Returned and Services League of Australia (Queensland Branch) v Joyce
[2003] QSC 481
•23 December 2003
SUPREME COURT OF QUEENSLAND
CITATION:
Returned and Services League of Australia (Queensland Branch) v Joyce & Ors [2003] QSC 481
PARTIES:
RETURNED AND SERVICES LEAGUE OF AUSTRALIA (QUEENSLAND BRANCH)
(applicant)
v
GILBERT KEITH JOYCE
CAROLE ANN REYNOLDS,
ANTHONY MICHAEL DAWES
BRENDON MAURICE RYAN and
NEVILLE WILLIAM TICKNER
(first respondents)
ROBERT PETER JARROTT AS REPRESENTATIVE OF THE MEMBERS OF THE MACKAY DISTRICT BRANCH OF THE RETURNED & SERVICES LEAGUE OF AUSTRALIA (QUEENSLAND BRANCH)
(second respondent)
FILE NO:
BS9243 of 2003
DIVISION:
Trial
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
23 December 2003
DELIVERED AT:
Brisbane
HEARING DATE:
10 December 2003
JUDGE:
Douglas J
ORDER:
1. DECLARE THAT PURSUANT TO A RESOLUTION PASSED ON OR ABOUT 24 NOVEMBER 2002, THE ROCKHAMPTON SUB-BRANCH OF THE MACKAY DISTRICT BRANCH OF THE RETURNED & SERVICES LEAGUE OF AUSTRALIA (QUEENSLAND BRANCH) (“THE ROCKHAMPTON SUB-BRANCH”) HAS BEEN WOUND UP OR OTHERWISE IS DEFUNCT AND/OR HAS CEASED TO OPERATE AND FUNCTION;
2. DECLARE THAT THE MACKAY DISTRICT BRANCH OF THE RETURNED & SERVICES LEAGUE OF AUSTRALIA (QUEENSLAND BRANCH) (“MACKAY DISTRICT BRANCH”) IS ENTITLED TO ALL REAL AND PERSONAL PROPERTY PREVIOUSLY HELD OR OWNED BY THE ROCKHAMPTON SUB-BRANCH OR ALTERNATIVELY, WHICH WAS OR IS HELD BY THE FIRST RESPONDENTS IN THEIR CAPACITY AS TRUSTEES, OTHER THAN THE LAND, AS DEFINED IN PARAGRAPH 4 OF THIS ORIGINATING APPLICATION;
3. DECLARE THAT THE AGREEMENT ENTERED INTO BY THE MEMBERS OF ROCKHAMPTON SUB-BRANCH MANAGEMENT COMMITTEE OF THE MACKAY DISTRICT BRANCH OF THE RETURNED SERVICES LEAGUE OF AUSTRALIA AND THE MEMBERS OF ITS AGED PERSONS HOMES MANAGEMENT COMMITTEE AND THE RETURNED SERVICES LEAGUE OF AUSTRALIA, QUEENSLAND BRANCH IN 1981, A TRUE COPY OF WHICH IS EXHIBIT GO4 TO THE AFFIDAVIT OF GEOFFREY OPRAY FILED HEREIN ON 16 OCTOBER 2003, HAS BEEN DETERMINED;
4. DECLARE THAT THE APPLICANT WAS AND IS ENTITLED TO POSSESSION OF THE LAND AND IMPROVEMENTS SITUATED AT PATTISON STREET, EMU PARK, IN THE STATE OF QUEENSLAND, THE SUBJECT OF THE SAID AGREEMENT AS AND FROM 24 NOVEMBER 2002, AND CONTINUES TO BE ENTITLED TO POSSESSION OF THE LAND;
5. ORDER THE FIRST RESPONDENTS TO DELIVER UP TO THE APPLICANT ALL BOOKS, RECORDS, ACCOUNTS AND OTHER PAPERS IN THEIR POSSESSION OR UNDER THEIR CONTROL OF AND RELATING TO THE AFFAIRS, CONDUCT AND UNDERTAKING OF THE ROCKHAMPTON SUB-BRANCH;
6. RESTRAIN THE FIRST RESPONDENTS BY THEMSELVES, THEIR SERVANTS OR AGENTS FROM:
(A) DEALING WITH ANY REAL OR PERSONAL PROPERTY PREVIOUSLY HELD BY THE ROCKHAMPTON SUB-BRANCH; AND
(B) RECEIVING THE PROCEEDS OF ANY RENTAL FROM THE LAND;
7. ORDER THAT THE FIRST RESPONDENTS ACCOUNT TO THE APPLICANT FOR ANY AND ALL MONEY RECEIVED BY THEM OR ANY OF THEM FROM THE LAND.
CATCHWORDS:
Associations and Clubs – General matters – Dissolution – Sub-branch of RSL – Whether defunct or ceasing to operate and function – Motion to wind up – Whether leads to conclusion that sub-branch has ceased to operate – Beneficial entitlement to sub-branch property.
Words and phrases – “Defunct” – “Ceasing to operate and function”.
COUNSEL:
A Collins for the applicant
M Plunkett for the first respondentsSOLICITORS:
Deacons for the applicant
Hall Payne Lawyers for the first respondents
DOUGLAS J: On 24 November 2002 the Rockhampton District sub-branch of the Returned and Services League of Australia (Queensland Branch) (“RSLQ”) resolved to wind itself up. That possibility had been raised at an earlier meeting of 13 October 2002. After the motion was passed on 24 November 2002 there was further discussion and another resolution passed in these terms:
“That the Trustees are directed to hold everything in trust for the next two years:
The ‘proviso’ being:
That if at any time there are problems in regard to matters the Trustees feel should be brought back to members, the Trustees call a special meeting so that members can be kept up to date.”
The RSLQ is a body corporate incorporated by letters patent issued pursuant to the Religious Educational and Charitable Institutions Act 1861. Its operations are governed by its rules and by-laws which permit the creation of district branches and sub-branches of those district branches. A Rockhampton sub-branch has existed since well before 1956. It was within the Mackay District Branch. A representative of that district branch, Mr Jarrott, has agreed to act as a nominated representative of the district branch in these proceedings but does not wish to appear in the hearing. The main contestants here are the RSLQ and the first respondents who are members of the RSLQ and were members of the Rockhampton sub-branch and trustees of its property.
The principal question raised by this application is whether the motion to wind up had the effect of making the sub-branch defunct or of causing it to cease to operate and function pursuant to r. 27.5 of RSLQ’s rules. That rule provides:
“27.5DEFUNCT SUB-BRANCHES
In the event of a Sub-Branch becoming defunct or ceasing to operate and function, all money and property of whatever nature and of which it shall stand possessed shall, after satisfying all its creditors and meeting all other obligations, be taken over and held by the District Branch, under whose jurisdiction it formerly functioned, pending its reorganisation or reformation and if the District Branch shall have been abolished, as hereinbefore provided, then the State Branch shall take over the said money and property. The said District Branch, or State Branch if the District Branch is not operating, shall satisfy to the limits of the defunct Sub-Branch assets any creditors or obligations which are verified, to the satisfaction of the District or State Branch, as having been incurred by the defunct Sub-Branch.
(a)Should the Sub-Branch be not reorganised or reformed under the authority of the District or State Branch within a period of two years from the date on which such money or property were taken over by the State or District Branch, as the case may be, then the State or District Branch may sell or otherwise deal with any property held or expend any moneys in such manner and for such purposes of the League in the area in which such Sub-Branch operated. If, after such disposal of the original Sub-Branch property, the Sub-Branch reforms or is reorganised, it shall have no claim to the previous assets.
(b)Further, the Trustees of any defunct Sub-Branch in whom lands or other property shall be vested, shall sign all documents and do all such acts and things as may be necessary to transfer the same to the District or State Branch or to dispose of, or otherwise deal with, the same and the proceeds thereof as the District or State Branch shall direct.”
The rule has to be set in context. Rule 1.3 allows RSLQ to establish and control branches and sub-branches. Each sub-branch shall comply with such lawful directions as are given to it from time to time by RSLQ; r. 17.1(c)(iii). Rule 17.2 deals with district branches while rule 17.3 deals with sub-branches which may be formed by application of at least 10 members or persons eligible for membership to the relevant district branch; r. 17.3(b). The state congress or council may veto or annul the formation of any sub-branch and, on notice to this effect being given within a specific time, that sub-branch will cease to function and exist; r. 17.3(e). Rule 26.3 is of some interest as it provides how a district branch “may be abolished and cease to function and operate” if, amongst other things, a majority of members present at a meeting called for the purpose vote in favour of such abolition. It may carry on with full powers in order to wind up its affairs after the meeting for one month. After that month it ceases to function and operate and no resolution passed after that period shall have any force or effect. Rule 26.5 also sets out the procedure for re-forming an abolished district. It would have been useful if similar detail had been expressed in respect of the abolition of a sub-branch.
After the resolution of 24 November 2002 the state branch was informed of what had occurred. The state managing council acceded to the Rockhampton sub-branch decision and resolved as follows at its meeting on 15 December 2002,
“That the Sub Branch winds up by 31 December 2002 at which time the Charter will be cancelled.
…
That State Council delegate its powers in relation to the Emu Park units to the State Executive.”
The charter of the sub-branch was, no doubt, granted pursuant to r. 17.3(f), while the Emu Park units formed a retirement village for members managed by an aged persons’ homes management committee of the Rockhampton sub-branch.
It was, in part, a concern about to whom rental for those units should be paid that has led to these proceedings. The issue arose because the management agreement made in 1981 provided that, if at any time the Rockhampton sub-branch shall be dissolved by a resolution at a general meeting of the members of the Rockhampton sub-branch, then the said land and improvements and all other assets managed by the homes committee remaining after the payment of all expenses and other liabilities shall be handed over to the RSLQ; see cl. 1(j) of ex. GO4 to the affidavit of Mr Opray filed 16 October 2003.
The resolution of RSLQ’s state managing council meeting of 15 December 2003 that the sub-branch wind up by 31 December 2002 and that its charter be cancelled was conveyed to the secretary of the Rockhampton sub-branch by letter of 16 December 2002. By letters of 15 April 2003 and 24 July 2003 RSLQ also pointed out to members of the former Rockhampton sub-branch that their membership was to be transferred to RSLQ’s unattached list but also said that if they wished to transfer to another RSL sub-branch they could do so.
The first respondents, the trustees of the Rockhampton sub-branch’s property, outlined the nature of their dispute with RSLQ in their letter of 23 July 2003, ex. GO20 to Mr Opray’s affidavit. In it they asserted that they were required by instructions of their members to hold the sub-branch’s property in trust and that the sub-branch was not defunct.
Prima facie it would be hard to find better evidence that a sub-branch of an association had become defunct in the sense of having ceased to operate or function than its own resolution that it be wound up. The fact that it may remain in existence for some time to enable itself to be wound up does not, in my view, mean that it continues to operate as part of a body whose principal purpose is to promote the interests and welfare of former and serving members of the Australian Defence Force and their dependants; see r. 4.1. I can appreciate that winding up such a group may not be an instantaneous process as it may be necessary to get in assets, convert them into money, ascertain liabilities, terminate contracts, pay debts and seek to extinguish liabilities before a winding up may be complete. As a first step on the path to becoming extinct, however, the resolution is reasonably conclusive and, in my view, had the result that the sub-branch ceased functioning as part of RSLQ so as to fall within the language of r. 27.5.
Where the sub-branch of an organisation is only part of a larger body whose governing organisation accepts that resolution and itself resolves that the sub-branch wind up by 31 December 2003 and that its charter be cancelled at that time, the conclusion seems inescapable to me. This is particularly so because of the provision made by r. 27.5 for the manner in which creditors are to be satisfied and obligations met, namely by the district branch under whose jurisdiction it formerly functioned taking possession of the sub-branch’s property and satisfying the verified creditors or obligations to the limits of the defunct sub-branch’s assets. The reassignment of the former members by RSLQ to the unattached list is also some evidence that the sub-branch had ceased to exist. There is no need, then, for the sub-branch to continue to operate to meet its obligations. Moreover, a “defunct Sub-Branch” is treated by the language of the rule as one that still could have assets, creditors and obligations incurred from an earlier period.
The further motion carried at the meeting of 24 November that the trustees are directed to hold everything in trust for the next two years with the proviso that they can call a special meeting to keep members up to date does not affect my conclusion. It does not anticipate that the sub-branch will continue to operate. It may have been a motion based on a garbled understanding of r. 27.5’s reference to the power to deal with the sub-branch’s property after a failure to reorganise or reform the sub-branch within two years of the property being taken over by the state or district branch.
The point is, however, that the members of this sub-branch did not form an autonomous group but were members of a larger association by whose rules they were bound. In other words, upon the resolution of the members, which was accepted by RSLQ, the sub-branch became defunct and ceased to operate and function except to the extent required by r. 27.5 by which its property was to be used to satisfy its creditors and be taken over and held by the district branch. The trustees themselves were obliged by r. 27.5(b) to sign all documents and do all such acts and things as may be necessary to transfer the lands and property of the defunct sub-branch to the district or state branch or to dispose of or otherwise deal with them and their proceeds as the district or state branch should direct. The resolution of the sub-branch members with its proviso at the meeting of 24 November 2002 did not operate to exempt the trustees from the operation of that rule. It could not, as, on no view of the powers of such a meeting consisting merely of the members of one sub-branch of a much larger organisation, could the organisation’s rules be disregarded; see the discussion in Master Grocers’ Association of Victoria v Northern District Grocers’ Co-operative Ltd and Ors [1983] 1 VR 195, 201-204. To put it more bluntly, the tail cannot wag the dog.
It is only if there is a re-organisation or re-formation of the sub-branch within two years that the re-formed or re-organised sub-branch may perhaps have some claim to property of the former sub-branch. There has been no re-formation or re-organisation in the manner required by r. 17.3 of the rules. That would be the appropriate course to adopt if there were to be a re-formation or re-organisation, the making of an application under r. 17.3 by 10 appropriately qualified people. Here there is simply an assertion by the trustees and perhaps some other former members that the former sub-branch was not defunct and continues to exist. That flies in the face of the dissolution motion and is not itself supported by, for example, a motion of the former members of the sub-branch seeking to rescind the earlier motion under By-law 2 r. 1.23. That course was not taken, if it were indeed possible to take it, and I do not believe that it would be available now.
The motion to reactivate the sub-branch “subject to legal advice on procedure” at a meeting held on 31 August 2003 of 26 “members of the League”, as they were described, was not a meeting of the sub-branch nor one that fell within RSLQ’s rules; nor was the meeting of 29 “ordinary and life members” held on 7 December 2003 a meeting of the former sub-branch. It had ceased operating and these meetings were not meetings of that sub-branch but simply of people who may have been former members of the sub-branch. To reform or reorganize the sub-branch it is my view that the course envisaged by r. 17.3 has to be followed.
In the circumstances the conclusion I have formed is that the sub-branch became defunct and that it was also dissolved for the purposes of the management agreement cl. 1(j) with the consequence that, subject to any submissions about their form or continuing necessity and as to costs, I propose to make the following orders:
1. A declaration that pursuant to a resolution passed on or about 24 November 2002, the Rockhampton Sub-Branch of the Mackay District Branch of the Returned & Services League of Australia (Queensland Branch) (“the Rockhampton Sub-Branch”) has been wound up or otherwise is defunct and/or has ceased to operate and function;
2. A declaration that the Mackay District Branch of the Returned & Services League of Australia (Queensland Branch) (“Mackay District Branch”) is entitled to all real and personal property previously held or owned by the Rockhampton Sub-Branch or alternatively, which was or is held by the First Respondents in their capacity as trustees, other than the Land, as defined in paragraph 4 of this originating application;
3. A declaration that the Agreement entered into by the members of Rockhampton Sub-Branch Management Committee of the Mackay District Branch of the Returned Services League of Australia and the members of its Aged Persons Homes Management Committee and the Returned Services League of Australia, Queensland Branch in 1981, a true copy of which is exhibit GO4 to the affidavit of Geoffrey Opray filed herein on 16 October 2003, has been determined;
4. A declaration that the Applicant was and is entitled to possession of the land and improvements situated at Pattison Street, Emu Park, in the State of Queensland, the subject of the said Agreement as and from 24 November 2002, and continues to be entitled to possession of the Land;
5. An order requiring the First Respondents to deliver up to the applicant all books, records, accounts and other papers in their possession or control of and relating to the affairs, conduct and undertaking of the Rockhampton Sub-Branch;
6. An injunction restraining the First Respondents by themselves, their servants or agents from:
(a) dealing with any real or personal property previously held by the Rockhampton Sub-Branch; and
(b) receiving the proceeds of any rental from the Land;
7. An order that the First Respondents account to the Applicant for any and all money received by them or any of them from the Land.
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