Shane Monks represented the Respondent, instructed by Clyde & Co.
The Applicant challenged three board decisions not to renew or consider its “affiliation” with the Respondent unless its management committee changed or gave assurances as to its conduct.
The principal issue was whether the decisions were authorised. The Court held that, under the Respondent’s constitution and its Affiliation and Membership Policy, “affiliation” and “membership” were distinct concepts, so the decisions could not be justified as determinations about membership. Neither the constitution nor the Policy conferred power to make the decisions. Sections 124 and 125 of the Corporations Act 2001 (Cth), which concern corporate capacity, did not relieve the board of its obligation to act in accordance with the constitution. The Policy was also held invalid to the extent that it required Member Associations to be affiliated, as it varied class rights without the approval required by s 246B(2).
The decisions were declared invalid and the Respondent was ordered to reinstate the Applicant’s rights as a Member Association. Costs were adjourned.
The judgment can be read by clicking here
