Re Bucks Constabulary Widows' and Orphans' Fund Friendly Society (No. 2)
| Jurisdiction | England & Wales |
| Date | 1979 |
| Court | Chancery Division |
Friendly Society - Dissolution - Distribution of assets - Distribution to members in accordance with contractual rights - Whether bona vacantia - Basis of distribution - Whether equality of shares - Whether sum improperly paid out affecting shares of members voting for payment -
A society, open to serving members of a county constabulary and registered under the Friendly Societies Act 1896, had as its object the provision by the voluntary contributions of its members, for the relief of widows and orphans of deceased members, the payment of money on a member's death and the relief of members during sickness or infirmity. Under rule 31 the society could be dissolved by an instrument of dissolution. In April 1968 the constabulary was amalgamated with a number of others. On October 31, 1968, the members resolved, inter alia, to wind up the society, to continue until its dissolution to pay benefits to all existing beneficiaries, to realise its assets, for the purchase of annuities for all present beneficiaries, and to transfer some assets to the Thames Valley Constabulary Benevolent Fund to purchase the right of entry for all its present and future beneficiaries. By paragraph 5 of the instrument of dissolution, the society's net funds were proposed to be divided and appropriated to purchase annuities, to grant to the benevolent fund the sum of £40,000, and to donate the balance to another benevolent fund. The society was legally dissolved in 1969. After the purchase of the annuities and the payment of the £40,000 into the Thames Valley Constabulary Benevolent Fund, the plaintiff, as sole trustee of the society, had the balance in his hands. By an originating summons dated June 14, 1973, the plaintiff asked the court, inter alia, to determine whether, pursuant to section 79 (4) of the Friendly Societies Act 1896 and the execution of the instrument of dissolution, he was authorised to dispose of the funds in accordance with paragraph 5 of the instrument. The matter came before Megarry V.-C. who held that the instrument of dissolution was ineffective for its purpose. On further questions on the summons, as to the correct destination of the funds of the society:—
Held, (1) that there was a general principle applicable to all unincorporated societies, under a contract subsisting between all the members of the society, that the society's funds should be held and applied in accordance with the rules of the society, and that in the absence of any rule to the contrary a term was to be implied into such contract that the society's surplus funds should, on a dissolution, belong to the then existing members of the society; that in any event where, as in the present case, the society was registered under the Friendly Societies Act 1896 the whole of the property of the society was, in accordance with section 49 (1) of the Act, vested in the trustees for the use and benefit of the society and its members and of all persons claiming through such members, and accordingly since at the dissolution there were still existing members, its surplus funds were to be held on trust for such existing members to the total exclusion of any claim thereto, as bona vacantia, by the Crown (post, pp. 939G–940B, 942A, G, 943C–D, 951F–G).
(2) That the entitlements of members, inter se, to the society's surplus funds were governed purely by contract unaffected by equitable doctrines, and therefore such funds were in principle divisible between existing members in equal shares that since the documents signed by certain members, agreeing to the dissolution and authorising payment of £40,000 to the Thames Valley Constabulary Benevolent Fund did not, on their true construction, constitute directions by such members to deal with their individual beneficial interests in that manner, the surplus funds should be distributed unaffected by such documents amongst existing members as at the date of dissolution and the estates of members who had died since that date in equal shares (post, pp. 952A–C, 953A–B, 954F, H–955E).
The following cases are referred to in the judgments:
Braithwaite v. Attorney-General [
Cunnack v. Edwards [
Customs and Excise Officers' Mutual Guarantee Fund, In re [
Denby (William) & Sons Ltd. Sick and Benevolent Fund, In re [
Lead Co. Workmen's Fund Society, In re [
Printers and Transferrers Amalgamated Trades Protection Society, In re [
Recher's Will Trusts, In re [
St. Andrew's Allotment Association, In re [
Sick and Funeral Society of St. John's Sunday School, Golcar, In re [
Tierney v. Tough [
West Sussex Constabulary's Widows, Children and Benevolent (1930) Fund Trusts, In re [
The following additional cases were cited in argument:
Blackburn Philanthropic Assurance Co. Ltd., In re [
Sawyer v. Sawyer (
ORIGINATING SUMMONS
On June 14, 1973, George William Thompson, the sole trustee of the Bucks Constabulary Widows' and Orphans' Fund Friendly Society (“the society”), issued an originating summons, the defendants being David Holdsworth, the trustee of the Thames Valley Constabulary Benevolent Fund, George Hugh Witton Wilkinson, a trustee of the Bucks Constabulary Benevolent Fund, Hywel Wyn Edwards, one of the persons claiming to be beneficially interested in the society's funds, and the Treasury Solicitor. Question (1) on the summons was dealt with by Megarry V.-C. [
The facts are stated in the judgment of Megarry V.-C. [
Robert Reid for the plaintiff.
R. G. B. McCombe for the third defendant.
J. L. Knox for the fourth defendant, the Solicitor for the Affairs of H.M. Treasury.
Judith Jackson for the defendant
July 11. WALTON J. read the following judgment. The relevant facts are all set out in the judgment of Megarry V.-C. [
Before considering the relevant legislation, the Friendly Societies Act 1896, since largely replaced by the
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