O'Neill v Irish Hereford Breed Society Ltd

Judgment Date01 January 1992
Date01 January 1992
Docket Number[1989 No. 8687P]
CourtHigh Court
O'Neill v. Irish Hereford Breed Society Ltd.
Owen O'Neill and Bova Genetics Ltd.
The Irish Hereford Breed Society Ltd.
[1989 No. 8687P]

High Court

Natural justice - Fair procedures - Disciplinary body - Bias - Pre-judgment - Allegations of irregularities in plaintiff's dealings with society - Expulsion by council of society - Council members initiating and investigating complaints - Council members on sub-committee which recommended expulsion - Council members suspending secretary and stopping transactions relating to plaintiff- Sufficient council members without such involvement to make quorum - Plaintiff's failure to object to composition of council prior to court hearing - Whether there was bias rendering proceedings invalid - Test to be applied - Doctrine of necessity - Whether plaintiff estopped on basis of waiver from raising complaint of bias - Whether plaintiff's delay in objecting to composition of council a criterion in awarding costs of action - Rules providing for automatic suspension of membership for non-payment of annual subscription - Eligibility for re-admission at discretion of council on payment of arrears - Whether court could interfere with such discretion.

Practice - Estoppel - Delay - Disciplinary tribunal - Composition of tribunal - Complaint of bias - Failure to object to composition of tribunal before hearing of action - Whether such delay constituted waiver - Circumstances when litigant will be estopped from raising complaint of bias - Whether delay would affect award of costs.

The aims of the defendant as set out in its rules were inter alia to maintain the purity of and to improve in Ireland the Hereford cattle breed. Its rules provided that the defendant's affairs were under the control of a council of 18 elected members which could delegate powers to sub-committees which were composed only of council members. The editing committee was the sub-committee which dealt with the investigation of issues relating to the registration of animals. A corporate body such as the second plaintiff could be a member by nominating one of its members to represent it. Rule 7 provided inter aliathat if any subscribing member failed to pay his annual subscription for any year within three months of it becoming due he would automatically cease to be a member but would be eligible for readmission at the discretion of the council upon payment of all arrears. Rule 13 was entitled "Expulsion" and provided as follows:—

"Any member who shall fail in the observance of any rule, regulation or bye-law made by the Council of The Society, and whose conduct in any other respect shall be, in the opinion of the Council, derogatory to the character or prejudicial to the interests of The Society, or shall neglect, for a period of three months, to pay any money payable by such member under the provisions of these rules, may be removed from the Society by the Council, by a resolution to that effect, passed by a majority of at least two-thirds of the members of the Council present and voting at a special Council meeting of which not less than 21 days previous notice specifying the intention to propose such resolution shall have been sent to all members of the Council and to the member whose conduct is in question, and at which not less than one-third of the members of the Council exclusive of the member whose removal is in question, if he happens to be a member of the Council, shall be present. The member concerned shall be informed of the nature of the complaint and shall be invited to attend, to be represented at and to be heard, or to submit written evidence to that meeting of the Council at which the case will be considered."

Rule 68 provided for arbitration of disputes between the defendant and its members or former members.

The principal method by which the defendant achieved its objects was the processing of applications for the registration of the pedigree Hereford cattle bred by its members in the herd book of the Hereford Herd Book Society in England. The rules of the defendant expressly provided for the method of registration and the fees payable.

The first plaintiff was a member of the Council of the defendant, had been a member of the defendant for many years and had been its chairman from 1981 to 1984. He was the principal shareholder of the second plaintiff and was registered as its representative with the defendant.

Field officers had been employed by the defendant in 1987 to carry out investigations because a number of irregularities had occurred and the defendant had determined to tighten up its procedures and to impose serious penalties for breaches thereof.

In April, 1989, a field officer reported to the chairman of the defendant that cattle purporting to be pedigree Herefords were presented to a Department of Agriculture testing station without being registered. The field officer and the chairman on inspection of the cattle's tatoo marks and the defendant's files found that two of the cattle belonged to the first plaintiff. The files also showed that an unregistered animal belonging to the first plaintiff had been transferred to an artificial insemination station; that he had sold unregistered animals and that he had entered unregistered Hereford cattle at shows. The chairman of the defendant and the chairman of the editing committee reviewed the files and were concerned that irregularities had been facilitated by the defendant's secretary. On the 28th April, 1989, the chairman suspended the secretary and directed that no registration of any transaction relating to the first plaintiff was to take place. On the 30th April, 1989, an informal meeting of the council members contacted by the chairman and the chairman of the editing committee (other than the first plaintiff) were informed of the facts and confirmed the chairman's actions. On the 4th May, 1989, the editing committee considered the field officer's report and the first plaintiff's file and made a recommendation that the council should consider the expulsion of the first plaintiff. At a meeting of the council on the 24th May, 1989, the first plaintiff made no defence to the criticisms implied by the editing committee's report. When the first plaintiff withdrew the remaining council members unanimously decided to implement the editing committee's recommendation and to set in train the process for the expulsion of the first plaintiff.

A special meeting of the council was convened for the 11th July, 1989, to considerinter alia two letters from the defendant's solicitors to the first plaintiff's solicitors setting out the substance of the complaints against the first plaintiff and inviting their comments on them and to consider a resolution to expel the first plaintiff. The chairman of the defendant and the chairman and members of the editing committee were present and most of the members present had also been present at the meeting of the 24th May, 1989. The first plaintiff attended the meeting together with counsel and his solicitor. Counsel for the first plaintiff sought to have the matter referred to arbitration pursuant to rule 68 in relation to the registration requirements of the defendant. The council's decision was to postpone the consideration of the application. The first plaintiff then withdrew from the proceedings without answering any of the questions posed in the correspondence from the defendant's solicitors. The council unanimously passed a resolution expelling the first plaintiff in accordance with rule 13.

The plaintiffs' statement of claim alleged that the defendant had acted in an ultra vires manner in refusing to refer the matter to arbitration. The first plaintiff did not at any time during the course of the various hearings allege the existence or appearance of bias and it was not pleaded or alleged in the action until after the commencement of the hearing when a letter was sent to the defendant's solicitors furnishing particulars in relation thereto and alleging inter alia in relation to the council meeting of the 11th July, 1989, a real likelihood of and a reasonable suspicion of bias, (i)because members of the editing committee who had already recommended expulsion attended and fully participated in the decision, (ii)because the chairman of the council initiated the complaints against the plaintiffs, brought the complaints before the editing committee, sat on the editing committee and adjudicated the complaint he himself had laid before it and then presided at the council meeting which considered the recommendation of the editing committee, (iii) the chairman of the council attended personally at the testing station and personally made the report to the editing committee on which the committee purported to rely in making the report to the council which under the chairmanship of the council purported to expel the first plaintiff and (iv) the tone and atmosphere of the meeting of the 11th July, 1989, and in particular the demeanour adopted and the remarks made by certain members of the council.

In reply to the plaintiffs' allegation of pre-judgment by members of the editing committee the defendant submitted that the editing committee had not considered and had not power to consider expelling the first plaintiff but had merely recommended that the council should consider such expulsion. The report of the committee stated:—

"The committee suggests that Mr. O'Neill did not observe the rules . . . of the society and that the conduct of his affairs were not in the interests of the society."

It was argued on behalf of the defendant that even if one or more of the council members were disqualified by reason of bias that the first plaintiff had waived that point or was estopped from making it by acquiescing in the composition of the council which conducted the hearing.

The second plaintiff had not been expelled under rule 13 but its membership had lapsed under rule 7 for the...

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