- Bookmark
- Share
- CaseIQ
Samantha Kane against Leslie Stewart Waugh and another (Court of Session)
Factual and Procedural Background
The Petitioner and the Respondents were formerly members of Company A. The Petitioner challenged a decision made at a public meeting of Company A on 17 April 2025 to propose a resolution to dissolve Company A, and the subsequent public vote on 22 May 2025 at which the dissolution resolution, ex facie, passed. The Petition originally sought reduction, declarator and damages; the Petitioner abandoned damages and later abandoned the remedy of reduction, restricting the petition to a claim for declarator alone. Clause 17 of Company A's constitution governed dissolution, requiring a two‑thirds majority of councillors to decide that dissolution was "necessary or advisable", notice provisions for a public meeting, a majority of those present and qualified to vote, and approval by Company B for the Council to be deemed dissolved.
Legal Issues Presented
- Whether the decision to propose dissolution (17 April 2025) and the subsequent vote (22 May 2025) were unlawful because the power to dissolve was used for the improper purpose of removing the Petitioner from Company A.
- Whether the threshold in clause 17 ("necessary or advisable") was properly engaged or applied by Company A's members when the decision was taken.
- Whether procedural fairness or natural justice (in particular the right to be heard) was breached in the conduct of the 22 May 2025 meeting.
Arguments of the Parties
Petitioner's Arguments
- The power to dissolve was used improperly as a disciplinary device to exclude the Petitioner from Company A rather than for a legitimate collective judgment about dissolution.
- The dissolution procedure effectively functioned as a mechanism to remove the Petitioner, despite Company A having no express constitutional power to exclude a sitting member.
- Subsidiarily, the Petitioner contended that fundamental principles of natural justice, notably the right to be heard, were not observed at the 22 May 2025 meeting.
Respondents' Arguments
- The decision to propose dissolution arose legitimately "in the moment" during the disorder at the 17 April 2025 meeting and complied with clause 17; six of seven members present satisfied the two‑thirds threshold.
- The proposal and subsequent vote were taken for a proper purpose: Company A was not functioning due to disruption, and dissolution gave the community the opportunity to decide its future rather than serving as a disciplinary measure targeted at the Petitioner.
- Any procedural fairness concern is answered by the fact the Petitioner was permitted to make a short statement at the 22 May 2025 meeting before the vote was taken.
- Counsel relied on authority asserting flexibility in assessing terms like "necessary or desirable" and on precedents regarding challengeability of decisions even where bad faith is alleged.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Lloyds Pharmacy Ltd v National Appeal Panel 2004 SC 703 | Counsel invoked dicta on flexibility in interpreting the phrase "necessary or desirable" (noting the authority arises in a different area) | The court recorded the respondents' reliance on the dicta but treated the context as materially different and did not allow that authority to justify the instant ex tempore decision-making. |
| Macfarlane v Mochrum School Board (1875) 3R 88 | Authority referenced for the proposition that certain decisions may not be open to challenge even if bad faith is alleged | The court noted the respondents' reliance on the authority but rejected the respondents' position that the threshold test under clause 17 had been properly engaged or applied in this case. |
Court's Reasoning and Analysis
The court (Judge Arthurson) found the challenged decision proceeded upon an unlawful basis. The reasoning was as follows:
- The decision to propose dissolution was taken "in the moment" at the 17 April 2025 meeting; a genuinely collective conclusion on whether dissolution was "necessary or advisable" could not meaningfully have been reached under those circumstances.
- From inception (17 April 2025) to effective conclusion (22 May 2025) the objective of the dissolution process, in the court's view, was to exclude the Petitioner from membership. Counsel for the Respondents could not point to any constitutional provision authorising exclusion of a sitting member.
- Clause 17 was therefore utilised to effect the Petitioner’s removal, and those who initiated and completed the process did not apply their minds in form or substance to the clause's threshold test.
- The court rejected respondents' ex post facto assertions that the threshold had been properly engaged and rejected the contention that a history of dissent could justify invoking the dissolution power to remove a dissenter.
- On the subsidiary procedural fairness point, the court did not detect a breach: the Petitioner was permitted to make a short statement at the 22 May 2025 meeting and the court did not elaborate further on that point.
- Regarding remedies, because the Petitioner had abandoned reduction (to preserve a functioning council) and was left only with declarator, the court declined to issue a declarator in circumstances where it would have no practical effect, observing courts should not decide theoretical issues in a vacuum.
Holding and Implications
DISMISSED
The petition is dismissed. No finding is made as to expenses. The direct consequence is that no declarator is pronounced and the prior dissolution process is not the subject of a court‑ordered reduction in this proceeding. The court emphasised it would not grant declaratory relief that would be purely academic or have no practical effect; the decision does not establish a new general legal precedent beyond the application to the facts in this case.
Alert