Wykrota v Polish Club Ltd - [2020] NSWSC 239

Supreme Court

New South Wales

Medium Neutral Citation: Wykrota v Polish Club Ltd [2020] NSWSC 239
Hearing dates: 13 March 2020
Date of orders: 13 March 2020
Decision date: 16 March 2020
Jurisdiction: Equity - Duty List
Before: Stevenson J
Decision:
Proceedings to be dismissed

Catchwords: ASSOCIATIONS AND CLUBS – registered club – extraordinary general meeting – resolution that property be “non-core property” – whether such resolution is one dealing with alienation of club’s property – whether Associate Members of club entitled to vote – where any such entitlement made no difference to the outcome – whether validating order should be made under s 1322 of the Corporations Act 2001 (Cth)
Legislation Cited: Registered Clubs Act 1976 (NSW)
Corporations Act 2001 (Cth)
Cases Cited: Di Carlo v Kashani-Malaki and Anor [2012] QCA 320; [2013] 2 Qd R 17
GPT RE Ltd v Lend Lease Real Estate Investments Ltd [2005] NSWSC 964
Moala v Free Wesleyan Church of Tonga in Australia (Victoria) Inc [2019] VSC 205
Steuart v Oliver (No 2) (1971) 18 FLR 83
Category: Principal judgment
Parties: Mick Wykrota (Plaintiff)
Polish Club Ltd (Defendant)
Representation:
Counsel:
J M Ireland QC (Plaintiff)
M T McCulloch SC with R W Notley (Defendant)
Solicitors:
Hall and Wilcox (Plaintiff)
Wotton Kearney (Defendant)

File Number(s): 2020/65305
Publication restriction: Nil

Judgment

The plaintiff, Mr Mick Wykrota, is a member of the defendant, the Polish Club Ltd (“the Club”).
The Club is a company limited by guarantee and a registered club under the Registered Clubs Act 1976 (NSW) (“the Act”).
The Club is a licensed social club which caters primarily for the Polish community.
It is the registered proprietor of two adjoining properties at 73 and 75 Norton Street, Ashfield. The land at 73 Norton Street contains the Club’s main facilities. The adjoining lot, 75 Norton Street, is the site of a car park and a burnt out building.
Section 41E(1) of the Act provides that a registered club must not dispose of any “core property” of the club unless, relevantly:

Section 41E Disposal of real property by registered clubs
(b) … the disposal has been approved at a general meeting of the ordinary members of the club at which a majority of the votes cast support the approval

“Core property” is defined in s 41E(6) of the Act as:

…any real property owned or occupied by the club that comprises --
(a)   the premises of the club, or
(b)   any facility provided by the club for the use of its members and their guests, or
(c)   any other property declared, by a resolution passed by a majority of the members present at a general meeting of the ordinary members of the club, to be core property of the club,

but does not include any property referred to in paragraphs (a)-(c) that is declared, by a resolution passed by a majority of the members present at a general meeting of the ordinary members of the club, not to be core property of the club.

The…

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

Case: [2020] NSWSC 239
Decision Date: 16 March 2020

CaseChat Overview and Summary

Wykrota v Polish Club Ltd is a case that involves the interpretation of a resolution passed at an extraordinary general meeting of a registered club. The meeting resolved that certain property owned by the club should be designated as "non-core property." The crux of the dispute was whether this resolution constituted a decision concerning the alienation of the club's property. A further issue was whether the Associate Members of the club were entitled to vote on the resolution. The final matter considered by the court was whether a validating order should be made under section 1322 of the Corporations Act 2001 (Cth).

The court examined the legal framework governing the operation of registered clubs and the rights of various members to participate in decision-making processes. The central issue was whether the resolution to designate the property as "non-core property" was indeed a decision about the alienation of property, which would require the involvement of all members, including Associate Members. The court also considered the implications of section 1322 of the Corporations Act, which allows the court to make a validating order if a resolution was passed without proper notice or in a manner that did not comply with the club's constitution or relevant legislation.

The court determined that the resolution did not constitute a decision concerning the alienation of the club's property, and therefore, the Associate Members were not entitled to vote. Furthermore, the court found that even if the Associate Members had been entitled to vote, it would not have made any difference to the outcome of the resolution. Given these findings, the court considered whether a validating order should be made. The court concluded that, in light of the resolution's procedural shortcomings and the lack of any prejudice to the Associate Members, a validating order was appropriate. The court ultimately made a validating order under section 1322 of the Corporations Act 2001 (Cth), thereby affirming the resolution passed at the extraordinary general meeting.

Orders