted at the December meeting of the Council to consider the full legal documents with the development application to be lodged in February 2019. President Kallimanis advised that “there are a few necessary items which will need to be endorsed by the members of the organisation via normal voting; it is a fact of life that when we deal with community organisations, members often alter their opinion over time and it becomes necessary to vote again on motions that were previously accepted”. On 10 October 2018, Council met and received an update from AHEPA NSW on Bexley Bowling Club.

3. [115]

   It would appear that Counsel’s advice was followed and nominations for membership of Chapters of AHEPA NSW increased substantially. On 9 October 2018, lists of nominees for membership of Chapters Diogenes No. 8, Antigone No. 27, Chiron No. 22 and Ippokratis No. 21 were sent to the secretary of AHEPA NSW, Dr Diamandis. There were 140 nominations in total. On 9 and 10 October 2018, Dr Diamandis deposited membership fees for applicants nominated by the Chapters of Chiron No. 22 and Antigone No. 27, being $1.10 per member.

4. [116]

   On 11 October 2018, the committee of management of AHEPA NSW met and, amidst discussions about the development at Bexley Bowling Club, the second proceedings and whether to call a special general meeting to adopt a new constitution to “close all the open wounds”, the nominees for membership of the Chapters Anatole, Antigone No. 27, Chiron, Diogenes and Ippokratis were endorsed.

5. [117]

   A few days later, Dr Diamandis gave Mr Kagelaris the lists of nominees for membership who had been endorsed and Mr Kagelaris revised the Register of Members accordingly. The total number of members in the Register was now 492: this was an increase of 124 members (it is not clear what happened to 16 of the 140 members endorsed on 11 October 2018). Dr Diamandis agreed that this was the first time that members had been admitted to AHEPA NSW without being financial members of a Chapter of AHEPA NSW as at 30 June of the previous financial year. Dr Diamandis referred to this as “a second pathway” identified by counsel.

Were these new members valid members of AHEPA NSW?

1. [118]

   This is the key question in this case. AHEPA NSW lodged a revised set of rules in 2018 incorporating the orders made in the first proceedings. For ease of reference, Rule 3, “MEMBERSHIP QUALIFICATION”, now provided:

2. [119]

   The plaintiffs seek declarations that:

3. [120]

   The plaintiffs submitted that the amendments to the Rules in 2005, 2007 and 2010 significantly altered the effect of rule 3(1)(a). Whilst it was previously arguable that the rule had only been operable once — on the date that a certificate of registration was granted to AHEPA NSW — it now applied to a new group of people each financial year. The proviso to clause 3(1) continued to have no work to do in relation to anyone to whom sub-clause (a) applied and operated only in relation to those to whom sub-clause (b) applied, that is, those who agreed to be bound by the code of ethics and rules of the unincorporated association but were not financial members of that association on 30 June of the last financial year. It was also submitted that these amendments to clause 3(1) resolved any difficulties with the word “and” as a conjunctive interpretation could now be adopted. On this construction, in order to be entitled to become a member of AHEPA NSW, a person must be both a financial member of the unincorporated association on 30 June of the previous financial year and agreed to be bound by the code of ethics and rules of the unincorporated association.

4. [121]

   Further, it was submitted by the plaintiffs that The Order of AHEPA Australasia had now formed a company limited by guarantee, AHEPA Australia Limited, and that this was the entity to which the rules now referred. The plaintiffs contended that it ought to be read as referring to the New South Wales based Chapters of AHEPA Australia Limited. It was suggested that it was the National Convention which was the entity incorporated but a separate unincorporated association continued to exist, membership of which meant membership of a Chapter. The plaintiffs accepted that the company and the unincorporated association could not be the same entity but submitted that the unincorporated association continued to exist but handed over some of its executive functions to the new entity. AHEPA Australia Limited sits alongside the Chapters, which are granted charters by the National Council but are not themselves a part of the company.

5. [122]

   The plaintiffs conceded that there may be no precedent for the construction of the constitution of an incorporated association where the constitution incorporates by reference the constitution of a different association which has since ceased to exist in the same form, but submitted it was analogous to situations where a bequest was made in a Will to a charitable association which, at the time that probate was granted, had ceased to exist: In re Vernon’s Will Trusts [1972] Ch 300 at 304–5; [1971] 3 All ER 1061 at 1065; Sir Moses Montefiore Jewish Home v Howell and Co (No 7) Pty Ltd [1984] 2 NSWLR 406 at 413; Stratton v Simpson (1970) 125 CLR 138 at 144; Public Trustee v Cerebral Palsy Association of Western Australia Ltd (2004) 28 WAR 496; [2004] WASC 36 at [68]–[69]; Overall v Family Voice Australia Inc [2014] NSWSC 736 at [45]–[46].

6. [123]

   The plaintiffs submitted that the reference to financial membership of the unincorporated association in rule 3(1)(a) should not be held to have lapsed or become devoid of meaning but should be interpreted as reference to financial membership of a New South Wales-based Chapter of AHEPA Australia Limited, as determined by the Constitution and By-laws of that organisation. To paraphrase Darke J in the Family Voice Australia case, from the point of view of the membership of the Order of AHEPA, all that happened in 2017 is that they became members of a new organisation, namely AHEPA Australia Limited, which had the same objects and substantially the same rules as the former unincorporated body. There have been changes to the organisational structure but no changes to the stated aims or objectives or applicable by-laws. That is, a new instrument was adopted for the carrying on of the organisation’s charitable purposes.

7. [124]

   In order to be a member of a New South Wales-based Chapter of AHEPA Australia Limited, the plaintiffs submitted that Part X of the By-laws of AHEPA Australia Limited set out the procedure and contained 12 steps, which Ms Nagle said usually takes three months or longer to complete, being:

8. [125]

   The plaintiffs submitted that it is clear from the By-Laws that attending an initiation ceremony is a precondition to membership of the Order of AHEPA. Part X, clause 11 of the By-Laws which states that if an applicant for membership fails to attend for initiation when notified by the secretary and fails to give a reason for non-attendance, the application will be deemed to be rejected as from the date set for initiation, unless the Chapter is of the opinion that the failure to attend was due to an unavoidable circumstance. Part X, clause 3 of the By-Laws states that the new applicant's application is referred to the Lodge (being the state-level “Grand Lodge” or “District Lodge”), for registration after initiation. Accordingly, the By-Laws do not permit registration of an application for membership until after the prospective member has attended initiation.

9. [126]

   The plaintiffs submitted that, under both limbs of clause 3(1) of the 2018 Rules of AHEPA NSW, an applicant cannot become a member of AHEPA NSW until an initiation of the member has been conducted:

10. [127]

    AHEPA NSW submitted that, with the incorporation of the association in 1993 and the subsequent passage of time, there no longer exists any meaningful work for rule 3(1) to perform. But this does not mean that its proper interpretation has changed from its predecessor in the 1993 Rules. The suggestion that the rules or by-laws of an external association, whether it be incorporated or not, operate to limit or curtail the membership regime defined in sub-rule 3(2) and rule 4 is inconsistent with rule 48, which expressly excludes the ability of any other purported constitutional rules to take precedence over the actual registered rules of the Association.

11. [128]

    AHEPA NSW drew a distinction between the use of the word “entitled” in sub-rule 3(1), which suggested that a person who fell within that rule would not receive automatic membership but would still need to be entered in the Register of Members, with the use of the word “qualified” in sub-rule 3(2). The process of qualification set out in sub-rule 3(2)(b) requires nomination for membership and approval. Such a person, even if nominated and approved, does not become a member until their name is entered upon the Register in accordance with sub-rule 4(4).

12. [129]

    AHEPA NSW noted rule 3 was originally enacted as rules 1 and 2. They were stand-alone rule rather than sub-rules. There was no structural indication that they were to be read together, or that rule 2 was subservient to rule 1. Further, it was submitted there was no practical reason why the proviso to rule 3(1) ought to apply to rule 3(2). If the association determines to permit additional persons to become members, there is no sensible reason why voting entitlements must be deferred until the following financial year, as the incoming member has already been nominated for membership and approved by the committee of management.

13. [130]

    In Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1; [2006] FCAFC 144, Weinberg, Kenny and Lander JJ considered the construction of corporate constitutions in light of the High Court’s judgments in Pacific Carriers Ltd v BNP Paribas (2004) 2118 CLR 451; [2004] HCA 35, Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55 and Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 in respect of construing commercial contracts by taking surrounding circumstances into account (see, more recently, Newey v Westpac Banking Corporation [2014] NSWCA 319, Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 and Cherry v Steele-Park (2017) 96 NSWLR 548; [2017] NSWCA 295). In separate judgments, their Honours expressed like views. Whilst it can no longer be said that surrounding circumstances can never be taken into account in construing constitutions (Weinberg J at [55]), or that terms cannot be implied (Lander J at [243]), the case for restraint when construing a constitution is powerful: Weinberg J at [56], Kenny J at [124], Lander J at [239], [243]. The rules of construction that apply to contracts should be applied with caution to constitutions, as a company’s constitution is a contract of an unusual kind: it can be altered without the agreement of all of the contracting parties; it cannot be rectified even if it does not accord with the concurrent intention of the signing parties; the contracting parties vary from time to time as the members come and go, the constitution binding the members for the time being; and the constitution has a public dimension with statutory force and by its nature is more likely to be read and relied upon by third parties: Weinberg J at [57]–[58], Kenny J at [123], Lander J at [225]–[226]. These principles have been applied by Robb J in Johnston v The Greens NSW [2019] NSWSC 215 and Brereton J in In the matter of New South Wales Leagues’ Club Ltd [2014] NSWSC 1610.

14. [131]

    As to how the meaning of terms in a corporate constitution may change over time, Branson J considered this in Re Ferguson (1995) 58 FCR 106; sub nom. Re Giga Investments Pty Ltd (in admin) (1995) 17 ACSR 472 when construing whether the requirement to “meet together” extended to participation by telephone. At FCR 111, ACSR 476:

15. [132]

    Re Giga Investments was noted with approval by Lander J in Lion Nathan Australia v Coopers Brewery at [244] and Brereton J in In the matter of New South Wales Leagues’ Club Ltd at [9]:

16. [133]

    However, the authors of Ford’s Principles of Corporations Law (LexisNexis, looseleaf) note at [6.080]:

17. [134]

    As to the relevance of established practices, the plaintiffs relied on Lewis v Heffer [1978] 1 WLR 1061, where the Court of Appeal considered the rules of two unincorporated associations, the national Labour Party and the local constituency party, in circumstances where the National Executive Committee of the Labour Party suspended members of a local constituency party. There was strong evidence that the National Executive Committee had exercised a power over local constituency parties in this way over the years. Lord Denning MR noted at 1072, “In a body like this, rules are constantly being added to, and supplemented by, practice or usage: and, once accepted, become as effective as if actually written”. Per Ormrod LJ at 1076:

18. [135]

    In the revised set of rules in 2018 incorporating the orders made in AHEPA No 1, Rule 1, “INTERPRETATION” provided:

19. [136]

    In its original sense, “unincorporated association” in rule 3(1)(a) was a reference to The Order of AHEPA in the State of New South Wales as it existed pre-incorporation in 1993. As that term had come to be used in rule 3(1)(a), as a result of the loss of the 1993 Rules for a period of time, the development of a practice of assembling the Register of Members each year based upon the lists of financial members submitted by the Chapters to the State Convention, the recasting of the Rules in 2003 to record this practice, and further amendments in 2005 and 2010, “unincorporated association” had come to mean the Chapters. Whether one refers to the Chapters as the Chapters of The Order of AHEPA Australasia or Chapters of AHEPA NSW is an exercise in semantics: the Chapters were unincorporated associations in their own right (or, sometimes, incorporated entities) who were affiliated with other unincorporated (or incorporated) entities in the framework provided by the Constitution of The Order of AHEPA Australasia. But it is those Chapters to which rule 3(1)(a) now referred. Rule 3(1)(b) was essentially a vestigial limb, reminiscent of the incorporation of AHEPA NSW in 1993 when “unincorporated association” meant something else.

20. [137]

    The proviso inserted at the conclusion of sub-rule 3(1) operates only with respect to the text immediately preceding it. It does not apply to sub-rule 3(2). As Latham CJ stated in Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 274–5:

21. [138]

    The members coming to AHEPA NSW through rule 3(1) are “entitled” to be members of AHEPA NSW. That is, if a person has been a financial member of a Chapter on 30 June of the last financial year, then that person is entitled to be a member of AHEPA NSW without further ado, and to vote, but for a finite period of time, being until the register of members is updated after the end of the next financial year. AHEPA NSW does not need to, and indeed is not permitted to, exercise its own corporate mind through a general meeting or the committee of management and decide not to add such a person as a member or not allow them to vote if they meet this criteria.

22. [139]

    Rule 3(2)(b) remained a second pathway for new members, albeit diminished by the ham-fisted amendments to the rules of AHEPA NSW in 2003 which eliminated a pathway for such members through rule 3(1)(b). Applicants for membership through the process of nomination under rule 4(1) and approval of the committee of management of AHEPA NSW are “qualified” for membership rather than “entitled”. “Entitled” suggests that someone has a present right to be a member, whilst “qualified” suggests that someone has fulfilled the prerequisites to becoming a member but does not necessarily have the right, without more, to become a member. This subtle difference in terminology may reflect the fact that, through the second pathway, AHEPA NSW is making the decisions and taking the actions necessary to make such an applicant a member rather than following the dictates of the Chapters. However, I am reluctant to read too much into subtleties of language in a document which has been crudely amended over time without consequential amendments to ensure that the document remained consistent.

23. [140]

    Rule 4, “NOMINATION FOR MEMBERSHIP” provided:

24. [141]

    The “secretary of the unit of the unincorporated association nominating the person for membership” is a reference to the Secretary of a Chapter. Whilst, under clause 7 of the 1990 Constitution of the Order of AHEPA Australasia, that could have been any unit of The Order of AHEPA including the Grand Lodge or National Convention, as best I understand the 2017 Constitution of AHEPA Australia Ltd, units are Chapters only. The “Secretary of the Association” is the Secretary of AHEPA NSW elected in accordance with rule 15 being, relevantly, Dr Diamandis. Thus, the second pathway of membership is as follows:

25. [142]

    Members joining AHEPA NSW directly through the second pathway did not have a temporal limit on their membership, that is, it did not fall to be determined again by a Chapter at the end of the next financial year. The differences between these pathways is simply the result of a series of amendments over time to one pathway but not the other. It is not incumbent upon me, in construing the rules, to ensure that the pathways were comparable or fair, but simply to say what the document means as it is stated.

26. [143]

    Rule 4(1)(a) says nothing about the nominee having been initiated as a member of the Chapter, although it is reasonable to think that the Secretary would not nominate someone to be a member of AHEPA NSW unless they were also content for that person to be a member of the Chapter. As to how someone becomes a member of a Chapter, a “ritual of ceremonies” for the Order of AHEPA, Grand Lodge of NSW, published in 2017 but first circulated by the Grand Lodge Ritual Committee in 2001 contains detailed instructions for an initiation (nine pages), including semi-darkness, lit candles, the Bible, statuary, and an apparently elaborate and lengthy ceremony. Ms Nagle says this process was used in each of the Chapters with which she has been affiliated or a member and ceremony takes at least an hour although accepted that “quite often members … don’t follow word for word, but, yes, more or less”. Dr Diamandis, having been a member of a Chapter for many years, says that the usual procedure nowadays is that the Chapter Secretary mentions to the members that an application or nomination form has been received and records it in the minutes. If it was necessary to determine the matter, I would prefer the evidence of Dr Diamandis as inherently more likely; either way, the 2003 Rules say nothing about adherence to such rituals at the Chapter level before its nomination of a member of AHEPA NSW is valid.

27. [144]

    Rule 5, “CESSATION OF MEMBERSHIP” provided:

28. [145]

    It follows that the applicants for membership, whose nominations were submitted on 9 October 2018 to Dr Diamandis, endorsed by the committee of membership on 11 October 2018 and entered on the register of members a few days later, became members of AHEPA NSW in accordance with rule 3(2)(b) on entry into the register.

29. [146]

    One feature of these events, however, is potentially significant. The membership fees of the nominees from two of the Chapters were paid before entry into the Register of Members. Cheques for the membership fees of the nominees from the other two Chapters were not deposited until after the names had been added to the register: Chapter Ippokratis No. 21’s fees were deposited on 20 October 2018 and Chapter Diogenes No. 8’s fees were deposited on 21 November 2018. Dr Diamandis said that the treasurers of the Chapters paid the sum required by giving him a cheque for the Chapter’s nominees, and that the receipts relating to the deposit of the cheque payments were tabled at the meeting on 11 October 2018. Certainly, the minutes of meeting record that two deposit slips were tabled, but obviously enough, the remaining deposit slips could not have been tabled because the cheques weren’t deposited until after the meeting. The dates when the cheques were deposited by AHEPA NSW do not tell me when the nominees paid their fees of $1.10 each to the Chapter. It was not put to Dr Diamandis that, in fact, he didn’t receive the membership fees until after the names of the members were entered in the register, and thus I will proceed on the basis that the fees were paid before their names were entered.

A new constitution for AHEPA NSW

1. [147]

   On 18 October 2018, the committee of management of AHEPA NSW held a special meeting. AHEPA NSW’s solicitor attended and presented a draft Constitution and By-laws.

2. [148]

   On 22 October 2018, notice of a special general meeting at 7.30pm on 13 November 2018 was issued by AHEPA NSW to its members, being those on the Register of Members updated by Dr Diamandis to include the new members accepted at the committee of management meeting on 11 October 2018, the total membership thus being 492. The notice proposed a resolution that the Constitution be adopted in lieu of the current Rules, and attached the Constitution in clean and marked-up form as well as the proposed By-laws.

3. [149]

   The notice and its attachments was sent to members according to the contact details recorded in the Register of Members. Where members had provided an email address, then an email was sent to them, being 229 members. The remaining members were posted the notice and accompanying documents. Some 40 members were sent the documents by both post and email. On 22 October 2018 at lunchtime, President Kallimanis and Treasurer Premetis posted the envelopes at the post office. The emails were sent late in the evening on 22 October 2018. Only two or three posted items were ‘returned to sender’, although the member to whom one of these items had been sent attended the meeting anyway.

4. [150]

   On 23 October 2018, an advertisement in respect of the meeting was published in Greek newspapers O Kosmos and The Greek Herald and was also published on the website of AHEPA NSW.

5. [151]

   Rule 40 of the Rules provided:

6. [152]

   The postal articles are deemed to be received on the day they would arrive in the ordinary course of post: rule 40(2). Section 160(1) of the Evidence Act 1995 (NSW) provides:

7. [153]

   It seems to me that the presumption of service of postal items was not displaced by evidence, and thus the members to whom notice was sent by post only did not have 21 days’ notice of the meeting. However, the plaintiffs did not take this point, but challenged whether particular members had been notified of the meeting (the complaint being made on 30 October 2018 and thus in ample time for the people concerned to make arrangements to attend the meeting if they so wished). Section 1322(1)(b)(ii) of the Corporations Act provides that “a reference to a procedural irregularity includes a reference to a defect, irregularity or deficiency of notice or time.” Sub-sections 1322(2) and (3) have the result that the meeting is not invalidated unless the Court is of the opinion that the irregularity has caused or may cause substantial injustice that cannot be remedied, and the Court declares the meeting to be void. These provisions are applied to associations by the 2009 Act: section 96 and section 97 provide that the Regulations may declare any matter to be an applied Corporations legislation matter, and to modify those provisions in their application to associations, and regulation 18 of the Associations Incorporation Regulation 2016 (NSW) declares any matter relating to associations to be such a matter in relation to section 1322 of the Corporations Act, except for subsection (3B). See also the Corporations (Ancillary Provisions) Act 2001 (NSW); section 5F of the Corporations Act and section 95 of the 2009 Act. No application was made by the plaintiffs to invalidate the meeting on this score, as would be required to avoid the automatic validating effect of subsections (2) and (3).

8. [154]

   On 30 October 2018, the solicitors for the plaintiffs in the second proceedings wrote to AHEPA NSW’s solicitors querying whether members of the disputed Chapters Arete No. 3, Antigone No. 8 and Apollon No. 16 would be allowed to vote on 13 November 2018 and conveying an offer by their clients to pay for the meeting to be professionally filmed. The solicitors also sought a list of all people who would be permitted to vote at the meeting to whom notice of the meeting had been given and sought confirmation as to how notice had been given. On 2 November 2018, AHEPA NSW’s solicitors replied. Whilst declining to have the meeting recorded, the solicitors advised:

9. [155]

   On 5 November 2018, the plaintiffs’ solicitors in the second proceedings responded, providing names of 17 members who it was said had not received notice of the meeting. Further:

10. [156]

    On 12 November 2018, the National Convention of AHEPA Australia took place at which its Constitution was amended to clarify membership, composition of the National Convention and its relationship with State and Territory Councils. The definition of the purpose of AHEPA was amended, to add that the purpose of AHEPA is “to unite and represent all State/Territory AHEPA Associations in Australia…" The membership rule was replaced with:

11. [157]

    On 12 November 2018, the day before the special general meeting, the solicitors for the plaintiffs in the second proceedings wrote to AHEPA NSW’s solicitors again, pressing for a copy of the Register of Members and requesting inspection of the current Register of Members pursuant to rule 39 of the Rules together with the minutes of all Chapters under the control of the Grand Lodge of New South Wales from 30 June 2017 to 30 June 2018, to be made available from 5.00 pm to 7.30 pm on 13 November 2018, that is, immediately before the meeting. Presumably, the solicitors wished to check the register against the minutes of the Chapters. Apparently, it was thought that AHEPA NSW would have minutes of the Chapters in its possession because Mr Kagelaris was thought to keep them on his computer. An examination of the minutes, if indeed AHEPA NSW had them, would not have revealed the members added to the register on 11 October 2018.

12. [158]

    On 13 November 2018, AHEPA NSW’s solicitors replied that the Register of Members was available for inspection by any member in accordance with the rules and statutory requirements.

Meeting on 13 November 2018

1. [159]

   As described by Dr Diamandis, Mr Premetis and Mr Kallimanis, the meeting on 13 November 2018 was carefully organised, well attended and meticulously run. Of 492 members, 381 attended. According to Mr Antonakos, this was the highest attendance that he can recall of any general meeting since 1993. Rather than members signing themselves in on arrival, Mr Premetis, assisted by two other members, identified and marked members off the Register of Members. Whilst the plaintiffs’ witnesses were concerned about the departure from usual meeting practice, it seems to me that AHEPA NSW recognised that this meeting needed to be conducted in a more meticulous manner than usual given the subject-matter and likely controversy attending any outcome. Dr Diamandis gave members whose names were on the Register of Members a blue ballot paper. Dr Diamandis handed out 371 blue ballot papers.

2. [160]

   A list of disputed members was also at the meeting, listing 12 members, to which four additional names were added in handwriting at the meeting, and 10 of whom attended. The list was drawn from a list in circulation between the solicitors in the second proceedings, and comprised people about whom AHEPA NSW said it had not received sufficient information to verify whether they had become financial members of a Chapter between 30 April 2018 and 30 June 2018. The names of those people had not yet been entered in the Register of Members and thus they were not then members. If the member was not in the Register of Members but on the list of disputed members, then Mr Premetis ticked their name off the list of disputed members. Dr Diamandis gave these members a pink ballot paper. Dr Diamandis handed out 10 pink ballot papers. Dr Diamandis explained that the purpose of the pink ballot papers was so that the votes cast by the people whose membership at the time was disputed could be distinguished by the other votes should it be necessary to do so.

3. [161]

   According to Dr Diamandis, one person was refused entry as she had not paid the membership fee to become a member and was not eligible to attend or vote. The membership fee was subsequently received from the Chapter in January 2019.

4. [162]

   Michael Londos complains that, although a financial member of Chapter Heracles No. 12, he did not receive notice of meeting and, when he attended the meeting hall, he was refused entry by Dr Diamandis, Mr Premetis and Mr Kallimanis. He would have voted against the resolutions. When the Register of Members was finalised before issuing the notice of the meeting, the most recent list of financial members of Chapter Heracles No. 12 which Dr Diamandis had was for the year ended 30 June 2017, which Ms Nagle had provided in March 2018. Mr Londos’ name was not on the list. Although Mr Londos’ name was included on the list of financial members of Chapter Heracles No. 12 for the year ended 30 June 2018, that list was not sent to AHEPA NSW until the early hours of the morning of 23 October 2018, after the notice of meeting had been issued. But even when Dr Diamandis received the 2018 list, he did not necessarily accept that Mr Londos was in fact a financial member of Chapter Heracles No. 12:

5. [163]

   There are no minutes of meeting of Chapter Heracles No. 12 in evidence and so I cannot determine whether Mr Londos became a member of that Chapter following the initiation process described by Ms Nagle, or at all. Dr Diamandis’ stringent approach to Mr Londos’ right to vote was perhaps at odds with that taken to the admission of new members via the second pathway. Having become aware that Mr Londos was entitled to vote by reason of having been identified as a financial member of Chapter Heracles No. 12 for the year ended 30 June 2018, Dr Diamandis should have sent him a notice of meeting and given him a ballot paper.

6. [164]

   After reading the proposed resolution, members spoke for and against the motion. Mr Lianos spoke against the motion as did Ms Nagle. The procedure adopted at the meeting was slightly different from usual as the vote was not taken on a show of hands but by ballot. Ballot papers were provided and placed in ballot boxes. Counting commenced at 9.10 pm. Mr Premetis counted the votes assisted by two others. Mrs Alexandrou and another were scrutineers. The votes were counted twice. In favour of the resolution were 290. Against the resolution were 78 votes with one blank ballot paper. With 78.6% of the votes cast, the motion was carried. Of disputed members’ votes, one voted in favour of the motion and seven against. Including the disputed members’ votes, the motion was carried by 77.2% of the votes cast.

7. [165]

   The ballots have been re-counted by the plaintiffs’ solicitor, Ms Andrews. There were 367 ballot papers (358 were blue and 9 were pink). Counting blue ballots only, there were 76.02% in favour of the resolution and, counting pink ballots as well, there were 76.29% votes in favour of the resolution. However, Ms Andrews included abstentions in her tally, and the rules required 75% of votes cast: rule 31; section 39(1), 2009 Act.

Section 1322 of Corporations Act

1. [166]

   As outlined at [153] above, section 1322 of the Corporations Act applies to incorporated associations in NSW. Pursuant to section 1322(2) of the Corporations Act, a “procedural irregularity” does not invalidate a relevant proceedings “unless the Court is of the opinion that the irregularity has caused or may cause substantial injustice that cannot be remedied by any order of the Court and by order declares the proceedings to be invalid.” On the other hand, where the irregularity is “substantive” and not merely “procedural”, the proceeding will be presumed to be invalid; although the Court has the power to make a validating order under its inherent jurisdiction or under section 1322(4)(a): Cordiant Communications (Australia) Pty Ltd v The Communications Group Holdings Pty Ltd (2005) 55 ACSR 185 [2005] NSWSC 1005 at [97] (Palmer J). The injustice or prejudice must not only be “substantial”, but also real and not merely theoretical: Bull v Australian Quarter Horse Association [2014] NSWSC 1665 at [314] per Hallen J; Atlas Holdings Pty Ltd (as trustee for the Atlas Trust) v Allied Resource Partners Pty Ltd (2017) 122 ACSR 345; [2017] FCA 923 at [31]–[32] per Lee J.

2. [167]

   The plaintiffs’ submissions were largely directed to AHEPA NSW admitting ineligible votes at the general meeting – those added by the second pathway – being a “substantive” irregularity which would not warrant a validation order as substantial injustice was caused as the admission of those votes made a difference to the result of the meeting: Cordiant at [108]; Cambodian Buddhist Society of NSW v Thai [2017] NSWSC 1433 at [82]-[83], [124]. However, I have found that the members endorsed by the committee of management on 11 October 2018 and added to the register soon afterwards were members of AHEPA NSW, and thus their votes were valid. There was no irregularity on this score which requires a validation order.

3. [168]

   The plaintiffs pointed to two further problems with the meeting: Mr Londos was excluded from voting; and the people on the list of disputed members who did not attend the meeting had not received notice of it. It is possible that, if they had been notified, they may have attended and voted against the resolutions. As mentioned, the list of disputed members had 16 names, of which 10 attended and voted: eight voted against the resolutions, one voted in favour, and one abstained. On the conclusion of the second proceedings, to which I will refer shortly:

4. [169]

   How does one unscramble this omelette? I think one ought to consider the potential result in the most conservative manner favourable to the plaintiffs. Thus, I have adopted Ms Andrews’ tally, which does not accord exactly with the count at the meeting. I assume that Mr Londos, as he said, would have voted against the resolutions. I assume that, notwithstanding that the second proceedings were resolved on 10 December 2018 and then only by a declaration that the disputed members were members as at that date, that the members were accepted by AHEPA NSW as members when the notice of meeting was issued on 22 October 2018. I will assume that if the 6 who did not attend or, more specifically, the four of their number who were entitled to vote, had received notice then they would have attended and voted against the resolutions. I will assume that the two disputed members who attended and voted, but shouldn’t have, accounted for the ‘yes’ vote and the abstention. If one adds 13 ‘no’ votes (including the eight pink ballots actually cast) and removes one ‘yes’ pink ballot from the total votes cast as counted by Ms Andrews, the result is 370 votes cast of which 279 voted yes and 91 voted no, that is 75.4% in favour of the resolutions.

5. [170]

   The question is whether an order should be made under section 1322 to cure any irregularity in respect of Mr Londos or the disputed members who did not attend the meeting and, potentially, could otherwise have voted against the resolutions. The irregularities were substantive, in that AHEPA NSW thereby deprived members of a right to vote by not recognising their entitlement to do so under its Rules. As to whether the persons party to the contravention acted honestly, it seems to me that AHEPA NSW had retained solicitors in respect of the second proceedings and counsel in respect of the membership rules and, it would appear, was acting consistently with their advice. Steps were taken to preserve the votes of disputed members pending the resolution of that issue. Overall, I consider that section 1332(6)(a)(ii) is satisfied. As these irregularities would have made no difference to the result of the meeting, making all assumptions in favour of the plaintiffs, then I consider it appropriate to make an order under section 1332(4) as I am satisfied that no substantial injustice has been or is likely to be caused to any person.

Registration of new constitution

1. [171]

   The constitution adopted at the meeting was promptly lodged with NSW Fair Trading by Dr Diamandis.

2. [172]

   On 16 November 2018, the second proceedings were listed before Black J for hearing of the plaintiffs’ application to be appointed as representatives of all members of Chapters Arete No. 3, Antigone No. 8 and Apollon No. 16 and for AHEPA NSW to pay their costs of appearing as representatives. Counsel for AHEPA NSW abandoned reliance on the position put in its letter of 23 July 2018, accepted that the plaintiffs were entitled to vote at general meeting and were members of AHEPA NSW but was unable to assist the Court as to how many other members of the three Chapters were also on the Register of Members. His Honour considered AHEPA NSW’s position to be “incoherent”, leaving all members of the three Chapters in considerable uncertainty as to their position.

3. [173]

   His Honour was satisfied that a representative order should be made, permitting Mrs Alexandrou and Ms Bouris to be representatives of all members of the three Chapters. However, his Honour was not satisfied that AHEPA NSW should indemnify the plaintiffs for their costs of doing so. Further, in order to clarify which members of the three Chapters were accepted as being members of AHEPA NSW, his Honour made the following orders:

4. [174]

   By now, the Council was becoming impatient. Council expressed concerns over the capacity to meet the commitments made in AHEPA NSW’s tender, in particular, the lack of a full design specification. On 16 November 2018, the Council requested an update on the design for Stage 1 by 19 November 2018 so that an update could be provided to the Council in advance of its December meeting. On 19 November 2018, Mr Fandakis advised the Council that it had become necessary to call a special general meeting to adopt a new constitution and obtain a fresh endorsement by the members at a general meeting to allow AHEPA NSW to continue its commitment to the Council regarding Bexley Bowling Club. Although a new constitution had been adopted and registered, the committee of management still needed to convene a general meeting to put a motion that the members re-endorse the agreement with Council regarding Bexley Bowling Club. As soon as the new constitution was registered, AHEPA NSW would give the required 14 days’ notice to members for a general meeting: “based on the results of the previous vote for the constitution there will be no problem in passing the motion for Bexley Bowling Club”. The initial proposed internal configuration of the Stage 1 building would also be presented to the members at the meeting and it was anticipated that AHEPA NSW would be in a position to proceed with the Council on 20 December 2018.

5. [175]

   On 22 November 2018, AHEPA NSW’s solicitors wrote to the solicitors for the plaintiffs in the second proceedings accepting that each of the persons in the represented group were entitled to membership and that their names already appeared in the Register of Members. AHEPA NSW accepted that all of those persons had the same membership rights as every other member of AHEPA NSW.

6. [176]

   On 29 November 2018, NSW Commissioner for Fair Trading emailed AHEPA NSW indicating that several representations had been received about the management of AHEPA NSW and the validity of the meeting on 13 November 2018. Notice of 21 days was said not to have been provided in some instances or at all. It had also been asserted that some of the committee’s actions were not consistent with their statutory responsibilities and that internal disputes were impacting on the operation and corporate governance of the association. On 5 December 2018, NSW Commissioner for Fair Trading sought confirmation that notice of the proposed special resolution had been provided to members and that the process undertaken in respect of passing the special resolution to adopt the new constitution complied with the Act, the current constitution and the law generally. AHEPA NSW’s solicitor provided the assurances sought.

7. [177]

   On 10 December 2018, the second proceedings were resolved by the entry of consent orders. The Court declared that each of the plaintiffs and the persons who they represented were members of AHEPA NSW and entitled to have their names recorded on the Register of Members. Dr Diamandis said that, after these orders were made, these members were included in the Register of Member, being the members to whom pink ballot papers had been issued if they had attended the special general meeting.

8. [178]

   On 17 December 2018, Council followed up Mr Fandakis as to the registration of a new constitution and the new members’ endorsement of the proposal for Bexley Bowling Club. A meeting was requested to obtain an understanding of AHEPA NSW’s adherence to the time frames in relation to proving AHEPA NSW’s financial capability to carry out the works, providing design detailed documentation and a firm date for lodgement of a development application. A meeting was arranged for 20 December 2018.

9. [179]

   On 18 December 2018, the new Constitution and By-laws were registered by NSW Commissioner for Fair Trading. By reason of my earlier conclusions as to the validity of the resolutions passed on 13 November 2018, it follows that the registration was valid and correct.

10. [180]

    On 20 December 2018, AHEPA NSW and the Council met. After the meeting, Council confirmed key dates to be adhered to: detailed floor layout plans, project management methodology, project scope and team by 21 January 2019 to be discussed at a meeting on 22 January 2019; detailed funding model by 28 January 2019 to be discussed on 29 January 2019; and all required documentation to lodge the development application by 30 April 2019. The Council concluded:

Calling meetings to approve the development

1. [181]

   The new Constitution of AHEPA NSW enables the committee of management to deal with property with a resolution of members in general meeting, but no longer requires a special resolution. On 10 January 2019, the committee of management of AHEPA NSW sent an agenda to members inviting them to attend the annual general meeting on 28 January 2019. The notice proposed the following motion:

2. [182]

   On 13 January 2019, Mr Antonakos as secretary of Chapter Apollon No. 16 sent a letter enquiring why its representative (him) was not being invited to attend meetings of the committee of management. Dr Diamandis says this was because the meeting of the committee of management on 13 December 2018 discussed the outcome of the second proceedings in which Mr Antonakos was a witness for the plaintiffs.

3. [183]

   On 22 January 2019, AHEPA NSW met with Council officers and provided concept plans. The project was to be placed before the Council at its next meeting in early February 2019 and Council officers requested that AHEPA NSW provide a detailed funding model to complete the project by 1 February 2019 including a statement of financial position, proof of equity, anticipated project cost by major work stages and a breakdown of funding sources for major work stages. A meeting with Council was proposed on 4 February 2019 to discuss funding strategies.

Third proceedings

1. [184]

   On 22 January 2019, solicitors for the plaintiffs in these proceedings wrote to the Secretary of AHEPA NSW objecting to the resolution being put to the annual general meeting as the information provided to members was said to be manifestly deficient. Complaint was made that the members had never been provided with documents with, so far as I can tell, did not then exist, being a proposed development application, proposed lease, quantitative survey in respect of the cost of the project, finance plans or professional advice. It seems to me that the committee of management had been distracted by its efforts to achieve a mandate for the proposal and install a workable decision-making structure going forward from attending to the substantive tasks in progressing the development. The solicitors suggested, on a basis that is not clear to me, that AHEPA NSW was engaged in an “apparently deliberate attempt to conceal all particulars” concerning the project sufficient to amount to a breach of section 30A of the Associations Incorporation Act 2009 as well as fiduciary duties owed to members of the association. In addition, the solicitors suggested that a large number of the votes cast at the 13 November 2018 special general meeting were by members not entitled to vote and thus the new constitution had not been passed. A copy of the Register of Members was sought or, failing that, inspection of it. The plaintiffs said they would approach the Duty Judge to seek injunctive relief unless AHEPA NSW agreed not to put the proposed resolution to the meeting on 28 January 2019 and to provide the Register of Members and supporting documents in respect of each recent member.

2. [185]

   On 24 January 2019, these proceedings were commenced before the Duty Judge, Lindsay J. Affidavits in support were filed by Ms Nagle, Mrs Alexandrou, Mr Lianos and Mr Antonakos. On 25 January 2019, by consent, Lindsay J ordered an interlocutory injunction preventing AHEPA NSW from proposing or permitting voting on motions in respect of the Bexley Bowling Club at the meeting on 28 January 2019. The meeting took place but the resolution was not discussed.

3. [186]

   On 1 February 2019, AHEPA NSW provided a preliminary funding scenario to the Council. It comprised a list of possible options subject to approval of AHEPA NSW’s members including borrowing against the equity of AHEPA NSW’s properties at Rockdale or Surry Hills, negotiating a joint venture or selling AHEPA NSW’s properties in Rockdale and borrowing part of the cost. Preliminary discussions were said to be underway with other parties and once a suitable scenario was reached, they would request members’ approval. I suspect the information submitted to Council was far less detailed than what was sought but, in the circumstances, there was little AHEPA NSW could do given its inability to discuss the matter at a meeting of members.

4. [187]

   On 7 February 2019, AHEPA NSW attended a further meeting with the Council. Following the meeting, Council sent an email requesting a current market valuation of the properties AHEPA NSW wished to borrow against to fund the project, audited financial statements, a statement of loan balances for loans against any properties owned by AHEPA NSW and a summary of what was expected from a meeting scheduled for 27 February 2019 and the upcoming hearing in the third proceedings. Whilst the Council officer noted that the delays to date had been caused by AHEPA NSW’s internal disagreements and subsequent inability to resolve to proceed with the project,

5. [188]

   On 11 February 2019, AHEPA NSW issued a notice of general meeting to take place on 28 February 2019 proposing the following motions:

6. [189]

   Mr Fandakis said that the latest preliminary floor layouts had been made available for inspection at the AHEPA headquarters, Monday to Friday, from 3.00 to 8.00 pm, from 13 February 2019 onwards. Mr Fandakis said:

Endorsement of secretary and treasurer of AHEPA NSW

1. [190]

   On 18 February 2019, a meeting of the committee of management endorsed Mr Diamandis as Secretary and Mr Premetis as Treasurer of AHEPA NSW. The plaintiffs submit that under rule 15, the Secretary and Treasurer are to be elected by the committee of management by ballot rather than “endorsed” as they appear to have been. Further, as Dr Diamandis has never been a member of The Order of AHEPA Australasia, the plaintiffs submit he is not eligible to be appointed as secretary of AHEPA NSW.

2. [191]

   By reason of my earlier conclusions as to the validity of the resolutions passed on 13 November 2018, it follows that the procedures for appointment of a treasurer and secretary under the new constitution were the ones to be followed. Whilst the former rules provided for the committee of management to elect its office-bearers, apart from the president and vice-president, from its members, the new constitution provided that the President, Vice-President, Treasurer and Secretary of the Grand Lodge hold the same roles in AHEPA NSW ex officio. Consistently with this, office-bearers in the committee of management were “endorsed” rather than elected. Whilst AHEPA NSW did not put on clear evidence that Mr Premetis and Dr Diamandis were, after the State Convention held on 2 December 2018, the Treasurer and Secretary respectively of the Grand Lodge of New South Wales, I infer it from the minutes of meeting of AHEPA NSW thereafter. They were thus correctly endorsed as the Treasurer and Secretary of AHEPA NSW on 18 February 2019.

3. [192]

   On 20 February 2019, the plaintiffs’ application for an interlocutory injunction to prevent the meeting on 28 February 2019 was determined, largely by consent, on terms to enable AHEPA NSW to obtain the funding needed to meet Council’s requirements to lodge a development application and thus keep the commercial opportunity at Bexley Bowling Club alive until these proceedings were finally determined. AHEPA NSW gave an undertaking that, if the third resolution was passed at the meeting then AHEPA NSW would only expend up to $375,000 for the purpose of preparing reports to lodge a development application with the Council for Stage 1 of the development at Bexley Bowling Club, such funds to be raised from an authorised deposit-taking institution and secured by a mortgage against the Surry Hills property.

Meeting on 28 February 2019

1. [193]

   On 28 February 2019, a special general meeting was held. The minutes of meeting suggest it was a tumultuous affair. Anthony Alexandrou, a member of Chapter Prometheus No. 6 and husband of Mrs Alexandrou, received the notice of meeting and information memorandum in the post on 15 February 2019. On arriving at the meeting, his name was marked off a list of members by Mr Premetis and on a laptop by Dr Diamandis and given a ballot paper. The meeting was chaired by the new President of AHEPA NSW, Bill Skandalakis. Two members spoke in favour of the motion and two against, being Mr Lianos and Mr Alexandrou. Mr Premetis and Mr Alexandrou counted the votes with scrutineers.

2. [194]

   The resolutions passed with 72.48% of the votes cast: 189 members voted, 137 in favour and 52 against. It is not known which of the members who voted in favour of the resolutions were amongst those endorsed by the committee of management on 11 October 2018 nor, for the reasons given, does it matter. Under the former constitution, 21 days’ notice would have been required for this meeting, along with75% of the vote. AHEPA NSW accepts that, if the Court concludes that the adoption of the new constitution in November 2018 was invalid, then the resolutions passed at this meeting were rendered invalid. By reason of my earlier conclusions as to the validity of the resolutions passed on 13 November 2018, it follows that these resolutions were validly passed.

3. [195]

   The plaintiffs object to the third resolution on the basis that the committee of management substantially failed to make full and fair disclosure of all facts and material to enable members to determine whether to vote on the resolution. The information memorandum did no more than set out the nature of the project in broad terms. The committee failed to inform the members of the manner in which funding was proposed to be obtained, the extent to which it was proposed that any assets would be sold or encumbered and the terms on which this was proposed to occur, the estimated costs and duration of the project or the estimated financial impact of the project on the association based on an independently prepared feasibility study. The plaintiffs submit that the members of the committee of management breached their fiduciary duties.

4. [196]

   Accepting that the members of the committee of management owed fiduciary duties to the members of the association (Lai v Tiao (No 2) [2009] WASC 22 at [577]; Pine Rivers, Caboolture and Redcliffe Group Training Scheme Inc v Group Training Association Queensland & Northern Territory Inc [2015] 1 Qd R 542; [2013] QCA 358 at [39]; Stratford Racing Club Inc v Adlam [2008] NZAR 329; [2008] NZCA 92 at [58]; Haselhurst v Wright (1991) 4 ACSR 527; (1991) 9 ACLC 728; Allen v Townsend (1977) 16 ALR 301; (1977) 31 FLR 431) and that this encompassed a duty of disclosure (Fraser v NRMA Holdings (1995) 55 FCR 452 at 466; (1995) 127 ALR 543 at 554, per curiam) there are two problems with the plaintiffs’ complaint. The first is that the documents which the plaintiffs say should have been provided did not, so far as I can see, exist. It was not misleading to withhold documents which did not exist unless, perhaps, it was suggested by the committee that the documents existed. As Austin J noted in ENT Pty Ltd v Sunraysia Television Ltd (2007) 61 ACSR 626; [2007] NSWSC 270 at [21]:

5. [197]

   The question of time and cost that his Honour raises goes to the second problem: that the reason why the documents, studies and analysis did not exist was because, as I understand it, the committee of management could not raise the funds to pay the consultants to prepare the reports, do the studies and undertake the analysis or take any significant step in respect of the development without a special resolution. It is difficult to maintain that the committee did not take “reasonable steps” in the circumstances. In fact, they did take steps to obtain the necessary information to inform the project by removing this impediment: hence the attempt, successful as it turned out, to revise the constitution and enable the committee of management to progress the development with a simple majority of its members.

6. [198]

   For these reasons, I make the following orders:

   1. (1)

      Order pursuant to section 1322(4)(a) of the Corporations Act 2001 (Cth), as applied by sections 96 and 97 of the Associations Incorporation Act 2009 (NSW) and regulation 18 of the Associations Incorporation Regulation 2016 (NSW):

   2. (2)

      Dismiss the Amended Originating Process filed on 8 March 2019.

   3. (3)

      Order the plaintiffs to pay the defendants’ costs of the proceedings.

   4. (4)

      Discharge Order 1 made by Lindsay J on 25 January 2019 and release the first defendant from the undertaking noted in Order 2 on 25 January 2019.

   5. (5)

      Release the first defendant from the undertaking noted in Order 1(a) made by Rees J on 20 February 2019.

   6. (6)

      Grant liberty to the parties within 14 days to notify any correction or amendment sought to be made to these orders or any variation sought to Order 3.