Cullwick v Lini [2004] VUSC 35; Civil Case 201 of 2004 (26 November 2004)

IN THE SUPREME COURT
OF THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 201 of 2004

BETWEEN:

LEIASMANU CULLWICK
Claimant

AND:

MRS MARY LINI
First Defendant

AND:

JENNY LIGO, ROBIN TRU
Second Defendant

AND:

ANNET MIAL, MARYANNE BANI, ROSALYN GARAE, NAOMI MALAU, ELIZABETH HOSEA, SUPIE FRANK, LILY AMOS, YELO RUTH, MORRIS KALORAN
Third Defendant

AND:

WESTPAC BANK (VANUATU) LIMITED
Fourth Defendant

AND:

ANZ BANK (VANUATU) LIMITED
Fifth Defendant

AND:

NATIONAL BANK OF VANUATU
Sixth Defendant

Coram: Justice P. I. Treston

Mrs. Cullwick in person (assisted by Ms. Temakon as Mackenzie friend)
Mrs. Lini, Mrs. Ligo, Mrs. True in person (assisted by Ms. Helen Wodak as Mackenzie friend)

Date of hearing: 23 November 2004
Date of decision: 26 November 2004

JUDGMENT

APPLICATION

The Claimant has filed an application for interim restraining orders as follows: -

1. Order to restrain the Defendants from organizing the VNCW Board Meeting and Conference scheduled for 8^th to 4^th November 2004 until further order of the Court.
   
2. Order to maintain the Claimant as President of the Vanuatu National Council of Woman until further orders of the Court.
   
3. Order that the Claimant be responsible for the affairs of the VNCW until further orders of the Court.
   
4. Order to restrain the Defendants from disturbing the Claimant from undertaking her role as President of VNCW until further order of the Court.
   

As it happens the Conference of the Vanuatu National Council of Women has been adjourned until 9 to 10 December 2004 on the island of Espiritu Santo.

The grounds in support of the application, are as follows: -

1. In Civil Case No. 51 of 2003, the Court held that the VNCW convene a conference to elect a President and the Claimant has been duly elected President of VNCW by the Conference held from the 16^th to 18^th of December 2003 in Port Vila
   
2. The Claimant had been terminated as President of VNCW by the First Defendant on or about 26^th April 2004.
   
3. The VNCW Constitution provides under Article 8.3 that there are procedures to appoint an independent mediator to mediate when there is a conflict concerning the President before the President can be removed by two thirds majority of the Board however this was not followed.
   
4. Article 5 of the VNCW Constitution provides that the Claimant is a member of the Board of VNCW even if she is not the President however, she was never called to a meeting by the First, Second and Third Defendants and the Claimant has never been given an opportunity to be present at the Board meetings.
   
5. The First, Second and Third Defendants are calling a National Conference from 8^th November to 14^th November 2004 to elect a new President of the Vanuatu National Council of Women without the Claimant's knowledge and participation.
   
6. The Fourth, Fifth and Sixth Respondents had assisted the First, Second and Third Defendants to change the authorized signatories to VNCW Bank Accounts whereas Article 7.2 (1) (a) of the VNCW Constitution provides that the Claimant as President is a signatory and has the authority to authorize change the signatories to the Bank Accounts.
   
7. The Claimant had on or about May 2004 reported the matter to the Public Solicitor but nothing has been done concerning her termination as President of VNCW whereas the Public Solicitor had referred the misappropriation case to the Police but no positive action has been done by the Police to date.
   

The application was opposed. Neither party applied to cross-examine the makers of the sworn statements which were filed, all of which the Court has considered in full.

FACTS

The Applicant has been a member of the Vanuatu National Council of Women ("VNCW") Board since 1998. Last year she was also a Claimant in Civil Case No. 51 of 2003. The Claimant has said that that case involved the same parties. That in itself is an inaccuracy because she was one of the three Claimants and, while Jenny Ligo, Naomi Malau, Elizabeth Hosea, Supie Frank and Lily Amos together with ANZ Bank (Vanuatu) Limited and Westpac Bank (Vanuatu) Limited were Defendants to the previous action, in the present application parties are different. Effectively the other case involved the previous Board of VNCW while this case concerns the present Board together with Mrs. Robyn True, and the named banks.

At the last conference of the VNCW in December 2003, the Claimant was duly elected President by a margin of one and at that conference a motion put forward by the Claimant resolved that the costs of CC51/03 would be paid by VNCW. The Claimant's costs came to the rather extraordinary amount of VT750, 000 which included food amounting to VT30, 000, fuel amounting to VT54, 000, secretarial work amounting to VT150, 000 meeting and Court attendance amounting to VT150, 000 and unsocial hours of work, communication costs and meeting with the Defendants amounting to VT250, 000. Significantly the invoice containing that amount from the Claimant was dated 15/12/2003 which was before the conference took place on 16 to 18 December 2003 and shows a certain amount of prescience. It seems that the Claimant anticipated that her invoice for payment of costs would be accepted even before the conference took place.

In any event, such an application for costs is again extraordinary in the face of the decision of the Court in the earlier action when it was specifically said as follows: -

"As to the question of costs, some of which have been reserved from time to time during the course of the hearing, I note that on one occasion the Court considered whether the action should be struck out for want of prosecution by the Claimants. I note that the members of VNCW, apart from the CEO and other staff, are largely voluntary workers giving generously of their time and support for furtherance of the aims of VNCW. I also add that, although the Claimants have required the Court to make a decision in relation to their claim, I am of the view that the rulings earlier made by the Court on 25 June 2003 largely answered their concerns and that with even a small amount of cooperation and working together with goodwill the issues could have been resolved internally months ago. I remind the parties that it is incumbent upon members of VNCW to remember and operate under the stated aims of their organization.

Having said all that, I consider that costs should lie where they fall and I make no order for costs one way or the other."

Certainly the orders to facilitate the judgment of 21 October 2003 included this ruling: -

"That the National Conference can vote on the question of the expenses in relation to this action".

Clearly expenses are different to costs and under Rule 15.4 of the Civil Procedure Rules No. 49 of 2002 ("the Rules"), a party who is not represented by a lawyer may recover disbursements but is not entitled to recover costs. Expenses are the same as disbursement and it seems to me totally inappropriate that a largely non-profit organization (see Article 1.4 of the constitution of VNCW) should have to fund the costs of a private action brought by its members.

However it is clear the in the 2003 resolution the conference agreed that the costs of the case be paid by VNCW. Significantly a further resolution was as follows: -

"In the future VNCW solve (sic) disputes without going to Court."

The first Board meeting after the 2003 National Conference and AGM took place on Friday 19 December 2003, the Board discussed the date of the next Board meeting and said it was important for the next Board meeting to review the finances of VNCW and matters to go before the Board, and at that meeting Mary Lini spoke to the Claimant and said that she did not think that the VT750, 000 should be paid to the Claimant until they had had a proper look at the budget and their accounts. She said that they would not have a chance to do that until the next Board meeting. It was as a result of that that the Board agreed that financial matters in relation to the budget should be discussed at the 19 January 2004 meeting.

However, shortly after that the Claimant, as president arranged with Annett Mial, the elected treasurer of VNCW, to sign a cash cheque of VT750, 000 that was subsequently cancelled because at the time Mrs. Mial was not a signatory to the account. However, on 23 December 2003, it seems from the evidence of Paula Aruhuri, financial officer of VNCW at the time, that the Claimant arranged for a cheque to be signed for the VT750, 000 even though the Board had not approved it and this was discussed in the presence of Jenny Ligo and the Claimant and the cheque was paid out on the same day.

As a result of that the Board at its next meeting on 19 January 2004 noted through Mary Lini the vice president, that although the Conference had approve the spending of VT750, 000, the Board had not received an invoice for that expense and was not requested to approved that spending. It was her concern that the president did not advice the vice-president and the treasurer of this transaction and the Board considered that a conflict of interest situation with regard to the Claimant had arisen and she should not be present while the Board dealt with financial matters that she was directly involved with.

It seems that the president said that the Board was making a big issue about finance and spending too much time on finance issues.

The meeting continued on 20 January 2004 and the Claimant was asked to remove herself from the meeting due to her conflict of interest in the matters to be discussed. Decisions were made that a letter should be sent to the Claimant requesting her to return the VT750, 000 to the VNCW or to produce an itemized account with receipts by 23 January. The Board considered that the account was not legitimate and was grossly inflated, there was also another issue concerning other expenditure made by the Claimant.

At the hearing the Claimant confirmed that she has never furnished the receipts and the detail of expenditure contained in the VT750, 000 and has never returned the moneys.

As a serious dispute had arisen the Claimant was to remove herself from the Board meeting. Various meetings were set up for the Board to meet the Claimant on 29 January and 16 February 2004 but she either refused to attend or gave unsatisfactory excuses and did not show up.

Thereafter arrangements were made for mediation in accordance with the constitution but despite being give notification the Claimant did not attend on 20 February 2004. Another date was set when the Board attended but the Claimant did not and the mediation proceeded in her absence.

On 10 March 2004, in a telephone vote all Board members but one, who declined to vote, agreed that the Claimant should be removed from her position as president of VNCW Board.

The decision was confirmed to the Claimant by a letter from VNCW of 26 April 2004.

SUBMISSIONS

The Claimant submitted that a president could only be removed at a Board meeting and that a telephone vote could not be valid or appropriate.

The Claimant also submitted that the mediation process had not been properly carried out because it was the mediator who should have contacted both parties. She choose not to go because the notification of mediation was from the vice president. The Claimant also complained that she had never been informed who the mediator was, and, as the mediator named had been peripherally involved in Civil Case 51/03, she was disqualified.

The Defendants argued that the dispute resolution procedure had been followed but the Claimant choose not to attend any of the scheduled meetings or mediations and that the voting procedure of removing the president was valid because it was conducted under the particular article which did not require such a vote to occur at a meeting of the Board.

PRELIMINARY MATTERS

Prior to the hearing the Defendant Robyn True (referred to as "Robin Tru")applied to the Court to be removed from the case. The Defendant said that she was a CUSO volunteer advisor to the Board, management and staff of VNCW and not a member of the Board of Directors and did not attend regular meetings and had no standing or responsibility for the financial management or the decisions made by the Board.

This application was opposed by the Claimant who indicated that it was clear that Ms. True had assisted the Board in composing letters and had signed some documents.

The question of removal of a party from a case is covered by Rules 3.2(2) (a)(b) of the Rules where it is set out as follows: -

"The court may order that a party to a proceeding is no longer a party if:

(a) the person's presence is not necessary to enable the court to make a decision fairly and effectively in the proceeding; or

(b) for any other reason the court considers that the person should not be a party to the proceeding."

The Court was satisfied that Ms. True's presence was not necessary to enable the Court to make a decision fairly and effectively in the proceeding. She had no capacity of decision making in the VNCW, she could also not be bound by any of the orders sought by the Claimant. I directed that she was no longer a party.

Although Westpac Bank (Vanuatu) Limited, ANZ Bank (Vanuatu) Limited and National Bank of Vanuatu were cited as parties, it is also clear that they ought to be removed as parties. There was no relief sought against those parties. Although they were served with the application only the National Bank of Vanuatu filed a notice of beginning to act through its solicitor Mr. Morrison. Mr. Morrison did not attend the hearing.

Each of those Defendants, namely the fourth, fifth and six Defendants is also removed as a party and I make no orders as to costs because none was sought.

FINDINGS

Article 5.2(3) of the Constitution of VNCW provides as follows: -

"A member of the Board cannot serve for longer than two consecutive terms"

In her own sworn statement and at the hearing, the Claimant conceded that she has been a member of the Board for three consecutive two year terms namely from 1998 to the present time. Her presence on the Board, then, has been contrary to the constitution and consequently she has no status to apply to this Court to grant any order making her president to be responsible for the affairs of the VNCW without disturbance. She is not even currently eligible under the Constitution itself to be a Board member.

The Claimant argued that others are in the same situation. That is irrelevant as far as her situation is concerned and no doubt VNCW will regularize the situation as to the membership of the Board according to the Constitution at its next conference.

Effectively that disposes of the Applicant's application but for completeness I turn to deal with her other submissions.

I earlier indicated that one of the resolutions of the last conference in December 2003 was that in the future VNCW should solve disputes without going to Court. The Applicant has applied to Court contrary to that resolution although she claimed that her rights had been infringed but really she has no right to come back to the Court and to impose further expense on VNCW.

As to the Claimant's contention that she was wrongly excluded from the meetings because of conflict of interest and that the dispute procedure was not correctly carried out, it clearly was a conflict of interest situation. While the conference in its resolution had agreed that the costs of the current case be paid by VNCW it was clear that the Claimant had never received the approval of the Board to the payment. Article 5.6(3) provides as follows: -

"All expenditures and financial commitments in excess of VT200, 000 are to be approved by the Board prior to spending"

Even though there had been a resolution for payment of the costs, and I have already commented about that, that resolution was subject to Board approval because it was in excess of the amount contained in the constitution. The reason for that is clear. If there is a resolution by the conference as to expenditure it needs to be checked and properly verified by the Board. The Board had not approved the payment of costs to the Claimant. The Claimant took it upon herself, knowing that she did not have the Board approval, and arranged for payment to herself immediately after the first Board meeting and is for that reason that the Board ruled that there was a conflict of interest. It was admitted that she has never made available detailed receipts in relation to the amount sought for verification by Board, and it was not surprising that she was excluded from the Board meeting in discussing the matter of the costs. She was asked to return the funds or to provide proper verification. She has declined to do either.

In fact in that circumstance where the Claimant failed to abide by the decision taken by the Board to discuss financial matters at the next Board meeting she should have resigned from the Board in accordance with article 5.6 (9) which provides: -

"Once the Board has taken a decision, all members must abide by the decision and speak with one voice. If a Board member cannot abide by the decision taken by the Board, she or he must resign from the Board".

The Claimant has failed to do the honourable thing in accordance with that article.

The process to resolve dispute is contained in Article 8.2, which provides as follows: -

"DISPUTES

(1) Disputes are to be resolved by co-operative discussion at meetings of the Board, held in accordance with the procedures set out in this Constitution.

(2) If there is any dispute involving the Board of Director, the Board is to convene a meeting immediately to resolve the dispute.

(3) Once the Board votes on a matter, all Board of Directors and disputing parties are bound by the Board's decision, and must act in accordance with that decision. However, it does not prevent the disputing parties from raising the matter at a meeting of National Conference.

(4) If the dispute is between staff members, the Chief Executive Officer may deal with the matter following the instructions in the Staff Manual."

A meeting had been arranged but the Claimant did not attend.

The matter then proceeded to mediation and Article 8.3 provides as follows: -

"Mediator

(1) If the dispute is not resolved, the matter may go to mediation.

(2) The role of the mediator is to reach a friendly and satisfactory resolution of the dispute, in the spirit of this Constitution and the aims of VNCW.

(3) The mediator and parties to a dispute are encouraged to place their loyalty to VNCW before their private view, and to keep the dispute, as far as possible, a private matter to be dealt with within VNCW rather than in the public area.

(4) The mediator is to:

• (a) discuss the matters involved in the dispute with each of the disputing parties separately, as often as is necessary; and
  
• (b) arrange a meeting between the disputing parties at a reasonable time; and
  
• (c) at the meeting, encourage harmonious and meaningful discussions between the parties with a view resolving the disputes.
  

(5) In a dispute that does not involve the President, the President is to appoint a person to act as mediator (whether a member of VNCW or not). If the President is involved, the Board is to appoint a mediator who cannot be a member of the VNCW. The President is not entitled to vote on the matter.

(6) If the dispute is not resolved after mediation, the Board members concerned may be removed from office by a vote of two-thirds of the Board of Directors.

(7) If the removed member is the President, the National Conference shall appoint a new President. The Vice-President is to act as President until the next National Conference.

(8) If the dispute involves a criminal offence, the Board or any member must refer the matter to the police."

Despite being given a number of chances the Claimant did not attend mediation, and she simply relies on the fact that it was not the mediator who had arranged the meeting between disputing parties at a reasonable time. The Claimant was given proper notice of the meetings for mediation and, although that notice was given to her by the vice president, she did not attend. There is nothing in the constitution to say that the mediator cannot arrange a meeting between the disputing parties through another official such as the vice president. I am satisfied that the mediation process was in accordance with the constitution.

In Article 8.3 (6) it is provided that a removal from office can occur by a vote of two thirds of the Board of Directors. I agree that Article 8.3(6) does not require the vote to take place at a meeting of the Board. It is a separate procedure involving a resolution of a dispute by mediation. I am satisfied that a vote may indeed be taken by telephone. That is particularly so in relation to an organization such as VNCW. Common sense should prevail and it is far too expensive for VNCW to arrange to bring in members to Port Vila from their respective islands. I am satisfied that the procedure was carried out correctly and that the Claimant was quite properly removed from her office as president by a vote of two-third of the Board of Directors.

The first order that the Claimant seeks is for the Court to restrain the Defendants from organizing the VNCW National Conference this year. This is it self contrary to the Constitution because it is provided in Article 1(1) that the National Conference of VNCW must be held once a year. The last conference was held on 16 to 18 December 2003. The proposed conference is to be held in Santo on 9 to 10 December 2004. If that conference were restrained the Article would be breached.

I am satisfied that any potentially criminal matter has been referred to the police.

CONCLUSION

For all the above reasons, the application for interim restraining orders is declined. The Court understands that certain banks may have frozen the accounts of VNCW. Any restriction should be immediately lifted.

Throughout the hearing the Claimant referred to the Constitution and in particular article 8.1 (1) which states: -

"It is the aim of this Constitution that members of the VNCW conduct themselves in the spirit of harmony, cooperation and friendliness, to further and uphold the aims of VNCW."

With the greatest respect to the Applicant, she has referred to this admirable concept more than once during her submissions but has failed to put the philosophy into practice and seems to be putting her own interests ahead of VNCW.

Dated AT PORT VILA, this 26^th day of November 2004

BY THE COURT

P. I. TRESTON
Judge