Battle v Bundagen Co-operative Ltd (No 2) [2011] NSWCA 38 (8 March 2011)

Last Updated: 31 October 2011

This decision has been amended. Please see the end of the decision for a list of the amendments.

Court of Appeal New South Wales

Case Title:	Battle v Bundagen Co-operative Ltd (No 2)
Medium Neutral Citation:	[2011] NSWCA 38
Hearing Date(s):	8 February 2011
Decision Date:	08 March 2011
Jurisdiction:
Before:	Hodgson JA at 1; Campbell JA at 86; Sackville AJA at 88
Decision:	(1) Leave to appeal granted, notice of appeal to be filed within fourteen days. (2) Appeal allowed and orders below set aside. (3) Order that the Co-operative's proceedings be dismissed. (4) Mr Battle's submissions on costs to be provided within fourteen days, and submissions by the Co-operative on costs to be provided within a further fourteen days. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	CO-OPERATIVES - Rules - Rule providing for expulsion of member by resolution of general meeting - Construction of rule - Requirements for validity of resolution - Content of requirements of natural justice - Effect of rule concerning resolution of disputes.
Legislation Cited:	Co-operatives Act 1992 Division 4 of Part 4 ss 89 and 90; Division 5 of Part 4 s 99; Part 5 s 106; Part 8 ss 176, 189, 190B and 197(10); Part 17 s 440A Co-operatives Regulation cl 23 Corporations Act 2001 (Cth) s 1322 Uniform Civil Procedure Rules r 14.14
Cases Cited:	Barnes v Australian Telecommunications Commission [1989] FCA 47; (1989) 25 FCR 283 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Forge v Australian Securities and Investment Commission [2004] NSWCA 448; (2004) 52 ACSR 1 Hall v New South Wales Trotting Club Ltd [1977] 1 NSWLR 378 Malone v Marr [1981] 2 NSWLR 894 Maloney v New South Wales National Coursing Association Ltd [1978] 1 NSWLR 161 McClelland v Burning Palms Surf Life Saving Club [2002] NSWSC 470 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; [1992] HCA 66; (1992) 110 ALR 449 Randazzo v New South Wales Sports Aircraft Club [2009] NSWSC 1473 Whittle v Australian Miniature Pony Society Incorporated [1995] FCA 1267; (1995) 57 FCR 252
Texts Cited:
Category:	Principal judgment
Parties:	Christopher BATTLE (appellant) BUNDAGEN CO-OPERATIVE LTD (respondent)
Representation
- Counsel:	Counsel: J DOYLE/ L GOODCHILD (Ms) (appellant) P SINGLETON (respondent)
- Solicitors:	Solicitors: In Person (appellant) Carty & Cox Solicitors (respondent)
File number(s):	2009/293060
Decision Under Appeal
- Court / Tribunal:
- Before:	Latham J
- Date of Decision:	05 March 2010
- Citation:	Bundagen Co-operative v Battle [2010] NSWSC 160
- Court File Number(s)	11238/2009
Publication Restriction:

HEADNOTE

Facts

The respondent (Bungaden Co-operative Ltd, "the Co-operative") owns a large area of land near Coffs Harbour. The appellant (Mr Battle) has been a member of the Co-operative since February 1989, and resides on its land. Rule 47(a) of the Co-operative's Rules is as follows:

A member may be expelled from the co-operative by special resolution at a general meeting of the co-operative to the effect:

(i) that the member has failed to discharge the member's obligations to the co-operative, whether prescribed by these rules or arising out of any contract; or

(ii) that the member has been found guilty of conduct detrimental to the co-operative, in particular, breaking the Rules or By-laws.

On 22 July 2007 a general meeting of the Co-operative was held. A special resolution "That Chris Battle be expelled from Bundagen Co-operative Ltd" was passed with a two-thirds majority, purportedly pursuant to Co-operative rule 47.

The Co-operative required Mr Battle to leave its land by 1 December 2007. Mr Battle did not comply, alleging that he was denied procedural fairness and that the resolution was invalid because of substantial departure from the rules. Mr Battle attempted to invoke dispute resolution procedures provided by Co-operative rule 90.

On about 7 November 2008 the Co-operative gave notice to its members and Mr Battle of another general meeting to be held on 29 November 2008. The meeting considered in detail the special resolution set out in the notice. Each of the particular allegations made against Mr Battle in the special resolution was put to the meeting, voted upon, and passed by a two-thirds majority; the final resolution expelling Mr Battle. Mr Battle questioned whether this was another "dud" special resolution.

The primary judge held that Mr Battle had not been denied natural justice on 22 July 2007, and that his expulsion by both meetings' resolutions was not ultra vires by reason of limitations imposed by Co-operative rules 47 and 90.

Issues

Issues arising on appeal:

(1) Was the resolution of 22 July 2007 authorised by rule 47?

(2) Was there a denial of natural justice on 22 July 2007 either through bias or through other features of the procedure?

(3) Did rule 90 preclude reliance on the 22 July 2007 resolution?

(4) Was the resolution of 29 November 2008 authorised by rule 47?

(5) Did rule 90 preclude reliance on the 29 November 2008 resolution?

(6) Did the primary judge err in failing to consider the exercise of discretion?

HELD ( Granting leave to appeal, appeal allowed, setting aside orders of the primary judge and ordering the respondent's proceedings be dismissed ):

In relation to (1) - 22 July 2007 and rule 47

( Per Hodgson JA, Campbell JA and Sackville AJA agreeing )

The resolution was not authorised. Rule 47 should not be construed loosely, as it is a very serious step possibly involving the loss of a home. The resolution "That Chris Battle be expelled from Bundagen Co-operative Limited" is not "to the effect of" either pars (i) or (ii) required by rule 47(a); and is not altered by the statement of grounds in the notice or the content of the discussion at the meeting.

( Per Sackville AJA, Hodgson JA disagreeing, Campbell JA agreeing )

The resolution did not conform with rule 47, because 47(a) requires a two-stage process: the finding of guilt followed by a separate resolution expelling the member. The " rolled up " single resolution of 22 July 2007 did not comply with this requirement.

In relation to (2) - 22 July 2007 and natural justice

( Per Sackville AJA, Campbell JA agreeing )

Mr Battle was denied a reasonable opportunity to be heard, for the reason that a two-stage process was not followed.

( Per Hodgson JA )

It was not necessary to make a finding on the question of natural justice.

In relation to (3) - 22 July 2007 and rule 90

( Per Hodgson JA, Campbell JA agreeing, Sackville AJA not deciding )

(i) Prior to 22 July 2007

Rule 90 relates to the possible commencement of court proceedings, not to the passing of a resolution under rule 47; therefore it cannot be used to preclude reliance on the 22 July 2007 resolution.

(ii) After 22 July 2007

Rule 90 does not provide a defence to proceedings, but rather provides a ground for staying them until rule 90 has been complied with. As Mr Battle did not apply for a stay, no relief under rule 90 is available.

In relation to (4) - 29 November 2008 and rule 47

( Per Hodgson JA, Campbell JA and Sackville AJA agreeing )

The resolution did not conform to rule 47 because it was not passed as a resolution to expel a member. It was passed as a resolution to enhance the Co-operative's position in relation to a person who was not a member.

In relation to (5) - 29 November 2008 and rule 90

( Per Hodgson JA, Campbell JA agreeing, Sackville AJA not deciding )

Rule 90 did not preclude reliance on the resolution of 29 November 2008 for the reasons given in relation to (3) above.

In relation to (6) - Exercise of discretion

( Per Hodgson JA, Campbell JA and Sackville AJA agreeing )

It was not necessary to make a finding on this question.

JUDGMENT

1. HODGSON JA: In proceedings brought in the Common Law Division, the respondent (the Co-operative) sought a declaration that the applicant (Mr Battle) had been expelled from the Co-operative, and order that Mr Battle cease residing on land owned by the Co-operative and judgment for possession of that land.

2. On 5 March 2010, Latham J gave her decision in the proceedings, by which she made the orders sought by the Co-operative, and also ordered Mr Battle to pay the Co-operative's costs of the proceedings.

3. Mr Battle seeks leave to appeal from that decision. A stay of the primary judge's orders has been granted. The application for leave to appeal was heard on the basis that, if leave is granted, the appeal will be decided without further argument.

Statutory provisions

4. Relevant to the application are provisions of the Co-operatives Act 1992 (the Act).

5. Division 4 of Part 4 of the Act, dealing with disputes involving members, includes ss 89 and 90:

89 Grievance procedure

(cf Vic Act s 88)

(1) The rules of a co-operative must set out a grievance procedure for dealing with any dispute under the rules between:

(a) a member and another member, or

(b) a member and the co-operative.

(2) A member may appoint any person to act on behalf of the member in the grievance procedure.

(3) The grievance procedure must allow for natural justice to be applied.

(4) In this section and section 90, member includes any person who was a member not more than 6 months before the dispute occurred.

90 Application to Court

(cf Vic Act s 89)

(1) The Court may, on the application of a member or the co-operative, make an order declaring and enforcing:

(a) the rights or obligations of members of the co-operative between themselves, or

(b) the rights or obligations of the co-operative and any member between themselves.

(2) An order may be made under this section whether or not a right of a proprietary nature is involved and whether or not the applicant has an interest in the property of the co-operative.

(3) The Court may refuse to make an order on the application or may make an order for costs against a party, whether successful or not, if it is of the opinion that:

(a) the issue raised in the application is trivial, or

(b) having regard to the importance of the issue, the nature of the co-operative, any other available method of resolving the issue, the costs involved, lapse of time, acquiescence or any other relevant circumstance, it was unreasonable to make the application, or

(c) the unreasonable or improper conduct of a party:

(i) has been responsible for the making of the application, or

(ii) has added to the cost of the proceedings.

6. Division 5 of Part 4 dealing with oppressive conduct of affairs, provides for applications to court in cases of oppression, and includes s 99:

99 Basis on which Court makes orders

The Court may make an order under this Division if of the opinion:

(a) that affairs of a co-operative are being conducted in a manner that is oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members (the oppressed member or members ), whether or not in the capacity of a member or members, or in a manner that is contrary to the interests of the members as a whole, or

(b) that an act or omission, or a proposed act or omission, by or on behalf of a co-operative, or a resolution, or a proposed resolution, of a class of members of a co-operative, was or would be oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members (the oppressed member or members ), whether or not in the capacity of a member or members, or was or would be contrary to the interests of the members as a whole.

7. Part 5 of the Act, dealing with rules, include s 106:

106 Effect of rules

(1) The rules of a co-operative have the effect of a contract under seal:

(a) between the co-operative and each member, and

(b) between the co-operative and each director, the principal executive officer and the secretary of the co-operative, and

(c) between a member and each other member.

(2) Under the contract, each of those persons agrees to observe and perform the provisions of the rules as in force for the time being so far as those provisions are applicable to that person.

8. Part 8 of the Act, dealing with voting, includes ss 176, 189, 190B and 197(10):

176 Voting

(cf Vic Act s 180)

(1) The right to vote attaches to membership and not share holding.

(2) Except as provided in subsections (3) and (4), each member has only one vote at a meeting of the co-operative.

(3) Except as specifically authorised by this Act, the rules of a co-operative must not contain a provision that restricts the voting rights of members.

(4) If the rules so provide, the chairperson has a second vote at a board meeting or general meeting.

(5) In the case of joint membership:

(a) the joint members have only one vote between them, and

(b) that vote may be exercised (subject to the grant of a proxy or power of attorney) only by the joint member determined in accordance with the rules.

(6) If shares are held jointly, each member (other than a joint member) holding the share is entitled to vote at a general meeting.

189 Special resolutions

(cf Vic Act s 192)

(1) A special resolution is a resolution of a co-operative which is passed:

(a) by a two-thirds majority at a general meeting of members, or

(b) by a two-thirds majority in a postal ballot (other than a special postal ballot) of members, or

(c) by a three-quarters majority in a special postal ballot of members.

(2) A special resolution may be passed by a postal ballot only if the rules of the co-operative so permit or this Act requires the special resolution to be passed by postal ballot (including a special postal ballot).

(3) A resolution is not to be considered to have been passed as a special resolution unless not less than 21 days' notice has been given to the members of the co-operative specifying:

(a) the intention to propose the special resolution, and

(b) the reasons for the making of the special resolution, and

(c) the effect of the special resolution being passed.

(4) (Repealed)

190B Effect of special resolution

(cf Vic Act s 196)

(1) Subject to subsection (2), a special resolution has effect from the date that it is passed.

(2) A special resolution relating to any of the following has no effect until it is registered:

(a) the removal of an auditor,

(b) the expulsion of a member,

(c) any matter for which a special resolution is required to be passed by special postal ballot (other than a special postal ballot in favour of a voluntary winding up).

197 Circulation of members resolutions etc

...

(10) Despite anything in the co-operative's rules, the business that may be dealt with at an annual general meeting includes any resolution of which notice is given in accordance with this section, and, for the purposes of this subsection, notice is to be considered to have been so given despite the accidental failure to give notice to a member or members.

...

9. Part 17 of the Act, dealing with general matters, includes s 440A:

440A Service on member of co-operative

(cf Vic Act s 460)

(1) A notice required under this Act to be given to a member of a co-operative must be in writing.

(2) A notice or other document required under this Act to be given to a member of a co-operative may be given:

(a) personally, or

(b) by post, or

(c) by publishing the notice in a newspaper circulating generally in New South Wales or in the area served by the co-operative, if:

(i) the co-operative is a non-trading co-operative, or

(ii) the member's whereabouts are unknown to the co-operative, or

(iii) the Registrar permits notice to be given to members of that co-operative in that manner.

10. Schedule 1 Rule 1 provides that the rules of all co-operatives must set out or make provision for a number of matters, including:

20 The manner of calling general and special meetings, the requisite notices of meetings and the quorum for meetings of the co-operative.

Rules of the Co-operative

11. The application requires consideration of many of the rules of the Co-operative.

12. The objects of the Co-operative set out in rule 10 include:

(i) to manage the land owned, managed or leased by the co-operative in a manner consistent with the ideals of environmental responsibility, social harmony and economic independence which are to be sought via a form of co-operative organisation;

(ii) to facilitate the establishment and development of a multiple occupancy conceived as an intentional, rural-based community, comprising co-operative members and their immediate family, located on property/ies owned, leased or managed by the co-operative;

(iii) to regulate, organise and conduct the affairs of the co-operative using communal decision-making system based on a commitment to the principle of non-hierarchical, participatory democracy;

13. Rule 15 a. and b. is in the following terms:

a. The co-operative shall have the power to make by-laws not inconsistent with the Act, the Regulations and the rules or any statute or legislation in force relating to any of the following:

(i) the conduct of members, visitors and other people on land owned, leased or managed by the co-operative;

(ii) the operations of the co-operative;

(iii) procedure for payment and collection of membership subscriptions, maintenance payments, residential levies and other fees;

(iv) the procedures for determination of disputes between members, visitors and other people on land or other property owned, leased or managed by the co-operative;

(v) the procedures for determination of disputes concerning the rights relating to licences granted by the co-operative for occupancy by a member on the co-operative's land or land managed or leased by the co-operative;

(vi) such other matters as the co-operative may deem necessary.

b. To become a by-law a resolution has to be passed by two (2) General Meetings.

14. Rule 34 deals with voting rights, conformably with s 176 of the Act (Blue 257), apart from a question whether it is consistent with the Act to limit voting to "active members". No issue on this arises in this application.

15. Rules 47 and 48 are in the following terms:

EXPULSION OF MEMBERS

47.

a. A member may be expelled from the co-operative by special resolution at a general meeting of the co-operative to the effect:

(i) that the member has failed to discharge the member's obligations to the co-operative, whether prescribed by these rules or arising out of any contract; or

(ii) that the member has been found guilty of conduct detrimental to the co-operative, in particular, breaking the Rules or By-laws.

b. In either case, written notice of the proposed resolution shall be forwarded to the member not less than twenty one (21) days before the date of the meeting at which the special resolution is to be moved and the member shall be given a reasonable opportunity of being heard at the meeting.

c. The shares of any member expelled shall be cancelled as at the date of expulsion and the cancellation shall be noted in the register of shares.

d. Expulsion of a member shall not be effective until the special resolution expelling the member is registered.

REPAYMENT OF EXPELLED MEMBERS' SHARE CAPITAL

48.

a. Subject to paragraph b. of this rule, the co-operative shall pay to the expelled member, the amount of capital paid up on the member's shares at the time of expulsion (less any amount owing by the member to the co-operative).

b. For the purpose of this rule "deficiency" shall mean the amount of accumulated loss or deficiency disclosed in the last preceding balance sheet of the co-operative. Where such a deficiency exists an appropriate proportion of the loss or deficiency must me [sic] deducted from the amount of capital paid up on the shares of the expelled member. This shall be done having regard to the number of such shares in relation to the number of shares in the co-operative.

c. Payment to the expelled member shall be made at such time as shall be determined by the co-operative in its discretion but not later than twelve (12) months from the date of expulsion.

d. An expelled member shall not be re-admitted as a member unless such re-admission is approved by special resolution at a general meeting of the co-operative. A member so re-admitted shall not have the shares restored which were cancelled on the member's expulsion.

16. Rules 52 and 53 provide for the requisitioning of meetings (Blue 264 - 265); and rules 54, 55 and 57 are in the following terms:

NOTICE OF GENERAL MEETINGS

54.

a. Subject to Rule 55, at least fourteen (14) days notice (not including the day on which the notice is served or deemed to be served, but including the day for which notice is given) shall be given of any general meeting in the manner stipulated in Rule 92.

b. Notice must be given to those persons who are, under these rules entitled to receive such notices from the co-operative, but the non-receipt of the notice by any member shall not invalidate the proceedings at such general meeting. The notice must specify the place, the day and the hour of the meeting and in the case of special business, the general nature of that business.

c. Any member who has a resolution to submit to a general meeting must give written notice of the terms of the resolution to the co-operative not less than twenty eight (28) days prior to the date of the meeting, unless it is a special resolution in which case they must give written notice of the terms of the resolution not less than thirty five (35) days prior to the date of the meeting. Written notice of the special resolution must comply with Rule 55.

d. The board shall have inserted in any notice convening a general meeting any business which a member has notified of intention to move and for which notification has been given in accordance with this rule.

e. Notice of every general meeting shall be given in same manner as authorised in Rule 92 to:

(i) every member of the co-operative, except those members who have not supplied to the co-operative an address or facsimile number or email address for the giving of notices to them; and

(ii) every person entitled to a share in consequence of the death, incapacity or bankruptcy of a member, who, but for that member's death, incapacity or bankruptcy, would not be entitled to receive notice of the meeting; and

(iii) the auditor or auditors of the co-operative.

f. Except as provided in this rule, no other persons shall be entitled to receive notices of general meetings.

NOTICE OF SPECIAL RESOLUTIONS

55.

Notice of a special resolution shall be given to those persons, entitled to receive notice under Rule 54, at least twenty one (21) days before the general meeting. This notice shall specify:

(i) the intention to propose the resolution as a special resolution at that meeting;

(ii) the reason for the making of the special resolution; and

(iii) the effect of the special resolution if passed.

QUORUM AT GENERAL MEETINGS

57.

a. No item of business shall be transacted at any general meeting unless a quorum of members entitled to vote is present at the time when the meeting is considering that item.

b. Except where these rules state otherwise, twenty (20) active members present in person and entitled to exercise a total of twenty (20) votes constitute a quorum.

c. If, within one hour after the appointed time for the meeting, a quorum is not present, the meeting, if convened upon the requisition of members, shall be dissolved. In any other case it shall be adjourned to the same day in the next week at the same time and place. If, at the adjourned meeting, a quorum is not present within half an hour after the time appointed for the meeting, the active members present in person shall constitute a quorum

d. Shares held jointly shall be counted as one member only for the purpose of determining whether a quorum is present.

17. Rule 58 deals with the chairing of meetings by a "facilitator", and rule 59 with standing orders at meetings (Blue 268 - 269).

18. Rule 60 a. and b. is in the following terms:

ATTENDANCE AND VOTING AT GENERAL MEETINGS

60.

a. At any meeting of the co-operative, a member whose membership is required to be forfeited under rule 20 (being an inactive member), is not entitled to attend.

b. A member of the co-operative is not entitled to vote at a meeting of the co-operative:

(i) if the person is not an active member of the co-operative;

(ii) the person is excluded from voting under the Act or these rules.

19. Rule 61 contains provisions in relation to requirements for a special resolution for expulsion of a member, relevantly to the same effect as s 189(1) and s 190B of the Act (Blue 272 - 3).

20. Rule 90 provides as follows:

DISPUTES BETWEEN THE CO-OPERATIVE AND MEMBERS & OTHER PARTIES

90.

a. In this rule:

(i) "party" includes:

A. a member of the co-operative:

B. any aggrieved person who was a member not more than 6 months before the dispute occurred;

C. any person claiming through or under a member or any aggrieved person referred to in Rule 91.a.(i) B.; and

D. the co-operative, including the board or any other officer of the co-operative;

(ii) "dispute" may only refer to a matter affecting a person of the type mentioned above in A - C in the capacity of such a person as a member or ex-member of the co-operative; or as a person claiming through or under a member of the co-operative in that person's capacity as a member.

b. If a dispute arises a party may not commence any court or arbitration proceedings relating to the dispute unless it has complied with the following paragraphs of this rule except where the person seeks urgent interlocutory relief.

c. A party claiming that a dispute has arisen must give written or verbal notice to the other a party or parties specifying the nature of the dispute.

d. On receipt of that notice by that other party or parties, the parties must endeavour to resolve the dispute expeditiously, using the current dispute conciliation/mediation policy as agreed to by a general meeting of the co-operative or the mediation rules of the NSW Law Society.

e. If the parties do not agree within seven (7) days of receipt of the notice (or such further period as agreed in writing between them) as to:

(i) the timetable for all steps in the procedures; and

(ii) the selection and compensation of the independent person required for mediation,

then the dispute shall be settled by arbitration in accordance with the Commercial Arbitration Act 1984.

f. Nothing in this rule shall extend to any dispute as to the construction or effect of any mortgage or contract contained in any document other than these rules or agreements made at general meetings.

21. Rule 91 provides notices, and is to similar effect to s 440A of the Act.

Outline of facts

22. The Co-operative is a co-operative registered under the Act, and it owns a large area of land near Coffs Harbour on which there are numerous houses, in which members and their families and/or guests live. Mr Battle has been a member of the Co-operative since February 1989.

23. There are a number of groups of houses in various parts of the Co-operative's land. One of these groups is known as the Outback Village and the house occupied by Mr Battle is in that group.

24. On or about 8 June 2007, Mr Battle was given notice by way of a letter (Blue 34) that there was to be a general meeting of the Co-operative held on 22 July 2007, pursuant to a requisition to hold such a meeting to consider a special resolution to expel Mr Battle. The letter enclosed a copy of a special resolution, and invited Mr Battle to submit a reply by 22 June 2007. Mr Battle did this, by way of a 12 page document dated 21 June 2007 (Blue 37 - 48).

25. On or about 24 June 2007, Mr Battle and other members of the Co-operative were served with a notice of the general meeting to be held on 22 July 2007. The notice commenced as follows:

Notice of a Special General Meeting

on 22 July 2007, 10am

at the School on Bundagen Cooperative.

The following special resolution and a requisition to hold a special GM was put before the coordinators. Chris was given 14 days to respond to this proposal and his rebuttal is also included.

1) Special Resolution: That Chris Battle be expelled from Bundagen Cooperative Ltd.

Submitted by the following members:

Bob Young, Andy Bullock, Jaala Cohen, Will Cronan, Phil Dean, Dawn Fletcher, Jenny Ledgar, Heike Lucas, Sol Lucas, Mick Pollard, Boyd Pope, Lesley Pope, Uwe Wegner, Daniele Xerri.

Grounds for special resolution :

1. Chris Battle's behaviour is in breach of Rule 47(a)(ii) being conduct detrimental to the co-operative, in particular, breaking By-law 1.3 -

[By law 1.3 (1/88, 4/88, 1/01, 4/01) Physical violence, or threatened physical violence against any person or property shall be deemed conduct detrimental to the co-op and be a ground for expulsion from the co-op at a GM. Physical violence shall include child abuse and child sexual abuse as defined by the current NSW Child Protection Act.]

Particulars of grounds for special resolution:

1. In or about May 1993 screaming maniacally at Andy Bullock that he will 'do the 'worst possible thing' to Jenny if she did not apologise for an accusation she made earlier against him. When asked by Andy if this was a threat Chris responded 'It's not a threat it's a promise.'

2. In or about September 1996 declaring to Andy Bullock words to the affect [sic] "I would like to set off a bomb at a community meeting".

3. On or about July 1997 in response to Alistair's acceptance as a member, telling Sol Lucas "This is war" or words to that effect.

4. Levelling a hand drill in the manner of a gun at Mick Pollard in or about November 2006 while he was delivering a letter;

5. Letter from Chris, dated July 2004, just prior to his return from the USA in which he announces his intention to "lay siege to Bundagen" to "marshal forces and construct siege engines for a long and protracted battering against its walls... I would use whatever means are available to achieve justice - including the principle 'the enemy of my enemy is my friend'." The letter also includes references to Charles Manson and the Unabomber.

6. On or about January 2007 the display of a large sign in red paint saying, "Fuck off Phil" erected outside Chris Battle's house, which Chris refused to take down for about four months despite numerous personal and formal requests from the cooperative and members.

7. Telling Phil "I will make your life miserable until you leave" in or about January 2007.

8. Telling Phil "I will tell your friends to fuck off" in January 2007.

Effect of the Resolution if Passed

Chris Battle's shares will be cancelled as at the date of expulsion and the expulsion shall be noted in the register of shares (Rule 47c.). The expulsion shall not be effective until the resolution is registered (Rule 47d.). His membership shall cease (Rule 49) and any license granted by the Cooperative to occupy the land shall also cease (Rule 5e.).

2. Ordinary, administrative, supplementary proposal from the coordinators' meeting, 20-06-07

That, if the proposal to expel Chris Battle is passed that this special General Meeting deal with and make decisions about:

Chris' interim status and residence

Chris' behaviour

Ongoing liaison with Chris

Any other relevant issues.

26. The notice continued with Mr Battle's 12 page response.

27. The general meeting was held on 22 July 2007, commencing at 10.45 am and finishing at 4.30 pm. The minutes of the meeting report that the following special resolution was passed with a two-thirds majority (42 in favour, 11 against, 3 abstaining):

That Chris Battle be expelled from Bundagen Co-operative Ltd (Blue 292D, 296I).

The transcript of a tape-recording of the meeting confirms that this was the resolution introduced to the meeting (Blue 486F), albeit that the grounds for the resolution set out in the notice were read out immediately thereafter. The transcript also discloses that at the end of discussion, the resolution was put in terms of being in favour of or against Mr Battle's expulsion (Blue 560F).

28. The other matters raised in the notice of meeting, which were dependent upon the success of the resolution, were deferred to a general meeting on 4 August 2007. At that meeting, it was determined that Mr Battle's structures and/or building materials would be independently valued and Mr Battle reimbursed according to any decision taken at a further general meeting. In the event that Mr Battle did not accept that process, he was to be given three months within which to remove any improvements to the land and leave the property. It was further determined that Mr Battle be informed that he was from that time onwards a visitor on the Co-operative's land, and was required to pay visitor's levies.

29. Mr Battle was informed by a letter dated 17 September 2007 from the Co-operative's solicitors that the decision to expel him from membership took effect on 30 July 2007, when that resolution was registered by the Department of Fair Trading, Registry of Co-operatives. Meanwhile, however, Mr Battle had written to the Co-operative on 12 August 2007 the following letter:

I wish to enact the dispute resolution procedure, under Rule 90, in relation to the conduct of the Special General Meeting of 22 July, 2007, which put the special resolution proposing to expel Chris Battle from the Bundagen Co-operative Ltd. I contend that I was not afforded natural justice or procedural fairness, in the process leading up to, and at the Special GM itself. As a result, my contention is that the special resolution passed at that GM is null and void, because of legal errors, and therefore I still consider myself a member, in good standing, of the Bundagen Co-operative Ltd.

The directors of the co-operative will no doubt dispute my contentions, but they must acknowledge, that under Section 89 of the Co-operatives Act 1992, sub-section (4), it states, "In this section and section 90, " member " includes any person who was a member not more than 6 months before the dispute occurred."

I trust that the Secretary will see to the enactment of the dispute resolution procedures to deal with this dispute, as per Rule 90, in an efficient and expeditious manner.

30. Over ensuing months, Mr Battle raised various arguments, the tenor of which was that he was denied procedural fairness, and that the resolution was invalid because of substantial departure from the rules. The Co-operative required Mr Battle to leave the Co-operative's land by 1 December 2007; but Mr Battle did not comply with this requirement.

31. On about 7 November 2008, the Co-operative gave notice to Mr Battle and to its members generally of a general meeting to be held on 29 November 2008. A copy of this notice is an appendix to this judgment.

32. On about 25 November 2008, the Co-operative sent a letter in the following terms to Mr Battle:

On behalf of the Coordinators of Bundagen Cooperative, I would like to remind you that the Special GM to decide on the Special Resolution concerning yourself will be held on Saturday 29 th November, 10AM at the school. You already have received a written notice to that effect, as delivered to by [sic] Roger Horton and myself.

Although you are no longer a member of the cooperative, for the purposes of this meeting you shall be allowed to attend and express your right of reply, should you wish to.

33. The general meeting was held on 29 November 2008. Mr Battle was on the property on 29 November 2008 but did not attend the meeting, in spite of the fact that two members went to his premises during the meeting, invited him to attend and informed him that he could speak and vote, notwithstanding the effect of the earlier resolution effectively stripping him of member status.

34. The meeting of 29 November 2008 considered the special resolution set out in the notice in considerable detail. This meeting was attended by 54 members. A document written by Mr Battle as a letter to the meeting was read out. Each of the particular allegations made against Mr Battle was put to the meeting in terms of whether or not it constituted conduct detrimental to the Co-operative. Each of those particulars was put to the vote, each of them was passed by a two-thirds majority, and a final resolution expelling Mr Battle was again passed, 37 in favour, 8 against, with 2 abstentions. That resolution was registered with the Department of Fair Trading on 11 December 2008.

35. By a letter to the Co-operative dated 2 December 2008 (Blue 198), Mr Battle raised the question whether the resolution of 29 November 2008 was another "dud" special resolution, and indicated that he did not want to remain any longer than he had to, if it was clear that he had been properly expelled.

36. These proceedings were commenced on 3 March 2009.

Decision of primary judge

37. In its statement of claim, the Co-operative relied on both the resolution of 22 July 2007 and the resolution of 29 November 2008. By his defence, Mr Battle denied the validity of these resolutions on many grounds, including the ground that his expulsion was ultra vires of Co-operative's rule 90, because the charges brought against him were matters subject to a prior dispute resolution procedure which (in relation to the 29 November 2008 resolution) he had invoked but the Co-operative had refused to implement the mandatory dispute resolution procedure in relation to the passing of the first resolution (Red 16A). Rule 90 was raised only as a defence to the proceedings, and no application was made for a stay.

38. Mr Battle was self-represented before the primary judge.

39. The primary judge made the following finding concerning the events at the meeting on 22 July 2007:

[8] The general meeting was held on 22 July 2007. The meeting commenced at 10.45 am and was attended by 56 members. In the course of the meeting two persons, one a member and one a non-member, were chosen as co-facilitator or chair. A time-keeper was appointed for the purposes of allowing members of the plaintiff to speak for or against the resolution. The minutes of the meeting (Ex RPH 2) record in significant detail the process undertaken. Consistent with the custom adopted by the plaintiff, the members sat in a circle on the floor. The venue did not allow all the members to be seated comfortably in this fashion and from time to time, various members went outside for short periods of time. In summary, a number of members of the plaintiff spoke in the course of the meeting before the resolution was put to the vote. The defendant was also given the opportunity to speak to the meeting without interruption. The meeting did not conclude until 4.30 pm. The resolution that the defendant be expelled from the plaintiff (the first resolution) was supported by 42 votes, with 11 voting against and 3 abstaining.

40. The primary judge considered whether Mr Battle had been denied natural justice, and she held that Mr Battle had been fairly appraised of the allegations against him and had been afforded a fair opportunity to dispute those allegations, and that the decision was not vitiated by actual or apprehended bias.

41. The primary judge considered whether expulsion was ultra vires , by reason of limitations imposed by rules 47 and 90. In relation to rule 47, the primary judge said this:

[56] The defendant points to the terms of rule 47 which suggest that a finding of guilt in respect of conduct detrimental to the co-operative must be made before the plaintiff was able to exercise the discretionary power to expel him. According to the defendant, the first step was not taken before the second, in that the resolution put to the July 2007 [sic] rolled up the alleged misconduct with the recommendation to expel.

[57] There is some merit in the defendant's argument in this respect. The meeting of July 2007 was concerned entirely with the proposal that the defendant be expelled and the particulars notified to the defendant of the misconduct which was alleged to be detrimental to the co-operative, being the basis for the expulsion, may well have been matters of incidental discussion. However, the basis of the special resolution, being the particulars of misconduct, were contained in the documents served upon the members of the plaintiff. It was clear that a vote in favour of the resolution comprehended satisfaction that these incidents occurred. There was no requirement in the rules to adopt a formal method of proof of the misconduct, before proceeding to put the resolution to the vote. I am not persuaded that the procedure adopted at the July 2007 meeting gave rise to any invalidity.

[58] Even if I am wrong in that respect, the defendant's objections in that regard were met by the procedure adopted at the meeting on [sic] November 2008, where each of the particulars of the defendant's misconduct was referred to the meeting for a finding on the balance of probabilities, before the resolution to expel the defendant was formally put and voted upon. Hence, whatever the status of the July 2007 meeting, the resolution passed at the November 2008 meeting was valid.

42. The primary judge held that rule 90 did not prevent the Co-operative from taking action towards expulsion of a member merely because attempts to settle a dispute at mediation or arbitration had not been made.

43. The primary judge dealt with further issues raised by Mr Battle: no finding of "guilt" and no opportunity to address in mitigation of penalty; whether the presence of strangers, or the absence of members during part of the meeting, or the inadequacy of the venue, or the non-member status of a co-facilitator vitiated the resolutions; whether members delegated their decision-making powers; Wednesbury unreasonableness; whether there was unreasonable delay; whether the first resolution was made in bad faith, or was oppressive or discriminatory; whether the meeting on 29 November 2008 required a hearing " de novo "; and whether the defendant was exposed to double jeopardy. The primary judge rejected all these contentions of Mr Battle. On the question whether the meeting of 29 November 2008 required a de novo hearing, she said this:

[83] The defendant's submissions on this ground seem to assert that the meeting in November 2008 was, in effect, no more than a "rubber stamp" of the July 2007 meeting, largely because the same membership of the plaintiff was in attendance and because the resolution to expel him remained in the same terms. However, it is worthy of note that this meeting gave particulars of further incidents of misconduct by the defendant that had occurred since the July 2007 meeting. In that respect, it was a fresh consideration of the resolution to expel, on the basis of more extensive particulars of misconduct.

[84] There is nothing in the rules of the plaintiff that restrict the number of times a resolution to expel a member may be put to a number of Special General Meetings. Provided the procedure adopted at the meetings complies with the rules, a resolution in the same terms may be passed a number of times.

44. Accordingly, the primary judge held the Co-operative was entitled to the relief it sought.

Issues on appeal

45. The draft notice of appeal provided by Mr Battle runs to 13 pages, and includes 24 grounds with many sub-grounds. An amended draft notice of appeal was submitted late by counsel, who had been briefed late to appear at the hearing. The Court permitted argument on two additional grounds in the latter notice, namely grounds 5 and 18:

5. The Court erred in finding at paragraph [8] of the judgment below that " various members went outside for short periods of time " when the court was bound to accept the uncontested evidence lead by the Defendant to the effect that several members were absent for substantial periods of time, and at least two members attended only immediately before the vote when the attendance book was circulated, and the Court should have held that in those circumstances the Appellant was denied procedural fairness such that the First Resolution was procedurally unfair and in breach of the Co-operatives Rules and was accordingly invalid, void, or liable to be set aside.

...

18. The Court erred in failing to consider whether, in the proper exercise of its discretion in the circumstances, it should grant relief to the Plaintiff.

46. Ultimately, it was not disputed that the matters argued by Mr Doyle, counsel for Mr Battle, were within either the original draft notice of appeal or the two additional grounds. I will deal in turn with the following issues:

(1) Was the resolution of 22 July 2007 authorised by rule 47?

(2) Was there a denial of natural justice on 22 July 2007 either through bias or through other features of the procedure?

(3) Did rule 90 preclude reliance on the 22 July 2007 resolution?

(4) Was the resolution of 29 November 2008 authorised by rule 47?

(5) Did rule 90 preclude reliance on the 29 November 2008 resolution?

(6) Did the primary judge err in failing to consider the exercise of discretion?

Rule 47 and the 22 July 2007 resolution

47. For Mr Battle, Mr Doyle submitted that the resolution put to the meeting was not a resolution authorised by rule 47, for two reasons:

(1) The resolution "that Chris Battle be expelled from Bungaden Co-operative Limited" was not a resolution "to the effect" of either of the alternatives set out in rule 47(a).

(2) Since the grounds put forward were grounds relating to par (ii) in rule 47(a), referring to "has been found guilty", there must be a separate resolution making that finding of guilt, that is, at least two resolutions altogether.

48. For the Co-operative, Mr Singleton submitted that nothing in rule 47 required more than one resolution, and that resolutions merely had to be "to the effect" that one or other or both of pars (i) and (ii) of rule 47(a) obtained; and in the circumstance where there was a statement of grounds in the notice of the meeting and a canvassing of those grounds at the meeting, the effect of the resolution was as provided by rule 47. Further, this was a question of fact which had been found in the Co-operative's favour by the primary judge.

49. The expulsion of a member from the Co-operative is a very serious step, possibly involving (as in this case) the loss of a home; and in my opinion this suggests that rule 47 should not be construed loosely. Certainly the words "to the effect of" indicate that precision of wording of the required resolution is not necessary. However, in my opinion there must be a resolution passed as a special resolution that is itself to the effect of par (i) and/or par (ii) of rule 47(a). In my opinion the resolution "That Chris Battle be expelled from Bundagen Co-operative Limited" is not to the effect of either or both of par (i) or par (ii); and this is not altered by the statement of grounds in the notice nor the content of the discussion at the meeting.

50. I do not think this is an over-technical reading of rule 47. In such a serious matter, I think it important that the resolution be in terms that indicate to the members voting on it that the matter to be resolved is not whether the member in question is to be expelled, but is rather whether the member comes within par (i) and/or par (ii) and is to be expelled on that basis and no other.

51. In circumstances where the notice of meeting and the minutes are in evidence, and there is nothing in the transcript to suggest that the minutes are relevantly inaccurate, I do not think the primary judge's finding in par [57] of her judgment that "a vote in favour of the resolution comprehended satisfaction that these incidents occurred" is a finding of fact of compliance with rule 47, that has protection from appellate intervention. In my opinion, the question is essentially one of interpretation of rule 47, on which this Court is in as good a position as the primary judge.

52. I should mention here one matter not raised by the parties. Clause 23 of the Co-operatives Regulation 2005 (made pursuant to ss 10 and 11 of the Act) makes applicable to co-operatives ( mutatis mutandis ) parts of s 1322 of the Corporations Act 2001 (Cth), including s 1322(1) - (3) and (4) - (6):

1322 Irregularities

(1) In this section, unless the contrary intention appears:

(a) a reference to a proceeding under this Act is a reference to any proceeding whether a legal proceeding or not; and

(b) a reference to a procedural irregularity includes a reference to:

(i) the absence of a quorum at a meeting of a corporation, at a meeting of directors or creditors of a corporation, at a joint meeting of creditors and members of a corporation or at a meeting of members of a registered scheme; and

(ii) a defect, irregularity or deficiency of notice or time.

(2) A proceeding under this Act is not invalidated because of any procedural irregularity 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 proceeding to be invalid.

(3) A meeting held for the purposes of this Act, or a meeting notice of which is required to be given in accordance with the provisions of this Act, or any proceeding at such a meeting, is not invalidated only because of the accidental omission to give notice of the meeting or the non-receipt by any person of notice of the meeting, unless the Court, on the application of the person concerned, a person entitled to attend the meeting or ASIC, declares proceedings at the meeting to be void.

...

(4) Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes:

(a) an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation;

(b) an order directing the rectification of any register kept by ASIC under this Act;

(c) an order relieving a person in whole or in part from any civil liability in respect of a contravention or failure of a kind referred to in paragraph (a);

(d) an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding;

and may make such consequential or ancillary orders as the Court thinks fit.

(5) An order may be made under paragraph (4)(a) or (c) notwithstanding that the contravention or failure referred to in the paragraph concerned resulted in the commission of an offence.

(6) The Court must not make an order under this section unless it is satisfied:

(a) in the case of an order referred to in paragraph (4)(a):

(i) that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature;

(ii) that the person or persons concerned in or party to the contravention or failure acted honestly; or

(iii) that it is just and equitable that the order be made; and

(b) in the case of an order referred to in paragraph (4)(c)-that the person subject to the civil liability concerned acted honestly; and

(c) in every case-that no substantial injustice has been or is likely to be caused to any person.

These provisions were not raised by way of reply by the Co-operative or by any party in submissions below or before this Court; and accordingly it is not necessary for me to consider whether the defect in this case could be considered a procedural irregularity within s 1322(1), and if so to address the question posed by s 1322(2) whether this defect caused substantial injustice that could not be remedied by any order of the court; or whether an order under s 1322(4) should be made. Although s 1322(2) operates without the need for a court order, a party wishing to rely on it does need to raise it (see Uniform Civil Procedure Rules r 14.14); and then, if it does apply, the other party will have the opportunity to lead evidence concerning the question of substantial injustice. These issues were not raised in this case.

53. Accordingly, I would uphold the first reason submitted by Mr Doyle, and on that basis hold that the resolution of 22 July 2007 was not a resolution authorised by rule 47.

54. As regards the second reason, I note there is a definition provision in the Rules (not set out above) to the effect that the singular is generally to be taken to include the plural and vice versa (Blue 238V); and so there can be no objection to there being a number of special resolutions passed in order to effect a rule 47 expulsion. I also accept that fairness may in some cases be enhanced if there are a number of separate special resolutions. However, in my opinion rule 47 does not in terms require that there be more than one resolution. If there is such a requirement, it must follow from the requirements of natural justice.

Natural justice

55. In considering whether Mr Battle was afforded natural justice, it is important to note that the decision under rule 47 is given to the general meeting of the Co-operative, not to any committee or other tribunal. Although the decision to expel under rule 47 greatly affects a person's rights, and principles of natural justice are engaged, these principles cannot operate in the same way in relation to a decision of a general meeting as in relation to a decision by a committee or other tribunal charged with making findings that may be adverse to an individual.

56. In the case of such a committee or tribunal, a person against whom such a finding may be made can generally expect that the committee or tribunal will be constituted so as to give an impartial and unbiased decision, and that persons affected by actual or apprehended bias will not take part in the decisions: cf Randazzo v New South Wales Sports Aircraft Club [2009] NSWSC 1473 at [31] - [33]; although even in the case of such a committee or tribunal, apprehended bias as distinct from actual bias may not be enough to disqualify a member: Maloney v New South Wales National Coursing Association Ltd [1978] 1 NSWLR 161. However, in my opinion this is not the case where the decision is assigned to a general meeting. Further, under s 176 of the Act and rule 34 of the Co-operative, members (or at least active members) have an entitlement to vote at general meetings; and in my opinion they cannot be deprived of that entitlement by considerations of actual or apprehended bias. The assignment of rule 47 decisions to the general meeting is in the context of that entitlement.

57. I note that in Whittle v Australian Miniature Pony Society Incorporated [1995] FCA 1267; (1995) 57 FCR 252, Burchett J at 268 - 269 suggested that the views expressed in Maloney applied "even more completely" where a general meeting of the body in question was the adjudicator, thus apparently leaving open that actual bias could deprive a member of his or her vote. If, contrary to what I said in the previous paragraph, actual bias could in some circumstances deprive a member of a vote, it could not in my opinion do so in the face of the statutory entitlement to vote applicable in this case; or at the very least, there would in my opinion have to be a particularly entrenched and unreasonable bias, beyond anything that was proved in this case. Certainly, in my opinion, the circumstance that other members of the Outback Village group requisitioned the meeting and sponsored the resolution, and wished to have Mr Battle expelled, would not disentitle them to vote.

58. My conclusion on this aspect of the case does not mean that a member is without any remedy when voting rights are used oppressively: remedies are provided by Division 5 of Part 4 of the Act, notably by s 99 set out above.

59. Turning to the conduct of the meeting, there is force in a submission made for Mr Battle that the primary judge's finding in par [8] that "from time to time, various member went outside for short periods of time" understates the extent to which people who voted were not present during the meeting. In my opinion the evidence did justify findings that some who voted were absent from the meeting for long periods of time, that during the meeting a substantial number of members were conversing on the verandah outside the meeting, and that two members voted who had not previously been at the meeting.

60. In my opinion, the circumstance that some members chose to vote without having attended to the debate on the resolution would not amount to a denial of natural justice that could invalidate the resolution. All members had received Mr Battle's 12 page reply, and in any event in my opinion the statutory entitlement to vote cannot be lost because a member does not attend to the debate. However, it could be the case that a denial of natural justice could occur if such non-attendance to the debate was caused by the way the meeting was conducted, rather than being a choice of the member concerned.

61. It was contended for Mr Battle that a denial of natural justice occurred because of the circumstances of the meeting and the way it was conducted. It was submitted that the venue was inadequate, that there were insufficient breaks in an exhausting six-hour meeting, and that Mr Battle was allowed insufficient time to speak and insufficient opportunity to answer other speakers and was interrupted.

62. In my opinion these submissions should be rejected. From a reading of the transcript, my strong impression is that in these respects the meeting was conducted fairly under very challenging circumstances.

63. One particular contention is that Mr Battle was denied natural justice because fresh allegations were raised against him without notice. In my opinion this submission should be rejected. As pointed out by the primary judge, the Co-operative could not censor the remarks made by members at the meetings. It could be a denial of natural justice if new matters were raised and were made the subject of findings of guilt supporting a resolution made under rule 47, but this did not happen. Further matters adverse to Mr Battle outside the particulars of the grounds for expulsion could be highly relevant as providing a context for considering the significance of the conduct identified in the grounds relied on, and thus in determining whether or not those grounds warranted expulsion.

64. The most substantial ground supporting denial of natural justice is that there was no separate finding of guilt, and thus that Mr Battle had no reasonable opportunity to address the meeting on penalty. Mr Doyle for Mr Battle submitted that it was established by Hall v New South Wales Trotting Club Ltd [1977] 1 NSWLR 378 that there must be a two-stage process, in which first the question of guilt is decided, and then there is a consideration of penalty in which the person found guilty has an opportunity to be heard; and that this principle had been applied in Forge v Australian Securities and Investment Commission [2004] NSWCA 448; (2004) 52 ACSR 1 at [418] - [425]. In Malone v Marr [1981] 2 NSWLR 894, Holland J applied Hall to a domestic tribunal, namely a committee of the North Sydney District Rugby League Football Club.

65. However, I note that in McClelland v Burning Palms Surf Life Saving Club [2002] NSWSC 470, decided before Forge , Campbell J at [125] considered there was "no rule of law to the effect that it is not possible for there to be a single hearing which addresses both questions of guilt, and on a contingent basis, questions of penalty", referring to Barnes v Australian Telecommunications Commission [1989] FCA 47; (1989) 25 FCR 283 at 290 - 291, a decision of Spender J.

66. I agree with Campbell J that there is no rule of law mandating a two-stage process in all circumstances. In cases like Hall and Forge , where there are both a substantial number of different findings on guilt that could be made, and also a considerable range of consequential penalties that could be imposed, it is generally the case that natural justice does require first a determination of what findings are made on guilt, and second an opportunity to be heard concerning the range of possible penalties. Otherwise, it is not possible for submissions concerning penalty to be appropriately focussed. However, in my opinion, if for example there were only two possibilities on guilt, that is, either guilty or not guilty on one charge, then it could be that submissions concerning penalty could be appropriately focussed in a single-stage hearing. And where, as in this case, there are only two possible results on "penalty", that is, expulsion or non-expulsion, again it may be that submissions concerning penalty could be sufficiently focussed in a single-stage hearing.

67. In my opinion, it would generally be preferable under rule 47 to have a separate submission on penalty after a determination as to guilt is made; but I do not think this is mandatory in every case. Where it is not necessary for me to make a finding in this case on the question of natural justice, I would prefer not to do so.

Rule 90 and the 22 July 2007 resolution

68. Mr Battle's reliance on rule 90 was based primarily on attempts by him to invoke this rule, being a rule giving effect to the requirements of s 89 of the Act.

69. There were alleged attempts by him to invoke this rule prior to the meeting of 22 July 2007, particularly by a notice given by him on 10 January 2006 to other members of the Outback Village (Blue 99). In that notice, Mr Battle identified the dispute as follows:

In relation to the incident in the village on Dec 3 2000, and related events subsequent to that, I believe the Village has acted towards me in a prejudicial and discriminatory manner, thus depriving me of my legal Civil Rights.

70. Even if that notice did specify the nature of a dispute, so as to satisfy rule 90(c), it is clear in my opinion that this could not inhibit the taking of steps to pass a resolution under rule 47. Rule 90(b) relates to possible commencement of court proceedings, not to the passing of a resolution under rule 47 or steps towards that end.

71. I would add that, in my opinion, the notice of 10 January 2006 did not specify the nature of any dispute so as to engage rule 90. In my opinion, rule 90 requires some specification of the dispute, including some identification of what it is that the parties are disputing about. I note that a statement prepared by other members of the Outback Village dated 25 February 2006 (Blue 105 - 106) in response to Mr Battle's notice refers to an agreement given on 9 December 2003 to acknowledgments concerning the incident in December 2000, suggesting even greater difficulty in identifying what dispute is being referred to in Mr Battle's notice.

72. I also note that one precise matter of dispute that could have been appropriate for rule 90 procedure, raised by Mr Battle in his response to the eighth ground in the notice of the meeting of 27 July 2007, namely Mr Battle's claim that his neighbour Phil's arrangements for parking motor vehicles impacted unreasonably on Mr Battle's enjoyment of his property and Phil's refusal to change those arrangements, has apparently never been raised by Mr Battle for resolution under rule 90. The whole of the correspondence in evidence is capable of giving the impression that Mr Battle is not seeking solutions that fairly recognise the rights of others as well as his own rights, but rather is focussed on obtaining full recognition without any qualification of what he sees as his own rights, and on establishing that in all matters he is in the right and others are in the wrong.

73. There is more substance in Mr Battle's reliance on rule 90 in respect of events after the meeting of 22 July 2007. Mr Battle's letter of 12 August 2007 set out above did appropriately invoke the rule 90 procedure in respect of his allegation that the resolution of 22 July 2007 was invalid; and it correctly asserted that even if that resolution had been valid, Mr Battle would still have been a member within rule 90, because in that rule "member" includes any person who was a member not more than six months before the dispute. Accordingly, according to rule 90, legal proceedings based on the resolution should not have been commenced until the rule 90 procedure had been completed.

74. However, rule 90 does not oust the jurisdiction of the court; and rule 90 does not provide a defence to proceedings, but rather provides a ground for staying them until the rule 90 procedure has been completed. Mr Battle did not apply for a stay, but attempted to rely on rule 90 as a ground of invalidity. A court dealing with an unrepresented litigant must try to ensure that the case is dealt with fairly to both parties; but this does not generally require a court to point out to unrepresented litigants the possibility of procedural steps that are not taken. In my opinion, it cannot be said that either the primary judge, or any judicial officer who dealt with the case before it came on for hearing, was in error in not suggesting to Mr Battle that he apply for a stay.

75. Accordingly, I would not grant any relief on the basis of rule 90.

Rule 47 and the 28 November 2008 resolution

76. For Mr Battle, Mr Doyle submitted that the resolution on 29 November 2008 was not authorised by rule 47, because it was presented to members of the Co-operative not as a resolution to expel a member, but as a resolution to strengthen the position of the Co-operative in relation to a person who was not a member.

77. For the Co-operative, Mr Singleton submitted that the terms of the resolution, including the resolution that Mr Battle "is hereby expelled from the Co-operative" were clear, and conformed to rule 47. He submitted that the explanatory statement on the first page of the notice (Blue 427) and the statements as to the effect of the resolution (Blue 431), suggesting that the resolution of 22 July 2007 was valid, that the proposed resolution would merely "reconfirm" its effect, and that if it was not passed Mr Battle's status as a trespasser would be unchanged, were not part of the resolution itself; and that the question of validity did not depend on the subjective understanding of members as to what they were voting for, or on their motivation. Mr Singleton submitted that it did not invalidate the resolution, that the notice conveyed to Mr Battle that he was not a member and so would not have a vote, and did not convey to him that he would be entitled to attend and be heard. Although the letter of 25 November 2008 did not suggest he could vote, it did tell him that he could attend and be heard.

78. I accept Mr Singleton's submission that validity under rule 47 does not depend on the subjective understanding of members or their motivation. However, in my opinion validity does depend upon the resolution, as put to the members, objectively disclosing a meaning conforming to the requirements of rule 47, that is, relevantly, a resolution having the effect of expelling a member , on the basis of one or both of the grounds in rule 47(a).

79. The relevant resolution was, in terms, that Mr Battle "is hereby expelled". However, the notice conveyed that Mr Battle was not a member and was accordingly a trespasser. Although the explanatory statement and the statements as to the effect of the resolution are not parts of the resolution itself, they are statements required by s 189(3) of the Act and cannot be treated as mere surplusage. In my opinion, the notice was objectively such as to convey to members that the resolution was not a resolution to expel a person who was a member, but was rather a resolution to enhance the Co-operative's position in relation to a person who was not a member. The resolution passed by the meeting conformed to what was notified in the notice; and in my opinion it did not conform to rule 47 because it was not passed as a resolution to expel a member.

80. The same comments in relation to s 1322 of the Corporations Act apply to this resolution as to the previous one. It may be that, if the defect in this case could be said to be procedural, it would be difficult to say that injustice was caused. Each allegation was put separately to the meeting and overwhelmingly carried, and the resolution to expel was put to the meeting separately and overwhelmingly carried. However, the question of validation by force of s 1322 was not raised.

81. I should note here a further ground of invalidity urged by Mr Doyle on behalf of Mr Battle was that the notice referred to satisfaction "on the balance of probabilities" and explained that expression in terms of a greater than 50 per cent chance; whereas the matters in question needed to be established on the higher standard referred to in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336. Having regard to the explanation of Briginshaw given in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 110 ALR 449 at [2], I do not think this could invalidate the resolutions.

Rule 90

82. Mr Battle's letter of 2 December 2008 might be considered as invoking rule 90, albeit not so clearly as in relation to the 22 July 2007 resolution. However, for reasons given in relation to the earlier resolution, rule 90 cannot assist Mr Battle.

Discretion

83. If the expulsion of Mr Battle was valid, he became a trespasser. In my view, the only substantial discretionary question would then be how much time he would be given before an order to give up possession should take effect. However, it is not necessary to pursue this matter, in circumstances where the appeal is to be allowed for the reasons I have given.

ORDERS

84. For those reasons, in my opinion the appeal should be allowed. The success of Mr Battle has been on a narrow basis, and it may be this will affect the orders to be made as to costs, both at first instance and on appeal.

85. I propose the following orders:

(1) Leave to appeal granted, notice of appeal to be filed within fourteen days.

(2) Appeal allowed and orders below set aside.

(3) Order that the Co-operative's proceedings be dismissed.

(4) Mr Battle's submissions on costs to be provided within fourteen days, and submissions by the Co-operative on costs to be provided within a further fourteen days.

86. CAMPBELL JA: I agree with the reasons of Sackville AJA for the invalidity of the special resolution passed on 22 July 2007.

87. In other respects I agree with the judgment of Hodgson JA, and with the orders his Honour proposes.

88. SACKVILLE AJA : I have had the advantage of reading the judgment of Hodgson JA in draft. I agree with the orders proposed by his Honour.

89. I agree with Hodgson JA that the special resolution to expel Mr Battle, which was passed at the general meeting of the Co-operative held on 22 July 2007, did not conform to rule 47(a) of the Rules of the Co-operative for the reasons given by his Honour (at [49]).

90. In my opinion, however, there is another reason why the special resolution did not conform to rule 47(a). Properly construed, rule 47(a) requires a two stage process before a special resolution can be passed for the expulsion of a member on the ground that he or she has been found guilty of conduct detrimental to the Co-operative. First, the meeting must pass a resolution finding the member guilty of conduct detrimental to the Co-operative. Secondly, a resolution must then be passed expelling the member by reason of the conduct of which he or she has been found guilty. Throughout this process, rule 47(b) requires that the member should be given a reasonable opportunity of being heard at the meeting.

91. The language and structure of rule 47 support this construction of the rule. Rule 47(a) permits the expulsion of a member from the Co-operative by a special resolution to the effect that:

"the member has been found guilty of conduct detrimental to the co-operative." (Emphasis added.)

The bolded words in rule 47(a) contemplate the passage of a special resolution to the effect stated, after the member has been found guilty of detrimental conduct.

92. If a meeting passes a single resolution finding the member guilty of specified detrimental conduct and banning him or her from the co-operative, the member voting cannot distinguish between the two issues, namely, whether some or all of the alleged detrimental conduct occurred and, if so, whether the member should be expelled. The more natural reading of the language in rule 47(a) is that a finding that the member has been guilty of detrimental conduct has to be made before the meeting turns its attention to whether the member should be expelled. In this way, the members are required (and enabled) to consider separately whether the detrimental conduct found by members to have occurred warrants the drastic step of expulsion and all the consequences that flow from expulsion.

93. In the present case, eight separate particulars of detrimental conduct were alleged against Mr Battle. It is impossible from the resolution itself or from the record of the meeting to ascertain which of the eight particulars were regarded as proven by each of the members voting for the " rolled up " expulsion resolution. In theory, in a case such as the present it is possible for the expulsion resolution to be passed by a two-thirds majority when a similar majority of members does not find a single particular of detrimental conduct proven.

94. It is true that the obligation to afford a member threatened with expulsion a reasonable opportunity to be heard at the meeting (rule 47(b)) may well require the meeting to afford that member an opportunity to be heard as to why he or she should not be expelled by reference to the particulars of detrimental conduct that the meeting has found proven. The construction I favour puts the position beyond doubt and establishes a clear procedural mechanism for ensuring that the member has an opportunity to be heard on both the question of detrimental conduct and the question of expulsion. This construction also recognises that expulsion from a co-operative by reason of detrimental conduct is a very serious step and that if there is any ambiguity in rule 47, it should be construed in a manner that affords maximum procedural protection to the member facing expulsion.

95. If this is not the correct construction of rule 47(a), I would have accepted Mr Battle's argument that he was denied a reasonable opportunity to be heard in the circumstances of this particular case. It is difficult to understand, in a case where the allegations involve a large number of possible combinations and permutations of detrimental conduct, how Mr Battle could have had a reasonable opportunity to argue against expulsion when he never knew the precise case he had to meet on that issue. He did not know, for example, whether only one or two of the particulars had been found proven by the meeting or whether all eight had found to be established. The suggestion, made by counsel for the Co-operative, that Mr Battle had an opportunity to put arguments on the full range of possibilities in advance of the resolution being put is unconvincing. To take advantage of that opportunity would have required him to make submissions on a very large range of possible combinations of detrimental conduct. That imposed a quite unfair burden on him.

96. I agree with Hodgson JA, for the reasons that his Honour gives, that the resolution purportedly passed on 29 November 2008 was not authorised by rule 47.

97. I do not think it is necessary to express an opinion on other issues raised by Mr Battle.

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Annexure A

Amendments

07 Jun 2011 Correction to "In relation to (2) - 22 July 2007 and natural justice" Paragraphs: Headnote