Graeme McGuire and Others v John Rasmussen and Others

• Jurisdiction: Singapore
• Judge: Lee Seiu Kin JC
• Judgment Date: 30 March 1998
• Neutral Citation: [1998] SGHC 90
• Docket Number: Suit No 23 of 1998
• Date: 30 March 1998
• Year: 1998
• Published date: 19 September 2003
• Plaintiff Counsel: Chelva Rajah SC and Burton Chen (Tan Rajah & Cheah)
• Citation: [1998] SGHC 90
• Defendant Counsel: Lim Chor Pee (Chor Pee & Partners),C Arul - fourth defendant in person,Harpreet Singh Nehal (Drew & Napier)
• Court: High Court (Singapore)
• Subject Matter: Whether resolutions proposed for special general meeting ultra vires,Requisitioning special general meeting,Friendly societies,Whether requisition made bona fide,Convening special general meetings,Meetings,Basis of members' relationship founded on contract,Whether club committee required to call special general meeting pursuant to every requisition,Members' club,Special general meeting not empowered to do anything not provided for in club rules,Whether timing of requisition evidence of lack of bona fides,Each member bound by rules of club on joining,Unincorporated Associations and Trade Unions,Requisition made before club committee had time to convene to consider matter,Power of club committee to deal with ultra vires resolution,Obligation of committee to put non-ultra vires resolutions to special general meeting

Judgment:

LEE SEIU KIN JC

There is a long waiting list of Singaporeans wishing to join the Tanglin Club (the Club). This is because rule 11(ii) of its Rules provides that the citizens of any one country shall not comprise more than 51% of its members. Many, if not most, of the people on the waiting list are children of members and it is said that it could take up to nine years before a Singaporean is allowed in. On the other hand, an expatriate has only to wait about three months because the demand is lower.

2.The defendants are the members of the committee of the Club, elected in May 1997. Prior to the election, the defendants canvassed for support by sending letters to members calling for a number of changes, including raising the limit on Singaporean members to 60% and improvements to management efficiency in order to cut costs. There was dissatisfaction in certain quarters of the Club, including some members of the outgoing committee, with the manner in which the defendants carried out their election campaign. The local English language press sniffed out the story and the tussle was reported on 17 May 1997 in the Straits Times and Business Times . These reports sowed the seeds of the dispute now before me.

3.The second defendant responded to those press reports by writing a letter to the Straits Times . This was published in its 20 May edition under the heading `Tanglin Club election "fight" a battle of ideas`. In it he characterised the `fight` as a battle of ideas rather than a nationality issue. He also obliquely criticised the present and past committees for failing to keep up with the times.

4.After their election the defendants set about to carry out their campaign promise of changing the membership limit. They convened a special general meeting, scheduled for 18 August 1997, to amend the Rules to raise the limit to 60%. Again the press reported this development in its 26 July edition under the headline `Tanglin Club may raise proportion of S`porean members`. This article prompted at least one reader to write to complain that a Singapore club should not be restricting the number of Singaporeans in its membership.

5.The build-up to that special general meeting attracted the further attention of the press and on 13 August the Straits Times carried a report under the title `Expats upset by club`s move to have more S`poreans`, which succinctly summarises its contents. The second defendant again responded by writing a second letter to the Straits Times . It was published on 16 August under the heading `Why should S`poreans be condemned to long wait`. The letter was prefaced by a statement that the second defendant was writing in his personal capacity as a member of the club, presumably as opposed to his capacity as a member of the committee. He said that the newspaper had concentrated on `emotional red herrings` raised by a small group who had neither the imagination nor the ability to think clearly. The second defendant went on to discuss issues facing the club, particularly the long wait faced by children of Singaporean members to join. He also said that the majority of expatriates took a short term approach to the issues facing the club because their stay here were transitory. If the club ran into financial straits, it would be the Singaporean members who would be left to shoulder the burden. He also said that the club facilities had fallen into disrepair due to years of inaction, presumably by the past committees.

6.This letter upset some members of the club. On 20 August, the first and third plaintiffs, together with one Joseph Low Pitt Qwee, wrote a letter to the first defendant in his capacity as president of the committee. This letter was accompanied by a list purporting to contain the names and signatures of 98 members of the club. The letter complained about the use of the press by the second defendant to ventilate issues of the club and sought his resignation from the committee. The three signatories to the letter also wrote to the second defendant to demand his resignation. Under rule 6(iii) of the Club`s Rules, the committee is empowered to remove any of its members. Rule 6(iii) states:

Any president, vice-president, honorary treasurer or member of the committee who in the opinion of the majority of the committee behaves in a manner prejudicial to the interest of the Club or conducts himself in a manner unbecoming a member of the committee or the Club shall cease to hold office and shall be removed from the committee.

7.On 3 September, before the committee could meet to consider the matter, the plaintiffs and 14 other members requisitioned a special general meeting under rule 34. This called for the special general meeting to pass four resolutions. The last resolution was to make an amendment to the Rules and is not germane to the matter before me. I am only concerned with the first three and they are as follows:

(A) That David Gabriel has conducted himself in a manner unbecoming a member of the committee and injurious to the character of the club by publicizing the affairs of the club and criticizing the management and past committees of the club to the public at large in letters to the Straits Times of 20 May 1997 and 16 August 1997 and has therefore lost the mandate and confidence of the members to continue as vice-president of the Tanglin Club.

(B) That David Gabriel be and is hereby removed from the committee and all sub-committees of the Tanglin Club.

(C) That the committee be and is hereby censured for its failure to remove David Gabriel from the committee, pursuant to rule 6(iii), in disregard for the overwhelming sentiment of members as expressed at the special general meeting held on 18 August 1997 as well as a written request dated 20 August 1997, endorsed by ninety nine (99) members.

8.At first, the committee agreed to convene the special general meeting, believing that it was obliged to do so under rule 34. Accordingly, by a letter dated 23 September 1997, the general manager informed the first plaintiff that the requisition was `accepted` by the committee and a date for the special general meeting would be decided when it next met on 13 October. He indicated that it would probably be held sometime in November. On 23 October, the general manager wrote to the first plaintiff again to inform him that the committee had fixed the special general meeting on 11 January 1998 at the Kallang Theatre. On 8 December 1997, the general manager put out a notice of the special general meeting together with the agenda and the proposed resolutions, in compliance with rule 35. All four resolutions of the requisition were put on the agenda.

9.On 17 December the second defendant wrote to the committee, enclosing a copy of his solicitor`s letter dated 17 December advising that a special general meeting had no powers to pass the first three resolutions. The committee urgently convened to consider the matter and took the unanimous position that those resolutions were ultra vires the Rules. On or about 2 January 1998, nine days before the date fixed for the special general meeting, the members were notified that the first three resolutions would be removed from the agenda. On 9 January the plaintiffs commenced this action and sought a mandatory injunction to require the committee to reinstate the resolutions at the special general meeting. Counsel for the plaintiffs and counsel for all the defendants, except the fifth defendant, appeared before me on the evening of 9 January. I adjourned the matter for a decision to be made on 10 January as to whether I would grant the injunction as prayed or any variation thereof. However at the resumption of the hearing on 10 January, counsel informed me that the parties were prepared to come to some compromise and requested my assistance in crafting one. In the event, the parties consented to the following order:

(A) No order be made on prayer (1) of the plaintiffs` application.

(B) This action be converted to an originating summons for a declaration as to whether the defendants are obliged to hold a special general meeting to determine on resolutions (A), (B) and (C) in the plaintiffs` letter dated 3 September 1997 to the general manager of the Tanglin Club.

(C) Parties...