QFL Limited v Worrell
[2000] QSC 381
•26 October 2000
SUPREME COURT OF QUEENSLAND
CITATION: QFL Limited & Anor v. Worrell [2000] QSC 381 PARTIES: QUEENSLAND RUGBY FOOTBALL LEAGUE LIMITED
(first applicant)
and
BURDEKIN JUNIOR RUGBY LEAGUE FOOTBALL CLUB INC
(second applicant)
v
IVOR WORRELLFILE NO: 6097 of 2000 DIVISION: Trial division DELIVERED ON: 26 October 2000 DELIVERED AT: Brisbane HEARING DATE: 28 July 2000 JUDGE:
ORDER:
Helman J
Application refused
CATCHWORDS: CORPORATIONS – WINDING UP – LIQUIDATORS – DUTIES AND LIABILITIES – IN VOLUNTARY WINDING UP – whether the liquidator’s act, as agent of the club, of distributing the surplus funds of the club was ultra vires
CORPORATIONS – WINDING UP – CONDUCT OF INCIDENTS OF LIQUIDATIONS – OTHER CASES – whether the Court should inquire into the act of the liquidator
ASSOCIATIONS AND CLUBS – INCORPORATED ASSOCIATIONS – whether the liquidator complied with the rules of the club
Associations Incorporation Act 1981, ss 26, 89, 91, 92
Corporations Law, ss 509, 536,Belvista Pty Ltd v Murphy (1993) 11 ACSR 628
Burns Philp Investments Pty Ltd v Dickens (1993) ACLR 272
Knowles v Scott [1891] 1 Ch 717
New Brilliant Freehold Gold Mining Co Ltd (in Liquidation) v Mills & Anor [1928] St R Qd 120
Rankine & Anor v Harris [1997] QCA 194
Re Construction Forestry Mining Energy Union; ex parte W J Deane & Sons Pty Ltd (1994) 181 CLR 539COUNSEL: P E Hack for the applicants
C Wilson for the respondentSOLICITORS: Hopgood Ganim Lawyers for the applicants
Sciaccas Lawyers for the respondent
This application concerns the conduct of the respondent as liquidator of the Colts Leagues Club Inc. It is made under s. 536 of the Corporations Law which, so far as it is relevant, is as follows –
536
. . .
(1) Where:
(a)it appears to the Court or to the Commission that a liquidator has not faithfully performed or is not faithfully performing his or her duties or has not observed or is not observing:
(i) a requirement of the Court; or
(ii)a requirement of this Law, of the regulations or of the rules; or
(b)a complaint is made to the Court or to the Commission by any person with respect to the conduct of a liquidator in connection with the performance of his or her duties;
the Court or the Commission, as the case may be, may inquire into the matter and, where the Court or the Commission so inquires, the Court may take such action as it thinks fit.
. . .
(3) The Court may at any time require a liquidator to answer any inquiry in relation to the winding up and may examine the liquidator or any other person on oath concerning the winding up and may direct an investigation to be made of the books of the liquidator.
The applicants apply for an order that the court inquire into the conduct of the respondent in relation to his actions as liquidator in distributing the surplus assets of the club and for an order for the payment of $36,000.00 to them, with interest.
By a special resolution passed at an extraordinary general meeting held in Ayr, Queensland on 17 February 1998 the members of the Colts Club, which had been incorporated under the Associations Incorporation Act 1981, resolved that it should be voluntarily wound up. The respondent, a registered and official liquidator, was appointed the liquidator. The extraordinary general meeting was called to pass the special resolution pursuant s. 89 of the Associations Incorporation Act which provides for the voluntary winding up of an incorporated association. By operation of s. 91(1) of that Act the provisions of the Corporations Law dealing with winding-up applied to the winding-up of the club.
When the respondent was appointed liquidator there was in existence a joint venture pursuant to an agreement which took effect on or about 1 July 1990 to which the Colts Club was party. The other joint venturers were the second applicant and Burdekin Touch Association Incorporated. Prior to the appointment of the respondent, the club and the other joint venturers were in dispute about certain assets of the club. The second applicant and the Burdekin Touch Association each claimed one third of the club’s assets. On 18 January 1999 an agreement was reached terminating the joint venture, and a deed of settlement was executed by the club, the second applicant, the Burdekin Touch Association, and the respondent. Pursuant to the settlement the second applicant received $31,659.00: property to the value of $11,309.00 and $20,350.00 in cash. The Burdekin Touch Association received $22,850.00 in cash.
By April 1999 the respondent found that after all of the Colts Club’s creditors had been paid there was a surplus of between $35,000.00 and $37,000.00. There was a rule of the club concerning the distribution of surplus assets, r. 31:
31. If the Club shall be wound up in accordance with the provisions of the Associations Incorporation Act 1981, and there remains, after satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the members of the Club, but shall be given or transferred to some other institution or institutions having objects similar to the objects of the Club, and which shall prohibit the distribution of its or their income and property among its or their members to an extent at least as great as is imposed on the Club under or by virtue of Rule 28(j), such institution or institutions to be determined by the members of the Club.
Rule 2 provided for the objects of the club:
2. The objects for which the Club is established
are :-(a)To foster the sport of rugby league in the Lower Burdekin area and in particular to foster and support the Colts Rugby League Football Club and the Colts Junior Rugby League Club;
(b)To provide Clubhouse, training and recreational facilities for members of the Club and for members of such other Football Clubs as may affiliate with the Club;
(c)To do any other thing and to provide any other service consistent with the aforegoing objects.
Mindful of r. 31 but not considering s. 92 of the Associations Incorporation Act to which I shall refer in greater detail later, the respondent sent a letter dated 20 April 1999 to ‘Members of Colts League Club Inc.’ care of Mrs Judith Bradley, who had been secretary of the club from 3 November 1993:
Dear Colts Executive
RE: COLTS LEAGUE CLUB INC (IN LIQUIDATION)
As you are aware, I am the Liquidator of the abovenamed Club.
The only remaining matter to be finalised in the Liquidation of the Club is to disburse the surplus funds held by me. As you may be aware, Clause 31 of the “Rules of Colts League Club Inc.” (“Rules”) requires that any surplus funds available from the winding up of the Club shall be transferred to another institution or institutions having objects similar to the objects of the Club. Attached is a copy of the Rules for your reference.
As you will note the objects of the Club are defined under Clause 2 of the Rules. I draw your attention to Clause 2 (a) of the Rules which states that an object of the Club is to foster the sport of Ruby [sic] League in the lower Burdekin area and in particular to foster and support the Colts Ruby [sic] League Football Club and the Colts Junior Ruby [sic] League Club.
I would appreciate it if you would advise me of the following:-
1.If Colts Rugby League Football Club and the Colts Junior Rugby League Club are still in existence and if so, provide me with the contact details of the President of each Club.
2.If the above Clubs do no exist, please provide me with names and addresses of Clubs that you feel have similar objects to those of Colts League Club Inc. A copy of the Constitution or Rules of these Clubs would be of assistance.
3.Any proposal you may have on how to distribute the surplus funds held.
I anticipate that approximately $35,000 to $37,000 will be available for distribution.
Once I have received your reply to the above, I will assess how the surplus funds will be distributed. Once I have determined this, I shall contact you further before distributing the funds.
I look forward to your reply and should you have any queries in relation to the above, please do not hesitate to contact Mr Jason Cronan of this office.
Mrs Bradley responded ‘on behalf of the ex Committee & Members C.L.C. Inc.’ in a letter dated 15 May 1999:
In reply to your letter of 20th April, 1999, we respond as follows.
We wish to inform you, as you should be aware, that neither Colts Rugby League Football Club or Colts Junior Rugby League Club have been in existence for at least 12 years.
At the meeting to wind up our club, held on 17th February, 98, if you can recollect saying that you didn’t mind which Junior sporting organisations we directed our share of the funds to.
At our meeting held on April 5th, 99 the ex committee and members strongly opposed any further windfalls directed towards Burdekin Junior Rugby League or Burdekin Touch Association. We feel that other Junior Sporting Clubs would greatly appreciate and benefit from a share of our funds as the aforementioned clubs have received their adequate share.
As a gesture of appreciation to the community for their initial and ongoing support which contributed to the success of what was Colts Leagues Club, we urge you to honour your statement as mentioned above. We propose to disperse our share of the funds to the following organisations: Junior Soccer, Junior Lifesavers, Junior Gymnastics & the Burdekin Sailing club. We also feel that the primary and secondary schools would benefit from a share, to replace much needed football equipment solely funded by the fundraising efforts of parents.
Copies of letters and Constitutions will be made available to you.
We trust that our requests receive a favourable reply.
The Burdekin Sailing Club Inc. amalgamated with another organization on 2 June 1999 and continued under the name Alva Sports Recreation and Community Association Inc. The junior gymnastics club declined to produce a copy of its rules and Mrs Bradley told the respondent on or about 28 July 2000 that the members considered that the BMX Club would be an acceptable alternative recipient.
On 30 July 1999 the respondent received copies of the constitutions of the four clubs favoured by the committee and members of the Colts Club. They were the Alva Sports Recreation and Community Association Inc., the Ayr Surf Life Saving Club Inc., the Burdekin Junior Soccer Association Inc., and the Burdekin BMX Club Inc. The respondent concluded that r. 31 would permit the distribution decided upon at the informal meeting of members of the club referred to in Mrs Bradley’s letter of 15 May 1999, but substituting the Burdekin BMX Club Inc. for the gymnastics club. The respondent considered the following: first, that all four clubs had objects he regarded as sufficiently similar to the objects of the Colts Club, i.e., all four clubs had the objects of supporting their chosen sport and recreational activity in the Burdekin area; secondly, each club lacked the power to distribute its income or capital to members; and thirdly, the clubs were chosen by the members of the Colts Club. On or about 12 August 1999 each of the four clubs received a cheque for $9,000.00 from the respondent as its share of the surplus assets.
On 8 September 1999 the respondent gave a notice pursuant to s. 509 of the Corporations Law convening a final general meeting of members and creditors of the Colts Club to be held at his office in Brisbane on 20 October 1999 ‘for the purpose of having an account laid before [the members and creditors] showing the manner in which the winding-up [had] been conducted and the property in the Club disposed of and hearing any explanations that might be given by the Liquidator’. In the accompanying ‘FINAL MEETING ADVICE – 8TH SEPTEMBER 1999’ the following appeared under the headings ‘DISTRIBUTION OF SURPLUS FUNDS’ and ‘BOOKS & RECORDS OF THE CLUB’
DISTRIBUTION OF SURPLUS FUNDS
A total of $36,000 was available in surplus funds after paying out all claims and costs of the liquidation. $9,000 was paid to each the following entities in accordance with the Rules of the Club:-
> Ayr Surf Life Saving Club > Burdekin Sailing Club Inc.
> Burdekin Junior Soccer Assoc. Inc. > Burdekin BMX Club Inc.
BOOKS & RECORDS OF THE CLUB
I have a number of the Club’s records in my possession. I wish to have the records destroyed in order to avoid incurring further storage costs. Given that the administration has been finalised I do not think it is necessary to retain the records. At the final meeting I will be seeking a resolution to have the records destroyed.
On or about 16 September 1999 Ms Helen Viero, who was then the president of the second applicant, made a complaint to an employee of the respondent about the distribution of the surplus assets. A facsimile dated 28 September 1999 from the solicitors then acting for the second applicant to the respondent referred to the distribution of the surplus assets and questioned its regularity. The respondent responded by facsimile the same day saying that he did not intend to enter into any further correspondence with the solicitors about the matter. But, having received the complaint on behalf of the second applicant and having then considered s. 92 of the Associations Incorporation Act, the respondent decided that it would be advisable to place the matter of the distribution before the members of the Colts Club at a general meeting for the purpose of considering its ratification. As the complaint by the second applicant was made after notification of the meeting of 20 October 1999 the respondent adjourned that meeting to enable a further notice to be given to members of the proposed ratification of the distribution of the surplus assets.
By a notice convening a final meeting of members and creditors dated 25 October 1999 given pursuant to s. 509 of the Corporations Law the respondent called a general meeting of members and creditors to be held at his office in Brisbane on 3 December 1999. The agenda were:
1.Having an account laid before the meeting showing the manner in which the winding up has been conducted and the property of the Club disposed of and hearing any explanations that may be given by the Liquidator.
2.To consider a special resolution “that the distribution of surplus funds available from the liquidation of the Club be ratified, it being noted that the funds were distributed as follows:-
· $9,000 to Ayr Surf Life Saving Club;
· $9,000 to Burdekin Junior Soccer Assoc. Inc.;
· $9,000 to Burdekin Sailing Club Inc.; and
· $9,000 to Burdekin BMX Club Inc.”
3.To consider a proposal “that the liquidator be authorised to destroy the books and records of the Club at the closing of the meeting”.
4.Any other business that may be considered with the foregoing.
In the accompanying ‘FINAL MEETING ADVICE – 25TH OCTOBER 1999’ the following appeared under the headings ‘RECONVENED FINAL MEETING’¸ ‘DISTRIBUTION OF SURPLUS ASSETS’ and ‘BOOKS & RECORDS OF THE CLUB’:
RECONVENED FINAL MEETING
I adjourned the meeting held on the 20th of October 1999 in order to allow members to vote on the distribution of the surplus funds. This is discussed below.
The reconvened final meeting will be convened on the 3rd of December 1999 at 9.00am. Given that the liquidation is almost completed I will be convening the meeting in Brisbane to minimise costs.
I have attached a Proxy Form for those creditors or members that wish to participate in the meeting but are unable to attend in person. Members are encouraged to participate. It is permissible to appoint the Chairman of the meeting as your proxy holder.
DISTRIBUTION OF SURPLUS FUNDS
As noted in my previous Update, a total of $36,000 in surplus funds was distributed amongst the following entities:-
> Ayr Surf Life Saving Club > Burdekin Sailing Club Inc.
> Burdekin Junior Soccer Assoc. Inc. > Burdekin BMX Club Inc.The decision to distribute the surplus funds to these Clubs was made by the Executive of Colts.
I have received legal advice which indicates that a special resolution of the members of the Club ratifying the Executive’s decision is desirable. Accordingly, I will be seeking a resolution from members at the final meeting to have the distribution of the surplus funds confirmed. The exact resolution being sought is detailed in the attached Notice of the Meeting and the Proxy Form.
BOOKS & RECORDS OF THE CLUB
As detailed in my previous Update, I wish to have the records of the Club destroyed in order to avoid incurring further storage costs. Given that the administration has been finalised I do not think it is necessary to retain the records. At the final meeting I will be seeking a resolution to have the records destroyed.
In a facsimile dated 2 December 1999 from the second applicant’s solicitors to the respondent’s solicitors it was asserted that the distribution of the surplus assets was not in accordance with the Colts Club rules, and the respondent’s solicitors were notified that the second applicant’s solicitors were then preparing proceedings to be commenced against the respondent, and that those proceedings would be ‘filed and served in the near future’. At the meeting on 3 December 1999 twenty-three members of the club were represented. The resolution referred to in agenda item 2 was passed as a special resolution by nineteen votes to four, and a special resolution in accordance with the proposal in agenda item 3 also passed as a special resolution, by eighteen votes to five. At the time of the final meeting the club had no creditors and there were no further assets available to be distributed.
By 5 May 2000 no proceedings had begun against the respondent, and he applied to the Office of Fair Trading to have the records of the club destroyed on the ground that a reasonable period of time had passed without any proceeding having been brought against him. The Office of Fair Trading confirmed to the respondent in a letter dated 22 May 2000 that the records could be destroyed in accordance with s. 542 of the Corporations Law, and they were destroyed.
The incorporation of the Colts Club was cancelled on 22 May 2000. This application was filed on 14 July 2000.
Among the objects of the first applicant are those of fostering, developing, extending, governing, and controlling Rugby League football throughout Queensland. The first applicant’s board of nine directors has direct control over six divisions of the first applicant’s organization. Local leagues affiliate each year with the divisions and clubs affiliate with the local leagues. The second applicant, one of eight junior clubs playing in the Townsville and District Junior Rugby League competition, is affiliated with the first applicant through the Townsville Junior Rugby League and the Northern Division. The second applicant is incorporated under the Associations Incorporation Act. The objects of the second applicant are set out in its second rule:
2. The Club is formed to promote, foster, support and encourage Rugby League Football and all matters related thereto and in particular, and without limiting the generality of the foregoing, to promote and carry into effect such objects and aims of the Queensland Rugby Football League Limited (hereinafter referred to as “the Q.R.L.”) as are set forth in the Memorandum and Articles of Association of the Q.R.L. and the Rules made by the Q.R.L. pursuant thereto.
Mr Ross Livermore, the managing director of the first applicant, has sworn that if the application is successful it is proposed that, after deducting legal fees, the balance of the proceeds will be paid to the second applicant to assist it in fostering ‘the game in the area’. The first applicant has, Mr Livermore added, the authority to ensure that the proceeds are paid in that way.
On behalf of the applicants it was submitted that they are bodies that might have expected to receive the surplus assets of the Colts Club had they been distributed in accordance with r. 31. It is arguable that the applicants are not required to show a special interest to have standing to bring the application since s. 536(1) of the Corporations Law provides that ‘any person’ may do so, but in any event they demonstrated a special interest in the subject matter as Rugby League organizations. Two complaints are made by the applicants: first, that the respondent had acted ultra vires in making the distribution, that being a power reserved to the members of the club; and secondly, that the respondent distributed the funds to institutions that did not have objects similar to those of the club.
The payments to the recipients of the surplus assets were, it is true, made by the respondent as liquidator, but as liquidator appointed in a voluntary winding up he was the agent of the Colts Club: Knowles v. Scott [1891] 1 Ch.717; New Brilliant Freehold Gold Mining Co Ltd (in liquidation) v. Mills & Anor [1928] St.R.Qd. 120 at pp. 125-126; Rankine & Anor v. Harris [1997] Q.C.A. 194 at p. 3 per McPherson J.A.; and McPherson, The Law of Company Liquidation (4th ed. L.B.C. Information Services, Sydney, 1999), p. 288. The respondent consulted the members of the club by his letter of 20 April 1999 and was told in reply that the ‘ex committee and members’ had discussed the surplus assets at a meeting held on 5 April 1999. It appears from Mrs Bradley’s letter that the wishes of the members were made clear at the meeting. That the wishes so expressed were indeed those of the members was confirmed by the voting at the meeting on 3 December 1999. It follows that in making the distribution in the way the respondent did he acted as the agent of the club, and, in doing so, carried out the wishes of the members.
On behalf of the applicants it was argued, however, that the distribution was void as being contrary to the similar-objects provision of r. 31; and because the distribution was void, the decision to make it could not be validly ratified by a special resolution under s. 92 of Associations Incorporation Act, as the respondent asserts it can. Section 92 was, at the relevant time:
92. (1) Where, upon the winding-up of an incorporated association, a special resolution relating to the distribution of the surplus assets of the incorporated association has been passed by its members in accordance with its rules, all surplus assets shall, subject to any trust affecting the same, be disposed of in the manner so resolved.
(2) Where no such special resolution has been passed-
(a) the Governor in Council may by regulation vest all or any of the surplus assets of the incorporated association in the public trustee;
(b)subject to paragraph (c) the surplus assets vested in the public trustee under this subsection shall be held upon the trusts and for the purposes upon or for which they were held prior to being vested in the public trustee;
(c)the Governor in Council may by regulation vary the trusts or purposes referred to in paragraph (b) and may by the same or any subsequent regulation vest those surplus assets or any part of them in such persons or incorporated associations and for such purposes as the Governor in Council shall specify;
(d)the receipt of the public trustee shall be a sufficient discharge to any persons paying or transferring any surplus assets under this subsection as to the surplus assets paid or transferred, and the said persons shall not thereafter be liable or accountable therefor or be bound to see to the application, distribution, or appropriation thereof.
(3) In this section-
“surplus assets” means, in relation to the incorporated association, the assets after payment of the debts and liabilities remaining on a winding-up of the incorporated association and the costs, charges and expenses of the winding-up.
In arguing the respondent's case for resisting this application, Mr Wilson proceeded on the premiss that his client had been in error in making the distribution without the authority of a special resolution under s. 92(1); in making the distribution, then, the respondent had acted as the agent of the Colts Club, but without proper authority to make it even though he had consulted the members in his letter of 20 April 1999 and acted in accordance with their wishes. It is not necessary for me to consider the validity of that premiss because of the way in which the issues were argued, but I note that s. 92(1) given its literal meaning does no more than provide for the effect of the passing of a special resolution of the kind referred to, and s. 92(2) provides for a power that the Governor in Council may exercise in his discretion if a special resolution has not been passed. Such a regime may, one might have thought, admit of the possibility of a lawful distribution of surplus assets in accordance with the rules of an association but without such special resolution. But even if the premiss accepted by Mr Wilson is not correct the respondent was clearly prudent in seeking to have a special resolution passed.
Even though the respondent had exceeded his authority as agent of Colts Club in making the distribution, Mr Wilson argued, his action in doing so was validly ratified by the members in their special resolution of 3 December 1999. Mr Wilson relied on the proposition, referred to in Re Construction Forestry Mining Energy Union; ex parte W. J. Deane & Sons Pty Ltd (1994) 181 C.L.R. 539 at p. 545, ‘that, where an act is done in the name of or on behalf of another (“the principal”) by a person who has no authority to do that act, the principal, by ratifying the act, may make it as valid and effectual as if it had been originally done with the principal’s authority, whether the person doing the act was exceeding his or her authority or had no authority at all’. The passage continues with an explanation that ratification does not operate retroactively where the act done without authority would, if done with authority, affect property rights, as in the case of a notice to quit. The reason why subsequent ratification is not effective in such a case is that ‘the act is required to be valid and effective when it is done’. The argument for the applicants was that the special resolution of 3 December 1999 was not effective in ratifying the distribution because the requirement of s. 92(1) is for a special resolution ‘in accordance with [the incorporated association’s] rules’, and in this case the special resolution did not comply with r. 31. Rule 31 was not complied with, so the argument for the applicants went, so far as it required a distribution of the funds to ‘some other institution or institutions having objects similar to the objects’ of the Colts Club, so even if the special resolution had been passed before the distribution it would not have been valid. It would follow that such a resolution could not ratify the respondent’s distribution. (I should record here that no argument was advanced on behalf of the applicants concerning the requirement that a recipient of the surplus assets should prohibit the distribution of its income and property among its members to the extent provided for in r. 31.)
In response to the proposition that even if the special resolution had been passed before the distribution it would not have been valid, Mr Wilson relied on s. 26 of the Associations Incorporation Act, which, so far as it is relevant, provides:
26.(1) No act of an incorporated association (including the entering into of an agreement by the incorporated association) and no conveyance or transfer of property, whether real of personal, to or by an incorporated association shall be invalid by reason only of the fact that the incorporated association was without capacity or power (whether by provision of this Act or by its rules or otherwise) to do such act or to execute or take such conveyance or transfer.
(2) Any such lack of capacity or power may be asserted or relied upon only in –
(a)proceedings against the incorporated association by any member of the incorporated association to restrain the doing of any act or acts or the conveyance or transfer of any property to or by the incorporated association;
(b)any proceedings by the incorporated association or by any member of the incorporated association against the present or former officers of the incorporated association . . .
Mr Wilson argued that even if the distribution was beyond the power conferred by r. 31, the applicants are prevented from asserting or relying on any such lack of capacity because this application is not one in which such an assertion or such reliance is permitted. For this part of the argument, Mr Wilson conceded that the distribution was beyond the power conferred by r. 31, although he added that it would depend on how the similar-objects provision was construed: transcript, p. 30. My conclusion is, however, that, even if it is accepted that the concession without the qualification is correct, the respondent can rely on s. 26 in resisting this application. There is no reason to suppose that a special resolution to which s. 92(1) applies should be regarded as outside the scope of s. 26, which is consistent with the provisions in the Corporations Law concerning the old narrow ultra vires doctrine.
I should add, however, that in my view the objects of the four recipients were similar to those of the Colts Club in that they were all sporting clubs. None was concerned to cater for the same sport as the Colts Club was, so their objects were not identical to those of the Colts Club, but they all qualified as similar in the way I have mentioned. It may be accepted that none of the recipients had objects as near to those of the Colts Club as those of the second applicant, but there was no requirement in r. 31 that the recipient or recipients of the surplus assets should have objects as near as possible to those of the Colts Club. There is no analogy between r. 31 and the cy-prPs doctrine applicable to a gift with charitable intention if the mode of execution specified by the donor cannot be achieved. Similarity of objects was all that was required. Similarity of objects being an imprecise concept, a good deal of latitude was necessarily permitted the members in disposing of their surplus assets. In making their decision as to the identity of the recipients of their largesse they properly took into account their local knowledge, and also, again properly I think, their settlement with the second applicant. Their decision did not infringe the similar-objects requirement of r. 31 in my view.
I do not think that there is any merit in a further submission made on behalf of the applicants that the reason for the special resolution was not sufficiently revealed to the members of the Colts Club. Documents sent to them explained the reason for the special resolution adequately, and it was of course open to any member to ask the respondent at the meeting for any further explanation that might have been required. I therefore conclude that the special resolution of 3 December 1999 was effective in removing any irregularity in the distribution by the respondent.
Before an inquiry of the kind applied for here can be launched there must be something before the court to suggest that it would be in the public interest to do so: Burns Philp Investments Pty Ltd v. Dickens (1993) 11 A.C.L.C. 272, at p. 273. As McLelland C.J. in Eq. observed in Belvista Pty Ltd v. Murphy (1993) 11 A.C.S.R. 628 at p. 630, s. 536 ‘is concerned with aspects of the conduct of liquidators and others which are liable to attract sanctions or control for what might broadly be described as disciplinary reasons’. This case clearly fails to meet those requirements.
[23] It follows that the application should be refused.
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