John Dunne and Others v Oliver Mahon and Another

JudgeMr. Justice Clarke
Judgment Date08 April 2014
Neutral Citation[2014] IESC 24
CourtSupreme Court
Docket Number[S.C. Nos. 36 & 155 of 2013]
Date08 April 2014
Dunne & Ors v Mahon & O'Connor
John Dunne, Antoinette Agnew and Philomena Moody


Oliver Mahon and Maurice O'Connor

[2014] IESC 24

Clarke J.

MacMenamin J.

Dunne J.

[Appeal Nos: 36/2013 & 155/2013]


Dissolution – Appeal - Social Club – Amendment of Rules – Majority Vote on Dissolution – Jurisdiction of Court to Dissolve – Court"s Equitable Jurisdiction – Substratum – Minority Member Rights

This is an appeal against a judgment in the High Court that ordered the dissolution of the club, Roadstone Sports & Social Club (Club). The club is a social organisation comprised of ordinary members and associate members. Following a majority vote at an ordinary member meeting, the ordinary members opted to dissolve the club and split the assets. The respondents (the Trustee Representatives) pursued this dissolution to the High Court. The High court, ordering the dissolution, decided that the will of a majority of the members was a sufficient basis to invoke the jurisdiction of the High Court to wind-up the club and the club rules can be amended by simple majority vote. The appellants, also trustees of the Club but opposed to the order of dissolution, contend that there is nothing in the rules that stipulates that the club can be dissolved by a simple majority vote. Both Counsels however agreed that no Substratum existed and the court has the power the dissolve an unincorporated body like a club on just and equitable grounds. The case was brought before Clarke J. sitting in the Supreme Court.

After considering all of the relevant facts Clarke J. held that it is inappropriate to imply into the club rules the power to amend by simple majority. There is some mention of the distribution of its assets on dissolution but nevertheless the rules do not make an express provision for the way in which the club can be dissolved. Clark J. decided that given the rules do not make any provision for a vote on dissolution the court is bound to the exercise it"s equitable jurisdiction and take into account all the various factors including the financial stability of the club and broad range of member views, when contemplating whether or not it is just and equitable to dissolve. Clark .J reversed the decision of the trial judge and allowed the appeal against the dissolution order.

Appeal Allowed.


Judgment of Mr. Justice Clarke delivered the 8th April, 2014.


Judgment delivered by Clarke J. [nem diss]

1. Introduction

2 1.1 What is a club? What keeps it alive and when can it be said, as a matter of law, to come to an end? These are the fundamental questions which arise on this appeal. The case concerns the Roadstone Sports & Social Club ("the Club"). The Club has been in existence since 1957. It would, I think, be fair to say that the Club has been in declining fortunes of late, although the extent of any decline is open to question. However, it owns an important asset at Kingswood, Clondalkin, Co. Dublin. The Club has a number of categories of membership. Because of their particular relevance to the issues which have now arisen, it is necessary to note that there are, amongst other classes, both "ordinary" members and "associate" members Ordinary members must be current staff of what is described in its rules ("the Rules") as the "Roadstone Group" and which is now in substance CRH plc. The position of associate members is a little more complex and will need to be addressed further. However, the class of associate members includes persons who were formerly ordinary members but who have since ceased to work for the Roadstone Group.


3 1.2. There is no doubt that the Rules are somewhat confusing. It will again be necessary to look at some of the Rules, which are relevant to the dispute which has now arisen, in due course. However, some things are clear. The Rules do not make express provision for the way in which the Club can be dissolved although there is some mention of the distribution of its assets on dissolution. The Rules do provide for a committee with a chair, twelve ordinary members and three associate members. One of the underlying problems which the Club has faced has been a decline in the number of ordinary members, although there remain quite a significant number of associate members.


4 1.3 Be all that as it may, a meeting of the ordinary members of the Club resolved that the Club should be dissolved and authorised the plaintiffs/respondents ("the Trustee Representatives"), who are some of the trustees of the Club, to bring proceedings in that regard in the High Court. The precise form of resolution passed at a general meeting and the terms on which it was, thereby, decided to seek dissolution will need to be considered in due course. So also will be the fact that it was only the ordinary members who were deemed entitled to vote on the question of dissolution. However, the relevant proceedings were ultimately brought and came on for hearing before Hogan J., who made a series of orders which, in substance, provided for the Club's principal asset to be sold, the Club to be dissolved and the proceeds of sale distributed amongst the members in accordance with a resolution passed by the committee of the Club ("the Committee") on the 14 th December, 2012.


5 1.4 The defendants/appellants ("the Trustee Opponents") are also trustees of the Club but opposed the course of action suggested. They have appealed to this Court against the judgment and order of Hogan J. In order to understand the issues which arise on this appeal, it is necessary to say a little more about the underlying facts and to identify the basis on which Hogan J. decided the matter in the High Court.

2. The Background Facts

2 2.1. The Club was established in 1957 for the benefit of the employees of the Roadstone Group. Initially, it was a small social club limited to the employees of that group. However, following the growth of the parent company, membership correspondingly grew in the decades that followed. As the Club's activities grew, a new category of membership, being associate membership, was created to facilitate non-employees of the group. When the Roadstone Group established a new administrative headquarters on the Belgard Road in Dublin, it gave the Club 30 acres of land and also built a prefabricated clubhouse. In 1991, the Club moved to its present location in Kingswood. The Club now owns approximately 18 acres of land where it maintains conference facilities, a large function hall, a bar/restaurant, a soccer pitch, basketball facilities/indoor soccer pitch and snooker tables. It also has a pitch and putt course.


3 2.2 As already noted, the Rules are relevant to the dispute and, therefore, it is necessary to set out some of these in full. Rule 1 states:


"The Club shall be styled and known as "ROADSTONE GROUP SPORTS CLUB" and Membership shall be open to all persons in the employment of the Roadstone Group."


The objective of the Club is set out in Rule 2. This provides:

"The object of the Club shall be to promote, supervise and encourage sporting and social activity on behalf of it's Member's."(sic)


Rule 4 (b) provides for the composition of the club's Committee of Management:

"The Committee of Management shall consist of 16 members which shall be elected by the body of the general meeting."


As follows: Chair-man, 12 Members and 3 Associate Members which shall include Treasurer, Secretary and 3 Committee Auditors."


The various types of membership are dealt with in Rule 6:

"The Club shall consist of:"


Employees of the Roadstone Group


Conferred by General Meeting only to Members of outstanding service to the Club


Employee members upon retiring from Company Service


Employees in temporary employment with the Roadstone Group


Persons in active participation of sporting and social facilities upon the formation of the Roadstone Group Sports and Social Club"


Rules 18 and 19 deal with the entitlements of the various membership classes in the following terms:-

"Rule 18"


Are entitled to all the facilities of the Club, except a vote at General Meeting.




Rule 19:


Honorary and temporary members would not be entitled to hold office unless it is specifically provided for in the rules. They would not be entitled to vote as a member or claim a share in the club property upon it's (sic) dissolution."


2 2.3 In 1992, an Extraordinary General Meeting was called and as a result Rule 37 was purportedly introduced to deal with any remaining monies of the club following dissolution. It appears that only 16 members were present at this general meeting and the rule change was passed by a majority of those in attendance. Rule 37 provides:

"In the event of The Club being disbanded and the premises being subsequently sold all monies left after all debts are paid will be donated to charity."


A separate challenge to the validity of Rule 37 also arises in these proceedings and on this appeal.


3 2.4 Rule 29 may also be of relevance to the matters before this Court. It states:

"The Club may, in General Meeting pass a resolution authorising the Committee to borrow money and to give such security as is necessary. All Members of the Club whether voting or not, would be deemed to have assented to the resolution as if they had been present and had voted in favour of it."


4 2.5 Due to redundancies and relocation of the activities of the Roadstone Group, the number of ordinary members declined significantly...

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