Cameron v Hogan

51 CLR 358
1934 - 0803B - HCA

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(Judgment by: Rich, Dixon, Evatt and McTiernan JJ)

Cameron
v Hogan

Court:

Judges:
Rich J, Dixon J, Evatt J, McTiernan JStarke J

Subject References:
Voluntary associations
Political organization
Membership rights
Contractual relation
Expulsion
Candidature for political election
Pre-selection

Hearing date: MELBOURNE 24 May 1934; 25 May 1934; 28 May 1934; 29 May 1934;
Judgment date: 3 August 1934

Sydney

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Judgment by:
Rich, Dixon, Evatt and McTiernan JJ

The following written judgments were delivered:

RICH, DIXON, EVATT AND McTIERNAN JJ. This appeal is from a judgment of Gavan Duffy J. given upon the trial of an action in which the respondent was plaintiff, and the appellants were defendants. The judgment is that the respondent do recover against the appellants one shilling damages with costs. The appellants are the six officers and eighteen members who form the central executive of a voluntary association called the "Australian Labor Party State of Victoria," of which the respondent was a member. They were sued, according to the statement of claim, "as such members of the central executive." The respondent sought various forms of relief against them in respect of two matters. First, he complained that on 23rd April 1932 they had failed in the performance of a duty imposed upon them by the rules of the Party in reference to the approval or endorsement or submission to ballot of his nomination as a person seeking selection by the Party as its candidate at a State parliamentary election then pending for a constituency for which he was the sitting member. Second, he complained that on 1st July 1932 they resolved to exclude him from the Party, although, as he alleged, the authority under the rules to expel members did not reside in them, the grounds upon which they acted did not expose him to expulsion, and no adequate opportunity of answering the charges against him had been afforded to him.

Gavan Duffy J. held that, upon the proper interpretation of the rules of the Party, both of these two complaints were well founded. The central executive had not submitted the respondent's name to ballot, and his Honour construed the rules as requiring them to do so, unless they proceeded under provisions which in fact had not been invoked. He held that the rules did not give the central executive the power of exclusion which they had assumed to exercise. He decided that, both in failing to submit the respondent's name to ballot and in assuming without authority to exclude him from the Party, the appellants had committed breaches of the contract arising, as he considered, from membership of the Party, and expressed in its rules. For these breaches of contract he awarded nominal damages as a vindication of the respondent's legal rights. His Honour refused, however, to grant an injunction, because, in his opinion, the jurisdiction to grant that remedy depended upon the existence in the respondent, as a member of the Party, of some proprietary right or interest, and no sufficient proprietary right or interest in him appeared. He also refused to make a declaration of right.

The respondent denies the correctness of the conclusion that he possessed no sufficient proprietary right or interest to entitle him to relief by injunction, and, while supporting the award of damages, seeks by way of cross appeal an injunction restraining the appellants from excluding him from the Party. He further contends that a declaration of right might and should be made under Order XXV., r. 5, independently of the existence of any proprietary right or interest, because the power to make such a declaration is no longer to be exercised upon considerations affecting the authority of a Court of equity. (Compare Chapman v Michaelson ^[[1]] ; Langman v Handover ^[[2]] , at pp. 357, 359; Ruislip-Northwood U.D.C. v Lee ^[[3]] .)

Judicial statements of authority are to be found to the effect that, except to enforce or establish some right of a proprietary nature, a member who complains that he has been unjustifiably excluded from a voluntary association, or that some breach of its rules has been committed, cannot maintain any action directly founded upon that complaint. For example, in Forbes v Eden ^[[4]] Lord Cranworth said: "Save for the due disposal and administration of property, there is no authority in the Courts either of England or Scotland to take cognizance of the rules of a voluntary society entered into merely for the regulation of its own affairs." (Compare per Jessel M.R., Rigby v Connol ^[[5]] ; per Barry J., O'Keefe v Cardinal Cullen ^[[6]] .) Gavan Duffy J. considered that such statements should be understood as relating only to the jurisdiction of Courts of equity. There are, however, reasons which justify the statement that, at common law as well as in equity, no actionable breach of contract was committed by an unauthorized resolution expelling a member of a voluntary association, or by the failure on the part of its officers to observe the rules regulating its affairs, unless the members enjoyed under them some civil right of a proprietary nature. As a generalization it expresses the result produced by the application of a number of independent legal principles: it is not in itself the enunciation or explanation of a rule or rules of the common law. One reason which must contribute in a great degree to produce the result is the general character of the voluntary associations which are likely to be formed without property and without giving to their members any civil right of a proprietary nature. They are for the most part bodies of persons who have combined to further some common end or interest, which is social, sporting, political, scientific, religious, artistic or humanitarian in character, or otherwise stands apart from private gain and material advantage. Such associations are established upon a consensual basis, but, unless there were some clear positive indication that the members contemplated the creation of legal relations inter se, the rules adopted for their governance would not be treated as amounting to an enforceable contract. (Compare per Jessel M.R., Rigby v Connol ^[[7]] , and per Scrutton L.J., Rose and Frank Co v J. R. Crompton and Bros. Ltd ^[[8]] .)

In the next place, the difficulty of framing an action by one member of a large body of persons for damages for breach of a contract constituted by his admission to membership has always been very great. Such a contract apparently is considered joint, and in common law in strictness it would have been necessary for the plaintiff to join all the members as defendants. It is true that his failure to do so could only be taken advantage of by the member or members sued by a plea of abatement. If the members of the body were very numerous, it might well become too difficult for a defendant to succeed upon such a plea. For the common law was that "the plea must accurately disclose the names of all the contracting parties so as to give a better writ; and if a party be omitted or too many be stated, the plaintiff may take issue on the plea and will succeed on the trial" (Chitty's Pleading, 6th ed. (1837), p. 719). But a plaintiff might well hesitate on his side, and in fact no such action appears to be reported. Since the Judicature Act, the objection that co-contractors have not been joined must be taken by interlocutory proceeding, and cannot otherwise be relied upon (Smith v Auchterlonie ^[[9]] ; Tipping v Richelieu ^[[10]] ). But if the objection is properly taken, it will seldom, or perhaps never, be possible to overcome it by constituting the defendants representative parties under Order XVI., r. 9. If the defendants were to represent the "association" as an unincorporated body, with a view to the plaintiff's recovering the damages exclusively from its funds, they would represent the plaintiff as well as the other members: see Kelly v National Society of Operative Printers ^[[11]] , at p. 1060, per Phillimore L.J.; compare R. v Cheshire County Court Judge and United Society of Boilermakers ^[[12]] , per Scrutton L.J. If the defendants were sued on behalf of themselves and the members other than the plaintiff, the damages would be sought, not out of the association's funds, but against them personally. Such a representative proceeding would not fall within the rule: see Hardie and Lane Ltd v Chiltern ^[[13]] , and the cases there cited.

But if these procedural difficulties were overcome, and an enforceable contract of membership of an unpropertied voluntary association were found to have been in contemplation, it would become necessary to consider whether a breach of contract had been committed, and who was responsible. If the member suing complained that his expulsion had been improperly resolved upon by a committee or other officers of the association, he would be met by two answers. If the resolution was not authorized by the rules, it would be simply a void act: his membership would be unaffected, and there would be no breach of contract. "In the case of a purely voluntary association, a Court of equity bases its jurisdiction on property, there being nothing else for it to act on. A Court of common law before the Judicature Act regarded the invalid expulsion as void, and gave no damages. So between the two jurisdictions the plaintiff could rely only on property as the basis of jurisdiction" (per Isaacs J., Edgar and Walker v Meade ^[[14]] ). If the member whose expulsion has been invalidly resolved upon asserts rights arising out of his membership, it may be that those who, relying upon the attempted expulsion, resist the assertion, will be led into the commission of acts which are tortious because they lack the justification which a valid expulsion may give them. For the tort the member may then sue. Innes v Wylie ^[[15]] affords an example. But he cannot recover from the committee or the members for breach of contract. Cases in which a member, improperly expelled from a proprietary club, has recovered damages from the proprietor supply an illustration of another application of the same principle. Each member is entitled by contract with the proprietor to have the personal use and enjoyment of the club, in common with other members, so long as he pays his subscription, and is not excluded from the club under its rules (per Stirling J., Baird v Wells ^[[16]] ). If a member is improperly expelled by the committee, his expulsion is invalid, he remains a member, and can enforce his contract with the proprietor.

If a member of a voluntary association complains, not of an invalid expulsion, but of some failure to observe the rules on the part of the committee or other officers, it would be necessary for the member complaining to show that the rules were intended to confer upon him a contractual right to the performance of the particular duty upon which he insists. It can seldom be the true meaning of the rules of any large association of such a kind that those undertaking office thereby enter into a contract with each and every member that they will execute the office in strict conformity with the rules. If, however, it were determined that the committee or the officers of a voluntary association in attempting to exclude the member complaining, or in some other respect, had committed a breach of contract, the remaining members of the association would not be responsible. The committee or officers may be agents for the members of the association. But if so, they are agents for all the members. If in the case of a member complaining they have violated the rules, they have exceeded their authority. Upon no doctrine of agency can one of the joint principals hold the others responsible. (See Kelly v National Society of Operative Printers ^[[17]] , per Swinfen Eady L.J., at p. 1058; per Phillimore L.J., at p. 1060; per Bankes L.J., at p. 1062).

In the present case the association is formed altogether for the promotion of political objects. It is an organized political party. Its members, who number very many thousands, consist of the members of Trades Unions which are affiliated with the Party, and of such persons as have been admitted to membership of that Party by a Branch after pledging themselves loyally to support the principles and constitution of the Party, and to vote for the selected labor candidate. Branches may be formed in any centre: one hundred and seventy Branches exist. Each affiliated Trade Union and the collective members of the Branches in each State electorate may send delegates to an annual conference, which is "the supreme ruling authority within the State." An annual conference must elect from the delegates six officers and eighteen members to be the central executive, which is "the managing and administrative authority." It is to "administer the constitution according to the letter, as far as it goes, and where the letter fails, according to its spirit." An appeal lies to the annual conference from a decision of the central executive upon a charge against a member. The central executive is required to form at least five different sub-committees, one of which examines the accounts, and watches and advises upon the financial affairs of the Party, and another of which supervises selection ballots and controls the conduct of election campaigns. In every State constituency there is a State electorate council composed of delegates appointed by Branches, which, with the addition of delegates from affiliated Unions, becomes a campaign committee for the purpose of conducting election campaigns and ballots for the selection of candidates. The "Australian Labor Party State of Victoria" is an organization which itself forms part of a federal organization. There is a federal conference to which each State organization sends six delegates. Resolutions passed by it in accordance with the Party federal constitution are binding upon State organizations. There is also a federal executive composed of two delegates from each State. Appeals lie to it from decisions of State conferences if they affect the federal labor platform or policy, or the attitude thereto of a member, or if the State conference or executive gives leave to appeal. From the decisions of the federal executive an appeal lies to the federal conference. The revenue required to defray the expenses of all these bodies is raised through the Branches and the affiliated Unions. Upon affiliation a Union and a Branch must pay to the central executive a fee which goes from two shillings and six pence, if its members are not more than twenty-five, to forty shillings if they exceed a thousand. Every affiliated Union must then pay to the central executive for every male member ten pence a year in quarterly payments. Every Branch member, if an adult male, must pay two shillings a year to the Branch. But the Branch must pay four pence a year for every member to the central executive. The State electorate councils must also be paid twenty-five per cent of the membership contributions. These councils may impose an additional per capita levy. The State organizations bear the cost of the meetings of the federal conference and executive. The rules contain provisions for the banking of Branch funds, the preparation and audit of Branch accounts, and the submission by Branches to the central executive of audited balance-sheets. The central executive is required to submit an audited balance-sheet to the annual conference. The rules provide for the banking of the funds of an electorate council, and the presentation by the secretary of an audited balance-sheet at its annual meeting. The last balance-sheet of the central executive before the time of the grievances complained of in these proceedings showed a credit balance of PD2,500. The assets apparently included approximately PD1,400 owing to it by Branches, PD400 at the credit of its bank account, furniture of the value of PD200 and some shares in a printing company.

Under the rules the members of the Party obtain no advantage from the funds susceptible of personal enjoyment. The funds are devoted to the promotion of the political ends for which the Party exists. But the rules declare that "the collective membership is sovereign," and this is relied upon as implying that membership gives some voice in the application of the Party funds. As might be expected, the selection of candidates for Parliament is the subject of elaborate provision. Unfortunately, however, the rules upon the subject are confusedly drawn. One rule requires that all nominations for Party selection shall be admitted to ballot. Another empowers the central executive to withdraw any candidate on the ground of unfitness or unworthiness, after giving him an opportunity of defence before an investigating committee. Yet another provides that all candidates' nominations must be immediately submitted to the central executive for approval, or endorsement, or otherwise.

The respondent was duly nominated as a candidate for selection. Because of resolutions which the central executive had already taken in the course of acute differences relating to matters of political policy, the chairman ruled that the respondent was not eligible for re-endorsement, and a motion disagreeing with his ruling was lost. His nomination was not admitted to ballot. After some fluctuation of opinion, Gavan Duffy J. construed the rules as giving the central executive no absolute discretion to accept or reject the nomination, but only a power to reject after proceeding under the rule relating to withdrawal. It was for this reason that he held that, in failing to submit the nomination to a ballot of the members in the State electorate, the central committee did what amounted to, or gave rise to, a breach of contract for which the respondent was entitled to damages. But the question which arises first is whether the rules relating to the selection of party candidates were intended to operate at all as a contract. If the action be treated as a representative proceeding against all the members of the Party other than the respondent, it would be necessary for him to establish that the rules should be understood as a warranty by every member to every other who should be nominated for selection that his name would be admitted to ballot, unless it was withdrawn after proper opportunity for defence. If the action be treated as a proceeding against the members of the central executive who failed to submit the respondent's nomination for ballot, to establish a breach of contract it would be necessary for the respondent to show that the appellants, either by accepting office, or by adhering to the rules as members of the Party, engaged with him contractually as a member to perform their duties in relation to nomination in complete accordance with the rules. Neither of these interpretations of the rules appears to be warranted. Hitherto rules made by a political or like organization for the regulation of its affairs and the conduct of its activities have never been understood as imposing contractual duties upon its officers or its members. Such matters are naturally regarded as of domestic concern. The rules are intended to be enforced by the authorities appointed under them. In adopting them, the members ought not to be presumed to contemplate the creation of enforceable legal rights and duties so that every departure exposes the officer or member concerned to a civil sanction. The matter has not been the subject of much, if any, discussion in English cases. For American authority it is enough to refer to McKane v Adams ^[[18]] , at pp. 612-614.

In adopting a resolution excluding the respondent from the Party, the central executive assumed a power which is not explicitly given to that body by the rules. Gavan Duffy J. rejected the contention that from various provisions an intention sufficiently appeared that the central executive should be authorized to exclude members for good cause. He found it, therefore, unnecessary for him to consider the remaining grounds upon which the resolution of expulsion was attacked. He treated it as a breach of contract for which at least nominal damages were recoverable. This view has, in effect, been already dealt with in advance. For the resolution was either invalid or else effectual. If it was invalid, it is to be considered simply as a void and unauthorized act. Members, moreover, are not responsible at law to another member for an act of the committee not authorized by the rules. The committeemen themselves by attempting to do what, according to the hypothesis, they could not do, committed no breach of contract. It was contended, however, on behalf of the respondent that the appellants by their defence had admitted that the respondent had been in fact excluded from the association: accordingly, as it was admitted it was done, it would be enough to show that it was not lawfully done. This puts an extreme and erroneous meaning upon the appellant's pleading, which ought to be understood as expressing the actual position adopted by them, namely, that the resolution effected an exclusion of the respondent.

It follows that the judgment for nominal damages ought not to stand.

The question remains whether Gavan Duffy J. was right in refusing relief by way of injunction or declaration of right. The foundation of the jurisdiction to grant an injunction is the existence of some civil right of a proprietary nature proper to be protected. The property under the control of the central executive and that under the control of the branches might, if all the members concurred in dissolving the association, be distributed among them, but if so, it would be by reason of a decision under the rules authorizing that distribution. Except for this, the respondent has no interest capable of enjoyment. There is much to be said for the view that payments made by members to the Branch or by the Branch or the Union to the central executive or State electorate council are final: that they are subscriptions to an object, and that no resulting interest however contingent remains in the member. No doubt indirectly in choosing delegates members may affect the mode in which the fund is expended. But whatever view may be taken of the exact and technical situation of the legal and equitable property in the various assets "belonging" to the Party, it is reasonably clear that membership of the association carries with it no tangible or practical proprietary right. The association must be conducted, and money is needed to carry it on. There must be some margin of revenue over current expenditure, some continuing possessions for use by its officers, some rights incidentally acquired in process of fulfilling its objects. But the existence of such property is incidental and accidental. The organization is a political machine designed to secure social and political changes. It furnishes its members with no civil right or proprietary interest suitable for protection by injunction. Further, such a case is not one for a declaration of right. The basis of ascertainable and enforceable legal right is lacking. The policy of the law is against interference in the affairs of voluntary associations which do not confer upon members civil rights susceptible of private enjoyment. See Watt v MacLaughlin ^[[19]] , at pp. 116-118.

For these reasons the respondent is not entitled to invoke the jurisdiction of the Courts of law in reference either to his complaint that his nomination for selection was improperly withheld from ballot, or that a resolution for his expulsion was adopted without authority or justification under the rules. In these circumstances the question, whether, upon the true meaning of the rules, the central committee acted in accordance with or contrary to them is not one of which the Court takes cognizance.

The appeal should be allowed. The judgment of the Supreme Court should be discharged. Pursuant to their undertaking the appellants should pay the respondent's costs of the appeal.

The action should be dismissed without costs.