Wilkinson v. City of Glasgow Friendly Society & Others [1911] ScotLR 504 (18 January 1911)

Wilkinson v. City of Glasgow Friendly Society & Others [1911] ScotLR 504 (18 January 1911)

The conversion scheme was invalid because (1) the special resolution was not passed by the required majority of members as mandated by statute, but only by delegates, and (2) the scheme unlawfully diverted a substantial portion of the society's assets and capital to officials and employees, contrary to the society's rules and statutory purpose, thus fundamentally altering the mutual benefit character and objects of the society.

Citation
[1911] ScotLR 504
Parties
Complainer: William T. Wilkinson; Respondents: City of Glasgow Friendly Society & Others (including Robert Pirie, M.D., trustees)
Jurisdiction
Scotland
Judgment Date
18 January 1911
Procedural Posture
Civil (suspension and Interdict) / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, Second Division
Outcome
Appeal dismissed; interlocutor of Lord Ordinary adhered to; interdict granted as craved with expenses to complainer.
Legal Topics
Conversion of Friendly Society to Company, Ultra Vires Acts, Distribution of Assets, Procedure for Special Resolutions, Member Rights in Mutual Associations
Company Law Friendly Societies Law Trusts and Estates Conversion of Friendly Society to Company Ultra Vires Acts Distribution of Assets Procedure for Special Resolutions Member Rights in Mutual Associations

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Parties

William T. Wilkinson

Complainer

City of Glasgow Friendly Society & Others (including Robert Pirie, M.D., trustees)

Respondents

Procedural Posture

Civil (suspension and Interdict) / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, Second Division

Legal Issues

  1. 1 Whether the conversion of the City of Glasgow Friendly Society into a limited company was valid under the Friendly Societies Act 1896
  2. 2 Whether the special resolution authorising conversion was validly passed by delegates rather than members
  3. 3 Whether the scheme for distribution of assets and capital was ultra vires and contrary to the society's rules and statutory requirements

Ratio Decidendi

The conversion scheme was invalid because (1) the special resolution was not passed by the required majority of members as mandated by statute, but only by delegates, and (2) the scheme unlawfully diverted a substantial portion of the society's assets and capital to officials and employees, contrary to the society's rules and statutory purpose, thus fundamentally altering the mutual benefit character and objects of the society.

Court Disposition

Appeal dismissed; interlocutor of Lord Ordinary adhered to; interdict granted as craved with expenses to complainer.

Orders

  • Interdict prohibiting respondents from carrying into effect the resolution to convert the society into a limited company under the Companies (Consolidation) Act 1908.
  • Expenses awarded to complainer.