Bankstown Community Child Care Incorporated - [2008] NSWSC 173

CITATION: Bankstown Community Child Care Incorporated [2008] NSWSC 173

HEARING DATE(S): 03/03/08

JUDGMENT DATE :
5 March 2008

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Order for disposal of surplus assets by liquidator

CATCHWORDS: ASSOCIATIONS AND CLUBS - incorporated associations - winding up by the court - surplus after payment of debts - no special resolution specifying destination of surplus - statutory power of court to determine manner of distribution - proposed distribution to like community organisations - whether association competent applicant - whether liquidator competent applicant - CORPORATIONS - corporation aggregate - where corporation aggregate has no members - whether corporation dissolved

LEGISLATION CITED: Associations Incorporation Act 1984, ss 5, 7(2)(a), 15, 51(1)(j), 51(3), 53
Corporations Act 2001 (Cth), Part 5.7
Corporations (Ancillary Provisions) Act 2001. s 14(1)

CATEGORY: Principal judgment

CASES CITED: A L Campbell & Co Pty Ltd v Federal Commissioner of Taxation [1951] HCA 36; (1951) 82 CLR 452
Lunn v Cardiff Coal Company (No 3) [2003] NSWSC 789; (2003) 11 FLR 411
QBE Workers Compensation (NSW) Ltd v Wandiyali ATSI Inc [2004] NSWSC 1022; (2004) 62 NSWLR 117
Re Bankstown Community Child Care Inc [2006] NSWSC 612
Re Bankstown Students Association Inc [2005] NSWSC 700

TEXTS CITED: William Blackstone, "Commentaries on the Laws of England", Oxford, 1765-1769
Cecil T Carr, "The General Principles of the Law of Corporations", Cambridge, 1905
Stewart Kyd, "A Treatise on the Law of Corporations", London, 1794

PARTIES: Morgan Lane - First Applicant
Bankstown Community Child Care Incorporated - Second Applicant

FILE NUMBER(S): SC 3004/06

COUNSEL: Mr S M Golledge - Applicants
Mr J G Chegwidden - Bankstown Community Resources Group Incorporated and Milperra Community & Children’s Services Limited

SOLICITORS: Leonard Legal - Applicants
Graham Chegwidden - Bankstown Community Resources Group Incorporated and Milperra Community & Children’s Services Limited

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

WEDNESDAY, 5 MARCH 2008

3004/06 RE BANKSTOWN COMMUNITY CHILD CARE INCORPORATED – MORGAN LANE & ANOR, APPLICANTS

JUDGMENT

1 On 19 June 2006, the court made an order under s 51(1)(j) of the Associations Incorporation Act 1984 that Bankstown Community Child Care Incorporated (which I shall call “the Bankstown Association”) be wound up. It was further ordered that Mr Lane be appointed liquidator.

2 Mr Lane has almost completed his administration. He has reached a point where creditors have been ascertained and paid in full. A surplus remains. It is substantial, being of the order of $600,000. Mr Lane has now approached the court seeking relief directed towards orderly and proper disposal of that surplus.

3 Section 51(3) of the Associations Incorporation Act, coupled with s 14(1) of the Corporations (Ancillary Provisions) Act 2001 of this State, has the effect that a court ordered winding up of an incorporated association is governed by, and is to proceed in accordance with, the provisions in Part 5.7 of the Corporations Act 2001 (Cth) applying to the winding up under that Act of bodies other…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Bankstown Community Child Care Incorporated [2008] NSWSC 173
Case: [2008] NSWSC 173
Decision Date: 5 March 2008

CaseChat Overview and Summary

The case involved an incorporated association, Bankstown Community Child Care Incorporated, and the issue of winding up the association and distributing its surplus funds. The case was heard in the Supreme Court of New South Wales. The association had no members and its funds were surplus to the payment of its debts. The association sought to have the surplus distributed to other community organisations. The association argued that it was competent to make the application and the liquidator also sought to be an applicant.

The court considered whether the association was competent to apply for the winding up and distribution of its surplus. The court found that the association was not a competent applicant as it had no members and had effectively dissolved. The court also considered whether the liquidator was a competent applicant and found that the liquidator was competent to apply for the winding up and distribution of the surplus. The court considered the statutory power to determine the manner of distribution of the surplus and found that the proposed distribution to like community organisations was appropriate.

The court made an order that the liquidator of the association was the competent applicant for the winding up and distribution of the surplus. The court also made an order that the surplus funds be distributed to other community organisations in the same field of operation as the association. The court noted that the association had effectively dissolved and had no members, and that the distribution of the surplus was in the best interests of the community.

Orders