In the matter of Austinmer Bowling Club Ltd (in liq); Russell v Rodden [2008] NSWSC 730

In the matter of Austinmer Bowling Club Ltd (in liq); Russell v Rodden [2008] NSWSC 730

Clause 6 of the memorandum identified the members as the class to determine the destination of surplus on winding up, but did not give every individual member a right to participate or prescribe the procedure for making the decision. Because the memorandum was silent on procedure, it was supplemented by the articles of association, which provided for member decision-making by voting at meetings. Under articles 6, 7 and 20(a), only Bowling Members and Life Members were entitled to attend and vote at meetings; Social Members were not. The provisions of the Registered Clubs Act 1976 (NSW) concerning other club decisions did not apply to the surplus decision, and article 2 did not adjust...

Jurisdiction
Australia
Judgment Date
17 July 2008
Procedural Posture
Corporations Winding Up Proceeding Concerning Distribution of Surplus of a Company Limited by Guarantee / Application by Liquidator, Changed From Directions Application to Proceeding for Binding Declarations of Right; Court Considered Substantive Issues and Deferred Whether to Make Binding Declarations Pending Supplementary Submissions
Outcome
The Court agreed with the substance of the declarations sought that any members' determination of surplus must be made at a meeting under the articles and that only Bowling Members and Life Members may attend and vote, but deferred whether to make binding declarations pending supplementary written submissions; the...
Legal Topics
['company Limited by Guarantee' 'surplus on Winding Up' 'construction of Memorandum and Articles of Association' "members' Meetings and Voting Rights" 'representative Proceedings']
['corporations' 'equity' 'registered Clubs' 'winding Up'] ['company Limited by Guarantee' 'surplus on Winding Up' 'construction of Memorandum and Articles of Association' "members' Meetings and Voting Rights" 'representative Proceedings']

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Procedural Posture

Corporations Winding Up Proceeding Concerning Distribution of Surplus of a Company Limited by Guarantee / Application by Liquidator, Changed From Directions Application to Proceeding for Binding Declarations of Right; Court Considered Substantive Issues and Deferred Whether to Make Binding Declarations Pending Supplementary Submissions

Legal Issues

  1. 1 ["Whether a determination by members under clause 6 of the Club's memorandum of association about the destination of surplus on winding up had to be made at a meeting convened and conducted under the articles of association." 'Whether Social Members were entitled to attend and vote at such a meeting.' 'Whether article 2 operated to give Social Members voting rights because voting members were a minority of Full members.' 'Whether the Court should make binding declarations or instead grant relief under s 511 of the Corporations Act 2001 (Cth).']

Ratio Decidendi

Clause 6 of the memorandum identified the members as the class to determine the destination of surplus on winding up, but did not give every individual member a right to participate or prescribe the procedure for making the decision. Because the memorandum was silent on procedure, it was supplemented by the articles of association, which provided for member decision-making by voting at meetings. Under articles 6, 7 and 20(a), only Bowling Members and Life Members were entitled to attend and vote at meetings; Social Members were not. The provisions of the Registered Clubs Act 1976 (NSW) concerning other club decisions did not apply to the surplus decision, and article 2 did not adjust...

Court Disposition

The Court agreed with the substance of the declarations sought that any members' determination of surplus must be made at a meeting under the articles and that only Bowling Members and Life Members may attend and vote, but deferred whether to make binding declarations pending supplementary written submissions; the...

Orders

  • ['Proceedings to be stood over to a later date for matters concerning convening and conduct of the meeting and distribution of surplus, to the extent necessary.' 'Supplementary written submissions to be received on whether binding declarations of right should be made, particularly in relation to binding Bowling and...