Roper v Ward and Others

• Jurisdiction: Ireland
• Judge: Justice Carroll
• Judgment Date: 27 May 1981
• Neutral Citation: 1981 WJSC-HC 2062
• Court: High Court
• Date: 27 May 1981

1981 WJSC-HC 2062

THE HIGH COURT

No. 412SP/1980

ROPER v. WARD, McCABE, HENDRICK

IN THE NATTKR OP THE COMPANIES ACT 1963 SECTION 280 AND

IN THE MATTER OF THE DUBLIN GAS COMPANY EMPLOYEES SOCIAL AND

SPORTS CLUB LIMITED

BETWEEN :-

REGINALD G. H. ROPER

Plaintiff

-and-

JOHN WARD AND ROBERT H. McCABE AND GERARD HENDRICK

Defendants

1 Justice Carroll delivered on the 27th day of May 1981.

2 On the 2nd December, 1957 the Dublin Gas Company Employees" Social and Sports Club Limited ("the Company") was incorporated as a company limited by guarantee not having a share capital under the Companies Acts 1908 to 1924. It was established as a recreation club primarily for employees and former employees of the Alliance and Dublin Consumers' Gas Company ("the Gas Company"). The Company acquired extensive premises known as Khockrabo at Dundrum with the assistance of a loan from the Gas Company secured by a mortgage which has since been paid off

3 The possibility of selling the Company's property was discussed at a management committee meeting on 13th August, 1973 and it was unanimously decided that no new members would be accepted from Thursday the 9th August, 1975. The purpose of this was to prevent new members who had played no part in building up the club, becoming entitled to share in the surplus assets of the Company. However new associate members were allowed to join as the management committee did not consider that associate members were members entitled to share in the surplus assets.

4 The original register of members of the Company contained particulars of members and particulars of associate members. The associate members were not kept in a separate register but were interspersed throughout the register of members. Instead of their occupations being given, as was done for members, they were noted as associates and marked "A".

5 Mr. Leo O'Connor became secretary of the Company in Summer 1972 and he took over the duty of keeping the register up to date. He found the original register had not been properly kept and he prepared another register of members in loose leaf form. He put together the new list from the old register and from a list of names supplied to him by the Gas Company of those employees from whose wages the weekly subscription to the Company was deducted.

6 Mr. O'Connor divided the membership list into various headings:- employees (under the type or place of work within the Gas Company), pensioners, associate members, deceased members, married ladies and redundant employees. All those persons appearing on the list of pensioners, and redundant employees and all the married ladies (save for six) formerly appeared as members under one of the categories of employment within the Gas Company. There is a cross reference to show from which group they came. The deceased members list is simply a list of those members who died on or after the 11th September, 1974. In his evidence Mr. O'Connor said that until he took over, a list of associate members had not been kept and that the purpose of his list was to keep track of those entitled as associate members. But he is mistaken in this, as the original register clearly shows that associate members were entered in the register.

7 The Company passed a series of resolutions on the 11th September, 1974. The first resolution, "That the club premises at Mount Anville known as Knockrabo be sold, and accordingly that the committee be, and they are hereby authorised to sell the same in the most suitable manner at the best price obtainable and after debts and costs are paid, the remaining money be distributed amongst the members", was passed by 181 votes to 12 votes. The next resolution, "That a member or a pensioner who died on or from the 11/9/74 will have his estate credited with his share", was passed unanimously. The third resolution, "That members allow their share to be reduced by an amount which will give member pensioners and the two presidents an equal share", was passed unanimous".

8 The minutes then record as follows:

"The case of the ladies who had married and continued in the Gas Company employment to an agreed period of two years but who technically were not full members after their marriage was discussed at length".

9 The fourth resolution, "That members allow their share to be reduce by an amount which will allow the ladies in question and any other simile cases which may arise, an equal share", was passed unanimously.

10 The fifth resolution, "That a member who is made redundant and who cannot be placed in an alternative position in the Gas Company would be entitled to receive his share", was passed unanimously.

11 It is further noted in the minutes, firstly, that the resolution on redundant workers refers only to existing members as at the 11/9/74 and who were made redundant after that date, and secondly, that the interpretation of the resolution on married ladies is "that those ladies will be working in the Gas Company up to a period of two years and when they leave the Gas Company's employment they will not have a claim on this sports club."

12 In his evidence Mr. McCabe said that from memory the notice given to the members for the meeting in September 1974 was prepared 14 days prior to the meeting and was posted to all members. His recollection was that the items of business shown on the agenda were for the sale and winding up of the Company. The various other resolutions just emerged from the meeting and were not on the agenda.

13 The property was sold and the sale closed on the 31st Hay, 1978. The resolution to wind up the Company voluntarily was passed on the 5th July, 1978 and the Plaintiff was appointed as liquidator. An interim payment was made on the 18th December 1978 to 507 persons who appeared to be entitled as members (but not associate members). The sum of £138,554.97 with interest accruing is now available for distribution subject to the costs of the liquidation.

14 The liquidator wishes the Court to decide whether the associate members are members entitled to share in the distribution of surplus assets and whether the resolutions purporting to give shares to pensioners, the two presidents, certain married ladies and certain redundant employees were valid and effective.

15 In order to decide these matters it is necessary to construe the Memorandum and Articles of Association of the Company. These are not well drafted and are sometimes inconsistent in the terminology used.

16 In Clause 1 of the Memorandum it is provided:-

17 "The name of the Company (hereinafter called "The Club") is "The Dublin Gas Company Employees' Social Club Limited."

18 Clause 5 commences as follows:-

"The objects for which the Company is established are:-"

2 (1). To establish, maintain and conduct a Club for the promotion of social intercourse, recreation and sporting activities amongst persons in the service or employment or formerly in the service or employment of the Alliance and Dublin Consumers' Gas Company or of any other Company or Firm associated with or established in succession thereto and for the accommodation of members of such Club (whether being members of the Company or not), and to provide a Club House, pavilion and other conveniences and generally to afford to such members and their friends and members of their families all the usual privileges, advantages, conveniences and accommodation of a Club.

3 (2). To manage the affairs of such Club or any of them and generally to do whatever may seem to the Company best calculated to promote the interests of such Club or the members thereof."

19 Throughout Clause 3 the word "Company" is Used in many of the object clauses to mean the Company incorporated thereunder (i.e. the Company). The word"Club" is used, in my opinion, in sub-clauses (1) and (2) to describe the activity to be carried on by the Company.

20 In particular I construe the phrase in sub-clause (1), "(whether being members of the Company or not)," as referring to members of the Company incorporated thereunder (i.e. the Company) and not (as was argued by Mr. Hill) as referring to employees of the Gas Company. In my opinion there is no reason why employees of the Gas Company should be referred to as members of the Gas Company. Secondly there is no reason in the context to construe the word "Company" as meaning the Gas Company rather than the Company.

21 As a result of this construction it appears to me that that object Clause (1) envisages that there will be members of the club (i.e. the activity carried on by the Company thereby incorporated) who need not necessarily be members of such Company.

22 Clause 3 (37) empowers the Company "to distribute any of the propert of the Company in specie among the members."

23 Clause 5 of the memorandum provides:- "Every member of the Company undertakes to contribute to the assets of the Company in the event of the same being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the Company contracted before he ceases to be a member, and of the costs, charges, and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, such amount as may be required not exceeding £1." In my view the members who undertake by virtue of Clause 5 of the Memorandum to contribute in the event of a winding up and the members entitled to share in assets under Clause 3 (37) are an identical class of members.

24 Moving on then to the Articles of Association, these must be looked at to see if the class of persons known as associate members are members of the Company within the meaning of Clause 3 (37) and Clause 5 of the Memorandum of Association. It is only in the Articles that it is possible to find out who are such members.

25 In construing the Articles I am guided by the principle that they are subordinate to and...