There was a sports and social club associated with GKN, whose members were all employees of GKN. The main issue in the case was whether the club had ceased to exist. But one subsidiary issue was whether a meeting had been validly convened. The club rules required 14 days’ notice to be given, but in fact only three days’ notice were given. Notice of the meeting was posted in the company’s canteen, to which all the members had access. However, the requirement of 14 days’ notice had hardly ever been followed. Seven or three days’ notice were not unusual and there was no evidence that anyone had ever objected to short notice. The subject matter of the meeting was to discuss the sale of the club’s sports ground The court also considered the status of associate members of a club, who obtained that status merely by signing a vistors book.
Held: The rules did not make such associate members members properly. Despite the short notice, the resolution to sell the sports ground was validly passed: ‘with the prospect that a sale would bring some money to each member of the club, it seems obvious that news of the meeting would speedily reach all, if not quite all, of the members of the club.’
However, the same meeting (convened by the same notice) also passed resolutions altering the way in which the proceeds of sale of the sports ground would be distributed among the members, and Megarry V-C held that insufficient notice of that business had been given, with the consequence that those resolutions were invalid.
Megarry V-C said: ‘As is common in club cases, there are many obscurities and uncertainties, and some difficulty in the law. In such cases, the court usually has to take a broad sword to the problems, and eschew an unduly meticulous examination of the rules and resolutions. I am not, of course, saying that these should be ignored; but usually there is a considerable degree of informality in the conduct of the affairs of such clubs, and I think that the courts have to be ready to allow general concepts of reasonableness, fairness and common sense to be given more than their usual weight when confronted by claims to the contrary which appear to be based on any strict interpretation and rigid application of the letter of the rules. In other words, allowance must be made for some play in the joints.’
Judges:
Megarry J VC
Citations:
[1982] 1 WLR 774
Jurisdiction:
England and Wales
Cited by:
Cited – Hunt and Another v McLaren and others ChD 4-Oct-2006
Land had been given to a football club under a trust for its exclusive use as such. That land was sold and a new ground acquired and a stadium built, but the land was subject to restrictive covenenats limiting its use to sports, which considerably . .
Cited – Speechley and Others v Allott and Others CA 10-Mar-2014
The parties disputed the management of a social club. The club owned a bowling green, and bowling members sought to restrain its closure. The appellants now said that the court should not have found at first instance that a meeting had validly . .
Lists of cited by and citing cases may be incomplete.
Trusts, Company
Updated: 07 May 2022; Ref: scu.245262