Boyle & Ors v Collins & Ors

A registered industrial and provident society remains a corporation, beneficially owning its assets, until dissolved by a method prescribed by statute or until its registration is cancelled. Cancellation may remove the effect of incorporation, after which principles applicable to an unincorporated association may apply. The relevant date for distribution is the date on which the corporation ceased to exist. Where club activities and subscription collection were formally suspended, ordinary members did not lose membership merely by failing to pay subscriptions while there was no means of payment. A membership card is evidence of membership, not necessarily a condition of it. Members with proprietary entitlements should not be excluded without a proportionate opportunity to establish their claims.

The Luton Labour Club and Institute Limited was registered under the Industrial and Provident Societies Act 1965. Its activities ceased, its property was sold, and the Registrar cancelled its registration on the ground that the society had ceased to exist. A fund representing the sale proceeds remained under the control of the property committee.

The claimants sought directions concerning the date for distribution, the classes of members entitled to participate, unverified membership claims, the appointment of trustees and administrative costs. The central issues were whether the registered society could dissolve informally, when it ceased to exist, and whether ordinary members lost membership through non-payment of subscriptions during the period of suspension.

1. Corporate status and dissolution. The registration of a society under the Industrial and Provident Societies Act 1965 makes it a body corporate and vests its property in the society. The corporation continues to own its assets beneficially until dissolved by a statutory method or until registration is cancelled. A registered society cannot cease to exist merely because its activities have stopped.
2. Effect of cancellation. Cancellation under section 16 does not itself retrospectively dissolve the society, but it removes the effect of incorporation. If the society still exists after cancellation, it becomes an unincorporated association. If its substratum has already permanently ceased, cancellation terminates the corporation without a successor association. The Registrar’s cancellation on 31 March 2000 was therefore the relevant date for distribution.
3. Earlier authorities. The authorities concerning spontaneous dissolution of unincorporated associations did not govern the society while incorporated. They were nevertheless useful in identifying when the activities of an unincorporated association would have permanently ceased. The club’s suspension, the possible relocation, and its continuing corporate existence when the property was conveyed meant that October 1997 was too early. Permanent cessation could not be established before 10 September 1999, but the legal distribution date remained 31 March 2000.
4. Membership and subscriptions. Rule 28 implied distribution among members. The court inferred that the subscription requirement was suspended during the formal suspension of the club’s activities, or applied only while the club traded. Ordinary members who were paid up at the end of December 1997 were therefore entitled in principle to participate. A member who died before 31 March 2000 was not entitled under rule 13.
5. Proof of membership and administration. A membership card was not a precondition of membership. Claimants lacking cards were to receive a further reasonable opportunity to provide evidence, after which the trustees could accept or reject claims. The claimants were appointed trustees subject to affidavits of fitness. The trustees were directed to pay into court amounts due to members whose addresses could not be ascertained, and were entitled to indemnity from the fund for reasonable advice and distribution costs.