OPINION Of SIR JOHN FINDLAY, K.C.

Ashburton Guardian, Volume XXXVI, Issue 8465, 2 June 1916, Page 5

OPINION Of SIR JOHN FINDLAY, K.C.

RE ASHBURTON COUNTY RACING CLUB RULES. The following facts have been stated for my consideration :— "At v a Committee meeting of the Ashburton County Racing Club, held ; on August 21, 1914, it was suggested that a proportion of tho net pro- ; fits of the forthcoming race meeting I bo.given to the Great Britain, Ire- ' land, and Belgium Relief Fund. On\ the motion of 'A' it was decided to ] hold over consideration of this sug j gestion until after the race meeting. | At the first meeting,of the Commit j tee subsequent to the race meeting, | a sum of 100 guineas was voted to the Belgium Fund. "At a-'public: 1 meeting- held in April, 1915, 'A' referred to this matter, a.nd said that capital was being made out of his action in connection with the Racing Club Committee's grant to the Belgian Fund, and justified his action by stating ' tho rules .stipulate that no special business shall be dealt with unle-ss -notice of it bo given beforehand. ij^L refuted this statement, saying ■r^*' there is no such-rule in-existence.' "' A' subsequently replied as follows: ' I still maintain that I am perfectly right in the'stand I took, as the rules provide that no special business can be transacted unless ■notice is given of a special meeting where special business only can be taken. And as.'B' still-thinks he ib ri^ht, I am prepared to lodge tho sum of £1000 against his £100 m support of my contention, with a provision that whoever is wrong shall hand tho amount he has deposited to the Belgian Relief "Fund.' "

I am asked to answer the following questions: " (1) Was tho resolution of the Committee to vote a certain sum of the Racing Club's Funds to the Belgian Reiiof Fund ' Special Business'?" "(2) Do the rules provide that no Special business can be transacted by the Committee unless notice is given of a special meeting, when special business only can be"taken?" ym " (8) Who should hand his "cheque to the Belgian Fund, 'A or 'B'?"

Tlio rules of the Club have been submitted to' mo and I have carefully perused same. There is no definition of the phrase "special business" in the rules nor is that phrase ever used in the rules. T-W"phrase " ordinary business " is used in rule 50 in the following context:— "50 The Committee shall meo^as often as occasion may- require for transition of ordinary business live.. members to form a quorum. '

The rules do not mako any provision for special meetings of tlio Committee. Throughout tho rulos, the phrases « Committoe meotinj; " or " mcmuig-of the Committee" arc used without. the addition of the adjecttve -special or | ," ordinary." )? Tho phrase " special meetings appears in the margin of *l"]£'^trt jt is clear from tho rule that bj fepem meeting" is meant V?r nfh an meeting of members pi the Club and not a Committoe meeting. I am of opinion therefore .that^ aU business which is within *c. *>ower oi the Committee to perform is " ordmaiy "business" and only business which requires a general meeting of the members of the Club to perform (e.g. an alteration of the Club's Rules) can be properly be termed " special. Tho question I havo to decide therefore is whether it was within tlio power of tho Committee to make a grant to the Belgian Fund. Tins involves two questions: (a) Is such a o-rant intra vires the Club, (b) Is such t grant intra vires the Committoe. This question is not touched by the War Contributions Validation Act, 1914- which only applies to coriiribution^in aid of the War Sporting Clubs throughout the Do-

minion have been making grants to the various patriotic and relief funds, .but this does not weigh with me in the least degree, for at a time like the present, rules and regulations arc liable to bo overlooked or disregarded.

My duty is to decide the matter according to legal principles without regard to sentiment. The powers of a Club depend upon its objects. The objects of the' Club are stated in Rule.. 2 to be the holding of race meetings on the Club's course at Ashburton. or any course over which' the Club shall have control for the time being. The objects clause Would authorise not only the actual holding of race meetings but all matters incidental thereto.

'In Small v. Smith, 10 App. Case 119, Lord Selborne at p. 129 states the principle in the following terms:—

"When you have got a main purpose expressed and ample authority given to effectuate- that main purpose, things which are incidental to it and which may reasonably and properly be done- aoad against which no express prohibition is found, may and., ought prima facie to follow from the authority for offectuating the main purpose by proper and general means." In Taunton v. Royal Insurance Company, 2 H & M 130,~at page 141 Wood, V.C., expresses the same principle in language which though different ,in form is in. substance' the same. He states:— . . , .

"It is one thing to say that tho Directors arc paying something which they are not bound to pay, find quito another thing to say that they are making payments for purposes not within the objects of the company. In this case tho answer of the Directors is that they make the payments as the course most conducive to the objects and the interests of the" company."

Applying tho above principle to the caso of a non-trading concern Swintcn Eadn J. in Cyclists Touring Club v. Hopkinson (1910) 1 Ch 179 held that a cycling club (notwithstanding the absence- of express power in the memorandum) might pay a gratuity to a rotired servant of the Club as being a payment in furtherance of the best objects of the Club in that it would induco better service from the Club's officers.

Tho principle applicable to the subject is well settled but the difficulty arisos when one comes to apply the principle to a concrete case and to decide whether a given object is incidental to tho principal object of a Club or company. It is quite clear that the Courts will not hold every object which may prove conducive to the main object to be irupliedly authorised. As illustration, of this fact is provided by the case of Tomlinson v. S. E. Rail Co. 58 L.T. 813, in; which a Railway Company was restrained from contributing towards the establishment of an "Imperial Institute" notwithstanding the establishment thereof would .probably result in an increase of traffic. Oa -the other hand Wood V.C. m the case of Taunton v. Royal Insurance Company (supra) aj; page 140 expresses tho opinion-that-subscribing to a. school might bo a. legitimate application of money if it vrere proved to be the received mode of carrying on a particular business. . ' This opinion is, however, purely obiter a:nd is consequently not entitled to tho same respect as an actual decision.. Tho grant to the Belgian. I< und can be hold "intra vires of the Club only it it -'appears that it is incidental and condu.iivo"to the main object which is the holding of race meetings. It is capable- of argument that it is essential for the continued existence of raemp- clubs that they should contribute 1 " liberally to patriotic and charitable funds in view of tho necessity of retaining the goodwill oi am^iority of the public, the, loss or which would probably result in racing clubs j being abolished. . . But in vie.w of the decision in Lomlinson v. S.E. Railway Company (supra) it is quite impossible to say with any certainty that such an argument would be successful. Upon a careful consideration of the authorities but with much doubt, I have come to the conclusion that the better view is that the grant is intra vires or the Assuming the grant to be intra vires the Club, there can be no question that it is intra vires the .Committee. . Rule 24 provides fch.it the alian-s and general business of the Club shall be managed by a Committee consisting, etc But the rule specifically dealing with tho powers of the Committee is Rule 32, which is as iollows:— "The Committee shall have the entire management and control of tho affairs, concerns a.nd business ot tho Club, and shall have, power to enter into on-behalf or the Club a 1 such contracts as they may deem adviable, and shall from timo to time and at all times control, invest, dispose of, and deal with the Kinds and property of the Club as they may deem best for promoting and conserving its interests and carrying out. its objects." The very wide powers conferred upon the Committee by this rule are m my opinion ample to authorise the Committee to make any grant to charity which- is within the power oi the Club

to make. . /•„.*.! 1 must therefore answer the lu.,t | question put to me by stating that m, my opinion the grant was " ordinary ! business, and not "special" business.! There is certainly nothing m the | rules either express or implied which j would iustifiy the contention that no special business can be transacted by the Committee unless notice is given ; of a Hpwial meeting when sp^J" 1 busi-j ness only can be taken. Hierc is , i'nd<>r tho Rules no division ol Com- i mittoo biißiiiess into.specu.l and ordi- j nary and in my opinion tin- only business which could be termed r pwi:.l. is that which requires a genera, meeung of the Club to transact. „ I tun thoretore o opinion thai A should hand his cheque tor 11000 to that there is no such rule. Dated at Wellington this 24th day o^ Mar, 1916. • J. G. FINDLAY.