Thompson v Cavalier King Charles Spaniel Rescue (Qld) Inc [2022] QSC 82 discusses costs in a dispute where the plaintiff was a member of a small not-for-profit association, the management committee of that association resolved to terminate the plaintiff’s membership, a summary judgment application was brought more than eight years after the proceeding commenced, the plaintiff relied on contracts created by s 71 of the Associations Incorporation Act 1981 (Qld), the plaintiff has been ordered to pay in excess of $130,000 in costs (the claim for pecuniary damages for breach of contract is approximately $1,300 per annum) and the plaintiff’s unsuccessful appeals and failure to observe rule 5 of the Uniform Civil Procedure Rules 1999 (Qld) added to the costs of the proceeding.
Jackson J states
[1] These are two applications for summary judgment or orders stopping the proceeding under s 73 of the Associations Incorporation Act 1981 (Qld) (“the Act”) or striking out the statement of claim.
[2] The applications raise two out-of-the-ordinary questions: first, does a committee member of an association incorporated under the Act contractually promise each member that he or she or the committee members as a body will observe the rules of the association in acting as the committee? Second, are there circumstances that are sufficient under s 73 of the Act to warrant an order that the court stop a proceeding because the issue raised is trivial or it was unreasonable to make the application, or the unreasonable conduct of a party has been responsible for making the application or has added to the cost of the proceeding?
[3] It will become apparent that the applications should succeed, one on a summary judgment basis and the other because a proceeding of this kind under s 73 involving unreasonable conduct by the plaintiff should be stopped. It is necessary to explain the bases for those conclusions and in doing so to decide the arguments presented for determination. ...
[4] The plaintiff is self-represented. He has what now seems to be a morbid legal fascination reflected in the volume of materials he filed in response to these applications. Documents he describes as affidavits contain long passages of legal argument supported by detailed references to cases, on procedural points a-plenty.
[5] Regrettably, despite the apparent length and breadth of his self-education in the law for this case, the plaintiff has not yet absorbed the importance of the implied undertaking to the court and to the other parties to proceed expeditiously at a minimum of expense under r 5 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”).
[6] He filed 17 affidavits approximately 250 pages in text just for his response to these applications. Those affidavits sought to raise numerous complaints about the conduct of the affairs of the first defendant (“the Association”) that are not within the scope of the issues raised by the statement of claim. He submitted that was because he did not know what the grounds of the applications against him were. That made no sense as an explanation for introducing fresh subjects of complaint. I infer, instead, that his aim or strategy was to continue to expand the subjects of dispute to the extent that the court might permit.
[7] As well, the material relied upon by the plaintiff included many affidavits and documents beyond those specifically filed by the plaintiff in response to these applications. That threatened to make these applications inutile and required the court to wade through a mountain of irrelevant material, just to decide them.
Background
[8] The Association is a small not-for-profit association, now with seven members. It was and is funded solely by donations from members of the community and operated by a group of volunteers. It is primarily concerned in the rescue and rehoming of dogs of the Cavalier King Charles Spaniel breed, predominantly in Queensland. Its operations are described on the Association’s Facebook page, its website and pet rescue websites.
[9] The Association is and was a charity. From the 2012/2013 annual statement lodged by the Association with the Australian Charity and Not-for-Profit Commission, it appears that in 2013 there were approximately 40 volunteers.
[10] In June and July 2011, the time of the events in question in this proceeding, the Association was regulated by the rules adopted in 2006, in the form of the “Model Rules Version 5” under the Act. They included rules providing for the management committee to terminate a member’s membership if the member conducted himself or herself in a way considered to be injurious or prejudicial to the character or interests of the association, and for a terminated member to appeal the management committee’s decision to a general meeting.
[11] In May 2018, following the acceptance of a new form of model rules under the Act by the Office of Fair Trading (Qld) in the prior year, the Association adopted new rules in the form of the “Model Rules Version 6”. Rule 5(1) of the new rules limits membership to ordinary members. Rule 5(2) limits the number of members to seven and provides that each member is to hold a position on the management committee.
Statement of claim
[12] On 21 July 2011, the management committee at that time comprised the named second to seventh defendants (“the Committee”). The Committee resolved to terminate the plaintiff’s membership of the Association (“21 July 2011 resolution”). That was the event from which this proceeding arises.
[13] On 27 September 2013, the plaintiff started this proceeding by claim. To date, the claim has been set down for trial twice, only to be adjourned. Now in its ninth year, over events that occurred two years before it started, the proceeding is not set down for a final hearing or trial. The delay is a disgrace to the parties, particularly having regard to the subject matter, as will appear from these reasons. That context makes these applications all the more out-of-the ordinary. A summary judgment application after so long is itself remarkable, almost unheard of. One brought after eight years during which the proceeding was set down for trial on two prior occasions is of Dickensian “Bleak House” character.
[14] When the claim was started, the defendants were the Association and all six members of its Committee. Like the attrition rate of combatants in the Great War, only one of the former Committee members remains a defendant, being the third defendant, who now applies to stop the proceeding against her. All of the other Committee members have been removed from the proceeding previously. On 12 February 2016, Mullins J gave judgment for the fifth, sixth and seventh defendants. The second and fourth defendants are no longer parties because they died with the controversy yet to be quelled by an exercise of judicial power.
[15] The fifth amended statement of claim (“statement of claim”) does not conform to the rules of pleading in many ways and contains a large amount of impermissible material. But that does not make it altogether incomprehensible. Some length in these reasons will be saved by a brief summary of the case it alleges for the purpose of analysis of these applications and the parties’ submissions. ....
[57] The present case is one where the power to grant summary judgement under r 293 of the UCPR in favour of the third defendant should be exercised. The plaintiff has no real prospect of succeeding on all of the claim against her. There is no need for a trial. No factual inquiry at the trial will alter that conclusion as against the third defendant. ...
[64] The nature of the Association is a small charitable organisation now comprising seven members (apart from the plaintiff’s claim to be a continuing member) with the purpose of fostering and protecting animals of a particular dog breed. It is wholly funded by charitable donations made by members of the public and carries out its activities through the unremunerated voluntary service of its members and other volunteers.
[65] There was another available method for the plaintiff to resolve the issue of his membership, namely an appeal from the Committee’s decision to terminate his membership to the entire membership of the Association in general meeting under rule 10 of the rules. When the plaintiff started this proceeding more than two years after the 21 July 2011 resolution, the Association offered to permit him to make such an appeal and to waive the time limit for an appeal to enable him to do so. The plaintiff declined, preferring his chances of success in this proceeding. The availability of such an appeal was said in one case to warrant the “view that in general the courts should be a last resort for the determination of club and association disputes. A democratic decision of the members will be the preferred course in most instances” and that “courts have no wish to intrude into the general conduct and resolution of club disputes.” The Plaintiff submitted in oral argument that it would be unreasonable to use this internal review mechanism because the decision makers on appeal would have been the same people who decided to terminate his membership in the first instance.
[66] Having regard to the expectation of the QLRC in propounding the drafts of s 72 and s 73 that a case such as this should be conducted in a relatively quick and inexpensive way by an application for an injunction, the costs involved in this proceeding have been inordinate. There are no fewer than 341 filed court documents. On the hearing of this application alone the Association read four of them, being the application and three affidavits. The plaintiff read 43 of them.
[67] As well as the two aborted trials so far, there have been numerous interlocutory applications, and many directions hearings, no fewer than three appeals to the Court of Appeal so far and one application to the High Court of Australia.
[68] To date, the plaintiff has been ordered to pay costs of various interlocutory disputes, including an unsuccessful appeal to the Court of Appeal and an unsuccessful application for leave to appeal to the High Court, together exceeding $130,000 on assessment. There are other orders for the plaintiff to pay costs that are not yet assessed and the overall costs of the proceeding are not yet subject to any order or assessment. The costs of any future trial would have to be added to the costs incurred so far.
[69] If these costs were not the product of unreasonable conduct of any of the parties under s 73(2)(c), they illustrate that when the proceeding was started the prospective costs were such that under s 73(2)(b) it was unreasonable to make the application made by the claim, in preference to the appeal procedure under the Rules.
[70] But a significant proportion of the costs have been the product of unreasonable conduct. The plaintiff’s pleadings have been the subject of five successful strike out applications. The appeals to the Court of Appeal were unadvisedly made as they were unsuccessful and resulted in an at least one indemnity costs order.
[71] There was a lapse of time under s 73(2)(b) in starting the claim between 21 July 2011 and 27 September 2013 that was also inordinate and is unexplained on the evidence.
[72] There is evidence of improper conduct under s 73(2)(c) in that plaintiff has had a purpose in prosecuting the proceeding beyond simply obtaining the relief claimed. On 30 November 2015, evidence of that emerged when the claim first came on for trial, and it was apparent that the plaintiff had not pleaded grounds of invalidity on which he wished to rely that would necessarily adjourn the trial. In that context, this exchange occurred between the Judge and the plaintiff: “HIS HONOUR: ...say... that decision is set aside, what’s that going to achieve from your point of view? It’s a society that have fairly clearly indicated they don’t want you... PLAINTIFF: Maybe that’s why I want to be in their face.”
[73] That evidence may raise a question of abuse of process by a collateral purpose that may amount to oppression. But it is not necessary to decide a question of that kind in order to decide this application. The court should not do so, as well, because the application was not made on that ground, although the Association relied on that evidence as malice on the part of the plaintiff.
[74] Overall, when the proceeding was started, it may have been unreasonable to make the application raised by the claim under s 73(2)(b), although I consider that question with caution recognising the possibility that the benefit of hindsight could affect that view.
[75] Under s 73(2)(a), a relevant factor for the court to refuse to make an order on the claim is that the issue is “trivial”. There is no bright line test for what is trivial. A claim for reinstatement by a wrongly terminated member of an incorporated association would not ordinarily be regarded as trivial.
[76] But it should not be overlooked that the plaintiff’s claim for pecuniary damages for breach of contract is limited to a particularised amount, at 2011, of about $1,300 per annum. The ordinary pecuniary loss before a claim is brought in this court for damages for breach of contract is in excess of $700,000, because monetary claims for that cause of action below that amount are within the jurisdiction of the District Court of Queensland[59] and below $150,000 within the jurisdiction of the Magistrate’s Court. Claims for damages for breach of contract below those amounts are ordinarily transferred to the appropriate court of monetary jurisdiction to reduce costs.
[77] A rough pecuniary indicator of the relative triviality of the claim for pecuniary loss also exists in the fact that the plaintiff has been ordered to pay in excess of $130,000 in costs of the interlocutory proceedings to date which is approximately 100 times the claimed annual value of the alleged pecuniary loss at 2011, before interest or inflation are taken into account.
[78] As well, or alternatively, under s 73(2)(c), the unreasonable conduct of the plaintiff has clearly added to the cost of the proceeding. That is illustrated by the plaintiff’s unsuccessful appeals and unsuccessful application for special leave to appeal, the plaintiff’s abject failure to observe the implied undertaking to the court under r 5 of the UCPR so as to bring the claim to a final decision and the plaintiff’s attempt on the hearing of this application by his many affidavits to introduce a range of additional allegations of complaint about the conduct of the Committee in 2011, beyond those pleaded in the statement of claim.
