Buddha's words

Buddha's words
My inspiration. We are what we think, All that we are arises from our thoughts, With our thoughts we make the world. Photo copyright Sean Duggan

Saturday, February 21, 2009

Things that can go wrong when Associations are not managed properly

Dear Readers,

I was recently involved in a Supreme Court case where the acting secretary of the Association tried to sell part of the Association's land without authority.

The summary of the case is as follows:

The AUSTRALIAN CHINESE CONFUCIUS-MENCIUS SAINT TAO CENTRE INC association was incorporated in Dec 1992 by 6 well meaning Saint Tao followers. The religion incorporates elements of Confucianism, Taoism and Chinese Buddhism.

One of the founding member was Sheng Chin Lai (the “Plaintiff”) in SUPREME COURT OF WESTERN AUSTRALIA action Lai v Tiao (No. 2 (2009) WASC 22.

In 1995, Lai donated over $250,000 to the Association to purchase Lot 42 Warton Road, Canning Vale, Canningvale with the aspiration that a Tao Centre temple would be constructed on the land, and eventually, homes built for the elderly in its vast compounds.

The other founding members were Cheng Chih Tiao, Hui Ping Wang (both known as the First defendants in this case), Yun Sen Chou, Ho Ming Wang and Song Tyan Kuo.
With the donations from over 200 donors and well wishers, a temple was constructed and completed in March 1996 with a grand opening ceremony.

The list of of over 200 contributors is engraved on a marble plaque which is placed at the temple.

In April 1996, there was a meeting between the 6 original contributors, ie Lai and Chou, Ho Ming Wang and the 1st and 2nd defendant and finally Kuo. There was a huge disagreement between the 6 original contributors regarding how the temple should be operated. Lai and Chou decided to make things easier for all concerned by refraining from further involvement in the temple.

Ho Ming Wang died in 2001, and the First defendants, Tiao & Wang took total control of the association and its funds.

On 11 May 2004 Tiao signed a contract to sell part of the temple land to Level Holdings Pty Ltd (“Level”). According to the contract, in return for developing the land into ten lots, Level will keep 5 lots and the Association was to keep the other 5 lots.

Tiao signed the contract, using his personal address and without the Association’s seal.

By sheer chance, Lai discovered that the land was being developed in Jan 2005 and immediately instructed Tan and Tan Lawyers to lodge a caveat to protect the interest of the Association.

On 17 Jan 2005 and 1 Feb 2005, Lai through Tan and Tan Lawyers demanded from Tiao all information regarding the contract with Level as Lai suspected no authorisation had ever been sought by Tiao from the members.

Instead of responding to the question as to whether he was authorised to sell the land, Tiao signed up 38 new members, who comprises some of his family and friends. He now claimed they are the new members of the Association.

He then organised the 1st ever AGM of the Association on 26 Feb 2005 and convinced the “new members” to pass resolutions to:

1. Approve the development of the land to raise infrastructure funds for the Association.

2. Ratify all past acts, deeds, transactions and omissions of whatever nature of each of the officeholders.

When Lai finds out about the 1st ever AGM and the resolutions that were passed, Tan and Tan Lawyers went to the Supreme Court and obtained an injunction against the land being transferred to Level.

By this time the land was worth, conservatively, at $1.8million.

The injunction was granted on 19 Apr 2005. At the injunction hearing, it became clear that the Association had never maintained a list of members, from 1992 until the issue was raised on 10 January 2005 by Tan and Tan Lawyers. There was therefore no authorisations obtained from any members regarding the land sale to Level Holdings.

At this point, it was also revealed that no accounts were ever maintained by Tiao in that time. It also appeared that the Association’s funds were merged with Tiao’s personal accounts.

For the next two years numerous interim applications and injunctions were lodged and fought by the parties until the final hearing which was heard on 19 Nov 2007 for 6 days.

The hearing centred around :

(i) Who is supposed to be a member of the Association as Tiao never kept any list of members or proper accounts from 1992? (ii) whether the selling of the land was authorised.

None of the donors who contributed towards the temple building funds were consulted on the sale of the land as Tiao insisted they are not members and had no interest in the Association.

Tiao claims his 38 members should be the only legitimate members as they were on record at the first ever AGM. And since they had ratified his actions at the first ever AGM, his actions were sanctioned.

Lai was of the opinion that all persons who had contributed towards the Temple construction should be accepted as legitimate members.

(ii) Was Tiao authorised to sign the Level Holdings land contract? The decision of who is a member was crucial to the answer.

The decision of the Judge was delivered in a 162 page judgement on 12 Feb 2009 as follows:

(i) All persons who had initially contributed towards the temple construction and whose names are listed in the temple plaque are the rightful members of the Association.

(ii) That the meeting on 26 Feb 2005 where the 38 members were signed up by Tiao were invalid. Therefore the resolutions passed to ratify the actions of Tiao and the decision to continue with the sale of the land to Level Holdings are invalid.

(iii) The Judge found that Tiao operated the temple like his own “fiefdom” disregarding the interest of the persons who should be the rightful members.
Quote from Justice Johnson:

“In my opinion, at all times the first defendants (“Tiao and Wang”) have acted out of self interest and not in the interests of the Association and it’s membership. Over time, Tiao has adopted the approach that it is his perogrative to decide what is in the best interests of the Association. He either has no grasp of the concepts of separate corporate identity or chose to disregard the distinction between his view and that of the Association which would normally be identified by the resolutions passed by members at general meetings.

This is best illustrated by his decision to enter into the Level Holdings contract without raising the matter at a validly convened board meeting with notice given to all board members before putting the matter before the members of the Association at a validly convened general meeting. Such steps were required of Tiao but, in my view, he deliberately declined to take them”.

(iv) The Judge also found that Tiao had mixed his personal funds with the Association’s funds.

(v) The Judge declared that the contract to sell the land to Level Holdings was unauthorised.

(vi) The Judge also declared that Conal OToole and his counsel P McGowan, were not validly authorised by the Association to represent the interest of the Association.

The Judge has now ordered that there be a meeting as soon as possible by all members who are listed in the temple plaque to decide what they want to do to resolve the issues faced by the Association.

The Association continues to be represented by Mr Raymond Tan of Tan and Tan Lawyers while Ken Robson acted as counsel.

All members whose names appear in the plaque located at the Association’s premises are encouraged to contact Mr Raymond Tan to register their interest in the forthcoming Special General Meeting.

This is a picture of the plaque at the temple.

A copy of the full Judgement can be found at :


Sunday, February 8, 2009

My personal brush with the law and finding out what it is like to sit in the back of a paddy wagon.

My Saturdays are usually very routine. Bring the kids to Chinese School in the morning, clean up the house for the weekend, play badminton with my friends followed by dinner with the badminton players.

Last Saturday, 7 February 2009 took a slightly different turn. At dinner, there was a bottle of red wine shared between my wife and another couple. We did not even finish the bottle though I must admit I had more than the other 3 drinkers.

I decided to drive home instead of getting the missus to drive as it was a short trip and I was sure I was under the limit.

While driving back home from Victoria Park to Kensington, I saw the flashing and blinding lights of a copper's wagon.

I pulled to the side and got out of the car.

Yes, it is always better to get out of the car so that you can have a friendly chat with the cops to see what you have done. I find that sitting in your car while being questioned usually causes a bit more tension.

It is usually intimidating dealing with the law even though I am a lawyer and well versed in the criminal laws. This is especially where you are the suspect.

Constable Worthington, a very pretty constable and Constable Vellaquex (I think), an equally charming copper said they did not think I was turning the car properly when I turned right into Berwick St. The next thing I know, I was being breathalysed.

The reading was just above 0.05 which is an offence liable to a fine and demerit points but no suspension for a 1st offence.

I was then asked to return to the Kensington Police Station where I was to be tested again on one of their more sophisticated machines.

This is a picture of me getting into a police car taken by my sister in law.

It looks amusing now, and I was smiling when I stepped into the paddy van as I knew I had not committed a serious offence. Nevertheless, it is still a drink driving offence and should be taken seriously as many accidents have happened as a result of drink driving.

However, once you are sitting inside the paddy van, life takes on a different perspective. There are no cushions or seatbelts, and there is but a small window that you look out of. I am sure there was also no airconditioning. My mind immediately flashed back to a recent case where an Aboriginal elder collapsed in a prison van while being transferred to Kalgoorlie in stifling heat. He died a short time later in hospital.

Luckily for me the ride was just a couple of minutes.

At the station, I had to wait for over 1/2 an hr before the machine could take my reading. I had a good chat with the coppers about the law and their side of it compared to my perspective of it.

My final breathalyser reading was finally done and the reading was 0.059. However, the police then reduce the reading by the time of your last drink.

Under : ROAD TRAFFIC ACT 1974 - SECT 71

71 . Determination of blood alcohol content at material time

(1) In any proceeding such as is mentioned in section 70(1) a person’s blood alcohol content at any time which is or may be material in the proceeding (the material time ) shall be calculated having regard to —

(a) the time of the person’s last drink containing alcohol taken at or before the material time; and

(b) the material time; and

(c) the time at which the sample of the person’s breath or blood was provided or taken for analysis (the time of sampling ); and

(d) the person’s blood alcohol content at the time of sampling,

so as to give effect to the presumption that after a person’s latest drink containing alcohol the person’s blood alcohol content increases at the rate of 0.016g of alcohol per 100ml of blood per hour for a period of 2 hours and, after that period, decreases at the rate of 0.016g of alcohol per 100ml of blood per hour.

(2) For the purpose of making a calculation under subsection (1) in any case where any one or more of the times referred to in that subsection can only be ascertained as falling within a period of time, the calculation shall be made taking such time within that period as produces the result most favourable to the person charged.

(3) For the purpose of making a calculation under subsection (1) but subject to subsection (2), in any case where the time of a person’s last drink containing alcohol is not ascertained, the time of the person’s last drink containing alcohol shall be taken to have been such time as produces the result most favourable to the person charged.

(4) In any proceeding such as is mentioned in section 70(1), the concentration of alcohol calculated to have been present in the blood of a person at any time under the preceding provisions of this section shall be conclusively presumed to have been present in the blood of that person at that time.

Based on the assumption that I had a last drink 1 hr ago, the reading was reduced by
0.016 which brought my reading of 0.059 to below 0.05 or 0.43 to be exact.

That meant I had not broken the law by drink driving.

Well, with a handshake to my police friends, I bade them good night as my wife Annie, was waiting for me to drive me home.

I was glad to have been able to experience part of the process of drink driving arrests. I was even more relieved that I did not have to go through the whole process by being charged.

I do suggest to my friends and clients that drink driving offences are very serious offences as it can cause the loss of lives or injury. It will also result in financial hardship especially when you cannot drive to work.

Any person who commits a 0.08 drink driving offence automatically gets a 3 mths suspension. For certain categories of drivers, the tolerance is below 0.02.

The court system does however allow a person who has been disqualified to apply for an extraordinary licence. These licences are getting harder and harder to get as the courts get serious about drink driving.

One of the lessons learnt is that if you had a last drink 1 to 1 1/2 hrs ago the police will give you the benefit of the doubt by taking the lowest reading possible.

Conversely as the alcohol level is presumed to decrease after the 2nd hr you will not get the benefit of a reduced reading if your last drink was 3-5 hrs before being breathalysed.

However, the best lesson is that if you drink, you should not drive.

Till my next blog, drive carefully.