REGISTRAR OF FRIENDLY SOCIETIES V AUCKLAND WORKINGMENS CLUBHC AK CIV-2003-404-2391

REGISTRAR OF FRIENDLY SOCIETIES V AUCKLAND WORKINGMENS CLUBHC AK CIV-2003-404- 2391 9 November 2005IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2003-404-2391IN THE MATTER OF the Friendly Societies and Credit Unions Act 1982 AND AND IN THE MATTER OF of the Companies Act 1993 BETWEEN THE REGISTRAR OF FRIENDLY SOCIETIES AND CREDIT UNIONS Plaintiff AND AUCKLAND WORKINGMEN'S CLUB AND MECHANICS' INSTITUTE Defendant Hearing: 9 November 2005 Appearances: W Smith for Plaintiff G Greenough, W Haslam and ET Nobbs on behalf of the Defendant Judgment: 9 November 2005JUDGMENT OF ASHER JSolicitors: Grove Darlow & Partners, PO Box 2882, Auckland Copy: W Smith, Barrister, PO Box 2375, Auckland G Greenough, 52 Newington Road, Henderson W Haslam, 3A Glass Road, Mt Roskill ET Nobbs, 14 Whites Way, Ellerslie[1] This is an application by the Liquidators of the defendant, Auckland Workingmen's Club and Mechanics' Institute (In Liquidation) ("the Club"), for directions in respect of the distribution of the Club's surplus funds. [2] These proceedings were initiated by the Registrar of the Friendly Societies and Credit Unions because the Club has ceased operating and was not able to call a special meeting in terms of Sections 93 and 94 of the Friendly Societies and Credit Unions Act 1982. [3] An order was made placing the Club in liquidation under s 90 of the Friendly Societies and Credit Unions Act 1982 on a "just and equitable" basis. [4] Mr Smith, as counsel for the Liquidators, has prepared meticulous papers in support of the application. Three members of the Club have attended Court today. They are Mr Gordon Greenough, Mr William Haslam and Mr Ernest Nobbs. They have considered the papers and there has obviously been some discussion between them and Mr Smith. They do not oppose the orders proposed by the Liquidators, which incorporate some changes that have been made in the course of submissions during this hearing. [5] Neither the Friendly Societies and Credit Unions Act 1982, the Companies Act 1955 or the Societies Rules provides specific guidelines to the Liquidators on the application of funds in the course of a winding up. In Re Registered Securities Limited (1991) 5 NZCLS 66,874 at 67,884 C.A., Somers J stated:The Court must give directions as will do substantial justice between the parties.[6] The papers prepared by Mr Smith have been designed to achieve exactly that, and the members present accept that this will be achieved by the proposed orders. I am satisfied that the orders I will now set out do give substantial justice to the Club and its members.[7] I now make the following orders, which are based on the terms of the application filed and further draft directions set out in Mr Smith's careful submissions: (1) Subject to directions (2) and (3) below, the defendant's net assets after payment of the defendant's debts and liabilities and the Liquidators' costs ("the surplus"), be distributed in equal shares to all persons who were either life members or subscribed members of the defendant as at the 6 th day of March 2001. (2) No former member of the Club who is now deceased is to participate in the distribution. (3) If a cheque sent to any such life or subscribed member at his or her last address known to the Liquidators is returned unclaimed, or is unpresented within 6 months, the Liquidators may: (a) either distribute that payment equally among the life and subscribed members to whom payments have been successfully made; or (b) seek the Court's further direction on how to deal with the unclaimed payment. This may be pursued by a memorandum from Mr Smith directed to me so that, if it is possible, I can deal with the matter on the papers without the expense of a further hearing. (4) For the purpose of making the distribution(s) referred to in paragraph (1) above, the Liquidators shall settle lists of subscribed and life members of the defendant as at the qualification date ("the lists"), in the following manner: (a) by including in the lists the persons whose names appear as life or subscribed members of the defendant in Exhibits "N"or "P" to the affidavit of Michael Alfred Hogben filed in support of this application; and (b) by writing to the "unconfirmed deceased" persons listed in Exhibit "Q" to the affidavit of Michael Alfred Hogben for whom the Liquidators have addresses, asking them to provide the Liquidators with proof of their membership of the defendant as at the qualification date (whether by production to the Liquidators of membership card or receipts, or otherwise); and (c) by including in the lists the names of any persons to whom the Liquidators have written under subparagraph 4(a) hereof, who respond and satisfy the Liquidators that they were in fact subscribed or life members of the defendant as at the qualification date; and (d) by advertising for life and subscribed members of the defendant as at the qualification date; (e) by including in the lists the names of any other persons (being persons not already included under paragraphs 4(a) or 4(c) hereof, who: (i) within 30 days after the completion of such advertising give written notice to the Liquidators of their claim(s) to have been subscribed or life members of the defendant as at the qualification date; and (ii) (within or after that 30 day period) satisfy the Liquidators that they were in fact subscribed or life members of the defendant as at the qualification date.(f) by finally and conclusively deciding any dispute as to whether any person to whom the Liquidators have written under subparagraph 4(b) hereof, or who has given a written notice complying with paragraph 4(e)(i) hereof, was or was not a life or subscribed member of the defendant as at the qualification date (the Liquidators for that purpose having all of the powers of the Committee acting under Rule 57 of the defendant's Rules); and (g) by excluding any person who has not been included in the lists under any of the steps set out in subparagraphs 4(a)-(f) hereof. (5) Leave is reserved to Mr Smith for the Liquidators to seek further directions or to vary these orders. As I have stated in 3(b) of these orders, this may be by way of memorandum from Mr Smith directed to me so that, if it is possible, I can deal with the matter on the papers without the expense of a further hearing. [8] As I have indicated during this judgment, I am grateful to Mr Smith for the meticulous work he has done in preparing these papers and submissions. I am also grateful to the three members of the Club who have taken the time to come to Court today to give their assistance. Asher J