In the matter of Old Newingtonians’ Union Incorporated

This application has been brought by originating process filed in court on 17 May 2024 by seven plaintiffs, the first of whom is Peter Prilis, against the defendant, Old Newingtonians’ Union Incorporated (ONU). The plaintiffs seek an order that the ONU, by its Council, be restrained from appointing members to the Council of the ONU pursuant to r 19.3 of the rules of the ONU (Rules).

The issue has arisen following a special general meeting of the ONU which was held on 27 March 2024. It is the outworkings of the resolutions said to have been passed at that meeting which form the subject of this application.

I note that the plaintiffs give the usual undertaking as to damages with respect to the interlocutory relief that they seek.

The application is supported by an affidavit of Peter Prilis sworn 17 May 2024, together with the documents which are exhibited to that affidavit.

I am satisfied from the affidavit of service of Brenden John Miller sworn 20 May 2024 that there has been service on the ONU in accordance with the orders that were made on 17 May 2024 by Black J, with that service taking place by email to particular email addresses. There has been no appearance on behalf of the ONU at the hearing today, including after the proceedings were called outside the court.

The ONU was created by those who have attended Newington College, which is an independent Uniting Church school located in Stanmore in Sydney. Newington was founded in 1863 at its initial location, Newington House, Silverwater, Sydney. In 1880, Newington moved to its present location in Stanmore.

Newington is administered by the Council for Newington College (College Council). The College Council was established pursuant to the Newington College Council Act 1922 (NSW), which also vested the property of Newington in the College Council to be held on trust, pursuant to the trusts contained in an indenture dated 23 October 1873. The College Council is distinct from, has a completely different role to, and is not to be confused with, the Council of the ONU.

The ONU was founded in 1895. The ONU is governed by the Rules. The Rules relevantly provide as follows:

On 28 February 2024, 26 members of the ONU requisitioned the Honorary Secretary of the ONU to convene a special general meeting of the ONU. Amongst those members were all of the plaintiffs in these proceedings, other than Mr Prilis.

The requisition for the special general meeting sought the passing of a number of ordinary resolutions of the members of the ONU, amongst which was resolution 2 which sought:

On 13 March 2024, the Honorary Secretary of the ONU gave notice to its members of a special general meeting of the members of the ONU to be held on 27 March 2024 at the Wesley Conference Centre, Wesley Theatre, 220 Pitt Street, Sydney with registration from 6pm for a 7:30pm start. The form of the ordinary resolutions proposed was set out in the notice, including resolution 2 in the same form in which it had been stated in the requisition.

In advance of the special general meeting, there was correspondence regarding the way in which the meeting would proceed, and whether or not the resolutions sought would be put to the meeting. But by the time of the special general meeting on 27 March 2024, it was agreed that each of the resolutions the subject of the notice would be put to it.

The terms of the notice of the special general meeting stated that registration would take place from 6pm, and that the meeting would commence at 7.30pm. There was a very large turnout of members of the ONU at the special general meeting (estimated at around 1,000 members), such that it was not possible for the registrations to be completed within the 90 minutes which had been envisaged. Instead, the meeting did not commence until sometime around 9pm.

The voting at the special general meeting took place in person and also by proxy. Each of the resolutions, including proposed resolution 2, was put to a vote at the meeting and by proxy, but by the time the meeting completed, the outcome of the voting on each of those resolutions was not known. It was not until the following day that the results of the resolutions were announced. In the case of resolution 2, the total of the votes by poll and by proxy was 51.2% in favour and 48.74% against, meaning that resolution 2 was carried.

Unfortunately, because of the late start of the meeting and that it was not known until the following day whether or not resolution 2 had been passed during the course of the meeting, the further steps required to be taken to carry out resolution 2 (the elections of all the elected positions on the ONU Council) could not occur at the special general meeting. During the course of the meeting the chair (and President of the Council of the ONU), Alexander Pagonis, stated the following:

Subsequent to the special general meeting, there was correspondence which was issued on behalf of the Council of the ONU.

On 28 March 2024, a letter was sent out by Mr Pagonis as the outgoing President of the ONU to “Old Newingtonians” which referred to the special general meeting the previous evening and set out the results of the votes on each of the resolutions. At the conclusion of the letter, Mr Pagonis said:

Unfortunately, what was anticipated to occur in the letter on 28 March 2024 does not seem to have continued to be held as the view of the Council of the ONU or, more accurately, some members of it.

On 2 May 2024, a letter was sent from the “ONU Past Presidents Committee” to “Old Newingtonians” which was titled “Call for Expressions of Interest - ONU Council Elected Positions”. This letter relevantly stated:

This letter appeared to suggest that the way in which the Council intended to deal with the vacancies that had been created by resolution 2 and the filling of those vacancies was by not immediately having an election as had been contemplated in resolution 2 but instead filling the vacancies on a casual basis in accordance with rule 19.3 of the Rules.

There then followed a series of communications in early May 2024 between Mr Prilis and Peter Hedge (one of the Past Presidents of the ONU) in which the disagreement as to the manner in which the Council proposed to proceed was voiced.

In summary, the respective positions put were:

There is no evidence of whether there has been any meeting of the Council since the special general meeting on 27 March 2024. There is no evidence that there has been any resolution of the Council appointing the Past Presidents to act on behalf of the ONU Council. It is, however, evident that whatever is occurring is not what was contemplated by resolution 2 or the Chair’s statement at the special general meeting.

On 13 May 2024, the solicitors acting for the plaintiffs, Garland Hawthorn Brahe, sent a letter to Mr Ross Xenos (chief operating officer at Newington College) requesting an undertaking not to appoint members to the Council of the ONU via the method of expressions of interest as opposed to members being elected to the Council via an election process. There has been no response to that letter, and the undertaking that was requested in it has not been provided.

As I mentioned earlier, there has been no appearance on behalf of the Council of the ONU at this hearing.

In May v Walker [2023] NSWSC 1628 at [130]–[142], I set out the longstanding and orthodox principles for the determination of whether an interlocutory injunction of the type sought in these proceedings should be granted:

Those principles are well known and the essence of them was recently repeated in JC Jewels Pty Limited [2024] NSWSC 532 by Pike J at [41]:

They were also stated in Nature’s Care Holdings Pty Ltd v Chen [2024] NSWSC 14 by Rees J at [41]:

In addition, in terms of the serious question to be tried test, Richmond J in Jaken Properties Australia Pty Limited v Anthony Naaman [2024] NSWSC 216 at [46] observed:

Turning first to the question of whether there is a serious question to be tried in this case, I direct my attention to the way in which the Council appears to be pursuing the filling of vacancies on the Council by reference to the casual vacancy provision in r 19.3 of the Rules. In my consideration, there is a seriously arguable case that the Council cannot proceed pursuant to r 19.3 in light of the terms of resolution 2 which was passed at the special general meeting on 27 March 2024 and which requires an election to be held.

There is a seriously arguable case that the terms of resolution 2 as carried at the special general meeting requires there to be an election of the elected positions on the ONU Council immediately, and at the special general meeting. But this election did not take place because the Chair of that meeting determined that such an election would not be able to be completed at the meeting because of the lack of time, and instead directed, as contemplated by r 31(3), that a poll should be taken as the Chair directed, which was to be by the holding of an election within four weeks.

In my consideration, there is a seriously arguable case that the Chair in fact made such a direction at that meeting and therefore, the manner and time at which that poll was to take place is as contemplated by what was directed by the Chair.

Argument was put to me in relation to the operation of r 20 of the Rules. Unfortunately, r 20 is unhappily drafted, replete with several important drafting errors which make it difficult to read. However, it would appear that what is contemplated by r 20, should those drafting errors be overlooked and on a proper construction that gives it meaning, is that what should have in fact taken place at the special general meeting was that there should have been a further resolution that was required to appoint a person to hold office until the expiration of the term of the office holder of the Council member(s) who had been removed.

In other words, whilst there was provision in resolution 2 for the removal of Council members by resolution, there was not in resolution 2 or in any other resolution, the provision for the appointment of nominated persons to immediately fill the vacancy. For that reason, whilst resolution 2 was carried, it did not resolve who in fact was to be appointed in place of those who were to be removed.

Turning to the question of the balance of convenience, the evidence indicates that the nominations which have been sought by the Committee of Past Presidents of the Council close at the end of today. There is obviously in train a process pursuant to which people are nominating for the vacant positions on the Council, but it seems to me that to allow that process to continue where it is seriously arguably not in accordance with the Rules will cause significant prejudice by allowing people to be appointed rather than elected to the Council.

As matters presently stand, it appears that no appointments of any new members to the Council have occurred. The status quo which should be preserved is that there should be no appointments of such persons pursuant to r 19.3.

There has been no delay on the part of the plaintiffs in bringing this matter to court. It has only been in the past three weeks that it has become clear exactly how the Council proposed to proceed after the resolutions passed at the special general meeting.

Whilst the making of any interlocutory order of the sort for which application is made by the plaintiffs does not mandate the procedure by which the vacancies on the Council will be filled, at least the interlocutory injunction would restrain the Council from proceeding in a way in which I consider it is seriously arguable they are not permitted to do.

One of the matters to which I need to give consideration in the balance of convenience is the strength of the case that is made for final relief. I do not consider the plaintiffs’ case to be overwhelmingly strong, but it does seem to me that it is sufficiently strong that the balance of convenience lies in favour of the grant of the interlocutory injunction.

The matter which is of primary concern to me is that resolution 2 was passed by a vote of the members at the special general meeting, but what appears to have taken place subsequent to that is not in keeping with what one would expect resolution 2 permits.

I am also guided by the fact that the members of the Council who were removed by resolution 2 do not comprise the whole of the Council. From my understanding of the position, when all of the members of the Council are present, there is something in the order of 30 plus members of the Council. It appears that the vacancy has been created in respect of 15 of those positions, which means that the Council can still continue to operate, as under r 21(5) there is a required quorum of 10 Council members pending the holding of and the declaration of any election which might be held in due course to fill the vacancies.

It does not seem to me that there are any significant adverse practical consequences to the ONU if the interlocutory injunction is granted.

On the other hand, if the interlocutory injunction is not granted and the vacancies on the Council are filled by way of the process that the Council appears to have in mind, the effect of resolution 2 that was passed by the members would be rendered nugatory, and the wish of the majority of the members of the ONU would effectively be ignored. The courts have been reticent to become involved in the affairs of organisations where it would have the effect of subverting the will of the members in matters such as election processes: see Countouris v Kallos (2008) 67 ACSR 543; [2008] NSWSC 840, Young CJ in Eq at [14]; Cox v The Animal Welfare League of New South Wales [2017] NSWSC 374, Ward CJ in Eq (as the President then was) at [30]–[31]; In the matter of Sri Guru Singh Sabah, Sydney Inc (The Sikh Association of Sydney) [2017] NSWSC 1092, Brereton J at [37]. But in my view, the obverse is true: the court should become involved in election processes where what is envisaged is not in keeping with the will of the members.

Taking all these matters into account, it appears to me that the balance of convenience lies in favour of the grant of the interlocutory injunction sought.

For the reasons expressed above, I propose to order: