In the matter of Maitland Benevolent Society Limited (in liquidation) [2020] NSWSC 1284

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Maitland Benevolent Society Limited (in liquidation) [2020] NSWSC 1284 Hearing dates: 11 September 2020 Date of orders: 21 September 2020 Decision date: 21 September 2020 Jurisdiction: Equity - Corporations List Before: Rees J Decision: Liquidator justified in paying surplus to Royal Freemasons' Benevolent Institution. Catchwords: CORPORATIONS – not for profit – distribution of surplus on winding up – aged care home – sanction – loss of accreditation – buyer sought – representation will pay surplus to buyer – buyer increases bid – funds needed to improve facility – directions to liquidator, principles at [10]-[14] – requirements of constitution – recipient must prohibit directors' fees – directors' fees, principles at [41]-[49] – one interested recipient does not meet criteria – approach to distributing surplus of charity at [61]-[64]. Legislation Cited: Supreme Court Act 1970 (NSW), s 23 Corporations Act 2001 (Cth), ss 9, 140, 202A, 202B, 300A; Sch 2, ss 90-15, 90-15(3)(a), 90-20(1)(d) Cases Cited: Application of Gregory Jay Parker (liquidator of Shellharbour Golf Club Ltd (in liq) [2006] NSWSC 219 Australian Securities and Investments Commission (ASIC) v Lewski (2018) 266 CLR 173; [2018] HCA 63 Australian Securities Commission v Melbourne Asset Management Pty Ltd (Receiver and Manager Appointed) (1994) 49 FCR 334 Bankstown Community Child Care Incorporated [2008] NSWSC 173 Dean-Willcocks v Soluble Solution Hydroponics Pty Limited (1997) 42 NSWLR 209 at 212; (1997) 24 ACSR 79 Gerard Cassegrain & Co Pty Ltd v Cassegrain [2011] NSWSC 1594 Hawcroft v Jamieson [2017] NSWSC 1478 Hutton v West Cork Railway Co (1883) 23 Ch D 654 In the matter of 7 Steel Distribution Pty Limited (in liquidation) (receivers and managers appointed) [2013] NSWSC 669 In the matter of Dungowan Manly Pty Limited (in liq) [2018] NSWSC 1083 In the matter of Dungowan Manly Pty Ltd (in liquidation) (2017) 124 ACSR 218; [2017] NSWSC 1771 In the matter of Hawden Property Group Pty Ltd (in liq) (ACN 003 528 345) (2018) 125 ACSR 355; [2018] NSWSC 481 In the matter of ICS Real Estate Pty Ltd (in liq) (2014) 14 ASTLR 382; [2014] NSWSC 479 In the matter of Octaviar Administration Pty Ltd (in liq) [2017] NSWSC 1556 Kelly v Commissioner of Taxation (2013) 213 FCR 460; [2013] FCAFC 88 Meadow Springs Fairway Resort Ltd (in liq) v Balanced Securities Ltd [2007] FCA 1443 Re Ansett Australia Ltd (2001) 39 ACSR 355; [2001] FCA 1439 Re Daniel Efrat Consulting Services Pty Ltd (receiver appointed) (in liq) (1999) 91 FCR 154; [1999] FCA 412 Re GB Nathan & Co Pty Ltd (in liq) (1991) 9 ACLC 1291 Re George Newman & Co [1895-9] All ER Rep Ext 2160; [1895] 1 Ch 674 Re Willmott Forests Ltd (No 2) (2012) 88 ACSR 18; [2012] VSC 125 Texts Cited: ASX Corporate Governance Council, 'Corporate Governance Principles and Recommendations' (4th edition, February 2019) ASX Listing Rules (1 December 2019), r 10.17 Australian Charities and Not-for-profits Commission, 'Remunerating charity board members' (July 2017) Australian Institute of Company Directors (Director Tools, 'Directors' fees – Board composition', 31 October 2017) R P Austin, I M Ramsay, Ford, Austin & Ramsay's Principles of Corporations Law (online, July 2020) Winifred Murray, 'The role of company boards: Are they to blame for excessive executive remuneration?' (2009) 23 Australian Journal of Corporate Law 178 Category: Principal judgment Parties: Jeffrey Shute as liquidator of the Maitland Benevolent Society Ltd (in liquidation) (Plaintiff) United Protestant Association (First Interested Party) Royal Freemasons' Benevolent Institution (Second Interested Party) Representation: Counsel: Mr J Darams (Plaintiff) Mr S Wallace, Solicitor (First Interested Party) Mr A Fernon (Second Interested Party)