Frederick Ernest Keene and Another v Wellcom London Ltd and Others
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Peter Smith,Peter Smith J |
| Judgment Date | 30 January 2014 |
| Neutral Citation | [2014] EWHC 134 (Ch) |
| Docket Number | Case No: HC13E02158 |
| Court | Chancery Division |
| Date | 30 January 2014 |
[2014] EWHC 134 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Peter Smith
Case No: HC13E02158
Mr Peter Shaw (instructed by Speechly Bircham LLP) for the Claimants
Mr Jonathan Davey (instructed by Treasury Solicitor) for the Respondents
Hearing dates: 24 th January 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
INTRODUCTION
This is a hearing of a Part 8 Claim issued by the Trustees of the Graphic Reproduction Federation ("the Federation").
By their application the Trustees seek (1) a declaration that the Federation was spontaneously dissolved at some stage between 1987 and now (2) alternatively an order dissolving the Federation pursuant to the Court's inherent jurisdiction and (3) directions as to how and to whom the Federation's assets should be distributed.
BACKGROUND
The Federation is an un-incorporated association formed in 1916 or thereabouts to further the interests of employers engaged in the graphic reproduction trade, to promote fair trading within the industry and to negotiate national agreements with Trade Unions. It is governed by a set of rules which have been amended on various occasions the most recent of which was in 1985 ("the Rules").
The Trustees contend that since about 1987 (with the demise I suspect of the traditional form of printing to be found historically in the area where the Rolls Building is) the Federation has spontaneously dissolved but cannot clearly identify any date.
Its administrative records have not been kept up to date since then, nor have any subscriptions been called for or paid since 1986. There have been no Annual General meetings since 1985 and the Management Committee has not met since 29 th November 1987.
The only activity carried out has been the preparation of annual accounts by its accountants and the storage of its records by the First Claimant. Its net assets were valued at £272,250 in its financial statement for year ending 31 st December 2011. These statements value the Federation's investments (consisting of shares in stock exchange listed companies) at cost value of £15,657. As at 26 th April 2013 the Claimants' solicitors estimated that these investments had a current value of £590,683.98.
MEMBERSHIP
By 1987 most of the Federation's members had resigned or been expelled for non payment of subscriptions. The only members who paid their 1986 subscriptions were the First to Third Respondents and the Fifth Respondent. Other corporate members have been dissolved since 1987 namely Mayday Reproduction Ltd (1998), Tower Engraving Ltd (2000), Lithospeed Ltd (2011).
Another potential member Tomlinson Engraving Ltd has been dissolved and sometime prior to its dissolution its shares were transferred to Tomlinson Ltd (the Fourth Respondent).
All parties agree that the Federation ought to be dissolved (if it has not already been spontaneously dissolved). That can be done by the Court or under the Rules (see below).
THE RULES
Clause 3 sets out the various objects of the Federation. It will be seen that its objects can be promoted by (inter alia) establishing a fund or funds for the advancement of the Federation's purposes and the general and material welfare of its members (clause 3 (f)).
The Trustees contend that the Federation has been dissolved spontaneously since 1987 as their primary submission. They also submit that the assets should be distributed to a printing charity to serve the underlying spirit and purpose of the Federation. That is on the premise that the Federation has been dissolved or that the Court exercises its inherent jurisdiction to dissolve it.
Further provisions of the Rules are relevant however. First clause 17 provides that the Trustees hold all of the assets of the Federation for the benefit of the Federation and its members. That is of course unexceptional as it merely deals with the legal title of the Trustees for administrative purposes.
Second are provisions (clause 19 and following) dealing with a management committee but the management committee has not met for many years and there is a doubt as to whether or not there is actually a current management committee.
Clause 45 provides for the ability to expel a member (inter alia) in the case of voluntary or compulsory liquidation other than for the purposes of reorganisation or amalgamation.
Tomlinson Engraving Ltd has been dissolved but at some time prior to its dissolution its shares were transferred to Tomlinson Ltd (the Fourth Respondent). It seems to me and I am prepared so to decide that was a transfer for the purpose of amalgamation or reconstruction so that the Fourth Respondent is a current member in succession to Tomlinson Engraving Ltd.
No steps have been taken under clause 45 to expel any of the members that had gone in to liquidation and subsequent dissolution.
Clause 51 provides as follows:-
"51. The Federation may be dissolved whenever the Members in General Meeting assembled have passed a resolution in favour of the dissolution by a majority of not less than three-fourths of the Members present at a General Meeting of which seven days' notice specifying the intention to propose such resolution has been given. If the number of Members is reduced to or below ten a majority of Members present at such General Meeting shall be sufficient to pass such a resolution for dissolution.
Upon the dissolution of the Federation the property of the Federation not consisting of moneys shall be applied in satisfaction of the debts and liabilities of the Federation and Subject thereto shall be distributed among the Members existing at the date of the passing of the resolution for dissolution in the proportion that the amount of subscription respectively paid by such Members to the Federation during the last three years of membership has to the total amount of subscriptions for such period."
If the Federation is not already dissolved it is open to the members in my view at a General Meeting to dissolve it. It is then provided expressly that upon such dissolution the assets are to be distributed upon "the Members existing at the date of the passing of the resolution for dissolution in proportion to the amount of subscriptions paid by such member during the last 3 years of membership".
As I have said, none of the parties before me seek to argue that the Federation has already been dissolved. It follows that it is open to the present members (that is to say those members who have not gone into liquidation and been dissolved) to invoke clause 51 if they so wish. Prior to that they could equally (for the avoidance of doubt) invoke clause 45 and seek to expel those members which had already gone into liquidation. There is no relieving power so that they can be expelled even if those companies would seek to pay off their arrears of subscriptions.
HAS THE...
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