In re Kavieng Club [1949] PGSC 1 (22 June 1949)

IN THE SUPREME COURT OF THE
TERRITORY OF PAPUA AND NEW GUINEA

RE: KAVIENG CLUB.

JUDGMENT

PETITION:

This Petition concerns the Kavieng Club and its property. That Club suffered severely, as did many of its members, in the disruption caused by the Japanese invasion of the Territory in early 1942.

The Petitioner, John Hinwood McDonald, is the survivor of the two Trustees who were appointed by the Club prior to the enemy invasion and in whom all the property of the Club's was, by the Club's Rules, vested. He is also the sole survivor of all the office-bearers then appointed by the Club, the others having died in enemy hands. For reasons that will later appear, he claims that the results of the Japanese occupation created a situation that has made it impracticable to carry on the Club in accordance with its Rules. He has therefore petitioned this Court, praying:- that the Club may be deemed to have been dissolved as at the 23rd day of January, 1942, (the date on which the Japanese forces occupied Kavieng), or at such other date as the Court may determine; that directives be given by the Court as to the disposal of the assets of the Club; and that the Court determine the persons who are entitled to share in those assets. The Trustee has stated in his Petition, and verified by affidavit, that those assets consist of the sum of £3,330/9/2, received from the War Damage Commission and placed to the credit of a joint account in the names of himself and the Club's Honorary Solicitor with the Commonwealth Savings Bank at Port Moresby; a credit of £324/15/4 with V.R. Carpenter & Company Ltd. of Sydney; and the freehold Club site at Kavieng, which is "considered to be of the value of £200." As the Trustee has also stated in his Petition that "so far as is known the Club has no creditors save and except current fees due to the Club's solicitors and an amount of £l7/16/4 duff to one BING SANG, a carpenter of Kavieng, "the surplus assets appear to be substantial.

Pursuant to an order made by one on 23rd February last, notice of the hour, day and place fixed for the hearing of the Trustee's Petition has been advertised in three Australian States and in this Territory. That notice, inter alia, called on persons desirous of opposing the Petition to appear in person or by Counsel at the hearing. In consequence of that notice, Mr. Dudley Jones of Counsel has appeared at this hearing to represent "certain objectors." These "objectors" contend that the activities of the Kavieng Club were only suspended during the Japanese occupation; and that they themselves are still members of the Club. They wish it to continue as a Club. They therefore oppose its proposed dissolution. It is also submitted, on their behalf, that if, in the circumstances that have arisen, the Rules of the Club fail to make provision for the Club's continuance, then the Court, should make an order directing that, after such notice as the Court might prescribe has been given, an annual General Meeting of the members of the Club should be held, at an hour, day and place fixed by the Court, for the purpose of electing new Trustees and vesting the assets of the Club in them and generally for the purpose of making arrangements for the continuance of the Club and its activities.

The Acting Crown Law Officer has also appeared at this hearing, on behalf of the Administration; but merely to inform the Court that the Administration was making no claim, on the ground that they were bona vacantia, to the assets which are subject-matter of the present Petition.

Apart from the small group of persons represented by Mr. Jones, no one else has appeared in person or by Counsel to oppose the Petition; yet the Club has a fairly large membership.

A copy of the Club's Rules and By-Laws - (as adopted 10th April, 1941, and amended at the Annual Counsel Meeting of 1936) has been put before the Court. These Rules are, of course, of special importance because they form, so to speak, the Club's constitution.

In Rule 2, the objects of the Club were stated to be:-

"The provision and maintenance in Kavieng of a Club House; the provision of meal and residential accommodation in the Club House for members, and the promotion of social intercourse amongst members!"

Rule 3 (a): provided that "the affairs of the Club shall, unless otherwise provided in these rules, be under the exclusive management of the following office-bearers, viz: President, Vice-President, Secretary-Treasurer (who shall be styled Secretary), and a Committee. The President, Vice-President and Committee shall be elected at the Annual General Meeting. The Secretary-Treasurer shall be appointed by and shall remain in office during the pleasure of the Committee...."

Rule 6: provided that the Committee should be composed of the President, Vice-President and Secretary-Treasurer as ex officio members and of four other members; that any vacancy occurring in the Committee should be filled by the Committee; and that four members of the Committee should constitute a quorum.

Rule 4: dealt with Trustees, and read:- Two Trustees shall be elected at an Annual General Meeting and any vacancy occurring during any year may be filled by a Special General Meeting or the Next Annual General Meeting. All the property of the Club and all equities, real and personal, shall be vested in the Trustees for and on behalf of the Club Members. The Trustees shall remain in office until death, resignation, or removal by an Annual General Meeting or a Special General meeting.

Incidentally, Rule 17 (2) provided that "in the event through any cause of new officers not having been appointed at the time and date provided by these Rules, then the office bearers of the past year shall be deemed to continue in office and shall have full authority to manage the affairs of the Club until such time as their successors are appointed."

Ruled 8 empowered the Committee to make by-laws not inconsistent with the Rules, but these by-laws were subject to disallowance, in whole or in part, by Annual General Meeting or a Special General meeting.

Rule 10 (a) empowered the Committee to elect or reject candidates for membership in accordance with the Rules.

Rule 10 (e) provided that "membership of the Club shall be composed of five classes, viz: Town members, Country members, District members, Non-Resident members, and Junior members. These five classes of members are defined in Rule 10 (p) and their various rates of subscription appear in Rule 10 (v).

Although Junior members were debarred from holding office or voting (see Rule l0 (p) (v) and Rule 19 (a)), the general intention of the Rules appears to have been that all five classes of members should participate equally in the privileges of Club membership. Thus Rule 14 provides ..."No person shall be entitled to enjoy or derive directly or Indirectly any benefit or advantage which is not shared equally by every member of the Club."

Rule 10 (v) provided that "the payment of entrance fee and first installment of entrance fee and subscription for the first year shall be evidence of "(a new) member's acquiescence in the Ruler and By-laws of the Club and his acceptance of them as binding on him." Failure to pay such fees within thirty days of notification of election of a new member voided his election unless the Committee extended the time for payment: Rule 10 (v).

Failure by n member to pay an overdue subscription (and fine) within sixty days of written notice from the Secretary rendered him ipso facto no longer a member: but if he assigned reasons for that failure, satisfactory to the Committee, and paid arrears and any fines in full, he could be re-admitted to membership: Rule 10 (z).

The Rules also provided for the holding of Annual General Meetings and Special General Meetings. Thus, Rule-27 (a) provided that an Annual General Meeting should be held "on a day fixed by the Committee not later than September 15th in each year": and that at such meeting the business transacted should include matters such as the election of office bearers; the reception of the Committee's report for the past year, balance sheet, etc.: propositions for any new Rule or alteration of any existing rule: election of Trustees if necessary: and the consideration of matters affecting the Club. By Rule l7 (g) the Committee might at any time itself convene a Special General Meeting by giving not less than seven days' notice of the date and object of the meeting: and the Committee was bond by this Rule to call a Special General Meeting on the written requisition of at least ten "financial" members. The quorum at General Meetings was fifteen "financial" members: Rule 17 (d). Rule 20 (a) provided that "at all Annual and Special General Meetings the President stall preside and in his absence the Vice-President, and in the absence of both a member of the Committee, nominated by decision of the Committee shall preside."

Rule 19 related to dissolution and provided that "on application made in writing to the Committee by the equivalent of three-fifths of the Town and Country members, none of whom are in arrears ... signifying their desire that the Club should be dissolved a Special General Meeting shall be called to consider the question." At least three months' notice of the meeting had to be given and votes, including proxy votes, of at least two-thirds of the total number of members were necessary to carry the proposition for dissolution. The Trustees were to receive at least three months' notice in writing from the Secretary of the meeting.

As its Rules indicate, the Kavieng Club was a normal type of "members Club" or "unincorporated association." As is said in Halsbury's "Laws of England" (2nd edition) Val. N, at page 483:- "The members for the time being" (of such a club) "are jointly entitled to all the property and funds of the Club, the property usually being vested in trustees:" (in footnote (L) on the same page it is said - "The interest of a member in the property of the club is not transferable or transmissible, and continues only during membership") The text continues:- "It is only upon a dissolution, however, that the individual rights of the members in the property become capable of realisation. Until then their rights are merely to enjoy the use of the club premises, if any, and other privileges of the Society, in accordance with the rules, so long as they pay their subscriptions and continue to be members. The rights and duties of the members of such a club as between themselves, and the internal arrangements for carrying it on, depend upon the rule," At page 487:- The rules form part of the contract between the members in the case of a members' club...." At page 491, it is stated:- "If, as is usually the case, the rules provide that an elected candidate shall not be entitled to the privileges of membership until he has paid the entrance fee and first year's subscription, the candidate on receiving notice of his election, with a copy of the rules, has a right either to accept or reject the membership so offered, the contract not being complete until he fulfils the condition by payment of the sums mentioned." This principle is recognised in Rule 10 (v) of the Rules of the Kavieng Club, already quoted.

Now it appears, from the evidence before me, that tragic consequences of the Japanese occupation of Kavieng have made it impossible to apply some of the Rules of the Kavieng Club. The enemy occupation ipso facto made it impossible to continue to pursue, at that time, two at least of the objects of the Club, viz: "the provision and maintenance in Kavieng of a Club House; and "the provision of meals and residential accommodation in the Club House for members." The whole of the Club's pre-invasion property except the Club Site was lost to the enemy or destroyed during the occupation. The whole of the Club's records, kept at the Club house, were totally destroyed. Of a pre-invasion membership of over a hundred, a large number of members are dead - many drying while in enemy hands. The President, Vice-President, Secretary-Treasurer, and all other members of the pre-invasion Committee are all dead. No evidence has been put before the Court to show that any of these deceased office-bearers of the Club have been replaced by others elected or appointed in accordance with the Rules. Under the Rules, such office-bearers may generally only be replaced at an Annual General Meeting or, no doubt, at a Special General Meeting: but, under the Rules, such General Meetings may only be convened by the Committee, and the Committee no longer exists. In short, a situation has arisen for which the Rules made no provision.

The reaction of the sole surviving Trustee to this state of affairs has been to approach the Court with his present Petition.

The reaction of "certain objectors" who claim to be still members of the Club and who now oppose the Trustee's Petition has been different, and is described in the affidavit of one of them, Mr. Stanfield. In paragraph 7 of his affidavit he says: - "Some members of the Club resident in rind around Kavieng decided that a Special General Meeting of the said Club should be ccnve.ned. This meeting was set down for the sixteenth day off April, 1949 , at Kavieng. Having in my possession a copy of the Constitution of the said Club the procedure in regard to Notices of Meeting, Agenda, Notices, of Motion, and the convening of a Special General Meeting as prescribed in the said Constitution was followed, the notice board situate at the District Office, Kavieng, being used as the notice board of the said Club." (For reasons already, stated, particularly the non-existence of the Committee, the only body empowered under the Rules of the Club to convene a Special General Meeting, it is incorrect to say, as Mr. Stanfield has said, that the procedure for convening a Special General Meeting, as prescribed in the Club's Constitution, was followed). In paragraphs 8 and 9 of his affidavit, Mr. Stanfield states that "as the list of members of the said Club has been lost or destroyed during the Japanese occupation a list of approximately one hundred and twenty-eight members was compiled from the memories of those members available for consultation," and he says that a notice of the Special General Meeting proposed to be held in Kavieng on 16th April, 1949, was sent to each of the persons named in that list in paragraph 11 of his affidavit Mr. Stanfield says that, out of the 128 members said to have been so "circularised," replies had been received, at the l6th April from 32; that 29 of these 32 "expressed the opinion that the Club should obtain its assets and resume its activities; that two had expressed no definite opinion; and that one had expressed the opinion that the Club should be dissolved. 1n paragraph 10 of his affidavit Mr. Stanfield states that what he calls "the Special General Meeting of members of the said Club" was, - to use his own words, - "duly held" at Kavieng on the 16th April, 1949, "when sixteen members of the said Club attended." A copy of the minutes of that meeting was an exhibit to his affidavit. A perusal of these copy minutes discloses that the meeting, undeterred by, or oblivious to, the irregularity of the manner of its convention and of its proceedings in general, blithely passed a number of resolutions and did other business. Thus it resolved that "the activities of the Kavieng Club which were suspended because of the Japanese invasion be resumed." It proceeded to "elect" a President, Vice-President, Secretary-Treasurer and members of a Committee. It decided to oppose the Trustee's present Petition, and resolved that the legal costs of such opposition "be met out of the War Damage money." It then resolved that if the legal costs were not paid out of War Damage money, "the members guarantee payment of costs." A motion that the surviving Trustee should be removed from office gave way to an amendment which was carried unanimously and was as follows:- "This quorum has no knowledge of any existing trustees, but should any exist, they are hereby removed from office." The meeting then purportedly "elected" two new Trustees. It resolved that "all necessary steps be taken as soon as possible to resume control of the Club's property, including War Damage payable in respect of damage to the Club's property, for the purpose of rebuilding the Kavieng Club on its old site." A number of other motions of minor or ancillary importance were also carried.

I have already indicated my opinion that the meeting of sixteen, held at Kavieng on 16th April, 1949, was irregularly convened and that its proceedings were contrary to the Rules of the Club. The desire of the small group of people who were members of the Club when the Japanese arrived and who have now returned to the place from which they were expelled by the enemy is understandable and not unnatural. That desire has, I imagine, been influenced to some extent by the turn of events. It has so happened that the fortunes of war have enabled that group of members to return to Kavieng. What their wishes would have been had the fortunes of war left the Japanese in indefinite or permanent occupation of Kavieng, may only be surmised. In the present instance, the meeting of sixteen purported to act on a semblance of the Rules of the Club; but it was a partial semblance only. For the rest, the meeting of the sixteen was convened and conducted in accordance with "rules" of their own invention but not in accordance with the Rules of the Club that they had agreed, on becoming members of the Club, to abide by and be bound by while remaining Members of the Club. They therefore adopted a course of action that was not permissible, because, as is said in Halsbury Vol. IV, (already cited), at page 489:- "The rules of an unincorporated members' I club can only be altered or added to in accordance with the express provisions of the rules themselves, except where 'he alteration or addition is made with the consent of every member." Here, it is not, pretended that the consent of every member to a variation of the Club's Rules was obtained: this was admittedly impracticable because the names and whereabouts of all the members are not certainly known. A majority, even a great majority, of members will not suffice to legitimise an attempted variation of the Rules that is not made in accordance with procedure laid down in the Rules: even one dissentient is enough to wreck such an attempt, as has been decided in Harington v Sendall, 1903 l6n. 921. For these reasons I am of the opinion that, so far as the Club, the Club's property and other members of the Club are concerned, the resolutions of the meeting of the sixteen at Kavieng on the 16th April last were "sound and fury, signifying noshing" or at most very little.

What then, is the position of the Kavieng Club and its members; and what is to be done with the Club's assets? Let us see what assistance may be had from authority in answering these questions.

Cunnack v Edwards, [1896] 2 Ch.679, was d case relating to the affairs of a society established in 1800 for the purpose of raising, by subscriptions, fines and forfeitures, a fund for the provision of annuities for the widows of its deceased members. By 1879 all the members had died, and the last widow – annuitant died in 1892 - at which time the unexpended funds of the society were £1,250. The Court of Appeal held there was no resulting trust in favour of the legal personal representative of the members of the Society; that the Society was not a "charity and therefore the unexpended fund was not applicable cy-pres to charitable purposes; and that the fund passed to the Crown as bones vacantia. Lord Halsbury L.C. said (at P.681) : "The entire beneficial interest has been exhausted in respect of each contributor ... There never was and never could be any interest remaining in the contributor other then the right that his wife, if she survived him, should became entitled to a widow's portion thus provided. This was the final and exhaustive destination of all the sinus contributed to the common fund." These remarks show that Cunnack v Edwards is clearly distinguishable from the present case.

In re Printers & Transferers Amalgamated Traders Protection Society[1899] UKLawRpCh 88; , 1899 2 Ch. 184, related to a society registered under the English Trade Union Acts. The Rules of the Society provided for the dissolution of the Society with the sanction of four-fifths of its members; but the Rules made no provision as to how any funds of the Society that were unexpended at the time of dissolution, were to be expended. Eventually a resolution for the dissolution of the society was duly passed at a general meeting. At that time there mere 201 members and funds amounting to over £1,000. The Court was asked to decide hour those funds were to be distributed. It was held,. distinguishing Cunnack v Edwards, that these vas a resulting trust in favour of these who had subscribed to the fund and that the money was divisible among those who were members at the time of the dissolution in proportion to their contributions. In that case, of course, the members had duly passed a resolution for dissolution: no such resolution has been passed in regard to the Kavieng Club.

A case nearer to the present one is the South Australian one, In re The Unlay Democratic Association[1936] SAStRp 47; , 1936, S.A.S.R. 473. That Association was an unincorporated association that had been formed in 1910 to "advance the cause of democracy, is and not for the purpose of pecuniary gain. It acquired property which was vested in trustees. By 1921, however, the Society had become moribund and only four members remained. But the Rules of the Society provided that five members were necessary to form a quorum at, any meeting of the Society. What, then, was the position as to the Society and its assets? Reed J. (then A.J.) answered these questions in this way:- "Shortly after the 30th June, 1921 the four survivors must have known that they were the only remaining members of the Association. There were then only four members desirous of its continuance. As already mentioned, five members were required for a quorum at any meeting; and new member could be elected only at a meeting of the members. Therefore, when there were only four members they were powerless to do anything. They could not hold an effective meeting: they could not elect: officers or auditors, or issue any directions to the trustees and not possessing phoenix-like Powers, they could not add to their number, and so revive the Association. Neither could they deal with the situation by altering the rules, as R.20 provides that none of the rules shall be cancelled amended or added to unless it a special meeting Convened for that purpose....It seems to me" (Mr. Justice Reed went oh) ''that the solution in these circumstances is that the law implies a condition resolutive of the contract, that condition being that when the number of members should fall below that necessary o carry on the affairs of the Association in accordance with the rules for the time being in force, the Association should be dissolved. In one sense it might be said that the members' contract had become impossible of performance when the number of members fell below five. Whether from the legal point of view that is an accurate: description of the position, or whether it should be described as a failure of the purposes for which the Association was formed, does not seem to be more than a question of terms. The result in either case, if the essential conditions exist, is that the law implies the condition which determines the contract: (cf. for example), Westralian Farmers Ltd. v Commonwealth Agricultural Service Engineers Ltd. [1936] HCA 6; (1936) 54 CLR 361, at P. 372, per Latham C.J.: Maritime National Fish Ltd. v. Ocean Trawler Ltd. [1935] UKPC 1; [1935] AC 524, at P. 519. In the present case "(Mr. Justice Reed continued) "Without question the purpose for which the Association was farmed became impossible of fulfilment, and consequently there was a 'frustration,' using that term in its wider sense...."

He also said:- "In the present case I case one no reason for suggesting that the rules contain any provision dealing with a situation such as has arisen; or that the implication of the condition which I have mentioned, is in any way inconsistent with the rules." He therefore decided that "The Association was dissolved shortly after 30th June, 1921." and that any surplus funds of the Association belonged to those who were members at that time.

It seems to me that many of Mr. Justice Reed's observations in that case are applicable to the present case. On the day the Japanese occupied Kavieng (23rd January, 1942) two at least of the three objects of the Kavieng Club became impossible of continued performance. On that day who could foresee whether the Japanese possession of Kavieng would last for a hundred years, or more or less? Who could foresee that the success of Allied Arms would end it in only a few years? The members of the Club resident in and around Kavieng more scattered to the four winds. Many were captured and died in enemy hands. All the pre-invasion property of the Club, except its site, was lost or destroyed during the enemy occupation. The Club's records were similarly lost or destroyed and for that reason it is not now possible to say exactly who were "financial" members of the Club at the moment of' the Japanese invasion. Though one Trustee survives, the other Trustee (who was also President) died when a captive of the enemy. The Vice-President, the Secretary-Treasurer and all members of the Committee are dead none of them has been replaced by election or appointment in accordance with the Rules of the Club. Indeed they cannot be replaced in accordance with these Rules, because the Rules provide for the election of office--bearers at a General Meeting and such a meeting may only, by the Rules, be convened by the Committee and on notice sent to all members. In short, the rules do not provide for the situation that has arisen; and I think it will be agreed that the framers of the Rules of 1931, as amended in 1936, would have shown uncanny foresight if they had included Rules that would have made full provision for air enemy invasion, for the deaths of the entire Committee, and for the other tragic consequences to the Club of the Japanese occupation. Obviously the makers of the Club's Rules were thinking in terms of peace, not of war. In my view it is also clear that, because of what has happened, the performance of the contract evidenced by the Rules, which members became bound by on becoming members and remained bound by so long as they continued to be members, has, through no fault of theirs, become impossible. The solution of this dilemma seems to me to be that expressed by Reed A.J. in In re The Unley Democratic Association. See also Tamplin Steamship Coy. Ltd. v Angio-Mexican Petroleum Products Coy Ltd. (1961) 2 AC P.397 (H.L.) where Lord Loreburn said, at pages 403-404:- "... when our Courts have held innocent contracting parties absolved from further performance of their promises, it has been upon the ground that there was an implied term in the contract which entitled them to be absolved.

Sometimes it is put that performance has become impossible and that the party did not promise to perform an impossibility. Sometimes it is put that the parties contemplated a certain state of things which fell out otherwise. In most of the cases it is said that there was an implied condition in the contract which operated to release the parties from performing it, and in all of them I think that was at bottom the principle upon which the Court proceeded. It is, in my opinion, the true principle for no Court has an absolving power, but it can infer from the nature of the contract and the surrounding circumstances the a condition which is not expressed was a foundation on which the parties contracted." Compare the remarks of Russell J. (later Lord Russell of Killowen) in In re Badische Co., etc., (1921) Ch. P. 331:- "If the supervening events or circumstances are such that it is impossible to hold that reasonable men could have contemplated that event or those circumstances and yet have entered into the bargain expressed in the document, a term should be implied dissolving the contract upon the happening of the event of circumstances.... The term to be implied must not be inconsistent with any express term of the contract."

The contract entered into between the members of the Kavieng Club and evidenced by the Rules of the Club contained no express provision to meet the event of war or the possible consequences of war - much less the catastrophic consequences the Japanese invasion brought upon the Club. The Rules give no express indication that the possibility of war was foreseen or even thought of by those who adapted them. I find it impossible to suppose, that, had that dread possibility been considered or the future invasion been foreseen by the members of the Kavieng Club, they would have done otherwise than to agree that, in such an event, the contract between them should be at an end.

For the reasons expressed in this judgment, I hold that it must be inferred, from the nature of the contract between them and from all the surrounding circumstances, that it was an implied condition of their agreement that on such an event as the invasion of their Territory and their Club, itself by enemy forces, their contract was to end and the Club to be dissolved. The condition so implied is not, in my opinion, one that is inconsistent with any express rule of the Club. I therefore further hold that the Club was dissolved on 23rd January, 1942, the day on which the Japanese forces occupied Kavieng; and that after the Club's liabilities have been discharged, any surplus insets of the club belong, in equal shares, to all those persons who were, on that date, members of the Club, that is to say, members of one or other of the five classes of members specified in the Rules of the Club; (see Rules 10(e) and 10 (p).). Where any of the persons so entitled to share in the Club's surplus assets has died since the dissolution of 23rd January, 1942, his share w 11, of course, go to his legal personal representative. I should perhaps mention that, because of the dissolution, those who were members at the date of the dissolution ceased to be liable, in the absence of any Rule to the contrary, to pay subscriptions occurring after that date (though they would be liable for any arrears due at that date) : non-payment of annual subscriptions for the years since the date of dissolution does not forfeit their interests in the assets of the Club, as was pointed out in In re Unley Democratic Association, already cited).

In regard to the suggestion made by Mr. Jones on behalf of "certain objectors," namely, that the Court should make an order directing a General Meeting of the Club to be held, - it is my opinion that, were the Court to adopt and act on that suggestion, it would be acting as irregularly as I consider the meeting of sixteen did at Kavieng in April last.

The Kavieng Club, being an association of more than seven members and not saving been registered as a Company under the Companies Ordinance 1912-1926 (Papua) (Adopted), falls within the definition of "unregistered Company" in S.2 of that Ordinance. Section 84 of the "Ordinance prohibits the winding;-up, under Part 1 of the Ordinance, of an "unregistered company" either "voluntarily" or "subject to the supervision of the Court." But, because Section 80, an "unregistered company" may be wound up by the Court in certain circumstances, that is to say;- "whenever the company is dissolved or has ceased to carry on business or is carrying on business only for the purpose of winding-up its affairs ''whenever the company is unable to pay its debts;" and "whenever the Court is of opinion that it is just and equitable that the company should be wound-up," - which last phrase, by the way, is not to be construed ejusdem generis with the two preceding ones, (Loch v Blackwood, [1924] UKPC 45; [1924] AC 783). In the present case, the Court has held the Kavieng Club to have been dissolved, and the circumstances in which the Club now finds itself and which have been set cut in this judgment confirm me in the opinion that it is just and equitable that the Club should be wound-up by the Court.

I therefore propose to include, in the Court order herein, a direction that the Club be wound-up by the Court; an appointment of an Official Liquidator; directions as to the powers he may exercise, etc.; directions as to the publication of notice of the making of the Court's order, which should, I think, be not less wide than the publication earlier ordered in regard to notice of the hearing of this Petition; a direction, under s.81 of the Companies Ordinance, that subsequent proceedings in the winding-up be had and taken before the registrar of the supreme Court; and a provision regarding costs. Before pronouncing that Order, however, I am prepared to hear anything that learned Counsel may wish to say, concerning the scatters just mentioned and the form of the proposed order.

(Cromie, for petitioners made submissions concerning suitable appointee as, and remuneration of, Official Liquidator; and asked for petitioner's costs out of Club's assets. Jones for objectors, submitted that their costs should also be paid cut of the Club's assets but the Court rejected that submission).

ORDER.

The Court then made the following Order: - The Court doth:-

ORDER AND DECLARE that the Kavieng Club shall be deemed to have been dissolved at the time the Japanese enemy forces occupied Kavieng on 23rd January, 1942: AND THAT all persons who were at that date members of the Club, that is to says, all persons who were members of one or other of the five classes of members specified in Rules 10 (e) and 10 (p) of the Club, are the persons alone entitled to any assts of the Club that remain surplus after the liabilities of the Club have been discharged, which surplus assets shall be distributed among those persons in equal shares, the share of any one of those persons who may have died since the dissolution of the Club on 23rd January, 1942, to be paid to his legal personal representatives, be entitled to receive that share as his legal persona representative.

ORDER THAT, pursuant to the provisions of the Companies Ordinance 1912-1926 (Papua) (adopted) the Club be wound-up by the Court;

APPOINT Ernest Alfred James, Accountant, Port Moresby, to be the Official Liquidator of the Club.

ORDER that the said Ernest Alfred James shall not be required to give any security AND THAT he may receive, out of the assets of the Club, remuneration, as official liquidator, in an amount not exceeding 2¹/₂ per centum of the gross assets of the Club got in by him as official liquidator.

DIRECT THAT the distribution among those entitled as aforesaid to the surplus assets of the Club shall be made as soon as practicable and in two instalments of 60 per centum and 40 per centum respectively, the second instalment to be paid at a date not less than three months after the date of the payment of the first instalment.

ORDER AND DIRECT THAT the official Liquidator, subject to his first obtaining the sanction of the Court or a Judge before malting any distribution of any of the surplus assets of the Club among those entitled as aforesaid to the surplus assets, may otherwise exercise, without such sanction, the powers given to an Official Liquidator under the provisions of the abovementioned Companies Ordinance.

ORDER AND DIRECT THAT the Official Liquidator shall, as soon as practicable after the date of this Order, cause a notice of the making of this Order to be published in –

(a) two successive issues of the Territory of Papua New Guinea Government "Gazette;" and

(b) issues on two successive Saturdays in each of the following newspapers, that is to say - the "Age" in Melbourne, the "Sydney Morning Herald" in Sydney, and the "Brisbane Courier" in Brisbane; and

(c) in one issue of the "Pacific Islands Monthly" Magazine;

AND THAT that notice shall call upon all persons who claim to have been members of the Club on 23rd Januarys 1942, and upon the legal personal representatives of all persons who were members of the Club at that date but who have since died, to submit their claims, verified by affidavit or statutory declaration, to the Official Liquidator on to before a date which shall be specified in the notice by the Official Liquidator and which shall be a date not less than three months after the date of the last publication of the notice;

AND THAT that notice shall also state that the Official Liquidator may, after the date fixed for the submission to him of the said claims, proceed with the winding-up and seek the sanction of the Court or a Judge to a distribution of the surplus assets of the Club without further regard being had to any claim not received by him by the date fixed for the submission of claims:

ORDER AND DIRECT that a note be appended to the Order calling on the Petitioner to hand over to the Official Liquidator all moneys, books, papers, documents of title, effect's, choses in action and other property of the Club that he has in his possession or control as Trustee of the Club and generally to do all such things as, may be lawfully required of him by the Official Liquidator for the purpose of the Official Liquidator's exercising his duties in reference to winding-up the Club;

ORDER AND DIRECT that, pursuant to Section 81 of the said Companies Ordinance, all subsequent proceedings for winding-up the Club, ether than the giving of sanction to any distribution of the surplus assets of the Club, be had and taken before the Registrar of the Supreme Court:

ORDER THAT Petitioner's costs of the present petition be taxed and be paid out of the assets of the Club.

F.B. PHILLIPS
J.

22/6/49.