One life member, an 80-year-old retiree, described the scene as "a riot": "People were up in arms. I had a stand-up argument with the finance person."

The elderly man, who asked not to be named, said he had since suspended his regular donations to the home and was considering changing his will to remove a bequest to the animal charity. Two other life members have told Fairfax Media they are planning to cancel bequests to the home.

It is the latest evidence of controversy at the 106-year-old Melbourne institution, which has become deeply divided by personalities and the politics of euthanasing animals.

Beth Healy, who was at the meeting on behalf of an elderly friend, said attendees were visibly upset. The audience was stunned to learn that the home's membership had been reopened, after being closed for years, and that hundreds of new members had been quietly signed up just two weeks earlier and had given their proxy votes to the board.

"There were a lot of elderly people there who were very unhappy. They were asking a lot of questions about the votes and the finances and the board wouldn't answer all of them. They were getting very upset."

The dispute centres on the board's use of several hundred proxy votes to block the election of a new director, and its refusal to answer several questions from the floor.

Supporters of the unsuccessful board candidate, Georgia Murphy, are seeking legal advice over whether the board has breached regulations by quietly reopening membership so soon before the AGM and apparently inviting people to join.

Chair of the board Prue Gillies also used the hundreds of new proxy votes to block a motion to have her removed.

Another life member present at the meeting accused Gillies and board member Terry Makings of running the home "like their own personal fiefdom".

Many of those who contacted Fairfax Media claimed that the majority of the new memberships came from the so-called no-kill movement, and a particular charity, Rescued With Love. This is a group that opposes euthanasing unwanted animals in facilities such as the Lost Dogs Home.

Rescued With Love president Kay Norman said she had no comment regarding the new memberships.

At the AGM several questions were asked from the floor, including the reason for an increase of more than $2 million for administrative expenses between 2015 and this year.

Another member said the secretive membership drive was a clear misuse of the board's powers. She said the board had been "dysfunctional and toxic", constantly criticising management with no logic or understanding of the business.

Fairfax Media has also learnt from several sources that the home is involved in two bullying claims. While Fair Work Australia will not disclose details of the confidential process, Dr Pam Whiteley, wife of the home's former director and chief executive Graham Smith, said she had been present at Fair Work Australia this year when two female staff members arrived to begin a confidential process. Whiteley said she was pleased to see people being held accountable for their behaviour.

Another longtime member of the home said she had been contacted by a lawyer investigating the bullying claims.

The Lost Dogs Home said it had no response to questions in writing from Fairfax Media and that Gillies would not make any comments.

The bitter feud at the home dates back to controversy over its removal of Graham Smith in 2013, and a split between supporters and opponents of so-called no-kill activists. It has been through eight chief executives and acting chief executives in the three years since.

The previous chief executive, Kerry Thompson, left the home in September, with a note on the home's website saying "Due to differences between the Board of TLDH and Ms Thompson in relation to the strategic direction of TLDH, Ms Thompson has decided to resign and pursue other opportunities".

The current chief executive, Andrew Israel, was appointed in October.

Murphy said she had been involved with the home for more than 20 years and stood for a position on the board because she wanted to help with necessary cultural change. But she said she had recently become aware that some board members were treating staff in ways that were bullying and disrespectful, and was concerned that it was being overly influenced by the more extreme no-kill movement.

"The way they [the board] are treating people is impacting their mental health. The staff have a difficult enough job without members of the board creating a toxic culture."

Critics of the no-kill movement argue that this ideal means not even dangerous or very sick animals are euthanased, which leaves less room at shelters for animals that could be rescued and successfully adopted out. However the no-kill activists argue euthanasia rates have long been far too high.