One member’s claim for rights in an unincorporated association: John Setka v Noah Carroll & Ors

Setka is employed as the Victorian Secretary of the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU), and is a member of the Victorian Branch of the ALP and a CFMEU delegate at ALP state and national conferences. As was well documented by the papers, Setka sought an injunction from the Supreme Court of Victoria to prevent the ALP National Executive from expelling him from the ALP.

This case is instructive for not-for-profits because it addresses issues relating to member rights in member based not-for-profit organisations.

The issues for determination before the Court[1] were:

  • Whether because:
    • the ALP fulfils a substantial public function in our society and has statutory recognition;
    • the expulsion would affect Setka’s property rights;
    • the expulsion would affect the Setka’s reputation and employment;

the Court could entertain relief concerning the legitimacy of the expulsion motion.

  • Whether the power of the ALP National Executive to expel a member under clause 16(d) of the National Constitution of the ALP is subject to any limitation requiring compliance with rule 20 of the Victorian Rules.
  • Whether the Court should exercise its discretion to grant declaratory and/or injunctive relief.

Could the Court entertain relief?

Courts have historically been reticent to interfere with or be otherwise involved in the internal workings of voluntary unincorporated associations. In Cameron v Hogan the High Court considered a claim for a declaration and injunction by a member of the ALP on the basis of his allegedly wrongful exclusion from the party and the non-endorsement of his candidature.

The High Court held “that a member could not maintain an action at law on the basis of:

(a) being unjustifiably excluded from a voluntary association; or

(b) a breach of the association rules;

unless the member could establish a proprietary right; or that the rules were contractually enforceable.” [30]

Setka submitted that a number of decisions since Cameron v Hogan have distinguished the decision, that he had an interest in the property of the ALP and expulsion would affect his employment any of which would allow the Court to intervene.

The judge discussed the cases subsequent to Cameron v Hogan and particularly the reasons of Dowsett J in Baldwin v Everingham. In that case, the Court found that the justiciability arose ‘because the Commonwealth Parliament, in conferring legislative recognition upon political parties has taken them beyond the ambit of mere voluntary associations’.

After a detailed analysis of that case and cases applying that decision, the judge concluded:

In my opinion, the cases that follow Baldwin v Everingham do not identify the cause of action or other ascertainable or enforceable legal right which would entitle the claimant to relief at law or equity; or otherwise provide a proper basis to distinguish Cameron v Hogan.” [60]

The Court also rejected the claim that Setka had an interest in the property of the ALP, as there was no practical proprietary right to the ALP’s property and in any case, Setka had no greater rights than Hogan in the High Court case.

Further, the judge also rejected that the proposed expulsion would affect the reputation of Setka and thus harm his employability. This has been a ground of allowing the Courts to intervene in some cases involving professional associations without whose licence to practice, a member could not undertake their profession or trade. The situation was a little different to that in Cameron v Hogan and did not amount to a civil right of a proprietary nature.

The judge found that he was bound by the High Court’s decision in Cameron v Hogan and had no jurisdiction.

However, he did go on to discuss the other issues, in the event that, on appeal, his decision was reversed.

Does the ALP National Executive have power to expel a member?

The judge noted that expulsion powers must be expressly conferred and then are strictly interpreted.

The ALP has a structure consisting of state branches and a national body. The state branches have detailed provisions about the expulsion of members.

Clause 16(d) of the ALP’s national rules is that “the National Executive may exercise all powers of the Party on its behalf without limitation” and it is described as a plenary power. Could this power alone be used to expel Setka?

The Court found that on a proper construction of the National Constitution and the Victorian Rules, the National Executive could not exercise an expulsion power without the limitations and preconditions set out in the Victorian Rules.

In coming to this conclusion, the Court noted that:

  • The clause was inconsistent with the principle that any power to expel members from an unincorporated association must be exercised strictly in accordance with the language of the rule.
  • Although authorities support the fact that the Court can have regard to evidence of established practice and usage with respect to the application of rules, and that such practice may even form part of the rules, this was not the case here. Previous usage was about intervention in pre-selection of candidates supported by specific constitutional provisions about such matters.
  • Any other interpretation did not produce a sensible result.

The judge declined to consider the issue of whether the Court should refuse relief exercising its discretion because it was hypothetical.

Comment

The Australian High Court case of Cameron v Hogan confirmed that associations which are ‘social, sporting, political, scientific, religious, artistic or humanitarian in character’, and not formed ‘for private gain or material advantage’, are usually formed on the basis of mutual consent. Unless there is some clear, positive indication that the members wish to relate to each other in a legal fashion, the rules of the association will not be treated as an enforceable contract in contrast to the rules of incorporated bodies such as companies.

Since Cameron v Hogan, a significant number of cases have distinguished or otherwise declined to follow this precedent of the High Court. A trenchant criticism is found in McKinnon v Grogan [1974] 1 NSWLR 295, 298 where Wootten J said that ‘citizens are entitled to look to the Courts for the same assistance in resolving disputes about the conduct of sporting, political and social organisations as they can expect in relation to commercial institutions’. According to Wootten J at 298, if disputes are not settled by the Courts, this would create a ‘legal-no-man’s land, in which disputes are settled not in accordance with justice and the fulfilment of deliberately undertaken obligations, but by deceit, craftiness, and an arrogant disregard of rights’.

The decision in Setka’s case casts doubts on the reliability of those cases about political party internal disputes that have sought to depart from or distinguish Hogan v Cameron.

This case also has relevance to faith-based bodies that are formed as unincorporated associations of members. Where the association is an incorporated association or company then usually there is a contract between the member of the entity and other members that can be relied upon to enforce membership claims.

[1] [2019] VSC 571

2019-11-27T12:31:15+00:00November 27th, 2019|